Troutman Pepper Hamilton Sanders LLP

02/25/2021 | News release | Distributed by Public on 02/25/2021 23:07

Preparing for a More Aggressive Federal Environmental Enforcement Regime

The Biden administration has already taken several actions that signal its intention to shift to a more federally focused environmental enforcement approach. Although the Trump administration generally adopted a 'hands off' approach that afforded states broad deference in deciding when to initiate and prosecute environmental enforcement actions, the new administration appears to be moving toward a more robust federal role in environmental enforcement.

Biden-nominated EPA Administrator Michael Regan has a strong enforcement record. During his tenure as the secretary of the North Carolina Department of Environmental Quality, the number of inspections and the amount of collected fines increased significantly as compared to previous years. Once confirmed, he will likely build on this record while leading EPA. In addition, DOJ recently removed Trump-era impediments to its enforcement discretion, indicating a more active DOJ presence in EPA enforcement actions.

Although the trade press has been reporting on these signals, there has not been much in the way of practical advice on how companies should prepare for this shift. Here are a few suggestions that we have been working on with clients:

1. Take a fresh look at internal compliance practices and recordkeeping.

This would be a good time to objectively evaluate the scope and effectiveness of existing compliance practices. For many companies, COVID-19 created severe disruptions in normal internal environmental auditing functions. With COVID-19-related restrictions easing up, companies would be well advised to dust off those audit/inspection protocols and take a fresh look at how their compliance policies are being implemented at their facilities. Given the rapid changes taking place in Washington D.C., companies should ensure that employees are trained to properly respond to federal inspections (which are often different and less routine than state inspections) and are familiar with applicable permitting/recordkeeping obligations.

Although establishing and maintaining good relationships with state/local environmental agencies is a critical component of any compliance program, companies should avoid getting too comfortable with decisions made by state/local agencies under the current administration. A more active EPA will be more likely to scrutinize/challenge state's enforcement decisions, which creates understandable pressure on state regulators who may be more inclined to pursue enforcement to be consistent with EPA oversight agreements.

2. Start factoring in environmental justice (EJ) considerations into your compliance programs.

The January 27 Executive Order 14008, Tackling the Climate Crisis at Home and Abroad, requires EPA to 'strengthen enforcement of environmental violations with disproportionate impact on underserved communities through the Office of Enforcement and Compliance Assurance.' It also directs the DOJ's Environment and Natural Resources Division (ENR) to coordinate with EPA, through the Office of Enforcement and Compliance Assurance and other agencies as appropriate, in developing a comprehensive EJ enforcement strategy. In addition, the executive order suggests: (1) renaming the ENR Division to the 'Environmental Justice and Natural Resources Division' and (2) creating an Office of Environmental Justice within DOJ. The executive order also requires EPA to create a community notification program to monitor and provide real-time data on current environmental pollution, including emissions, criteria pollutants, and toxins, in frontline and fence line communities.

In the past, many companies have deferred to EPA and state environmental agencies to address EJ concerns. Under the new administration, that is no longer a prudent approach. Companies should proactively evaluate potential EJ concerns associated with their industrial operations (including expansion plans and required permitting actions). Under the new EJ directives, they will need to be ready to address questions from EPA, state regulators, and local community/EJ advocacy groups regarding proposed or expanded facilities and their environmental impacts. It is also important to note that under the Obama administration, all enforcement cases were screened for potential EJ concerns when deciding whether to elevate the matter to EPA headquarters. We may see a similar approach under the Biden administration.

3. Establish a formal tracking process to identify and prepare for new environmental regulatory and statutory changes.

Many regulatory schemes are undergoing reviews following the new administration's directive. Multiple policies are also being changed, and these changes are coming fast and furious. Paying close attention to these developments is crucial to ensure understanding of new compliance obligations and to properly assess and minimize enforcement exposure. Simply reading available trade press is not enough. Proactive companies should identify critical programs and strategically track changes that may affect their operations and potential liability.