Why Is Australia Taking 3M to Court Over Forever Chemicals?
Synopsis
3M challenges Australia’s billion-dollar lawsuit over forever chemicals, as decades-old contamination raises questions about product safety, environmental damage and corporate responsibility.
What Happened
3M, the US chemicals company is facing a A$2 billion (US$1.38 billion) lawsuit from Australia over pollution caused by its firefighting foam. The lawsuit, which is filed against 3M and its Australian unit, involves contamination at 28 military bases where the company’s products were used.
Australia has accused 3M of knowing, or should have known that its foam could damage people and the planet, but did not warn the government. The government is seeking compensation for cleanup costs that it has incurred and which it will incur in the future.
In a court hearing on Friday, 3M’s lawyer said Australia’s claim does not satisfy the standards by which public nuisance is defined as an issue that affects the use of, or enjoyment of land and water.
The firm will also dispute Australia claiming that it breached consumer protection laws by issuing misleading statements about the safety of its foam, arguing some or all of the claims may be filed too late because the conduct was filed decades ago. The case was returned to court in December as 3M is due to file its defence on December 11.
Why It Matters
PFAS, also called Forever Chemicals, are synthetic substances that are used for making other products resistant to heat, water, and grease. But the substances can stay in the environment for a long period of time and some studies even show that people become the substances are associated with health problems, like liver, damage, lower birth weight and testicular cancer,
So far, Australia has incurred A$1.3 billion of the cost of contamination, including A$408 million paid in legal settlement to the affected communities by the substance. The nation’s Defence Department has also treated or removed more than 200,000 metric tons of tainted soil and treated more than 13 billion litres of water.
The case is underlining for businesses how product-related risks can escalate into costly legal disputes, cleanup costs and liability claims. A company can remain liable for its products long after such products have been sold.
The Founder Angle
Founders should know that they have a responsibility beyond profiting when launching and selling a product. Businesses must validate the safety of products, back their claims with evidence and acknowledge all the potential risk to customers very clearly.
This case is a classic example of a decision taken decades ago can impact your business even today. That is why at start-ups, legal risks should be avoided by keeping good records and simply addressing the disputes in the starting stage only.
The 60-Second Takeaway
A founder should review the product safety, environmental impact, and marketing claims about their products before they reach the customers. They should ensure that the business is delivering on what it promises its customers and has a very transparent management of risks and complaints.
The Inspirepreneur Question
Is it fair to hold companies accountable for the environmental and health impacts of their products decades after they’ve been sold?
Source: Reuters
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
