sain t-gobain annu al report 2008 annual report
sain t-gobain annu al report 2008 annual report
sain t-gobain annu al report 2008 annual report
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Outlook for 2009<br />
No significant developments have been observed during the<br />
past few months, either in terms of new claims or in terms of<br />
compensation paid.<br />
In Brazil, former Group employees suffering from asbestosrelated<br />
occupation<strong>al</strong> illness are offered either exclusively<br />
financi<strong>al</strong> compensation or lifetime medic<strong>al</strong> assistance<br />
combined with financi<strong>al</strong> assistance. Only a sm<strong>al</strong>l number of<br />
asbestos-related lawsuits were outstanding at December 31,<br />
<strong>2008</strong> and they do not represent a materi<strong>al</strong> risk for the<br />
companies concerned.<br />
Ruling by the European Commission<br />
following the investigation into the construction glass<br />
and automotive glass industries<br />
In November 2007 and <strong>2008</strong>, the European Commission<br />
issued its decisions concerning, respectively, the construction<br />
glass industry and the automotive glass industry.<br />
In the November 28, 2007 decision concerning its investigation<br />
into construction glass manufacturers, the European<br />
Commission held that Saint-Gobain Glass France had violated<br />
Article 81 of the Treaty of Rome and fined the company<br />
€133.9 million. Compagnie de Saint-Gobain was held jointly<br />
and sever<strong>al</strong>ly liable for the payment of this amount.<br />
Compagnie de Saint-Gobain and Saint-Gobain Glass France<br />
decided not to appe<strong>al</strong> this decision and the fine was paid on<br />
March 3, <strong>2008</strong>.<br />
In the November 12, <strong>2008</strong> decision concerning its investigation<br />
into automotive glass manufacturers, the European Commission<br />
held that Saint-Gobain Glass France, Saint-Gobain Sekurit<br />
France and Saint-Gobain Sekurit Deutschland GmbH had<br />
violated Article 81 of the Treaty of Rome and fined them<br />
€896 million. Compagnie de Saint-Gobain was held jointly<br />
and sever<strong>al</strong>ly liable for the payment of this amount.<br />
The companies concerned believe the fine is excessive and<br />
disproportionate, and have appe<strong>al</strong>ed the decision before the<br />
Court of First Instance of the European Communities.<br />
The European Commission has granted them a stay of<br />
payment until the appe<strong>al</strong> has been heard, in exchange for a<br />
bond covering the €896 million fine and the related interest,<br />
c<strong>al</strong>culated at the rate of 5.25% from March 9, 2009. The necessary<br />
steps have been taken to set up this bond within the<br />
required timeframe.<br />
As a result of these developments, the €694 million provision<br />
set aside at December 31, 2007, which was reduced<br />
to €560 million at June 30, <strong>2008</strong> following payment of the<br />
€134 million fine, was increased to €960 million at December<br />
31, <strong>2008</strong> to cover the €896 million fine, together with the cost<br />
of the bond and the estimated leg<strong>al</strong> cost over the appe<strong>al</strong><br />
period. The addition<strong>al</strong> €400 million set aside in the second<br />
h<strong>al</strong>f of <strong>2008</strong> was recorded in “Other business expense”.<br />
NOTE 27<br />
Environment – He<strong>al</strong>th – Safety (EHS)<br />
Environment<strong>al</strong> assets<br />
Costs incurred to mitigate or prevent environment<strong>al</strong> risks are<br />
capit<strong>al</strong>ized when they are expected to generate future<br />
economic benefits that will flow to the Group. The costs relate<br />
to environment<strong>al</strong> management and clean-up equipment,<br />
investments in raw materi<strong>al</strong> and waste recycling solutions,<br />
measures to reduce consumption of energy and certain raw<br />
materi<strong>al</strong>s, as well as research into improving product life<br />
cycles.<br />
Environment<strong>al</strong> liabilities<br />
When the Group considers that it is exposed to an environment<strong>al</strong><br />
risk, a provision for the estimated future cost is<br />
recorded in provisions for other liabilities and charges. Environment<strong>al</strong><br />
provisions amounted to €158 million at December<br />
31, <strong>2008</strong> (December 31, 2007: €146 million; December 31, 2006:<br />
€131 million).<br />
The provisions are discounted on a case-by-case basis<br />
according to when the risk is expected to materi<strong>al</strong>ize. This is<br />
particularly the case for provisions covering the cost of<br />
dismantling and retiring assets and site restoration costs.<br />
However, when the timing of the risk cannot be estimated<br />
reliably, the provision is considered as short-term and is not<br />
discounted.<br />
Environment<strong>al</strong> risks and manufacturing facilities governed by<br />
specific environment<strong>al</strong> regulations are overseen by the<br />
Environment, He<strong>al</strong>th and Safety Department.<br />
175 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br />
Saint-Gobain – Financi<strong>al</strong> Report <strong>2008</strong>