ASTM International recently published a Standard
Guide for Identifying and Complying with Continuing
Obligations, ASTM E 2790-11 (Guide). This Guide
offers a comprehensive approach to assist property owners (and
other users such as tenants/operators, as may be appropriate) with
maintaining important environmental liability protections. The
Guide fills a critical gap by providing practical guidance to
implement statutory liability protections to promote the
redevelopment of Brownfields and other under-utilized properties.
This Guide was developed by representatives of various industrial,
lending, consulting, and governmental entities and provides a
uniform procedure to better understand the ongoing obligations and
risks associated with environmentally challenged properties. The
Guide generally outlines a suggested procedure to evaluate
potential environmental impacts, identify the continuing
obligations that may flow from these environmental impacts
consistent with legal obligations, and implement such continuing
obligations.
The Guide was written to assist those who are seeking to maintain
the bona fide prospective purchaser (BFPP), the innocent landowner
(ILO), and the contiguous property owner (CPO) liability
protections under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA). This Guide is also
potentially useful to establish similar defenses from any
applicable state statutory liability scheme that is modeled after
CERCLA. Passed as part of the 2002 Brownfields Amendments, the
liability protections are designed to strike a balance between the
competing public interests of requiring cleanup and encouraging
prospective owners to purchase and redevelop environmentally
distressed properties including Brownfields. After finding that
CERCLA's existing liability regime tended to chill
redevelopment of impacted properties, the 2002 Brownfields
Amendments attempted to encourage redevelopment of distressed
properties by adding key protections from CERCLA's infamous
"strict liability" regime for qualified persons.
In creating the BFPP and CPO exemptions, and in amending the
existing ILO defense, Congress created a series of elements
required to qualify and maintain each respective liability
protection See 42 U.S.C.§§ 9601(40) and 9607(r) (BFPP),
42 U.S.C. §§ 9601(35)(a)(iii) and 9601(35)(b)(i)(ii),
(ILO), and 42 U.S.C. §9601(q) (CPO). Many of these
requirements have been considered by stakeholders to be confusing
and difficult to implement with certainty. For example, each of the
liability protections require some variation of "reasonable
steps" to stop continuing releases; prevent any future
threatened releases, and prevent or limit human, environmental, or
natural resource exposure to any previously released hazardous
substance. The obligations for each liability protection varies
slightly, and other obligations apply as appropriate, depending on
which liability protection a person is seeking to qualify for and
maintain.
The Guide presents a four-step approach to identify and comply with
continuing obligations under CERCLA. In addition, the Guide
proposes some options to help document efforts to meet the elements
of the liability protections, at the user's option.
The first step involves a detailed review of the Phase I
Environmental Site Assessment or All Appropriate Inquiry report for
the property, and any other actual knowledge of the presence of
hazardous substances at the property. Where a user has actual
knowledge of environmental impacts, or where there is reason to
know of potential environmental impacts at the property, Step 2
focuses attention on these environmental impacts. The Step 2
analysis also suggests a detailed review of available information
relating to any cleanup activities that may have occurred in the
past. Such information will inform the user what continuing
obligations to implement, if any.
Where environmental impacts are confirmed, Step 3 suggests methods
to identify and implement "initial" continuing
obligations, which are those steps taken to meet the statutory
elements of the liability protection. For example, initial
continuing obligations might include removing leaking drums from a
property, or installing an engineered barrier. Property-specific
circumstances will determine the type and number of initial
continuing obligations that may be appropriate.
Step 4 suggests methods to identify and implement
"ongoing" continuing obligations, which are those actions
taken either continuously or intermittently from time to time to
maintain compliance with the statutory elements. Such requirements
may include inspecting the property to evaluate compliance with
land use restrictions, or evaluating the land use to ensure that
changes in property use do not result in unacceptable risks of
exposure to hazardous substances.
The Guide notes that compliance with continuing obligations is
necessarily property-specific since the environmental conditions
and potential impacts at any given property are unique. As a
result, the Guide develops a suggested procedure for evaluating and
implementing continuing obligations, but does not mandate any
specific action. In addition, the Guide strives to allow the
procedure used to be commensurate with the circumstances
encountered in the field. Therefore, simple solutions can be
implemented to address simple situations.
Furthermore, the Guide notes that property owners (and
tenant/operators) seeking to maintain these liability exemptions
should consult experienced environmental counsel where appropriate,
because much of the law is not settled, and many of the legal
issues associated with identifying and implementing continuing
obligations continue to evolve. In addition, each of the liability
exemptions requires compliance with slightly different legal
requirements, and experienced counsel may be helpful for those
seeking to fully preserve all legal rights and defenses.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.