DuPont 2008 Annual Report Download - page 45

Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations, continued
Total expenditures for previously accrued remediation activities under CERCLA, RCRA and similar state laws were
$81 million, $68 million and $64 million in 2008, 2007 and 2006, respectively.
Remediation Accruals
At December 31, 2008, the Consolidated Balance Sheets included an accrued liability of $379 million compared to
$357 million at December 31, 2007. Considerable uncertainty exists with respect to environmental remediation costs
and, under adverse changes in circumstances, potential liability may range up to two to three times the amount
accrued as of December 31, 2008. Of the $379 million accrued liability, approximately 8 percent was reserved for
non-U.S. facilities. Approximately 69 percent of the reserve balance was attributable to RCRA and similar
remediation liabilities, while about 23 percent was attributable to CERCLA liabilities. Remediation accruals of
$103 million, $76 million and $71 million were added to the reserve in 2008, 2007 and 2006, respectively.
Facility Security
DuPont recognizes that the security and safety of its operations are critical to its employees, neighbors and, indeed,
to the future of the company. As such, the company has merged chemical site security into its safety core value
where it serves as an integral part of its long standing safety culture. Physical security measures have been
combined with process safety measures (including the use of inherently safer technology), administrative
procedures and emergency response preparedness into an integrated security plan. The company has
conducted vulnerability assessments at operating facilities in the U.S. and high priority sites worldwide and
identified and implemented appropriate measures to protect these facilities from physical or cyber attacks.
DuPont is partnering with carriers, including railroad, shipping and trucking companies, to secure chemicals in
transit.
In April 2007, the Department of Homeland Security (DHS) issued an interim final rule (Rule) that establishes risk-
based performance standards for the security of U.S. chemical facilities. Covered chemical facilities are required to
prepare Security Vulnerability Assessments that identify facility security vulnerabilities and to develop and
implement Site Security Plans that include measures satisfying the identified risk-based performance
standards. The Rule contains associated provisions addressing inspections and audits, recordkeeping, and the
protection of information that constitutes Chemical-terrorism Vulnerability Information. DHS can seek compliance
through the issuance of Orders, including Orders Assessing Civil Penalty and Orders for the Cessation of
Operations.
In November of 2007, DHS finalized the list of chemicals regulated by the Rule and required facilities that have those
chemicals in specified quantities to register with DHS. DuPont’s U.S. facilities have submitted this information and in
June of 2008 DHS notified those facilities that were determined to be covered by the Rule’s security requirements.
DuPont facilities that were notified by DHS conducted and submitted security vulnerability assessments to DHS.
Once DHS has reviewed and approved those assessments, it will work with the company to establish security
expectations specific to each facility. DuPont has already devoted substantial effort and resources in assessing
security vulnerabilities and taking steps to reinforce security at its chemical manufacturing facilities. Until each facility
develops and receives DHS approval for its site security plan, specific requirements can not be determined and
considerable uncertainty exists regarding estimates for future capital expenditures. However, based on guidance
issued by DHS regarding its risk-based performance standards, it is expected that new security measures will need
to be implemented at the regulated facilities and that capital costs to implement such measures over the next three
years will be about $50 million.
PFOA
DuPont manufactures fluoropolymer resins and dispersions as well as fluorotelomers, marketing many of them
under the Teflon», Capstone
TM
and Zonyl»brands. The fluoropolymer resins and dispersions businesses are part of
the Electronic & Communication Technologies segment; the fluorotelomers business is part of the Safety &
Protection segment.
Fluoropolymer resins and dispersions are high-performance materials with many end uses including architectural
fabrics, telecommunications and electronic wiring insulation, automotive fuel systems, computer chip processing
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Part II