[Federal Register Volume 71, Number 240 (Thursday, December 14, 2006)]
[Notices]
[Pages 75275-75277]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21252]


-----------------------------------------------------------------------

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