Menendez, Booker Raise Concerns Over Passaic River Polluter’s Bankruptcy Filling

Today, U.S. Senators Cory Booker and Bob Menendez raised concern over whether the recent bankruptcy filing by Maxus Energy Corporation, a wholly owned subsidiary of Argentina’s state-owned oil company YPF, was motivated by a desire to avoid cleanup liability for the Passaic River. In a letter to the Argentine Ambassador to the United States Martín Lousteau, Booker and Menendez urged careful consideration of the bankruptcy filing and called for a meeting to discuss the situation in more depth. In a hearing yesterday of the Senate Foreign Relations Committee, Booker raised the concerns about the state-owned company and the Passaic River Superfund cleanup during consideration of a resolution marking U.S.-Argentina relations.

“This bankruptcy filing left many in New Jersey with concerns about YPF’s role in the bankruptcy proceedings, and whether the filing is motivated by a desire to evade environmental cleanup liability,” the lawmakers wrote. “After enduring decades of contamination, the community surrounding the Passaic River deserves full and comprehensive remediation and each responsible party should be held accountable to pay for it without further delay.”

Last March, the U.S. Environmental Protection Agency (EPA) announced a $1.3 billion remediation plan for the Passaic River, making it the largest sediment removal in the Superfund program’s history. Maxus Energy Corporation, which was acquired by YPF in 1995, has been identified as having substantial environmental liabilities in the cleanup of the Passaic River. Shortly after EPA’s remediation announcement, Maxus filed for bankruptcy protection, raising concerns over whether this was an attempt to elude environmental liability. Members of the New Jersey Legislature have since held hearings on the matter and called on federal agencies to investigate further.

The full text of the letter is as follows:

May 26, 2017

His Excellency Martín Lousteau

The Ambassador of the Argentine Republic

Embassy of the Argentine Republic

1600 New Hampshire Avenue, NW

Washington, DC 20009

Dear Ambassador Lousteau:

We deeply value the partnership our countries have strengthened in recent years, and look forward to continuing to promote greater cooperation on human rights, peacekeeping, trade and investment. With this in mind, we would like to bring to your attention an important matter concerning Argentina’s state-owned oil company YPF S.A. (YPF).

YPF is the parent company of Maxus Energy Corporation (Maxus), a company which has been identified as having substantial environmental liabilities with regard to the lower eight miles of the Passaic River through Essex and Hudson counties of New Jersey. The site, where the Diamond Alkali Company (later Maxus Energy Corporation) manufactured agricultural chemicals including “Agent Orange,” is one of the most polluted sites in the nation, and has been on the Environmental Protection Agency’s (EPA) National Priorities List for over 30 years. Last March, the EPA selected a remedy and issued its Record of Decision, which will make the Diamond Alkali Superfund Site the largest sediment removal in the Superfund program’s history, at an estimated cost of $1.3 billion.

The clean-up plan will clear more than 6 million cubic yards of contamination, including cancer-causing dioxin, PCBs, mercury and other pollution.

In 1995, YPF acquired Maxus along with the company’s valuable assets and environmental liabilities. However, after a series of transactions in which YPF appears to have stripped billions of dollars out of Maxus, and shortly after last year’s Record of Decision was issued, Maxus filed for bankruptcy protection. This bankruptcy filing left many in New Jersey with concerns about YPF’s role in the bankruptcy proceedings, and whether the filing is motivated by a desire to evade environmental cleanup liability. The New Jersey Legislature has held hearings on the topic and is currently considering resolutions in both the state Assembly and Senate calling on a number of federal agencies to investigate whether these proceedings are an attempt by YPF to discharge its obligations to pay for the remediation of the Passaic River.

As the United States and Argentina work to strengthen our bilateral trade relationship, we write to bring these concerns to your attention and urge your careful consideration of the situation. We would appreciate a meeting to discuss the matter in more depth.

After enduring decades of contamination, the community surrounding the Passaic River deserves full and comprehensive remediation and each responsible party should be held accountable to pay for it without further delay. We appreciate your time and attention to this matter.

Sincerely,

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