Clients will have to adapt to the certainty of increased regulation at the international, federal, state and local levels to meet the aggressive carbon-reduction goals set by governmental authorities. John Doerr in his recent book “Speed & Scale, An Action Plan for Solving our Climate Crisis Now” summarizes the actions he submits that politicians, industries and investors must undertake to reach net-zero by 2050. He begins his blueprint for action with an admonition from his 15-year-old daughter voiced at a dinner he hosted in 2006 after a screening of An Inconvenient Truth: “Dad, your generation created this problem. You better fix it.”
Environmental Compliance & Enforcement Defense
Following up on President Biden’s 2020 Climate Change Executive Order 14008 issued in his first week in office, EPA Administrator Michael Regan issued a policy statement on May 26, 2021 that directed all EPA offices to update their 2014 Climate Implementation Plans to:
Companies that store hazardous waste liquids with organics or other volatile and light vapors should ensure that the tanks, containers, and equipment used at those facilities satisfy the RCRA Organic Air Emission Standards in Subparts AA, BB, and CC under 40 CFR Parts 264 and 265. Over the past month, EPA has announced at least five separate penalty enforcement actions for air emission violations under the Subpart BB and Subpart CC standards. EPA promulgated the RCRA hazardous waste air emission standards to reduce the release of air emissions and organic vapors into the atmosphere from hazardous waste tanks, containers, equipment, and process vents, to prevent ozone precursors and other air toxics.
Manufacturers, suppliers, retailers, and other entities in supply chains for consumer products sold in California might soon need to provide warnings regarding certain per- and polyfluoroalkyl substances (PFAS) in their products. California’s Office of Environmental Health Hazard Assessment (OEHHA) recently announced its intent to further regulate and study certain per- and polyfluoroalkyl substances under California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65. Proposition 65 prohibits companies from knowingly exposing California consumers to chemicals “known to cause cancer or reproductive toxicity” (i.e., “listed chemicals”) in consumer products without first providing a “clear and reasonable warning.” (Although not the focus of this article, Proposition 65 also addresses occupational and environmental exposure to listed chemicals.)
On December 16, 2020, a cold storage warehouse and ice manufacturing facility in East Providence, Rhode Island, entered into a guilty plea with the Justice Department for a “knowing” criminal violation of Clean Air Act section 112(r)(7), 42 USC 7412(r)(7), in connection with EPA’s Chemical Accident Prevention Program and requirement to submit a risk management plan (RMP) under 40 CFR Part 68. The facility used a refrigeration system to manufacture and store ice and other frozen products, with 19,000 pounds of anhydrous ammonia in the refrigeration process.
Manufacturing facilities, industrial operations, and other businesses subject to environmental statutes and regulations will want to evaluate a new EPA document when considering whether and how to voluntarily disclose environmental violations to the federal government. EPA recently published a 22-page guidance document, dated January 2021, clarifying EPA’s Audit Policy. EPA’s Audit Policy consists of incentives the agency offers to companies that voluntarily discover their own violations of environmental laws and regulations and disclose the violations to EPA. When all of the nine eligibility conditions in the Audit Policy are met, the Audit Policy allows for up to complete elimination of the gravity-based portion of civil penalties for environmental non-compliance, and a recommendation of no criminal prosecution. (EPA penalties may also include amounts to address the economic benefit of non-compliance, which the Audit Policy does not address.) The Audit Policy itself is memorialized in Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations, 65 Fed. Reg. 19618 (Apr. 11, 2000) (an update to the original 1995 document establishing the Audit Policy).
Chemical plant owners and operators need to carefully review a recent federal appellate court decision that could substantially expand process safety management (PSM) considerations and related chemical safety and accidental release regulatory requirements under EPA’s Risk Management Plan (RMP) program.
On August 26, 2020, the U.S. Securities and Exchange Commission (SEC) announced significant changes to the disclosure requirements for publicly traded companies under Regulation S-K. Businesses that receive monetary sanctions from the EPA and other governmental authorities involving violations of environmental laws will want to carefully review the new Item 103 Legal Proceedings rules as it may substantially alter disclosure obligations.
Accidental chemical releases in the workplace and offsite into the environment continue to be a high-priority enforcement area for both the U.S. Environmental Protection Agency and the U.S. Department of Labor’s OSHA, including releases of anhydrous ammonia and other toxic and flammable substances under the agencies’ RMP and PSM programs.
On April 21, 2020, the U.S. Army Corps of Engineers (“Corps”) and the Environmental Protection Agency published the finalized Navigable Waters Protection Rule in the Federal Register, ushering in significant changes to the definition of Waters of the United States (“WOTUS”), those waters federally regulated under the Clean Water Act. The rule affects multiple Clean Water Act programs, including Section 404 (wetlands), Section 402 (end-of-the-pipe discharges), and Section 311 (oil and hazardous substance spills). The rule is available here, and an EPA fact sheet regarding the rule is available here. For more background information, our latest article regarding the WOTUS saga is available here.