DuPont To Pay Record Fine In PFOA Case
EPA announced on Dec. 14 that it has reached a $16.5 million settlement with DuPont over the company's failure to report to the agency possible health risks associated with a synthetic chemical used in the manufacture of Teflon.
Under the settlement, filed with the agency's Environmental Appeals Board, DuPont will pay $10.25 million -- the largest civil administrative penalty EPA has ever obtained under any federal environmental statute -- and the company is committing to $6.25 million for supplemental environmental projects (SEPs).
"This is the largest civil administrative penalty EPA has ever obtained under any environmental statue. Not by a little, by a lot," said Granta Y. Nakayama, assistant administrator for the Office of Enforcement and Compliance Assurance. "EPA takes violations of toxic substances laws seriously and is committed to enforcing those laws. This settlement sends a strong message that companies are responsible for promptly informing EPA about risk information associated with their chemicals."
The settlement, which still must be approved by the EAB, would resolve DuPont's violations related to the synthetic chemical Perfluorooctanoic Acid (PFOA) under provisions of both the Toxic Substances Control Act (TSCA) and the Resource Conservation and Recovery Act (RCRA).
The settlement resolves the four violations alleged in the agency's two complaints filed against DuPont in July and December 2004, and settles four additional counts involving information about PFOA that EPA obtained after initiating its action against DuPont. Seven of the eight counts involve violations of TSCA Section 8(e) -- the requirement that companies report to EPA substantial risk information about chemicals they manufacture, process or distribute in commerce.
DuPont officials said the settlement closes this matter for DuPont without any admission of liability. "Our interpretation of the reporting requirements differed from the agency's (interpretation). The settlement allows us to put this matter behind us and move forward," said Stacey Mobley, DuPont senior vice president and general counsel. "We have already cut PFOA emissions from U.S. plant sites by 98 percent, and we are committed to reducing those emissions by 99 percent by 2007."
PFOA (also known as C8 or Ammonium Perfluorooctanoate (APFO)), is used in the manufacturing process of fluoropolymers, including some Teflon® products, at DuPont's Washington Works facility in Washington, W.Va. Fluoropolymers impart desirable properties, including fire resistance and oil, stain, grease and water repellency. They are used to provide non-stick surfaces on cookware and waterproof, breathable membranes for clothing.
As part of this settlement, DuPont has voluntarily agreed to undertake two SEPs valued at $6.25 million. A SEP is an environmentally beneficial project that the violator agrees to undertake in exchange for mitigation of the penalty to be paid. SEPs are related to the environmental violation and further EPA's goal of protecting and enhancing public health and the environment.
The first SEP, valued at $5 million and to be completed in three years, is a project designed to investigate the potential of nine of DuPont's fluorotelomer-based products to breakdown to form PFOA. This SEP will help industry, scientists, the public and EPA examine the potential sources of PFOA in the environment and potential routes of human exposure to PFOA. The public will have an opportunity to nominate members to a Peer Consultation Panel, an independent group of scientists that will address specific charges identified in the SEP. DuPont has agreed to require the laboratories that it contracts with to perform work under the SEP to follow the agency's Good Laboratory Practices standards as well as prepare and follow a Quality Assurance Project Plan.
For the second SEP, DuPont will spend $1.25 million to implement over an expected three year period, the Microscale and Green Chemistry Project at schools in Wood County, W.Va. This SEP will foster science laboratory curriculum changes to reduce risks posed by chemicals in schools. Using microscale chemistry, which reduces exposure to chemicals, and green chemistry, an approach that uses safer chemicals, the project will reduce risks to children's health and enhance science safety in all of the participating schools.
"We are pleased that as a direct result of this settlement with DuPont, valuable information will be produced for the scientific community to better understand the presence of PFOA in the environment and any potential risks it poses to the public," said Susan Hazen, EPA's principal deputy assistant administrator for the Office of Prevention, Pesticides, and Toxic Substances. "We are hopeful that (this) action will serve as an important reminder of the importance of timely industry reporting of substantial risk information to EPA."
The violations resolved in this settlement consist of multiple failures to report information to EPA about substantial risk of injury to human health or the environment that DuPont obtained about PFOA from as early as 1981 and as recently as 2004. The seven TSCA Section 8(e) counts fall within three types of categories: human health information, environmental contamination, and animal toxicity studies. More information on the violations is available by clicking here.
EPA continues its risk assessment process for PFOA to determine if there are any issues that require a regulatory response. DuPont claims that studies by the company and independent researchers confirm that cookware and other consumer products made with or using DuPont materials are safe for consumer use.
EPA began its investigation because PFOA is very persistent in the environment, was being found at very low levels both in the environment and in the blood of the general U.S. population, and caused developmental and other adverse effects in laboratory animals. Additional information on PFOA is available at http://www.epa.gov/opptintr/pfoa.
Sanford Lewis, an attorney representing DuPont Shareholders for Fair Value, said that the settlement is not the end of DuPont's problems with these materials, but probably just the tip of the iceberg from both an environmental and financial standpoint.
Earlier this year, the Department of Justice issued a criminal subpoena to DuPont on issues related to PFOA. "Not only does the proposed settlement leave open the possibility of criminal charges against our company, but it also may foreshadow much larger hits in liability and market loss," said Lewis. He noted a $5 billion consumer fraud case pending against DuPont, alleging a failure to disclose risks related to Teflon to consumers.
The Environmental Working Group, which gave the agency the information that initially prompted the agency to act against the company, said that the settlement is is less than half of one percent of DuPont's after-tax annual profits from the Teflon product when averaged over the past 20 years.
"What's the appropriate fine for a $25 billion company that for decades hid vital health information about a toxic chemical that now contaminates every man, woman and child in the United States? What's the proper dollar penalty for a pollutant that will never break down, and now finds its way into polar bears in the Arctic and human babies in their mothers' wombs? We're pretty sure it's not $16 million, even if that is a record amount under a federal law that everyone acknowledges is extremely weak," said EWG President Ken Cook.
The consent agreement and SEPs can be viewed at http://www.epa.gov/compliance/resources/cases/civil/tsca/dupont121405.html.
This article originally appeared in the 12/01/2005 issue of Environmental Protection.