The company pleaded guilty to distributing pesticides with misleading and unapproved labels, distributing unregistered pesticides and falsifying pesticide registrations – but the most disturbing was its use of toxic insecticide in its bird food products, including Storcide II and Actellic 5E.
Part of Friday’s $12.5 million criminal settlement will go towards restoring some of the wildlife the company may have endangered. Scotts will be forced to contribute $500,000 to organizations that protect bird habitats. Other fines include a $6 million civil penalty, $2 million for environmental projects and a $4 million criminal state fine.
“Storcide II is extremely toxic to fish and toxic to birds and other wildlife,” reads the label on the containers of the chemical. Still, Scotts used the substance and sold its illegally treated bird food for two years after it began making it and for six months after employees warned the company of its dangers. The company admitted it used the toxic substances to protect against insects in the bird food during storage.
Under the Federal Insecticide, Fungicide and Rodenticide Act, the Environmental Protection Agency (EPA) had prohibited the use of Actellic 5E and Storcide II, both of which were used by Scotts and which the company imported illegally from other countries.
Sale of the toxic bird food was terminated in March 2008, but by that time, more than 70 million units of the pesticide-treated food had already been sold – putting millions of birds at risk of poisoning.
The EPA has been investigating criminal violations by Scotts for the past five years and issued more than 40 Stop Sale, Use or Removal Orders for its more than 100 pesticide products that violated federal pesticide laws.
“As the world’s largest marketer of residential-use pesticides, Scotts has a special obligation to make certain that it observes the laws governing the sale and use of its products,” Ignacia Morena, assistant attorney general at the Department of Justice, told Agence France-Presse.
Scotts, which is based in Marysville, Ohio, will owe the state $4 million and be required to perform community service. But the company has annual sales over $3 billion annually, so the fines will have little effect on its profits. Still, the publicity surrounding Scotts’ violations prompted an apology.
“It’s important for all of our stakeholders to know that we have learned a lot from these events and that new people and processes have been put in place to prevent them from happening again,” Scotts chairman and chief executive Jim Hagedorn said in a statement.