Ohio Chamber of Commerce - Governmental Affairs

TESTIMONY OF
World Kitchen
In Support of Sub. SB 105
House Committee on Energy and Environment
January 24, 2002

Jeffrey L. Burman
Technology Manager

Good morning Madam Chairwoman and members of the Committee. Thank you for the opportunity to present testimony today. I am Jeff Burman, Technology Manager for World Kitchen's Massillon, Ohio facility. I have lived in Ohio off and on for 29 years and have worked at the Massillon facility in Stark County for 11 years. I am here today on behalf of my company, the Ohio Chamber of Commerce and the Ohio Manufacturers' Association in the hope that World Kitchen's recent experience will highlight the dire need for some type of temporal restriction on the agencies in charge of enforcing Ohio's environmental laws and regulations. Thus, World Kitchen supports Sub. S.B. 105.

First, I want to tell you a little bit about World Kitchen's Massillon facility. Then, I would like to explain the Ohio Environmental Protection Agency's ("Ohio EPA") recent Clean Air Act enforcement initiative against the facility, which relies on actions that occurred 3 owners and 22 years ago.

It is likely that World Kitchen's Massillon facility manufactured the muffin pan in your kitchen. The Massillon plant produces a full line of bakeware and has been in operation since 1945. At that time, EKCO Housewares owned the facility. American Home Products acquired EKCO Housewares in 1965, including the Massillon facility, and later sold EKCO Housewares to EKCO Group in 1984. CCPC later purchased the EKCO Group in 1999 and has since changed its name to World Kitchen. Thus, 3 owners had operated this facility until World Kitchen decided to invest in Ohio when it purchased the facility over 3 years ago. The process of making the bakeware is quite simple. First, the equipment stamps the baking sheet out of metal. The baking sheet then travels down a conveyer line to a degreaser to remove oil remnants, then to a spray booth where a silicone coating is added, and finally to the oven where the baking sheet is cured.

The Massillon facility employs 125 people and is one of the largest employers in Massillon. Thus, the vitality of the facility is extremely important to all of our employees' families as well as to the City itself. In addition to employment opportunities, World Kitchen also provides financial support to the City and the County through payment of taxes and civic donations.

Ohio EPA's current regulatory action against the Massillon facility is based on permits they issued decades ago pursuant to Ohio EPA's equivalent of the Clean Air Act. In its simplest terms, the statute requires a facility to obtain a Permit to Install ("PTI") before installing any piece of equipment that will emit certain listed air pollutants into the atmosphere. A similar Permit to Operate ("PTO") is necessary for the operation of this same equipment. Additional requirements related to installation and emission controls are triggered based on whether an area is designated as attainment for ozone (i.e. levels in the air meet the requisite federal standard) or nonattainment (ie. does not meet these levels). Nonattainment areas require much more extensive controls.

In light of this background, let me tell you about Ohio EPA's attempt to resurrect decade old history in order to bring current air permit violations. Ohio EPA issued a Notice of Violation ("NOV") to the Massillon facility in late 1999. The NOV is primarily targeted at the facilities' two coating lines. A brief history of Ohio EPA's involvement with these coating lines, as well as the involvement of its counterpart, the Canton City Health Department ("CCHD"), is essential to understanding the egregiousness of Ohio EPA's position.

EKCO, the initial owner of this facility, applied for a PTI for its first bakeware coating line, and Ohio EPA granted EKCO a PTI on November 30, 1979. Ohio EPA also granted EKCO a PTO for the coating line on October 24, 1980. PTOs last for approximately 3 years, and EKCO regularly applied for its PTOs for the first line, and Ohio EPA regularly granted these PTOs (March 16, 1984; March 2O, 1987; Aug. 3, 1990; Mar. 18, 1994). In fact, on October 31, 1983, Ohio EPA wrote EKCO a letter stating that the line was in compliance and no additional controls were needed.

When the demand for its products increased, EKCO decided to install a second coating line, and appropriately applied for a PTI for that line. Ohio EPA granted the PTI to EKCO on April 25, 1984. Ohio EPA subsequently issued a PTO to EKCO for the second line on Nov. 30, 1984. Just like with the first line, EKCO regularly applied for its PTOs, and Ohio EPA regularly granted these PTOs (Dec. 1, 1987; Dec. 3, 1990; Mar. 18, 1994).

Additionally, CCDH, on behalf of Ohio EPA, inspected the facility annually, including the coating lines, and repeatedly reported that "sources were functioning cleanly," EKCO was in "compliance with all applicable regulations" and "all sources appeared free from emission problems." (Sept. 30, 1981; August 20, 1982; Feb. 22, 1988; Nov. 1, 1989; Nov. 14, 1989; June 13, 1991; July 22, 1992; Jan. 25, 1996). A February 22, 1988 Ohio EPA inspection report stated that "EKCO has taken a very responsive attitude toward the environmental needs of the equipment they are using at their plant."

In 1993, EKCO discovered that the degreasers serving the coating lines were emitting more pollutants than had been estimated earlier and voluntarily disclosed these circumstances to the Ohio EPA. EKCO agreed to replace the degreasers pursuant to agreed upon Findings and Orders in settlement of all prior violations. At this same time, EKCO also agreed to voluntarily reduce the combined emissions of the two coating lines by converting to a different coating system. EKCO completed all of these agreed changes and on time at a cost of over $4 million.

Despite this history between EKCO and Ohio EPA, Ohio EPA's NOV focuses on two primary allegations:

1. Ignoring the fact that Ohio EPA issued a PTI to EKCO 22 years ago for the first coating line and has continuously issued PTOs for this line, Ohio EPA alleges that EKCO did not have a valid PTI for the first coating line because the PTI should have required EKCO to employ additional controls and offsets for the nonattainment areas in which the facility was located; and

2. Again, ignoring the fact that Ohio EPA issued the PTI to EKCO 18 years ago for the second coating line and has continuously issued PTOs, Ohio EPA also alleges EKCO did not have a valid PTI for the second coating line because it should have required EKCO to employ additional controls and offsets for the nonattainment area.

To "correct" their own oversight, Ohio EPA has demanded that World Kitchen, as the current owner, do a number of things:

1. First, re-submit a PTI application for both coating lines as if these coating lines had never been permitted in the past;

2. Second, employ stringent control technology, usually reserved for nonattainment areas, to reduce emissions even though Stark County has been an attainment area since 1996. Ohio EPA is also taking the position that the determination of what would be sufficient control technology must be based on what is mandated today in 2002 for a newly installed emissions unit, not what technology would have been acceptable when the units were installed in 1979 and 1984. Such a determination is technically implausible and prohibitively expensive; and

3. Third, Ohio EPA has stated that it will require World Kitchen to pay a substantial civil penalty, the amount of which is unknown at this time, but could amount to millions of dollars.

World Kitchen is an environmentally responsible company that places a priority on compliance with environmental laws. However, World Kitchen can only keep its facilities in business if they make money. Ohio EPA's attempt to resurrect events from two decades ago, events for which EKCO already paid a penalty and settled in 1993,is threatening the viability of the Massillon facility. When World Kitchen considered investing in the Massillon facility, it undertook a due diligence review of Ohio EPA's files to determine the facility's compliance status. Repeatedly, the Agency's documents reiterated the compliance status of the facility. Ohio EPA issued the very same permits they are now finding deficient. Now, more than 20 years later, Ohio EPA is questioning their own actions and attempting to revise this facility's compliance with the permitting requirements under the Clean Air Act.

World Kitchen's frustration with the allegations is compounded by the passage of time. How is World Kitchen--indeed, anyone--to defend itself where ownership of the facility has changed hands three times, records have been lost or destroyed, and most of the employees with knowledge of these events are long retired or deceased?

The payment of a large penalty and/or the requirement that the facility install expensive technology that is not even required in this attainment area would put the facility out of business. Thus, World Kitchen is faced with a very difficult dilemma - whether to attempt to fight these violations in expensive, lengthy litigation, the end result of which could mean excessively large penalties or to move the Massillon operations overseas. Obviously, such a move would put hundreds of people out of work.

Even though the federal government would be barred by a five year statute of limitations for bringing these very same claims, Ohio has no such limitation. Thus, World Kitchen is forced to spend time and money to continue to defend these ancient, baseless allegations, which is threatening the viability of the entire Massillon operation. I can assure you that World Kitchen will not invest in Ohio in the future as long as no restrictions exist to control such an injustice.

For these reasons, World Kitchen supports Sub. S.B. 105. While disappointed that the "savings clause" in Sub. S.B. 105 allows EPA to continue to dredge up decade-old violations until two years after the passage of this Act and forces World Kitchen to defend Ohio EPA's meritless clairn, we nonetheless continue to support this bill and believe in the absolute necessity of a statute of limitations for environmental actions.

Thank you for your time and the opportunity to testify today. Are there any questions that I can answer?