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Wal-Mart to Pay $110 Million for Clean Water Act and Pesticide Disposal Violations

Health + Wellness

Beyond Pesticides

Last week Wal-Mart Stores, Inc. plead guilty in cases filed by federal prosecutors in Los Angeles and San Francisco to six counts of violating the Clean Water Act by illegally handling and disposing of hazardous materials at its retail stores across the U.S., including pouring pesticides down the drain. The Bentonville, AR, based company also plead guilty in Kansas City, MO, to violating the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) by failing to properly handle pesticides that had been returned by customers at its stores across the country.

As a result of the three criminal cases brought by the Justice Department, and the related civil case filed by the U.S. Environmental Protection Agency (EPA), Wal-Mart will pay approximately $81.6 million for its unlawful conduct. Coupled with previous actions brought by the states of California and Missouri for the same conduct, Wal-Mart will pay a combined total of more than $110 million to resolve cases alleging violations of federal and state environmental laws. According to the Kansas City Star, the company stated that the fines and penalties would “not be material to its financial position.”

“By improperly handling hazardous waste, pesticides and other materials in violation of federal laws, Wal-Mart put the public and the environment at risk and gained an unfair economic advantage over other companies,” said Ignacia S. Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division.

“Today, Wal-Mart acknowledged responsibility for violations of federal laws and will pay significant fines and penalties, which will, in part, fund important environmental projects in the communities impacted by the violations and help prevent future harm to the environment.”

FIFRA Violations

From 2006 to 2008, the company sent more than 2 million pounds of damaged containers of pesticides and other hazardous products to a third-party management company, Greenleaf, in Neosho, MO. The products were then mixed together and offered for sale to customers without the required registration, ingredients or use information, which constitutes a violation of FIFRA. Greenleaf was under contract with Wal-Mart to recycle pesticide products, but lacked the necessary FIFRA registrations to mix, repackage and relabel some of the pesticides. Greenleaf also did not have the capacity to handle all the products sent to it by Wal-Mart, resulting in significant releases of hazardous substances. Greenleaf was also convicted of a FIFRA violation and paid a criminal penalty of $200,000 in 2009.

Pursuant to the plea agreement filed in Missouri and accepted by U.S. District Judge John T. Maughmer, Wal-Mart agreed to pay a criminal fine of $11 million and to pay another $3 million to the Missouri Department of Natural Resources, which will go to that agency’s hazardous waste program and will be used to fund further inspections and education on pesticide regulations for regulators, the regulated community and the public. In addition, Wal-Mart has already spent more than $3.4 million to properly remove and dispose of all hazardous material from Greenleaf’s facility.

“This tough financial penalty holds Wal-Mart accountable for its reckless and illegal business practices that threatened both the public and the environment,” said Tammy Dickinson, U.S. Attorney for the Western District of Missouri.

"Truckloads of hazardous products, including more than 2 million pounds of pesticides, were improperly handled under Wal-Mart’s contract. Today’s criminal fine should send a message to companies of all sizes that they will be held accountable to follow federal environmental laws," Dickinson continued. "Additionally, Wal-Mart’s community service payment will fund important environmental projects in Missouri to help prevent such abuses in the future.”

In conjunction with the company’s guilty pleas in the three criminal cases, Wal-Mart has agreed to pay a $7.628 million civil penalty that will resolve civil violations of FIFRA and Resource Conservation and Recovery Act. In addition to the civil penalties, Wal-Mart is required to implement a comprehensive, nationwide environmental compliance agreement to manage hazardous waste generated at its stores. The agreement includes requirements to ensure adequate environmental personnel and training at all levels of the company, proper identification and management of hazardous wastes, and the development and implementation of environmental management systems at its stores and return centers. Compliance with this agreement is a condition of probation imposed in the criminal cases.

Clean Water Act Violations

In California, Wal-Mart plead guilty to six misdemeanor counts of negligently violating the Clean Water Act. According to documents filed in U.S. District Court in San Francisco, from a date unknown until January 2006, Wal-Mart did not have a program in place and failed to train its employees on proper hazardous waste management and disposal practices at the store level. As a result, hazardous wastes, including pesticides, were either discarded improperly at the store level—including being put into municipal trash bins or, if a liquid, poured into the local sewer system—or they were improperly transported without proper safety documentation to one of six product return centers located throughout the U.S.

The six criminal charges were filed by the U.S. Attorney’s Office in Los Angeles and San Francisco (each office filed three charges), and the two cases were consolidated in the Northern District of California, where the guilty pleas were formally entered before U.S. Magistrate Judge Joseph C. Spero. As part of a plea agreement, Wal-Mart was sentenced to pay a $40 million criminal fine and an additional $20 million that will fund various community service projects, including opening a $6 million Retail Compliance Assistance Center that will help retail stores across the nation learn how to properly handle hazardous waste.

“As one of the largest retailers in the United States, Wal-Mart is responsible not only for the stock on its shelves, but also for the significant amount of hazardous materials that result from damaged products returned by customers,” said Melinda Haag, U.S. Attorney for the Northern District of California.

“The crimes in these cases stem from Wal-Mart’s failure to comply with the regulations designed to ensure the proper handling, storage and disposal of those hazardous materials and waste. With its guilty plea today, Wal-Mart is in a position to be an industry leader by ensuring that not only Wal-Mart, but all retail stores properly handle their waste.”

Wal-Mart owns more than 4,000 stores nationwide that sell thousands of products which are flammable, corrosive, reactive, toxic or otherwise hazardous under federal law. The products that contain hazardous materials include pesticides, solvents, detergents, paints, aerosols and cleaners. Once discarded, these products are considered hazardous waste under federal law.

These criminal cases are a result of investigations conducted by the FBI and the EPA, which received substantial assistance from the California Department of Substance and Toxics Control and the Missouri Department of Natural Resources. In Missouri, the case was prosecuted by Deputy U.S. Attorney Gene Porter and ENRD Senior Trial Attorney Jennifer Whitfield of the Environmental Crimes Section of the Environment and Natural Resources Division (ENRD). In California, the cases were prosecuted in Los Angeles by Assistant U.S. Attorney Joseph O. Johns and in San Francisco by Assistant U.S. Attorney Stacey Geis.

Visit EcoWatch’s CLEAN WATER ACT pages for more related news on this topic.

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