PHOSPHORUS MANUFACTURER PLEADS GUILTY TO TWO FELONIES, WILL PAY $18 MILLION IN CRIMINAL FINE AND RESTITUTION AND CLEAN UP SITE

WASHINGTON, D.C. - Rhodia Inc. (“Rhodia”) pleaded guilty today in federal district court in Missoula, Montana to two felonies, for violating the Resource Conservation and Recovery Act (“RCRA”). The violations took place at Rhodia’s elemental phosphorus manufacturing plant located in Silver Bow County, Montana. Pursuant to a plea agreement subject to approval by the court, Rhodia will be required to pay $18 million in criminal fines and restitution. Rhodia will also be required to clean up the site pursuant to orders by EPA under RCRA.

The Silver Bow Plant previously manufactured elemental phosphorus, from at least 1986 until 1996. Elemental phosphorus was used by other manufacturers to produce fertilizer, pesticides and food grade phosphoric acid. Elemental phosphorus waste, however, is known as a “hazardous” waste under RCRA, in that it is ignitable, since it can spontaneously ignite when exposed to air, posing a serious threat to the environment and public health. In 1996, the Silver Bow Plant was put into “mothball” status, and was closed in 1997.

Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division stated, “Rhodia’s admissions of guilt comes after an outstanding joint effort by federal criminal investigators and state environmental investigators. It should send a strong message to industry that if you illegally store hazardous wastes that can threaten the environment and public health, you will be prosecuted and held accountable for your illegal conduct.”

J.P. Suarez, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency said, “Besides getting a hazardous site cleaned up, the substantial fine for Rhodia will strongly discourage would-be violators from 'walking away' from hazardous waste sites.”

Rhodia has admitted that after from January 1999 until August 2000, after the Silver Bow Plant was closed, it illegally stored elemental phosphorus sludge, a hazardous waste, at the site in a large concrete tank known as a 100-foot clarifier. Rhodia has also admitted that it illegally stored carbon brick and precipitator dust contaminated with elemental phosphorus waste, a hazardous waste. The carbon brick and precipitator dust had been discarded from a furnace at the site. The illegal activity was discovered in May 2000, when EPA and Montana Department of Environmental Quality (“DEQ”) executed a search warrant at the Silver Bow Plant.

Rhodia has agreed to pay $18 million, $16.2 million of which will be paid as a criminal fine and $1.8 million which will be paid as restitution. The criminal fine is the largest ever paid for criminal environmental violations in the District of Montana, and one of the largest ever paid for prosecution of hazardous waste crimes in the country. Pursuant to a plea agreement, Rhodia will be required to perform remediation of all hazardous wastes at the Silver Bow Plant. The remediation will be subject to approval by EPA. The plea agreement also recommends that Rhodia be subject to five years’ probation and that the period of probation be extended should remediation at the Silver Bow Plant take longer than five years.

Sentencing for Rhodia has been scheduled by the court for April 29, 2004.

###

04-029