In the context of COVID-19, many companies are downsizing operations or, in some cases, completely eliminating product lines or shuttering facilities. The considerations that go into such a decision are difficult and complicated, in part because the effects may be felt long into the future. However, if you are faced with such a decision, here are a few points to consider with regard to your environmental obligations.
Many states' environmental permitting systems allow a permit to be placed on suspended status. Such a status has different names under different permit regimes and can be in effect for varying lengths of time. Clean Air Act and Clean Water Act permits often include "emergency conditions" or "upset provisions" and other terms that offer defenses against enforcement for failed compliance under appropriate circumstances. In the coal industry, where the relevant permit status is usually called "temporary cessation," this pause rarely has a cap – although regulators attempt to track the number that have been idled for at least three years. In uranium mining, where operations usually wait in "standby," the limits differ by state – 10 years in Colorado and indefinitely in Utah if "good cause" is shown, for instance. Other permits can be moved into suspended status for cause shown.
The important thing is to understand your rights and obligations under applicable permits. Facility environmental permits impose obligations on operators, including during periods of shutdown or changes in operations. The terms of these permits often offer relief from certain compliance requirements in the face of unanticipated events or circumstances. Of course, there will be questions of applicability of that relief to any particular circumstance. Regardless of these applicability questions, the ability to take advantage of any such regulatory relief will most certainly require adherence to the procedures laid out in the applicable permits, including prompt notice to regulators of any unexpected impediments to compliance. You need to establish what permit obligations are triggered by the idling of plants and what regulatory limits and monitoring and reporting requirements will continue to be imposed on these operations. This is why we recommend communication with your legal counsel as well as the applicable environmental agencies, early and often (as needed). Such efforts will be critical to the success of any efforts to obtain relief, if necessary, from compliance obligations.
But the permit status is not the only consideration. The facility must also consider their obligations under governmental orders to which they are party. Government cleanup orders impose obligations on operators, including during periods of shutdown or changes in operations. For example, Superfund cleanup orders typically include force majeure provisions excusing compliance with certain order requirements. We have previously reported on that force majeure issue here (LINK).How these provisions might apply to circumstances and operational challenges triggered by the current circumstances and suspended operations should be considered carefully in consultation with legal counsel given the unprecedented nature of this crisis.
As a third consideration, there are compliance issues implicated by a prolonged shutdown of operations. At a minimum, companies will be obligated to act reasonably and to ensure that no harm to public health or the environment occurs during these transitional periods or shutdowns. But what does that mean in the context of an individual facility? A careful review of operations will help to answer that. Some examples of questions to ask regarding compliance issues include:
- Will facility disruptions cause exceedances of hazardous waste generator storage limits?
- What actions will be necessary to operate, maintain, and inspect product storage and waste management units and essential pollution control systems and equipment?
- What impact will suspended operations have on ongoing remediation or long-term monitoring programs and potential risks to the public or the environment?
There are other consideration as well; these are just a few.
Originally published 28 May 2020
This article is presented for informational purposes only and is not intended to constitute legal advice.