3.7 Contingent liabilities
Product liability claims and disputes
A lawsuit related to a claim in the Fort Hills oil sands mining project in Alberta, Canada, has been
served against Jotun A/S and Chokwang Jotun Ltd, where Fort Hills Energy LP is seeking CAD 182
million (NOK 1.2 billion) in damages. The numbers are undocumented. In addition, reservations are
made from the plaintiff for any potential additional costs. These possible records are to be proven at
trial. Jotun contests the customer’s claim, and as a result of this position, no provision has been made
for a negative outcome of a lawsuit.
Environmental matters
Jotun A/S is through its operation exposed to environmental and pollution risk. Production facilities
and product warehouse sites have been inspected regarding environmental conditions in the soil. For
sites where clean-up costs are probable and reliable estimates of the costs have been made, provisions
are recorded accordingly. Due to uncertainties inherent in the estimation process, it is possible that
such estimates could be revised in the near term. In addition, further expenditures may arise as the full
scope of conditions at some sites has yet to be determined. The related amount of potential, future
costs is not determinable due to the unknown timing and extent of corrective actions which may be
required.
Jotun’s activities are carried out in accordance with local laws and regulations, and the Group’s HSE
requirements. Changes in laws and regulations may require Jotun A/S to make investments and incur
costs to meet future compliance requirements.
3.8 Contractual obligations and guarantees
Back to Notes for the Parent Company
Purchase obligations
Jotun A/S contractual purchase obligations are mainly related to investments in new headquarter
and R&D centre and upgrade of the factory. Out of the total ongoing investment programme, NOK
136 million is contractual committed capital expenditures (CAPEX) at year end. For purchase of raw
materials there are no actual commitments for the company. In general, these contracts can be
terminated without significant penalties.
Other obligations
Jotun A/S has guarantees covering tax withholding and other guarantees for subsidiaries. These
amounted to approximately NOK 208 million in 2019 (2018: NOK 219 million).
JOTUN A/S
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