Company How To: Maintaining Environmental Enforcement Compliance
The myriad of national and local responses to the COVID-19 pandemic—including, inter alia, forced business closings, stay-in-shelter orders, social distancing directives, and the like—present new challenges to entities with environmental compliance obligations.
Accordingly, entities operating under the auspices of environmental compliance enforcement should carefully consider how to maintain compliance therewith. Provided below is guidance, as well as other important considerations, entities should take into account when navigating their respective environmental compliance obligations. Entities should also consult the Environmental Protection Agency’s (“EPA”) recently issued “COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program,” (the “Temporary Policy”) for additional information regarding same.
1. FORCE MAJEURE
A force majeure event refers to the occurrence of a “superior force” event that is outside the reasonable control of a contracting party, and which acts to prevent that party from performing its respective obligations. A party affected by such an event of force majeure generally will be excused from performing the obligation(s) affected for the duration, and to the extent, so affected.
Force majeure provisions are common in settlement agreements with federal and state agencies, especially, the EPA. In fact, the EPA recently announced, in recognition of “the potential impact the threat of Covid-19 may have on facility operations,” that it would “evaluate requests to invoke force majeure or extension provisions of enforcement agreements on a case-by-case basis.”
While neither the Connecticut Public Utilities Regulatory Authority (“PURA”) nor the Connecticut Department of Energy and Environmental Protection (the “CTDEEP”) has, to date, echoed the EPA’s statement, given the various local and state-wide responses to COVID-19, such a response might soon follow.
Accordingly, companies that are subject to federal and/or state settlement agreements, judicial decrees, and the like should review the terms of same to determine whether a force majeure provision (or a variation thereof) is included there. If so, the company should consider whether it applies to the present COVID-19 situation. Such a provision may offer temporary relief for the company and mitigate the potential for future enforcement action in the event of noncompliance.
2. ENFORCEMENT DISCRETION
It is important that companies remember that the respective enforcement decisions of the EPA, PURA, and the CTDEEP are discretionary in nature. Accordingly, even in the absence of a force majeure provision (or like clause) in an enforcement agreement, companies can still seek temporary relief from the appropriate agency(ies).
Notably, the EPA recently issued a new temporary policy, entitled, “COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program” (the “Temporary Policy”) that excuses certain violations involving routine monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification obligations that result from the COVID-19 pandemic. In such cases of non-compliance, the EPA will not impose penalties, so long as “the EPA agrees that COVID-19 was the cause of the noncompliance and the entity provides supporting documentation to the EPA upon request.” The Temporary Policy does not, however, excuse criminal violations.
While neither the CTDEEP nor PURA has announced such a policy, as a “best practice,” entities should voluntarily discover, promptly disclose, expeditiously correct, and take steps to prevent recurrence of potential violations. Attention with same may result in a reduction or elimination of any civil penalties that otherwise might apply.
3. STAFFING AND SUPPLIES
Governor Lamont’s Executive Order 7H directed all businesses (and nonprofit entities) in the State to utilize, to the maximum extent possible, any telecommuting or work-from-home procedures that they can safely employ. The Order also directed that, each non-essential business or nonprofit entity reduce the in-person workforce at each business location by 100% from pre-state of emergency declaration employment levels. Needless to say, such measures present staffing and supply challenges that can severely compromise a company’s ability to comply with its respective environmental obligations.
A staff shortage, for example, may result in the company missing important monitoring, recordkeeping, and reporting obligations and/or deadlines. As such, companies may want to very clearly justify (and document) the reasons for excusing environmental compliance staff from work. In the alternative, companies may want to ensure that there is a strong internal system in place that alerts them to important monitoring/reporting obligations, and associated deadlines. If companies do not have such a system, they may wish to consider establishing one.
Moreover, it is not only important for a company to ensure that, internally, it can fulfill its respective environmental obligations, but that its compliance ability will not be jeopardized by the actions, or inaction, of a third-party. That said, many companies rely upon third-parties for their compliance efforts. Businesses may need certain pollution control equipment from a designated supplier, advice, testing, and/or recommendations from environmental experts or scientists, and other like assistance.
It is therefore incumbent upon companies to reach out to their respective vendors, contractors, and other third-parties to ensure that they are able to perform, and in the event that they are not, be proactive in finding suitable alternatives and/or replacements. To the extent finding a suitable alternative and/or replacement has been rendered virtually impossible, companies should clearly document that fact and alert the appropriate agency as quickly as possible.
4. ADDITIONAL GUIDANCE FROM THE EPA
The EPA’s Temporary Policy offers meaningful guidance regarding maintaining environmental compliance obligations during the coronavirus pandemic. Accordingly, while entities are still instructed to make every effort to comply with their respective environmental obligations, to the extent such compliance is not reasonably practical, the Temporary Policy encourages facilities to:
- Act responsibly under the circumstances, in order to minimize the effects and duration of any noncompliance resulting from COVID-19;
- Identify the specific nature and date(s) of any instance(s) of noncompliance;
- Identify how COVID-19 was the cause of the noncompliance, and the decision(s) and ameliorative action(s) 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
- Clearly document the information, action, or condition specified in items 1 through 4 above.
Pullman & Comley attorneys have been closely monitoring the many developing implications of the COVID-19 pandemic for businesses and for professionals, including law firms. We have been responding, and will continue to respond, to a wide range of risk management questions. The firm’s FOCUS page for the latest COVID-19 advisories may be found here.