Diligence is still recommended despite easing of some policies
Published in NH Business Review (8/6/2020)
The world faces an uncertain, and for some, insecure future amid the evolving Covid-19 pandemic. For the regulated community, the combined effects of changing economic and operational conditions make compliance with environmental regulatory and enforcement order obligations more difficult, and in some cases impossible.
Adding further uncertainty is the question of whether and to what extent federal and state agencies will seek to enforce against noncompliance with environmental obligations caused by Covid-19.
To alleviate some of this burden on companies unable to maintain compliance due to Covid-19, federal and state agencies have issued policies regarding their enforcement discretion.
Companies should be aware of these temporary policy changes, review exculpatory clauses in existing administrative or judicial enforcement orders, and take all necessary steps to protect themselves from potential enforcement measures.
Federal enforcement discretion
On March 26, EPA’s Office of Enforcement and Compliance Assurance issued a temporary policy, retroactive to March 13 and extending at least until Aug. 31, directing the agency to exercise enforcement discretion for noncompliance with environmental obligations that cannot be met due to Covid-19.
The policy provides that EPA will not pursue enforcement or seek penalties for noncompliance but makes clear that companies must be able to demonstrate that they made “every effort” to meet compliance obligations.
Under the policy, EPA will exercise enforcement discretion for routine compliance sampling, monitoring, recordkeeping and reporting. Noncompliance with substantive standards, however, will receive greater scrutiny – for with air emission standards or wastewater discharge limits that may cause harm to human health or the environment.
If compliance cannot be achieved, companies must:
- Minimize the effects and duration of any non-compliance caused by Covid-19
- Identify the specific nature and date of non-compliance
- Identify how Covid-19 caused the noncompliance, best efforts to comply and measures to come into compliance at the earliest possible date.
In addition to EPA’s policy, on May 19, President Trump signed an economic order on regulatory relief directing all “regulatory standards that may inhibit economic recovery” be reviewed and, as necessary, temporarily or permanently rescinded, modified or waived.
It directs agencies to exercise “appropriate enforcement discretion” or grant temporary extensions for compliance. It also directs agencies to “decline enforcement against persons and entities that have attempted in reasonable good faith to comply.” In order to benefit from such forbearance, companies must carefully document actions taken to comply with existing law and the specific obligations of judicial consent decrees or administrative orders. In the case of court-ordered consent decrees, it may not be enough that the executive branch curbs its enforcement authority; the courts have independent authority to enforce its orders.
New Hampshire’s response
In New Hampshire, agencies and the Department of Justice may exercise enforcement discretion where appropriate. However, New Hampshire has not yet issued an enforcement discretion policy as broad as EPA’s. While certain federal environmental laws are delegated to and administered by the state, EPA’s policy may not protect companies from non-compliance with such laws.
On March 25, the Department of Environmental Services issued a notice allowing for the postponement or establishment of alternative sampling schedules for environmental field sampling. The notice applies directly to sampling performed under state groundwater management and groundwater release detection permits but appears to apply to all NHDES remediation projects. All requests for postponement or for alternative sampling schedules must be submitted in writing to, and approved by, NHDES.
In a separate March 25, notice, NHDES clarified that it and the EPA “have no intention of relaxing sampling schedules for public water systems.”
To avoid high-risk exposure to the virus at sampling locations, NHDES will allow bacteria samples to be collected at an alternative location that is representative of the water in the distribution system and that is lower risk for the sampler. Owners and operators of public water systems should review their facility’s sampling schedule to ensure it remains in compliance.
The terms of the force majeure provisions in existing decrees or orders with the federal or state government, although not originally written in contemplation of a pandemic, should protect companies from penalties for noncompliance resulting from Covid-19.
Such relief will only be available if the strict notice requirements of those provisions are met. Reporting is typically required as soon as the regulated entity knows or should have known that the force majeure event might cause delay.
Force majeure provisions also typically require regulated entities to make all reasonable best efforts to anticipate and address the effects of a potential force majeure event in order to prevent or minimize delays or disruptions to the greatest extent possible.
In the Covid-19 era, supply chain disruptions, worker availability and operational restrictions due to social distancing requirements and/or stay-at-home orders create unprecedented compliance uncertainty. Successful utilization of force majeure relief depends on timely, thorough documentation of each step specified in the force majeure provisions. Failure to provide the earliest adequate notice possible may prevent an entity from obtaining relief from requirements of the order with which it is in fact unable to comply due to circumstances beyond its control.
During this time of rapidly changing uncertainty, one thing is indeed certain: the effects of the pandemic will continue to be felt for some time to come. Facilities should make every effort to avoid or minimize any noncompliance with environmental compliance obligations. Where non-compliance is unavoidable, facilities should meticulously record how their inability to comply was caused by Covid-19.
Adam Dumville, a director at McLane Middleton and vice chair of its Administrative Law Department, can be reached at 603-230-4414 or [email protected]. Viggo Fish, an associate in the firm’s Administrative Law Department, can be reached at 603-230-4412 or [email protected].