Dow Chemical has agreed to pay a $2.5 million civil penalty to settle alleged violations of the Clean Air Act, Clean Water Act and the Resource Conversation and Recovery Act at its chemical manufacturing and research complex in Midland, Michigan, the U.S. Department of Justice and the United States Environmental Protection Agency said Friday.

In addition to paying a penalty, Dow will implement a comprehensive program to reduce emissions of volatile organic compounds and hazardous air pollutants from leaking equipment such as valves and pumps.

"This compliance program should serve as a model for industry and will go a long way to assure future violations will not happen again at this facility," said Ignacia Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. "Dow worked cooperatively with the government to resolve this matter and in doing so set an example for responsible compliance with our nation's environmental laws."

According to the complaint, Dow allegedly violated Clean Air Act requirements for monitoring and repairing leaking equipment, and for failing to comply with reporting and record-keeping requirements.

The complaint also alleges that the company violated the Clean Water Act's prohibition against discharging pollutants without a permit in addition to violating the Resource Conservation and Recovery Act's requirements for hazardous waste generators.

The consent decree is subject to a 30 day comment period and final approval by the court.

The agreement encompasses air, water, and waste issues identified during an inspection that was conducted over a 20-month period between August 2005 and March 2007.

Dow said in statement Friday that it has been working with the US EPA and DOJ since the inspection to review and resolve the issues from the audit.

"We are committed to best-in-class performance of our Environmental, Health and Safety practices and have learned some very valuable lessons from this process. We know that every detail of compliance is critical - including the administrative detail," said Earl Shipp, vice president of Michigan Operations.