BASF, Shell in Talks to Settle $653 Million Brazil Contamination Penalty

BASF SE (BASF), the world’s biggest chemical maker, is in talks with Royal Dutch Shell Plc (RDSA) to determine who should pay a 490 million-euro ($653 million) fine for contamination in Brazil.

The site in Paulinia was “significantly” contaminated by the production of crop protection products, and BASF and Shell were jointly ordered in August 2010 to pay damages to former employees for medical treatment and personal suffering, BASF said in its 2011 annual report.

BASF said its Brazilian unit filed a lawsuit against Shell on March 30, asking a court to declare that Shell is responsible for the full amount of the damages resulting from the contamination at Paulinia. The two companies are in settlement talks, Ludwigshafen, Germany-based BASF said.

The Paulinia unit was built by Shell, sold to Cyanamid in 1995 and then acquired by BASF in 2000, the German company said in its annual report. The contamination stems from the period before 2000, BASF said.

Jennifer Moore-Braun, a spokeswoman for BASF, declined to comment beyond what is in the annual report. Spokesmen for Shell didn’t immediately return calls seeking comment.

The suit against Shell was reported today in German newspaper Financial Times Deutschland.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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