Lead paint & pigment makers deemed guilty of public nuisance

FOCUS ON P I G M E N T S A MONTHLY REPORT FROM REG ADAMS

LEAD PAINT & PIGMENT MAKERS DEEMED GUILTY OF PUBLIC NUISANCE

MARCH 2006 In this issue

PLANTS

2-3

Imerys to make GCC in China Birla to build its third Indian carbon black plant Two Vietnamese masterbatch ventures by Japanese companies

COMPANIES

3-5

Clariant launches no-frills channel for US pigment customers European Colour Chairman rescues Magruder from bankruptcy Lanxess sells optical brighteners business to Kemira

HEALTH & SAFETY

5-6

Carmine & cochineal face tighter labelling requirements Lycopene colorants approved by FDA & objections dismissed

ENVIRONMENT

6-7

Colorants to control underwater aquatic plant & algae growth EU may ease laws on TiO2 plants

TECHNOLOGY

7

New products from: Bunge, Degussa, Nanophase Technologies & Troy

EVENTS

PIGMENTS

AN INTERNATIONAL NEWSLETTER MONITORING TECHNICAL AND COMMERCIAL DEVELOPMENTS IN THE PIGMENTS SECTOR ISSN 0969–6210

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PIGMENTS

Over the past 15 years, more than 100 lawsuits have been filed in the US, seeking to blame paint and pigment manufacturers for problems arising from badly maintained lead painted surfaces in residential properties and in public buildings. The proud boast of the paint and pigment industry has traditionally been that its track-record in defending itself against such lawsuits is 100%. However, this may be about to change. In mid-February 2006, a jury in the Providence County Superior Court determined that the presence of lead pigment in a painted surface constituted a public nuisance and it also determined that three former manufacturers were responsible for creating that public nuisance. The three “wrongdoers” in this case were: Millennium (inheritors of certain SCMGlidden assets and now a subsidiary within the Lyondell group); NL Industries (formerly National Lead Co); and Sherwin-Williams. The plaintiff in the case was the Attorney General of the State of Rhode Island. The lawsuit, originally filed in October 1999, was deliberately modelled along the lines of lawsuits filed by other State governments seeking to recover from tobacco companies money spent on treating smoking-related illnesses. In April 2001, the Superior Court for Rhode Island dismissed all claims on product liability, equitable relief to children and unfair trade practices alleged to have been carried out prior to 1970. But it allowed certain other claims to proceed for further discovery of the facts. These claims included: creating

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a public nuisance and unjust enrichment. In October 2002, the case was heard at the Providence County Superior Court before Judge Michael Silverstein. The jury failed to agree on a verdict and the judge ruled that there had been a “mistrial”! This meant that a new hearing would have to take place, before a new jury. In July 2005, DuPont reached an out-of-court agreement with Rhode Island Government officials, whereby DuPont would pay towards paint remediation work, public education and compliance programmes in Rhode Island, as well as making a large donation to the Children’s Health Forum and to Brown’s University Medical School (at Providence, RI). These payments and donations amounted to an estimated $12 M altogether. In return, the Rhode Island Government officials agreed to remove DuPont’s name from the charge-sheet in respect of the retrial. ICI had already been removed from the list of manufacturers indicted because it successfully argued that the Glidden entity that it purchased from SCM Corp in 1986 was a separate legal entity from the company named Glidden that had previously manufactured lead paints. Cytec Industries and ConAgra were listed for the 2002 hearing, but were delisted during 2005. So, by the time the lawsuit came up for a second hearing, only four companies were indicted. BP/Atlantic Richfield was one of the four defendants at the retrial, but it was acquitted of all liabilities. Millennium, NL Industries and Sherwin-Williams were not so

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F O C U S fortunate. They were deemed guilty of creating a public nuisance. The jury decided that they would not be liable for punitive damages, but also decided that they would be liable to contribute towards lead paint remediation measures. If this means that lead paint must be entirely removed, then the total cost of remediation could be as high as $4.5 bn. On the other hand, if remediation can be adequately achieved by sealing the relevant painted surfaces, so that there is no further danger of lead flakes or chips getting into the environment, the total cost of remediation might be more like $350 M. All three companies have stated that they will appeal against the verdict. Millennium stated: “This verdict is just one step in a lengthy process.” Sherwin-Williams stated: “We continue to believe that the facts and the law are on our side. Lead paint remains a problem in just a small number of poorly maintained properties. Paint is not the only source of lead exposure. The State has not proven a clear link between the lead pigment made by us and the children who were poisoned in Rhode Island.” Following the Rhode Island Court ruling, an Appeals Court in California has reinstated a lawsuit by several Californian city and county authorities to force former manufacturers to remediate lead paint problems in lowincome housing and Government buildings. The reference case here was filed in 2000 by Santa Clara County against Millennium, Atlantic Richfield, American Cyanamid, ConAgra, DuPont, O’Brien, SCMGlidden and Sherwin-Williams. The Rhode Island Court ruling is also likely to pave the way for four counties and 22 municipalities in New Jersey to revive lawsuits alleging public nuisance on the part of a number of former lead paint manufacturers. Last August, the New Jersey Appeals Court (based at Trenton) ruled that the authorities have inherent police powers entitling them to bring lawsuits for public nuisance. Lobbyists in the US and elsewhere have also been studying the impact of the Rhode Island Court ruling on the paint and pigment manufacturers’ liability for damages caused by lead in forms other than white lead. In particular, chrome yellow pigments, based on lead chromate, are coming

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under increased scrutiny. So too is the use of lead-based stabilisers for polyvinyl chloride (PVC) and so too is the use of lead-based soaps as through-driers to accelerate drying and paint film formation with solventbased paints. Reg Adams

PLANTS China: Imerys – calcium carbonate Imerys (of Paris) is spending $20 M to develop a marble mine and associated processing facilities at Hezhou-Zhongshan (Guangxi province). The project should be completed by the end of 2006. Imerys will then be able to produce up to 500,000 tonnes/y of heavy calcium carbonate, suitable for use in the paper, paint, rubber and plastics enduse sectors. China Chemical Reporter, 26 Feb 2006, 17 (6), 20

China: Shaanxi Huawei Biochemical – calcium carbonate Shaanxi Huawei Biochemical Science & Technology Co Ltd has started-up a 120,000 tonne/y heavy calcium carbonate plant in Danfeng County (Shaanxi province). Investment to date is assessed at Yuan 30 M. Work has already begun on raising capacity to 220,000 tonnes/y.

India: Aditya Birla – carbon black Aditya Birla Novo has outlined plans for building a 60,000 tonnes/y carbon black at an unidentified greenfields site in Gujarat province. If it goes ahead, this will be Birla’s third carbon black plant in India. Meanwhile, the company is awaiting environmental permits to proceed with its 50,000 tonnes/y expansion of the Gummidipoondi plant in Tamil Nadu province. On completion, Birla’s carbon black capacity will be 150,000 tonnes/y. The budgeted cost of this expansion is Rup 1.05 bn and it follows a 50,000 tonnes/y expansion project, completed in 2004 at a cost of Rup 600 M. Birla’s other plant in India is located at Renukoot (Uttar Pradesh) and it has a capacity of 70,000-80,000 tonnes/y. Outside of India, Birla has interests in carbon black plants in China, Egypt and Thailand. The company’s total carbon black capacity is assessed at 542,000 tonnes/y. For the year to end-March 2005, Aditya Birla’s global sales of carbon black amounted to Rup 4.67 bn out of total group turnover of Rup 18.6 bn. For the latest reported quarter, to endDecember 2005, Birla’s earnings from carbon black before interest and tax (EBIT) increased by 25.5% to Rup 98.4 M, while sales increased by 28% to Rup 1.5 bn. ICIS Chemical Business, 13 Feb 2006, (Website: http://icischemicalbusiness.com)

China Chemical Reporter, 26 Feb 2006, 17 (6), 22

China: Zhejiang Kaihua Xinji – silica white, by gas-phase process Zhejiang Kaihua Xinji New Material Co Ltd is building a silica white plant, employing the gaseous-phase process. Funding for this project is being provided by Guangzhou GBS High-Tech & Industry Co Ltd and Zhejiang Xinan Chemical Group. The first phase of the project is due for completion in June 2006. Initial capacity will be 5000 tonnes/y. After the second phase, due for completion in 2008, capacity will be 8000 tonnes/y. Of this total, 1000 tonnes/y will be produced in the form of silica products with a special surface treatment. China Chemical Reporter, 6/16 Feb 2006, 17 (4/5), 14

India: NMDC & Kanoria Chemicals – TiO2 from kimberlite mine tailings The National Mineral Development Corp (NMDC) currently mines kimberlite in the Panna district of Madhya Pradesh, with an annual production of about 84,000 carats (16.8 grams) of commercial diamonds. In collaboration with the Central Salt & Marine Chemicals Institute (CSMRCI), the NMDC has developed a hydrometallurgical process for extracting marketable byproducts from kimberlite mine tailings. The two organisations, in partnership with Kanoria Chemicals & Industries, have signed a joint memorandum of understanding to set up pilot-scale facilities for the production of precipitated silica, sodium silicate and zeolite-A. In an associated project,

MARCH 2006