Written by Patrick Traylor, Conrad Bolston, and Misty M. Howell, Vinson & Elkins LLP
Companies with environmental compliance obligations should think carefully about and plan ahead for how the coronavirus outbreak might affect their ability to comply. Depending on the severity of the outbreak, companies may run out of the supplies they need to operate pollution controls, or their environmental compliance departments might become short-staffed, which could result in missed monitoring, recordkeeping, or reporting. Here are six things to keep in mind.
Enforcement discretion. Think about developing a strong argument for why federal and state environmental enforcement agencies should exercise their enforcement discretion not to pursue noncompliance caused by an emergency. The EPA has a long-standing policy that allows for “no action” assurances to be issued to excuse noncompliance during emergencies. The prerequisites for an assurance are stringent, and a requestor must demonstrate that the public interest in excusing noncompliance outweighs the public impacts from the noncompliance. These assurances may only be issued by the Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance, so the work of obtaining them must be conducted at EPA Headquarters.
Malfunctions and upset defenses. Think about how malfunction and upset provisions in federal and state regulations and many permits can provide protection against enforcement, but only if the company complies with the prerequisites for these provisions. Each state (and some federal regulations) has different malfunction and upset rules, so it will be important to meet the stringent conditions of these rules before noncompliance will be excused.
Force majeure. Think about whether the company is subject to federal or state settlements that might have a force majeure clause that could excuse noncompliance. Most federal judicial consent decrees have force majeure clauses that could excuse noncompliance, but require that companies use “best efforts” to avoid noncompliance. Companies should carefully review their settlements to see how to comply with their force majeure provisions. And some states have “act of God” statutes under which the inevitable consequences of such events (which may include “other catastrophes”) are deemed to not constitute violations at all.
Impact of staffing challenges. Think about how staffing challenges might affect the company’s ability to comply. With companies beginning to shut down operations, it is possible that environmental compliance staff might not be able to work, and the company might miss monitoring, recordkeeping, and reporting obligations. A company will want to very clearly justify decisions to excuse environmental compliance staff from work, especially if a “no action” assurance is sought or a malfunction/upset/force majeure claim is made.
Don’t forget your supply contracts. Think about the terms and conditions of supply contracts that are critical for environmental compliance and consider taking steps now to make sure suppliers comply with their contracts. If they cannot, think about whether a supply failure could qualify as a malfunction, upset, or force majeure event.
After the storm has passed. Think ahead to when the crisis has passed, and governmental and non-governmental organizations evaluate whether the emergency justified any noncompliance.
About the Authors
Patrick Traylor is a partner in Vinson & Elkin’s Environment and Natural Resources practice and was most recently the Deputy Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance in Washington, D.C., where he helped oversee the EPA’s enforcement response during natural disasters.
Conrad Bolston is a senior associate in Vinson & Elkin’s Environment and Natural Resources practice. He has assisted clients with a variety of federal and state environmental enforcement matters, environmental due diligence efforts, regulatory guidance, internal investigations, and litigation.
Misty M. Howell is an associate in Vinson & Elkin’s Environment and Natural Resources practice. She has assisted clients with a variety of federal environmental enforcement matters, due diligence efforts, government investigations, and litigation.