Comprehensive Environmental Response, Compensation, and Liability Act (1980) (Major Acts of Congress)
Gregory S. Weber
Excerpt from the Comprehensive Environmental Response, Compensation, and Liability Act
Whenever ... any hazardous substance is released or there is a substantial threat of such a release into the environment ... the President is authorized to act, consistent with the national contingency plan, to remove or arrange for the removal of, and provide for remedial action relating to such hazardous substance, pollutant or contaminant at any time (including its removal from any contaminated natural resource), or take any other response measure consistent with the national emergency plan which the President deems necessary to protect the public health or welfare or the environment.
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (P.L. 96-510, 94 Stat. 2767) is known both by its acronym, CERCLA (pronounced "SIR-cluh"), and by one of its major program components, the Superfund, described below.
When enacted, CERCLA addressed a substantial gap in national environmental law. The Resource Conservation and Recovery Act of 1976 (RCRA) had addressed the cleanup of active hazardous waste sites. Yet the late-1970s saw a series of front-page stories of property contamination and human sickness associated with abandoned waste sites, such as at Love Canal, New York. Faced with the cleanup of thousands of such sites across the nation, congressional committees held hearings in 1979 that highlighted the potential costs and complexities of the cleanup efforts. In late 1980, with both a lame-duck Congress and president, the bill that became CERCLA was introduced and passed virtually overnight.
Critics have traced many problems in CERCLA's implementation to this hasty legislative process. Indeed, as originally enacted, CERCLA lacked many critical details and left limited legislative history. While these criticisms have merit, the statute's principal amendment, the Superfund Amendments and Reauthorization Act of 1986 (SARA), addressed many of the charges. SARA added many detailed provisions and provided substantial legislative history.
THREE PRINCIPAL ELEMENTS
Three key elements underlie CERCLA. These include: (1) the EPA's cleanup authority and processes; (2) cleanup liability; and (3) the Superfund.
EPA Cleanup Authority and Processes. CERCLA authorizes the Environmental Protection Agency (EPA) to respond to releases or threatened releases into the environment of hazardous substances from vessels or facilities. Hazardous substances are broadly defined to include just about anything that is toxic or hazardous, except petroleum-based substances. (Given this exclusion, cleanups of petroleum-based substances are best addressed under RCRA, which contains no such exclusion.) Facility covers just about any kind of structure, pipeline, pit, or container, except a "consumer product in consumer use." Release includes all accidental and intentional discharges, except for motor vehicle emissions or radioactive materials. And finally, as its responses, the EPA may conduct either short-term removals or long-term remedial response actions. The former apply when prompt action is needed. Examples include fencing a site. The latter apply to all other situations. Examples include pumping and treating contaminated groundwater. These long-term actions may cost millions of dollars and take decades to complete.
A complicated array of procedures details how EPA prioritizes and supervises the cleanup work. Only sites placed on a National Priority List (NPL) are proper subjects for long-term remedial actions. The EPA places sites on the NPL by assessing their relative risks to the public under a detailed Hazard Ranking System (HRS). Guiding the EPA's cleanup efforts at these sites is the National Contingency Plan (NCP). The NCP details each step of the cleanup process, from initial site assessment and inspection, through remedy selection, to remedy implementation. Among other matters, the NCP has substantial provisions addressing public participation in site planning.
Cleanup Liability. CERCLA casts a wide net over those potentially responsible parties (PRPs) who are liable for site cleanup costs. Four classes of PRPs exist: (a) present site owners or operators; (b) those who owned or operated at the time of disposal; (c) persons who arranged for disposal; and (d) transporters who selected the disposal site. Hundreds of court cases have fleshed out these categories. For example, courts have addressed the liabilities of parent corporations, successor corporations, individual shareholders, and those who have loaned money to a PRP for its use on the site. Congress eventually addressed the latter issues in the Asset Conservation, Lender Liability, and Deposit Insurance Act of 1996.
An equally large number of cases have extended liability in other ways. Under case law, liability is strict, that is, no fault needs to be proven. Liability is also joint and several, that is, any individual PRP is liable for the entire site cleanup costs, even if it only contributed a small amount of the waste. (EPA, however, generally offers small contributors special settlement terms in amounts proportionate to the amount and type of waste involved.) Finally, liability is retroactive, that is, applies to disposals that occurred prior to 1980.
The principal defense to CERCLA liability requires proof of a PRP's lack of knowledge or reason to know that hazardous substances had been released on a site. Few PRPs have succeeded in providing such proof. Because enormous financial consequences may come with even unwitting ownership of a hazardous waste site, prospective property owners now must thoroughly inspect property prior to purchase. Reluctance to purchase possibly contaminated property led to what became known as brownfields. Brownfields are abandoned sites, largely in urban areas, with contamination issues. To encourage development of these areas, Congress has authorized the EPA to offer financial assistance to help fund their cleanup.
The Superfund. The Superfund is an EPA-administered trust that ensures the availability of cleanup funds. Supported by taxes on, among other things, crude oil and certain chemicals, the Superfund totals $8.5 billion. EPA can use it to pay response costs, natural resource damages, and research, development and demonstration costs.
Because even at $8.5 billion the Superfund is inadequate to pay the full cleanup costs of all the NPL sites, EPA hoards it carefully. As a result, EPA's favored CERCLA enforcement tool is to negotiate a settlement among a site's PRPs. Under the settlement, the PRPs will clean up the site under EPA's supervision. Any cleanup costs expended by EPA and recovered from a PRP are returned to the fund to finance future cleanups.
ACCOMPLISHMENTS AND CHALLENGES
In a report commemorating CERCLA's twentieth anniversary, EPA summarized its progress in hazardous waste cleanup. It noted that it had taken over 6,400 emergency actions; had completed construction at 757 NPL sites; had gotten PRPs to conduct cleanup work at 70 percent of all NPL sites; had secured $18 billion from PRPs to fund cleanups; and had de-listed 219 sites. Nevertheless, because new sites frequently arise or are discovered and because cleanups often require decades to complete, CERCLA-like legislation likely will be needed for the foreseeable future.
See also: HAZARDOUS AND SOLID WASTE AMENDMENTS OF 1984; TOXIC SUBSTANCES CONTROL ACT.
"CERCLA Overview." U.S. Environmental Protection Agency. July 2003. <http://www.epa.gov/superfund/action/law/cercla.htm>.
Cooke, Susan M. The Law of Hazardous Waste: Management, Cleanup, Liability, and Litigation. New York: Matthew Bender, 1992.
Grad, Frank. Treatise on Environmental Law. New York: Matthew Bender, 1993.
Moya, Olga L., and Andrew L. Fono. Federal Environmental Law: The User's Guide. St. Paul, MN: West Group, 2001.
Rogers, William H., Jr. Environmental Law, 2d ed. St. Paul, MN: West Publishing Co., 1994.
Sprankling, John G., and Gregory S. Weber. The Law of Hazardous Wastes and Toxic Substances in a Nutshell. St. Paul, MN: West Publishing Co., 1997.
Stensvaag, John-Mark. Hazardous Waste Law and Practice. New York: Wiley, 1989.
Comprehensive Environmental Response Cleanup and Liability Act (CERCLA) (Encyclopedia of Small Business)
The Comprehensive Environmental Response Cleanup and Liability Act (CERCLA), better known to the general public as the Superfund program, was passed by Congress on December 11, 1980. Under CERCLA, the Environmental Protection Agency (EPA) was given the authority to respond directly to the release or threatened release of hazardous substances onto sites which could endanger the public health or the environment. Superfund established requirements regarding these contaminated sites as well as the liability of individuals and businesses responsible for the site contamination. In order to pay for the environmental cleanup of abandoned or uncontrolled hazardous waste sites, the government began taxing chemical and petroleum industries over a period of five years. The resulting $1.6 billion created a trust fund or Superfund to pay for these cleanups.
Later legislation, such as The Superfund Amendments and Reauthorization Act (SARA) in 1986, underlined the need for permanent and creative solutions in cleaning up hazardous waste sites by providing methods for settlement between responsible parties and the government. SARA also ensured CERCLA was in line with other federal and state environmental legal standards and requirements and increased state involvement in the Superfund program. It revised the Hazards Ranking System in order to ensure it focused on the human health issues associated with the sites. Finally, SARA brought another $8.5 billion into the fund for cleanup. Additional funds have been appropriated since.
There have been some legislative attempts at reducing or eliminating the liability for small businesses under CERCLA. However, in the wake of expensive cleanup efforts and increased environmental legislation, most large companies have dramatically improved their operations in order to avoid future remedial action. Unfortunately, the EPA has found that many small businesses tend to be among the most egregious polluters.
POTENTIALLY RESPONSIBLE PARTIES (PRPS)
Liability for contamination under CERCLA extends to a number of individuals or groups it terms "potentially responsible parties" (PRPs). These include: the current owner or operator of the site; previous owners or operators of the site during the time of contamination or after it; companies or individuals handling the waste disposal or transportation; and other parties connected to the sale or lease of the property, such as title companies or real estate agents.
The impact of this legislation for the small business owner can be devastating. Essentially, if a site is found to be contaminated, the landowner or operator and other parties connected to the property are responsible for environmental cleanup costs. This liability extends to the owner/operator, even if the site was contaminated by previous owner/operators and, in most cases, even if the current owner/operator was unaware of the contamination.
When considering the purchase of real estate, a small business should attempt to avoid contaminated sites both from the perspective of unwanted liability and costs for cleanup as well as the adverse impacts on business that a cleanup (also known as a remediation project) can bring. These include the stigma associated with a contaminated site and the cleanup's probable interference with business operations.
Therefore, a thorough assessment of the site in question (also known as "due diligence") should be conducted prior to purchasing it. This can, in some instances, protect the purchaser from liability for contamination. In order to be covered under the "innocent purchaser exemption" of CERCLA, however, a landowner must prove that s/he "did not know and had no reason to know" of the problem at the time of purchase. Since there is so much at stake, hiring a professional to do an environmental site assessment can (but does not guarantee) that you qualify for the exemption if the property turns out to be contaminated.
ENVIRONMENTAL SITE ASSESSMENTS
An environmental site assessment (ESA) performed by an environmental auditing company can ensure that a property is not contaminated. There are two forms of environmental site assessments. The first, known as a Phase I ESA, examines public records such as aerial photographs, EPA documents, and other public documents of the property in question, in order to determine whether the site had previous uses such as manufacturing operations or hazardous materials storage which may cause contamination. If any data found during the Phase I ESA proves questionable or suspicious, a Phase II ESA is called for. In a Phase II ESA, the environmental consulting firm takes soil and other samples from the site. The type and location of the samples will be determined by information found in the Phase I ESA.
Environmental site assessments (primarily Phase I ESAs) of property may also be required by banks when a business seeks to borrow against the equity of the property. This is because a possible cleanup could severely diminish the value of the site. Depending on the lending institution, this may be required for large loans, such as those over $500,000.
According to the Small Business Administration, the cost of a Phase I Environmental Site Assessment can begin around $1000 and rises with the size of the property and detail of the assessment. Since this is a crucial investment, it pays to secure a reputable firm. Look for an environmental consulting firm with a proven track record and actual experience in performing ESAs, as well as one that is insured. Be sure to check references.
What happens if a business already owns a contaminated site or, despite its best efforts, purchases a site which is later found to have contamination? Under CERCLA, liability for cleanup is difficult to avoid. In legal terms, CERCLA liability is strict, several and joint. Strict liability does not require intent or negligence or a specified amount of precaution on the part of the potentially responsible party. If the PRP is within one of the categories established by CERCLA, that party can be held strictly liable for all costs associated with an environmental cleanup of the site. Liability for the cleanup is also joint and several. This means, according to Martin McCrory in American Business Law Journal, that all of the PRPs "are liable as a group or that each contributor is individually liable for the entire harm at the site." In layman's terms, a business's responsibility for costs incurred in the site cleanup is not necessarily proportional to its actions that lead to the site's contamination.
Once the liability of a PRP is established, escaping the burden of costs is only defensible under a few scenarios. These include if the release was caused by an act of God, an act of war, an act or the lack of action by a third party, or any combination of these scenarios. The defense that the release was caused by an act or lack of action by a third party is the most often used defense. It also frequently fails, according to McCrory.
RESPONSE ACTIONS OR SITE CLEANUP
Under CERCLA, there are two types of governmental responses to contamination that can take place. The first is known as a short-term removal or removal action, in which the EPA takes immediate action in order to prevent or eliminate the release of hazardous materials in the case of an environmental emergency. A removal action cannot take more than one year from start to finish, and cannot cost more than $2 million. The second, known as a long-term remedial action, works to "permanently and significantly" lower the dangers connected to releases or threats of releases. This kind of action is meant to be much more comprehensive and therefore can continue over several years and, according to McCrory, average over $30 million per site. Long-term remedial response actions occur only at sites listed on the EPA's National Priorities List (those sites which rate highest on the Hazards Ranking System.)
Prior to the start of the cleanup, a remedial investigation and feasibility study (RI/FS) is done on the site in order to determine the level of contamination and select a method for removal or neutralization of the hazardous materials. The RI portion of the study collects information needed to establish the nature and extent of the contamination at the site. It also characterizes the environmental risks of the contamination and establishes the goals of cleanup. Using this information, the FS develops a number of possible cleanup scenarios for the contaminated site. Finally, the RI/FS forms the basis of the Record of Decision (ROD), which evaluates these scenarios and selects the appropriate one. Frequently, the cleanup proposal will be phased with separate remedies to address different problems on the site.
A PRP may settle with the EPA to handle all of these remedies (known as a global settlement) or some of them. The business may also come to an agreement with the EPA to pay for the RI/FS or the removal of the contamination. In some cases, the business/PRP may actually perform the site cleanup, rather than reimburse the EPA. It should be noted, however, that a settlement with the EPA does not necessarily protect a PRP from future liability.
Given the potential for liability, the best method for avoiding costly litigation and cleanup is prevention. When purchasing real estate, a company should work to avoid previously contaminated properties by engaging professionals to do thorough site evaluations. Companies whose business operations generate or deal with hazardous waste should work to prevent disasters. An environmental plan is crucial for this. A company needs to determine which regulations impact them, develop a comprehensive plan for dealing with hazardous waste, and work closely with local authorities where needed to execute it.
The EPA has established a toll-free number for assistance on hazardous waste issues: the RCRA/Superfund Hotline. Callers can get information on storage and transportation procedures, local contractors and governmental agencies, and other information pertinent to hazardous waste. Additional information is available on the EPA Web site. If contamination is discovered, the most important action a business can take is to stay involved in the process and take responsibility early in the hopes of a settlement, rather than an EPA-led cleanup.
Hoover, Kent. "Small Businesses Contest Superfund Fines." Baltimore Business Journal. October 22, 1999.
Hoover, Kent. "Smith Believes Superfund Needs More Than Small-Business Relief." Sacramento Business Journal. December 17, 1999.
McCrory Martin A. "Who's On First: CERCLA Cost Recovery, Contribution, and Protection." American Business Law Journal. Fall 1999.
Mester, Zoltan C. "The Role of Environmental Due Diligence in Property Transactions." Pollution. November 2000.
Powell, Fiona M. "Current Issues in Environmental Management." Business Horizons. January-February 1998.
SEE ALSO: Environmental Law and Business
Comprehensive Environmental Response, Compensation & Liability Act (CERCLA) of 1980 (Superfund) (Encyclopedia of Business)
- STRUCTURE OF CERCLA AND ADMINISTRATION OF SUPERFUND
- PUBLIC REACTION TO EPCRA AND SUPERFUND
- FURTHER READING:
In December 1980, Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, which is commonly called "Superfund." Superfund was passed in response to public concern about chemical contamination such as that revealed in connection with the Love Canal disaster in the state of New York, where health effectsncluding unusually high rates of cancer, miscarriages, and birth defectsere traced to chemical wastes from an abandoned chemical dumpsite. The 1980 Superfund law created a $1.6 billion fund to be used to identify and clean up hazardous waste sites over a period of five years. The program is administered by the federal Environmental Protection Agency (EPA), which often acts in cooperation with its state counterparts. Major amendments to Superfund were passed in 1986 in the Superfund Amendments and Reauthorization Act (SARA). Pursuant to SARA, the Superfund program was extended for five years and additional funding of $8.5 billion was provided for the period from 1986 to 1991. With the passage of SARA, the Superfund program and provisions for taxes supporting it were extended for four more years but there were no significant changes made in the program. Funding for the program and liability for those parties who have been required to pay for cleanup actions have been sources of great controversy throughout Superfund's history.
IMPETUS FOR CREATION OF SUPERFUND
The Love Canal disaster near Niagara Falls, New York, and similar crises in Times Beach, Missouri, and Woburn, Massachussetts, were brought to the attention of U.S. citizens through extensive news media coverage during the late 1970s. At Love Canal, an emergency declaration by the federal government condemned a school and two hundred houses. In the wake of that action, Congress passed CERCLA as a means of identifying and cleaning up such hazardous waste dumps. CERCLA was signed into law in December 1980 by President Jimmy Carter.
STRUCTURE OF CERCLA AND ADMINISTRATION OF SUPERFUND
CERCLA has four parts. First, it establishes a system to identify chemical dump sites and develop priorities for cleanup actions. Second, it grants authority to the EPA to engage in "removal" actions to respond to emergency situations involving hazardous substances and to engage in "remedial" actions to clean up hazardous waste sites. Third, CERCLA creates a Hazardous Substances Trust Fund to pay for removal of hazardous wastes and for remediation actions at hazardous waste sites. Fourth, the act places liability for cleanup costs upon "responsible parties" who contributed wastes to the site being cleaned up.
Removal actions include clean up of hazardous materials in emergency situations such as chemical spills resulting from a train wreck or collision of motor vehicles or where polluted waters threaten to overflow. Removal actions are usually handled by state or local officials, but the EPA assists in particularly difficult situations. Removal actions in which the EPA participates are limited by statute to one year and $2 million in costs.
Remediation actions, in contrast, are long-term and involve such activities as groundwater treatment, removal or incineration of wastes, and treatment or removal of soil. State governments work with the federal EPA's remedial action division of the EPA's Superfund Office to identify the most dangerous hazardous waste sites throughout the United States. After a state "nominates" a site for consideration, a "paper" analysis is done to select sites to be visited. When a site is visited by EPA inspectors, air, soil, and water samples are taken to assess the nature and degree of contamination of the site. The worst sites are placed on the EPA's National Priority List (NPL). The EPA was criticized in the 1980s and early 1990s for having nearly 40,000 sites on its Superfund inventory. In the mid- to late 1990s, the EPA removed 27,000 sites from its active inventory list. (The EPA says that those sites have been "archived.") That action has been praised by cities and financial institutions as a major step that can encourage and facilitate redevelopment of those sites.
Once a site is placed on the NPL, more intensive testing is done at the site to further assess the extent of contamination at the site, and a feasibility study is done to identify potential remedies such as incinerating the waste, recycling it, treating it, or removing it from the site for containment elsewhere. Then a design study is conducted. Finally, when a site is ready for action, the EPA relies on the Army Corps of Engineers to draw up plans and specifications and obtain competitive bids for the work to be done.
Cleanup operations at Superfund sites progressed slowly until about 1992, but then cleanup efforts increased. By the end of fiscal year 1992, only 40 of the 1,200 NPL sites had been "delisted" by the EPA. (Delisting means that remediation goals for the site have been achieved.) Another 109 of these sites had been "cleaned up" but had not been delisted because long-term treatment was continuing or the site was in the process of being delisted. By 1996, however, the EPA reported that cleanup activities had been started at 95 percent of the Superfund sites listed on its NPL.
In addition, the EPA reported that it had completed cleanup at over 400 of the NPL sites (29 percent of the sites) and that at least one phase of cleanup had been started at 95 percent of the sites on the NPL.
One of the most controversial aspects of Superfund has been and continues to be the question of who pays. Industry argues that a company should not be liable for the cleanup of hazardous wastes dumped in the past if no laws were violated at the time the wastes were dumped. Congress has, thus far, however, not accepted that argument and has relied on the principle of "polluter pays" with respect to at least part of the funding for cleanup actions.
Pursuant to CERCLA, companies identified as responsible parties for the dumping at a site can be compelled by the federal EPA to clean it up, or, in the alternative, the EPA can clean up the site with Superfund money and then seek reimbursement from the responsible party (or parties) through court action. There are four broad categories of responsible parties: (1) present owners or operators of the site; (2) those who owned or operated the site at the time hazardous substances were disposed of on the site; (3) generators of the waste that ended up at the site; and (4) those who transported the waste to the site. The categories have created a great deal of controversy because they have been interpreted broadly by the courts. For example, in U.S. v. Fleet Factors Corp, a 1990 opinion of the Eleventh Circuit U.S. Court of Appeals, it was held that a secured creditor may be held liable as a responsible party if it participates in financial management of a facility in a way that shows that it could influence the facility's decisions regarding handling of hazardous waste.
The EPA can use an "enforcement first" action and seek an administrative order to force one or more potentially responsible parties (PRPs) to clean up a site. A court order can be pursued if a party contests the administrative order. Failure to comply with an administrative order or court order for such cleanup can result in fines of $25,000 per day against a party.
In the alternative, the EPA itself may pursue remediation of the NPL site and later try to recover all or part of the costs from PRPs. The EPA is particularly likely to pursue this route when there are many PRPs, where it is difficult to identify PRPs, or where PRPs are "judgment proof because they are out of business or are in a precarious financial condition. Such cleanups are financed through the Hazardous Substances Trust Fund, except the cleanup of land used by the U.S. Department of Defense and the U.S. Department of Energy is paid for through separate, direct federal budget appropriations for that purpose. It should also be noted that states are required by federal law to pay for a portion (usually 10 percent to 50 percent) of cleanup costs for any site within their boundaries. In addition, the EPA has the authority to delegate the responsibility for leading clean up of a specific site to the state in which that site is located. Thus, businesses often find themselves dealing with a state counterpart to the EPA rather than the EPA itself.
Pursuant to the 1980 Superfund law, the Hazardous Substances Trust Fund received monies from taxes on certain basic chemicals referred to as "feedstock" chemicals, taxes on crude oil and imported petroleum products, and general federal tax revenues. Pursuant to the 1986 amendments to Superfund, those sources of monies were renewed, and a surtax was imposed on all U.S. businesses with an annual income of more than $2 million as an additional source of revenues. At the end of 1995, however, Congress allowed the "Superfund tax" to expire, thus cutting off nearly $4 million per day that was generated for Superfund cleanups. Without reinstatement of that tax, the Superfund Trust Fund will not be able to cover as many cleanups.
NEW PROGRAMS ADDED PURSUANT TO SARA IN 1986
In addition to reauthorizing and providing additional funding for the Hazardous Substances Trust Fund, the 1986 Superfund Amendments and Reauthorization Act (SARA) included the Emergency Planning and Community Right-to-Know Act (EPCRA), also known as Title III. EPCRA established important new programs designed to extend "right-to-know" protections to communities and to plan for dealing with emergencies created by chemical leaks or spills. EPCRA was enacted in response to public concerns arising from a disaster in Bhopal, India, in 1986. In Bhopal, an accidental release of methyl isocyanate, a poisonous gas, from a Union Carbide plant killed more than 2,000 people. Most people residing near the plant had not known that toxic chemicals were used there. Further, there were no advanced plans for dealing with such a chemical emergency. U.S. citizens were concerned that similar accidents could occur here.
EPCRA has two sets of provisions. First, communities are required to establish plans for dealing with chemical leaks or spills. Second, businesses must convey to the public the same kinds of information about chemical hazards that they have been required to convey to their workers pursuant to the right-to-know provisions of the Occupational Safety and Health Administration's Hazard Communication Standard. EPCRA is viewed as an important step away from crisis-by-crisis kinds of environmental protection and toward a proactive, preventive approach. Pursuant to EPCRA, the governor of each state has established a State Emergency Planning Response Commission. In turn, each state commission has established various emergency planning districts and has appointed a local emergency planning committee (LEPC) for each. Each LEPC is required to prepare plans for potential chemical emergencies within its communities. Plans must include the identities of business facilities with hazardous chemicals on their premises, the procedures to be followed in the event of a chemical release, the identities of community emergency coordinators, and the identity of a facility coordinator for each business facility covered by EPCRA.
A business facility is covered by EPCRA if it has a substance in a quantity meeting or exceeding a quantity specified on a list of about 400 extremely hazardous substances published by the EPA. In addition, after public notice and comment, the State Emergency Planning Response Commission or the governor of the state may designate additional facilities to be covered.
In the event of an accidental release of a hazardous substance, the covered facility must report that release immediately and provide follow-up notices and information to the community coordinator of its LEPC. Hazardous substances that trigger such a report include those on the EPA's extremely hazardous substance list and those that are so classified under CERCLA.
The second major set of EPCRA's provisions provides for a community right-to-know program. The program requires businesses to prepare two sets of annual reports: the Hazardous Chemical Inventory and Toxic Chemicals Release Inventory (TRI), also known as Chemical Release Forms.
For the Hazardous Chemical Inventory, each covered business facility must obtain or prepare a material safety data sheet (MSDS) for each chemical on its premises meeting or exceeding the threshold quantity. These forms are submitted to the LEPC, the local fire department, and the State Emergency Planning Response Commission. In addition, for each chemical in the inventory, the business must file a chemical inventory report each year.
The TRI is a second set of reports that must be filed annually. In the TRI, releases made by the facility into air or water or onto land during the preceding 12 months are listed and totaled. Those releases reported on the form must include even those made legally pursuant to permits issued by the EPA or its state counterparts. The TRI must be filed by any company with ten or more employees if that company manufactures, imports, stores, or otherwise uses designated toxic chemicals at or above threshold levels.
Information submitted pursuant to both the emergency planning and the community right-to-know provisions of EPCRA is available to the general public upon request to the LEPC. In addition, health professionals may obtain access to specific chemical identities in order to treat or protect individuals who may have been exposed to the chemicals. Such access by health professionals is available even if the information is claimed to be a trade secret by the business facility.
Congress has provided stiff penalties for noncompliance with EPCRA. A business failing to comply with reporting requirements may be assessed up to $25,000 per day for a first violation and up to $75,000 per day for a second violation. Private citizens have the right to sue companies that fail to report. Enforcement by the government can include criminal prosecution and can result in imprisonment of managers of businesses that fail to report.
PUBLIC REACTION TO EPCRA AND SUPERFUND
Studies reveal that EPCRA has had far-reaching effects on businesses, prompting many to implement new waste reduction programs or adapt their existing programs. Other companies have developed safety audit procedures, reduced their chemical inventories, and changed their operations to substitute less hazardous chemicals for those they were using previously. In addition, various industry groups, such as the Chemical Manufacturers Association, have conducted workshops and prepared educational materials to assist their members in communicating risk EPCRA information and risk information in general to their communities. EPCRA is not an unqualified success, however. It is criticized for being less effective in conveying information to the public than it should be. One problem is lack of funding for the program. For example, LEPCs depend on unpaid, volunteer members. Also, information conveyed in an MSDS is not in a language or a format that is easily understood by most laypeople.
In its administration of the Superfund program, the EPA has received extensive criticism. During the first six years of Superfund, not only did the EPA fail to act aggressively to implement and enforce the program, but there were charges of mishandling of funds, illegal favorable treatment of industries identified as PRPs, and manipulation of the Superfund for political purposes. A scandal dubbed "Sewergate" by the news media ensued. As a result of a Congressional investigation, Anne Burford (later Gorsuch), chief administrator of the EPA, and 20 other EPA officials resigned from their positions. Among those resigning was Rita LaVelle, head of the Superfund program, who went to prison after being convicted of perjury in her testimony on the affair before Congress.
Since 1986, the credibility of the EPA has been rebuilt, in part, because EPA administrators following Burford have been chosen carefully by the U.S. presidents to ensure that each has demonstrated an appreciation for the cause of environmental protection. Criticism of the Superfund program, however, continues to come from diverse sources including businesses, the financial community, environmental groups, practicing attorneys, and legal scholars. Studies criticizing Superfund have come from a variety of organizations including, but not limited to, Congressional committees, the General Accounting Office, the Center for the Study of American Business, and the Rand Institute for Civil Justice.
Such groups have issued reports evaluating the implementation and effectiveness of the Superfund program, and they have been highly critical for a variety of reasons. Those reasons include those already described in this essay, such as the EPA's lack of progress in cleaning up and delisting sites; the enormous compliance costs imposed on companies identified as responsible parties; the broad sweep of Superfund's definitions of "responsible parties," which has extended liability even to financial institutions that have acquired the ability to engage in management decisions; and at least four other major sets of criticisms, which are described below.
First, Superfund's liability scheme is criticized, because it has resulted in a plethora of lawsuits. The EPA sues polluters to recover costs; polluters sue their insurance companies and each other. Litigation with respect to a site in Glenwood Landing, New York, presents an extreme example of this phenomenon. There, the EPA identified 257 PRPs who hired over 130 law firms to represent them; 442 insurance companies were sued, and the insurance companies hired 72 law firms for their defense. In response to this, the EPA has used policy and settlements to cut down on contribution litigation and to provide protection to de minimus parties, de mirocmis parties, and parties with a limited ability to pay. Contributors of extremely small amounts of hazardous materials are removed from the liability scheme early in the process.
Second, Superfund's retroactivity is harshly criticized. Companies pay for cleanup of wastes placed at sites before Superfund's passage in 1980 regardless of whether the practices were legal at the time of disposal and even if disposal methods followed what was common industrial practice at the time.
Third, U.S. businesses allege that Superfund places them at a competitive disadvantage in the developing global economy. They say that Superfund imposes more stringent regulations on them than those placed on manufacturing firms operating in other countries.
Fourth, it is alleged that the EPA has pursued levels of cleanup that are unrealistic and not cost-effective. Critics of Superfund say that individual communities insist on "gold-plated" cleanups even where such a level is not warranted. "How clean is clean?" continues to be a major, complicated issue facing the EPA.
THE EFFECTS AND THE FUTURE OF SUPERFUND
Superfund has changed the way business is done in the United States. EPCRA, added to Superfund in 1986, requires record keeping and reporting that affect businesses in their everyday operations and in their dealings with the public. Since its initial implementation in 1980, Superfund has changed the way land and facilities are bought and sold in the United States. Environmental audits have become a standard step of the process of buying and selling commercial or industrial real property in this country, and most lending institutions require such audits as a precondition to issuance of any kind of mortgage on business property.
One unfortunate result of Superfund is that it appears to encourage businesses to purchase and develop previously unused property rather than risk potential Superfund liability arising with respect to land previously used for industrial purposes. Such lands are called "brownfields." According to a report from the U.S. Conference of Mayors, there are an estimated 450,000 brownfields (contaminated commercial and industrial sites) across the United States. The Conference of Mayors is encouraging the U.S. government to support the cleanup and redevelopment of brownfields. In response, the EPA has instituted a Brownfield's Economic Redevelopment Initiative. Under that initiative, through a program called Brownfield Pilots, 76 sites were funded up to $200,000 in 1995 and 1996 with the objective of promoting their redevelopment. Brownfield Pilots is designed to generate interest in brownfields and to promote cooperation between and among private parties, and federal, state, and local governments.
As we enter the 21st century, U.S. citizens, the U.S. Congress, and the EPA face tough questions regarding the future of Superfund. About 70 percent of Superfund cleanups up to the end of 1995 were funded by taxes on petroleum and on a variety of chemicals; these taxes expired at the end of 1995. As a consequence, lack of funding put off cleanup at some Superfund sites in the late 1990s. By 1998, it was said that Congressional inaction was delaying cleanup at at least 171 sites around the United States. In the meantime, EPA officials continue to urge Congress to reinstate those taxes. In 1996, 1997, and 1998, Congress failed to pass proposed legislation designed to revamp the Superfund program. Congress will again consider proposals for reform of Superfund in 1999 and, if it does not act in 1999, again as we begin the 21st century.
[Paulette L. Stenzel]
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