Occidental to Pay $190M in New Jersey River Pollution Case

By | September 16, 2014

Occidental Petroleum Corp.’s chemical unit agreed to pay $190 million to cover its liability for the cleanup of the Passaic River in northern New Jersey, state officials said.

Occidental Chemical is the legal successor to Diamond Shamrock Chemical Co., which was found to have intentionally dumped industrial waste in the river for decades, acting Attorney General John Hoffman said in a statement. If approved by a judge and the state Department of Environmental Protection, the Occidental payment would mean New Jersey has recovered $355.4 million for the work, Hoffman said.

Part of the settlement will cover costs associated with a $1.7 billion plan by the U.S. Environmental Protection Agency to remove 4.3 million cubic yards of contaminated sediment from the lower eight miles (13 kilometers) of the Passaic, Hoffman said.

“The citizens of our state should not be forced to shoulder the cost of repairing damage to one of our most precious natural resources — the Passaic River — by industrial polluters,” Hoffman said. “Our objective throughout the Passaic River litigation has been to hold accountable those legally responsible.”

The state eight years ago sued companies associated with the former Diamond Shamrock site on Lister Avenue in Newark, the state’s largest city. Diamond Shamrock from the 1940s through 1960s made pesticides and herbicides including the defoliant Agent Orange, Hoffman said.

Maxus Energy

OxyChem will seek reimbursement from Maxus Energy Corp., a subsidiary of YPF SA, according to an e-mail from an Occidental spokesman, Eric Moses. Maxus is financially responsible for claims against OxyChem in the litigation, according to Moses. YPF is Argentina’s largest company.

“All of the conduct alleged in the state’s lawsuit occurred while Maxus companies owned, operated or controlled the Lister Avenue plant site,” Moses said.

OxyChem never owned the Lister Avenue site and bought the stock of Diamond Shamrock from Maxus in 1986, 17 years after the plant closed, Moses said. Before the sale, Maxus transferred ownership of the plant to its affiliate Tierra Solutions Inc., which still owns the site, he said.

As part of the purchase agreement, Maxus retained liability for the plant and agreed to indemnify Houston-based OxyChem, Moses said.

A state court judge last year approved two settlements over the Passaic River cleanup that totaled $165.4 million, according to Hoffman.

The case is New Jersey Department of Environmental Protection v. Occidental Chemical Corp., L9868-06, Superior Court of New Jersey, Essex County (Newark).

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