In recent years, companies have come under increasing scrutiny for their environmental practices. The heightened focus on corporate ESG and sustainability has cast a spotlight on the impact businesses have on air emissions, water discharges, hazardous waste, and other environmental considerations.
In-house lawyers working at companies across a wide variety of industries should have a solid understanding of key environmental laws and regulations. While many companies do not operate businesses that directly emit pollutants into the environment, the majority of companies have indirect environmental impacts.
The penalties for violating environmental laws and regulation in the United States are severe. Failure to comply can result in civil monetary penalties and criminal penalties including jail time. It is therefore essential for in-house legal counsel to help their respective companies navigate the complex web of federal, state, and local environmental regulations.
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As a first step, in-house lawyers should have familiarity with the main federal agencies that implement and enforce regulations.
The Environmental Protection Agency (EPA) is the main federal agency that is tasked with creating and enforcing regulations to protect the environment. It is an independent executive agency of the U.S. federal government. When litigation is brought to enforce environmental laws and regulations, the Department of Justice (DOJ) is brought in to represent the EPA.
The Council on Environmental Quality (CEQ) is responsible for coordinating environmental efforts among federal agencies. One of its main responsibilities is to issue guidance on environmental impact statements (EIS), The National Environmental Policy Act mandates an EIS for certain actions “significantly affecting the quality of the human environment.”
The Department of Interior (DOI) protects natural resources and public land. The DOI can bring claims against companies for natural resource damage. They can also require remediation of contaminated sites.
Many federal environmental laws delegate enforcement authority to state environmental agencies. States are free to adopt stricter environmental regulations than those imposed at the federal level.
Water quality standards and issues pertaining to water pollution are primarily governed by the Clean Water Act (CWA). The CWA establishes water quality standards. Before certain pollutants are discharged into surface waters, companies must obtain a permit from the EPA. Knowing and willful violations of the CWA can result in criminal penalties.
The Clean Air Act regulates air emissions. It establishes national ambient air quality standards (NAAQS) for particulate matter, sulfur dioxide, carbon monoxide, ozone, lead, and nitrogen dioxide. The Clean Air Act also requires companies to phase out the production of chemicals that destroy stratospheric ozone.
Companies that are considered major air polluters must obtain a Title V operating permit. This is typically issued by state environmental agencies. A Title V permit is required for:
- All air emissions greater than major stationary source thresholds
- Affected air emission sources under acid rain rules
- Solid waste incineration units
- Any air emission source with a major source permit under the New Source Review (NSR) Permitting Program
Under the Resource Conservation and Recovery Act, the EPA and delegated state agencies are given wide-ranging powers to regulate the generation, treatment, storage, transportation, and disposal of hazardous waste.
Significant enforcement actions can result from violations of hazardous waste regulations, including criminal prosecution. The daily monetary penalties for violations that place people in imminent danger of death or serious bodily harm can be high.
Before structures that contain asbestos are renovated or demolished, approvals must be obtained under EPA regulations. The EPA also has reporting and recordkeeping requirements in place. Many state and local governments have stricter asbestos regulations than those of the EPA.
Under the Occupational Safety and Health Act (OSHA), employers are required to adopt protective measures to prevent employees from asbestos exposure.
The rules for soil and groundwater contamination are addressed in the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The regulations are wide-reaching. Virtually any company with a current or past nexus to a contaminated facility can be held liable. Under the CERCLA, the government and private parties can recover site investigation and clean-up costs from violations.
Conducting Environmental Diligence and Discovering Issues
As an in-house lawyer, you should make sure the company is undertaking regular environmental due diligence in order to avoid violating regulations. You should have an understanding of the environmental impact of its business operations. You should also be aware of any usages of the company’s properties that is resulting in contamination that could be linked to significant environmental liabilities.
Environmental diligence covers topics such as:
- Liability for direct and indirect site contamination
- Compliance history and status
- Litigation and enforcement risks
- Upcoming regulations that could impact the business
- Occupational health and safety exposure