Outrage Over Company Backing Out of Superfund Cleanup Through Bankruptcy

By Brenda Flanagan

“One blue crab in Newark Bay has enough dioxin in it to give somebody cancer,” said Clean Water Action New Jersey Campaign Director Dave Pringle.

Environmental advocate Pringle today warned New Jersey lawmakers toxins lurking within the Passaic River sediments can kill you, especially if you eat a blue crab caught there, which signs urge you to avoid. That’s why the EPA last March approved a $1.38 billion cleanup plan for the last eight miles of river bottom — remediation to be paid for by companies that contributed to the toxic soup.

“This risk to public health is unacceptable. That is why it is always frustrating to me that some polluters continue to shirk their responsibilities when it comes to cleaning up the river,” said NY/NJ Baykeeper and Executive Director Debbie Mans.

Public outrage over one company’s apparent attempt to duck that liability roiled a joint public hearing of the Senate and Assembly environment committees. Decades ago in Newark’s Ironbound, Diamond Alkali manufactured Agent Orange, leaching the carcinogen dioxin into the river. The plant’s now an entombed Superfund site. Meanwhile, Diamond Alkali was bought by Maxus Energy Corp, which in 1995 was bought by YPF — Argentina’s state-owned oil company. Three months after the EPA announced the cleanup’s price tag, YPF placed Maxus into bankruptcy and backed away from the cleanup — leaving public outrage in its wake.

“Spinning off companies, going into bankruptcies, but all this means is the companies — especially Maxus — does not want to pay for the mess that they made and the poisoning of a river and a community they did. That’s why it’s so critical for the Legislature to move forward,” said New Jersey Sierra Club Director Jeff Tittel.

“This is a blatant fraud,” said Dennis Hart, executive director of the Chemistry Council of New Jersey. “What Maxus and YPF and the government of Argentina is doing is nothing involved in that. They are brazenly and right in everybody’s face in New Jersey and this government, just walking away from their responsibilities. This is not what bankruptcy was established for.”

Sen. Bob Smith cited an internal memo from a YPF-connected law firm and charged it deliberately moved assets out of Maxus.

“It appears to me that it lays out a plan to divest the assets so that there’s an overall scheme not to pay any environmental liability,” Smith said. “They’re trying to stick the taxpayers of New Jersey with an absolutely horrendous cleanup bill for a major Superfund site in this country.”

In a statement, YPF stated it “never polluted the Passaic River and has been a responsible corporate citizen. Since it purchased Maxus in 1995, YPF has transferred more than $700 million to Maxus that has been spent to fund environmental remediation…and during Maxus’ bankruptcy process has offered to pay more than $130 million in additional funds that would help fund environmental remediation.”

It does little for longtime Ironbound residents.

“We’ve heard all kinds of stories from the older generations that when they were younger, they’d get to go and swim in the river. And we’ve never during our lifetime ever seen that,” said Sergio Rodrigues.

The joint committees also want to send a copy of their resolution to President Trump who’ll be meeting with the president of Argentina later this month. They’re hoping some diplomatic pressure might yield positive results.