Alcoa 2011 Annual Report Download - page 45

assessed for the year 2005, it is possible that the EC could extend its investigation to later years. If the EC’s
investigation concludes that the regulated electricity tariffs for industries are unlawful, Alcoa will have an opportunity
to challenge the decision in the EU courts.
Environmental Matters
Alcoa is involved in proceedings under the Comprehensive Environmental Response, Compensation and Liability Act,
also known as Superfund (CERCLA) or analogous state provisions regarding the usage, disposal, storage or treatment
of hazardous substances at a number of sites in the U.S. The company has committed to participate, or is engaged in
negotiations with federal or state authorities relative to its alleged liability for participation, in clean-up efforts at
several such sites. The most significant of these matters, including the remediation of the Grasse River in Massena,
NY, are discussed in the Environmental Matters section of Note N to the Consolidated Financial Statements under the
caption “Environmental Matters” on pages 114-117.
As previously reported, representatives of various U.S. federal and state agencies and a Native American tribe, acting
in their capacities as trustees for natural resources (Trustees), have asserted that Alcoa and Reynolds Metals Company
(Reynolds) may be liable for loss or damage to such resources under federal and state law based on Alcoa’s and
Reynolds’ operations at their Massena, New York and St. Lawrence, New York facilities. While formal proceedings
have not been instituted, the company has continued to actively investigate these claims. Pursuant to an agreement
entered into with the Trustees in 1991, Alcoa and Reynolds had been working cooperatively with General Motors
Corporation, which is facing similar claims by the Trustees, to assess potential injuries to natural resources in the
region. With the bankruptcy of General Motors in 2009, Motors Liquidation Company (MLC) took over General
Motors’ liability in this matter. In September 2009, MLC notified Alcoa and the Trustees that it would no longer
participate in the cooperative process. Alcoa and the Trustees agreed to continue to work together cooperatively
without MLC to resolve Alcoa’s and Reynolds’ natural resources damages liability in this matter. In January 2011, the
Trustees, representing the United States, the State of New York and the Mohawk tribe, and Alcoa reached an
agreement in principle to resolve the natural resource damage claims. The agreement is subject to final approval of the
respective parties and will be subject to a federal court approved consent decree, including public notice and comment.
Any upward adjustment in the remediation reserve would be taken in connection with the finalization of the settlement
agreement.
As previously reported, in August 2005, Dany Lavoie, a resident of Baie Comeau in the Canadian Province of Québec,
filed a Motion for Authorization to Institute a Class Action and for Designation of a Class Representative against Alcoa
Canada Inc., Alcoa Limitée, Societe Canadienne de Metaux Reynolds Limitée and Canadian British Aluminum in the
Superior Court of Québec in the District of Baie Comeau. Plaintiff seeks to institute the class action on behalf of a
putative class consisting of all past, present and future owners, tenants and residents of Baie Comeau’s St. Georges
neighborhood. He alleges that defendants, as the present and past owners and operators of an aluminum smelter in Baie
Comeau, have negligently allowed the emission of certain contaminants from the smelter, specifically Polycyclic
Aromatic Hydrocarbons or “PAHs”, that have been deposited on the lands and houses of the St. Georges neighborhood
and its environs causing damage to the property of the putative class and causing health concerns for those who inhabit
that neighborhood. Plaintiff originally moved to certify a class action, sought to compel additional remediation to be
conducted by the defendants beyond that already undertaken by them voluntarily, sought an injunction against further
emissions in excess of a limit to be determined by the court in consultation with an independent expert, and sought
money damages on behalf of all class members. In May 2007, the court authorized a class action suit to include only
people who suffered property damage or personal injury damages caused by the emission of PAHs from the smelter. In
September 2007, the plaintiff filed his claim against the original defendants, which the court had authorized in May.
Alcoa has filed its Statement of Defense and plaintiff has filed an Answer to that Statement. Alcoa also filed a Motion
for Particulars with respect to certain paragraphs of plaintiff’s Answer and a Motion to Strike with respect to certain
paragraphs of plaintiff’s Answer. In late 2010, the Court denied these motions. 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, in January 2006, in Musgrave v. Alcoa, et al, Warrick Circuit Court, County of Warrick,
Indiana; 87-C01-0601-CT-0006, Alcoa Inc. and a subsidiary were sued by an individual, on behalf of himself and all
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