3M Bound to Incur More Losses as $581 Million Chemical Cleanup Pact is Finalized

Errol Villorente, Tech Times 07 July 2022, 01:07 pm

Bundeswehr Assists In PPE Distribution And Disinfectant Production During The Coronavirus Crisis — (Photo : Photo by Alexander Koerner/Getty Images) BLANKENBURG, GERMANY - APRIL 08: A soldier of the Bundeswehr, Germany's armed forces, holds 3M FFFP2 face mask at a Bundeswehr medical warehouse as the coronavirus crisis continues on April 8, 2020 in Blankenburg, Germany. The Bundeswehr is assisting in Germany's struggle to contain the spread of the virus by supplying hospitals with supplies necessary for treating patients suffering from COVID-19.

Minnesota-based multinational company 3M has "open-ended" duties to Belgium, according to Flemish environment minister Zuhal Demir. This statement is in reference to the health and environmental impact of the widespread and long-time contamination in the vicinity of 3M's Antwerp factory.

3M Agrees to Settle for $581 Million on Soil Remediation

Though the company is in agreement with the Flemish government to settle $581 million for soil remediation and resolution of other identified damages, Demir asserts that the agreement doesn't protect 3M from the responsibility for the human health damages that civilians may claim from PFAS contamination.

PFAS is short for Perfluoroalkyl and Polyfluoroalkyl Substances, a chemical group used in most household and industrial items. Studies have proven that significant exposure to PFAS is linked to major environmental and health risks. There is currently no known medical way to extract PFAS from the body, and the only thing that can be done is to remove its source.

With this, the Flemish government ordered 3M's Antwerp factory to cease production last year after tests on nearly 800 residents in the area resulted in a majority of unsafe PFAS levels in their bloodstream. Last month, some PFAS production resumed.

The agreement between 3M and the Flemish government now gives the American company some room to resume operations, but Belgian officials made sure that any civilian health damage that could eventually arise will not be put aside by a mere agreement and that the company may still be held liable to civilian charges. Meanwhile, the agreement was said to ensure that future potential obligations by 3M Belgium will still be addressed. The company says they are taking a $360-million pretax charge. For the remediation of the soil in the Antwerp factory's vicinity, along with the installation of PFAS treatment technology, 3M will also add $300 million.

3M is Also Confronting Issues in Other Locations

3M is surely facing more and more expenses beyond the agreement. On top of all funds announced, 3M is set to assist in funding the government-sponsored highway and tunnel project that shall complete the construction of a ring road in the area. They are set to pay $100 million as this project was involved in digging up 3M's PFAS contaminated soil. Another $100 million will be paid by the company to the Flemish government for PFAS-related expenditures such as the running of medical tests on locals. Luckily, the contamination in Antwerp has not affected the locals' source of drinking water.

In Minnesota, 3M's obligations were worse, reaching an $850 million settlement to resolve PFAS contamination that had impacted the drinking water supply in certain areas. This case took eight years to settle. In Belgium, the government's open-ended agreement was concluded in about 10 months and offers absolutely no limitations on civil claims.

Geert Lenssens, one of the lawyers representing a local family seeking compensation, says, "the complete picture of the damages isn't clear. This is not the end of it. It's a start." He says civil claims can trigger more lawsuits to surface. This year alone, 3M shares have dropped 27%.