U.S. EPA Issues Guidance for Temporary Enforcement Discretion During COVID-19 Pandemic

COVID-19 Update

Date: March 30, 2020

Key Notes

  • The Enforcement Memorandum provides U.S. EPA enforcement discretion for some but not all federal environmental noncompliance; companies must consider potential state violations separately.
  • It does not cover noncompliance with Superfund or RCRA Corrective Action programs, but U.S. EPA expects to issue separate guidance soon.
  • Parties seeking to utilize the Enforcement Memorandum must clearly document efforts taken to minimize effects and duration of noncompliance, how COVID-19 specifically caused the noncompliance, best efforts taken to comply and return to compliance promptly.
  • Certain noncompliance requires affirmative reporting to U.S. EPA.
  • The Enforcement Memorandum retroactively applies to March 13 and remains in effect until seven days after EPA provides notice of termination.

Overview

The United States Environmental Protection Agency (U.S. EPA) has issued important guidance in response to the substantial uncertainty and disruption the COVID-19 pandemic has caused regarding compliance with various federal environmental laws, regulations and permit requirements. The U.S. EPA memorandum, COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program (Enforcement Memorandum), was issued March 26, 2020, and sets forth the agency’s temporary position to exercise enforcement discretion and not seek penalties for specified categories of environmental noncompliance while emphasizing the need to make best efforts to comply and protect human health and the environment. The stated purpose of this policy is to allow U.S. EPA to focus its resources on situations that may create an acute risk or imminent threat to public health or the environment during the pandemic.

This update focuses on the key aspects of the Enforcement Memorandum and presents practical recommendations for ongoing compliance and steps that regulated entities should take to comply with the required conditions should noncompliance be unavoidable.

COVID-19’s Environmental Compliance Impacts

The unprecedented nature and scope of the COVID-19 pandemic, and the rapid pace of related developments, has resulted in serious and widespread actual and threatened impacts for the environmental regulated community in the private and public sectors.

The impacts include temporary (and possibly longer-term) closure of facilities; worker shortages due to actual illness or remote working to prevent the spread of the virus; impacts caused by social distancing measures; possible delays or stoppages in transportation of necessary materials, hazardous and non-hazardous waste and other supplies needed to maintain compliance; and concerns over laboratories’ ability to process and analyze environmental samples.

Recognizing the vast impacts that the pandemic is causing and will continue to cause over the coming weeks and months, U.S. EPA issued the Enforcement Memorandum to provide some clarity and certainty to the regulated community during these challenging times.

Key Provisions of the Enforcement Memorandum

Duration: The Enforcement Memorandum applies retroactively to March 13, 2020, and while temporary in nature, will remain in effect until further notice. U.S. EPA states that it will continue to assess the need and scope of the Enforcement Memorandum and will provide at least seven days’ notice prior to its termination.

Conditions to Applicability: U.S. EPA makes it clear that the pandemic itself does not create a “get out of jail free” card for all noncompliance. Specifically, the Enforcement Memorandum begins by emphasizing that regulated entities must make every effort to comply with all environmental obligations and remain in compliance, before laying out steps that regulated facilities must take if compliance is “not reasonably practicable.” Those steps include:

  1. take reasonable action to minimize the effects and duration of noncompliance caused by COVID-19;
  2. identify the specific nature and dates of noncompliance;
  3. specify exactly how COVID-19 caused the noncompliance and the “best efforts” the facility took to comply, and steps taken to come into compliance as early as possible;
  4. return to compliance as soon as possible; and
  5. document all actions, information and conditions taken in conditions (a) through (d).

These conditions largely mirror a typical force majeure clause in U.S. EPA Administrative Orders on Consent (AOCs) or Consent Decrees. The Enforcement Memorandum does not expressly mention financial impacts from COVID-19, but the stated conditions strongly suggest that impacts causing noncompliance covered by the policy cannot be driven by financial considerations. Force majeure clauses in AOCs and Consent Decrees usually have an affirmative statement that the definition of a force majeure “does not include financial inability to complete the Work or increased cost of performance.”

Although the impacts from this unprecedented pandemic could result in some extra agency leniency across the board, the Enforcement Memorandum is clear that regulated entities must still report the noncompliance to U.S. EPA (under applicable permit/regulatory requirements) or maintain documentation (if no affirmative reporting obligation exists). U.S. EPA will likely scrutinize some of the reported and documented noncompliance and could take action if it disagrees with an entity’s own determination of the nature or extent of noncompliance. It is therefore strongly recommended that entities create clear written documentation to meet the Enforcement Memorandum’s conditions.

Scope of Enforcement Memorandum: The Enforcement Memorandum provides examples of categories of noncompliance that are covered under this temporary policy, and areas that are specifically excluded. Covered areas include routine compliance monitoring and reporting under permits and regulatory programs (such as various air emissions and water monitoring), training (including periodic spill prevention countermeasure and control and hazardous waste training) and reporting certifications (including Toxic Inventory and greenhouse gas inventory reporting). Other covered categories include integrity testing, laboratory analysis and certification obligations.

For ongoing facility operations, the Enforcement Memorandum provides that notice to U.S. EPA (or the authorized state or tribe) must be made if operations impacted by COVID-19 may create an acute risk or an imminent threat to human health or the environment. Also, if the pandemic causes impacts that result in the failure of air emission control or wastewater/wastewater treatment systems that create exceedances of enforceable limits, the facility must provide notice “as quickly as possible.” Although the quoted time frame is not defined, facilities should provide this notice as promptly as possible with the goal of meeting the spirit of this provision.

If COVID-19 disruptions prevent hazardous waste generators from transferring waste off-site during required time frames, the Enforcement Memorandum states that facilities should continue proper labeling and storage activities and meet the conditions outlined above to minimize noncompliance and return to compliance as soon as possible.

In addition to compliance activities required by permits and statutes/regulations, the Enforcement Memorandum also covers noncompliance with requirements under AOCs and Consent Decrees. Parties subject to these documents facing noncompliance must follow all notice requirements in the documents, which are typically found in the force majeure provisions. U.S. EPA states it will generally not seek stipulated penalties for noncompliance with the same types of issues described above for permits and regulatory requirements as long as the force majeure and Enforcement Memorandum conditions are met.

The Enforcement Memorandum also addresses compliance with other common reporting requirements. During the pandemic, U.S. EPA will accept electronic signatures where submissions otherwise would require “wet” signatures of responsible officials. In addition, the agency will accept electronic submissions of documents that typically must be submitted as original paper copies.

Certain programs and violations are specifically excluded from the Enforcement Memorandum. Criminal violations, typically involving knowing actions or omissions that lead to non-compliance, are excluded as expected. Also expressly excluded are activities performed under Superfund or the Resource Conservation and Recovery Act (RCRA) Corrective Action enforcement instruments. U.S. EPA plans to issue separate guidance for these activities. Thompson Hine will evaluate that forthcoming guidance document, as many of our clients conduct investigation and remediation activities under these programs.

Finally, U.S. EPA reminds us that reporting under the federal Self-Policing (Audit) Policies is still available when the criteria under the policies are met.

It is important to remember that the Enforcement Memorandum is guidance, not law, and that the language U.S. EPA uses in the guidance document offers considerable wiggle room for enforcement and is not binding on state agencies which often have primary enforcement authority for environmental violations. U.S. EPA states that it “does not expect to seek penalties” for noncompliance in the above categories “where the EPA agrees that COVID-19 was the cause of the noncompliance and the entity provides supporting documentation to the EPA upon request.” While we do not expect U.S. EPA to aggressively enforce these routine noncompliance issues during the pandemic, facilities should be careful to follow the procedures of the Enforcement Memorandum. In short, companies should make best efforts to comply, clearly document why any unavoidable noncompliance was caused by COVID-19 and document all efforts taken to promptly return to compliance.

Practicable Considerations

The potential impacts to environmental compliance caused by COVID-19 may range from relatively minor issues like a slight delay in routine monitoring to significant disruption or closure of operations and a complete inability to comply with environmental requirements during the pandemic.

Companies facing these disruptions should closely follow the guidance in the Enforcement Memorandum and proactively identify requirements that may be delayed and possibly result in noncompliance. Companies should carefully document all efforts taken to maintain compliance or return to compliance as soon as practical and store this information in an organized manner to possibly defend the noncompliance if later questioned by U.S. EPA. Based on permit/regulatory-required or general reporting obligations, companies should assure that personnel and other necessary resources are in place to provide notice to the relevant regulatory agencies, especially in circumstances of monitoring exceedances, accidental releases and other circumstances that may present acute risk or imminent threat to public health or the environment.

Finally, because the Enforcement Memorandum covers federal policy and enforcement discretion only, companies should be prepared to evaluate state and local policies during the pandemic. Some states, such as Ohio, have specific closure requirements that are applicable to manufacturing facilities undergoing temporary and permanent closures, which apply equally during the pandemic and under normal operating circumstances.

FOR MORE INFORMATION

Thompson Hine is assisting its clients with a wide variety of issues pertaining to COVID-19 impacts on environmental laws and is ready to help others in need of guidance. For more information, please contact:

Joel D. Eagle
216.566.5938
Joel.Eagle@ThompsonHine.com

Andrew L. Kolesar
513.352.6545
Andrew.Kolesar@ThompsonHine.com

or any member of our Environmental practice group.

ADDITIONAL RESOURCES

Thompson Hine has assembled a firmwide multidisciplinary task force to address clients’ business and legal concerns and needs related to the COVID-19 pandemic. Please see our COVID-19 Task Force web page for additional information and resources.

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