Department of Justice Seal Department of Justice
MONDAY, MARCH 18, 2002
DOJ (202) 514-2007
DOJ TDD (202) 514-2008
EPA (202) 564-7818


Company Violated New Source Review At Its Former
Flame Retardant Manufacturing Operations

WASHINGTON, D.C. - The Justice Department, the Environmental Protection Agency, the state of Indiana, and the city of Hammond, Ind. today jointly entered into a $3 million settlement of claims against Ferro Corporation for the company's violations of the federal and state "new source review" provisions of the Clean Air Act (CAA) and of related state and local ordinances.

The CAA's new source review program is designed to prevent deterioration of our nation's air quality and requires certain facilities to obtain permits before they construct new sources of pollution, and to install air pollution control equipment that will reduce the amount of harmful emissions released into the atmosphere. The requirements to install controls and obtain permits apply to new major sources of pollution and to existing facilities that are "modified" and increase their level of emissions.

From at least 1980 until June 2000, Ferro Corporation manufactured Pyro-Chek, a flame retardant, at its Keil Chemical Division in Hammond. While manufacturing Pyro-Chek, Ferro unlawfully emitted tons of volatile organic compounds (VOCs) each year, primarily in the form of ethylene dichloride, a probable carcinogen. VOCs are linked with the formation of smog, which is a lung irritant. VOCs and particulate matter are also known to contribute to respiratory illnesses, especially in children and the elderly.

In June, 2000, Ferro completely shut down and dismantled its Pyro-Chek facility.

However, the rest of Ferro's chemical manufacturing business at the Hammond plant remained in operation. As a result of Ferro's Pyro-Chek shut down, the risk to human health from excess emissions of ethylene dichloride has been abated at its Hammond facility.

"Our joint enforcement efforts with the state and the city of Hammond led to great results in this case," said Tom Sansonetti, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. "Under this settlement, Ferro is going to pay a significant fine for its air pollution violations, and it must perform a comprehensive audit that will help it comply with all environmental laws, including the Clean Air Act's new source review rules."

"The Clean Air Act and its new source review requirements are intended to make the air safe and healthy for all Americans. When companies don't follow the law, they put citizens and the environment at great risk. This Administration expects all companies to fully comply with their environmental responsibilities, and will take appropriate enforcement action against those that don't," said Sylvia Lowrance, EPA's Acting Assistant Administrator for Enforcement and Compliance Assurance.

Under the agreement, Ferro is obligated to pay the federal, state and city governments collectively civil penalties totaling $3 million: $1,050,000 to the United States, $600,000 to the state of Indiana and $1,350,000 to the city of Hammond. Additionally, Ferro is obligated to hire an independent consultant to conduct an environmental management system audit at its Hammond facility. The audit should assist Ferro in achieving and maintaining compliance with all environmental laws at that facility.

Additionally, as a state and city environmental project, the company will finance a brownfield cleanup project in the city of Hammond, which is valued at $844,000. Known as the Industrial Fuel and Asphalt Site, it consists of 30 acres that housed an oil refinery and an asphalt plant from the 1950s until 1985. Once the cleanup is completed, the city of Hammond plans to convert the IFA Site into an industrial park with a $1.2 million grant from the U.S. Department of Commerce.

Ronald Novak, Director of the Hammond Department of Environmental Management, said, "Ferro's participation in financing the clean-up of the abandoned IFA Site also makes the settlement reached today a great one. This project will remediate one of the city's brownfield sites and turn it into a viable economic location that will provide jobs and increase the city's tax base."

"Our message is clear to those that would release harmful pollutants into Indiana's environment," Indiana Department of Environmental Management Commissioner Lori F. Kaplan said. "It's bad for Hoosiers, it's bad for our environment and it's bad for business. I hope this $3 million penalty serves as an unambiguous reminder and a powerful deterrent."

The consent decree was filed today in the United States District Court in Hammond, Ind. and is subject to a 30-day public comment period.