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DUPONT, NOW IN THE FRYING PAN

Teflon has been hugely successful for DuPont, which over the lasthalf-century has made the material almost ubiquitous, putting it not just onfrying pans but also on carpets, fast-food packaging, clothing, eyeglassesand electrical wires - even the fabric roofs covering football stadiums.

Now DuPont has to worry that Teflon and the materials used to make it haveperhaps become a bit too ubiquitous. Teflon constituents have found theirway into rivers, soil, wild animals and humans, the company, governmentenvironmental officials and others say. Evidence suggests that some of thematerials, known to cause cancer and other problems in animals, may bemaking people sick.

While it remains one of DuPont's most valuable assets, Teflon has alsobecome a potentially huge liability. The Environmental Protection Agencyfiled a complaint last month charging the company with withholding evidenceof its own health and environmental concerns about an important chemicalused to manufacture Teflon. That would be a violation of federalenvironmental law, compounded by the possibility that DuPont covered up theevidence for two decades.

DuPont contends that it met its legal reporting obligations, and said thatit plans to file a formal response this week.

If an E.P.A. administrative judge does not agree, the agency could fine thecompany up to $25,000 a day from the time DuPont learned of potentialproblems with the chemical two decades ago until Jan. 30, 1997, when theagency's fines were raised, and $27,500 a day since then. The total penaltycould reach $300 million. The agency is also investigating whether thesuspect chemical, a detergentlike substance called perfluorooctanoic acid,is harmful to human health, and how it has become so pervasive in theenvironment. The chemical - which is more commonly known as PFOA or C-8, forthe number of carbon atoms in its molecular structure - has turned up in theblood of more than 90 percent of Americans, according to samples taken fromblood banks by the 3M Company beginning in the mid-90's. Until it got out ofthe business in 2000, 3M was the biggest supplier of PFOA. DuPont promptlyannounced it would begin making the substance itself.

The E.P.A. is auditing 3M to determine if there were any civil violations ofenvironmental law involving its chemically related products, CynthiaBergman, a spokeswoman for the agency, said. The E.P.A.'s action on July 8 prompted the Chinese government to begin its own study on the safety ofTeflon, and some stores there pulled Teflon-coated pans from their shelves,the government-run China Daily newspaper reported.

Some people who live in or near Parkersburg, W.Va., where DuPont hasmanufactured Teflon for 50 years, are not waiting for more studies.Thousands of them have joined in a class-action suit filed in Wood County,W.Va., Circuit Court against the chemical maker, which they charge knowinglycontaminated the air, land and water around the plant for decades withoutinforming the community. The chemical has been found in the public drinkingwater at levels exceeding a longtime internal guideline considered safe byDuPont. The trial is scheduled to begin next month.

DuPont is contesting the accusations, and insists that neither PFOA norTeflon poses risks to humans. "The evidence from over 50 years of experienceand extensive scientific studies supports our conclusion that PFOA does notharm human health or the environment," said Stacey J. Mobley, generalcounsel of DuPont, in a statement responding to the E.P.A. ruling.

Critics say they will press their fight against the company because PFOAdoes not break down in the environment or in the human body, so the materialthat has been released could pose a health threat for many years. "This isan issue that won't go away for DuPont, because this chemical will not goaway," said Jane Houlihan, vice president for research at the EnvironmentalWorking Group, an organization in Washington that is DuPont's most vocalcritic.

For that reason, some critics said they think that PFOA, and the family ofperfluorochemicals known as PFC's to which it belongs, are potentially abigger problem than many chemicals that have been banned.

That could have implications for hundreds of companies that use thematerials, including the makers of popular brands like Gore-Tex, Stainmasterand SilverStone. "There's a huge ripple effect throughout the industry,"says Rich Purdy, a toxicologist who was at 3M until 2000.

For DuPont, the controversy could hamper plans by its chairman and chiefexecutive, Charles O. Holliday Jr., to shed the company's slow-growingbusinesses - including the unit that makes nylon and Lycra, both of which itinvented - and focus instead on faster-growing businesses like geneticallyengineered seeds, soy-based products and electronics. While the companyinvests in those areas, it is banking on steady profits from products likeTeflon.

Teflon-related products contribute at least $100 million in profit annually,according to company reports and court documents - almost 10 percent of thecompany's 2003 total. DuPont has been pushing its Teflon-branded materials(known as fluoroproducts) for new uses - such as a built-in stain repellentfor fabrics and a spray-on cleaning product - and has identified newmarkets, including China, for expansion. The company has invested $50million to expand Teflon production and $20 million on an advertisingcampaign in the United States.

DuPont has reported revenue increases for both quarters of 2004, andearnings increased 57 percent in the first quarter of 2004. Frank Mitsch, ananalyst with Fulcrum Global Partners, said he thought the E.P.A. actionwould not have an immediate effect on DuPont. "This will be tied up in thecourts for a while," he said.

Still, in announcing its second-quarter results on July 23, DuPont disclosedthat it had set aside $45 million as "a reserve for settlement in connectionwith the PFOA class-action suit." Gene Pisasale, an analyst with WilmingtonTrust, a bank that was founded in 1903 by T. Coleman du Pont and is now oneof DuPont's biggest shareholders, said that while "it's not a huge charge" -the company spent more than $1 billion on litigation over the fungicideBenlate - "if this were to be a continuing thing, I would have to take asecond look."

At the very least, the Teflon flap could damage DuPont's well-polishedimage. The 200-year-old company, based in Wilmington, Del., prides itself onits corporate values, and Mr. Holliday is a high-profile advocate ofsocially responsible business. "In the chemical industry, the critical thingis not only investor perception, but consumer trust," Mr. Pisasale said."That can be very hard to build back."

In a preliminary risk assessment report released last spring, the E.P.A.said PFOA was a possible carcinogen, but did not advise that consumers stopusing Teflon products. PFOA is used as a processing aid in making manyTeflon products and and is not present in end products, such as cookware.But some researchers assert that some Teflon products can release PFC's,including PFOA, in the environment and in the human body. They contend thatthis could account for its wide presence in the environment and in thepopulation.

A spokesman for W. L. Gore & Associates, which makes Gore-Tex, said thematerial it gets from DuPont does not break down into PFOA, but he concededthat the material could contain trace amounts and that there was still anopen question about safety. "Are the downstream folks involved? Sure. We allwant to find the sources and pathways here," the spokesman, Ed Schneider,said.

A study that appeared this month in Environmental Science & Technology,published by the American Chemical Society, found varying levels of PFC's,including PFOA, in the blood of people living on four continents. Theresearchers postulated that prolonged use of products containing PFC's -like paper products, packaging, carpet treatments and stain-resistanttextiles and cleaners - could be a major source of human exposure. DuPontdismisses such reports as speculation, and says it is working with theE.P.A. to study the sources of PFOA in the environment. Because PFC's do notoccur naturally, the most likely sources are thought to be manufacturingreleases or breakdown from products. The company acknowledges that fumesfrom Teflon pans subjected to high heat can release gasses unrelated toPFOA, which can kill pet birds and cause a flulike condition in humans knownas polymer fume fever. PFOA is known to cause cancer in some animals, andhas been linked to liver damage and other problems in animals. Its effectson human health have been little studied.

In the 1980's, a DuPont study of female workers exposed to the substancefound that two out of seven women gave birth to babies with facial defectssimilar to those observed in the offspring of rats that had been exposed toPFOA in another study. In its complaint, the E.P.A. charged that DuPont hadalso detected PFOA in the blood of at least one of the fetuses and in publicdrinking water in communities near DuPont plants, but did not report that ithad done the tests.

There is no federal requirement for companies to test unregulated chemicalslike PFOA, but if companies have reason to believe a substance poses athreat, they are required by the Toxic Substances Control Act to notify theE.P.A. The agency also said DuPont was in violation of another federalenvironmental law for not providing all of the toxicological data it hadgathered about the chemical after a 1997 request from the agency.

The class-action lawsuit, filed in Wood County, W.Va., the home of theWashington Works plant where DuPont has made Teflon for decades, has turnedup a series of documents that DuPont had sought to shield as proprietaryinformation. The latest came to light in May, when the West Virginia SupremeCourt voted unanimously to unseal several DuPont memorandums from 2000 inwhich John R. Bowman, a company lawyer, warned two of his superiors - ThomasL. Sager, a vice president and assistant general counsel, and Martha L.Rees, an associate general counsel - that the company would "spend millionsto defend these lawsuits and have the additional threat of punitive damageshanging over our head."

He added that other companies that had polluted drinking water supplies neartheir factories had warned him that it was cheaper and easier to replacethose supplies and settle claims than to try to fight them in court. Andthose companies, he noted, had spilled chemicals that did not persist in theenvironment the way that PFOA does. "Our story is not a good one," he wrotein one memorandum. "We continued to increase our emissions into the river inspite of internal commitments to reduce or eliminate the release of thischemical into the community and environment because of our concern about thebiopersistence of this chemical."

Another document summarizes the company's strategy for deflecting the PFOAissue and litigation. It offers various suggestions for improvingcredibility with employees, the community and regulators, such as "keepissue out of press as much as possible" and "do not create impression thatDuPont did harm to the environment."

Local officials said the memorandums - with the E.P.A.'s action and recenttests that found increasing PFOA levels in their water - confirmed theirfears.

"We've been exposed since at least 1984," said Robert Griffin, generalmanager of the Little Hocking Water Association, which serves about 4,000homes in rural Washington County, Ohio, directly across the Ohio River fromDuPont's Washington Works plant. "The community could have dealt with itback then, but DuPont saw fit not to inform us."

In June, Mr. Griffin included a warning in his annual water quality reportto customers. It stated, in bold capital letters, that until the issue wasresolved, "You are drinking this water at your own risk."

Written by: Amy Cortese, The New York Times


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