Registration document 2007 - Total.com

Grande Paroisse
An explosion occurred at the Grande Paroisse industrial site in
the city of Toulouse (France) on September 21, 2001. Grande
Paroisse, a former subsidiary of Atofina which became a
subsidiary of Elf Aquitaine Fertilisants on December 31, 2004
pursuant to the reorganization of the Chemicals segment, was
principally engaged in the production and sale of agricultural
fertilizers. The explosion, which involved a stockpile of
ammonium nitrate pellets, destroyed a portion of the site and
caused the death of 30 people and injured many others. In
addition, a certain property in an area of Toulouse was damaged.
This plant has been closed and the site is being restored. Individual
assistance packages have been provided for employees.
On December 14, 2006, Grande Paroisse signed, under the
supervision of the city of Toulouse, the deed whereby it donated
the former site of the AZF plant to the greater agglomeration of
Toulouse (CAGT) and the Caisse des Dépôts et Consignations
and its subsidiary ICADE. Under this deed, TOTAL S.A.
guaranteed the site restoration obligations of Grande Paroisse
and granted a 10 M€ endowment to the InNaBioSanté research
foundation in the framework of the city of Toulouse’s project to
create a cancer research center at the site.
Regarding the cause of the explosion, the hypothesis that the
explosion was caused by Grande Paroisse through the
accidental mixing of hundreds of kilos of a chlorine compound at
a storage site for amonium nitrate was discredited over the
course of the investigation. As a result, proceedings against ten
of the eleven Grande Paroisse employees charged during the
criminal investigation conducted by the Toulouse Regional Court
(Tribunal de Grande Instance) were dismissed and this dismissal
was upheld by the Appeals Court of Toulouse.
Nevertheless, the final experts’ report filed on May 11, 2006
continues to focus on the hypothesis of a chemical accident,
although this hypothesis was not confirmed by an attempt to
reconstruct the accident at the site. The hypothesis no longer is
based on the mixing of 500 kilograms of a chlorine compound at
a storage site for ammonium nitrate, but instead the pouring of
500 kilograms of ammonium nitrate in a container whose floor
was supposedly covered with sweepings of a chlorine
compound. Grande Paroisse was investigated based on this new
hypothesis in 2006. Grande Paroisse is contesting this explanation,
which it believes to be based on elements that are not factually
accurate.
On September 21, 2006, the investigating judge closed his
investigation. Grande Paroisse and the former manager of the
site have requested that additional information be obtained
relating to the expert’s investigations. These requests, are
currently being reviewed by the Chambre d’Instruction of the
Court of Appeal of Toulouse; a decision is expected in the first
half of 2007.
Pursuant to applicable French law, Grande Paroisse is presumed
to bear sole responsibility for the explosion as long as the cause
of the explosion remains unknown. While awaiting the conclusion
of the investigation, Grande Paroisse has set up a compensation
system for victims. At this stage, the estimate for the
compensation of all claims and related expenses has been
increased to 2.15 B€ (compared to 2.05 B€ in 2005). This figure
exceeds by 1.35 B€ Grande Paroisse’s insurance coverage for
legal liability (capped at 0.8 B€). The provision for potential
liability and complementary claims was increased by 100 M€ in
2006, and as a result the total unused provision stands at
176 M€ as of December 31, 2006, compared to a provision of
133 M€ as of December 31, 2005.
Antitrust investigations
Risk Factors
Legal risks
4
1) Following investigations into certain commercial practices in
the chemicals industry in the United States, subsidiaries of the
Arkema group are involved in several civil liability lawsuits in
the United States and Canada for violations of antitrust laws.
TOTAL S.A. has been named in certain of these suits as the
parent company.
In Europe, the European Commission commenced
investigations in 2000, 2003 and 2004 into alleged
anti-competitive practices involving certain products sold by
Arkema (1) . In January 2005, following one of these
investigations, the European Commission fined Arkema 13.5
M€ and jointly fined Arkema and Elf Aquitaine 45 M€. Arkema
and Elf Aquitaine have appealed these decisions to the Court
of First Instance of the European Union.
The Commission notified Arkema, TOTAL S.A. and Elf
Aquitaine of complaints concerning two other product lines in
January and August 2005, respectively. Arkema has
cooperated with the authorities in these procedures and
investigations. As a result of these proceedings, in May 2006
the European Commission fined Arkema 78.7 and 219.1 M€,
respectively. Elf Aquitaine was held jointly and severally liable
for, respectively, 65.1 M€ and 181.35 M€ of these fines while
TOTAL S.A. was held jointly and severally liable, respectively,
for 42 M€ and 140.4 M€. TOTAL S.A., Elf Aquitaine and
Arkema have appealed these decisions to the Court of First
Instance of the European Union.
No facts have been alleged that would implicate TOTAL S.A.
or Elf Aquitaine in the practices questioned in these
proceedings and the fines are based solely on their status as
parent companies.
Arkema began implementing compliance procedures in 2001
that are designed to prevent its employees from violating
antitrust provisions. However, it is not possible to exclude the
possibility that the relevant authorities could commence
(1) Arkema is used in this section to designate those companies of the Arkema group whose ultimate parent company is Arkema S.A.. Arkema became an independent company after being spunoff
from TOTAL S.A. in May 2006.
TOTAL – Registration Document 2006 81