Gov. Murphy CV’s and Weakens Passaic River Superfund Bill

Today Governor Murphy conditionally vetoed A997 (Rooney)/S1208 (Beach). 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 to the State by filing for bankruptcy or otherwise rendering a company or instrumentality incapable of fulfilling its responsibilities. The Bill requires that the state divest in companies like Maxus Energy Corporation who manufactured agricultural chemicals, including the herbicide known as Agent Orange. Governor Murphy agrees that divesting is an appropriate penalty for Superfund obligations however does not believe it should be the only option when companies have behaved poorly. The CV memo recommends the State Investment Council look at alternatives other than divesting.

“We are concerned that with Governor Murphy’s conditional veto, Maxus Energy could slip off the hook. We supported this bill because we believe polluters who don’t pay to cleanup their pollution should not get benefits from the state or the state should not invest in them. We need to make sure sites like in Passaic are being cleaned up and this bill will be incentive for companies and countries to do their job and address these toxic sites,” said Jeff Tittel, Director of the New Jersey Sierra Club. “This bill is important because instead of investing into Tesla, we could be putting money into an Argentine polluter.”

One example of a Superfund site in the State is the site in Newark where, for several decades, Diamond Alkali Company, purchased later by Maxus Energy Corporation, manufactured agricultural chemicals, including the herbicide known as Agent Orange.  The United States Environmental Protection Agency (EPA) found high levels of dioxin at the Diamond Alkali facility and placed the site on the Superfund National Priorities List in 1984.  Several other hazardous substances and semi-volatile and volatile compounds were also discovered at the site.

New Jersey has a significant interest in ensuring Superfund sites like in Maxus Energy Corporation’s site in Newark to no longer pose a threat to its residents, and if responsible parties are able to avoid the expense of a cleanup of Superfund sites without consequence. New Jersey has an estimated $18 million invested in Maxus Energy A997 (Rooney)/S1208 (Beach) says the State should not allow those parties to continue to profit from the State’s investments.

“Why should our state be investing money in a company that is poisoning the Passaic river and people in Newark? New Jersey should not be investing in companies that are polluting our air and adding to climate change. A997 (Rooney)/S1208 (Beach) is a message to Maxus but other companies too, that if you pollute in New Jersey, we will hold you accountable,” said Tittel.

Murphy’s CV memo recommends a “more effective and legally defensible approach would provide the State Investment Council with a variety of options to identify and correct the offending behavior, when appropriate, prior to divesture.” Murphy recommends revisions that would institute an Environmental, Social, and Governance (ESG) policy that would empower the Council to use a number of negotiating tools to influence a company’s behavior.

“Governor Murphy’s conditional veto weakens the purpose of the bill by giving the State Investment Council options. Will those options lead to divestment? Will these polluters pay to clean up the river or slip off the hook? We need to hold polluters accountable by divesting, period,” said Jeff Tittel, Director of the New Jersey Sierra Club. “Divesting in companies that avoid their Superfund obligations is a good step but New Jersey must take that further. We should be divesting our fossil fuel holdings from NJ Pension fund. We also need to hold banks accountable who are funding dirty and dangerous fossil fuel projects. New Jersey needs to start investing in infrastructure and projects that add to the well-being of our communities and environment.”