The Environmental Protection Agency on March 26 announced a temporary policy of relaxed enforcement of some environmental legal obligations due to COVID-19.
The policy, which applies retroactively from March 13, drew the ire of environmentalists after it was announced. Major news outlet headlines proclaimed the EPA had stopped enforcing environmental laws, prompting the agency to “correct the record” on what it called “reckless propaganda.”
“This temporary policy is not a license to pollute,” the EPA said in a March 30 news release.
Companies with EPA obligations will want to read beyond the headlines to understand the scope of the temporary policy before assuming their noncompliance or violations will be forgiven, according to Laura Riese, a partner at Davis Graham & Stubbs.
“Any ongoing enforcement cases I’m involved in are marching right along,” Riese said. “And if someone saw an illegal situation and turned it in to the EPA, you can be sure that they will enforce.”
The policy doesn’t apply to criminal violations, which are typically intentional. Nor does it apply to activities covered by Superfund and Resource and Conservation Recovery Act Corrective Action enforcement policies, which will be addressed in a separate memo that has yet to be released.
Imports of toxic or hazardous materials are also not covered by the relaxed enforcement policy, and the EPA singled out pesticide products that claim to address COVID-19 impacts as being especially subject to scrutiny right now, whether they’re imported or made in the U.S.
WHAT IT COVERS
The temporary policy does allow for relaxed enforcement if a company fails to comply with a wide range of routine obligations, including monitoring, testing, sampling, laboratory analysis, training and certification — as long as the noncompliance was the result of the coronavirus pandemic.
While the struggling oil and gas industry pushed for the relaxed EPA enforcement, citing staffing shortages, the temporary policy applies to almost every industry required to perform such compliance monitoring and reporting, from factories with smokestacks to real estate developments with groundwater sampling obligations.
The policy is meant to address scenarios where companies or facilities fall short of their federal regulatory obligations due to the COVID-19 crisis. That could mean failures or delays due to worker shortages, social distancing requirements and travel restrictions. The coronavirus outbreak has also led to slower processing times at laboratories and shipping delays, which could cause facilities to fail to meet deadlines.
The EPA said it doesn’t plan to seek penalties for violations of these routine monitoring, testing, reporting and other requirements that occur while the temporary policy is in place, nor will it require companies to “catch up” by submitting extra reports or samples after the agency returns to its previous enforcement policy. The temporary policy will stay in place until further notice, and the EPA will give at least a week’s notice before terminating the coronavirus-related rules.
COVERING YOUR BASES
Rebecca Almon, a director at Ireland Stapleton Pryor & Pascoe, said that for companies with environmental obligations, “the number one goal is to comply if you can comply.”
If COVID-19 makes it impossible to comply with regulatory obligations, the next goal is to document any violations and how they’re related to the pandemic, as well as the steps taken to remedy the situation. Keeping good records is a crucial step if companies want to benefit from the leniency, but it’s one that might face some resistance, according to Riese.
“That’s really hard to do, because in most of the noncompliance situations I have, people are very reluctant to document that,” Riese said.
The policy encourages companies to use existing internal systems or procedures for reporting noncompliance when possible. In bigger facilities, Riese said, that could mean a hotline for reporting near-misses or safety violations. Workers in the field might use these systems to call in and report instances of noncompliance related to COVID-19, and the company’s legal department could compile records from those reports, she said.
But for companies without such systems, Riese said, distributing a form for frontline workers to fill out when they can’t comply with obligations due to a lack of personnel, equipment or other resources can help establish those records. Even having workers write down compliance challenges on a legal pad and collecting those records regularly can help, she added.
“You can avoid penalties as long as you’re communicating or documenting anything,” Riese said. “But if it looks like you’re just taking advantage of the situation… that’s where I see the potential for trouble down the road.”
According to Almon, documenting any staffing shortages, social distancing requirements or travel restrictions in place during the noncompliance period could help prove a violation was coronavirus-related. Records of employee illnesses or workers placed under quarantine, shift schedules and facility startup and shutdown times can also help build a case that COVID-19 created compliance challenges.
There’s no obligation under the temporary policy to report every instance of coronavirus-related noncompliance for routine obligations. However, companies need to maintain their records and provide them to federal and state regulators if requested. Noncompliance unrelated to the pandemic must still be reported as required by state and federal regulators.
COMMUNICATION IS KEY
Companies and their in-house counsel should make sure they’re aligning their practices with the EPA’s health and public safety objectives, Riese said. “I think it’s hard to communicate that kind of thing with a directive from the legal department,” she said. She recommended getting on the phone or hosting company town halls to make sure key managers and staff understand the new policy beyond what they’ve seen in the headlines.
Under the temporary policy, facilities are still required to report any equipment or system failures that could violate air or water quality rules. The EPA issued a notice March 27 to reassure the public that the coronavirus has not been detected in drinking water and that the agency is prioritizing the safety of the water supply.
While the temporary policy might shield companies from penalties under federal law, it can’t protect them from bad press. Failures to keep up with routine monitoring obligations under the Clean Air Act, for example, could create public relations risks for companies, Almon said, since air pollution exacerbates asthma, cardiovascular problems and other conditions that may lead to complications for COVID-19 patients.
“That could be something you just want to be aware of, from a PR perspective,” Almon said. “You want to be able to document that and document that you have come into compliance as quickly as you possibly could.”