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Practical Solutions to Business Issues.
Environmental Compliance:Lessons Learned the Hard Way
Craig J. Pritzlaff
cttlegal.com
A little about myself…• B.S. Bioenvironmental Sciences, Texas A&M
University• Worked with local, state, and federal
environmental authorities• J.D. Southern Methodist University• Now practice environmental law, commercial
litigation• Practice focuses on environmental compliance,
permitting, enforcement, and litigation and covers all media (RCRA, CERCLA, CWA, CAA, FIFRA, EPCRA etc.)
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Three times a charm? Another lesson learned…
• Over $700M spent to-date
• Significant liability outstanding
• Decades of litigation ahead
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Your Goal
• As an environmental and health and safety professional you are charged with ensuring that your client/company complies with environmental and health and safety laws.
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Things to be concerned about:
Numerous laws and increased enforcement:– Federal *– State– Local **
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Things to be concerned about:
Issues:– Regulations are complex– Applicability of regulations to specific
processes can be subjective– Penalties for non-compliance are severe– Ignorance is not an excuse
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Lessons Learned
• Great companies that are well managed have found themselves in big trouble for inadvertent violations
• Areas of compliance where you can learn from their mistakes. . . . .– Reporting releases– Filing reports– Selling fire ant killer– Risk management plans
Practical Solutions to Business Issues.
LESSONS LEARNEDRELEASE REPORTING
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Lessons Learned: Release Reporting
• Environmental laws such as CERCLA and EPCRA and their state counterparts require any person in charge of a facility, as soon as he or she has knowledge of a release of a hazardous substance in quantities equal to or exceeding in any 24 hour period the reportable quantity (RQ), to immediately notify the government.
• Simple translation of the law is:– The law means immediate reporting upon
knowledge of the event.
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Lessons Learned: Release Reporting
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IMMEDIATELY
Lessons Learned: Release Reporting
State: 800-832-8224
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• In the context of environmental reporting, immediately means…
• “As soon as you have knowledge of a release equal to or greater than a reportable quantity”
• This is interpreted by EPA and state environmental agencies to mean within 15 minutes but no later than 1 hour after the release occurs.
• Immediate = 15 minutes
Lessons Learned: Release Reporting
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• Knowledge: Ignorance is bliss…?
Lessons Learned: Release Reporting
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• Knowledge– Knowledge means simply knowing that a
release has occurred– It does not mean knowledge
of every detail concerning the release.
Lessons Learned: Release Reporting
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LESSONS LEARNED: Plan Ahead
• Plan Elements 1. Know what the RQs are for toxic substances that could be released from your
facility
2. Know how much volume or at what rate of release or emission it takes to exceed an RQ
3. Know who to call and how to answer the questions they are going to ask…
• chemical name• is the substance an EHS• location• estimated quantity• time and duration of release• health risks• proper precautions.
4. Finally, environmental staff should not be allowed to go on vacation.
Lessons Learned: Release Reporting
Practical Solutions to Business Issues.
LESSONS LEARNEDFILING REPORTS - TRI
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• Section 313 of EPCRA requires that all facilities inform the public of any release of a toxic chemical that cumulatively exceeds threshold planning quantities
• Section 313 chemical list (40 CFR 372.65) contains over 600 chemicals
• Simple translation of the law is:– You have to file a “Form R” every year estimating the
quantities of chemicals released from the facility
Lessons Learned: TRI
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• Facilities subject to Section 313:– 10 or more full-time employees– fall within specific SIC/NAICS codes– “manufacture”, “process,” or “otherwise use” a
toxic chemical in excess of the reporting threshold
• “manufacture” or “process” threshold = 25,000 lbs
• “otherwise use” threshold = 10,000 lbs
• Lower thresholds for certain persistent toxic compounds like lead (100 lbs), mercury (10 lbs) PACs (100 lbs), dioxin-like compounds (.1 gram)
Lessons Learned: Release Reporting
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Client Company 1 Company 2 Company 4 Company 5
AMMONIA AMMONIA AMMONIA AMMONIA AMMONIA
AMMONIUM NITRATE
(SOLUTION)AMMONIUM NITRATE
(SOLUTION)AMMONIUM NITRATE
(SOLUTION)
AMMONIUM SULFATE (SOLUTION)
AMMONIUM SULFATE (SOLUTION)
AMMONIUM SULFATE (SOLUTION)
AMMONIUM SULFATE (SOLUTION)
CHLORINE CHLORINE CHLORINE CHLORINE CHLORINE
CHROMIUM COMPOUNDS CHROMIUM COMPOUNDS CHROMIUM COMPOUNDS
COPPER COMPOUNDS COPPER COMPOUNDS COPPER COMPOUNDS
HYDROGEN FLUORIDE HYDROGEN FLUORIDE HYDROGEN FLUORIDE HYDROGEN FLUORIDE
LEAD COMPOUNDS LEAD COMPOUNDS LEAD COMPOUNDS LEAD COMPOUNDS
MANGANESE COMPOUNDS MANGANESE COMPOUNDS
MERCURY COMPOUNDS MERCURY COMPOUNDS MERCURY COMPOUNDS MERCURY COMPOUNDS
METHANOL METHANOL METHANOL
NICKEL COMPOUNDS NICKEL COMPOUNDS
NITRATE COMPOUNDS NITRATE COMPOUNDS NITRATE COMPOUNDS
NITRIC ACID NITRIC ACID NITRIC ACID
PHOSPHORIC ACID PHOSPHORIC ACID PHOSPHORIC ACID PHOSPHORIC ACID PHOSPHORIC ACID
SODIUM HYDROXIDE (SOLUTION)
SODIUM HYDROXIDE (SOLUTION)
SODIUM HYDROXIDE (SOLUTION)
SODIUM HYDROXIDE (SOLUTION)
SODIUM HYDROXIDE (SOLUTION)
SULFURIC ACID SULFURIC ACID SULFURIC ACID SULFURIC ACID SULFURIC ACID
VANADIUM COMPOUNDS VANADIUM COMPOUNDS
ZINC COMPOUNDS ZINC COMPOUNDS ZINC COMPOUNDS ZINC COMPOUNDS
Lessons Learned: Release Reporting
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• LESSONS LEARNED: Do Not Rely on How Things Have Always Been Done
• Make an independent assessment of any report that is submitted to a regulatory agency, especially those prepared the same way over time
Lessons Learned: Release Reporting
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LESSONS LEARNEDSOFTLY KILLING FIRE ANTS
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• Requires that all pesticides must be registered – no person may sell or distribute any unregistered pesticide
• Pesticide includes any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any pest
Lessons Learned: FIFRA
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- Organic fire ant killer and other products sold to control fire ants
Lessons Learned: FIFRA
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• Lesson Learned: know the laws/programs that might apply to business activities, even seemingly innocuous or “good conscious” activities may fall within regulatory programs and lead to enforcement
Lessons Learned: FIFRA
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Risk Management Plan (RMP)
• Section 112(r) of the Clean Air Act requires that owners and operators of stationary sources producing, processing and storing extremely hazardous substances have a general duty to identify hazards associated with an accidental release, design and maintain a safe facility, and minimize consequences of accidental releases that occur.
• The Risk Management Plan (RMP) is required to be developed by subject facilities and includes an executive summary, registration information, off-site consequence analysis, five-year accident history, prevention program and emergency response program.
• EPA conducts inspections and RMP audits of facilities subject to CAA 112(r) in order to determine compliance with the statute and regulations by reviewing documents and verifying the quality of the overall preparedness, prevention and response program. EPA inspectors observe and document violations by collecting physical evidence necessary to successfully prosecute violators.
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Risk Management Plan (RMP)
• Simple translation of the law is:– There is a duty on owners and operators that
use extremely hazardous substances (EHS) to do so safely. The RMP outlines the plan for preventing and responding to accidents
• RMPs are low-hanging fruit for EPA inspectors and criminal investigators
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Risk Management Plan (RMP)
• Recent quote from an EPA Criminal Lawyer…– “Environmental crimes can be very complicated.
Most of the defendants are white collar defendants with no previous criminal history, such as Environmental Managers or Plant Managers. We [i.e. the government] charge defendants with as many violations as possible knowing that we [the government] need a conviction on just one count. RMP violations are easier to prove than other violations, so… we often look at RMPs during a criminal investigation.”
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Risk Management Plan (RMP)
• BP Refinery Explosion, Texas City, March 23, 2005
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Risk Management Plan (RMP)
• 15 people killed…175 injured…worst workplace accident since 1989
• Company pled guilty to a violation Risk Management Plan requirements set forth in Section 112(r) of the Clean Air Act for failing to maintain the mechanical integrity of the refinery
• On March 12, 2009, the federal judge approved the plea agreement, which fines BP $50 million in criminal penalties and sentences the company to 3 years probation
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Risk Management Plan (RMP)
• LESSONS LEARNED: Heed warnings from the government
• Focus on your RMP because that is the first place the government will look for prosecutable offenses in the event there is an accident at your facility
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- EPA Penalty Policies: provide uniformity and discretion in amount of penalty assessed
- Policies and most authorities give EPA discretion in negotiations to consider level of penalty, including degree of actual or threatened harm to environment or regulatory process; history of non-compliance; degree of culpability; attitude of company; other factors
Enforcement Recap
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Lessons Learned• Plan ahead
• Don’t rely on past performance to dictate future actions
• Heed government warnings
• Focus on matters before they become an issue of government concern
• Conduct regular internal audits
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Voluntary Audits
• Texas Environmental, Health, and Safety Audit Privilege Act– Potential immunity from civil and
administrative penalties
• EPA Audit Policy– Potential mitigation of gravity component, but
economic benefit of non-compliance not mitigated
• Audit must be voluntary and cover matters not otherwise subject to disclosure in reporting
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Craig J. Pritzlaff
Curran Tomko Tarski LLP2001 Bryan Street, Suite 2050
Dallas, Texas 75201
214.270.1419 [email protected]