Acting N.J. Attorney General John J. Hoffman and state Department of Environmental Protection Commissioner Bob Martin last week announced the approval of a $190 million settlement with Occidental Chemical Corp. to resolve the company’s liability for contamination of the Passaic River.
Approved by Superior Court Judge Sebastian P. Lombardi on Dec. 16, the settlement is the third and final one in the Passaic River litigation, a series of agreements in which the state obtained costs and damages from multiple parties responsible for polluting the river.
Altogether, the state has recovered $355.4 million from the litigation, over and above the cost of remediation.
“The Occidental settlement . . . along with the two Passaic River litigation settlements that preceded it represents a tremendous victory for the citizens of New Jersey,” Hoffman said.
“As a result of these three settlements,” he added, “not only will the Passaic River be cleaned up at no cost to New Jersey taxpayers, but the state also has recovered more than $150 million that it expended over many years of exhaustive legal and environmental effort to clean up the river.”
Among other terms, the Occidental settlement calls for $50 million of the payment to fund natural resource restoration projects in and around the Newark Bay Complex. A total of $67.4 million from all Passaic River settlements will be dedicated to such projects.
Occidental Chemical is a legal successor to the Diamond Shamrock Chemicals Co., which was found to have intentionally dumped hazardous pollutants, including dioxin, into the Passaic from its plant on Lister Ave. in Newark in the 1950s and ‘60s. The factory, in the Ironbound section of the city, was located on the river, directly across from the Harrison meadows area.
“Cleaning up the lower Passaic River is a top environmental priority for New Jersey, one that is vital to the health and safety of people who live and work along the river and who have long had to bear the burden of this pollution,’’ Martin said.
The commissioner said the state will continue to work with the federal Environmental Protection Agency “to get this cleanup project started as soon as possible.”
The EPA has proposed a $1.7 billion plan for cleanup of the lower eight miles of the river — the portion that flows past Nutley, Belleville, Lyndhurst, North Arlington, Kearny, East Newark and Harrison.
Under a federal law known as the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), it is possible the agency could call on New Jersey to bear a 10% share of the cleanup cost, Hoffman’s office noted.
However, as part of the Occidental settlement, the corporation reportedly agreed to cover the state’s share, if assessed.
“In short, the Occidental and other settlement payments are above and beyond the funds used to clean up the Passaic River,” Hoffman said. “That is, the responsible parties will clean up the river at their own expense, while the state will receive a total of $355 million, plus a guarantee to cover any costs to the state in the unlikely event those cleanup costs are assessed under CERCLA.”
The amount of Occidental’s guarantee is between $210 million and $400 million and is dependant upon on the outcome of the company’s indemnification claims against other original defendants in the Passaic River litigation.
Occidental also has assumed responsibility for any future state cleanup costs at the Newark Lister Ave. site and future costs within the Newark Bay Complex — provided these are related to the discharges from the Newark plant, Hoffman’s office reported.
– Karen Zautyk