Dow Chemical 2013 Annual Report Download - page 124

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Tittabawassee and Saginaw Rivers, Saginaw Bay
The Company, the U.S. Environmental Protection Agency (“EPA”) and the State of Michigan ("State") entered into an
administrative order on consent (“AOC”), effective January 21, 2010, that requires the Company to conduct a remedial
investigation, a feasibility study and a remedial design for the Tittabawassee River, the Saginaw River and the Saginaw
Bay, and pay the oversight costs of the EPA and the State under the authority of the Comprehensive Environmental
Response, Compensation, and Liability Act (“CERCLA”). These actions, to be conducted under the lead oversight of the
EPA, will build upon the investigative work completed under the State Resource Conservation Recovery Act (“RCRA”)
program from 2005 through 2009. The Tittabawassee River, beginning at the Midland Site and extending down to the first
six miles of the Saginaw River, are designated as the first Operable Unit for purposes of conducting the remedial
investigation, feasibility study and remedial design work. This work will be performed in a largely upriver to downriver
sequence for eight geographic segments of the Tittabawassee and upper Saginaw Rivers. In the first quarter of 2012, the
EPA requested the Company address the Tittabawasee River floodplain as an additional segment. The remainder of the
Saginaw River and the Saginaw Bay are designated as a second Operable Unit and the work associated with that unit may
also be geographically segmented. The AOC does not obligate the Company to perform removal or remedial action; that
action can only be required by a separate order. The Company and the EPA will be negotiating orders separate from the
AOC that will obligate the Company to perform remedial actions under the scope of work of the AOC. The Company and
the EPA have entered into three separate orders to perform limited remedial actions to implement early actions. In addition,
the Company and the EPA have entered into two separate orders to address remedial actions in two of the nine geographic
segments in the first Operable Unit.
Alternative Dispute Resolution Process
The Company, the EPA, the U.S. Department of Justice, and the natural resource damage trustees (which include the
Michigan Office of the Attorney General, the MDEQ, the U.S. Fish and Wildlife Service, the U.S. Bureau of Indian Affairs
and the Saginaw-Chippewa tribe) have been engaged in negotiations to seek to resolve potential governmental claims
against the Company related to historical off-site contamination associated with the City of Midland, the Tittabawassee and
Saginaw Rivers and the Saginaw Bay. The Company and the governmental parties started meeting in the fall of 2005 and
entered into a Confidentiality Agreement in December 2005. The Company continues to conduct negotiations under the
Federal Alternative Dispute Resolution Act with all of the governmental parties, except the EPA which withdrew from the
alternative dispute resolution process on September 12, 2007.
On September 28, 2007, the Company and the natural resource damage trustees entered into a Funding and Participation
Agreement that addressed the Company’s payment of past costs incurred by the natural resource damage 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. This Memorandum of Understanding was
amended and extended until March 2014. 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, 2013, the accrual for these off-site matters was $47 million (included in the total accrued obligation of
$722 million). At December 31, 2012, the Company had an accrual for these off-site matters of $42 million (included in the
total accrued obligation of $754 million).
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 impact on the Company’s results of operations, financial condition or cash flows.
Litigation
DBCP Matters
Numerous lawsuits have been brought against the Company and other chemical companies, both inside and outside of the
United States, alleging that the manufacture, distribution or use of pesticides containing dibromochloropropane (“DBCP”) has
caused personal injury and property damage, including contamination of groundwater. It is the opinion of the Company’s
management that the possibility is remote that the resolution of such lawsuits will have a material impact on the Company’s
consolidated financial statements.
Asbestos-Related Matters of Union Carbide Corporation
Introduction
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