On July 30, 2018, the U.S. Fish and Wildlife Service (FWS) published a notice in the Federal Register withdrawing the agency’s Endangered Species Act Compensatory Mitigation Policy (CMP) issued in December 2016. The policy withdrawal is effective immediately.

The CMP had been developed in accordance with President Obama’s November 3, 2015 Memorandum on Mitigating Impacts on Natural Resources From Development and Encouraging Related Private Investment (Memorandum). As it concerned actions under the Endangered Species Act (ESA), the Memorandum required that, for example, an incidental permit take permit under section 10 not simply minimize and mitigate the effects of the permitted activity to the maximum extent practicable (the statutory standard). Instead, the permit would need mitigation measures intended to result in a net benefit, or at a minimum, no net loss in the species and/or habitat at issue.

The Memorandum had been rescinded by Executive Order 13783 on March 28, 2017. Contemporaneously, the Secretary of the Interior revoked a 2013 Department order on mitigation strategy and directed that the various bureaus reexamine mitigation policy to better balance conservation strategies with job creation.

FWS concluded that the CMP raised serious questions of constitutionality under the takings clause because it was doubtful that there is a sufficient nexus between the potential harm (lost of species and/or habitat) and the remedy (compensatory mitigation).

FWS also concluded that

“because by definition compensatory mitigation does not directly avoid or minimize the anticipated harm, its application is particularly ripe for abuse. At times the nexus between a proposed undertaking and compensatory mitigation requirements is far from clear. These concerns are particularly acute when coupled with a net conservation gain goal, which necessarily seeks to go beyond mitigating actual or anticipated harm to forcing participants to pay to address harms the, by definition, did not cause.”

83 Fed. Reg. at 36469.

FWS also agreed with several commenters that the ESA requires neither net conservation benefit nor no net loss.