by Sam Levin
Officials with Walmart pleaded guilty this week to mishandling hazardous materials at retail stores in Missouri and California -- and as a result will have to pay a total of more than $110 million in fines to resolve these cases. The company, authorities say, violated a slew of federal and state environmental laws.
"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," Ignacia Moreno, assistant attorney general for the justice department's environment and natural resources division says in a statement. "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."
What kind of violations occurred in Missouri?
On Tuesday, the company pleaded guilty in Kansas City to violating the so-called Federal Insecticide, Fungicide and Rodenticide Act by "failing to properly handle pesticides that had been returned by customers at its stores," the department of justice says in a news release.
The guilty plea this week comes after the department brought forward three criminal cases against Walmart -- in addition to a similar civil case filed by the U.S. Environmental Protection Agency.
The company, authorities say, did not have a program in place and failed to train employees on proper disposal practices for hazardous wastes:
As a result, hazardous wastes 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 United States.
Tammy Dickinson, U.S. attorney for the western district of Missouri, released this statement on the plea agreement:
This tough financial penalty holds Wal-Mart accountable for its reckless and illegal business practices that threatened both the public and the environment.
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. Additionally, Wal-Mart's community service payment will fund important environmental projects in Missouri to help prevent such abuses in the future.
In the Missouri case, Walmart acknowledged that starting in 2006, it began sending damaged household products -- including regulated solid and liquid pesticides -- from six return centers to a Neosho-based recycling facility. There, products were processed for reuse and resale, but because employees didn't provide adequate oversight, "regulated pesticides were mixed together and offered for sale to customers without the required registration, ingredients, or use information," the department of justice says.
In Missouri, Walmart will pay a criminal fine of $11 million and another $3 million to the state department of natural resources. That funding will go to the agency's hazardous-waste program to be used for further inspections and education on pesticide regulations.
Walmart has already spent more than $3.4 million in the state to safely remove hazardous material from the Missouri recycling facility. The fines in both states add up to $81.6 million, authorities say, and given previous actions in Missouri and California, Walmart will eventually have paid a total of more than $110 million to fully resolve the various violations.
Continue for response from Walmart and for the full statements on the plea agreement.
In its lengthy statement on the plea agreement this week, Walmart notes that it has agreed to previous civil settlements in Missouri (and California) and has made all necessary remedies.
"The incidents on which the charges are based occurred years ago and involved the transportation and disposal of common consumer products. No specific environmental impact has been alleged and since then, Walmart designed and implemented comprehensive environmental programs that remain in place today," the company says in a statement.
Walmart says it has made significant changes:
1. Created nearly 50 dedicated environment compliance staff, with elevated management authority;
2. Developing and implementing more than 100 environmental compliance standard operating procedures for our stores and clubs;
3. Clearly identifying consumer products sold in stores and clubs that constitute hazardous waste if discarded, and providing this information to store and club associates through handheld terminals and shelf labels;
4. Implementing a hazardous waste management system so that store and club associates properly dispose of regulated items that become waste at the stores and clubs;
5. Providing enhanced environmental compliance training to associates in stores and clubs across the country.
Here's the full statement from the department of justice followed by the full statement from Walmart:
Wal-Mart Pleads Guilty to Federal Environmental Crimes, Admits Civil Violations and Will Pay More Than $81 Million
Retailer Admits Violating Criminal and Civil Laws Designed to Protect Water Quality and to Ensure Proper Handling of Hazardous Wastes and Pesticides
Wal-Mart Stores Inc. pleaded guilty today 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 United States. The Bentonville, Ark.-based company also pleaded guilty today 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, as well as a 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 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 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 United States.
"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."
"Federal laws that address the proper handling, storage and disposal of hazardous wastes exist to safeguard our environment and protect the public from harm," said André Birotte Jr., the U.S. Attorney for the Central District of California. "Retailers like Wal-Mart that generate hazardous waste have a duty to legally and safely dispose of that hazardous waste, and dumping it down the sink was neither legal nor safe. The case against Wal-Mart is designed to ensure compliance with our nation's environmental laws now and in the future."
"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."
"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. Additionally, Wal-Mart's community service payment will fund important environmental projects in Missouri to help prevent such abuses in the future."
"The FBI holds all companies, regardless of size, to the same standards," said FBI Special Agent in Charge David J. Johnson of the San Francisco Field Office. "We will continue to work closely with our law enforcement partners to ensure there is a level playing field for all businesses and that everyone follows the rules."
"Today Wal-Mart is taking responsibility for violating laws that protect people from hazardous wastes and chemicals," said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Walmart is committing to safe handling of hazardous wastes at all of its facilities nationwide, and action that will benefit communities across the country."
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.
Wal-Mart pleaded guilty this morning in San Francisco to six misdemeanor counts of negligently violating the Clean Water Act. 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 filed in California, 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.
In the third criminal case resolved today, Wal-Mart pleaded guilty in the Western District of Missouri to violating FIFRA. According to a plea agreement filed in Kansas City, beginning in 2006, Wal-Mart began sending certain damaged household products, including regulated solid and liquid pesticides, from its six return centers to Greenleaf LLC, a recycling facility located in Neosho, Mo., where the products were processed for reuse and resale. Because Wal-Mart employees failed to provide adequate oversight of the pesticides sent to Greenleaf, regulated pesticides were mixed together and offered for sale to customers without the required registration, ingredients, or use information, which constitutes a violation of FIFRA. Between July 2006 and February 2008, Wal-Mart trucked more than 2 million pounds of regulated pesticides and additional household products from its various return centers to Greenleaf. In November 2008, 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 today 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.
In conjunction with today'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 (RCRA). 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.
The criminal cases announced today 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. 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.
And from Walmart:
Walmart Resolves Government Investigation into Environmental Compliance
Implemented Compliance Program in 2006 to Address Claims for Handling Common Consumer Products Treated as Hazardous Waste
BENTONVILLE, Ark., May 28, 2013 - Walmart has entered into plea agreements with the U.S. Attorneys' Offices in the Northern and Central Districts of California, the U.S. Attorney's Office for the Western District of Missouri regarding misdemeanor violations of certain environmental laws, and has signed an administrative resolution with the Environmental Protection Agency (EPA) to resolve compliance issues that took place years ago.
This resolution follows previous civil settlements Walmart entered into with the State of California in 2010 and the State of Missouri in 2012 that addressed the same facts the federal government in this case raised and which Walmart has already remedied. The incidents on which the charges are based occurred years ago and involved the transportation and disposal of common consumer products. No specific environmental impact has been alleged and since then, Walmart designed and implemented comprehensive environmental programs that remain in place today.
"Walmart has a comprehensive and industry-leading hazardous waste program," said Phyllis Harris, senior vice president and chief compliance officer, Walmart US. "The program was built around training, policies and procedures on how to safely handle consumer products that become hazardous waste, and we continue to run the same program in every store and club that was deployed years ago," Harris continued. "We are pleased that this resolves all of these issues raised by the government."
Within the administrative resolution, the EPA noted that in 2006 Walmart began to implement an enhanced environmental management program in all of its retail facilities which seeks to properly manage hazardous waste and, in many respects, goes beyond compliance with environmental laws.
The EPA also acknowledged in the administrative resolution that Walmart has already taken steps to improve its environmental compliance program to address the issues and promote compliance with all applicable environmental laws related to the company's hazardous waste management. Walmart and the EPA have also entered into a separate agreement which provides that the company will not be disqualified from participating in federal government programs.
Walmart's expansive environmental compliance measures include:
Created nearly 50 dedicated environment compliance staff, with elevated management authority;
Developing and implementing more than 100 environmental compliance standard operating procedures for our stores and clubs;
Clearly identifying consumer products sold in stores and clubs that constitute hazardous waste if discarded, and providing this information to store and club associates through handheld terminals and shelf labels;
Implementing a hazardous waste management system so that store and club associates properly dispose of regulated items that become waste at the stores and clubs;
Providing enhanced environmental compliance training to associates in stores and clubs across the country.
Additionally, Walmart has reduced hazardous waste through its environmental sustainability measures by more than 30 percent since 2010. Examples include:
In 2011, Walmart worked with key suppliers and implemented a consumer aerosol can recapping program that resulted in a significant reduction of nearly 250,000 cans managed as hazardous waste as compared to 2010. The cans' plastic caps were susceptible to breaking through shipping and traffic on the sales floor. Because there is no damage to the product itself, Walmart is now able to order replacement caps and return the aerosols to the sales floor instead of disposing them into the waste stream.
Through extensive collaboration with the EPA and key suppliers, Walmart obtained federal approval to implement a bag patch program for solid pesticide and fertilizer bags that allows Walmart to patch bags with minor damage and sell them when they previously would be managed as waste. Between 2011 and 2012, this program prevented nearly 12 million pounds of bagged lawn and garden products from becoming waste, including a portion of which would otherwise have been managed as hazardous waste.
Walmart completed a multi-year project to enhance IT systems that allows it to analyze waste generation trends for consumer products. This enables the company to better identify and track the disposition of products that for a variety of reasons will not be sold in stores. Walmart can now provide real time product specific direction to associates regarding properly managing products, significantly reducing the number of products that become hazardous waste.
For additional information regarding Walmart's environmental compliance program and sustainability efforts, please visit our website or the Walmart Sustainability Blog, The Green Room.
Note: Together the plea agreements and administrative resolution call for Walmart to pay an aggregate amount of approximately $82 million consisting of the following payments: $60 million for misdemeanor Clean Water Act Violations in California ($40 million fine and $20 million community service payments); $14 million in Missouri for a misdemeanor Federal Insecticide, Fungicide, and Rodenticide Act violation (FIFRA) ($11 million fine and $3 million in community service payments); and a $7.6 million civil penalty to EPA to settle charges for FIFRA ($1.5 million) and Resource Conservation and Recovery Act (RCRA) violations ($6.1 million). The payments will not impact the company's results of operations for the second quarter of 2013 and will not be material to the company's financial position.