DOJ, EPA Reach Proposed $125 Million Agreement to Advance Lower Passaic River Cleanup

Key Takeaways

• Cleanup Moves Closer to the River: The proposed $125 million agreement covers much of the infrastructure needed before dredging and capping can begin along the Lower Passaic River.
• ERH Would Build the Supporting Facilities: Environmental Resource Holdings would construct a facility to process dredged sediment, along with additional sites and infrastructure to support future work in the river.
• Sampling Comes Before Construction: ERH would establish a new baseline by sampling the lower 8.3 miles of the river, while also covering EPA’s future oversight costs tied to the work.
• A Decades-Long Cleanup Takes Another Step: The agreement would advance remediation of the Diamond Alkali Superfund site, where decades of industrial activity left extensive contamination in the Passaic River.

Deep Dive

The Justice Department and Environmental Protection Agency have reached a proposed agreement requiring Environmental Resource Holdings to perform an estimated $125 million in work intended to move the long-running cleanup of New Jersey’s Lower Passaic River toward construction.

The proposed consent decree, lodged Thursday in the U.S. District Court for the District of New Jersey, centers not on the dredging itself but on the infrastructure needed before that work can begin. ERH would construct an upland processing facility and several support facilities for the cleanup of the Diamond Alkali Superfund site, which includes the lower 17 miles of the Passaic River. It would also conduct baseline sampling along the river’s lower 8.3 miles and reimburse EPA for future oversight costs associated with the work.

The distinction is important. EPA has spent years investigating, designing and litigating over one of New Jersey’s most complicated contaminated waterways. The new agreement would put in place some of the physical infrastructure needed to turn those plans into in-river construction.

At the center of the proposed work is an upland processing facility that would receive sediment dredged from the Passaic before the material is transported for disposal elsewhere. According to ERH’s description of the planned facility, dredged material would arrive as a water slurry before being screened, separated and dewatered. Sand, gravel and debris would be separated for off-site disposal or beneficial reuse, while concentrated solids would be stored and tested before leaving the site. Additional upland facilities would provide land and infrastructure for future river construction activities.

The work is designed to support a much larger remediation effort. EPA selected a cleanup plan for the lower 8.3 miles of the river in 2016 that calls for dredging contaminated sediment and installing an engineered cap over the river bottom. EPA approved the remedial design for that stretch in May 2024. Farther upstream, the agency selected an interim remedy for the upper nine miles in 2021, with additional design and sampling work continuing this year.

“Over many decades, industrial activity contaminated the Lower Passaic River,” Principal Deputy Assistant Attorney General Adam Gustafson of the Justice Department’s Energy and Natural Resources Division said in announcing the agreement, calling the settlement “a significant step” toward cleaning up the site.

EPA officials framed the agreement in similarly practical terms. Jeffrey Hall, assistant administrator for the Office of Enforcement and Compliance Assurance, said the construction represents the next step toward remediation, while EPA Region 2 Administrator Michael Martucci said the agreement would establish the foundation for dredging.

ERH is considered a potentially responsible party at the site. According to the Justice Department, the company is a corporate successor to Occidental Chemical Corporation and to Diamond Alkali Company/Diamond Shamrock Corporation, which owned and operated the former Diamond Alkali facility in Newark.

The history behind that responsibility stretches back decades. The former Diamond Alkali manufacturing facility at 80-120 Lister Avenue produced agricultural chemicals, including herbicides, during the 1950s and 1960s. EPA has linked operations there to contamination of the property and river sediments, including dioxin contamination. The Lower Passaic more broadly accumulated PCBs, pesticides, dioxins, heavy metals and other pollutants from numerous industrial sources along the river.

That history has also produced years of disputes over how the enormous cost of cleaning the river should be divided among responsible parties.

ERH’s predecessor OxyChem has challenged a separate settlement between EPA and 85 other potentially responsible parties under which those parties agreed collectively to pay $150 million. OxyChem has argued that the agreement assigns too little of the cleanup cost to those parties and could leave municipalities, public entities and a smaller group of non-settling parties exposed to disproportionate costs. It has also maintained that it previously offered to undertake broader cleanup work while preserving its ability to seek contribution from other responsible parties. Those arguments represent OxyChem’s position in the continuing dispute over allocation of Superfund liability, rather than findings contained in Thursday’s proposed $125 million settlement.

The new agreement nevertheless is a concrete development in a cleanup that has spent much of its history in investigation, design and litigation. ERH’s work would establish facilities through which contaminated sediment can actually be processed once dredging gets underway, while the required sampling would establish a baseline for the lower 8.3 miles before construction proceeds.

The proposed consent decree is not yet final. It is subject to a 30-day public comment period following its filing in federal court.

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