ch. 21-1 © 2006 prentice hall the legal environment of business a critical thinking approach fourth...

Ch. 21-Ch. 21-11 © 2006 Prentice Hall© 2006 Prentice Hall

THETHE LEGALLEGAL ENVIRONMENTENVIRONMENT OFOF BUSINESSBUSINESS

A Critical Thinking ApproachA Critical Thinking ApproachA Critical Thinking ApproachA Critical Thinking ApproachFourth EditionFourth Edition

Nancy K. KubasekNancy K. Kubasek

Bartley A. BrennanBartley A. Brennan

M. Neil BrowneM. Neil Browne

Nancy K. KubasekNancy K. Kubasek

Bartley A. BrennanBartley A. Brennan

M. Neil BrowneM. Neil Browne

© 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-22

THE LEGAL ENVIRONMENT OF BUSINESS

CHAPTER 21CHAPTER 21

Environmental LawEnvironmental Law

l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-33


Environmental ProtectionEnvironmental Protection

Pollution as “negative Pollution as “negative externality”externality”

A detrimental by-product of A detrimental by-product of an industrial economy an industrial economy

A national problem, A national problem, requiring national requiring national solutionssolutions



Alternatives to RegulationAlternatives to Regulation

Tort Law ActionsTort Law Actions

Nuisance: public and privateNuisance: public and private

TrespassTrespass

NegligenceNegligence

Tort Law ProblemsTort Law Problems

StandingStanding

CausationCausation



Other Alternatives to RegulationOther Alternatives to Regulation

Pay subsidies to pollutersPay subsidies to polluters

Charge pollution feeCharge pollution fee

Sell permits to pollute: Sell permits to pollute: “marketable discharge “marketable discharge permit”permit”



Direct Regulation to Protect the EnvironmentDirect Regulation to Protect the Environment

General approach: Set and enforce General approach: Set and enforce standardsstandards

Technology-forcingTechnology-forcing

Technology-drivenTechnology-driven



The EPAThe EPAThe largest federal agencyThe largest federal agency

Created 1972 by executive orderCreated 1972 by executive order

Mission: Protect environment from all Mission: Protect environment from all forms of pollutionforms of pollution

Methods: Sets standards, monitors Methods: Sets standards, monitors compliance, enforces regulations—compliance, enforces regulations—including criminal sanctions including criminal sanctions



National Environmental Policy Act of 1970National Environmental Policy Act of 1970

Created the Created the processprocess of requiring of requiring Environmental Impact Statements (EIS)Environmental Impact Statements (EIS)

For For major federalmajor federal legislation or agency legislation or agency action havingaction having

Significant impactSignificant impact on the quality of on the quality of the human environmentthe human environment



EIS ProcessEIS ProcessPreliminary decision: determination of non-Preliminary decision: determination of non-significancesignificance

When EIS is required, it includesWhen EIS is required, it includes

Impact of proposed actionImpact of proposed action

Unavoidable adverse effectsUnavoidable adverse effects

AlternativesAlternatives

Short-term v. long-term analysisShort-term v. long-term analysis

Irreversible commitments of resourcesIrreversible commitments of resources



Federal Water Pollution Control ActFederal Water Pollution Control Act

Direct regulation of water qualityDirect regulation of water quality

GOALSGOALS

““Fishable”Fishable” and and ““swswimmable”immable” waters waters

Total elimination of Total elimination of pollutant dischargespollutant discharges

METHODSMETHODS

Point source Point source effluent limitationseffluent limitations

NPDES discharge NPDES discharge permitspermits



Safe Drinking Water ActSafe Drinking Water Act

Regulates public water Regulates public water supply systemssupply systems

Application: 15 service Application: 15 service connections/25 personsconnections/25 persons

Primary and secondary Primary and secondary standardsstandards

Sets unenforceable goals Sets unenforceable goals for contaminantsfor contaminants



Air QualityAir QualityClean Air Act of 1970Clean Air Act of 1970

National Ambient Air Quality National Ambient Air Quality Standards (NAAQS)Standards (NAAQS)

State Implementation Plan State Implementation Plan (SIP)(SIP)

1990 amendments: focus on 1990 amendments: focus on cars; hazardous air pollutantscars; hazardous air pollutants



Air QualityAir QualityNew Source Review (NSR) 1977New Source Review (NSR) 1977

Hazardous Air Pollutants (HAP) 1999Hazardous Air Pollutants (HAP) 1999

Standard: Maximum Achievable Standard: Maximum Achievable Control Technology (MACT)Control Technology (MACT)



Indoor Air PollutionIndoor Air Pollution““Sick building syndrome”Sick building syndrome”

Emissions from building Emissions from building materials, furnishingsmaterials, furnishings

Clean Air Act does not applyClean Air Act does not apply

OSHA regulations may apply OSHA regulations may apply in workplace but not in homesin workplace but not in homes



Acid RainAcid Rain

1990 Clean Air Act Amendments1990 Clean Air Act Amendments

Emissions trading programEmissions trading program

Sulfur dioxide allowances auctionedSulfur dioxide allowances auctioned

One ton per allowanceOne ton per allowance

Effectiveness of process under Effectiveness of process under continuing study continuing study



Hazardous Waste and Toxic SubstancesHazardous Waste and Toxic SubstancesResource Conservation and Recovery Act of 1976 (RCRA)Resource Conservation and Recovery Act of 1976 (RCRA)

METHODMETHOD

Manifest program — creates certification Manifest program — creates certification and recordkeeping for entire life cycle of and recordkeeping for entire life cycle of designated hazardous wastes designated hazardous wastes

Goal: Goal: Control hazardous wasteControl hazardous waste



Hazardous Waste and Toxic SubstancesHazardous Waste and Toxic Substances

Comprehensive Environmental Response, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) Compensation, and Liability Act of 1980 (CERCLA)

Example: "SUPERFUND"Example: "SUPERFUND"

GOAL:GOAL: To remediate land polluted prior to RCRA regulation To remediate land polluted prior to RCRA regulation

METHOD:METHOD: Use government Superfund money to clean up Use government Superfund money to clean up toxic sites, then recover costs from those responsibletoxic sites, then recover costs from those responsible



““Superfund” Issues: LiabilitySuperfund” Issues: Liability

““Potentially responsible parties” Potentially responsible parties” – controversial extension of – controversial extension of liability toliability to

Present owners or operatorsPresent owners or operators

Previous owners or operatorsPrevious owners or operators

Hazardous waste generatorsHazardous waste generators

Hazardous waste transporterHazardous waste transporter



““Superfund” Issues: FundingSuperfund” Issues: FundingGoal: Self-supporting programGoal: Self-supporting program

1986 Amendments increased funding to $8.5 billion1986 Amendments increased funding to $8.5 billion

Funding comes from taxes on major Funding comes from taxes on major polluters: petroleum, chemical polluters: petroleum, chemical feedstock, environmental taxes on feedstock, environmental taxes on corporationscorporations



Toxic Substances Control Act of 1979 (TSCA)Toxic Substances Control Act of 1979 (TSCA)

Goal: Fills gap between Goal: Fills gap between RCRA and CERCLARCRA and CERCLA

Toxics broadly definedToxics broadly defined

Method: Requires PMN Method: Requires PMN to EPAto EPA



Federal Insecticide, Fungicide, and Federal Insecticide, Fungicide, and Rodenticide Act of 1972 (FIFRA)Rodenticide Act of 1972 (FIFRA)

Goal: Regulation of all Goal: Regulation of all pesticidespesticides

Method: Registration systemMethod: Registration system

Certifies: composition of Certifies: composition of compound; labeling; compound; labeling; performanceperformance

Registration determines scope Registration determines scope of use: of use: generalgeneral or or restrictedrestricted



Federal Food, Drug, and Cosmetic Act Federal Food, Drug, and Cosmetic Act (FFDCA)(FFDCA)

Goal: Establishes standards for pesticide Goal: Establishes standards for pesticide residue in foodresidue in food

Method: Issues ‘tolerances’ for pesticide Method: Issues ‘tolerances’ for pesticide used as determined by EPAused as determined by EPA

Applicant must demonstrate complianceApplicant must demonstrate compliance

1996 Food Quality Protection Act declares 1996 Food Quality Protection Act declares ‘safe residue level’ as ‘reasonable certainty ‘safe residue level’ as ‘reasonable certainty of no harm’of no harm’



Pollution Prevention Act 1990Pollution Prevention Act 1990Numerous regulatory efforts have been effectiveNumerous regulatory efforts have been effective

Pollution has been significantly reducedPollution has been significantly reduced

However, elimination of remaining pollution However, elimination of remaining pollution increasingly costly to achieveincreasingly costly to achieve

Pollution Prevention Act goal is to Pollution Prevention Act goal is to encourageencourage further progressfurther progress

Method: Provide information and incentive grants Method: Provide information and incentive grants to spur innovationto spur innovation



Global DimensionsGlobal DimensionsPollution is Pollution is transnationaltransnational

The ‘Global Commons’ The ‘Global Commons’ conceptconcept

Goal:Goal: International cooperation and harmonization of laws International cooperation and harmonization of laws

Methods:Methods: Share research; promote conferences; create Share research; promote conferences; create treaties; provide economic aid to accomplish goalstreaties; provide economic aid to accomplish goals



Selected Treaties and ProtocolsSelected Treaties and Protocols

Stockholm 1972 Stockholm 1972 sustainable developmentsustainable development

Montreal Protocol 1987 and 1996 Montreal Protocol 1987 and 1996 ozone ozone depletiondepletion

Rio de Janeiro 1992 Rio de Janeiro 1992 biodiversity biodiversity

NAFTA NAFTA side agreement on the environmentside agreement on the environment

Kyoto 1998 Kyoto 1998 greenhouse gasesgreenhouse gases



U.S. Government PoliciesU.S. Government Policies

U.S. did not sign Kyoto ProtocolU.S. did not sign Kyoto Protocol

U.S. does provide foreign aid to assist U.S. does provide foreign aid to assist selected countriesselected countries

Certain trade agreements contain Certain trade agreements contain environmental protection: NAFTAenvironmental protection: NAFTA

ch. 21-1 © 2006 prentice hall the legal environment of business a critical thinking approach fourth...

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