Document ZJOKJzo5MGMmLaNG3bD3YnjZd

TO: Distribution Interoffice Communication FROM: DATE: SUBJ: T. G. Grumbles April 4, 1990 RECENT ENVIRONMENTAL ARTICLES TO JCL- ERT: MJH: Aj6: rf XF: ViSTA Attached are two recent articles regarding environmental performance, public perception and its impact on a company's financial and operating status. T. G. Grumbles dlj .118 Attachment Distribution: J. D. Burns, J. R. Ball, R. D. Gamblin, J. A. DeBernardi, T. H. Huffman, J. J. Weidner, G. G. Draper, W. J. B. Vogel, B. E. A. Larsen, R. T. Ferrell, H. R, Flammer, G. W. Inbody V. W. Weiss-Austin Wv 000012836 / . m\rers ,'c2>neits "ts&' 1--^ VVV 000012837 and federal 'agencies werti cot "ade quately monitoring Formon.44itaa jBttckburn. a Hotmon attorteFfep'' iting the Calhoun County^Re-- Watch, said: "You may find gh to believe butpolitk ' ' .^nothing to do with iL,What_I 'vfotnd is when the pubtte let. . ^ up soil and watereontiml- -ITpoliticians know they^expectIBS ah emditKtmenUl group uid^. health to be protec$d,the-su4gjg3 tot!/epo2 relf^dJhursday- -*** rcSu.MSS InternaUonal plastics giant For* Bfll Jones, a Formosa spokesman, mosa was courted by Texas politi- said the company has turned the riafa and tpufrttc iolf}ciils_jn.L$*8 corner and has a new attitude aboat waoiit bbganits seapchJor asUe/Or environmental prt>6ieiu.f'r 'J-f i a new facility. The state promised He said a new policy was laid out . expedited regulatory hearings and 'tax Incentives that could lop $225 last, week by .company owaer-Y-C. Wang,,, the corporate leader of a ' million for the Taiwan-based cow group of plastic manufacturers said "pany .* - to..be among the larsestprivateiy A Houston Chronicle Investigation held corporations in tjewoqd- last summer uncovered a history of pollution incidents and violations of air and water permits In t^gtana and Texas by Formosa. ; '* -<;;Tsans United, the environmental -and economic development 'group, said Thursday that Formosa tboold -YEasencially. he^-saHf the rTexas Water Commission and the EnviroomeoUl.Protectioo Agency.are the teachers, and we better become the best students we can be.vWeJgot,the message" Jones Mid.*," **- be Investigated by federal officials uRe-. denied allegations ,that, the readMbe CTexas Water company hag ifvey,.. tried Cowhide information. ' ~""We may have'beeh'sTowThuf there has never been an attempt to cover up information," Jones said/- feet below tbe Formosa site, wiuefi is Many hi. the'stimdihg, rooot only close to Lavaca Bay, i group that crowded the cinder block fa suspected Abrahams, dtreetor of Tex ans United, urged a group of citizens at a town meeting here to demand an environmental impact statement from state and federal officials,... "If you look at what this company . has done, you'll know much of what .will happen in tbe futura.-Companies always look, better at ..permitting time, but companies, like individu al!,, don't change overnight,'!, Abra hams said.. *V-W . Hesuggested that the people of Calhoun County bargain with the company for unproved environmen tal safeguards. j Abrahams' report said that "de spite Formosa's claims to the con trary, the company's Point Comfopt plaat .has a long and dirty record of did and- water-pollution, including grievous violati?ns-of date and fed eral law." The report said that recent tests by the.,Texas Water Commission show extremely high levels of toxic chem icals in the ground water beneath Formosa "potentially endangered local drinking water supplies."' Residents questioned why state' community center carried signs sup porting tbe compact. Aj'they dl> ciined Formosa, the smoke' plume from Formosa's curraitfacility, adJhcbnt-io -the center,' Waited Over head throuxtr open Windows'-and dnoti.-^- , LArry'Robinson, 'president of the focal chamber o! commerce, said "we need Jobs ip Calhoun. County. That's tbe.bottom Une-V^^V.'H He decried the television cameras and reporters wbo were in tbe room. "We can do this within our county. We don't need all the adverse public ity/* Robinson said. ^ ~ l.!'- j if M ' i Diane Wilson., organizer, of tbe CSfboun County Resource: Watch, said the local media has been reluc tant to print , views of people wbo don't support the Tocmosa- expao- SiOB. J ':.* , '^fwli.ii rr. -tjli'"* The company expects a repgrfGfi its applicatioo to the water commissktn.wiihia 60 days. The report witi. be the basis upon which the thread member appointed commissjoj^ge- cides whether to ` grant' Forme-- requests to discharge water, contaltf ing ethylene dichloride Into Lavaca Bay. 120 miles south of Houston. POLLUTION UAbILllY --mvesioi* Slei Ultscu ui muuow/ wow Poor environmental report cards may cost companies future investors, say investment firms. Companies being spumed include industrial giants like General Motors and WJL Grace. Increasingly, investment companies are ruling out potential investments in corporations blamed for chronically dumping toxic waste or for releasing dangerous chemical emissions, say "socially responsible" companies like Fran klin Research & Development of Boston. Certain to deter investors are catastrophic chemical accidents like Bhopal and proven negligence by industrial polluters. Also damaging to investment prospects is being repeatedly named a "potentially responsible party" at hazardous waste sites. "Potential investors want to invest in companies that are kind to the environment. They put pressure on firms by refusing to invest in stocks and mutual funds," says one Franklin official. To identify questionable firms, investment companies poll their shareholders, consult with environmental and public inter est groups, tabulate answers firms give to questions on their environmental compliance record and check a firm's reputation by studying newspaperclippings. "A very favorable sign," says Steve Schueth of the Maryland-basedCalvert Social Investment Fund, "is a company's willingness to disclose information about its environmental trackrecord." Firms found innocent ofalleged waste disposal violations, those thatcooperate with EPA in legal action, and ones that take initiatives to curb theirdisposal oftoxic chemicals and that are forthcoming with that information earn a high grade. "Of course, companies must, first of all, be finan cially sound," says Schueth, "but they must also demonstrate they have avoided costly lawsuits and are free from liability." Firms that fail to make the grade, like GM and W.R Grace, earn a 5.0 "worst" environmental score, according to a Franklin rating of 25 major U.S. corporations cited in a recent article in Fortune Magazine. Despite initiatives taken by the companies to improve their environmentalrecord, both GM and Grace have a well-deserved reputation for questionable waste disposal prac tices, says Franklin. According to GM's 199010K Report, which must be submitted to the U.S. Securities & Exchange Commis- sion, the company has been designated a potential polluter at some 150 Superfund sites with a liability ofabout $90-million. At one site in Michigan, GM was fined $395,000 by EPA for PCB disposal. But GM is quick to point out that in many of those cases, the company is only one of several parties allegedly respon sible for the pollution. Furthermore, a GM report cites 30 Superfund site cleanups the company has participated in. The company says, in one case, it was credited with helping to remove 45,000 waste drums from the Seymour, IN site. In another, it initiated negotiation with EPA and the state of Delaware to clean up the Harvey and Knotts Drum site near Witmimgtnn. Under a mixed funding agreement with the agency, GM will pay about one-third ofthe $9-million cleanup cost. The company also says that its efforts to minimize waste by substituting less toxic materials in manufacturing and recovering materials from waste streams should be included in any accounting of GM's environmental record. W .R. Grace's trackrecord speaks for itself, says Franklin. The firm has been cited as a potential polluter at 26 Superfund sites including the controversial Woburn, MA site where Grace was blamed for drinking water pollution allegedly responsible for the leukemia deaths of six children. The Wobum case is the main reason the firm received a poor environmental rating, says Franklin. On May 31,19S8, Grace pleaded guilty to charges it lied to EPA about the amount of SUPERFUND REPORT -- February 28,1990 9 toxic chemicals it used ataplant inWobum. U.S. DistrictCourt Judge Joseph Tauro fined the firm $10,000 for misleading the government, a felony violation. "By submitting false informa tion to the EPA, W.R. Grace placed a greater value cm its legal liability, profits andpublic image than on the health and welfare ofthe community and environment," said then regional admin istrator Michael Deland. The charges stemmed from a federal grand jury investiga tion ofGrace's Cryovac plant, where EPA was told in 1982 that it hadpurchased only limited quantities ofhazardous materials. At the time, EPA investigators were trying to determine the source oftoxic contamination in two nearby wells, which some experts claimed wereresponsible for a high leukemiarate in the area. Grace said it used small quantities of industrial solvents such as toluene and trichloroethylene. But according to a 1987 indictment, the firm actually bought hundreds of gallons of solvents, including some compounds the company claimed not to have used and allowed employees to dump wastes in the ground. Although Grace reached an out-of-court monetary settlement with plaintiffs in the leukemia case in 1986,afederal courtjuryfound thatthe company "substantially contributed" to the pollution of two drinking wells. In November 1989, EPA said that Grace's Nashua, NH plant had "significant problems" in transferring hazardous chemicals and the way it alerts the city to chemical emergen cies. Both of the concerns fall under the authority of Superfund's Title m law. A joint audit of the Nashua plant's environmental and safety compliance by EPA and the Occupa tional Safety & Health Administration was conducted last fall in the wake oftoxic gas releases and the subsequent evacuation of residents, the discovery of 25 possible toxic waste sites on company property and an acknowledgement by Grace that it is the likely source ofcyanide that appears to have leaked from the site onto the banks of the Merrimack River. Some of the sites appear to be inactive waste sites, according to an EPA regional official. Despite its poor environmental track record, said a Fran klin official, the company should be credited with recent steps it has taken to improve that record. Among those initiatives are a 5-year goal to reduce toxic emissions, a commitment to improve chemical release prevention systems and the training of an on-site emergency response team equipped to respond to emergency chemical releases. In light of those developments and in response to arguments raised by Grace officials over the company's poor environmental rating, Franklin saidit is willing to review the rating. Grace environmental compliance officials were unavail able for comment. -- Lew Gurman VVV 000012838 LOVE CANAL RISKS -- Resettlement In the balance as EPA, state review options Resettlement of Love Canal, the nation's landmark hazardous waste site, grew more uncertain last week as federal and New York officials mulled moves that could influence the lifting of a two-year ban on reoccupying the area. A spokesman for EPA chief William Reilly said last week the agency is reviewing risk assessments and pollution and land use studies of the site in response to a demand by environmentalists who claim resettlement of the canal would endanger public health. According to the spokesman, Reilly fears that if resettlement is allowed to go ahead without a fresh look at the site, the agency could be blamed for establishing a precedent of endorsing cleanups that fail to meet the standards of health protection mandated by the Superfund law. Environmental activists Lois Gibbs of the Citizens Clearinghouse for Hazardous Waste and Jacqueline Warren of the Natural Resources Defense Council asked Reilly to reassess alleged health risks to pregnant women posed by the site, claiming that New York State Health Commissioner Dr. David Axelrod used a faulty approach in determining the site was habitable. A ban on resettlement ordered two years ago by state Attorney General Robert Abrams presently bars prospective home owners from purchasing homes in the resettlement zone near the canal. Although the ban is likely to be lifted if Abrams approves the final version of a draft environmental impact statement (E1S) issued three weeks ago by the Love Canal Area Revitalization Agency (LCARA), the quasi-state authority responsible for selling the homes, the Reilly move to reassess health risks appears to complicate the ultimate resolution of the issue. "What the state does depends on what EPA finds," said an attorney who works for Abrams. In any case, LCARA must still consider public com ments on the EIS before issuing a final EIS. Abrams must determine whether the final EIS complies with state envi ronmental laws before he can rule on the ban. Whether the EPA will play a major role in determining the solution to the dilemma is uncertain, said several sources. NEWSWATCH CERCLA LIABILITY -- Courts giving EPA too much discretion, lawyer charges Recent court rulings have expanded cleanup liability under Superfund, frequently ruling in favor of EPA when the agency has attempted to break new ground for liability. The expansion has at times stretched congressional intent of the law and allowed the agency a large amount of discretion, according to attorney Stephan D. Ramsey, who spoke at a recent American Bar Association seminar on environmental law. Over the past year, federal courts have expanded Superfund liability to the benefit of EPA's enforcement efforts to include individuals working for polluting companies, parent corporations, lending institutions and manufacturers of hazardous substances. The Superfund law, however, provides that only owner/operators, transporters, generators and disposers of hazardous waste can be held liable for Superfund cleanups. EPA looks for new areas of liability when assets sufficient to clean up a site are not available from the traditional owner/ operator defendants, according to Ramsey, who charges EPA's main concern is finding "deep pockets" to pay for cleanup. This is why EPA filed claims against individuals, failing to find a clear responsible party at the Arco Industries site in Michigan, he says--a case th^t has opened the door to individual liability. Otherdecisions, based on interpretations of the law, stretch the intent of Congress, according to Ramsey. An Eighth Circuit Court ruling holding a pesticide manufacturer liable far con tamination resulting from actions taken by apesticide blender is a prime example. While it is clear Congress did intend owners of contaminants to be held liable, holding one company, a manufacturer, liable for actions of another, a pesticide blender, may not be exactly what Congress wanted, says Ramsey. Two other important court decisions have also broadened the scope of Superfund liability, to include lending institutions and parent corporations. FleetFactors Corp. was held liable for cleanup costs after it foreclosed on equipment used at a con taminated work site of one of its borrowers (U.S. v. Fleet Factors, U.S. district court, southern district of Georgia). Kayser-Roth Corp. was held liable for cleanup costs incurred by EPA during agency efforts toremediateaSuperfund site created by Stamina Mills, a subsidiary of Kayser-Roth (U.S. v. KayserRoth, U.S. district court for Rhode bland). 000012839 vw