DuPont Investor Coalition Flags Major Regulatory Risk on PFOA Identified in New DuPont Quarterly Report

The following statement is from DuPont Shareholders for Fair Value:

In its quarterly shareholder report filed with the Securities and Exchange Commission yesterday, EI DuPont de Nemours (NYSE:DD) noted that $1 billion in annual revenues could be at stake in the event of regulatory restraints on the use of the chemical PFOA.

The company notes in its SEC filing that:

…there can be no assurance that the EPA or any other regulatory entity will not in the future choose to regulate or prohibit the production or use of PFOA. Products currently manufactured by the company representing approximately $1 billion of 2004 revenues could be affected by any such regulation or prohibition.

A coalition of DuPont shareholders, DuPont Shareholders for Fair Value (DSFV), took note of this disclosure today.  The group of investors has called on DuPont to fully disclose risks associated with the production and use of PFOA, also known as C8.   The group has filed a series of letters with the SEC complaining about the poor disclosure by DuPont.

“Shareholders have been poorly informed by DuPont for the past 25 years regarding the health, environmental and financial risks of PFOA and Teflon known to the management,” said DSFV spokesman Sanford Lewis, an attorney.  “Under pressure from its investors, DuPont has made a first step toward acknowledging the enormous risks associated with PFOA.”

The quarterly report also acknowledged to shareholders that the EPA’s science advisory board made a draft finding that PFOA is a likely human carcinogen.

Said Lewis, “Today’s disclosure makes it clearer to investors just how big the stakes are if DuPont’s products are banned by government. Now the company needs to tell the rest of the story – the potential liabilities at its various sites, marketplace developments and the litany of scientific studies showing health risks of PFOA.

“Only three years ago, DuPont began producing PFOA without disclosing the big regulatory and market risk it was taking for its product lines by perpetuating the use of this problematic chemistry,” said Lewis. “By contrast, 3M announced in 2000 that it was phasing out the production of these chemicals due to the environmental persistence of the chemicals.”

The DuPont quarterly report also stated: “Currently, PFOA is not regulated by the EPA and there are no regulatory actions pending that would prohibit its production or use.” However, according to Lewis, this statement is potentially misleading since there are regulatory reviews of PFOA and related compounds underway in the UK, Australia, and Canada.  In addition, there is a petition pending to restrict or ban PFOA worldwide under the Stockholm Convention on persistent toxic pollutants.

Members of the DSFV coalition own at least 488,000 shares of DuPont stock. The coalition includes the United Steelworkers of America, the Amalgamated Bank Long View Funds, the Sisters of Mercy Merion Regional Community in Merion, Pa., institutional investors Green Century Capital Management in Boston, and DuPont employee John D. Kimmerle of Kenmore, NY.