Editor's note: This story has been updated with comment from Formosa.
Petrochemical manufacturer Formosa Plastics has agreed to pay $50 million to settle a lawsuit in which a judge ruled the company illegally dumped billions of plastic pellets and other pollutants into Lavaca Bay and other waterways, according to the settlement.
In addition to the financial settlement, the company agreed to comply with “zero discharge” of all plastics in the future and to clean up existing pollution.
For a decade, Port Lavaca-area residents and environmental groups urged state and federal regulators to hold Formosa Plastics accountable for what they alleged was the rampant and illegal discharge of plastic pellets and other pollutants into Lavaca Bay and nearby waterways. Formosa has a plant in Point Comfort on Lavaca Bay.
“The years of fighting to protect the natural resources of the Lavaca Bay-Cox Creek area have finally paid off,” Diane Wilson, a former shrimper and a plaintiff in the suit, said in a statement released Tuesday by Texas RioGrande Legal Aid, which represented the residents who filed suit. “It’s a huge victory for the environment — and for the people who love and depend upon it. We look forward to working with Formosa to restore the health of our environment and make sure it stays pristine.”
Ken Mounger, executive vice president for the U.S. branch of Formosa, said the conditions of the settlement demonstrate the company's "commitment to manufacturing our products in a safe and environmentally friendly manner."
U.S. District Judge Kenneth M. Hoyt still must approve the settlement.
The proposed settlement
In June, Hoyt ruled that the Taiwanese-owned company violated its state-issued permits and the federal Clean Water Act over the discharge of pollutants. He also faulted the Texas Commission on Environmental Quality over not bringing the company into compliance.
TCEQ is reviewing the settlement agreement, but the organization is "generally supportive of the efforts of parties to resolve their concerns though settlement, which can serve as a pathway to compliance and protect human health and the environment," spokesman Andrew Keese wrote in an email.
During the trial, which began in late March, the plaintiffs brought in boxes full of plastic they had collected from Lavaca and Matagorda bays and Cox Creek over several years.
"The evidence demonstrates that Formosa has been in violation of its Permit concerning the discharge of floating solids ... since January 31, 2016 and that the violations are enormous," Hoyt wrote in his June ruling, in which he described Formosa as "a serial offender."
This is the largest settlement of a Clean Water Act suit filed by private individuals, a Texas RioGrande Legal Aid representative wrote in an email. The Clean Water Act regulates the discharge of pollutants into U.S. surface waters, including lakes, rivers and streams.
The settlement will be paid out over five years into a fund to support projects that reverse the damage of water pollution in Calhoun County, where the Point Comfort facility is located, according to documents detailing the settlement. None of the money will go to the plaintiffs.
Formosa will improve how its plant eliminates plastic pellets as part of the settlement agreement. Plaintiffs will be able to review decisions and make objections, from hiring an engineer to design improvements to monitoring the company while it works toward zero discharge.
If Formosa is found to be in violation again, each documented discharge will be paid into the settlement fund. The first penalty would come at $10,000 per discharge this year, with yearly increments to more than $54,000 per discharge.
Kiah Collier contributed to this report.