While regulators have at times relaxed environmental requirements on a local level to accommodate natural disasters, the government has not taken similar measures in response to the recent Wall Street meltdown, the effects of which are taking their toll on main street businesses with regulated commercial, industrial and manufacturing operations. With slowdowns anticipated as businesses adjust to the national-scale economic realities of a tightening credit market and increasing unemployment, no comprehensive regulatory relief is in sight.
To avoid tripping over environmental land mines, the regulated community, and those involved in transactions with regulated entities, need to bear in mind that while small or large scale operational changes may become necessary, they must be implemented within the existing regulatory framework. Oftentimes, the cost and time to make changes within the regulatory framework are overlooked — subjecting the impacted entity/owners to unexpected delays and penalties.
Shutdowns and Closings May Trigger Solid and Hazardous Waste Responsibilities.
When permitted or registered solid waste generation, storage, treatment, or disposal operations change or cease, regulatory requirements kick into gear. The Resource Conservation and Recovery Act (RCRA) and similar state solid and hazardous waste laws and regulations provide specific reporting, investigation, cleanup, closure and post closure care requirements that may be triggered by operational changes.
Maintain Required Financial Assurances
Financial assurance requirements may be triggered when operating or closing a variety of regulated businesses — from petroleum underground storage tanks to manufacturing or industrial sites. The assurances can take many forms, commonly including evidence of acceptable insurance or available capital or credit instruments. Financial assurance requirements typically run until the regulating authority recognizes that a “clean closure” is achieved and no further action or post-closure monitoring is needed.
Environmental permits of all kinds establish enforceable expectations that regulators and citizens (who have authority to enforce permits when governments do not) rely on in myriad ways. Commonly, an environmental permit or its authorizing regulation, will impose requirements to follow when planning or implementing a change in operation or status and, many times, require advance notice and, perhaps, approval before implementation.
Municipal or industrial wastewater discharge permits. These may include NPDES permits or state equivalents when discharging treated wastewater to surface or groundwater, as well as permits issued by municipalities for wastewater discharges to a municipal treatment system. Permitting bodies set allowances for specific amounts and quality of discharges as a way to manage the cumulative predicted effect of permitted discharges on the quality of receiving waters. Industrial wastewater fees may also apply. Changes in operations that result in increased or decreased permitted discharges may thus require advance notice to the permitting body and, possibly, its approval. Additionally, permit conditions continue to apply to a regulated entity until a permit expires or otherwise is modified or terminated. Simply put, operational changes that change permitted wastewater discharges do not eliminate the need to comply with permit requirements and permits may not be able to be terminated “at will.”
Stormwater permits. Whether issued for industrial or construction activities, stormwater permits impose ongoing responsibilities on the permit holder. These responsibilities may continue until a permit expires or is cancelled using a notice of termination. Construction sites will need to be stabilized prior to termination or the new owner/operator will need to continue to comply with the permit.
UST Change of Service/Change of Status
If operational changes will leave registered underground storage tanks idle or empty for an extended period of time, the tank registration will likely need to be amended. Taking registered USTs out of service typically triggers additional regulatory requirements for temporary or permanent closure.
Private Party Environmental Liabilities When Leaving or Selling a Facility
Leaving a leased commercial, industrial or manufacturing facility almost always triggers contractual environmental requirements and in some cases potential environmental liability under the lease. Similarly, when selling property or a facility, due diligence associated with the transaction can bring environmental issues to the forefront.
Scaling back may provide some opportunities, including selling or trading unused air emissions or wetlands credits, when applicable.