Alcoa 2009 Annual Report Download - page 43

plaintiff and defendant SCRG entered into a settlement agreement resolving claims against SCRG. Plaintiff filed a
notice of dismissal with the court, and the court entered an order dismissing SCRG on November 2, 2007. SCA
objected to the dismissal and requested that the court withdraw its order, and the parties have briefed SCA’s objection
and request. A decision from the court is pending. On November 10, 2007, SCA filed a motion for summary judgment
seeking dismissal of all claims in the case. The parties completed briefing of the motion in January 2008. A decision
from the court is pending. At this stage of the proceeding, the company is unable to reasonably predict an outcome or
to estimate a range of reasonably possible loss.
As previously reported, on December 8, 2008, Alcoa of Australia Limited (AofA) received a notice of prosecution in
connection with a dust event that allegedly occurred on May 14, 2006 near AofA’s Wagerup alumina refinery’s residue
storage areas. The prosecution was purported to be undertaken pursuant to section 49(2) of the Environmental
Protection Act 1986 (Western Australia) (the “Act”) which provides that a person who, with criminal negligence,
causes or allows pollution to be caused, commits an offense. The maximum potential penalty under the original charge
was $1,000,000 (AUD). On July 23, 2009, AofA entered a plea of “not guilty” to the charge of causing pollution with
criminal negligence. Subsequently, on November 24, 2009, the government amended the charge to remove the
allegations of criminal negligence and instead now alleges that Alcoa has “allowed pollution to be caused” in violation
of section 49(3) of the Act. The maximum potential penalty under the amended charge is $500,000 (AUD). Alcoa has
maintained its plea of “not guilty” to the amended charge, and the trial in this matter is scheduled to commence on
August 16, 2010. This litigation is in its preliminary stages and the company is unable to reasonably predict an
outcome.
In December 2009, Alcoa Alumínio S.A. (Alumínio) received information that a lawsuit had been filed by the public
prosecutors of the State of Para in Brazil. The suit apparently names the company and the State of Para, which, through
its Environmental Agency, had issued the operating license for the company’s new bauxite mine in Juruti. The claims
in the suit appear to call into question the validity of the Juruti licensing process and operating license. Alumínio has
not received a copy of the subpoena and, therefore, has not had access to the full details of the suit, but it is believed
that the public prosecutors seek suspension of the operating license issued by the State of Para Environmental Agency,
costs to remedy alleged damage and monetary fines. The company believes that in all respects it is in compliance with
all terms of its license and the law, but is communicating with the responsible officials and stakeholders to assess
exposure related to the matter. This proceeding is in its preliminary stage and the company is unable to reasonably
predict an outcome or to estimate a range of reasonably possible loss.
Other Matters
As previously reported, along with various asbestos manufacturers and distributors, Alcoa and its subsidiaries as
premises owners are defendants in several hundred active lawsuits filed on behalf of persons alleging injury
predominantly as a result of occupational exposure to asbestos at various company facilities. In addition, an Alcoa
subsidiary company has been named, along with a large common group of industrial companies, in a pattern complaint
where the company’s involvement is not evident. Since 1999, several thousand such complaints have been filed. To
date, the subsidiary has been dismissed from almost every case that was actually placed in line for trial. Alcoa, its
subsidiaries and acquired companies, all have had numerous insurance policies over the years that provide coverage for
asbestos based claims. Many of these policies provide layers of coverage for varying periods of time and for varying
locations. Alcoa believes that between its reserves and insurance it is adequately covered for its known asbestos
exposure related liabilities. The costs of defense and settlement have not been and are not expected to be material to the
financial condition of the company.
As previously reported, in July 2006, the European Commission (EC) announced that it had opened an investigation to
establish whether an extension of the regulated electricity tariff granted by Italy to some energy-intensive industries
complies with European Union (EU) state aid rules. The Italian power tariff extended the tariff that was in force until
December 31, 2005 through November 19, 2009 (Alcoa incurred higher power costs of $23 million pretax at its
smelters in Italy between the tariff end date and December 31, 2009). The extension was originally through 2010, but
the date was changed by legislation adopted by the Italian Parliament effective on August 15, 2009. Prior to expiration
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