Transcript Environmental Compliance: Lessons Learned the Hard Way

Practical Solutions to Business Issues.
Environmental Compliance:
Lessons Learned the Hard Way
Craig J. Pritzlaff
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. . . . .
–
–
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–
Reporting releases
Filing reports
Selling fire ant killer
Risk management plans
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Practical Solutions to Business Issues.
LESSONS LEARNED
RELEASE REPORTING
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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Lessons Learned: Release Reporting
IMMEDIATELY
State: 800-832-8224
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Lessons Learned: Release Reporting
• 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
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Lessons Learned: Release Reporting
• Knowledge: Ignorance is bliss…?
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Lessons Learned: Release Reporting
• Knowledge
– Knowledge means simply knowing that a
release has occurred
– It does not mean knowledge
of every detail concerning
the release.
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Lessons Learned: Release Reporting
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.
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Practical Solutions to Business Issues.
LESSONS LEARNED
FILING REPORTS - TRI
Lessons Learned: TRI
• 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
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Lessons Learned: Release Reporting
• 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)
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Lessons Learned: Release Reporting
Client
AMMONIA
Company 1
Company 2
Company 4
Company 5
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
METHANOL
METHANOL
METHANOL
MERCURY COMPOUNDS
NICKEL COMPOUNDS
AMMONIA
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
ZINC COMPOUNDS
VANADIUM COMPOUNDS
ZINC COMPOUNDS
ZINC COMPOUNDS
ZINC COMPOUNDS
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Lessons Learned: Release Reporting
• 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
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LESSONS LEARNED
SOFTLY KILLING FIRE ANTS
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Lessons Learned: FIFRA
• 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
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Lessons Learned: FIFRA
- Organic fire ant killer and other products
sold to control fire ants
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Lessons Learned: FIFRA
• 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
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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, offsite 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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Enforcement Recap
- 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
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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 LLP
2001 Bryan Street, Suite 2050
Dallas, Texas 75201
214.270.1419 wk
[email protected]
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