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STATE OF INDIANA    )        BEFORE THE INDIANA DEPARTMENT
                )    SS:    OF ENVIRONMENTAL MANAGEMENT
COUNTY OF MARION    )

COMMISSIONER OF THE DEPARTMENT    )
OF ENVIRONMENTAL MANAGEMENT,    )
                            )
        Complainant,                )
                            )
            v.                )    CAUSE NO. A-3820
                            )
MULTI-COLOR CORPORATION            )
                            )
        Respondent.                )            

AGREED ORDER

    The Complainant and the Respondent desire to settle and compromise this action without hearing or adjudication of any issue of fact or law, and consent to the entry of the following Findings of Fact and Order. Pursuant to IC 13-30-3-3, entry into the terms of this Agreed Order does not constitute an admission of any conclusion of law or violation contained herein. This Agreed Order is entered into solely for the purposes of resolving this disputed matter.

I. FINDINGS OF FACT

    1.    Complainant is the Commissioner (hereinafter referred to as "Complainant") of the Indiana Department of Environmental Management, a department of the State of Indiana created by IC 13-13-1-1.

    2.    Respondent is Multi-Color Corporation (hereinafter referred to as "Respondent"), which owns and operates a printing plant located in Scottsburg, Indiana.

    3.    The Indiana Department of Environmental Management ("IDEM") has jurisdiction over the parties and subject matter of this action.

    4.    The Respondent waives its right to issuance of a Notice of Violation and to the settlement period of sixty (60) days as provided for by IC 13-30-3-3.


    5.    326 IAC 8-5-5(c)(3)(B) provides that no owner or operator of a facility subject to this section and employing solvent containing ink may cause, allow, or permit the operation of the facility unless the owner or operator installs and operates an incineration system which oxidizes at least ninety percent (90%) of the nonmethane volatile organic compounds (VOCs) to carbon dioxide and water.

    6.    On January 24, 1996, Respondent conducted emissions tests at its printing facility, Press No. 1, located at 2281 South U. S. 31 in Scottsburg, Indiana. The average destruction efficiency demonstrated during that testing was 74.2 %, a violation of 326 IAC 8-5-5(c)(3)(B).

    7.    Press No. 1 was operated at this non-compliant destruction efficiency until January 24, 1997, when, after significant repairs and maintenance were performed on the oxidizer system, it was retested and demonstrated a destruction efficiency greater than 90%.

    8.    326 IAC 2-1 requires that a source or facility which has potential emissions of twenty-five (25) tons or more per year of any regulated pollutant apply for and obtain construction and operating permits prior to commencing construction and operation.

    9.    In April 1997, Respondent constructed/installed a packaging rotogravure printing press, designated as press No. 3, and commenced operation of this press in July 1997. No permit application for this facility was received by IDEM until
        July 21, 1997, and the final permit for this facility, CP 143-8004-00007, was not issued to Respondent until January 26, 1998. Respondent both constructed and operated this facility prior to the issuance of construction and operation permits, violations of 326 IAC 2-1-3 and 326 IAC 2-1-4.
    
    10.    In January 1997, Respondent constructed/installed a packaging rotogravure printing press, designated as printing press No. 4, and commenced operation of this press in April 1997. No permit application for this facility was received by IDEM until May 8, 1997, and the final permit for this facility, CP 143-8004- 00007, was not issued to Respondent until January 26, 1998. Respondent both constructed and operated this facility prior to the issuance of construction and operation permits, violations of 326 IAC 2-1-3 and 326 IAC 2-1-4.


    11.    326 IAC 8-5-5(c)(3) provides, in relevant part, that no owner or operator of a facility subject to this section and employing solvent containing ink may cause, allow, or permit the operation of the facility unless the owner or operator installs and operates one of the following:

            a)    a carbon adsorption system which reduces the VOC emissions from the capture system by at least ninety percent (90%) by weight;

            b)    an incineration system which oxidizes at least ninety percent (90%) of the nonmethane volatile organic compounds (VOCs) to carbon dioxide and water; or

            c)    an alternate VOC emission reduction system demonstrated to have at least a ninety percent (90%) reduction efficiency, measured across the control system, and has been approved by the commissioner.

    12.    Printing press No. 3 operated without the emission controls required by 326 IAC 8-5-5(c), during the time between July 1997 and January 1998, a violation of 326 IAC 8-5-5(c).

    13.    On February 5, 1997, IDEM received an application for a permit modification regarding operation of rotogravure printing press No. 2, stations 8 and 9. The proposed modification consisted of a change from solvent-based to water-based coatings at these stations. Approval for this modification was issued to the Respondent on August 6, 1997. The modification to operation condition No. 10 - CP No. (143) 1904/OP No. 143-0038 allowed for emissions from stations 8 and 9 to be vented to the ambient air, provided water-based coatings were utilized at these stations.

    14.    During the time period between August 6, 1997 and January 18, 1998, emissions from stations 8 and 9 on press No. 2 were intermittently vented to the ambient air while the Respondent continued to utilized solvent-based coatings, a violation of operation condition No. 10 - CP No. (143) 1904/OP No. 143-0038, as modified on August 6, 1997.

    15.    326 IAC 1-6-4(b) provides, in relevant part, that no facility shall be operated unless the air pollution control device(s) and measures are also in operation simultaneously and are not bypassed.

    16.    On January 15, 1998, the supply fan connecting rotogravure printing press No. 1 to the incinerator failed. The incinerator was shut down for repairs from January 15, 1998 until January 18, 1998. During this period of time the press was operated at normal full production without an operational emission control device, a violation of 326 IAC 1-6-4(b).

    17.    During the time period between October 1995 and January 1998, the Respondent intermittently bypassed the incinerators attached to press Nos. 1 and 2, violations of 326 IAC 1-6-4(b).

    18.    During the time period between April 1997 and January 1998, the Respondent intermittently bypassed the incinerators attached to press No. 4, violations of 326 IAC 1-6-4(b).

    19.    326 IAC 2-7-3 provides, in relevant part, that a Part 70 source may not operate after the time that it is required to submit a timely and complete Part 70 permit application if that source fails to submit said application.

    20.    326 IAC 2-7-4 provides, in relevant part, that the owner or operator of each Part 70 source has a duty to submit a timely and complete application no more than twelve (12) months after U. S. EPA approval of the Part 70 program. This due date was December 13, 1996.

    21.    On December 18, 1997, IDEM received a Part 70 Permit application from Respondent; however, the information included in this application was not accurate or complete. On August 24, 1998, IDEM received a revised application from Respondent. The continued operation of Respondent's printing plant after failing to submit a timely and complete Part 70 application constitutes violations of 326 IAC 2-7-3 and 2-7-4.

    22.    In recognition of the settlement reached, Respondent waives any right to administrative and judicial review of this Agreed Order.

    23.    In the event that a dispute arises regarding a final action taken by IDEM under this Agreed Order, both parties retain their rights under the Indiana Administrative Orders and Procedures Act (IC 4-21.5) concerning review of such final action, but this Agreed Order itself will not be subject to review.

    24.    In letters dated January 26, May 29, and August 4, 1998, and an environmental self-audit submitted to IDEM on May 7, 1998, Respondent voluntarily disclosed to IDEM the Respondent's noncompliance with various statutory and regulatory requirements pertaining to the operation of its facilities. Respondent has cooperated with Complainant's investigation concerning its noncompliance.


II. ORDER

    1.    This Agreed Order shall be effective ("Effective Date") when it is approved by the Complainant or his delegate, and has been received by the Respondent. This Agreed Order shall have no force or effect until the Effective Date.

    2.    Respondent is assessed a civil penalty of Six Hundred Twenty-Five Thousand Dollars ($625,000). This penalty reflects a reduction by IDEM based upon evidence submitted by the Respondent which adequately demonstrated an inability to pay a penalty in the amount commensurate with the violations. This civil penalty is subject to the conditions of paragraph 9, 11, and 12 below.

    3.    Civil and stipulated penalties are payable by check to the Environmental Management Special Fund. Checks shall include the Cause Number of this action and shall be mailed to:

            Cashier
            IDEM
            100 N. Senate Avenue
            P. O. Box 7060
            Indianapolis, IN 46207-7060

    4.     Respondent shall conduct annual VOC testing at press Nos. 1, 2, 3, and 4 to demonstrate compliance with 326 IAC 8-5-5 and applicable permit conditions. This testing shall be conducted in accordance with the requirements of 326 IAC 3-6, Source Sampling Procedures. Respondent shall conduct the first of these tests within the fourth quarter of 1999. Subsequent tests shall be conducted during the fourth quarter of each consecutive year. This requirement shall cease after the tests conducted in fourth quarter 2000 provided that the Respondent demonstrated complete compliance with 326 IAC 8-5-5 and applicable permit conditions during both the 1999 and 2000 tests. The performance of annual VOC testing under this Order shall otherwise satisfy any similar VOC testing requirements imposed on the Respondent under its air permits for the period of this Agreed Order.

    5.    Respondent shall maintain, and provide upon request, a record of all times that an incinerator is overloaded or shuts down and results in the triggering of the automatic press shut-off. This record should include the dates, times, and the presses and incinerators involved in each of these incidents.

    6.    Within sixty (60) days of the Effective Date of the Agreed Order, Respondent shall conduct testing which demonstrates that the automatic shut-off system on the presses operates properly. Specifically, Respondent shall demonstrate that when an incinerator(s) is overloaded, the associated presses cease operating immediately, and when an incinerator(s) otherwise shuts down, the associated presses cease operating immediately. Respondent shall submit, within twenty- five (25) days of the Effective Date of this Agreed Order, a protocol detailing the parameters and procedures for this test to both:

            Compliance Data Section            Matthew Stuckey
            IDEM/Office of Air Management        IDEM/Office of Enforcement
            P. O. Box 6015                P. O. Box 6015
            100 North Senate Avenue            100 North Senate Avenue
            Indianapolis, IN 46206-6015         Indianapolis, IN 46206-6015
        
    7.    As a Supplemental Environmental Project (SEP), the Respondent shall complete at least one of the following projects within sixteen (16) months of the Effective Date of this Agreed Order:

            A.    Respondent shall install and utilize an electron beam (EB) curing system for applying overprint varnishes or topcoatings in its printing operation on at least one press;

            B.    Respondent shall substantially reduce the use of solvent-based adhesives and convert to water-based adhesives at its printing plant; or

            C.    Respondent shall upgrade its existing system of incinerators in a manner which reduces air flow and emission loading concerns on the oxidizers at this facility.
        
        Implementation of either SEP A or B would result in significant reductions in VOCs from this facility. SEP C would result in an emission control system of incinerators with capacity that exceeds the maximum VOC output from all the presses, thus eliminating the need for constant adjustments to the printing operations to ensure compliance.

    8.    Respondent shall submit updates at three (3), six (6), and nine (9) months from the Effective Date of the Agreed Order. Each of the first two updates should include detailed information on the status of each of the three SEPs, the progress of the design specifications, customer trials, economic evaluations, and an evaluation of the feasibility of SEPs A and B. The third update should additionally summarize the bidding process, the necessary changes to the permit, the final evaluation of the customer qualifications and final economic evaluations.


    9.    The Respondent shall submit, by no later than the end of the tenth (10th ) month, a final statement which indicates the SEP which is expected to be completed. Upon receipt of this statement, IDEM will consider the other two SEPs no longer valid and Respondent shall be expected to complete and implement that project within the prescribed sixteen (16) months. If Respondent designates SEP B as the SEP to be completed, Respondent shall pay One Hundred Twenty-Five Thousand Dollars ($125,000) within sixty (60) days of submitting this final statement. This portion of the civil penalty is the difference in the amount of penalty offset due to the differing costs of the three SEPs.

    10.    Unless Respondent has completed its SEP and complied with the requirements of Order paragraph 12, Respondent shall submit, by no later than the end of the twelfth (12th ) month, an update which indicates the expected date on which the equipment will be delivered and installed. This update should also include the status of any associated permitting issues. Respondent should include with this update invoices and documentation which confirms that the SEP is in the final stages of implementation.

    11.    The Respondent shall perform and complete at least one of the SEPs described in paragraph 7 above. Respondent estimates that SEPs A and C will each cost Four Hundred Fifty Thousand Dollars ($450,000). Respondent estimates that SEP B will cost Two Hundred Thousand Dollars ($200,000). Respondent shall pay a portion of the civil penalty stated in paragraph 2 above, in the amount of Four Hundred Thousand Dollars ($400,000) . Said penalty amount shall be payable to the Environmental Management Special Fund in twelve (12) quarterly installments. The first of these installments in the amount of Thirty-Seven Thousand Dollars ($37,000) shall be due within thirty (30) days of the Effective Date of this Agreed Order. Subsequent payments of Thirty-Three Thousand Dollars ($33,000) shall be due every ninety (90) days thereafter until the balance is paid in full.

    12.    Upon the completion of the SEP, Respondent shall submit written notice and documentation to IDEM which substantiates all actions taken and costs incurred with respect to the SEP. In the event that Respondent completes either SEP A or C, and the cost of completing SEP A or C is less than Four Hundred Fifty Thousand Dollars ($450,000) , Respondent shall pay fifty percent (50%) of the difference between the proposed cost ($450,000) and the actual cost of the SEP. In the event that Respondent completes SEP B, and the cost of completing the SEP is less than Two Hundred Thousand Dollars ($200,000) , Respondent shall pay fifty percent (50%) of the difference between the proposed cost ($200,000) and the actual cost of the SEP. Payment of any difference shall be due within thirty (30) days from receipt of IDEM's notice to pay.


    13.    In the event that the Respondent does not complete at least one of these SEPs within sixteen (16) months from the Effective Date of this Order, the full amount of the civil penalty as stated in paragraph 2 above, plus interest established by IC 24-4.6-1-101 on the remaining amount, less the portion of the civil penalty Respondent has already paid, will be due within fifteen (15) days from receipt of IDEM's notice to pay. Interest shall be calculated on the amount due from the date which is thirty (30) days after the Effective Date of this Order until the full civil penalty is paid.

    14.    Force Majeure, for purposes of this Agreed Order, is defined as any event arising from causes beyond the control of the Respondent that delays or prevents the performance of any obligation under this Agreed Order despite Respondent's best efforts to fulfill the obligation. The requirement that the Respondent exercise "best efforts to fulfill the obligation" includes using best efforts to anticipate any potential force majeure event and best efforts to address the effects of any potential force majeure event (1) as it is occurring and (2) following the potential force majeure event, such that the delay is minimized to the greatest extent possible. Force Majeure does not include financial inability to complete the work required by this Agreed Order or increases in costs to perform the work.

    15.    The Respondent shall notify IDEM by telephone within three (3) business days and in writing no later than seven (7) calendar days after any event which the Respondent contends is a force majeure. Such notification shall describe the anticipated length of the delay, the cause or causes of the delay, the measures taken or to be taken by the Respondent to minimize the delay, and the timetable by which these measures will be implemented. The Respondent shall include with any notice all available documentation supporting its claim that the delay was attributable to a force majeure. Failure to comply with the above requirements shall preclude Respondent from asserting any claim of force majeure for that event. The Respondent shall have the burden of demonstrating that the event is a force majeure. The decision of whether an event is a force majeure shall be made by IDEM. Said decision shall be communicated to the Respondent.

    16.    If a delay is attributable to a force majeure, IDEM shall extend, in writing, the time period for performance under this Agreed Order, by the amount of time that is attributable to the event constituting the force majeure.


    17.    All submittals required by this Agreed Order, unless notified otherwise in writing, shall be sent to:

            Matthew Stuckey, Enforcement Case Manager
            Office of Enforcement - Air Section
            Indiana Department of Environmental Management
            100 N. Senate Avenue
            P. O. Box 6015
            Indianapolis, IN 46206-6015

    18.    In the event that Respondent fails to conduct the required tests, as specified in Order paragraphs 4 and 6 above, Complainant will assess, and Respondent shall pay, a stipulated penalty in the amount of One Thousand Dollars ($1000) for each calendar day, beyond the date specified in these paragraphs, until the tests are completed.

    19.    In the event that Respondent fails to produce the records, as required by Order paragraph 5, Complainant will assess, and Respondent shall pay, a stipulated penalty in the amount of Two Hundred Dollars ($200) for each calendar day, beyond the date these records are requested, until IDEM receives the records.

    20.    In the event that Respondent fails to submit the updates, as required by Order paragraph 8 and 10, Complainant will assess, and Respondent shall pay, a stipulated penalty in the amount of Five Hundred Dollars ($500) for each calendar day, beyond the date these updates are to be submitted, until IDEM receives the updates.

    21.    In the event that Respondent fails to submit the final statement, as required by Order paragraph 9, Complainant will assess, and Respondent shall pay, a stipulated penalty in the amount of One Thousand Five Hundred Dollars ($1500) for each calendar day, beyond the date this statement is due, until IDEM receives the statement.

    22.    Stipulated penalties shall be due and payable within thirty (30) days after Respondent receives written notice that the Complainant has determined a stipulated penalty is due. Assessment and payment of stipulated penalties shall not preclude the Complainant from seeking any additional relief against the Respondent for violation of the Agreed Order. In lieu of any of the stipulated penalties given above, the Complainant may seek any other remedies or sanctions available by virtue of Respondent's violation of this Agreed Order, or Indiana law, including but not limited to civil penalties pursuant to IC 13-30-4.


    23.    In the event that the civil penalty required by paragraph 2, as modified by paragraphs 9 and 11, is not paid within thirty (30) days of the Effective Date of this Agreed Order, or stipulated penalties are not paid within thirty (30) days after Respondent receives written notice that the Complainant has determined a stipulated penalty is due, Respondent shall pay interest on the unpaid balance at the rate established by IC 24-4.6-1-101. The interest shall continue to accrue until the civil or stipulated penalty is paid in full.

    24.    This Agreed Order shall apply to and be binding upon the Respondent, its successors and assigns. The Respondent's signatories to this Agreed Order certify that they are fully authorized to execute this document and legally bind the parties they represent. No change in corporate status of the Respondent shall in any way alter its status or responsibilities under this Agreed Order.

    25.    In the event that any terms of the Agreed Order are found to be invalid, the remaining terms shall remain in full force and effect and shall be construed and enforced as if the Agreed Order did not contain the invalid terms.

    26.    The Respondent shall provide a copy of this Agreed Order, if in force, to any subsequent corporations, successors, or assigns before ownership rights are transferred. Respondent shall ensure that all contractors, firms, and other persons performing work under this Agreed Order comply with the terms of this Agreed Order.

    27.    This Agreed Order shall remain in effect for a period of four (4) years after the Effective Date of this Agreed Order.

    28.    Compliance with the provisions of this Agreed Order shall constitute a final resolution of Respondent's liability, and the liability of all officers and directors initially appointed or elected after November 15, 1997, for all violations specified in this Agreed Order and those air violations disclosed to IDEM in Respondent's letters dated January 26, May 29, and August 4, 1998, and the environmental self- audit submitted to IDEM on May 7, 1998.

TECHNICAL RECOMMENDATION:        RESPONDENT:
Department of Environmental Management        Multi-Color Corporation

By:     _________________________        By: _________________________
    David P. McIver
    Chief, Air Section            
    Office of Enforcement            Printed: ______________________
    
                            Title: ________________________                         
Date: ________________________            Date: ________________________

COUNSEL FOR COMPLAINANT:            COUNSEL FOR RESPONDENT:
Department of Environmental Management

By: _________________________            By: ________________________
Office of Legal Counsel                
Department of Environmental Management

Date: _______________________            Date: ______________________

APPROVED AND ADOPTED BY THE INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT THIS _____ DAY OF ____________________, 199___.

                            
                            For the Commissioner:
                            

                             (Signed on 11/30/98)                                      Felicia Robinson George
                            Assistant Commissioner of Enforcement

Converted by Andrew Scriven