Legislation sponsored by Assemblymen Gordon Johnson, Gary Schaer and Nancy Pinkin to prohibit investment of pension and annuity funds by the state in entities that avoid Superfund obligations to the state received approval from the Assembly Budget Committee on Monday.
“Considering the devastating impact Superfund sites have on residents and the environment, any corporation avoiding their Superfund obligations should be aware that avoiding such responsibility will not be without consequence,” said Johnson (D-Bergen). “Under no circumstance should a corporation get a pass from fulfilling their Superfund obligations.”
The bill (A-997) refers to the Diamond Alkali Company Superfund Site and its detrimental effect on the state’s soil, waters, air and people. The contaminants from the site have tainted the fish and wildlife in the area of the Passaic River that was impacted to the point that prohibitions and advisories on consumptions of fish and crabs from the area are in place.
After a long-awaited decision from the united States Environmental Protection Agency (EPA), in March 2016, the EPA announced that remediation of the Diamond Alkali Company Superfund site would cost $1.38 billion.
Just three months following the announcement, YPF S.A., the Argentinian state-owned company that acquired Maxus Energy Corporation (previously Diamond Alkali Company) placed Maxus Energy into bankruptcy, ultimately stripping it of its assets and leaving it unable to fulfill its Superfund obligations for the Diamond Alkali site. Nevertheless, YPF S.A. remains a profitable business.
“The EPA enters into agreements with corporations they believe will fulfill their obligations,” said Schaer (D-Bergen, Passaic). “Unpredictable circumstances may occur during the course of the agreement but that, in no way, should negate their responsibility for clean-up and meeting any other obligation in regards to the Superfund site.”
The bill would prohibit the investment of New Jersey public employee retirement funds in any company, country, or country’s instrumentality that avoids its Superfund obligations.
“The goal of this legislation is to send a message to energy corporations that neglecting our environment is simply unacceptable,” said Pinkin (D-Middlesex). “Moreover, avoiding their responsibilities will not be without consequence.”
The State Investment Council, after consulting with an independent research firm that specializes in global security risk for portfolio determinations, would be required to take the appropriate action to sell, redeem, divest, or withdraw any investment held in violation of this prohibition.
The State Investment Council would have three years to complete the divestment required as a result of this bill and would not be required to make any premature or otherwise imprudent sale, redemption, divestment, or withdrawal of an investment. The bill would be effective immediately.