Dow Chemical 2009 Annual Report Download - page 152

Table of Contents
Attached to the AOC is language of a proposed modification to the License, which was issued for a sixty day public comment period on February 4,
2010. If approved, the modification will provide that work completed under the AOC satisfies the comparable License requirement, unless the State
invokes the dispute resolution mechanism set forth in the AOC.
Corrective action obligations with respect to the City of Midland remain under the oversight of the State under the Resource Conservation Recovery
Act (“RCRA”) License. The Company and the State are in ongoing discussions regarding the implementation of these corrective action requirements.
Alternative Dispute Resolution Process
The Framework contemplates that the Company, the State and other federal and tribal governmental entities negotiate the terms of an agreement or
agreements to resolve potential governmental claims against the Company related to historical off-site contamination associated with the Midland site. The
Company and the governmental parties began to meet in the fall of 2005 and entered into a Confidentiality Agreement in December 2005. The Company
continues to conduct negotiations with the governmental parties under the Federal Alternative Dispute Resolution Act.
On September 12, 2007, the EPA issued a press release reporting that they were withdrawing from the alternative dispute resolution process. On
September 28, 2007, the Company entered into a Funding and Participation Agreement with the natural resource damage trustees that addressed the
Company’s payment of past costs incurred by the trustees, payment of the costs of a trustee coordinator and a process to review additional cooperative
studies that the Company might agree to fund or conduct with the natural resource damage trustees. On March 18, 2008, the Company and the natural
resource damage trustees entered into a Memorandum of Understanding to provide a mechanism for the Company to fund cooperative studies related to
the assessment of natural resource damages. On April 7, 2008, the natural resource damage trustees released their “Natural Resource Damage Assessment
Plan for the Tittabawassee River System Assessment Area.”
At December 31, 2009, the Company had an accrual for off-site corrective action of $25 million (included in the total accrued obligation of
$619 million). At December 31, 2008, the accrual for off-site corrective action was $8 million (included in the total accrued obligation of $312 million at
December 31, 2008).
Environmental Matters Summary
It is the opinion of the Company’s management that the possibility is remote that costs in excess of those disclosed will have a material adverse impact on the
Company’s consolidated financial statements.
Asbestos-Related Matters of Union Carbide Corporation
Union Carbide Corporation (“Union Carbide”), a wholly owned subsidiary of the Company, is and has been involved in a large number of asbestos-related
suits filed primarily in state courts during the past three decades. These suits principally allege personal injury resulting from exposure to asbestos-containing
products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that Union Carbide sold in the past, alleged
exposure to asbestos-containing products located on Union Carbide’s premises, and Union Carbide’s responsibility for asbestos suits filed against a former
Union Carbide subsidiary, Amchem Products, Inc. (“Amchem”). In many cases, plaintiffs are unable to demonstrate that they have suffered any
compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to Union Carbide’s products.
Influenced by the bankruptcy filings of numerous defendants in asbestos-related litigation and the prospects of various forms of state and national
legislative reform, the rate at which plaintiffs filed asbestos-related suits against various companies, including Union Carbide and Amchem, increased in
2001, 2002 and the first half of 2003. Since then, the rate of filing has significantly abated. Union Carbide expects more asbestos-related suits to be filed
against Union Carbide and Amchem in the future, and will aggressively defend or reasonably resolve, as appropriate, both pending and future claims.
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