Shell, Basf Ordered to Pay $354 Million in Brazil Plant Contamination Case

The Brazilian units of Basf SE and Royal Dutch Shell Plc. were fined a total of 622 million reais ($354 million) after former workers suffered health problems because of contamination at a plant in Paulinia, Sao Paulo state, from the 1970s to 2002.

Basf SA and Shell do Brasil will also have to pay 64,500 reais in damages to each former worker and any children born during or after their service at the plant, according to an e- mailed statement from the Paulinia Labor Court yesterday. The payments cover medical treatment, exams and individual damages.

Shell and Basf have five days, starting yesterday, to publish a statement on the decision on Brazil’s two largest television networks, according to the court. Former workers at the Paulinia plant then have 90 days to present health documents. Basf and Shell both said they will appeal the decision.

“We are of the opinion that the environmental damage was caused by Shell, and we will appeal the decision,” Jennifer Moore-Braun, a spokeswoman for Basf in Ludwigshafen, Germany, said in a telephone interview today.

The Paulinia unit was built by Shell in the late 1970s and in 1992 was sold to Cyanamid, which was later bought by Basf, according to the statement. The ruling includes former employees of Shell, Basf and Cyanamid.

“Active remediation at the site has been under way for a number of years,” Kim Blomley, a spokesman at Shell in London, said in an e-mailed statement. “We are convinced there is no link between our operations and injury to people’s health based on blood tests of local residents, medical assessments of former workers and expert medical opinions.”

Shell’s Class A shares traded in London fell 0.8 percent to 1726 pence at 4:11 p.m. London time today. Basf fell 2.2 percent to 42.53 euros in Frankfurt.

To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net

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