Manufacturers, users, and distributors of PFOS and PFOA have faced litigation across the United States by plaintiffs alleging contamination of drinking water. The claims range from personal injury to diminution of property value. A recent study of PFAS in fast food packaging suggests possible health concerns associated with using certain PFASs in fast food packaging. Frank Citera and Kaitlyn Maxwell provide an overview of perfluorinated chemicals in drinking water and fast food packaging here. To access their CLE webinar on this topic please visit Lawline.
The environmental parameters associated with textiles continue to attract both regulatory and value chain attention. In an interesting development, Vietnam just relaxed its chemical testing rules for exported textiles (e.g., textiles and apparel exported to the U.S. and EU markets), specifically for formaldehyde and aromatic amines. Formaldehyde is frequently used in treating textiles, including popular “no-iron” and “permanent press” textiles. Aromatic amines are present in some common dyes used in textiles and include chemicals that are either known or suspected to be carcinogens.
The presence of these chemicals in textiles is relatively unregulated at the federal level in the United States, though there has been some attention at the state level. For example, formaldehyde is subject to California’s Proposition 65, and some crafts/textile stores in California post Proposition 65 warnings for their imported textiles. Washington, Maine, and Minnesota have statutes with reporting requirements for what are typically described as “high priority” chemicals, including formaldehyde, intentionally added to children’s products (though not all of these encompass apparel). There has been occasional litigation based on claims of skin irritation allegedly caused by the presence of formaldehyde in apparel.
Perhaps more importantly than formal regulation, the chemical content of apparel, including formaldehyde, receives a certain amount of attention in social media. This reverberates into market impacts, with some companies trying to leverage this into a competitive advantage by advertising “chemical-free” clothing. This leverage could increase if major buyers begin to drive chemical content requirements through their value chains. Some of the most prominent retailers, including Walmart, have already launched initiatives to decrease or remove certain chemicals, including formaldehyde, from a range of products, including personal care, cosmetics and cleaning products. Some major buyers and brands, including Walmart, Levi Strauss, and VF have signed on to policies and standards associated with sustainable forestry and agriculture that affect the value chain for a variety of raw materials for textiles, including rayon and cotton.
Decisions by Vietnam to impose more stringent chemical content standards for apparel on its own market than it does for its strong apparel export market might increase public and retailer attention to this issue. The most likely ongoing pressure points will probably be from social media, consumers, and companies seeking to leverage this issue for competitive advantage. And even if increased federal regulation is viewed by some as less likely under the current administration, that will not restrict state regulators from taking action (the preemption provisions of the newly amended Toxic Substances Control Act will operate, roughly speaking, in inverse proportion to the degree of EPA regulation of specific chemicals: the less active EPA is, the more freedom of movement at the state level).
On April 13, the U.S. Environmental Protection Agency (EPA) published a request for comments to aid EPA’s ongoing “Evaluation of Existing Regulations,” which seeks to identify regulations that may be appropriate for repeal, replacement, or modification. Comments must be submitted by May 15, so parties interested in taking this opportunity to help EPA identify regulations that are burdensome or otherwise undesirable need to act quickly.
This notice follows President Trump’s Feb. 24 Executive Order on Enforcing the Regulatory Reform Agenda, E.O. 13777, which outlined the new administration’s goal of alleviating unnecessary regulatory burdens. Pursuant to E.O. 13777, each federal agency must designate a Regulatory Reform Officer and establish a Regulatory Reform Task Force. EPA has already established both.
On April 13, the Acting Director of the U.S. Department of Interior, Office of Surface Mining Reclamation and Enforcement (OSMRE) announced that OSMRE will be reinitiating formal programmatic consultation with the U.S. Fish & Wildlife Service, pursuant to Section 7(a)(2) of the Endangered Species Act (ESA) and 50 CFR § 402.16, with respect to OSMRE’s implementation of Title V of the Surface Mining Control and Reclamation Act ( SMCRA). Today’s action is an acknowledgment that the recent disapproval and nullification of OSMRE’s Stream Protection Rule (SPR) by recent operation of the Congressional Review Act also in turn, nullified both the Dec. 16, 2016, Programmatic Biological Opinion and Conference Opinion on the Office of Surface Mining Reclamation and Enforcement’s Regulatory Program as Modified by the Issuance and Implementation of the Final Regulation (2016 BiOp).
Given that it would have been unlawful for OSMRE to have allowed the 2016 BiOp to continue in place, OSMRE today withdrew the 2016 BiOp and advised States that they may continue to rely on the 1996 Biological Opinion and Conference Report (1996 BiOp) and the 1996 Incidental Take Statement (ITS) for the exemption of take. In addition, while the reinitiated consultation is underway, OSMRE has developed interim guidance for the state regulatory authorities to ensure that all appropriate regulations, the requirements from the 1996 BiOp, and the Terms and Conditions listed in the Incidental Take Statement associated with the 1996 BiOp are followed.
This is good news for the major western and midwestern coal-producing states and mine operators, as the 2016 BiOp explicitly superseded and replaced the previous Biological Opinion issued in 1996 that imposed significantly less onerous conditions on SMRCA permits and other actions relating to ESA compliance.
A GT Shareholder represents the State of North Dakota in its federal court challenge in to the OSMRE’s Stream Protection Rule. While that Rule was invalidated recently under the Congressional Review Act, a related action by the U.S. Fish & Wildlife Service would have effectively allowed the SPR to live on and greatly impair surface coal mining in states across the country. Today, DOI took steps to stop that result.
On March 29, 2017, legislators in El Salvador passed a much-anticipated bill prohibiting all mining for gold and other metals. The results of the vote were unanimous and cross-party: 69 in favor, none against, and no abstentions. The bill makes El Salvador the first country in the world to institute such a blanket ban on metals mining.
The bill is succinct but comprehensive. With the exception of a transition period for small scale gold mining artisans, the law decrees an immediate, permanent ban on all exploration, extraction, and processing of metals, whether underground or above-ground. The prohibition includes exploration, extraction, or processing ore with techniques that involve cyanide of mercury – commonly used techniques in Central and South America. No license applications or old permits will be grandfathered in under the bill, which is scheduled to take effect one week after its publication in the official governmental gazette.
This new legislation comes at the heels of a lengthy investor state dispute settlement (ISDS) case between OceanaGold and the Salvadoran government. As detailed in my November 2014 blog post, Environmental Regulation and Investor State Dispute Settlement Clauses – OceanaGold and El Salvador, Pacific Rim – since acquired by the Australian-Canadian mining firm OceanaGold — filed a complaint in 2009 against El Salvador under the ISDS clause of the Dominican Republic-Central American Free Trade Agreement (CAFTA). Pac Rim Cayman LLC v. Republic of El Salvador (ICSID Case No. ARB/09/12). Pacific Rim, a Canadian company, originally discovered a gold mine site (El Dorado) along the Lempa River in 2002. In its complaint, Pacific Rim alleged that the investor-friendly former Salvadoran government encouraged it to spend “tens of millions of dollars to undertake mineral exploration activities” only to then institute a moratorium and withhold necessary permits once valuable deposits were discovered. Salvadoran officials stated that Pacific Rim failed to get government approval for its Environmental Impact Study, did not submit a required feasibility study, and did not meet land title and permission-to-mine requirements.
In 2012, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) found that Pacific Rim, as a Canadian company, could not invoke CAFTA. The company changed its claim, accusing El Salvador instead of violating its own investment law. From Sept. 15-22, 2014, ICSID held a hearing regarding whether El Salvador was required to issue a gold mining license to OceanaGold. OceanaGold sought either a green light for the El Dorado mine project or approximately US$300 million in compensation from the Salvadoran government. In October 2016, ICSID found in favor of El Salvador and ordered OceanaGold to pay the country US$8 million in legal costs. In March 2017, ICSID ordered OceanaGold to pay the US$8 million immediately or face the addition of 2-5 percent monthly interest.
El Salvador has since modified its investment law in an attempt to prevent disputes like the long-running OceanaGold case. Last week’s mining legislation may achieve multiple goals including increasing environmental protection, tying up loose ends in the OceanaGold case, and making a decisive statement regarding the country’s mining moratorium. This legislative development seems likely to end any hopes OceanaGold had of being able to develop or sell its El Dorado project.
On Wednesday, March 29, the U.S. Environmental Protection Agency (EPA) published a notice in the Federal Register making available the first national Mercury Inventory. 82 Fed. Reg. 15522 (March 29, 2017). The Mercury Inventory is part of a multi-faceted effort by Congress and EPA to regulate use and disposal of mercury, and to ban exports of mercury from the United States.
On March 22, 2017, the U.S. Court of Appeals for the 5th Circuit continued its stay of EPA’s Regional Haze Rule. Texas et al. v. U.S. Environmental Protection Agency, No. 16-60118 (Mar. 22, 2017). The EPA rule would have required power plants in Texas and Oklahoma to install costly and potentially unnecessary upgrades to their generators. Last July, the 5th Circuit granted Texas’ stay motion while rejecting the EPA’s motion to dismiss or transfer, explaining that the plan was likely unlawful, and the costs of compliance with the rule would increase rates for Texas consumers as well as endanger grid reliability if power plants were forced to close. In entering the new order, the court agreed that Texas and Oklahoma had demonstrated a substantial likelihood that the EPA had exceeded its statutory authority when it disapproved the Texas and Oklahoma implementation plans and imposed a federal implementation plan. The court did reject the petitioners’ effort to have the entire rule vacated, and instead granted EPA’s request to remand the rule for reconsideration at the administrative level. This order is not a final decision on the merits, however, and merely maintains the stay in effect.
Among the numerous goals announced thus far by President Donald Trump and his advisors is the significant reduction of administrative regulations that negatively impact states’ rights and make some innovation and corporate business practices more costly and time consuming. The new administration’s message has been that federal agencies are ignoring the boundaries Congress set when creating them and have abused their mandates, and they must be reined in. In other words, federal agencies need to stop doing so much regulating.
Restricting the scope of federal regulation will presumably make compliance with the rules easier, through increased transparency and simplicity, and lawmaking power will be returned to the sole control of Congress, where the administration believes it belongs. In addition, the new administration believes overactive federal agencies have been limiting the rights of individual states. The administration’s view is that control needs to be decentralized to allow for states to act as independent sovereigns, making decisions and issuing and enforcing regulations in keeping with their own best interests and individual attributes. President Trump’s actions to further these goals include his issuance of a regulatory moratorium shortly after his inauguration, and his appointment of agency leaders who support states’ rights and a limited central government.
Read more from my article in The Legal Intelligencer supplement, PA Law Weekly by clicking here.
On Feb. 3, 2017, the Dutch government sent a legislative proposal to amend the Dutch Environmental Management Act (Wet milieubeheer) regarding asbestos to the Dutch House of Representatives.1 If this legislative proposal becomes law, new and more far-reaching obligations to remove asbestos will be introduced for the owners of Dutch real estate.
The Required Removal of Asbestos Roofs and Other Far-Reaching Requirements
The legislative proposal provides for a statutory basis for further governmental decrees on the removal of asbestos roofs. Previously, on the March 3, 2015, a draft decree to amend the Asbestos Removal Decree 2005 was sent to the chairmen of the Dutch Senate and of the Dutch House of Representatives. This draft decree anticipates the statutory prohibition of asbestos roofs as of 2024.
Have you ever wanted to escape a clingy and annoying relationship? In terms of environmental compliance, triggering New Jersey’s Industrial Site Recovery Act (ISRA) can evoke the same feelings of frustration. N.J.S.A. 13:1K (1993). The recent Drytech, Inc. v. State of New Jersey, in particular, highlighted the pesky and recurrent nature of ISRA.
ISRA applies to owners and operators of industrial business operations that intend to sell or transfer their property. It requires that the owner or operator investigate the environmental condition of the property and complete any remedial activity necessary prior to the sale or transfer of a property (the triggering event). Drytech confirmed that ISRA compliance is required regardless of whether the environmental condition of the property has changed since the last triggering event.
Each triggering event requires the owner or operator to, at a minimum, hire a Licensed Site Remediation Professional (LSRP) to conduct a Preliminary Assessment (PA) and, if necessary, perform a Site Investigation (SI) and any remediation. The result of this process ends with a Response Action Outcome (RAO) certifying the property has no environmental issue on site and is compliant with ISRA. In addition to the annual fees of $900 assessed by the New Jersey Department of Environmental Protection (NJDEP) when ISRA is triggered, there are the costs associated with hiring an LSRP to conduct a thorough investigation, which can be a costly surprise if IRSA is triggered unknowingly.
In practice, ISRA’s triggering events occur repeatedly for the same property, and often without incident of any known environmental hazard (e.g., a spill) since the last investigation. This repetition of triggering events can require repeated investigations of the property under ISRA, despite a known lack of contamination on the site.
Drytech involved the applicability of ISRA’s LSRP requirement and annual fees for a manufacturer that had received three No Further Action Letters (NFA)—the precursor to the RAO –which indicated all environmental issues at the site had been addressed. The NJDEP abandoned the NFA letters in 2012. The court found that the NFA letters were no longer valid and that the manufacturer was required to hire an LSRP to certify the facility was ISRA compliant. The effect of this holding confirmed ISRA’s applicability even in instances where it is clear no environmental hazard exists on a site.
This case additionally highlighted the LSRP’s discretionary power to exercise “independent professional judgment.” The LSRP conducted a PA, but required an SI before granting the manufacturer an RAO, despite acknowledging there were no areas of concern on site not previously addressed. The SI was estimated to cost in excess of $12,000. The court found that such action was within the LSRP’s powers, as the NFAs were not binding on the LSRP. The takeaway from this finding is that in cases where it is clear no environmental hazard exists on site, there is still a risk that a property owner will be required to do more than the minimum requirements under ISRA to receive an RAO.
Corporations with industrial property in New Jersey should be mindful of ISRA when engaging in routine business decisions that may trigger the regulation. Often, business considerations dictate multiple transactions that trigger ISRA. However, careful attention can help mitigate this concern.