Registration Document 2005 - Total.com

Grande Paroisse
An explosion occurred at the Grande Paroisse industrial site in
the city of Toulouse (France) on September 21, 2001. Grande
Paroisse, a former subsidiary of Atofina which became a subsidiary
of Elf Aquitaine Fertilisants on December 31, 2004 pursuant to the
reorganization of the Chemicals segment, was principally engaged
in the production and sale of agricultural fertilizers. The explosion,
which involved a stockpile of ammonium nitrate pellets, destroyed
a portion of the site and caused the death of 30 people and injured
many others. In addition, a portion of Toulouse was significantly
damaged.
This plant has been closed and the site is being restored. Individual
assistance packages have been offered to employees.
On December 12, 2004, Grande Paroisse, TOTAL S.A., the greater
agglomeration of Toulouse (CAGT), the Caisse des Dépôts et
Consignations and its subsidiary ICADE signed a memorandum
of understanding, under the supervision of the city of Toulouse,
providing that after restoration of the site, Grande Paroisse would
donate a portion of the site as a “green” zone to the CAGT and
portion of the site as an industrial zone to ICADE. TOTAL S.A.
guaranteed the obligations of Grande Paroisse and also granted a
10 M€ endowment to the InNaBioSanté research foundation in the
framework of the cancer research centre anticipated by the city for
the site.
Ongoing investigations have not yet determined the cause of the
explosion but the hypothesis that the explosion was caused by
Grande Paroisse through the accidental mixing of hundreds of kilos
of a chlorine compound at a storage site for amonium nitrate
was discredited over the course of the investigation. Proceedings
against ten of the eleven Grande Paroisse employees charged
during the criminal investigation conducted by the Toulouse
Regional Court (Tribunal de Grande Instance) were dismissed and
this dismissal was upheld by the Appeals Court of Toulouse. This
investigation is still examining possible causes, without yet having
drawn conclusions.
Pursuant to applicable French law, Grande Paroisse is presumed to
bear sole responsibility for the explosion as long as the cause of the
explosion remains unknown. While awaiting the conclusion of the
investigation, Grande Paroisse has set up a compensation system
for victims. At this stage, the estimate for the compensation of all
claims and related expenses has been increased to 2.05 billion
(1) New corporate name of Arkema as from April 18, 2006
(2) New corporate name to be taken by the holding company of the Arkema group from April 18, 2006.
Risk factors
Legal risks
TOTAL - Registration Document 2005
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euros (compared to 1.95 billion euros in 2004). This figure exceeds
by 1.25 billion euros Grande Paroisse’s insurance coverage for
legal liability (capped at 0.8 billion euros). The provision for potential
liability and complementary claims was increased by 100 M€ in
2005, and as a result the total unused provision stands at 133 M€
as of December 31, 2005, compared to a provision of 110 M€ as
of December 31, 2004.
Antitrust investigations
1. Following investigations into some commercial practices in the
chemicals industry in the United States, Arkema and some other
chemical subsidiaries of the Group are involved in several civil
liability lawsuits in the United States and Canada for violations of
antitrust laws. TOTAL S.A. has been named in certain of these suits
as the parent company.
In Europe, the European Commission commenced investigations
in 2000, 2003 and 2004 into alleged anticompetitive practices
involving certain products sold by Arkema France (1) or its
subsidiaries. Under one of these investigations, in January 2005,
the European Commission fined Arkema France 13.5 M€ and jointly
fined Arkema France and Elf Aquitaine 45 M€. Arkema France
and Elf Aquitaine have appealed to the Court of First Instance of
the European Union. The Commission notified Arkema France,
TOTAL S.A. and Elf Aquitaine of complaints concerning two other
product lines in January and August 2005, respectively. Arkema
France has cooperated with the authorities in these procedures and
investigations.
No facts have been alleged that would implicate TOTAL S.A. or Elf
Aquitaine in these practices.
Although since 2001 an antitrust compliance program for
employees has been launched by Arkema, it cannot be excluded
that further proceedings involving entities of the Arkema group
(and TOTAL S.A. and Elf Aquitaine as well) would nonetheless be
launched by relevant authorities.
2. As part of the spin-off of the Arkema group from TOTAL,
TOTAL S.A. or certain other Group companies have given
guarantees to Arkema (2) or its subsidiaries to cover the risks related
to proceedings for anticompetitive practices that occurred prior to
the spin-off.
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