Monday, April 12, 2004 - Dow Community Advisory Panel Minutes

The Dow Community Advisory Panel met on Monday, April 12, 2004 at 6:00 p.m. at the Dow Conference Center. Those in attendance included the following:

After the facilitator welcomed those present, the panel approved the minutes of the March 8, 2004 meeting, with one correction noted.

Ms. Carville then introduced Mr. Lee Trusty, the new LAO Site Manager. Mr. Trusty stated that he was born in Baton Rouge and educated at Trinity University in San Antonio, Texas. He has lived in various locations during his tenure with Dow, the most recent being in Midland, Michigan. He stated that he is thrilled to be back in Baton Rouge.

Mr. Trusty then stated that there have been significant changes in the chemical industry requiring a need for cost-cutting measures. Along with a worldwide recession, the industry is faced with high natural gas prices, a sluggish economy, and lots of competition. Normally, the industry exports 20 billion more pounds of chemicals than it imports. Last year, that number was reduced to 10 billion pounds. Asian economic growth is increasing and some customers are moving their production overseas, mostly to China where labor costs are much lower. For 100 years, Dow has paid dividend funds. However, the company had to borrow money to pay dividends over the past 9 quarters. Dow's debt level is too high.

The focus for 2004 will continue to be on cost control. Dow has raised prices where possible and will continue this effort. There is a new CEO, and the business structure is being reorganized. Some senior management jobs will be eliminated during the organizational restructuring.

Answers to Questions and Comments Included the Following:

1. Although Dow can sign contracts for fuel costs, those contracts may be reopened if necessary.
2. Even though it is cheaper to produce many things outside the U.S., many products will continue to be made in the U.S. Products with high labor costs will be outsourced to foreign companies. The U.S. is a consuming nation. The U.S. must set its sites on high intellectual products.

Presentation on Vinyl Chloride Incident
Mr. McMurray stated that there was a release of 2,367 pounds of vinyl chloride and 26 pounds of hydrochloric acid when a flow meter weld failed. Two 1-16th inch holes in the weld caused the leak. This incident occurred on March 1, 2004. No injuries were caused by the incident. Emergency response personnel who patrolled the outside parameter of the plant detected no material outside the block. The flow meter, which failed, was installed in October 2003. Documentation from the manufacturer showed that they had X-rayed and hydro tested the flow meter prior to its installation. The true root cause of the leak cannot be determined until Dow is able to remove the flow meter from service at the next total plant outage scheduled for October, 2005. Two potential root causes are that the manufacturer's workmanship was less than adequate or that the flow meter was not adequately dried after the hydro test. Poor welds and porosity were detected on another meter of its kind that was installed at the same time. That meter, however, is not leaking. Corrective actions taken as a result of this incident include the following: 1) a leak repair box was installed on the C-100 flow meter; 2) the other flow meter was X-rayed for weld integrity; and 3) a leak repair box was also installed on it. During the next outage in October 2005, the flow meter will be removed from service and a detailed inspection will be done to determine the true cause of the failure. Additionally, a quality, service, and product performance complaint will be made to the company, which supplied the flow meters to Dow.

Answers to Questions Included the Following:

1. Checks of the perimeter were done at ground level. Vinyl chloride is a vapor that will not recondense.
2. Vinyl chloride has a higher molecular weight than air and the concentration decreases as it disburses.
3. Dow has preferred suppliers and uses the most effective technology. If a vendor doesn't sufficiently address concerns, then that vendor is removed from Dow's preferred list.
4. The flow meters were inspected 3 times and each inspection was documented. A non-destructive test was done on the flow meters to insure their integrity.
5. Dow has systems of checks and balance to determine if their vendors perform quality work.
6. Checks on pipes depend on their purpose in the plant.
7. The 2 openings in the meter were discovered simultaneously. It took 3 hours to completely stop the leaks.
8. Chlorine is more acutely hazardous than vinyl chloride.
9. Pressure monitors could not detect the leak.
10. DEQ was notified of the leak and is reviewing it.

Discussion About Asbestos Legislation in Congress
The court system is clogged with lawsuits dealing with asbestos and many companies are now bankrupt as a result of the situation. The legislation being discussed in Congress sets up a trust fund to provide compensation for the true victims of this exposure. Dow has already paid out $100 million in asbestos litigation cases. Senate Bill 1125 (the FAIR Act) will address the true issue - the victims. It doesn't take away the right to sue, but allows for payment to the victims from the trust fund that has been set up for that purpose. Dow is asking its employees and retirees to contact their U.S. Senators and ask them to support S.1125. Dow employees are planning to go to Washington, D.C. to discuss the FAIR Act with their Congressmen.

Answers to Questions Included the Following:

1. The trial lawyers are opposed to this legislation.
2. Exposure to friable and nonfriable asbestos is treated the same in the current legal system.
3. The FAIR Act will allow payment directly to the true victims of asbestos disease.
4. The estimated cap for payments from the trust fund is approximately $1 million/person.

Ms. Carville will provide answers to the following questions for CAP members at the next meeting (provided as of 5/10/04):

1. Does the bill only cover medical fees? Compensation under the FAIR Act was estimated to cover expenses incurred by the victims of the disease.
2. How many lawsuits have been filed against Dow regarding asbestos? 100's so far.
3. Who will administer the trust fund? The Department of Labor has been proposed to administer the Fund.

Responsible Care Measurements
Ms. Williams provided the panel with Responsible Care Measurements for March 9-April 12, 2004 (attachment). There have been 5 site OSHA injuries this year. A Dow clerical employee sustained a carpal tunnel injury while performing repetitive data entries, and a contractor broke his finger when a piece of wood rolled, smashing his finger. He was back to work the next day. There have been 9 agency reportables to date this year. There was one water non-compliance.

"Dow in the News"
Ms. Babin provided the panel with "Dow in the News - Louisiana Recap of March 2004" (attachment). With regard to the 7 PTEC scholarships worth $3000 each that Dow is offering to graduating seniors and mid-career adults, the deadline has been extended to April 16, 2004. Dow is in the process of filling 20 vacancies. The testing phase of the hiring process has been completed. Persons interested in applying Dow jobs should do so at www.careersatdow.com.

Next Meeting
The next Dow CAP meeting will be held on Monday, May 10, 2004 at 6:00 p.m. at the Dow Conference Center. The agenda will include a DEQ presentation on ozone non-attainment. The Georgia-Gulf CAP will be invited to meet jointly with the Dow CAP at this meeting. The June meeting agenda will be an explanation of the processes at Dow, including diagrams, etc. Guests may be invited to attend the June meeting.