Alcoa 2012 Annual Report Download - page 57

December 3, 2013. In the meantime, in December 2009, Alcoa Trasformazioni S.r.l. and Ligestra reached an initial
agreement for settlement of the liabilities related to Fusina. The settlement would also allow Alcoa to settle the 2006
civil suit by the MOE and MOPW for the environmental damages pending before the Civil Court of Venice. The
agreement outlines an allocation of payments to the MOE for emergency action and natural resource damages and the
scope and costs for a proposed soil remediation. In February 2011, a further and more detailed settlement relating to
Fusina was reached, allocating 80% and 20% of the remediation costs to Ligestra and Alcoa, respectively. Later in
2011, Alcoa and Ligestra signed a similar agreement relating to the Portovesme site. The agreements are contingent
upon final acceptance of the remediation project by the MOE. A proposed soil remediation project for Portovesme was
formally presented to the MOE in June 2012. To provide time for settlement with Ligestra, the Minister of
Environment and Alcoa jointly requested and the Civil Court of Venice has granted a series of postponements of
hearings in the Venice trial, assuming that the case will be closed. The last hearing was fixed for March 25, 2013.
Alcoa is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss beyond what is
described in Footnote N for several reasons. First, the MOE has not yet approved the remediation plans. The Company
understands that the MOE has substantial discretion in defining what must be managed under the Italian soils law. The
availability of appropriate landfills must also be considered as well as the nature of these sites. As a result, the scope
and cost of the final remediation plans remain uncertain. Secondly, in the case in which the plan is not approved and
the settlement with Ligestra becomes void, Alcoa should be held responsible only for its share of pollution, but the area
is impacted by many sources of pollution, as well as historical pollution. Consequently, the allocation of liabilities
would need a very complex technical evaluation by the authorities that has not yet been performed.
As previously reported, on November 30, 2010, Alcoa Alumínio S.A. (Alumínio) received service of a lawsuit that had
been filed by the public prosecutors of the State of Pará in Brazil in November 2009. The suit names the Company and
the State of Pará, which, through its Environmental Agency, had issued the operating license for the Company’s new
bauxite mine in Juruti. The suit concerns the impact of the project on the region’s water system and alleges that certain
conditions of the original installation license were not met by the Company. In the lawsuit, plaintiffs requested a
preliminary injunction suspending the operating license and ordering payment of compensation. On April 14, 2010, the
court denied plaintiffs’ request. Alumínio presented its defense in March 2011, on grounds that it was in compliance
with the terms and conditions of its operating license, which included plans to mitigate the impact of the project on the
region’s water system. In April, 2011, the State of Pará defended itself in the case asserting that the operating license
contains the necessary plans to mitigate such impact, that the State monitors the performance of Aluminio’s obligations
arising out of such license, that the licensing process is valid and legal, and that the suit is meritless. The Company’s
position is that any impact from the project had been fully repaired when the suit was filed. The Company also believes
that Jará Lake has not been affected by any project activity and any evidence of pollution from the project would be
unreliable. Following the preliminary injunction, the plaintiffs have taken no further action. The Company is not
certain whether or when the action will proceed. Given that this proceeding is in its preliminary stage and the current
uncertainty in this case, the Company is unable to reasonably predict an outcome or to estimate a range of reasonably
possible loss.
As previously reported, by an amended complaint filed April 21, 2005, Alcoa Global Fasteners, Inc. was added as a
defendant in Orange County Water District (OCWD) v. Northrop Corporation, et al., civil action 04cc00715 (Superior
Court of California, County of Orange). OCWD alleges contamination or threatened contamination of a drinking water
aquifer by Alcoa, certain of the entities that preceded Alcoa at the same locations as property owners and/or operators,
and other current and former industrial and manufacturing businesses that operated in Orange County in past decades.
OCWD seeks to recover the cost of aquifer remediation and attorney’s fees. Trial on statutory, non-jury claims
commenced on February 10, 2012, and continued through September 2012 when the case was submitted to the court
for decision. On December 11, 2012, the court issued its tentative ruling in the matter dismissing plaintiff OCWD’s
remaining statutory claims against all defendants. The court’s tentative ruling also invited further briefing on the
decision and it is subject to modification. On January 21, 2013, defendants filed a joint brief responding to ten specific
questions posed by the court’s tentative ruling. The joint brief argued that the court should make further findings of fact
and law in favor of the defendants in response to the ten questions. Alcoa Global Fasteners, Inc. also filed a separate
brief on two of the questions arguing that the court should determine that it is neither a cause of ground water
contamination nor a cause of plaintiffs’ incurred costs. A hearing is scheduled on February 28, 2013. A final decision
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