Wednesday, May 29, 2013

Wal-Mart To Pay $110 Million To Resolve Environmental Cases

May 29: Wal-Mart Stores Inc. pleaded guilty in cases filed by Federal prosecutors in Los Angeles and San Francisco to six counts of violating the Clean Water Act by illegally handling and disposing of hazardous materials at its retail stores across the United States. The Bentonville, AR-based company also pleaded guilty in Kansas City, MO, to violating the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) by failing to properly handle pesticides that had been returned by customers at its stores across the country. As a result of the three criminal cases brought by the Justice Department, as well as a related civil case filed by the U.S. EPA, Wal-Mart will pay approximately $81.6 million for its unlawful conduct. Coupled with previous actions brought by the states of California and Missouri for the same conduct, Wal-Mart will pay a combined total of more than $110 million to resolve cases alleging violations of Federal and state environmental laws.

    According to documents filed in U.S. District Court in San Francisco, from a date unknown until January 2006, Wal-Mart did not have a program in place and failed to train its employees on proper hazardous waste management and disposal practices at the store level. As a result, hazardous wastes were either discarded improperly at the store level – including being put into municipal trash bins or, if a liquid, poured into the local sewer system -- or they were improperly transported without proper safety documentation to one of six product return centers located throughout the United States. 

    Ignacia Moreno, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division said, "By improperly handling hazardous waste, pesticides and other materials in violation of federal laws, Wal-Mart put the public and the environment at risk and gained an unfair economic advantage over other companies. Today, Wal-Mart acknowledged responsibility for violations of Federal laws and will pay significant fines and penalties, which will, in part, fund important environmental projects in the communities impacted by the violations and help prevent future harm to the environment."

    Wal-Mart owns more than 4,000 stores nationwide that sell thousands of products which are flammable, corrosive, reactive, toxic or otherwise hazardous under Federal law. The products that contain hazardous materials include pesticides, solvents, detergents, paints, aerosols and cleaners. Once discarded, these products are considered hazardous waste under Federal law.

    Wal-Mart pleaded guilty in San Francisco to six misdemeanor counts of negligently violating the Clean Water Act. The six criminal charges were filed by the U.S. Attorney's Office in Los Angeles and San Francisco (each office filed three charges), and the two cases were consolidated in the Northern District of California, where the guilty pleas were formally entered before U.S. Magistrate Judge Joseph C. Spero. As part of a plea agreement filed in California, Wal-Mart was sentenced to pay a $40 million criminal fine and an additional $20 million that will fund various community service projects, including opening a $6 million Retail Compliance Assistance Center that will help retail stores across the nation learn how to properly handle hazardous waste.

    In the third criminal case resolved today, Wal-Mart pleaded guilty in the Western District of Missouri to violating FIFRA. According to a plea agreement filed in Kansas City, beginning in 2006, Wal-Mart began sending certain damaged household products, including regulated solid and liquid pesticides, from its six return centers to Greenleaf LLC, a recycling facility located in Neosho, Mo., where the products were processed for reuse and resale. Because Wal-Mart employees failed to provide adequate oversight of the pesticides sent to Greenleaf, regulated pesticides were mixed together and offered for sale to customers without the required registration, ingredients, or use information, which constitutes a violation of FIFRA. Between July 2006 and February 2008, Wal-Mart trucked more than 2 million pounds of regulated pesticides and additional household products from its various return centers to Greenleaf. In November 2008, Greenleaf was also convicted of a FIFRA violation and paid a criminal penalty of $200,000 in 2009.

    Pursuant to the plea agreement filed in Missouri and accepted today by U.S. District Judge John T. Maughmer, Wal-Mart agreed to pay a criminal fine of $11 million and to pay another $3 million to the Missouri Department of Natural Resources, which will go to that agency's Hazardous Waste Program and will be used to fund further inspections and education on pesticide regulations for regulators, the regulated community and the public. In addition, Wal-Mart has already spent more than $3.4 million to properly remove and dispose of all hazardous material from Greenleaf's facility.

    In conjunction with the guilty pleas in the three criminal cases, Wal-Mart has agreed to pay a $7.628 million civil penalty that will resolve civil violations of FIFRA and Resource Conservation and Recovery Act (RCRA). In addition to the civil penalties, Wal-Mart is required to implement a comprehensive, nationwide environmental compliance agreement to manage hazardous waste generated at its stores. The agreement includes requirements to ensure adequate environmental personnel and training at all levels of the company, proper identification and management of hazardous wastes, and the development and implementation of Environmental Management Systems at its stores and return centers. Compliance with this agreement is a condition of probation imposed in the criminal cases.
    In a company statement, Wal-Mart indicated, "The incidents on which the charges are based occurred years ago and involved the transportation and disposal of common consumer products. No specific environmental impact has been alleged and since then, Wal-Mart designed and implemented comprehensive environmental programs that remain in place today. Phyllis Harris, senior vice president and chief compliance officer, Wal-Mart US said, "Wal-Mart has a comprehensive and industry-leading hazardous waste program. The program was built around training, policies and procedures on how to safely handle consumer products that become hazardous waste, and we continue to run the same program in every store and club that was deployed years ago. We are pleased that this resolves all of these issues raised by the government."
    Wal-Mart said that EPA acknowledged in the administrative resolution that Wal-Mart has already taken steps to improve its environmental compliance program to address the issues and promote compliance with all applicable environmental laws related to the company's hazardous waste management. Wal-Mart and the EPA have also entered into a separate agreement which provides that the company will not be disqualified from participating in federal government programs. The company said the payments will not impact the company's results of operations for the second quarter of 2013 and will not be material to the company's financial position.

    Access a release from EPA with additional information (click here). Access more information about the actions against Wal-Mart (click here). Access a lengthy statement from Wal-Mart with links to more about the company's environmental compliance program and sustainability efforts (click here). [#Haz, #Toxics]
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