Dow Chemical 2014 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
Tittabawassee River floodplain ("Floodplain") as an additional segment. In August 2014, the EPA proposed for public
comment the techniques that can be used to remedy the Floodplain, including proposed site specific clean-up criteria. In
January 2015, the Company and the EPA entered into an order to address remediation of the Floodplain. The remedial
work is expected to take place over the next six years. 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 - two separate orders to address remedial actions in
two of the nine geographic segments in the first Operable Unit and the order to address the Floodplain.
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 ("MOU") to provide a mechanism for the Company to fund
cooperative studies related to the assessment of natural resource damages. This MOU was amended and funding of
cooperative studies was extended until March 2014. All cooperative studies have been completed. 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, 2014, the accrual for these off-site matters was $62 million (included in the total accrued obligation of
$706 million). At December 31, 2013, the Company had an accrual for these off-site matters of $47 million (included in the
total accrued obligation of $722 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, and use of pesticides containing dibromochloropropane (“DBCP”)
have 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.