In just 48 hours in the month of July, the US Department of Justice announced three major settlements against some of the largest chemical companies in the world. On July 19, Equistar Chemicals, LP agreed to spend more than US$125 million on pollution controls and cleanup to address alleged violations of the Clean Air Act (CAA), the Resource Conservation and Recovery Act (RCRA) and the Clean Water Act (CWA). In addition, the company has agreed to pay US$2.5 million in penalties and spend US$6.56 million on federal and state environmental projects. This settlement covers alleged violations at facilities in Illinois, Iowa, Louisiana and Texas.
The next day, E.I. du Pont de Nemours & Co. agreed to pay US$4.125 million in civil penalties for alleged violations of the CAA at facilities in Kentucky, Louisiana, Ohio and Virginia. DuPont also agreed to spend US$66 million on air pollution controls to meet new, lower sulfur dioxide emissions standards at its Darrow, Louisiana facility. Additionally, the company agreed to either install additional air pollution controls or cease operating its facilities located in Wurtland, Kentucky; North Bend, Ohio; and Richmond, Virginia. The estimated cost of these additional pollution controls is at least US$87 million.
Also in July, the EPA announced that Citgo Refining and Chemical Co. had been found guilty of three misdemeanor violations of the Migratory Bird Treaty Act (MBTA) for failing to erect nets to prevent birds from entering and landing in oil contained in two open tanks located at the company’s Corpus Christi East Plant Refinery. Sentencing is scheduled for October.
Each violation of the MBTA carries a punishment of up to six months in jail and fines of up to US$15,000 per dead bird. In addition, in June, Citgo Petroleum Corp. and its subsidiary Citgo Refining were each convicted of two counts of violation of the CAA for operating tanks without proper emissions controls installed. Each count carries a fine of up to US$500,000 or twice the gross economic gain, whichever is greater, and five years’ probation.
Additionally, in April of this year, the EPA announced that Rhodia, Inc., an acid manufacturer, had agreed to pay US$2 million in penalties and approximately US$50 million on additional air pollution controls to settle allegations that the company violated the CAA. A total of eight of the company’s sulfuric acid production plants in California, Indiana, Louisiana and Texas will be required to reduce sulfur dioxide emissions by 19,000 tons per year.
The bottom line is that the EPA and DOJ now have substantial in-house expertise to pursue punitive measures against the chemical industry. Once these bodies develop the expertise to pursue a particular industry, it is not unusual for them to continue such prosecutions for as long as needed to inspire greater compliance. For now, evaluating and improving internal compliance programs would be an excellent first step for any company toward avoiding unwanted attention from the EPA.