PUERTO RICO DISTILLERS ( PRD ) OPERATES A DISTILLERY FOR PRODUCTION OF ALCOHOLIC BEVERAGES IN ARECIBO, PR. PRD HAS NEVER INSTALLED TRTMT EQPMT FOR THE WASTEWATERS FROM ITS DISTILLERY AS REQUIRED BY THE CWA. IN 1974-1975, REGION II ISSUED NPDES PERMITS TO 5 CARIB- BEAN RUM DISTILLERS INCLUDING PRD. THESE PERMITS WERE BASED UPON BEST ENGINEERING JUDGMENT IN ABSENCE OF EFFLUENT LIMITS IN ADJUDICATORY HEARINGS. DURING THE ADJOURNMENT OF A ADJUDICATORY HEARING IN 1977, CONGRESS DIRECTED EPA TO CONDUCT A STUDY ON ENVIRONMENTAL EFFECTS FROM THE DISCHARGE OF RUM WASTES. THE STUDY CONCLU- DED THAT RUM WASTES DID HARM THE MARINE ENVIRONMENT. EPA & THE RUM DISTILLERS SUBSEQUENTLY REACHED A COMPROMISE SETTLE- MENT OF THE ADJUDICATORY HEARINGS. PRD ENTERED INTO A STIP- ULATION SETTLING ITS ADJUDICATORY HEARING IN SEPT., 1979. PRD WAS REQUIRED TO COMMENCE CONSTRUCTION OF ITS TRTMT SYSTEM BY 8/1/81. PRD, HOWEVER, ON 10/19/81 JOINED VIRGIN ISLANDS RUM INDUSTRIES, LDT. (VIRIL) IN URGING THE EPA ADMINISTRATOR BY PETITION TO RECONSIDER THE EFFLUENT LIMITS FOR THE RUM INDUSTRY EST'D IN '79. EPA REOPENED THE RUM PERMITS ON 4/9/82 W/ PUBLISHING OF A COMMENT PERIOD IN THE FEDERAL REGISTER. ON MAY 25, 1984 EPA DENIED THE VIRIL & PRD REQUESTS FOR RECONSIDERATION. REGION II & PRD HAVE ALREADY NEGOTIATED COMPLIANCE SCHED- ULES FOR THE TRTMT FACILITIES & OCEAN