DuPont 2011 Annual Report Download - page 73

Table of Contents E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
PFOA
DuPont uses PFOA (collectively, perfluorooctanoic acids and its salts, including the ammonium salt), as a processing aid to manufacture fluoropolymer resins
and dispersions at various sites around the world including its Washington Works plant in West Virginia. At December 31, 2011, DuPont has accruals of $16
related to the PFOA matters discussed below.
The accrual includes charges related to DuPont's obligations under agreements with the U.S. Environmental Protection Agency and voluntary commitments to
the New Jersey Department of Environmental Protection. These obligations include surveying, sampling and testing drinking water in and around the
company's Washington Works site and offer treatment or an alternative supply of drinking water if tests indicate the presence of PFOA in drinking water at or
greater than the national Provisional Health Advisory.
Drinking Water Actions
In August 2001, a class action, captioned Leach v DuPont, was filed in West Virginia state court alleging that residents living near the Washington Works
facility had suffered, or may suffer, deleterious health effects from exposure to PFOA in drinking water.
DuPont and attorneys for the class reached a settlement in 2004 that binds about 80,000 residents. In 2005, DuPont paid the plaintiffs’ attorneys’ fees and
expenses of $23 and made a payment of $70, which class counsel designated to fund a community health project. The company is also funding a series of
health studies by an independent science panel of experts (the “C8 Science Panel”) in the communities exposed to PFOA to evaluate available scientific
evidence on whether any probable link exists between exposure to PFOA and human disease. The company expects the C8 Science Panel to complete these
health studies through July 2012 at a total estimated cost of $33.
In December 2011, the C8 Science Panel announced that on the basis of epidemiologic and other scientific data available to it, the panel has concluded that
there is a probable link, as defined in the settlement agreement, between exposure to PFOA and pregnancy-induced hypertension, which includes
preeclampsia. A panel of medical experts will determine an appropriate medical monitoring protocol, if any, as a result of this finding. If a medical monitoring
protocol is defined, DuPont is required to fund a medical monitoring program to pay for such medical testing. Plaintiffs may pursue personal injury claims
against DuPont only for those human disease(s) for which the C8 Science Panel determines a probable link exists once the C8 Science Panel completes its
work. In January 2012, the company put $1 in an escrow account as required by the settlement agreement. The company will reassess its liability based on the
medical monitoring panel's determination since costs are not reasonably estimable until a medical monitoring protocol, if any, is identified. The company will
continue to reassess its liability based on the C8 Science Panel's future probable link findings, if any, and associated medical monitoring protocols, if any.
Under the settlement agreement, the company's total obligation to pay for medical monitoring cannot exceed $235. In addition, the company must continue to
provide state-of-the-art water treatment systems designed to reduce the level of PFOA in water to six area water districts, including the Little Hocking Water
Association (LHWA), and private well users.
During the fourth quarter 2011, the company reached final resolution of three actions brought by or on behalf of water district customers. The West Virginia
action was resolved in DuPont's favor when the U.S. Supreme Court refused in October to hear plaintiffs' appeal. The two consolidated New Jersey actions
were finally resolved with the settlement payment of $8.3 in October 2011. The pending Ohio action was brought by the LHWA and is currently in discovery.
In addition to general claims of PFOA contamination of drinking water, the action claims “imminent and substantial endangerment to health and or the
environment” under the Resource Conservation and Recovery Act (RCRA). DuPont denies these claims and is defending itself vigorously.
While DuPont believes that it is reasonably possible that it could incur losses related to PFOA matters in addition to those matters discussed above for which
it has established accruals, a range of such losses, if any, cannot be reasonably estimated at this time.
Environmental
The company is also subject to contingencies pursuant to environmental laws and regulations that in the future may require the company to take further action
to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the company or other parties. The
company accrues for environmental remediation activities consistent with the policy set forth in Note 1. Much of this liability results from the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA, often referred to as Superfund), RCRA and similar state and global laws. These laws
require the company to undertake certain investigative, remediation and restoration activities at sites where the company conducts or once conducted
operations or at sites where company-generated waste was disposed. The accrual also includes estimated costs related to a number of sites identified by the
company for which it is probable that environmental remediation will be required, but which are not currently the subject of enforcement activities.
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