sain t-gobain annu al report 2008 annual report

The other three are classified as “upper tier”: Bagneaux-sur-
Loing (Flat Glass) in France, which stores arsenic (AS 2O 3);
Hyvinkää (Insulation) in Finland, which stores phenol (C 6H 6O)
and formaldehyde (CH 2O); and Carrascal del Rio (Flat Glass)
in Spain, which stores hydrofluoric acid (HF), amongst
other substances.
In application of France’s Act of July 30, 2003 on the prevention
of technological and natural risks and the remediation
of contaminated sites, specific risk prevention and safety
policies have been implemented at all sites, with particular
emphasis on “upper tier” Seveso sites. After accident risks
and their potential impact on the environment were identified,
preventive measures were implemented, covering the design
and construction of storage areas, as well as the manner
in which they are used and maintained. Internal contingency
plans have been developed to respond to incidents.
Liability for personal injury and damage to property arising
from the operation of the plants is covered by the current
insurance program, except for the Bagneaux-sur-Loing plant,
which is insured under a specific policy taken out by the joint
venture that operates the facility. In the event of a
technological accident, compensation payments to victims
would be organized jointly by the joint venture, the insurance
broker and the insurer.
In the United States, the Lake Charles plant in Louisiana is
covered by the EPA’s Risk Management Program Rule
(RMP Rule) and the Emergency Planning and Community
Right to Know Act (EPCRA), due to its use of vinyl chloride
in the manufacture of PVC pellets that are the raw material
for some of the construction materials sold by CertainTeed,
such as siding, windows and fence, railing and deck products.
The Building Distribution sales outlets, the Group’s smaller
production units and plants that do not give rise to any
material risks (for example, certain units where buildingrelated
Flat Glass products are made) have a limited impact on
the environment, generally involving only neighborhood
issues. As explained in the description of the reporting system,
these sites are not included in the scope of the EHS
environmental reporting system.
Legal risks
The Group is not subject to any specific regulations that
could have an impact on its financial position, although its
manufacturing subsidiaries are generally required to comply
with specific national laws and regulations that vary from
country to country. In France, for example, Group plants are
subject to the laws and regulations applicable to classified
sites. The Group is not dependent on any other companies
for its technical or commercial operations, is not subject
to particular confidentiality restrictions and has full access
to the assets required to operate its business.
The regulations applicable to the Group may change in a
manner that may be favorable or unfavorable. The introduction
of stricter regulations or more diligent application of existing
regulations may, in some cases, open up new growth
opportunities for the Group, but may also change the way
the Group conducts its business, possibly leading to an
increase in operating expenses or restrictions on the scope
of the business or, more generally, acting as a brake on
business growth.
Compagnie de Saint-Gobain has elected to be taxed under
the group relief scheme provided for in articles 223 A et seq.
of France’s General Tax Code. The Group did not request
the renewal of its entitlement to income tax assessment on
the basis of its consolidated taxable income, and this regime
consequently lapsed on December 31, 2006.
The Group’s main legal risks concern asbestos-related
litigation in France and, above all, the United States,
and competition issues.
There can be no guarantee that there will be no unforeseen
or significant regulatory changes in the future with a material
adverse effect on the Group’s business, financial position
or results.
Asbestos-related litigation in France
In France, between 1996 and the end of 2008, 676 lawsuits
based on “inexcusable fault” were filed for asbestos-related
occupational diseases against Everite and Saint-Gobain PAM,
which in the past manufactured fiber-cement products.
At December 31, 2008, 567 of these 676 lawsuits had been
completed in terms of both liability and quantum. In addition,
as of December 31, 2008, 110 suits based on inexcusable fault
had been filed by current or former employees of 12 other
French companies in the Group (excluding Saint-Gobain
Desjonquères and Saint-Gobain Vetrotex, which have been
sold), in particular involving circumstances where equipment
containing asbestos had been used to protect against heat
from furnaces. At end-2008, compensation due by Everite
and Saint-Gobain PAM amounted to a total of €2 million.
Further details of these claims are provided in Note 26
to the consolidated financial statements.
Asbestos-related litigation in the United States
In the United States, several companies that once
manufactured products containing asbestos such as
asbestos-cement pipes, roofing products, specialized
insulation or gaskets, are facing legal action from persons
other than their employees or former employees.
The claims are based on alleged exposure to the products,
although in many instances the claimants cannot
demonstrate any specific exposure to one or more products,
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Saint-Gobain - 2008 Annual Report