Environmental Liability

Environmental liability is a legal obligation caused by the past or by the ongoing manufacture, use, release, or threatened release of a particular substance; or by other activities that adversely affect the environment and/or human health Federal, state, and local environmental statutes, regulations, and ordinances Common law

Economic Responsibility for Releases of Hazardous Substances Impacts to the land (contamination) soil, air, groundwater

Impacts to the ecology (ecological risk) natural resources, sensitive species and habitats

Impacts to humans (human health risk) Cancer and non-cancer

Impacts to adjacent landowners (3rd party liability) ability to use their property

Environmental Liability - where did it come from? Changing technological, economic and global conditions New technologies (can make more with less) New means of transporting goods Industry consolidation Cheap labor

Increased awareness about exposure to hazardous substances Human health effects Ecological impacts

Need to identify parties responsible for cleanup of impacted properties

Risk Management Managing risks through:

Identify Evaluate Solve

Identification of the Risks Due Conscientiousness Process Understand the regulatory status Understand the known and potential environmental situation Understand potential environmental liability Investigate further when needed Evaluation of the Risks Likelihood of occurrence Potential consequences Regulatory Common law Financial Transactional Political Social

Manage (solve) the Risk Strategies Avoid Reduce Transfer hold

Methods Remedial Action & Risk Based Decision Making Financial Instruments Contracts/Agreements Other Methods Manage the Risk-Remedial Actions How clean is Clean? Original condition? Pre-commercial or industrial use Regulatory unrestricted use standards? Risk-based levels considering current and future activities and land standards? Other Standards? Manage the Risk-Contracts/Agreements Full Indemnification Partial Indemnification Fixed Cost Remediation (Cost to Closure) Risk Transfer Contracts Manage the Risk - Financial Instruments Insurance Escrow accounts Grants Bonding Donations Risk Transfer to Third Party