The UK Government has published a Green Paper on Industrial Strategy, which identifies a number of challenges over the coming years, including: building on existing strengths and extending excellence into the future (with reference to the UK’s global reputation in industrial sectors – from automotive and aerospace to financial and professional services and the creative industries); ensuring that all areas of the country meets their potential by working to close the gap between our best performing companies, industries, places and people and those which are less productive; and to make the UK one of the most competitive places in the world to start or to grow a business. Consultation on the Strategy closes on 17 April 2017. Continue Reading
One area of EU law which is developing rapidly relates to improving the circular economy. There are a number of legislative proposals in the pipeline, but with the prospect of the UK leaving the EU in the next few years, what are the implications for these circular economy initiatives, and could there be opportunities for the UK to move ahead in any respects?
What is meant by Circular Economy?
The circular economy is “an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life.”
The circular economy affects all stages of the supply chain, from design for recyclability and reuse, through more efficient production and pricing to reflect recyclability, to increased recycling and recovery, and more use of secondary raw materials. There are widely acknowledged benefits for consumers, businesses, the environment and the economy.
Boosting the circular nature of the economy entails adjustments to legislation in a variety of policy areas. In the EU, this is being led through the so-called Circular Economy Package. Continue Reading
A coalition of environmental and conservation groups have given US EPA notice of their intent to sue over the Agency’s failure to timely review Ohio’s and Michigan’s biennial impaired waters listings. Under §303(d)(2) of the Clean Water Act (CWA), US EPA is required to approve or disapprove a state’s proposed list of impaired waters not meeting water quality goals within 30 days of submission. The Integrated Reports containing Ohio’s and Michigan’s impaired waters listings were sent to US EPA well over 30 days ago, with Ohio’s being sent on October 20, 2016 and Michigan’s on November 10, 2016. Continue Reading
The US Environmental Protection Agency (US EPA) has issued its proposed rule outlining the process by which it will conduct risk evaluations on chemical substances under the recently amended Toxic Substances Control Act (TSCA), to determine whether the substances present an unreasonable risk of injury to health or the environment under the conditions of use.
The proposed rule was published in the Federal Register on January 19, 2017. Comments on the proposed rule must be submitted to US EPA by March 20, 2017. The amended TSCA requires US EPA to promulgate the final risk evaluation rule by June 22, 2017. Details on the proposed rule and its implications can be found here.
In the final days of the Obama Administration, the US Mine Safety and Health Administration (MSHA) released the much anticipated “Examinations of Working Places in Metal and Nonmetal Mines” final rule amending 30 CFR Sections 56.18002 and 57.18002. The final rule was published in the Federal Register on January 23, 2017 with an effective date of May 23, 2017 notwithstanding a broad regulatory freeze affecting all federal agencies issued on January 20, 2017 by President Trump’s Chief of Staff.
Circulated just hours after the inauguration via memorandum to the heads of all executive departments and agencies, the President’s regulatory freeze directive immediately halted the issuance of any new regulations, except those required for emergency situations or to address urgent health, safety, financial or national security matters, pending review and approval by the Office of Management and Budget (OMB) or a department or agency head appointed by President Trump. The directive explicitly includes regulations that were sent to the Office of Federal Register but not published prior to January 20, 2017, which presumably applies to the final workplace examinations rule. MSHA officials confirm that the final workplace examination rule has been “pulled back” for review in accordance with the directive. Given President Trump’s commitment to reducing regulatory burdens on US companies, it is possible that the workplace examination rule, which imposes a number of burdensome new requirements on operators, will be revisited. We will update this post as more information becomes available.
As his administration drew to a close, President Obama invoked his executive authority to set aside large swaths of the Western US and the Atlantic and Arctic Oceans from future development. On December 28, 2016, President Obama established the Bears Ears and Gold Butte National Monuments in Utah and Nevada, respectively, setting aside nearly 1.5 million acres under the Antiquities Act of 1906. During his presidency, President Obama invoked the Antiquities Act 29 times—more than any other president—to expand or create national monuments. President Obama also protected the largest area of any president, with designations totaling 266.5 million acres—more than double any prior president.
In addition, on December 20, 2016, President Obama withdrew about 115 million acres of the US portion of the Arctic Ocean and about 3.8 million acres of the US portion of the Atlantic Ocean from mineral leasing under the Outer Continental Shelf Lands Act. The drilling ban does not affect existing federal leases and also does not apply to a 2.8 million-acre area of the Beaufort Sea near the Alaskan coast next to existing oil and gas infrastructure. Nevertheless, the ban represents the first time any president has used the Outer Continental Shelf Lands Act, which was passed in 1953, to indefinitely withdraw such a large coastal area from mineral leasing.
Republicans and industry trade groups have already threatened to challenge President Obama’s use of the Antiquities Act of 1906 and the Outer Continental Shelf Lands Act. However, any effort to undo the recent designations will likely require the help of Congress. While both the Antiquities Act of 1906 and the Outer Continental Shelf Lands Act expressly delegate to the president authority to withdraw public lands and coastal areas, neither statute delegates to the president authority to undo the withdrawals of a prior administration. Continue Reading
On December 1, 2016, the US EPA Administrator signed two documents about financial assurance – effectively bonding for facility cleanup – under Superfund for several industry sectors. The longer document with the shorter deadline concerned the hard rock mining and mineral processing industries, proposing specific costly rules, on which comments are due around March 13. As previously reported, US EPA had agreed to promulgate financial assurance rules for hard rock mining companies by December 1, 2017.
The other, shorter notice signed that day affects much more of the economy, because it announced US EPA’s decision to proposed financial assurance rules under Superfund for much larger sectors of the economy:
- Chemical manufacturing
- Petroleum and coal products
- Electric power generation, transmission and distribution
The notice, finally published on January 11, 2017, sets a schedule by which these rules will be published, a schedule dictated by court order. 82 Fed. Reg. 3512 (Jan. 11, 2017). Thus, while the new administration will certainly have much to say about the content of such rules, the timing of their proposal and the timing of final decisions about them are unlikely to change. Consequently, it would be a serious mistake for affected stakeholders to think that the change in administration means that these rules will not be proposed.
Given that reality, stakeholders will be well served to follow US EPA’s pre-proposal work closely, as well as the development of the rule for hard rock mining and mineral processing. While US EPA is clear that the mining rule is not necessarily the template for other industries, many common issues are likely to be settled in that first rulemaking.
The recent decision of the High Court in Price and Hardwicke v Powys County Council determined that a local authority may acquire potential liability under the contaminated land regime (“CLR”) from its statutory predecessor, notwithstanding that the CLR did not enter into force until over 5 years after the transfer of liabilities took place. Continue Reading
The UK Environmental Audit Committee (a cross-party parliamentary select committee which considers how well government policies and programmes contribute to environmental protection and sustainable development) has published its report on “The Future of the Natural Environment after the EU Referendum”. The report makes a series of recommendations for actions that the Government should take during the Brexit process to avoid weakening levels of environmental protection after Britain leaves the EU.
The key recommendation is that a new Environmental Protection Act must be put forward during the Article 50 negotiation period, to provide an equivalent or better level of environmental protection to that which is currently in place. The Committee sees this as a pre-requisite to ensure the Government meets its manifesto pledge to “be the first generation to leave the environment in a better state than it found it”.
Without such an Act, the Committee warns of difficulties of transposing some EU environmental legislation into UK law, and the risk of so called “zombie legislation”, where EU law that has already been transposed into UK domestic legislation ceases to be updated and can easily be eroded by statutory instruments with limited parliamentary scrutiny. The fear is that the Great Repeal Bill may seek to maintain the status quo initially, but without additional safeguards, standards of environmental legislation could more easily be eroded in future.
The environment secretary Andrea Leadsom has previously acknowledged that up to a third of the existing body of EU environmental legislation cannot readily be transposed into UK domestic law because of technical issues, and that work will be needed to make them work once Britain leaves the EU. The Committee urges the Government to identify this legislation before Article 50 is triggered to ensure full public and parliamentary debate and scrutiny of how this should be dealt with.
The other recommendations of the Committee’s report focus on replacement of existing EU environmental funding and future allocation of funding; links between Brexit and the two 25-year plans that the Department for Environment, Food and Rural Affairs (DEFRA) is due to be issuing this year (on the natural environment, and on food, farming and fisheries); the impact of trade agreements on the environment and agriculture; and establishing the objectives and governance model for future land management payments.
This report is the first in a series of inquiries to be carried out by this Committee in relation to Brexit. The next one, on “The Future of Chemicals Regulation after the EU Referendum”, has just been launched, and the Committee is inviting submissions on a range of questions on this issue. The deadline for submissions is 6 pm on Friday 20 January 2017.
A common question that arises when performing environmental due diligence on commercial real estate is the degree to which the presence of asbestos-containing materials (ACMs) should be investigated. In the case of ACMs, “what you don’t know can hurt you” and, therefore, the old axiom of “less is more” does not apply. This is especially true regarding asbestos not only in terms of health risks, but also from a regulatory perspective where parties can be held “strictly” liable without regard to knowledge or intent.
Those who regularly deal in commercial real estate are likely familiar with the need to obtain a Phase I Environmental Site Assessment, which is designed to identify the presence or likely presence of a release of hazardous substances and petroleum products on a commercial property. A valid Phase I is a prerequisite to qualifying for certain protections from liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA). Even though asbestos is a hazardous substance, it is generally not investigated in a Phase I largely because Section 104(a)(3) of CERCLA exempts ACMs as “building materials” when incorporated as part of the structure, or as a “naturally occurring substance” at a property. While there may be unique scenarios where an environmental professional will call out the presence of ACMs in a Phase I–such as former asbestos manufacturing sites or where ACMs were disposed of–the consultant will generally not investigate ACMs incorporated into structures on the property as part of routine due diligence.
Instead, investigation into the presence of ACMs is a “non-scope consideration” under ASTM Standard Practice E1527-13, which is a class of issues that are not required to be considered in the Phase I ESA (but can be included in the Phase I for an additional fee). Even where these services are requested, attention should be paid to how the environmental professional assesses ACM issues. Some consultants may only “screen” for suspect ACMs based upon the date of construction occurring after certain federal bans were implemented in the 1970s. However, unlike the bright-line ban in 1978 on the use of lead-based paint, the asbestos bans are more nuanced and prohibit only certain products and applications, such as some qualifying pipe insulation and spray on surfacing ACMs. ACMs continue to be manufactured and used extensively in building materials to this day, including (but not limited to) vinyl flooring, pipeline wrap, and roofing materials. While screening may offer a generalized risk profile for a property, it will not provide insight into specific risks. If an assessment of specific asbestos risks is needed for a property (for instance, where invasive renovations are planned), an asbestos survey by an accredited asbestos specialist is the best and only means to achieve this.
Moreover, if a renovation or demolition project is planned for the property, a survey is required prior to any activities that would impact ACMs. US EPA’s National Emissions Standards for Hazardous Air Pollutants (NESHAPs) for asbestos issued under the Clean Air Act require that owners and operators of demolition or renovation activities: (1) conduct a pre-activity survey by an accredited asbestos specialist, (2) provide written notice to the relevant agency 10 days prior to demolition and renovation activities when ACMs exceed certain amounts, and (3) employ various precautions and work practices during demolition and renovation activities (e.g. enclosure of work areas, keep ACMs wet during work, proper bagging and disposal of waste materials, etc.). Likewise, corollary state and local programs implement fundamentally similar requirements.
Similarly, the Occupational Safety and Health Administration has issued general occupational and construction standards that require employers and building and facility owners to determine the presence, location, and quantity of ACMs at workplaces and provide notification to employees and tenants, as well as to prevent employee exposure to airborne ACMs above certain permissible exposure limits (PELs). Because ACMs can be broken up (made “friable”) into dust-sized particles that can disseminate through HVAC systems, a minor maintenance project that dislodges ACMs can quickly generate a facility-wide exposure concern. A survey to assess ACM locations combined with an Operations & Maintenance Plan that educates maintenance staff and establishes appropriate procedures can avoid exposure risks and the need for extensive abatement and remediation.
Historical surveys and abatement information can provide a degree of confidence, but must be scrutinized carefully in the course of performing environmental due diligence. A given property may undergo years of investigations and abatement activities, and still not be completely understood. Surveys are commonly limited in scope or provide only a “representative” assessment, particularly in multi-unit scenarios. Further, as rehabs are performed, materials can be swapped out and areas that may have previously contained no ACMs, now contain newer materials of concern. As a result, historical summary reports that ostensibly provide an “all clear,” may actually deliver less than promised.
While the shortest route to liability is to fail to have a proper survey performed, ACMs can present numerous other challenges ranging from regulatory compliance with work site practices to construction management issues, such as selection of and coordination between subcontractors. All it takes is for a neighbor to complain to the local air agency regarding dust from the construction site to trigger an investigation that leads to costly enforcement, which may be brought against the property owner, the contractor or both. Civil penalties can accrue on a daily basis and quickly result in tens to hundreds of thousands of dollars, while the costs associated with project delay may magnify the financial impacts. Indeed, ignorance is not bliss when it comes to ACMs and those who anticipate acquiring a property should plan for adequate due diligence and familiarize themselves with the risks and legal requirements associated with the presence of asbestos.