¥ Wicaso, Mchgen see72 Janyary 7, 2008 eel CONFIDENTIAL SETTLEMENT MATERIALS SUBJECT TO FRE 408 AND CONFIDENTIALITY AGREEMENT Mary A.Gade Regional Administrator U.S. Environmental Protection Agency, Region 5 771 West Jackson Boulevard Chicago, IL 60604 Re: Region 5 Termination of Special Notice Letter Negotiations Dear Ms. Gade: This letier is a tesponse to your January 4, 2008 letter abruptly terminating negotiations with The Dow Chemical Company (“Dow”) with respect to the Special Notice Letter of October 10, 2007 from United States Environmental Protection Agency Region 5 (“EPA" or “the Region"). The alternative to a negotiated resolution appears to be a dual-agency, dual-program approach to the site that appears likely to create inefficiency, delay, and the potential for interagency conflict. “Thus, despite your termination of the negotiations, Dow remains committed to meeting with EPA at any time (o negotiate a comprehensive agreement that focuses on response actions that are justified by site-specific circumstances and that are consistent with the National Contingency Plan (*NCP") and relevant EPA guidance. Throughout the negotiations, as demonstrated by Dow's Good Faith Offer Letter and attachments of December 10, 2007, Dow has been willing to address every facet of the Region's proposed consent agreement, no matter how unusual it is for an agreement of this type and at this stage of investigation, Specifically, Dow had agreed to perform the Remedial Investigation/Feasibility Suidy (“RUFS”) pursuant to an aggressive schedule; to conduct substantial Interim Response Actions during the RI/FS: and to perform the Remedial Design for whatever final remedy the Region selects. Considerable progress was made during the first 60 days between our negotiating teams on the terms of the Administrative Order and Agreement on Consent (“Order”) and the Seopes of Work for the RUFS and the Remedial Design. ee» Mary A. Gade January 7, 2008 Page 2Mary A. Gade January 7, 2008 Page 3Mary A. Gade January 7, 2008 Page 4 ‘Throughout this period of intensive activity and EPA engagement, Dow has continued in parallel to conduct remedial investigation and risk assessment activities under MDEQ oversight and to otherwise meet Dow's extensive obligations under Michigan’s authorized Corrective Action program. This dual agency, dual program approach is inefficient and appears contrary to the policy EPA has developed to address legitimate concerns about overlapping and potentially inconsistent cleanup requirements under the CERCLA and RCRA programs. We do not understand why the Region would want to continue this lack of integration, as your letter suggests. Nonetheless, and notwithstanding our frustration, Dow remains ready and willing to complete negotiations of an Order with EPA Region 5 to perform the RIES, to undertake appropriate interim actions in advance of the completion of the RIFS that are consistent with the NCP and EPA’s policy and guidance, and to agree to perform the Remedial Design. Alternatively, Dow is willing to negotiate the more typical form of Order for performance of an RVFS, leaving to separate administrative orders in the future the performance of any interim actions called for by the data generated in the RI/FS and the performance of Remedial Design following EPA's issuance of a Record of Decision. ‘Substantial progress was made in the negotiations on the remainder of the draft Order. We believe that the public and the environment would be better served if we could proceed ina cooperative manner under an Order. For these reasons, and because we believe there are important national policy issues at stake, we intend to seck the involvement of EPA Headquarters to help put this matter back on a constructive track. Sincerely, ‘David E. Kepler Senior Vice President Chief Sustainability Officer Chief Information Officer Corporate Director of Shared Services