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ENR 616-0189 514-1888 553-1506 271-5071

KETCHIKAN PULP CO. TO PAY $3 MILLION IN CIVIL PENALTIES AND UP TO $6 MILLION TO HELP RESTORE WARD COVE Settlement Follows $3 Million Criminal Fine Two Weeks Ago WASHINGTON, D.C. -- Two weeks after agreeing to millions of dollars in criminal fines for its dumping activities, the Ketchikan Pulp Company ("KPC") will pay $3.1 million more in civil penalties and spend up to $6 million cleaning up the damage it caused to Alaska's Ward Cove, the Justice Department and Environmental Protection Agency announced today. The settlement, lodged in a consent decree in the Federal District Court in Anchorage, resolves Clean Water Act and Clean Air Act claims pending since 1992. In a separate criminal plea agreement filed March 6 involving Clean Water Act violations, KPC agreed to pay $3 million in fines for 14 counts of dumping harmful sludge and wastewater into Alaska's Ward Cove over a three-year period, including intentional dumping that lasted five straight days. More than half of the criminal penalty will be suspended if KPC spends at least $1,750,000 to complete an ambitious pollution prevention program. "Indifference and illegal waste disposal threaten Alaska's ecosystem," said Lois Schiffer, Assistant Attorney General for Environment and Natural Resources. "Ketchikan is paying the price for fouling the environment. At the same time, Ketchikan's commitments to improve operations are positive steps to fix the problems it created." "Today's events mark and end to a major enforcement effort by EPA, and a beginning for the rehabilitation of Wards Cove," said Chuck Clarke, EPA's Northwest Regional Administrator. KPC manufactures wood pulp and other logging products. Its mill uses chemicals to manufacture dissolving-grade wood pulp, which is the raw material used in producing rayon, cellophane and and other products.

(MORE) The waters near the Ketchikan plant in Ward Cove have been classified as "impaired" by EPA, Clarke said, because of the adverse cumulative effect of waste discharges including solids, toxic chemicals, alkaline substances and oxygen-depleting materials

that deprived the cove of its potential as a marine habitat. The vicinity of Ward Cove is populated with numerous species of wildlife including Killer Whales, Salmon, Halibut, Sea Otters, and various birds. Today's civil settlement resolves hundreds of violations of the Clean Air Act and the Clean Water Act, said Schiffer. The complaint asserts that KPC violated the Clean Air Act when one of its boilers spewed 1600 tons of sulfur dioxide into the air illegally over a two-year period. The Clean Water Act allegations include 42 occasions on which the discharges from KPC's mill were more acidic than its discharge permit allowed. Additional limits were exceeded on three dozen other occasions. KPC also repeatedly failed to properly report discharges from its mill, as required by its EPA discharge permit. "In settlement of the civil case, Ketchikan Pulp agreed to help restore Ward Cove by spending up to $6 million to reverse the effects of contaminated bottom sediments that have built up over the years," Clarke said. "The consent agreement requires Ketchikan Pulp to upgrade its water pollution control activities at the mill, and to curtail its emissions of air pollutants as well." To settle the civil case, Ketchikan Pulp agreed to pay a civil penalty of $3,111,000 for Clean Water Act and Clean Air Act violations. In addition to the penalties and the Ward Cove sediment remediation project, Ketchikan Pulp also agreed to take several remedial steps: * * * * * * eliminate direct discharges that bypass its water treatment plant, improve the mill's spill containment program, use only state-certified wastewater treatment operators, improve monitoring and laboratory analysis, conduct tests that will measure all sulfur dioxide emissions at the mill, and conduct a facility-wide environmental audit at the mill to ensure full compliance with environmental laws and help prevent pollution.

KPC is a Washington Corporation, and is a wholly owned subsidiary of Louisiana-Pacific Corporation. Its mill uses millions of gallons of water a day that must be treated in accordance with EPA permits. ### 95-151