Amid COVID-19, US EPA loosens its enforcement policies on the regulated community

On March 26, 2020, the Environmental Protection Agency (EPA) announced that it will exercise enforcement discretion in policing businesses and other regulated entities for noncompliance with certain environmental regulations in the wake of the coronavirus disease 2019 (COVID-19). These informative new guidelines were released in a memorandum entitled COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program. The policies apply retroactively beginning on March 13, 2020, and EPA will post a notification here at least seven days prior to terminating the policy.

For regulated entities, this relief may be particularly helpful in meeting deadlines for compliance testing and monitoring, hazardous waste storage, and for any failure of air emission controls or other control equipment.

Environmental compliance monitoring and testing may be interrupted

COVID-19 may constrain the ability of regulated entities to perform routine compliance monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification. If an entity is currently under an EPA administrative settlement agreement or consent decree, and has reporting milestones or obligations, parties may utilize noticed procedures − including notification for force majeure relief, as applicable. Accordingly, EPA does not expect to seek penalties for violations of these routine compliance monitoring and testing obligations so long as (1) EPA agrees that COVID-19 was the cause of the noncompliance and (2) the entity provides supporting documentation to EPA upon request.

Hazardous waste generators under the Resource Conservation and Recovery Act (RCRA) may properly store waste without a permit

Importantly, during the time the enforcement discretion is in effect, EPA will not recognize hazardous waste generators as treatment, storage, and disposal facilities if they are unable to transfer waste off-site due to COVID-19 within 90 days. If the facility continues to properly label and store the waste, EPA will continue to treat these facilities as hazardous waste generators, and penalties should not be imposed.

Failure of equipment resulting in unexpected exceedances or releases may occur

If a facility suffers from a failure of air emission control or wastewater or other equipment that results in an unauthorized release, the facility may notify EPA with information regarding the release and expected duration. EPA indicated that it will “consider the circumstances, including the COVID-19 pandemic, when determining whether enforcement response is appropriate.” Presumably, this will also affect EPA’s response to emergency responses undertaken at least during the period of national social distancing, which as of this writing, has been extended to April 30, 2020.

Conditions for enforcement discretion include reasonable mitigation/minimization

According to EPA’s memorandum, while entities should make every effort to comply with their environmental compliance obligations, if compliance is not reasonably practical due to COVID-19, those facilities should (i) act responsibly under the circumstances to minimize the effects and duration of noncompliance; (ii) document the specific nature and dates of noncompliance; (iii) identify how COVID-19 was the cause of the noncompliance as well as steps taken to return to compliance as soon as possible; (iv) return to compliance as soon as possible; and (v) document the information, action, or condition addressed in these steps.

Key elements of guidance include communication, monitoring, expertise, documentation, and understanding what is not covered

During this time, all business are struggling with continued operations. EPA’s temporary guidelines may assist with noncompliance risks and can provide valuable defenses to businesses under EPA oversight. But while EPA’s enforcement discretion policy intends to provide reasonable relief to regulated entities, it is not without conditions. Businesses are expected to remain vigilant about environmental compliance protocols and take all reasonable steps to continue compliance.

First, regulated entities should employ a heightened focus on communication among key employees monitoring environmentally sensitive systems and processes, and with regulators. Companies should integrate key employees into any COVID-19 screening procedures a company may implement, with contingent coverage arranged for absent employees. Another sound practice is for key company functions – such as compliance, plant management, human resources, and legal − to regularly communicate about environmentally sensitive operations to anticipate problems or identify them early and develop solutions. It is helpful to bring government regulators charged with oversight (not only EPA, but also state and local regulators) into the loop early if logistical or personnel problems arise because of COVID-19 absences and shelter-in-place orders.

Second, businesses should consider enhanced monitoring of critical employees and systems. For instance, management may consider whether staffing levels are adequate for key environmentally sensitive systems and processes, considering potential absences due to COVID-19 issues and shelter-in-place requirements. Remember that employee absences can occur not just because the employee is sick, but also due to quarantine orders based on family exposure, and even childcare or related complications. Further, implementing contingent coverage plans for key systems may require that backup employees receive supplemental training, where practicable, on processes they may be called on to engage with.

Third, particularly with regard to EPA’s guidance regarding hazardous waste storage, generators should not mistake EPA’s guidance for relaxation of the actual regulations governing those processes. In other words, EPA allowance for unpermitted hazardous waste generators to store hazardous waste for greater than 90 days is not an allowance to store such waste improperly. Entities that have never stored (long-term), treated, or disposed of hazardous waste must ensure that they are abiding by all regulatory requirements for those activities, to the extent practicable. Long-term hazardous waste storage can be complicated and dangerous, depending on the waste stored; and entities should ensure they have adequate facilities, equipment, training, and planning to undertake such storage, again to the extent practicable. Questions that arise should be addressed by appropriate experts. Finally, EPA’s guidance addresses unpermitted storage of hazardous waste, not treatment or disposal. Regulated entities generally are not to treat or dispose of hazardous waste without permits.

Fourth, appropriate documentation of all problems and decisions related to EPA’s guidance is critical. This is clear both because EPA specifically requires documentation when it lays out necessary steps under the guidance, and also as a matter of prudence. Throughout the memorandum, EPA makes clear that they will exercise enforcement discretion where appropriate, ie, where EPA agrees that non-compliant actions were reasonable and necessary under the circumstances. There will inevitably be situations in which regulator and regulated entity disagree on what was reasonable − the better documentation the entity has of its circumstances and efforts, the better its opportunity to convince EPA its actions were reasonable. To be clear, privileged communications should remain privileged. But at every step, regulated entities should be considering how they will show, through documented evidence, that they have complied with EPA’s guidance requirements set out in its memorandum and that they have taken commercially reasonable steps to maintain compliance and/or mitigate non-compliance:

If compliance is not reasonably practicable, facilities with environmental compliance obligations should:

a. Act responsibly under the circumstances in order to minimize the effects and duration of any noncompliance caused by COVID-19;

b. Identify the specific nature and dates of the noncompliance;

c. 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;

d. Return to compliance as soon as possible; and

e. Document the information, action, or condition specified in a. through d.

Finally, it is important for businesses to understand that EPA’s March 26, 2020 Memorandum covers only compliance enforcement − that is:

• Activities required by federal permits, regulations, and statutes;
• Reporting obligations and milestones in settlements and consent decrees;
• Enforceable limitations on air emissions and water discharges;
• Requirements for the management of hazardous waste; and
• Requirements to ensure and provide safe drinking water.

The March 26 memorandum does not provide enforcement discretion regarding criminal violations, does not address enforcement under Superfund and RCRA Corrective Action programs, and does not apply to imports (eg, of pesticide products). Further, the memorandum does not explicitly govern state or local regulators, to the extent they are enforcing non-federal laws. Regulated entities are encouraged to remain mindful of these limitations and watch for new guidance from EPA and other entities regarding other environmental programs and activities.

If you have any questions regarding these new requirements and their implications, please contact your DLA Piper relationship partner or any member of the DLA Piper Environmental group.

Please visit our Coronavirus Resource Center and subscribe to our mailing list to receive alerts, webinar invitations and other publications to help you navigate this challenging time.