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Shell in Talks to Settle $653 Million Brazil Contamination Penalty

BASF and Shell were jointly ordered in August 2010 to pay damages to former employees for medical treatment and personal suffering… BASF said its Brazilian unit filed a lawsuit against Shell… asking a court to declare that Shell is responsible for the full amount of the damages resulting from the contamination…

By Sheenagh Matthews – Mar 1, 2012 8:06 AM GMT

BASF SE (BASF), the world’s biggest chemical maker, is in talks with Royal Dutch Shell Plc (RDSA) to determine who should pay a 490 million-euro ($653 million) fine for contamination in Brazil.

The site in Paulinia was “significantly” contaminated by the production of crop protection products, and BASF and Shell were jointly ordered in August 2010 to pay damages to former employees for medical treatment and personal suffering, BASF said in its 2011 annual report.

BASF said its Brazilian unit filed a lawsuit against Shell on March 30, asking a court to declare that Shell is responsible for the full amount of the damages resulting from the contamination at Paulinia. The two companies are in settlement talks, Ludwigshafen, Germany-based BASF said.

The Paulinia unit was built by Shell, sold to Cyanamid in 1995 and then acquired by BASF in 2000, the German company said in its annual report. The contamination stems from the period before 2000, BASF said.

Jennifer Moore-Braun, a spokeswoman for BASF, declined to comment beyond what is in the annual report. Spokesmen for Shell didn’t immediately return calls seeking comment.

The suit against Shell was reported today in German newspaper Financial Times Deutschland.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at [email protected]

To contact the editor responsible for this story: Benedikt Kammel at [email protected]

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RELATED

Multi-million euro fine for Shell and BASF: By Radio Netherlands Worldwide: 20 August 2010

Extract: A Brazilian court has ordered Shell Brasil and international chemical giant BASF to pay a total of 490 million euros in fines and damages in connection with the exposure of workers at a Sao Paulo factory to toxic substances, Brazilian media report. Workers suffered health problems including high blood pressure and cancer.

Shell, Basf Ordered to Pay $354 Million in Brazil Plant Contamination Case: Bloomberg 20 August 2010

Extract: The Brazilian units of Basf SE and Royal Dutch Shell Plc. were fined a total of 622 million reais ($354 million) after former workers suffered health problems because of contamination at a plant in Paulinia, Sao Paulo state, from the 1970s to 2002.

Brazil Court Fines Shell, BASF $654M For Toxic Leaks- Report: The Wall Street Journal 21 August 2010

Extract: BASF said the ruling was “absurd,” as the contamination was “caused and acknowledged by Shell,” according to the report.

Brazil Court Fines Shell, Basf for Making Workers Sick: Herald Tribune 21 August 2010

Royal Dutch Shell Denial of Brazilian pesticide diseases: 23 May 2011 Friends of the Earth Netherlands

Extract: For a decade or more, beginning in 1977, Shell produced organochlorine pesticides (aldrin, dieldrin, endrin etc.) and other pesticides at a plant located near Paulínia, about 125 kilometres north-west of São Paulo, Brazil. The plant covered approximately 40 hectares.78 Due to its severe health impacts, by 1990 the use of aldrin and dieldrin was totally banned in the USA and Brazil.

Brazilian Indians demand Shell leave their land: Survival International: 6 Sept 2011

Extract: In a letter to the companies, the Indians warn that, ‘Since the factory began to operate, all our health has deteriorated – children, adults and animals’. The chemicals used on the sugarcane plantations are thought to be causing acute diarrhoea amongst Guarani children, and killing fish and plants.

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