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U.S., MISSISSIPPI REACH ENVIRONMENTAL AGREEMENTS WITH MORTON $20 Million Penalty is Largest-Ever Civil Fine for Environmental Violations at One Factory

Release Date: 10/26/2000
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THURSDAY, OCTOBER 26, 2000

U.S., MISSISSIPPI REACH ENVIRONMENTAL AGREEMENTS WITH MORTON
$20 Million Penalty is Largest-Ever Civil Fine for Environmental Violations at One Factory

WASHINGTON, D.C. – Morton International Inc. will resolve charges the chemical company violated several environmental laws at its Moss Point, Miss., facility under a civil settlement and criminal plea agreement announced today by the United States and Mississippi Department of Environmental Quality (MDEQ).

Morton, a wholly owned subsidiary of Rohm and Haas Company based in Philadelphia, has agreed to pay a $20 million penalty that will be divided equally between the United States and Mississippi under the civil settlement filed today in U.S. District Court in Biloxi. This penalty marks the largest-ever civil fine for environmental violations at a single facility.

The civil settlement, filed by the Justice Department on behalf of the EPA and the MDEQ, resolves claims the company violated clean air, clean water and hazardous waste laws. The agreement obligates Morton to perform $16 million worth of projects to enhance the environment. The agreement requires a third-party environmental audit of all 23 chemical facilities owned by Rohm and Haas in the United States. Under the settlement, Morton also will complete a comprehensive assessment of the Moss Point facility, determine whether corrective measures are needed to address pollution, and undertake any necessary measures.

In a separate action today, Morton pleaded guilty to criminal violations of the Clean Water Act and the Resource Conservation and Recovery Act. Under a plea agreement, Morton has agreed to pay a $2 million criminal penalty for these violations.

“After investigators uncovered criminal behavior, Morton worked with us to achieve a far-reaching agreement that is certain to improve the natural environment both in this Mississippi community and everywhere there is a Morton chemical plant,” said Lois J. Schiffer, Assistant Attorney General in charge of the environment at the Justice Department.

Morton produces plasticizers, synthetic rubber, rocket polymers, and other chemicals and adhesives at its facility in Jackson County, near the Escatawpa River. In 1996, an EPA inspector conducting an evaluation of the facility discovered what appeared to be falsified reports submitted to the MDEQ. Factories with permits issued under the Clean Water Act must periodically file these monitoring reports with regulators, indicating the types and amounts of pollutants they are discharging.

The EPA Criminal Investigation Division in Jackson and the FBI investigated the falsification of Morton’s discharge monitoring reports. In February 2000, Morton’s former environmental manager, Joe Magazzu, admitted that he falsified the reports and pleaded guilty to a felony Clean Water Act charge. The criminal investigation also led to the corporation’s guilty plea today in Biloxi.

“Besides falsifying data about its discharges of pollution, Morton also committed numerous civil violations of the clean air, clean water, and hazardous waste regulations,” said John H. Hankinson, Jr., EPA’s Regional Administrator for the Southeast. “Beyond the record penalty, we are requiring the company to make sure it is complying with every environmental law at all of its facilities nationwide. This joint enforcement action by the federal government and the State of Mississippi will protect the public and the environment, in Moss Point and across the country.”

The discovery of the falsified reports prompted the EPA and the MDEQ to launch
a joint investigation of the entire Moss Point facility, examining the company’s compliance with several state and federal environmental laws. This investigation revealed numerous civil violations of clean air, clean water, hazardous waste and other laws. These civil claims, described below, are settled in the consent decree lodged today in Biloxi.

The agencies found that Morton was disposing of several kinds of hazardous waste at its on-site landfill without a specific permit issued under the federal Resource Conservation and Recovery Act. These materials included waste ash, sludge, toluene and other hazardous wastes. In addition, regulators determined that Morton was disposing of hazardous wastes in deep injection wells, violating the facility’s underground injection facilities permit. Those hazardous wastes include toluene and methyl ethyl ketone, as well as other hazardous wastes.

Under federal law, a company that releases a specified amount of a hazardous substance into the environment is required to immediately notify the National Response Center. However, although Morton disposed of hazardous wastes into its landfill and injection wells on numerous occasions, the company failed to report these releases to the NRC, in violation of the Comprehensive Environmental Response, Compensation and Liability Act.

The company is also alleged to have violated the federal law that requires companies to report to the EPA each time they produce or release toxic chemicals in excess of an amount specified in the statute, the Emergency Planning and Community Right-to-Know Act. On several occasions between 1993 and 1995, Morton was found to have released methanol, methyl ethyl ketone, and toluene into the air and soil.

The United States and Mississippi also alleged that the Moss Point facility violated the Clear Air Act by building and operating a new boiler – increasing the amount of air pollution emitted – without first obtaining a permit. Mississippi’s state implementation plan under the Act requires that any new or significantly modified facility must have a permit before it begins operating.

The EPA and the MDEQ also determined that Morton had chronically violated the terms of its Clean Water Act permit, from 1991 to 1996, discharging excessive amounts of pollutants into the Escatawpa River.

"This cooperation between MDEQ, EPA, and the Department of Justice demonstrates our commitment to protect the citizens of the state of Mississippi and our resources of land, air, and water from willful environmental violators, regardless of where they live,” said Charles Chisolm, Executive Director of the Mississippi Department of Environmental Quality. “The settlement provides millions of dollars of assistance to the Moss Point community to further improve its environmental and community health."

Fact sheet also attached.

R-163 # # #

Morton International, Inc.: A wholly-owned subsidiary of Rohm & Haas since June 1999. Manufacturer of adhesives and specialty chemicals. Formerly headquartered in Chicago, Ill; 1999 sales over $2 billion; and 10,000 employees. Rohm & Haas is headquartered in Philadelphia, Pa.; 1999 sales of $6.5 billion; and 20,000-plus employees.

Significance of this Enforcement Action: Largest civil penalty ever collected for one facility and one of the largest ever collected by the Agency, reflecting the unprecedented extent of the violations. The corrective action at Moss Point will greatly reduce the risk to public health and the environment resulting from Morton’s poor environmental management of its facilities.
The additional environmental projects will benefit the surrounding residences of Moss Point, most of whom are minority and low income families. A national audit covering 23 Morton facilities is the largest third-party, multi-media audit ever undertaken as a result of an enforcement action.

Moss Point, MS, Facility: The violations were discovered at Morton’s facility in Moss Point, Miss., which employs approximately 250 people. The facility, which was established in 1952, produces liquid polysulfide and epoxy systems, polysulfide based coatings and sealants, rocket polymers and other chemicals and adhesives. The city of Moss Point is in the Central Gulf Basin about 10 miles inland from the Gulf of Mexico. Population of 18,000 people.

Co-Plaintiff: The Mississippi Department of Environmental Quality (MDEQ) has been a full partner in this enforcement action, providing significant and invaluable help in investigating and resolving the situation at Moss Point.

Violations: Thousands of violations of multiple environmental intended to protect public health and the environment. The most significant violations include: Resource Recovery and Conservation Act:
C abIllegal treatment, storage, and disposal of hazardous waste;
C abIllegal disposal of hazardous wastes into a landfill, including spent solvents, liquid wastes, and acutely toxic wastes;
C Poor maintenance and operation of the landfill leading to overflows during rain events and possible underground leaks;
C Acceptance of off-site hazardous waste without a permit; and
C Falsification of monitoring well reports concealing the possible release of hazardous wastes from closed hazardous waste lagoons.

Resource Recovery and Conservation Act/Safe Drinking Water Act:

C Illegal disposal of hazardous wastes into underground injection wells and improper operation and maintenance of those wells.

Clean Water Act:
C Falsification of nearly a hundred discharge monitoring reports, concealing hundreds of illegal discharges of pollutants to a local river, and more than 600 effluent limitation exceedances.

Clean Air Act:
C No pre-construction and operating permit, and no operation and maintenance log for a regulated source of air pollution

Emergency Planning, Community Right-to-Know Act; and the Comprehensive Environmental Response, Compensation, and Liability Act:

C Numerous unreported releases of hazardous waste to the environment.

How the Violations were Discovered: In early 1996, as part of a regular compliance inspection at the Moss Point facility, EPA investigators first discovered the possible widespread falsification of environmental documents at the Morton facility. An intensive joint MDEQ/EPA investigation ensued, which over the course of the next several years, revealed the full extent of the environmental problems at the Moss Point facility.

Settlement Terms:

1. Civil Penalty: $20 million, which is the largest single facility penalty ever collected by EPA; 50 percent goes to the state of Mississippi.

2. Injunctive Relief at Moss Point: RCRA investigation and corrective action at the facility to assess the extent of contamination and the potential for release of hazardous waste into the environment and to clean up the facility. The investigation will cost Morton several million dollars. Morton is also undertaking other actions to bring the facility into full compliance with all environmental laws, which will probably cost several million dollars more.

3. Environmental Management System: Morton will implement Rohm & Haas’s current environmental management system at the Moss Point facility and all 23 facilities covered by a national audit (see below).

4. National Audit of Morton Chemical Facilities: Morton will pay for a comprehensive, independent, third-party audit of all of its 23 chemical facilities located across the country (Illinois, Oklahoma, Michigan, Virginia, South Carolina, Kentucky, New Jersey, Massachusetts, Washington, Louisiana, Indiana, Pennsylvania, California, and Connecticut). The audit will cover compliance with all federally-enforceable environmental laws. At the conclusion of the audit at each facility, Morton will be required to develop a plan that sets forth how Morton will bring the facility into full compliance with all environmental laws promptly and address any environmental harm discovered as a result of the audit. The plans will be subject to approval by EPA. Morton may be liable for fines resulting from any violations discovered by the audits; though, EPA may reduce the gravity component of any penalty by 75 percent if there are no aggravating factors. The cost of the audits themselves may range from $25,000 to $50,000 per facility, for a total cost of $600,000 to $1.2 million.

5. Additional Environmental Projects ($16 million):

C $10 million to reduce the generation of wastes and to treat wastes more effectively at the facility, with the goal of eliminating the need for underground injection;

C $4 million to repair and replace sewer lines from private residences to the central Moss Point sewer system. The project would reduce chronic overloading of Moss Point region sewers.

C $2 million towards a research project at the University of Southern Mississippi, School of Polymer Science, in Hattiesburg, MS, to produce renewable and environmentally-friendly replacements for more hazardous chemicals.