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