Introduction and Overview
Unique Aspects and Challenges of Environmental Liabilities and Risks
Over the past 40 years, the scope of environmental law has continued to expand to reach almost every company and regulated industry. In this unique field, liabilities abound, as do opportunities for dedicated compliance professionals who are willing to keep up with the evolving changes. Depending on the company and its operations, environmental compliance can encompass the well-known and traditional challenges of regulating industrial wastewater discharges, controlling toxic air emissions, or managing hazardous wastes—as well as the lesser-known liability risks arising from adversely affecting endangered species or development projects near wetlands, among others. By way of example, in 2022, United States Environmental Protection Agency (EPA) enforcement and compliance efforts required violators to pay over $300 million in penalties fines and restitution. EPA enforcement concluded approximately 1,650 civil judicial and administrative cases.[2] And that is only the federal level of environmental enforcement.
While environmental compliance is a complex field, this article is designed to serve as a primer and provide a general introduction. When facing environmental legal or regulatory issues, all compliance professionals should work closely with, and rely upon, the guidance, advice, and direction of experienced counsel. This article does not constitute legal advice but will assist non-lawyers with an overview of some of the common statutes, concepts, terms, and issues that are likely to arise in corporate environmental disputes. EPA’s website often provides general and detailed information for its regulatory programs that can be very helpful to interested parties.
After this introduction, Part II of this article provides an overview of the most common statutory and regulatory programs. Part III then shifts from the substantive rules to the “process” by discussing the different venues where environmental disputes can arise and the different parties who may bring claims. Finally, Part IV discusses what every company should have in place: An environmental compliance plan. Part IV explains the core components of environmental compliance plans and other tools professionals in this field can use to prevent, detect, and respond to the most common corporate environmental risks. It also discusses EPA’s Audit Policy and the benefits of discovering and voluntarily disclosing regulatory violations to EPA in terms of reduced penalties and goodwill in the event of civil or criminal investigations into significant violations.
In an era of enhanced environmental enforcement and high-stakes civil liabilities, the value and importance of corporate environmental programs are paramount to prevent violations and reduce their likelihood; to reduce cleanup costs or fines and penalties, as well as to influence the broad enforcement discretion of the regulators and prosecutors; and of course, to protect the environment and a corporation’s business reputation. In short, effective environmental compliance can help greatly reduce risks while also adding value to a corporation.
Federal and State Interplay Through Delegated Programs
Because compliance officers with environmental responsibilities will interact with local, state, and federal agencies, it is important to understand the interplay and interconnections between the federal and state laws and regulations.
The EPA is the federal agency charged with administering and enforcing federal environmental laws. EPA’s national headquarters are in Washington, DC, but it has regional offices (split up into 10 regions) throughout the country that oversee various regulatory and enforcement activities.
Each state has its own environmental regulatory agency. These agencies also play an important role in environmental law because EPA delegates (or transfers) the administration of many of the most important federal environmental laws to the states. Many of the federal statutes governing air, water, and solid and hazardous wastes allow for some amount of state implementation while others, such as the Federal Insecticide, Fungicide, and Rodenticide Act, (the law governing the use of pesticides) only authorize EPA to implement and enforce them. For the former statutes, states can seek “primacy”—or program “delegation”—which means that the state will have the lead role in running the program. However, to obtain such delegation, the states must meet certain minimum requirements. In particular, states must convince EPA that they have adopted adequate laws and regulations to meet minimum federal standards, and that they have sufficient funding and other resources to administer and enforce the laws properly.
EPA has an ongoing obligation to monitor the delegated programs to ensure that the state programs continue to meet federal standards. In some cases, EPA may not approve certain elements of the states’ programs, and in such cases, EPA itself will administer those components of the state programs rather than fully withdrawing the state’s delegated authority. Regardless of whether EPA or the state has the authority to issue environmental permits and approvals for a particular program, both EPA and the state have legal authority to bring enforcement actions.
Major Statutory and Regulatory Programs (Overview, Elements, Common Violations, and Defenses)
Clean Water Act
Overview
The Clean Water Act (CWA) was enacted in 1972 to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.[3] As the primary federal statute regulating the protection of the “waters of the United States,” the CWA established national programs for prevention, reduction, and elimination of pollution in water, including a water quality standards program, a permit program for discharge and treatment of wastewater and storm water, a permitting program for discharge of dredge and fill materials, and an oil pollution prevention program.
Under Section 301 of the CWA[4] the discharge of any pollutant into the waters of the United States is unlawful unless authorized by a permit. Thus, the heart of the CWA is its two permitting programs. First, the National Pollution Discharge Elimination System (NPDES) permit program and pretreatment programs, implemented by the EPA and/or the states, regulate wastewater discharges, depending on whether the discharge is direct or indirect. Second, the Section 404 permitting program, implemented by the U.S. Army Corps of Engineers, separately regulates discharges (i.e., disposal) of dredged or fill material into waters of the United States.
The scope of the fundamental term “waters of the United States” (WOTUS) was a point of contention for the last two decades. The term has historically been interpreted broadly to include wetlands and streams connected to navigable waters. After a string of U.S. Supreme Court cases on the topic,[5] EPA promulgated a new rule in 2015 redefining the term (2015 WOTUS Rule).[6] In 2018, EPA issued a new rule (2018 WOTUS Rule) delaying the effective date of the 2015 WOTUS Rule.[7] In January 2020, the EPA and the U.S. Army Corps of Engineers (Corps) finalized a new rule redefining the term again (2020 WOTUS Rule).[8] The new definition took effect in June 2020, subject to a variety of challenges by states and non-governmental organizations in multiple state and federal courts.[9] In January 2023, EPA and the Corps launched yet another rule updating the definition of WOTUS, which took effect in March 2023 (2023 WOTUS Rule).[10] This 2023 WOTUS Rule did not last long. In May 2023, the U.S. Supreme Court narrowed the definition of WOTUS in Sackett v. EPA.[11] The Sackett Court held that CWA jurisdiction only extends to wetlands if they have a continuous surface connection to relatively permanent bodies of navigable water. In light of this decision, EPA and Corps issued a straight-to-final rule revised definition of WOTUS.[12] To conform to Sackett, the rule states that waters are no longer jurisdictional under the CWA as based on the significant nexus standard, and to be adjacent wetlands, waters must be relatively permanent, standing, or continuous flowing bodies of water, have a continuous surface connection to those waters, or separately qualify as jurisdictional.[13] The rule also removed “interstate wetlands” as jurisdictional. Companies with a stake in the definition should stay abreast of new legal developments in this area.
Wastewater Discharges
The NPDES permit program requires all parties to have a permit for all discharges of pollutants into jurisdictional waters from “point sources,” which are defined as any “discernible, confined and discrete conveyance.” Pollutants that enter surface waters without passing through a “point source” are considered “non-point source” pollution. EPA’s Nonpoint Source Management Program leaves nonpoint source pollution to states, with EPA playing a supporting role.
Courts have at times wrestled with the distinction between point and nonpoint source pollution, particularly with regard to whether pollution conveyed to surface waters through groundwater is subject to the CWA’s permitting requirements. In April 2020, the U.S. Supreme Court provided greater clarity on this issue, ruling in County of Maui v. Hawai’i Wildlife Fund[14] that the CWA’s NPDES permit requirement can apply to certain releases of pollutants that reach surface water through groundwater. The Court established a new “functional equivalence” test, holding that the CWA requires NPDES permits “when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”[15] In December 2020, EPA published draft guidance on applying the Maui Court’s decision but soon rescinded the guidance document in September 2021 under the Biden Administration. Since then, the EPA has not published a new rule. Given the novelty of this test, regulated entities should anticipate continued uncertainty in this area, as further EPA guidance, rulemaking, and litigation will determine what releases are the “functional equivalent” of a direct discharge, and therefore require a permit.
NPDES permits are issued by the EPA, or by individual states where the state has developed and received EPA approval of a permitting program equivalent to that established under the federal statute. The CWA defines the term “pollutant” very broadly when used in the NPDES program to include dredged spoil, solid waste, incinerator residue, filter backwash, sewage, garbage, sewage sludge, munitions, chemical wastes, biological materials, radioactive materials, heat, wrecked or discarded equipment, rock, sand, cellar dirt, and industrial, municipal, and agricultural waste discharged into water. Recently, the EPA has taken steps to address emerging pollutants through the NPDES program.[16] In April 2022, the EPA issued guidance for addressing per- and poly-fluoroalkyl substances (PFAS) in NPDES permits and pretreatment programs.[17] Though only guidance, EPA can use measures like this to pressure NPDES-authorized states to follow its PFAS policy even if it is not an enforceable federal regulation. Under the NPDES program, there is no de minimis level below which the discharge of a pollutant is not subject to the permitting requirement.
An NPDES permit requires compliance with the more stringent of technology-based and water quality-based requirements for each pollutant addressed. For many industries, the EPA has promulgated effluent limitation guidelines that establish technology-based requirements applicable to the industrial category (e.g., paper making, metal finishing), and these are written into NPDES permits. For industries and activities not yet covered by effluent limitation guidelines, NPDES permit writers establish technology-based effluent limits based upon their “best professional judgment.”[18] Water quality standards are distinct from the technology-based requirements and are governed by CWA Section 303.[19] Water quality standards are specific to particular bodies of water and are determined by the state, or if the state fails to act, by the EPA. EPA also publishes its own water quality criteria, which are recommended water quality values for states and tribes to adopt as water quality standards. To develop water quality standards, the water body is first assigned a designated use or uses (e.g., drinking water, recreation, cold water fishery). Then, numeric ambient concentrations of pollutants sufficient to protect and sustain those uses are established. These numeric values are known as water quality criteria. The water quality standards also may be expressed in narrative form. These standards will additionally reflect a state’s antidegradation policy, which requires certain water qualities to be maintained and protected.[20] Regardless of whether they are numeric or narrative, all water quality standards applicable to a given water body must be satisfied by all permits issued for discharges into those waters.
Under Section 303(d),[21] authorized states are required to produce a list of the water bodies in the state that are not expected to meet their water quality standards after the implementation of applicable technology-based standards. These are termed “impaired waters,” and the state must produce Total Maximum Daily Loads (TMDLs) for all water bodies designated as such.[22] TMDLs are a numerical expression of the maximum level of a pollutant loading that a water body can absorb and still meet water quality standards. TMDLs are not directly enforceable against dischargers but are the basis for “waste load allocations” to individual dischargers that must be included and are enforceable through the dischargers’ NPDES permits.
Pretreatment Standards
The National Pretreatment Program, as a component of the NPDES permit program, regulates indirect discharges of wastewater from nondomestic users to publicly owned treatment works (POTWs).[23] The general pretreatment standards establish responsibilities for federal, state, and local government; industry; and the public to implement pretreatment standards to control pollutants that pass through or interfere with POTW treatment processes or that can contaminate sewage sludge.[24] If a POTW accepted prohibited pollutants from a nondomestic user, it could result in (i) killing the POTW’s microbial treatment system, (ii) discharge of untreated wastewater because of a failure to react to the microbial system in place, or (iii) discharge of biosolids instead of proper disposal. The National Pretreatment Program sets forth four types of pretreatment standards: (1) general prohibitions; (2) specific prohibitions; (3) categorical pretreatment standards; and (4) local limits. These standards are developed at the federal, state, and local levels.[25] POTWs with approved programs must control discharges to the POTW “through permit, order, or similar means to ensure compliance with applicable pretreatment standards and requirements.”[26] All standards can be enforced by EPA, the state, and the relevant local government.
Section 404 Dredge and Fill Permits
The CWA dictates that the discharge of dredge or fill material into waters of the United States requires a permit from the Army Corps of Engineers[27] Though the Corps has primary authority over the Section 404 program, EPA has authority to review and object to permits. The Section 404 permitting program has been contentious in recent years given the controversy regarding the standards for defining “waters of the United States”, however, the Supreme Court’s decision in Sackett v. EPA provides permittees greater clarity in determining the definition of WOTUS and the jurisdictional bounds of the CWA.[28]
Common CWA Violations
The following are some of the most common CWA violations:
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Discharge without a permit when a permit is required
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Discharge in violation of permit terms, including:
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Numeric effluent limitations
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Narrative effluent limitations
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Failure to develop or implement required pollution prevention measures, especially with respect to NPDES storm water permits
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Submission of false reports or certifications
Defenses to CWA Liability
Under the act’s “permit shield” defense[29] a permitted facility that discharges pollutants into jurisdictional waters in compliance with the terms and conditions of its permit is shielded from enforcement actions and citizen suits. This defense is subject to certain qualifications, however; so one should seek advice from qualified counsel to understand the specifics of any given situation. There are additional defenses, common to other statutes, that are discussed in the enforcement section (Part III).
Clean Air Act
Overview
The Clean Air Act[30] (CAA) is a federal pollution control statute designed to protect and restore the quality of the nation’s air to promote public health and the environment. Congress first enacted the act in its modern form in 1970 as amendments to prior air pollution statutes and further amended the act in 1990. Generally, the act regulates air emissions from both stationary and mobile sources. The CAA is composed of five main sections (commonly known as Titles). This section will focus on Titles I, V, and VI, which are the most likely to impose substantive requirements on industrial facilities, and will provide generally applicable information on administration and enforcement of the act. Titles II, III, and IV, which we do not discuss here, address— respectively—mobile sources, CAA general provisions, and noise pollution and the acid rain trading program.
Title I
Title I[31] covers stationary sources, and includes the national ambient air quality standards (NAAQS), new
source performance standards (NSPS), and National Emissions Standards for Hazardous Air Pollutants (NESHAP) programs. The NAAQS establish overall air pollution standards for the ambient air, while the NSPS and NESHAP rules apply to individual sources. Title I also includes the New Source Review (NSR) and Prevention of Significant Deterioration (PSD) preconstruction permitting program, which is distinct from the Title V operating permit program discussed below.
The NAAQS program, often considered the centerpiece of CAA regulation, directs EPA to establish primary and secondary air pollution standards for “criteria pollutants.”[32] Currently, standards have been established for six criteria pollutants under this program: sulfur dioxide, nitrogen dioxide, particulate matter, carbon monoxide, ozone, and lead. Under the NAAQS program, EPA sets standards based on the best available science, and states develop implementation plans designed to achieve compliance with federal standards. The state implementation plans (SIPs) become federally enforceable obligations after EPA approval. States are divided into areas designated as attainment, nonattainment, and unclassifiable based on their compliance with the NAAQS.[33] More stringent standards apply in nonattainment areas. The NSR program requires preconstruction permits for new or modified stationary sources (both “major” and “minor”) to protect air quality and maintain or achieve NAAQS. In attainment or unclassifiable areas, major sources must also obtain a permit under the PSD program. The PSD program is designed to prevent the deterioration of air quality by setting emissions limits according to the “best available control technology” (BACT), which is determined on a case-by-case basis and requires consideration of energy, environmental, and economic factors. In nonattainment areas, the nonattainment NSR program is designed to achieve NAAQS by setting emissions limits for major sources according to “lowest achievable emission rate” technology, which is typically more stringent than BACT.[34] On November 24, 2020, EPA published a final rule that changes how facilities can calculate their emissions when assessing permitting requirements under the NSR program.[35] Under the rule, facilities are able to include emissions decreases as well as increases when assessing NSR applicability for a particular project. This “netting” of emissions will help some facilities avoid triggering NSR requirements.
Separately, the NSPS are source categories identified by EPA that contribute significantly to air pollution, and the program sets minimum standards to serve as the floor for any new or modified source in that category. EPA has currently identified and set standards for more than 60 source categories of stationary sources, primarily large industrial sources of air pollutants. If a NSPS is adopted for a category of new sources, Section 111(d) allows EPA to require states to reduce emissions from existing sources. In June 2022, the Supreme Court set limits to 111(d), ruling in West Virginia v. EPA[36] that although EPA could use 111(d) to establish emission guidelines for existing major sources of air pollution, the agency could not use 111(d) to “restructure the Nation’s overall mix of electricity generation” from coal-fired power plants to natural gas or renewable electricity generation.[37]
Under the NESHAP program,[38] EPA promulgates regulations establishing emissions standards for hazardous air pollutant (HAP) emissions from new and modified “major” and “area” sources (meaning, any nonmajor source) in specific categories. NESHAP also sets standards for existing sources, requiring such sources to achieve the average emissions of the top-performing 12% of sources in the same source category. In setting these standards, EPA determines the maximum degree of emissions reductions achievable for each category and subcategory based on the most stringent level achieved in practice by the best-controlled sources for each of the categories, i.e., the “maximum achievable control technology.” Under the NESHAP program, EPA currently regulates 187 HAPs from major and area sources. The original list of HAPs included 189 pollutants, but EPA has modified the list through rulemaking to include 187 pollutants.[39]
Title V
Title V[40] contains the act’s comprehensive operating permit program, which consolidates all applicable regulations into one document specific to each source regulated under the act. Sources required to obtain a Title V permit include all major sources, affected sources, sources subject to Section 111, major or area sources subject to regulation under Section 112 for HAPs, sources required to obtain a new source or modification permit, and other sources designated by the EPA under the act.[41] The Title V permit program is an independent requirement in addition to preconstruction permit requirements and other requirements already in place under the PSD program or NSR. Title V also includes monitoring provisions, which allow EPA to require that permits include periodic monitoring sufficient to ensure compliance. Sources are required to certify compliance at the end of the year and submit semiannual deviation reporting.
Title VI
Title VI[42] implements various programs to protect the stratospheric ozone layer. It provides for the phasing out of certain ozone-depleting substances (ODS), imposes labeling requirements for some products containing ODS, bans the import of certain products containing ODS, and implements various regulatory requirements for bulk imports of ODS. Title VI also establishes requirements regarding the use and disposal of ODS during the servicing of motor vehicle air conditioners[43] and during the servicing, repair, or disposal of appliances and industrial process refrigeration.[44]
Administration
Though the CAA is a federal statute primarily enforced by the EPA, the act relies on a structure of delegated federalism that allows states to administer all the CAA’s major air quality programs. In addition to crafting SIPs to ensure state compliance with NAAQS, states also implement PSD preconstruction and Title V permitting programs after EPA determines that each state’s program meets federal standards.
Submitting PSD and Title V permit applications is often a time-consuming and complex process requiring extensive engagement with state regulatory agencies. For Title V permits, each regulated source must submit a timely permit application in accordance with EPA regulations within 12 months of becoming subject to a permit program.[45] Also, as of December 2022, regional air permitting staff also apply eight principles for evaluating environmental justice issues during the permitting process.[46] Though theoretically nonbinding, permit applicants should proactively incorporate each of these eight environmental justice principles into permit applications to mitigate the risk of adverse permit decisions or extensive delays.
Primary Violations and Penalties
Like most other federal environmental statutes, the CAA empowers EPA to seek administrative,[47] civil,[48] or criminal[49] penalties from regulated entities for violations of the act, and allows citizens to supplement EPA enforcement by initiating private citizen suits against regulated entities seeking penalties or injunctions for noncompliance with the act.[50] EPA can also seek compliance orders or injunctions. EPA’s Air Enforcement website[51] provides more detailed and specific guidance regarding enforcement priorities and obligations imposed on specific source categories. Further discussion can be found later in Part III: The Process— Enforcement Actions & Litigation.
Common CAA Violations
The following are some of the most common CAA violations:
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Emissions without a permit
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Violating CAA permit terms, including:
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Emissions above limits
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Installing new equipment without permit modifications
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Not properly operating emission control equipment
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Failure to accurately track emissions
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Violating a NSPS or NESHAP
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Submission of false reports or certifications
Defenses to CAA Liability
Under the Title V permit shield defense, a permitted facility in compliance with the terms and conditions of its permit is automatically deemed in compliance with all of the statutory and regulatory provisions pursuant to which the permit was issued. Historically, regulated facilities could take advantage of affirmative defenses for “upsets” during start-up, shutdown, and maintenance (SSM). EPA removed these “emergency” defense provisions in July 2023 after prior court decisions from the U.S Court of Appeals from the D.C. Circuit held they are inconsistent with the EPA’s interpretation of the Clean Air Act enforcement structure.[52] There are additional defenses, common to other statutes, that are discussed in the enforcement section (Part III).
Resource Conservation and Recovery Act—Hazardous Waste Management
Overview
The Resource Conservation and Recovery Act (RCRA)[53] was enacted by Congress to promote the proper management of solid and hazardous wastes. The primary goals of RCRA are to protect human health and the environment from the potential hazards of waste disposal, to promote environmentally sound recycling that conserves energy and natural resources, and to reduce the amount of waste generated in the first instance.
Subtitle C of the act, which is the focus of this section, covers all phases of hazardous waste management, including generation, transport, and treatment, storage, and disposal (TSD). However, it is important to check for relevant state statutes and regulations, because virtually all states are authorized to implement their own hazardous waste programs in lieu of substantial portions of the federal RCRA program.[54] In some instances, the state programs are broader in scope and/or more stringent.
Solid Waste
In order for material to be classified and regulated as hazardous waste, it must first qualify as solid waste. Under RCRA, “solid waste” is defined as:
garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities, but does not include solid or dissolved material in domestic sewage, or solid or dissolved materials in irrigation return flows or industrial discharges which are point sources subject to permits under section 1342 of title 33, or source, special nuclear, or byproduct material as defined by the Atomic Energy Act of 1954, as amended.[55]
For purposes of the hazardous waste regulatory program, EPA has promulgated a somewhat narrower definition of solid waste, which covers any discarded material—including recycled material in some instances—that is not specifically excluded by another regulation.[56] There are a number of items that are excluded from the EPA’s definition of solid waste.[57] Additionally, the universal waste regulations apply to management of batteries, pesticides, mercury-containing equipment, and lamps.[58]
Hazardous Waste
RCRA defines “hazardous waste” as:
a solid waste, or combination of solid wastes, which because of its quantity, concentration, or physical, chemical, or infectious characteristics may (A) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; or (B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed.[59]
The RCRA hazardous waste regulatory program applies, i.e., a solid waste becomes a hazardous waste under RCRA, when: (1) the waste first meets an F, K, P, or U listing description; (2) the waste exhibits one or more of the four characteristics (ignitability, corrosivity, reactivity, toxicity);[60] or (3) the “mixture rule” applies.[61] Note that EPA has explicitly excluded a number of solid wastes from the “hazardous waste” classification.[62]
Hazardous Waste Lists. EPA has created four lists of hazardous wastes, and any waste included on one of these lists is automatically deemed hazardous and subject to regulation. The first list describes hazardous wastes from nonspecific sources.[63] The second list relates to hazardous wastes from specific sources.[64] The third and fourth lists describe discarded commercial chemical products.[65] Regulation can be triggered under the third list when, for example, a company decides to discard a listed chemical product in its natural form, or when there is a spill of one of the listed chemicals. A company should compare its waste with the ones listed to determine whether it is handling a hazardous waste.[66] Notably, generators have the ability to prepare a petition to exclude or “delist” a particular facility’s waste from hazardous waste regulations if the waste does not possess dangerous properties.[67]
Hazardous Waste Characteristics. If a waste is not included on one of the hazardous waste lists, it can still be considered a hazardous waste if a “representative sample” has any of the following characteristics:[68]
Mixing Hazardous and Solid Wastes. If a hazardous waste that is included on one of the four lists is mixed with a solid waste, the resulting mixture is considered a hazardous waste, unless it qualifies for an exemption. However, if a characteristic hazardous waste is mixed with a solid waste, the resulting mixture will only be deemed hazardous if the mixture exhibits any of the four hazardous characteristics.[73]
Requirements for Generators of Hazardous Waste
A “generator” is defined as “any person, by site, whose act or process produces hazardous waste identified or listed in [40 C.F.R. § 261] ... or whose act first causes a hazardous waste to become subject to regulation.”[62] A generator is charged with initially determining, based on the criteria discussed above, whether the waste that is generated is a hazardous waste.[74]
The amount of hazardous waste and status of the generator (namely, large- vs. small-quantity generators) determines the amount of time that generators may store hazardous waste on-site without a separate permit.[75]
Requirements for Transporters of Hazardous Waste
A “transporter” is any person “engaged in the offsite transportation of hazardous waste by air, rail, highway, or water.”[76] Any person who moves hazardous waste off the site where it is generated or the treatment, storage, and disposal site must comply with the requirements for transporters, which are found at 40 C.F.R. § 263. The regulations promulgated by EPA regarding transporters of hazardous waste largely mirror those issued by the DOT under the Hazardous Materials Transportation Act.
The bulk of the regulations governing transporters concerns manifesting the waste and maintaining proper records, as well as the responsibility of the transporters to clean up spills.[77] In limited circumstances, transporters carrying wastes from small-scale generators are exempt from these regulations but still have to follow certain requirements.[78]
Requirements for TSD Facilities
A “treatment” facility is one that uses:
any method, technique, or process, including neutralization, designed to change the physical, chemical, or biological character or composition of any hazardous waste so as to neutralize such waste, or so as to recover energy or material resources from the waste, or so as to render such waste non-hazardous, or less hazardous; safer to transport, store, or dispose of; or amenable for recovery, amenable for storage, or reduced in volume.[79]
A “storage” facility is one that engages in “the holding of hazardous waste for a temporary period, at the end of which the hazardous waste is treated, disposed of, or stored elsewhere.” A “disposal” facility is “a facility or a part of a facility at which hazardous waste is intentionally placed into or on any land or water, and at which waste will remain after closure.” A number of different TSD facilities are exempted from compliance with the regulations.[80]
TSD facility operations are governed by regulations that address waste manifesting, record keeping, security measures, personnel training, safety, emergency planning, financial assurance for proper closure and post- closure measures, and operations of a variety of treatment and disposal facilities, including incinerators, surface impoundments, landfills, etc.[81] Consult the regulations to see whether one of your facilities has specific regulations that must be followed.
Additionally, certain hazardous wastes are restricted from land disposal or are required to meet certain treatment standards before being placed on land, so consultation of regulations to determine whether your facility handles those wastes is important.[82] These restrictions could impose several other important requirements, such as a dilution prohibition and more paperwork requirements.
Corrective Action (i.e., Remediation of RCRA Facilities)
In 1984, Congress amended RCRA to require all RCRA-permitted facilities to identify and perform corrective action for all releases of hazardous waste or hazardous constituents from all current or past solid waste management units (SWMUs).[83] RCRA permittees generally have a continuing obligation to report all known releases of hazardous waste or constituents from SWMUs at their facilities.[84] The three major stages of RCRA corrective action are:[85]
RCRA Facility Assessment (RFA). RFAs are preliminary reviews of existing documentation and, if necessary, an on-site inspection of a facility. They are designed to identify all SWMUs and all potential releases of hazardous waste or hazardous constituents from SWMUs.
RCRA Facility Investigation (RFI). RFIs are comprehensive on-site investigations and evaluations of the nature and extent of all potential releases of hazardous waste and constituents at a facility. The data and analysis generated by RFIs inform the Corrective Measures Study.
Corrective Measure Study (CMS) and Implementation. CMSs evaluate the need for corrective measures, describe and analyze alternative corrective measures, and then recommend final corrective measures, which may include remediation, containment, institutional controls, or monitoring.[86]
Notably, the RCRA corrective action program was designed to mirror the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) remediation scheme promulgated in the national contingency plan (NCP).[87] CERCLA is a federal statute designed to identify, investigate, and respond to all releases of hazardous substances that threaten human health or the environment. CERCLA is discussed later in Part II. The three stages in CERCLA remedial actions that correspond to the three stages in RCRA corrective action are:
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Site evaluation,
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Remedial investigation and feasibility study (RI/FS), and
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Remedial design and remedial action (RD/RA).
Common RCRA Violations
The following are some common RCRA violations involving hazardous wastes:
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Failure to make a proper determination of whether wastes are hazardous;
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Storage of hazardous wastes by generators for longer than 90 days (or the longer limits for small-scale generators);
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Treating, storing, or disposing of hazardous wastes without a required TSD permit;
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Failure to comply with the applicable design and operating standards for the units used to manage hazardous wastes;
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Improper consolidation or mixing of hazardous wastes;
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Record keeping and reporting violations, including failure to comply with the requirements for hazardous waste manifests; and
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Submitting false reports or certifications.
Defenses to RCRA Liability
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Under RCRA’s permit shield defense, a permitted facility in compliance with the terms and conditions of its permit is deemed in compliance with RCRA Subtitle C; however, the facility must also comply with certain other provisions as applicable.[88]
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Under RCRA’s nonduplication provision, RCRA shall not apply to any activity or substance subject to the CWA; the Safe Drinking Water Act; the Marine Protection, Research, and Sanctuaries Act; and the Atomic Energy Act, except to the extent the application of RCRA is “not inconsistent” with the requirements of such acts.[89] This provision has been used to bar application of RCRA to activities already governed by the CWA and the Safe Drinking Water Act.
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Finally, there are additional defenses, common to other statutes, that are discussed in the enforcement section (Part III).
Basel Convention (International Regulation of Hazardous Waste)
The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (Basel Convention) was adopted by the Parties to the Convention in March 1989 and entered into force in 1992 in response to the toxic wastes from abroad being imported to and dumped in various developing countries.[90] The purpose of the Basel Convention is to reduce the transport of hazardous wastes and “other wastes” as defined by the convention (hazardous and other wastes) between nations, especially where waste is transported to developing countries or without the consent of the receiving nation.[91] The Basel Convention seeks to reduce the amount and toxicity of hazardous wastes produced while also encouraging waste disposal in the nation of generation using environmentally sound and efficient management, reducing health and environmental risks.[92]
The Basel Convention establishes restrictions and prohibitions on certain shipments of hazardous and other wastes. The Convention’s annexes provide lists of wastes that are presumptively hazardous, presumptively nonhazardous, and “other” wastes, as well as lists of hazardous constituents, streams, and characteristics.[93] Hazardous wastes generally include certain electronic waste, persistent organic pollutants, and other hazardous wastes that are considered explosive, flammable, toxic, or corrosive. Shipments of hazardous and other wastes require prior notice and consent and are prohibited if they are between a party and a non-party, unless the countries have a separate agreement. The Basel Convention does not prevent a party from imposing additional requirements consistent with the convention and international law such that looking at additional national laws may be important depending on the geographic context.[94] Parties to the Basel Convention have a number of treaty obligations, including reporting obligations, national action obligations, and obligations to other parties. Corporations that sell, transport, distribute, or receive hazardous waste abroad must consider the implications of the Basel Convention in their practice.
CERCLA or ‘Superfund’
Overview
CERCLA[95] was enacted in 1980 to address sites that were contaminated by releases of hazardous substances. CERCLA imposes a broad liability scheme that applies retroactively. The government may compel the investigation and cleanup of hazardous substances that were released, even if the hazardous substances were disposed legally at the time. In addition, CERCLA’s “strict liability” standard means that a party may be held liable even if not found to be negligent.
CERCLA case law imposes “joint and several” liability, pursuant to which a party that contributed only a small percent of the contamination may still be held liable for the full cost of cleanup.[96] In addition to liability for investigation and cleanup costs, CERCLA also imposes liability for natural resource damages (NRD). Trustee agencies at the state or federal level may recover funds they may use to implement projects to restore damaged natural areas.[97] The purpose of the NRD program is to compensate the public for damages to ecological and recreational services, both past and future.
CERCLA is frequently referred to as Superfund because it originally established a trust fund called the Superfund. The fund allowed the EPA to respond to serious threats to human health and the environment at contaminated sites or in emergencies, after which EPA would seek reimbursement for the fund from liable parties. While EPA may use fund dollars to perform remedial work, it is generally EPA’s policy to have potentially responsible parties (PRPs) perform or pay for response actions.
Potentially Responsible Parties
The strict liability scheme under CERCLA names four classes of PRPs that are generally liable for “response costs” (i.e., investigation and cleanup costs) and NRD:
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The current owner or operator of a facility,
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The owner or operator of a facility at the time of the disposal of any hazardous substance,
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Any person who arranged for disposal or treatment of hazardous substances at a facility, and
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Any person who transports hazardous substances to a facility selected by that person.[98]
Under common law principles of corporate law, a party may be held liable for the actions of its subsidiary, parent, or sister corporation if either the corporate veil can be pierced or the party exercised direct control over its corporate affiliate’s hazardous waste management operations.[99]
Removal Actions and Remedial Actions
CERCLA and its regulatory scheme governing cleanups, the National Contingency Plan (NCP),[100] divide all response costs into two categories: removal actions and remedial actions. The NCP has been described as the government’s “toxic waste playbook,” detailing the steps that must be taken “to identify, evaluate, and respond to hazardous substances in the environment.” Any party wishing to recover costs under Section 107(a) must substantially comply with this NCP playbook. Removal actions are generally short-term responses to mitigate the effects of pollution that requires immediate action; they also include all investigation costs.[101] On the other hand, remedial actions are generally long-term responses that aim to remediate or contain contamination at its source across an entire facility.[102] The distinction between the two is significant because different NCP procedures and standards apply to each category of response action and because different statutes of limitations apply to each.
Superfund Enforcement
EPA generally has two enforcement tools: It may order PRPs to investigate and clean up a facility pursuant to a Section 106 unilateral administrative order (UAO),[103] or it may investigate and clean up a site and then seek reimbursement from PRPs for all response costs. Unless there is an emergency requiring immediate action, EPA generally identifies PRPs, issues liability notices to them, and attempts to negotiate a cleanup by those PRPs before resorting to a UAO.
If a party is issued a UAO, the party has three general options. It may enter a consent decree with EPA and then seek contribution from other PRPs, including the United States if appropriate. It may simply comply with the UAO and then sue all PRPs for reimbursement during or after the cleanup. Or it may choose not to comply with the UAO. If EPA seeks penalties in court, the party may defend itself by arguing there was “sufficient cause” for noncompliance (i.e., an objectively reasonable basis to believe that the party was not liable or that the response action was arbitrary and capricious).[104] Failure to comply with a Section 106 order, however, may result in penalties of up to $59,017 per day, as well as treble damages for the amount EPA spends as a result of the party’s noncompliance.
Cost Recovery and Contribution Claims by Private Parties
Private parties may not sue other parties to compel cleanup under CERCLA. However, Section 107(a)(4) allows private parties that voluntarily investigate and clean up a site to recover costs from other PRPs.[105] In addition, a private PRP may bring a contribution claim against other PRPs under Section 113(f)(1) if the PRP has resolved its liability in an administrative or judicially approved settlement, or if it is sued under Section 106 or Section 107.
As clarified in the May 2021 U.S. Supreme Court case, Guam v. United States, a settlement must by its terms resolve CERCLA liability to trigger a contribution claim under Section 113(f)(3)(B).[106] Notably, parties that have settled with EPA may be, by the terms of the settlement, protected from contribution claims by other PRPs.[107]
Whether brought by a private party or the government, the general elements of a cost recovery or contribution claim are roughly the same. The plaintiff must demonstrate that:
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The defendant falls into one of the four categories of PRPs listed above;
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A “release”[108] of hazardous substances has occurred;
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The release occurred at a “facility”;[109] and
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The release resulted in response costs (i.e., the costs of investigating and/or remediating a site) that were expended in a way that was consistent with the requirements of the NCP.[110]
The main difference between a cost recovery claim by the government and claims by a private party is that the private party has the additional burden of proving that its response costs were necessary.[111] Also, the burden of proof for NCP consistency depends on whether the plaintiff is the government or a private party. For a government response, such costs must be “not inconsistent with” the NCP. For a private party, response costs must be “consistent with” the NCP to be recoverable.[112]
If a court finds a party liable, that party is joint and severally liable with all other PRPs, and all liable parties must either negotiate who pays what or have a court resolve their individual share of liability through the equitable allocation triggered by contribution actions.[113] Furthermore, a court must issue a declaratory judgment against all parties found liable for cost recovery under Section 107(a),[114] and courts generally grant declaratory judgments against all parties found liable for contribution.
Defenses to CERCLA Liability
CERCLA Section 107 contains the only defenses available against CERCLA liability. Commonly raised defenses include:
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Third-party defense. A PRP has a defense to liability if the release of hazardous substances at a facility was caused solely by the actions of a third party. To make use of this defense as to third-party actions, a party must establish that: (1) it had no contractual relationship, direct or indirect, with the third party; (2) the PRP exercised due care with respect to the hazardous substance; and (3) it took precautions against foreseeable acts or omissions of the third party and the foreseeable consequences.[115]
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Innocent landowner defenses. The innocent purchaser defense operates by exempting parties from the contractual element under the third-party defense if they did not know, and had no reason to know, of contamination present on the property at the time the property was acquired.[116] Separately, the bona fide prospective purchaser (BFPP) defense protects non-polluting parties who knowingly acquire contaminated property after January 11, 2002, and if they satisfy eight elements.[117] Lastly, the contiguous landowner defense may be used when property has become contaminated due to a neighbor’s actions and the landowner satisfies all nine elements of the defense.[118] Although each defense has distinct elements, they all share the central requirements that the landowner did not pollute the property and also conducted “all appropriate inquiries” into the previous ownership and uses of the facility, in accordance with accepted standards, prior to purchasing the property. The regulations contained in 40 C.F.R. § 312 further describe the “all appropriate inquiries” requirement.
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Federally permitted releases. A party is not liable under CERCLA for chemical releases authorized by other environmental statutes, such as discharges in compliance with a NPDES permit under the CWA.[119]
Other defenses include the “de micromis exemption” for parties that have contributed a very small amount of hazardous substances to a release at a facility via arrangement or transportation[120] and the “municipal solid waste exemption” for parties that arranged for disposal of only municipal solid waste and are small businesses, small nonprofits, or owners of residential property.[121]
Statute of Limitations
CERCLA also contains a statute of limitations provision for cost recovery and contribution actions. All cost recovery actions for remedial actions must be filed within six years after “initiation of physical on-site construction of the remedial action,” and all cost recovery actions for removal actions must be filed either within three years after completion of the removal action (or within six years after initiation of the remedial action if the latter was initiated within three years after completion of the removal action).[122]
All contribution actions must be commenced within three years after either a judgment in a cost recovery action or an administrative or judicially approved settlement.[123]
Emerging Contaminants: Per- and Polyfluoroalkyl Substances
The development of scientific knowledge (e.g., new detection methods, developments in toxicology) leaves open the possibility that new or additional remediation requirements could be imposed at Superfund sites. Currently, per- and polyfluoroalkyl substances (PFAS) are receiving increased attention across the US, especially perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), which have been used in many products for their resistance to heat, chemicals, and corrosion.
In September 2022, EPA proposed a rule to designate PFOA and PFOS, including their salts and structural isomers, as hazardous substances under CERCLA.[124] Following public comment, EPA issued an Advanced Notice of Proposed Rulemaking seeking public input on another proposed rule designating an additional seven PFAS compounds and precursors to PFOA and PFOS as hazardous substances under Section 102(a) of CERCLA.[125] The rulemakings would require entities to report immediately releases of PFOA and PFOS that meet or exceed the reportable quantity to the National Response Center, state or Tribal emergency response commission, and the local or Tribal emergency planning committee. EPA is expected to publish a final rule by February 2024.
The regulation of PFAS remains an evolving issue that will continue to develop in the years to come. EPA has published and continues to develop key actions to address PFAS, available on its website.[126] Ahead of EPA, various states have already listed per- and polyfluoroalkyl substances as hazardous substances under relevant state laws.[127]
Toxic Substances Control Act
Overview
Congress enacted the Toxic Substances Control Act (TSCA) as the primary federal chemicals law in 1976, giving EPA authority to regulate chemical substances in the United States and impose reporting, record keeping, and testing obligations.[128] TSCA applies to most chemicals in commerce with certain exclusions, such as for pesticides regulated under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (see section on FIFRA) and food, drugs, and cosmetics regulated under the Federal Food, Drug, and Cosmetic Act, among others.[129] All chemicals in commerce must be notified to EPA, evaluated, and listed on the TSCA Inventory. TSCA grants EPA the authority to regulate the full life cycle of chemicals, from manufacturing, processing, and distribution to use and end-of-life.
TSCA remained unchanged for 40 years until it was overhauled in 2016 by the Lautenberg Act, which took effect immediately upon passage on June 22, 2016.[130] The revised statute grants EPA increased authority to evaluate and regulate new and existing chemicals.
As noted above in the Superfund discussion, PFAS continue to receive substantial attention from legislators and regulators across the US. Under TSCA, EPA has promulgated or proposed several new regulations over the past seven years. EPA’s website provides a PFAS Strategic Roadmap reflecting its ongoing commitments to developing regulations governing the manufacture and importation of products containing PFAS.[131]
On July 27, 2020, EPA published a final rule amending its PFAS Significant New Use Rule (SNUR) “giving the agency the authority to review an expansive list of products containing PFAS before they [are] manufactured, sold, or imported in the United States.”[132] On December 22, 2022, EPA published proposed SNURS for 35 PFAS already subject to section 5(e) orders and on January 26, 2023, it proposed a SNUR for PFAS that have not been manufactured (including imported) or processed for many years and are designated as inactive on the TSCA Chemical Substance Inventory.[133] A final SNUR is expected by December 2023.
Section 5: New chemical substances. Companies must ensure that the chemicals they manufacture, import, and process are listed on the TSCA Inventory. TSCA requires companies to submit a premanufacture notice (PMN) to EPA if they intend to manufacture or import a new chemical (i.e., a chemical that is not already in commerce and listed on the TSCA Inventory), prior to manufacturing or importing such chemical.[134] The revised statute maintained the basic structure of the PMN review process, requiring EPA to review PMNs within 90 days.[135] However, the revised statute now requires EPA to make an affirmative determination regarding whether a chemical substance presents an unreasonable risk.[136] In making this determination, EPA cannot consider costs or other non risk factors and must consider any risk to potentially exposed or susceptible subpopulations. The revised statute requires EPA to make one of the following findings for each PMN reviewed by the agency: (1) the new chemical presents an unreasonable risk, (2) the new chemical may present an unreasonable risk, (3) the new chemical will be manufactured or imported in substantial quantities, (4) there is insufficient information to evaluate the new chemical, or (5) the new chemical is not likely to present an unreasonable risk.[137] Depending on the outcome of this determination, EPA can impose restrictions on the new chemical, promulgate regulations, require further testing, or allow the PMN submitter to commence manufacture or import of the new chemical, or some combination thereof.
In May 2023, EPA proposed changes to its TSCA regulations dealing with PMNs and certain exemptions from PMN requirements. Notably, EPA proposed to codify its stated position that PFAS are ineligible for low volume exemptions (LVEs) and low release and exposure (LoREX) exemptions. EPA also proposed to make persistent, bioaccumulative, and toxic substances ineligible for these exemptions and it solicited comments on whether to revoke previously granted LVE applications for PFAS. EPA also proposed to update the regulations to: 1) reflect the 2016 Lautenberg Act amendments requiring EPA to make an affirmative determination on PMNs, as well as LVE and LoREX applications before the proposed activity can commence; 2) specify the level of detail EPA expects as part of a notification; and 3) regarding pre-screening processes, incomplete submissions, and new information for PMNs and other notifications. EPA requested comments on these proposed changes by July 25, 2023.
TSCA reform has resulted in greater scrutiny of new chemicals, delays in the new chemicals review process, and increased restrictions on new chemicals. On January 8, 2021, EPA and OSHA signed a Memorandum of Understanding that advances collaboration and communication between the agencies on the new chemical review process under TSCA Section 5 and minimizes workplace exposures.[138]
Companies must also comply with SNURs, if applicable, for chemicals they manufacture, import, process, or use.[139] EPA can use SNURs to regulate the volume and use (e.g., industrial versus consumer use) of individual chemicals and impose worker health and safety, water release, and disposal requirements on the use of such chemicals. SNURs require manufacturers, importers, and processors to notify EPA at least 90 days before starting or resuming new uses of chemicals subject to a SNUR that do not comply with applicable restrictions.[140] In March 2021, EPA announced that it was evaluating its policies, guidance, templates, and regulations under the new chemicals program to ensure adherence to statutory requirements, the Biden-Harris administration’s executive orders, and other directives,[141] and specifically, that the EPA would stop issuing determinations of “not likely to present an unreasonable risk” based on the existence of proposed SNURs, which was a practice used during the Trump administration.[142]
Section 6: Prioritization, risk evaluation, and risk management for existing chemicals. Section 6 of TSCA governs prioritization, risk evaluation, and regulation of existing chemicals (i.e., chemicals that are already in commerce and listed on the TSCA Inventory).[143] Previously, EPA was required to restrict existing chemicals using the “least burdensome” requirements. In the 2016 updates, Congress removed the “least burdensome” standard, giving EPA more authority to regulate existing chemicals. The revised statute also established a new framework for regulating existing chemicals that involves prioritization, risk evaluation, and risk management. EPA is charged with prioritizing existing chemicals as high- or low-priority substances by considering whether a chemical “may present an unreasonable risk” without considering cost implications.[144] If a chemical is designated as a high-priority substance, EPA must conduct a risk evaluation on the chemical to determine if the chemical presents an unreasonable risk.[145] If EPA determines that the chemical presents an unreasonable risk, EPA must promulgate risk management regulations to ensure that the chemical no longer presents an unreasonable risk.[146]
In December 2019, EPA designated 20 chemicals as high-priority substances for risk evaluations.[147] Companies that manufactured any of those substances in the preceding five years must comply with the TSCA Fees Rule, which required them to self-identify as a manufacturer and will require them to contribute to the costs of the risk evaluations.[148] However, following controversy regarding the definition of “manufacturer” for these purposes, EPA issued a no-action assurance for certain manufacturers subject to the Fees Rule: those that import the chemical substance in an article, those that produce the substance as a by-product, and those that produce or import the substance as an impurity.[149] On January 11, 2021, EPA issued proposed rules to update and adjust the 2018 TSCA Fees Rule. The proposed revisions for fiscal years 2022–2024 included a number of exemptions for importers of articles containing a chemical substance, companies that produce a chemical as a byproduct or manufacture or import as an impurity, companies that use chemicals solely for research and development purposes, companies that produce a chemical in de minimis amounts, and companies that manufacture a chemical that is produced as a non-isolated intermediate from fees.[150] After considering public comments, the EPA issued the proposed rules.[151] On November 16, 2022, EPA released a notice to supplement the proposed rules and proposed numerous additional modifications.
EPA issued five final rules on January 6, 2021, to reduce exposures to certain chemicals that are persistent, bioaccumulative and toxic (PBT) under TSCA Section 6(h): Decabromodiphenyl ether (DecaBDE); Phenol, isopropylated phosphate (3:1) (PIP (3:1)); 2,4,6-Tris(tert-butyl)phenol (2,4,6-TTBP); Hexachlorobutadiene (HCBD); and Pentachlorothiophenol (PCTP). Following the issuance of Executive Order 13990 (Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis), EPA requested and received comments on the January 2021 rules, specifically, on additional actions that could be taken to reduce exposures to these chemicals to the extent practicable. In September 2021, EPA announced its intent to initiate a new rulemaking and anticipates proposing new rules in 2023 for the five PBT chemicals that are the subject of final risk management rules under TSCA.[152]
Section 8(a): Chemical Data Reporting. The Chemical Data Reporting (CDR) rules according to TSCA section 8(a) require manufacturers and importers of chemicals to report information regarding the production, import, and use of chemical at US facilities, if such activity exceeds certain thresholds, to EPA every four years. In December 2020, a federal district court issued a ruling directing EPA to amend its CDR reporting rule under Section 8(a) of TSCA.[153] EPA finalized amendments to the CDR rules in April 2020, which implemented a number of changes as compared to the 2016 rules.[154]
Section 8(e): Substantial risk reporting. Manufacturers, importers, processers, and distributors are required to immediately notify EPA when they become aware of information indicating that a chemical presents a substantial risk of injury to health or the environment, per TSCA section 8(e).[155] Companies must submit a Substantial Risk Notification to EPA within 30 calendar days of obtaining substantial risk information.[156] It is important for companies to establish internal procedures to evaluate information regarding chemicals for purposes of substantial risk reporting.[157] Persons responsible at a company for management of section 8(e) reporting retain potential civil and/or criminal liability, if required Substantial Risk Notifications are not submitted to EPA.[158]