TRENTON – A resolution sponsored by Senators Bob Smith and Christopher “Kip” Bateman urging relevant federal and State authorities to investigate actions taken by an Argentinian state-owned oil company to discharge Superfund obligations through bankruptcy proceedings was approved today by the Senate.
The resolution, SR-107/AR-219, urges the New Jersey State Commission of Investigation to examine actions taken by YPF S.A., and its subsidiary Maxus Energy Corporation, to use United States bankruptcy proceedings in an apparent attempt to avoid responsibility for environmental liabilities related to the cleanup of the Diamond Alkali Superfund site, the Passaic River, and other Superfund sites in New Jersey. The resolution also calls on the United States Attorney General and the New Jersey Attorney General to investigate any potential violations of federal or State law by YPF S.A. and Maxus, including any violations of the federal or State racketeer influenced and corrupt organizations (RICO) acts, and to pursue all appropriate legal remedies.
“Unbeknownst to most Americans, YPF is trying to stick the U.S. government with its share of the cost of cleaning up one of America’s most polluted rivers while at the same time raising billions of dollars on Wall Street. This company and these actions need to be held accountable. This is about protecting our environment for future generations of New Jerseyans and sending a clear message that we will not allow any company to cheat our residents or sidestep its obligations,” said Senator Smith (D-Middlesex, Somerset), chair of the Senate Environment and Energy Committee. “Bankruptcy laws are designed to help those who have a legitimate need for protection from creditors, not to assist companies or individuals to avoid paying for environmental damages that they caused.”
“We cannot allow YPF S.A. and those responsible for such great pollution to avoid responsibility for the immense cost of environmental cleanups, nor can they be allowed to shift the cost to New Jersey taxpayers,” said Senator Bateman (R-Somerset, Hunterdon, Mercer, and Middlesex). “We’re sending the message that polluters will pay. If you have profited by dumping toxic materials into our soil or waterways, bankruptcy court will not protect you from paying for any required environmental remediation.”
The Argentinian state-owned oil company, YPF S.A., acquired Maxus Energy Corporation (formerly the Diamond Alkali Company) in 1995, presumably with full knowledge of the environmental liabilities it would inherit with this acquisition after the EPA and the NJ DEP found high levels of toxins and hazardous substances at its former site in Newark and in the Passaic River and placed the site on the Superfund National Priorities List in 1984. In June 2016, YPF placed Maxus under bankruptcy following the EPA’s announcement of its Record of Decision in March 2016 to remediate contaminated sediments found in the lower 8.3 miles of the Passaic River, a part of the Diamond Alkali site, at a cost of $1.38 billion. The toxins and hazardous substances continue to affect the soil, groundwater, air, surface water, and building structures at the site.
The legislation also urges the New Jersey Department of Environmental Protection to prepare a report for submission to the Legislature that would include a listing and description of all Superfund sites where Maxus Energy Corporation is a potentially responsible party, an assessment of the potential impacts a bankruptcy declaration may have on the pace of the remediation at those sites, and the added burden this declaration would place on other potentially responsible parties and taxpayers. The report would also include an examination of the precedent that YPF S.A.’s actions would set for other companies facing Superfund obligations.
In addition, the resolution calls on the US Congress to request a report from the United States Government Accountability Office that would examine current Superfund obligations tied to foreign, state-owned corporations and any actions those corporations may be taking to avoid paying their environmental liabilities in the United States including, but not limited to, the use of bankruptcy proceedings. It also urges Congress to make appropriate changes to the federal “Comprehensive Environmental Response, Compensation, and Liability Act” to prevent foreign corporations from avoiding their Superfund liabilities.
The resolution cleared the Senate.