Canadian company has link to Rosewood fertilizer plant [The State, Columbia, S.C.]

Aug. 12--One of North America's most prominent farm corporations has ties to the old fertilizer factory suspected of poisoning yards in a working-class neighborhood of south Columbia.

Whether Canada's Agrium Inc. would be liable for cleanup costs in Edisto Court off Rosewood Drive isn't yet known.

But federal regulators are looking for a person or company with the legal responsibility to reimburse taxpayers if a cleanup is launched. And state regulators say the old fertilizer factory, operated by the F.S. Royster Guano Co., is the most likely source of the arsenic and lead contamination.

In 2006, Agrium acquired the Royster-Clark fertilizer company, a latter-day version of Royster Guano. Royster Guano closed its Columbia fertilizer plant in the late 1930s, but the company continued to operate in other parts of the South and eventually became part of Royster-Clark.

If federal regulators establish a strong enough connection between Agrium and the Royster Guano Co., they could hit Agrium with a cleanup bill that could cost the farm corporation hundreds of thousands, if not millions, of dollars.

Agrium spokesman Paul Poister was quick last week to distance his corporation from Royster Guano, saying his company has little connection to the Royster Guano Co. that existed in Columbia in the early 1900s.

"It was back then a separate company," Poister said. "That did not come through the process of (Agrium's) acquisitions. It was a different company than we eventually acquired into the Agrium company."

But lawyers familiar with U.S. pollution cleanup laws said corporations can be held responsible for contamination caused long ago by companies they acquired, and the costs can run into the millions for corporations found liable.

Under the federal Superfund cleanup law, liability can extend to the early 20th century, a time when federal environmental laws were nonexistent. A key consideration is showing that a modern-day company acquired the liabilities of the old company, as well as the assets, attorneys said.

"It can go way back," said former U.S. Justice Department lawyer Gerald George, now a private California attorney who represents companies potentially liable for past contamination. "If you had a period of 20 years, maybe from 1903 to 1923, if there was a release of contamination during that time, they can still have liability for the cleanup."

Liability not only applies to reimbursement of government cleanup costs, but it can also extend to individual lawsuits people file seeking damages for the impacts of pollution on their health or property values, Spartanburg environmental lawyer Gary Poliakoff said.

Columbia attorney Dick Harpootlian is investigating the source of contamination on behalf of Rosewood neighborhood leaders, and a lawsuit is possible.

George said he's not surprised. "A lot of lawyers will be looking at that," he said.

Headquartered in Alberta, Canada, Agrium is one of North America's largest suppliers of fertilizers. It has hundreds of outlets across the United States and, until last year, operated a fertilizer plant in the Hartsville area of the Pee Dee. In recent years, Agrium has aggressively acquired other agriculture companies, including Royster-Clark. The acquisitions helped swell its retail earnings to almost $800 million last year, according to The Financial Post, a Canadian news organization.

Columbia's Royster Guano plant opened in about 1902, according to a summary of the company posted on the Richland County Library website. State environmental regulators say it had closed by 1938 and other companies moved onto the property on Commerce Drive. Regulators say the same contaminants found on the fertilizer plant site were found last month along Easy Street, in yards of homes built after Royster Guano shut down.

Neighborhood residents are justifiably nervous. DHEC says some of the pollution may have existed in people's yards for years. Much of the Edisto Court community was developed in an old lake bed after the fertilizer plant closed. Contaminants are believed to have run into the lake and polluted the soil.

About one-quarter of the yards tested in the Edisto Court community, mostly on Easy Street, contain lead and/or arsenic above federally accepted safety levels, according to the U.S. Environmental Protection Agency. The EPA tested about 45 yards in Edisto Court last week to verify toxins first identified by the state Department of Health and Environmental Control in July.

Edisto Court's drinking water is safe because people don't rely on wells, state regulators say. But the threat comes from exposure to soil, where the toxins are buried. Children who play in the dirt could ingest lead or arsenic by failing to wash their hands. Lead is particularly dangerous to children because it can limit their ability to learn in school, even if they are exposed to small amounts.

Rick Jardine, an EPA official who oversaw soil testing in Edisto Court yards last week, said he could not address whether Agrium is being looked at. But he said the EPA is "not just throwing up our hands and saying this is 100 years old," meaning no responsible party can be found.

"My attorney thinks he has some leads, but whether they pan out will take some investigation," said Jardine, who is with an EPA division that assesses pollution problems and investigates those responsible for contamination.

The EPA's testing so far has cost about $50,000 to $75,000, he said. It could cost "10 times that or more" if the agency decides to clean up the yards through the federal Superfund program, Jardine said.

Poliakoff, who has handled pollution liability cases for about two decades, said it isn't always easy to recover the costs of cleanup or recover damages for impacts to people's health and property values. Corporations are reluctant to accept responsibility for past pollution and are usually fortified with expert legal teams. Proving their liability often depends on how hard the government or property owners want to battle, he said.

The key is establishing the connection between an old company and a new one, he said.

"It would be a major battle," Poliakoff said. "The plaintiff would want to show that when the current corporation acquired the assets it acquired enough of the assets that logically the liabilities followed with it. The defendant will always claim, 'No, we only bought some assets, we didn't buy any liabilities, and we are a different kind of business.'"

Still, Poliakoff said he won a favorable settlement several years ago after showing that a modern-day company was responsible for contamination caused by an old corporation it had acquired. Poliakoff said the Rosewood case "sounds very similar."

While DHEC has pointed the finger at the Royster Guano Co., other companies occupied the site after the fertilizer factory closed down. Rosewood neighborhood leader Jenna Stephens said she's not ready to concede that Royster Guano is the only potential source of the pollution. Her group, the Rosewood Community Council, retained Harpootlian.

"At this point, we are still in the information-gathering stage," she said.

One of the companies that occupied the site after Royster is SEACO, an asphalt plant that recently was purchased by Associated Asphalt Inc. of Virginia. According to state records and statements made by S.C. regulators, SEACO opened about 10 years after Royster Guano closed.

Both the asphalt company and DHEC say it had nothing to do with the pollution in Edisto Court.

SEACO's asphalt production process doesn't produce lead or arsenic, Associated Asphalt says. And while trucks have frequented the SEACO site since it opened in 1949, DHEC spokesman Mark Plowden questioned whether any leaded gasoline spills would have been significant enough to affect the Edisto Court neighborhood.

Meanwhile, Associated Asphalt, which now owns the SEACO site, is nearing completion of a contract with DHEC that will allow the company to continue and expand operations at the site without facing liability for past lead and arsenic contamination. Associated Asphalt has indicated it wants to expand and add a rail terminal on land it is buying next door.

Another company that once occupied the area was Bagnal Builders Inc. The Bagnal property is next to SEACO and has been purchased by Associated Asphalt as part of its plan for a railroad terminal.

Attempts to reach someone who could speak on behalf of Bagnal Builders were not successful. The company once sold lumber from the site on Commerce Drive. Lumber at one time was treated with arsenic.

View Rosewood pollution investigation in a larger map

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