Toronto, CANADA--December 18, 2002--MDS Inc. (NYSE:MDZ; TSE:MDS) announced today that it intends to defend itself against the charges laid yesterday following a lengthy investigation of our water-testing facility by the Ministry of the Environment (MOE).

After several months of investigation the MOE concluded that our testing was accurate and that there was never any threat to public safety. However, the MOE has placed charges that we would characterize as administrative violations related to delays in reporting six water-testing results to the Ministry. All six samples were negative for E.coli and were reported promptly to the water operator. At no time was there any risk to public safety.

The first charge was related to a one-day delay in reporting a positive heterotrophic test to the Ministry in October 2001. The heterotrophic result was reported to the operator immediately. At that time we apologized to the operator and the Ministry for this reporting delay and took corrective action. At no time was public safety in jeopardy.

The additional five charges are related to delays in posting routine negative results to the MOE website. All five samples were negative for E.coli and were promptly reported to the water operators. Some routine data submission of negative test results to the Ministry website were delayed by Ministry technical problems and system downtime.

Our water-testing laboratory processes over 100,000 water-testing samples per year and we are committed to timely and accurate testing to protect the health of residents of Ontario. We will be defending our position in the courts.

For Further Information Contact:

Jennifer Bowman Vice-President, External Affairs
416-213-4182 jbowman@mdsintl.com

Pat Everitt, Director Communications
416-213-4258 peveritt@mdsintl.com