alerts & publications
EPA Relaxes Environmental Compliance Requirements in Response to COVID-19 PandemicMarch 30, 2020
As the COVID-19 pandemic sweeps across the country, governments at all levels are issuing emergency orders and agency guidance to provide flexibility where disease-related precautions and social distancing orders, including “work from home” mandates, have made it difficult or impossible for companies to comply with legal requirements. On March 26, 2020, the U.S. Environmental Protection Agency’s (“EPA”) Assistant Administrator for Enforcement and Compliance Assurance issued a policy memorandum (“COVID-19 Policy”) stating that, retroactive to March 13, 2020, it will exercise “enforcement discretion” in connection with certain noncompliance resulting from the COVID-19 pandemic. The COVID-19 Policy is generally applicable to requirements under federal environmental law, as well as consent decrees, consent orders and permit conditions under such laws, but does not apply to Superfund and Resource Conservation and Recovery Act (“RCRA”) Corrective Action orders (which are to be covered by a separate, yet to be issued memorandum).
The key provision of the COVID-19 Policy states that entities should make every effort to comply with their environmental compliance obligations, but “if compliance is not reasonably practicable,” they should:
- Act responsibly under the circumstances in order to minimize the effects and duration of any noncompliance caused by COVID-19;
- Identify the specific nature and dates of the noncompliance;
- Identify how COVID-19 was the cause of the noncompliance, and the decisions and actions taken in response, including best efforts to comply and steps taken to come into compliance at the earliest opportunity;
- Return to compliance as soon as possible; and
- Document the information, action, or condition specified in a. through d.
The COVID-19 Policy has been described by some commentators as the most sweeping “free pass” ever given by the EPA, with potentially serious consequences for public health and the environment. Even with these broad exemptions, companies should continue to be mindful of public health and environmental considerations as they manage their response to COVID-19.
The COVID-19 Policy states that “EPA expects all regulated entities to continue to manage and operate their facilities in a manner that is safe and that protects the public and the environment,” that “facilities should contact the appropriate implementing authority (EPA region, authorized state, or tribe) if facility operations impacted by the COVID-19 pandemic may create an acute risk or an imminent threat to human health or the environment,” and that “if a facility suffers from failure of air emission control or wastewater or waste treatment systems or other facility equipment that may result in exceedances of enforceable limitations on emissions to air or discharges to water, or land disposal, or other unauthorized releases, the facility should notify the implementing authority (EPA regional office or authorized state or tribe) as quickly as possible.”
The COVID-19 Policy does not specify what actions “local implementing authorities” must take in response to a notice of non-compliance, but indicates that states, and tribes are strongly encouraged to consult with their EPA regional office on acute risks and imminent threats,” and if such notification is provided, the EPA would consult with the local authority and “discuss measures to minimize or prevent the acute or imminent threat to health or the environment from the COVID-19-caused noncompliance.” If the EPA is the applicable regulatory authority, the COVID-19 Policy outlines steps for the EPA to take, including evaluating whether an applicable permit, statutory, or regulatory provision addresses the situation, and if there is no permit/regulatory provision that addresses the situation, working with the facility to minimize or prevent the acute or imminent threat to health or the environment from the COVID-19-caused noncompliance, and obtaining a return to compliance as soon as possible.
With regard to routine compliance monitoring and reporting, the COVID-19 Policy recognizes that the consequences of the pandemic may constrain the ability of regulated entities to perform routine compliance monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification (such as Leak Detection and Repair). It states that “entities should use existing procedures to report noncompliance with such routine activities, such as pursuant to an applicable permit, regulation or statute,” and “if no such procedure is applicable, or if reporting is not reasonably practicable due to COVID-19, regulated entities should maintain this information internally and make it available to the EPA or an authorized state or tribe upon request.” It further states that in general, “EPA does not expect to seek penalties for violations of routine compliance monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification obligations in situations where the EPA agrees that COVID-19 was the cause of the noncompliance and the entity provides supporting documentation to the EPA upon request.” The EPA also states that it will not seek to pursue criminal sanctions for violations that are unavoidable as a result of COVID-19.
With regard to consent decrees entered into with the EPA and the U.S. Department of Justice, the COVID-19 Policy states,“EPA staff will coordinate with DOJ to exercise enforcement discretion with regard to stipulated penalties” for routine compliance obligations, “and will also consult with any co-plaintiffs to seek agreement to this approach.” One question this raises is whether economic distress alone would be covered under the COVID-19 Policy, such as where a company can no longer afford to engage the outside contractor it uses to conduct emissions monitoring. However, we note that consent decree force majeure provisions typically exclude financial incapacity.1
Recognizing that the pandemic could complicate efforts to comply with RCRA requirements for timely off-site disposal of hazardous wastes, the COVID-19 Policy states that if a hazardous waste generator is unable to transfer the waste off-site within the required time periods, it should continue to properly label and store such waste and take the steps noted above in the General Compliance section of this Alert. If those steps are met, the EPA will continue to treat such entities as hazardous waste generators, and not as treatment, storage and disposal facilities. In addition, the COVID-19 Policy states that the EPA will treat Very Small Quantity Generators and Small Quantity Generators as retaining that status, even if the amount of hazardous waste stored at their facilities exceeds their regulatory volume threshold, if the generator is unable to arrange for shipping of the waste off-site due to the pandemic.
The COVID-19 pandemic, and the many restrictions that have been rapidly imposed to slow its spread and reduce its severity, are unprecedented events that likely warrant a temporary reprieve from certain legal requirements. The EPA has issued a policy memorandum that is broad in scope, and short on guidance for companies that will likely be facing a range of compliance challenges. For example, the COVID-19 Policy does not provide guidance on when compliance would not be “reasonably practicable.” We strongly recommend that companies make every effort to continue to meet their compliance obligations while ensuring their employees’ safety, especially where compliance involves the control of emissions to air and water and managing hazardous wastes. We note that the COVID-19 Policy applies to federal compliance obligations only, so state regulatory authorities may choose not to afford similar flexibility. Furthermore, to the extent that public health or the environment is endangered, compliance failures can lead to future claims for bodily injury, property damage or remediation, and present significant reputational risks.
1 For a general discussion of force majeure provisions in the context of the COVID-19 pandemic, see O’Melveny’s March 6, 2020 Client Alert.
This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Eric Rothenberg, an O’Melveny partner licensed to practice law in Missouri and New York, and John Rousakis, an O’Melveny counsel licensed to practice law in New Jersey and New York, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.
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