Is the EPA Making Superfund Cleanups Easier?

The U.S. Environmental Protection Agency (EPA) under Administrator Scott Pruitt has set its sights on Superfund cleanups. A recently released Task Force report recommends 42 actions to streamline and improve the Superfund program established under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and a memo from Pruitt shows how he expects these cleanups to move forward in the face of reduced funding.

If you are currently responsible for remediating a Superfund site, or if you decide to embark on a project to remediate a Superfund site, what is your liability? And how does EPA’s attention to Superfund and these Task Force recommendations affect your liability?

What Exactly Is the Task Force Recommending?

The Superfund Task Force’s recommendations focus on five areas:

• Expediting the cleanup and remediation process;
• Incentivizing responsible party cleanup and reuse;
• Encouraging private investment;
• Promoting redevelopment and community revitalization; and
• Building and strengthening partnerships with stakeholders.

Pruitt’s memo directs Agency officials to implement 11 recommendations “expeditiously.” These include:

• Focus training, tools, and resources on current National Priorities List (NPL) sites with the most reuse potential.
• Work with potentially responsible parties (PRPs); state, tribal, and local governments; and real estate professionals to identify opportunities for PRP-lead cleanups to consider future reuse in cleanups.
• Encourage PRPs to work with end users to voluntarily perform assessment and additional cleanup or enhancement work to achieve reuse objectives and fund or perform enhanced cleanup or betterment by voluntarily entering into agreements with end users.
• Use purchase agreements with potential bona fide prospective purchasers (BFPPs) outlining their actions necessary to preserve their BFPP status.

When Are You Liable as a PRP?

At Superfund sites where PRPs are identified, the cost of remediation falls to them. You can be liable as a PRP under Superfund if you:

• Are the owner or operator of the property;
• Owned or operated any facility at the time hazardous wastes were disposed of on the property;
• Arranged for hazardous substance disposal or treatment;
• Arranged with a transporter for transport of hazardous substances for disposal or treatment; or
• Accepted hazardous substances for transport to disposal or treatment facilities, incineration vessels, or sites that you selected.

First the Carrots for PRPs

The Task Force recommendations include significant incentives for PRPs to quickly complete cleanups. This includes reducing oversight costs for PRPs that perform timely, high-quality work, in part, by reducing charges for indirect costs. Recommendations may also include designating a singular agency or third party to oversee certain aspects of the cleanup. The Task Force also recommends streamlining the dispute resolution process so that final decisions are quickly made and implemented.

Under the recommendations, the use of special accounts would be prioritized as financial incentives. Considerations include:

• Reserving special account funds for sites with the potential for redevelopment;
• Disbursing funds quicker to PRPs that complete work ahead of schedule; and
• Providing reimbursement from special accounts to reduce costs for PRPs.

The Task Force also recommends that the EPA review, and possibly amend, PRP financial assurance (FA) requirements. Recommendations include adjusting the discount rate used in calculations for the cost of future work and identifying opportunities for balancing the costs of FA and the risks of default.

In order to encourage PRPs to work with end users and enhance the cleanup of sites that have reuse or redevelopment potential, the Task Force recommends the “marketing” of property undergoing cleanup to encourage private investment. The EPA should also issue a directive to include creative mechanisms such as financial credits to encourage reuse actions by PRPs.

Don’t Forget the Sticks

The recommendations also include a number of disincentives that could affect a PRP’s liability costs. A stricter adherence to project deadlines, as recommended, could increase costs should unforeseen circumstances occur. The Task Force also calls for stipulated penalties when deadlines are missed. In addition, the EPA would identify triggers that would initiate takeover when multiple deadlines are missed and access financial assurance when appropriate.

Other ideas to impede delays and tardiness include prohibiting PRPs from having multiple chances to revise the same document when initial submittals are subpar. However, it is not clear just who would then rewrite a subpar submittal.

The Task Force also recommends using enforcement as a tool to get work under way quickly and keeping work on schedule. In addition, reimbursement from special accounts for response work would be delayed until a PRP takes steps to increase the potential for reuse or redevelopment at sites where cleanup would enhance marketability of the property.

The fear of becoming entangled in the potentially unending quagmire that can be a Superfund cleanup has kept many folks from purchasing a remediated Superfund site. Check tomorrow’s Advisor for updates on using the BFPP defense when purchasing a contaminated property.