PBF Energy 2013 Annual Report Download - page 36

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Our operations could be disrupted if our information systems are hacked or fail, causing increased expenses
and loss of sales.
Our business is highly dependent on financial, accounting and other data processing systems and other
communications and information systems, including our enterprise resource planning tools. We process a large
number of transactions on a daily basis and rely upon the proper functioning of computer systems. If a key system
was hacked or otherwise interfered with by an unauthorized access, or was to fail or experience unscheduled
downtime for any reason, even if only for a short period, our operations and financial results could be affected
adversely. Our systems could be damaged or interrupted by a security breach, fire, flood, power loss,
telecommunications failure or similar event. We have a formal disaster recovery plan in place, but this plan may
not prevent delays or other complications that could arise from an information systems failure. Further, our business
interruption insurance may not compensate us adequately for losses that may occur.
Product liability claims and litigation could adversely affect our business and results of operations.
Product liability is a significant commercial risk. Substantial damage awards have been made in certain
jurisdictions against manufacturers and resellers based upon claims for injuries and property damage caused by
the use of or exposure to various products. Failure of our products to meet required specifications or claims that
a product is inherently defective could result in product liability claims from our shippers and customers, and also
arise from contaminated or off-specification product in commingled pipelines and storage tanks and/or defective
fuels. Product liability claims against us could have a material adverse effect on our business or results of operations.
We may incur significant liability under, or costs and capital expenditures to comply with, environmental and
health and safety regulations, which are complex and change frequently.
Our operations are subject to federal, state and local laws regulating, among other things, the handling of
petroleum and other regulated materials, the emission and discharge of materials into the environment, waste
management, and remediation of discharges of petroleum and petroleum products, characteristics and composition
of gasoline and distillates and other matters otherwise relating to the protection of the environment. Our operations
are also subject to extensive laws and regulations relating to occupational health and safety.
We cannot predict what additional environmental, health and safety legislation or regulations may be adopted
in the future, or how existing or future laws or regulations may be administered or interpreted with respect to our
operations. Many of these laws and regulations are becoming increasingly stringent, and the cost of compliance
with these requirements can be expected to increase over time.
Certain environmental laws impose strict, and in certain circumstances, joint and several, liability for costs
of investigation and cleanup of such spills, discharges or releases on owners and operators of, as well as persons
who arrange for treatment or disposal of regulated materials at, contaminated sites. Under these laws, we may
incur liability or be required to pay penalties for past contamination, and third parties may assert claims against
us for damages allegedly arising out of any past or future contamination. The potential penalties and clean-up costs
for past or future releases or spills, the failure of prior owners of our facilities to complete their clean-up obligations,
the liability to third parties for damage to their property, or the need to address newly-discovered information or
conditions that may require a response could be significant, and the payment of these amounts could have a material
adverse effect on our business, financial condition and results of operations.
Furthermore, our Delaware City refinery and our Delaware City Rail Terminal are located in Delaware's
coastal zone where certain activities are regulated under the Delaware Coastal Zone Act and closely monitored by
environmental interest groups. On June 14, 2013, two administrative appeals were filed by the Sierra Club and
Delaware Audubon regarding a permit Delaware City Refining Company LLC (“DCR”) obtained to allow loading
of crude oil onto barges. The appeals allege that both the loading of crude oil onto barges and the operation of the
Delaware City rail unloading terminal violate Delaware’s Coastal Zone Act. The first appeal is Number 2013-1
before the State Coastal Zone Industrial Control Board (the “CZ Board”), and the second appeal is before the
Environmental Appeals Board and appeals Secretary’s Order No. 2013-A-0020. The CZ Board held a hearing on
the first appeal on July 16, 2013, and ruled in favor of DCR and the State of Delaware and dismissed the Appellants’