What Should Companies Do If They Cannot Meet Environmental Obligations In The Wake Of COVID-19?
Everyone in the United States has been affected in some way or another by the COVID-19 pandemic, but many companies with environmental compliance obligations are facing impossible situations. Worker shortages due to the pandemic as well as travel and social distancing restrictions imposed by many state and local governments have affected the ability of companies to carry out activities required by environmental permits, regulations, and statutes. Companies may be unable to meet limitations on air emissions or water discharges and requirements for the management of hazardous waste. Even if compliance is occurring, companies may not be able to provide proof because testing laboratories cannot timely analyze samples. Companies faced with these circumstances have three options to consider. First, companies with federal environmental obligations should review U.S. EPA's guidance dated March 26, 2020, entitled "COVID-19 Implications for EPA's Enforcement and Compliance Assurance Program". With this guidance, U.S. EPA announced that it will focus its enforcement "largely on situations that may create an acute risk or imminent threat to public health or the environment." As a result, U.S. EPA does not expect to seek civil penalties for violations of routine compliance monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification obligations, if they occurred as a result of the COVID-19 pandemic. This policy applies to violations beginning on March 13, 2020. To take advantage of this policy, companies must keep documentation supporting an argument that COVID-19 was the cause of the noncompliance. However, it should be noted that this policy does not necessarily apply to individual states, which can enforce state laws and regulations even if the U.S. EPA decides not to do so. Additionally, environmental organizations may still be able to bring citizen enforcement suits for violations. Second, companies with environmental obligations set forth in a permit, settlement agreement, or consent decree should examine those documents to determine if notification should be made to government agencies as a result of noncompliance. Many of these documents also contain force majeure provisions, under which certain conditions and requirements must be met to establish that a force majeure event has occurred. For example, companies may be required to have evidence that they exercised best efforts to fulfill their obligations, that a force majeure event occurred, and that they attempted to minimize the noncompliance to the greatest extent possible. Third, companies that fail to comply with environmental obligations may be able to take advantage of the federal environmental audit policy. (Some states have similar audit policies.) Under the federal policy, companies that voluntarily discover, promptly disclose, expeditiously correct, and take steps to prevent recurrence of violations may be eligible for a reduction or elimination of civil penalties. Therefore, companies have several options to consider when faced with a situation brought about by the COVID-19 pandemic that prevents compliance with environmental obligations. To take advantage of these options, however, companies must make sure that they keep documentation that they have done everything possible to comply, and that the noncompliance occurred through no fault of their own. 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.