[Federal Register: December 14, 2006 (Volume 71, Number 240)]
[Notices]
[Page 75275-75277]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14de06-99]
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DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-57,446]
Hercules Incorporation, Aqualon Division, Parlin, NJ; Notice of
Termination of Investigation
On August 23, 2006, the U.S. Court of International Trade (USCIT)
granted the Department of Labor's consent motion for voluntary remand
in Former Employees of Hercules Incorporation v. United States, Court
No. 05-00602.
On June 24, 2005, a duly authorized representative for the State of
New Jersey filed a petition for Trade Adjustment Assistance (TAA) and
Alternative Trade Adjustment Assistance (ATAA) on behalf of workers and
former workers of Hercules, Parlin, New Jersey (subject facility)
producing nitrocellulose (subject worker group). AR 1.
Following an investigation, the Department of Labor (Department)
issued a negative determination regarding the subject worker group's
eligibility to apply for TAA and ATAA on July 20, 2005. AR 24. The
Department's Notice of determination was published in the Federal
Register on August 26, 2005 (70 FR 50411). AR 31.
During the investigation, the Department found that the subject
facility produces not nitrocellulose but natrosol and that Hercules,
Inc. (subject firm) did not separate or threaten to separate a
significant number or proportion of workers as required by the Trade
Act of 1974. AR 24.
In a letter dated August 11, 2005, a representative of the
International Union of Operating Engineers, Local 68, (Union) requested
administrative reconsideration by the Department. The Union stated that
they represent ``7 Power plant employees'' and alleged that the ``Power
House'' workers produce steam used in the production of natrosol and
nitrocellulose. The Union inferred that the subject workers are
eligible to apply for TAA as workers of a secondarily-affected company,
asserting that the Power House supplied a component part to Green Tree
Chemical Technologies (Green Tree), which was TAA-certified on January
16, 2004 (TA-W-53,831), and that the workers' separations occurred
because ``Green Tree ceased production of Nitrocellulose in November of
2003.'' The Union also stated that ``if it wasn't for the
Nitrocellulose business going out of business, the larger power house
would have been left and employees would all stay working.'' The
subject firm's new power house ``would only require 5 of the 12 people
already employed.'' AR 32, 33.
The Department issued a Notice of Affirmative Determination
Regarding Application for Reconsideration on August 19, 2005. AR 36.
The Department's Notice was published in the Federal Register on
September 1, 2005 (70 FR 52131). AR 44.
Following the reconsideration investigation, the Department issued
a Notice of Negative Determination on Reconsideration on September 13,
2005. AR 42. The Department's Notice of Determination on
Reconsideration was published in the Federal Register on September 28,
2005 (70 FR 56741). SAR 1. In the reconsideration investigation, the
Department found that steam produced by the Power House was used in the
production of natrosol and sold to a TAA-certified company. The
Department also found that the sale of steam to the TAA-certified
company ceased in 2003, prior to the relevant period. As such, the
subject workers were not certified for TAA. AR 42.
In a letter dated November 1, 2005 to the USCIT, the Union
requested judicial review, stating that ``all Hercules employees prior
to 6/2000 and all of Green Tree employees which lost there (sic) jobs
had gotten the TAA benefits.'' SAR 2. In response to the complaint, the
Department filed an administrative record.
In a July 27, 2006 letter to U.S. Department of Justice (Justice)
counsel, Plaintiff's counsel provided Justice with a copy of an order
of the Superior Court of New Jersey, Middlesex County, filed November
21, 2003. SAR 5-12. Plaintiff's counsel asserts that the Department's
conclusions are inconsistent with facts reflected in the AR and the
Superior Court of New Jersey order, and that the Department's
secondarily-affected analysis was inappropriate. SAR 6.
Because the Department was previously unaware of the Superior Court
of New Jersey order and is obligated to issue its determinations based
on a thorough analysis for all available and facts, the Department
requested voluntary remand.
Nitrocellulose is a highly-flammable chemical compound powder that
is formed from nitric acid and cellulose. Common uses for
nitrocellulose are gunpowder and magician's ``flash paper'' (sheets of
paper than burn almost instantly with a bright flash and leave no ash).
Because of its applications, it is also commonly known as guncotton.
Unless the nitrocellulose is wet, it will self-explode. SAR 26-32.
Due to the volatile nature of the chemical compound, steam is an
important part of the nitrocellulose production process. Steam is used
to keep nitrocellulose wet, thus stable. Steam is not a component part
of nitrocellulose but is used in the production process. For example,
heat is used to bake cookies but is not a component part of the cookie,
and the workers who create the heat are considered to be engaged in the
production of cookies. Likewise, steam is used to produce
nitrocellulose but is not considered a component part of
nitrocellulose, and the workers who create steam are considered to be
engaged in the production of nitrocellulose. Steam is generated from a
power house.
For purposes of the Trade Act, the relevant period is from one year
prior to the petition date (June 24, 2005) through the date the initial
determination was issued (July 20, 2005). Therefore, the relevant
period is June 24, 2004 through July 20, 2005. While events and facts
that fall outside the relevant period may not be used as a basis for
TAA certification, they may be used to provide context for the remand
investigation.
During the remand investigation, the Department spoke to the former
owner of Green Tree, SAR 33, and Hercules company officials. SAR 14,
34, 35. The purposes of the conversations are to gather information in
order to determine the subject workers' eligibility to apply for TAA
and to reconcile factual discrepancies.
According to the former owner of Green Tree, Green Tree purchased
from Hercules the nitrocellulose line at the Parlin, New Jersey
location. Under the agreement, Green Tree would rent the land from
Hercules and purchase the buildings (including the Power House),
machines, and equipment from Hercules. The former owner also stated
that that nitrocellulose production ceased at Green Tree in November
2003 but some workers stayed on-site during the plant closure
(including cleaning, fire safety, and power house staff). The company
official also explained that that steam was produced throughout the
shut-down process because it was
[[Page 75276]]
needed to keep the nitrocellulose stable. SAR 33.
The Hercules counsel confirmed the facts surrounding the Superior
Court of New Jersey, November 21, 2003, order, SAR 14, and provided the
Department with a copy of a Superior Court of New Jersey, July 2, 2004,
order. SAR 19. A brief history of the subject facility follows.
In June 2000, Hercules leased a parcel of land to Green Tree and
sold the nitrocellulose production line, which sat on the parcel of
leased land, to Green Tree. Under the agreement, Green Tree would take
ownership of the Power House, which also sat on the leased land, and
supply Hercules with steam for Hercules' natrosol production, which sat
on a lot adjacent to the leased parcel of land. SAR 14.
In 2003, when Green Tree went out of business, Hercules was granted
permission by the Superior Court of New Jersey to operate the subject
facility as part of an effort to properly close it down. Such measures
were required since Green Tree was unable to shut down the facility in
a manner that was in compliance with New Jersey regulations. SAR 16-21.
Once Hercules obtained permission by the Superior Court of New
Jersey to do so, it began the first phase of the shut down: removing
the hazardous materials off-site, per New Jersey regulations. This
process began in November 2003 and was completed on July 14, 2005.
During that process, steam was required to keep the nitrocellulose
stable, and the Power House was in operation to generate the required
steam. When the hazardous material removal process was completed,
Hercules terminated nonessential Green Tree employees, per the Superior
Court of New Jersey orders. SAR 34.
Hercules is currently in the second phase of the shut down:
demolishing the buildings and disposing of the debris. There is no
projected completion date for this phase since disposal of the debris
is a dangerous and tedious process. Because of its nature,
nitrocellulose permeates the buildings and equipment. Each piece of
material and equipment must be wiped clean of nitrocellulose particles
and the nitrocellulose disposed of, per New Jersey regulations. SAR 34.
When asked about the Green Tree Power House, the Hercules' counsel
stated that Hercules' decision to construct a modern and efficient
power house of its own was made prior to Green Tree's bankruptcy in
2003 and was based on the advanced age and poor condition of the Green
Tree Power House. SAR 14. Construction of Hercules' power house began
in April 2005 and was completed in July 2005. SAR 35. After a trial
run, the Hercules power house was deemed fully operational in August
2005. SAR 34, 35. When the Hercules power House began producing steam
for its natrosol production, the Green Tree Power House was permanently
shut down. SAR 34, 35. Because the Hercules power house is smaller and
more efficient than the Green Tree Power House, only five of the twelve
Green Tree Power House workers were offered employment with Hercules.
SAR 34.
There are two allegations in the Plaintiff's complaint: 1) the
subject workers are Hercules employees (``In July of 2004 Hercules made
the Power House employees Hercules employees'') and 2) increased
imports of nitrocellulose caused the workers' separations (``if
Nitrocellulose business didn't deteriorate over the years due to
foreign competition repairs would have been made to the older
powerhouse, and both the nitrocellulose plant and the powerhouse would
still be running.'') SAR 2.
The first issue is whether the subject workers are Green Tree
employees or Hercules employees.
The Plaintiff stated in the complaint that ``In July of 2004
Hercules made the Power House employees Hercules employees.'' SAR 2.
Plaintiff's counsel's letter suggests that the subject workers are
Hercules employees (``Thus, from November 21, 2003 until the time at
which it was shut down, the power house in question was still being
operated in the name of and authority of Green Tree and not Hercules.
The administrative record does not appear to provide any indication of
when (if ever) the power house thereafter was operated by Hercules
acting as Hercules.'') SAR 6.
According to a Hercules company official located on-site, the steam
requirement for natrosol is one-third of the steam requirement of
nitrocellulose. SAR 35. Therefore, when nitrocellulose removal was
completed on July 14, 2005, steam production and employment levels at
the Green Tree Power House was reduced accordingly. After those
separations occurred, the remaining Green Tree workers continued to
operate the Power House until the Hercules power house was able to
produce its own steam in August 2005. When the Green Tree Power House
was permanently shut down in August 2005, the remaining Power House
workers were separated from employment with Green Tree and offered
positions with Hercules to operate the Hercules power house. SAR 34,
35.
Hercules' decision to operate the Green Tree Power House after the
conclusion of the nitrocellulose removal as cannot be construed as a
constructive conversion of Green Tree employees into Hercules
employees. The July 2, 2004 Superior Court of New Jersey order stated
that ``this authorization shall not relieve Green Tree of any
obligations it may have, including that under any permit.'' SAR 19. The
June 2000 agreement between Hercules and Green Tree obligated Green
Tree to provide Hercules steam for its natrosol production. SAR 14, 34.
Because Green Tree's legal obligation to provide steam to Hercules
was not voided, SAR 16, 20, the operation of the Green Tree Power House
to supply steam for Hercules' natrosol production is not ``Hercules
acting as Hercules,'' SAR 6, but Hercules acting in Green Tree's name
to maintain the operations of the Power House, as provided by the
Superior Court of New Jersey July 2, 2004 order. SAR 19.
The July 2, 2004 order reinforces the ``Green Tree-as-principle/
Hercules-as-agent'' relationship and identifies the workers at the
Power Plant as Green Tree employees. As such, the Department determines
that the subject workers are not employees of Hercules, Inc., Parlin,
New Jersey but employees of Green Tree Chemical Technologies, Parlin,
New Jersey.
Because the Department has determined that the subject workers are
in fact employees of Green Tree engaged in the production of
nitrcellolose, the subject workers are covered by a TAA/ATAA
certification which was in effect at the time of the petition (Green
Tree Chemical Technologies, Parlin, New Jersey; TA-W-53,831; issued
January 16, 2004; expired January 16, 2006).
The second issue is whether increased imports of nitrocellulose
caused the workers' separations. Because the workers are certified
under Green Tree Chemical Technologies, Parlin, New Jersey (TA-W-
53,831), it is apparent that the answer is in the affirmative.
Since the subject workers are covered by TA-W-53,831, further
investigation in this case would serve no purpose and the investigation
has been terminated.
Recognizing that there has been a significant delay between the
workers' separations and their notification of certification under TA-
W-53,831, the Department is providing guidance to the appropriate State
agencies to enable the subject workers to apply for worker adjustment
assistance.
[[Page 75277]]
Conclusion
After careful review of the findings of the remand investigation, I
am terminating the investigation of the petition for worker adjustment
assistance filed on behalf of workers and former workers of Hercules
Incorporation, Aqualon Division, Parlin, New Jersey.
Signed at Washington, DC this 6th day of December 2006.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. E6-21252 Filed 12-13-06; 8:45 am]
BILLING CODE 4510-30-P