OxyChem Expands Cleaning Offering As Superfund Site Liability Fight

A dispute over cleaning up New Jersey’s polluted Passaic River could be about to erupt after a chemical giant offered to sweeten its $441 million cleanup offer, which comes with some strings attached.

Occidental Chemical Corp.’s latest offer, outlined in a June 27 letter to the Environmental Protection Agency, would keep its initial January 2021 offer on the table to pay nearly half a billion dollars, either the entire tab for design and repair. action along the upper nine miles of the Passaic River.

But the new offer of a “stepped process” to coordinate the cleanup in tandem with another section of the river comes with the same request that OxyChem made with its initial pitch: that it retain the right to sue. the contributions of other companies which, according to her, are also polluted. River.

Over the past few months, several companies, including Sherwin-Williams Co. and Givaudan Fragrances Corp., a Swiss fragrance and cosmetics company, have been working on a settlement with the EPA that would also prevent them from having to contribute to cleanup costs. from OxyChem. along the upper nine-mile stretch of the Passaic River, one of the most expensive and complicated Superfund sites in the country. The new offering includes this section and another 8.3 mile stretch of the river.

The companies view OxyChem’s cleanup bid and related litigation as a last-ditch effort to prevent the EPA from properly exercising the powers it has under the nation’s Superfund law to determine which polluters should or should not be held responsible.

OxyChem responded by warning that its $441 million bid could be jeopardized if it cannot seek to recover some of its costs from other polluters. OxyChem continues to push back on negotiations between the EPA and other polluters, including through ongoing litigation initiated in 2018.

The standoff illustrates the challenge of using the Superfund Act to clean up landfills such as the Passaic River that were polluted so long ago. It also raises questions about whether the EPA should use its authority under the Comprehensive Environmental Response, Compensation, and Liability Act to negotiate settlements that essentially provide liability protection, leaving companies like OxyChem stuck with the tab and prevented from suing other companies for payment. .

Difficulties to blame

The law gives companies that pursue cleanups the right to sue other responsible parties, with costs awarded by a federal court, not the EPA, the company said in its offer letter to the administrator. EPA, Michael Regan.

“The EPA is a limited jurisdiction agency, and Congress has not granted the EPA authority to adjudicate liable parties by prohibiting contribution claims or otherwise,” according to their letter.

OxyChem’s offering includes support for job sequencing at both sites to minimize the risk of upstream cleaning ‘tampering’ with downstream cleaning jobs.

Many companies have argued that there is weak evidence that they are responsible for the cleanup or that they, like Sherwin-Williams Co., have already spent money to clean up their pollution.

The global paint company “spent millions of dollars” on early investigative efforts and feasibility studies, working with the EPA, said Julie Young, vice president of global corporate communications at Sherwin. Williams. OxyChem continued its “baseless” attempts to blame other parties “instead of focusing its efforts on working with the EPA and other parties to clean up the Passaic River.”

‘Hail Mary Attempt’

Regarding the overall cleanup plan, OxyChem shares key objectives with the agency, according to an OxyChem spokesperson, “that the cleanup of the Passaic River progress in an effective, efficient and timely manner and that all responsible parties are held pay their fair share of cleanup costs.

But other companies see it differently. Companies agreeing to a settlement with the EPA outlining their cleanup responsibilities should then not be subject to prosecution for contributions from other companies polluting the site, they argue.

“OxyChem could not escape the fact that it is solely responsible for cleanup costs to combat dioxin (and other pollution related to Diamond Alkali site operations) in the river,” William Hatfield, attorney for the firm of attorneys Gibbons PC. representing Givaudan, wrote in a Feb. 15 letter to Thomas Scrivo, the court’s special master overseeing the litigation.

OxyChem disagrees.

The U.S. government is not free to “insulate” certain companies “from their liability to OxyChem for costs that OxyChem has incurred and will continue to incur to clean up” pollution that the company did not cause, according to Kathy Patrick, attorney at Gibbs Bruns LLP representing OxyChem in the litigation.

Companies fighting OxyChem have dangled the possibility that they are close to reaching a settlement with the EPA limiting their liability in part to distract court attention from evidence they polluted the river, according to OxyChem. .

The EPA declined to discuss specifics while negotiations are underway, including “the inclusion or exclusion of potential rule provisions or the basis” of the regulations, according to Stephen McBay, a spokesman for the office. EPA Region 2.

The EPA and the Department of Justice are “engaged in confidential settlement negotiations with multiple parties” related to the Lower Passaic River Study Area portion of the Diamond Alkali Site, and any settlements between the parties will be released. public “if and when” they are concluded, he said.

dump

The Passaic River has been a dumping ground for companies since the late 1940s. One such company was Diamond Alkali, which operated there in the 1950s and 1960s, manufacturing herbicides, including Agent Orange used during the war from Vietnam. The Diamond Alkali site was later purchased by OxyChem and merged into the company.

The EPA has made some progress cleaning up the Passaic River, but it and the surrounding waterways haven’t improved much since the agency declared it a Superfund site in 1984.

In October 2021, the agency announced that it had finalized an interim plan to clean up contaminated sediment in the upper nine miles of the Passaic River, about half of the larger contaminated waterway running along a 17-mile stretch. OxyChem has offered $441 million to clean up this part.

Cleanups along the river accelerated in 2016 when the EPA announced a settlement with OxyChem to restart the cleanup of another stretch of the river – the lower 8.3 miles – at an estimated cost of $165 million. of dollars covering the engineering and design work required prior to the actual cleanup. began. OxyChem has also agreed to pay the EPA monitoring fee for this lower river cleanup.

Working groups identified

Under the CERCLA Superfund Act, the EPA can require “potentially liable parties” to perform cleanup operations or, in some cases, reimburse the EPA for cleanup costs it incurs.

“to begin negotiations” toward a consent decree outlining the cleanup of the site, including how it would be funded.

OxyChem along with Pharmacia LLC, Nokia of America Corp, Public Service Electric & Gas Co. and PMC Inc. were all found guilty of having sufficient liability. The agency offered PMC an “opt-out settlement” to release it from further liability, but PMC declined the offer, according to the EPA.

EPA letter calls on OxyChem, Pharmacia LLC and other ‘task forces’ to fully fund and carry out interim cleanup efforts – which OxyChem previously offered to carry out as part of its $441 million bid dollars – as well as helping with efforts for the lower 8.3 miles of the Passaic River.

If the parties fail to reach an agreement, the EPA could instead initiate “federally funded remedial action” on the site, according to the letter to the task forces, “the costs for which you may be held liable in under CERLCA”.

—With the help of Stephen Lee.

About Michael Murphy

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