New Jersey Soil Cleanup Agreement Sidesteps Grace Bankruptcy

WOODBRIDGE, New Jersey, April 25, 2005 (ENS) - A privately funded $13.2 million cleanup of soil contaminated with PCBs has been approved by the state of New Jersey for the Hatco site in Woodbridge Township. The chemical and minerals corporation, W.R. Grace & Co. (Grace), now in bankruptcy reorganization, owned and operated the site in the Raritan River watershed from 1959 to 1978 as the Hatco Chemical Division.

The Department of Environmental Protection (DEP) approved a remedy for the PCBs that involves both capping and off-site removal of the contaminated soil.

A private environmental remediation company, Weston Inc., will conduct the cleanup using the $13.2 million under an innovative agreement that places future liability for the remedial project with Weston and ACE USA, an insurance firm.

Weston and ACE USA will accept responsibility for all historical environmental liability in exchange for the up-front funding of the remediation and the purchase of the insurance policy.

Hatco

This aerial view shows the Hatco site outlined in red. (Photo courtesy New Jersey DEP)
As a result, the cleanup will be conducted by a nationally recognized environmental remediation company backed by a multi-billion dollar insurance company. Otherwise, cleanup might been delayed by Grace's bankruptcy filing, and the state was concerned that public funding might have been required. The agreement must be approved by the Delaware bankruptcy court handling Grace's affairs.

"This agreement provides a clear plan for cleaning up chemical contamination that has scarred this site for too long," said Acting Governor Richard Codey. "Restoration projects to preserve valuable open space and wetlands also are important to protect water quality in the Raritan River watershed."

"We are pleased that the parties have been able to reach an agreement for the remediation of the Hatco site and give particular note to the efforts of DEP," said Hatco President and CEO Alex Kaufman. "This agreement is the result of a lot of hard work, during months of meetings and negotiation sessions, by all the parties and, when approved by the bankruptcy court handling W.R. Grace's case, will result in the expeditious cleanup of the Hatco site and resolution of NRD issues."

On April 2, 2001, Grace and 61 of its United States subsidiaries and affiliates, including its primary U.S. operating subsidiary W. R. Grace & Co.–Connecticut, filed Chapter 11 bankruptcy petitions for reorganization. The bankruptcy court proceedings are currently focused on the estimation of Grace’s asbestos related liabilities associated with its vermiculite mine in Libby, Montana, a process that is likely to extend into 2006, the company says.

Announcing the Hatco agreement Thursday, DEP Commissioner Bradley Campbell said a separate 34 acre land parcel will be protected to compensate the state for injuries to its natural resources.

The DEP reached an agreement with Hatco Corporation and Grace to resolve the companies' natural resource damage (NRD) liability in connection with wetland and ground water contamination at the former industrial site. The companies agreed to conduct a land acquisition project with the state rather than executing a monetary settlement for the damages.

Hatco damages include 3.46 acres of contaminated wetland and a plume of ground water contamination extending over at least 16 acres.

"The Woodbridge community will be safer because this agreement makes the cleanup of remaining contaminated soils at the Hatco site a reality," said Commissioner Campbell. "This cleanup and natural resource damage settlement with Hatco is another significant step forward as we continue to reverse damage caused by decades of uncontrolled pollution to our water supply."

Wilson

Montgomery Township Mayor Louise Wilson (Photo courtesy Rutgers)
"Water quality is threatened from the headwaters to the big rivers, and where water is concerned municipal boundaries are meaningless - watershed boundaries matter," said Montgomery Township Mayor Louise Wilson. "This acquisition will protect water quality and critical woodland and meadow habitat in the Sourlands, where the ecosystem is fragile and very much at risk. That's priceless."

The land being acquired as part of the settlement is a mix of wetland and upland, meadow and forest on 34 acres in Montgomery Township. Rock Brook flows along the rear of the property.

Central New Jersey’s non-profit land preservation organization, D&R Greenway Land Trust, has a pending contract on this land and will receive funding from the settling parties to acquire the property as part of the state's settlement.

"Permanent preservation of high quality environmental land provides immediate and on-going benefits to the citizens of New Jersey," said D&R Greenway's Director of Land Preservation Bill Rawlyk. "This acquisition represents a turning point by creating a new model of funding for open space acquisitions that supplements the traditional DEP Green Acres Program and SADC [State Agriculture Development Committee] funding."

Pelzman

Woodbridge Township Mayor Frank Pelzman. Woodbridge Township, with a population of 100,400, is New Jersey's fifth largest municipality. (Photo courtesy Office of the Mayor)
"Woodbridge is pleased with the state's tenacity in concluding this landmark environmental settlement," said Woodbridge Township Mayor Frank Pelzman. "We applaud the cooperation among all parties that will now permit the cleanup to start."

Grace owned and operated the site from 1959 to 1978 as the Hatco Chemical Division. On August 21, 1978, Grace sold the assets to an entity that became known as Hatco Chemical Corporation. Hatco Chemical changed its name to Hatco Corporation in 1986.

Since the late 1980s and under a 1992 administrative consent order between the DEP and Hatco, investigation and interim emergency cleanups have taken place at a cost of $5 million, paid for by the responsible companies.

In September 2004, the DEP included the Hatco site as part of a Raritan River initiative to improve water quality that requires specific cleanup work by responsible parties at five contaminated sites along the river's lower section. The state agency worked with the Edison Wetlands Association to identify the sites where cleanup work had lagged for years.

"We view this announcement as a step in the right direction," said Robert Spiegel, executive director of the Edison Wetlands Association. "Our organization will be vigilant in ensuring that this site is cleaned up to levels that are protective of human health and the environment, and that natural areas onsite are fully restored."

"This agreement will ensure that the necessary expertise and resources are employed to remove toxic PCBs from this site so they will no longer endanger the health of area residents," said New Jersey Attorney General Peter Harvey. "We will continue to work with DEP to compel responsible parties to both clean up contamination that threatens our water quality and compensate the residents of New Jersey for damaging their natural resources."

DEP and the Attorney General's Office have collected $26.4 million in settlements for natural resource damages since 2002 involving 266 cases. The state is working with 95 additional parties representing about 850 sites that seek to voluntarily resolve their liability for natural resource damages.