Multi-million settlement is a drop in Passaic River cleanup project cost

The federal government is celebrating a $150 million settlement that was reached with 85 potentially responsible parties toward the cleanup of hazardous substances discharged into the Lower Passaic River, which is expected to cost $1.7 billion.

A lawsuit was filed on December 16, 2022, seeking damages from 85 corporate defendants for contamination of the Lower Passaic River caused by the production of Agent Orange, the herbicide used by the U.S. military during the Vietnam War that contained a dangerous chemical called dioxin.

While Senator Cory Booker once called the Passaic River a crime scene, the Department of Justice and the Environmental Protection Agency (EPA) announced a proposed consent decree with 85 potentially responsible parties, requiring them to pay a total of $150 million to support the cleanup work and resolve their liability for discharging hazardous substances into the Lower Passaic River, which is part of the Diamond Alkali Superfund Site.

“The Diamond Alkali Company and other corporate predecessors of Occidental Chemical Company operated a manufacturing facility located at 80 Lister Avenue in Newark, New Jersey, which produced, among other products, the defoliant chemical known as ‘Agent Orange.’ A byproduct of the manufacturing processes was 2,3,7,8-TCDD (2,3,7,8 tetrachlorodibenzo-p-dioxin, or ‘dioxin’), which was released into the Passaic River,” according to the complaint.

Production of Agent Orange ended in the 1970s and is no longer in use but the dioxin contaminant continues to have a harmful impact today. As many Vietnam-era veterans know, dioxin is a highly toxic and persistent organic pollutant linked to cancers, diabetes, birth defects, and other disabilities.

The EPA proposed to remove 4.3 million cubic yards of toxic mud from an eight-mile stretch of the river bottom in 2014 but in 2016, the agency scaled that back to a $1.4 billion plan to dredge more than 3.5 million cubic yards of sediment loaded with chemicals, pesticides, heavy metals, and other contaminants.

Occidental Chemical Corporation was found to be responsible for pollution discharged from the former Diamond Alkali pesticides manufacturing plant that operated in Newark from the 1940s to the 1960s.

On September 30, 2016, EPA entered into a $165 million settlement agreement with Occidental to perform engineering and design work needed to begin the cleanup of the lower 8.3 miles of the lower Passaic River.

EPA was given the power to seek out parties responsible for any release and assure their cooperation in the cleanup by the Comprehensive Environmental Response, Compensation, and Liability Act—otherwise known as CERCLA — which provides a federal “Superfund” to clean up uncontrolled or abandoned hazardous-waste sites as well as other releases of pollutants into the environment.

The lower 8.3 miles of the Lower Passaic River are located in a highly developed urban area that includes commercial, industrial, residential, and recreational use and it was polluted over a period of decades by industrial activities.

Among the defendants is Alden Leeds, Inc., a New Jersey swimming pool and spa chemicals company, which was sentenced along with its president, Mark Epstein, in U.S. District Court for convictions related to customs and import violations.

Epstein was sentenced to serve eight months in prison and four months of home confinement for his role in an elaborate rebate scheme that involved false statements to U.S. Customs, followed by inflated payments for imported chemicals and then rebates paid back to Alden Leeds, Inc. The company was also sentenced, receiving three years of probation and ordered to pay restitution to Customs in the amount of $2.25 million.

Alliance Chemical, another one of the defendants, was cited as long ago as 1966 in what federal officials described as “a nightmare for leakage” in the same area covered by the current EPA action.

Also among the defendants are Arkema Inc., a $10 billion multinational corporation based in France whose forebearers have been producing chemicals since 1850; Ashland Inc., a $5 billion American chemical company with operations in more than 100 countries; Atlantic Richfield Company (ARCO), former oil corporation currently owned by Marathon Petroleum; Atlas Refinery Inc., a Newark-based chemicals company; and BASF, the $100 billion German multinational that is the largest chemical producer in the world.

Celanese, Chevron, CNA Holdings, Coats & Clark, Congoleum Corporation, Conopco, Inc., doing business as Unilever;

Diamond Alkali was largely responsible for contamination leading to the creation of a Superfund Site in the Ironbound section of Newark.

Between 1951 and 1969, Diamond Alkali in Newark produced about 700,000 gallons of the herbicide Agent Orange. The plant had a reputation for accidents and frequently dumped “bad” batches of the herbicide into the Passaic River.

Between March 1951 and August 1969, the Diamond Alkali Company operated a manufacturing facility located at 80 Lister Avenue in Newark, New Jersey, which produced, among other products, DDT; 2,4-D; 2,4,5-TCP, and 2,4,5-T.

A byproduct of the manufacturing process was 2,3,7,8-TCDD , which was released into the Passaic River.

Production activities at the Diamond Alkali facility ceased in August 1969.

The former plant property and adjoining portions of the Lower Passaic River were declared a Superfund site in 1984.

In 1986, the Diamond Shamrock Corporation agreed to pay $150,000 for a canvas tarpaulin to cover 3 acres of the contaminated area.

Remediation efforts at Diamond Alkali began in 2000 and ecological investigation, dredging, and other cleanup activities are still underway.

In 1967, Diamond Alkali and Shamrock Oil and Gas merged to form the Diamond Shamrock Corporation, which would go on to merge with Ultramar Corporation, and the combined company, Ultramar Diamond Shamrock Corporation, would, in turn, be acquired by Valero Energy Corporation in 2001.

EPA has stated that the site is not ready for reuse and redevelopment.

New Jersey has thousands of the nation’s most toxic sites, some of which have been slated for the cleanup activity for decades.

Approximately 70 percent of Superfund cleanup activities historically have been paid for by the potentially responsible parties, reflecting the polluter pays principle.

However, 30 percent of the time a responsible party either cannot be found or is unable to pay for the cleanup. In these circumstances, taxpayers had been paying for the cleanup operations.

Through the 1980s, most of the funding came from an excise tax on petroleum and chemical manufacturers but, in 1995, the Republican-controlled Congress refused to renew the tax and the burden of the cost was shifted to taxpayers.

Since 2001, most hazardous waste site cleanups have been financed through taxpayers generally.

Despite its name, the program suffered from underfunding, and by 2014 Superfund National Priorities List (NPL) cleanups had decreased to only 8 sites, out of over 1,200.

The Infrastructure Investment and Jobs Act (IIJA), signed by President Joe Biden on Nov. 15, 2021, revives the Superfund excise tax on chemical manufacturers last effective in 1995, but only through December 31, 2031.

In November 2022, EPA Administrator Michael S. Regan said the agency deployed more than $1 billion for cleanup activities at more than 100 of the most polluted Superfund sites in the country.