Retailers: It’s Time To Check How Your Stores Manage Their Waste

by LeClairRyan

shopping_cartIf you’re a retailer, it’s a good time to assess your system for tracking and managing hazardous waste.  Think you don’t generate any?  Think again.  Those aerosol cans, product returns from customers, old pharmaceuticals and other waste materials all could potentially subject your retail outlets and stores to hazardous waste management requirements.  And don’t think that EPA doesn’t care.  It does, and it is embarking on a process that could either simplify or complicate how you manage your wastes.

A theme that runs through many of my posts is how environmental laws written to address a particular set of issues are confronted with new issues outside of those initial paradigms. Think climate change. When first enacted, the Clean Air Act was intended to address local and regional air pollution problems – ozone, particulates, lead – directly impacting human health and the environment. Now EPA is trying to twist the Act’s regulatory structure to address a problem – the emission of greenhouse gases – that it was never intended to. Needless to say, the fit is awkward, an issue the Supreme Court is considering right now.

A similar scenario faces retailers who generate hazardous waste and thus are subject to a law – the Resource Conservation and Recovery Act (RCRA) – that was designed for industry and manufacturers.  Last year, one retailer paid more than $81 million in civil and criminal penalties and agreed to continue developing and implementing a comprehensive, corporate-wide hazardous waste management program.  This program will require the company to make operational changes to ensure compliance with RCRA, including measures to address corporate structure and staffing, employee training, development of an environmental management system, maintaining a hazardous waste electronic database available to all workers to aid in the identification of hazardous wastes, and development of standard operating procedures relating to environmental compliance.

The problem facing retailers is that EPA’s existing hazardous waste management regulations don’t really suit retail operations with far-flung distribution centers and retail outlets.  For example, RCRA regulation kicks in when a material or product becomes a waste – that is, where it is “generated.”  Deciding when a waste is generated would seem like a simple task, but it isn’t.  It requires working through layers of EPA’s waste regulations.  An item becomes a waste and is generated when it is “discarded.”  In simple terms, an item is “discarded” when abandoned, recycled, or considered inherently waste-like.  Determining when something becomes a waste is never simple, but it is even harder in the retail context.  Consider reverse distribution, where individual stores return unsold products to a central processing location, from where they can, among other options, be disposed. When and where were these items “discarded”  (and thus made subject to RCRA) – at the central processing location or the originating retail store?

Retailers also face unique challenges because they typically only generate hazardous wastes episodically and at variable rates.  The volume of wastes generated by retailers depends on product recalls, customer returns, expiration dates, accidental spills and breakage and seasonality.  This variability creates complications for retailers because waste management requirements for generators  – including training, recordkeeping and manifesting – vary depending on the amount of waste generated each month.   This problem is exacerbated by the large number of different products sold in stores and received from different suppliers and manufacturers.

EPA is not blind to these issues and, to some extent has recognized the misfit between RCRA and retailers. Just recently, EPA issued a notice which may signal the beginning of a process to issue guidance or even new regulations for retailers who manage hazardous waste.  In this notice, EPA is seeking information to help the Agency better understand four recurrent issues that retailers confront:

  1. Where and when a hazardous waste determination must be made;
  2. Episodic generation;
  3. Reverse logistics, and
  4. Hazardous waste management programs.

The notice also describes the information EPA has already assembled about these issues.

All this activity shows that EPA is looking closely at the retail sector.  So what should a smart and prudent retailer do?  You can take several steps now to avoid unwanted regulatory scrutiny.

  • Examine the type and quantities of waste your stores generate.
    Characterize the types of waste being generated to determine whether they qualify as hazardous wastes, universal wastes or just solid wastes.  Determine the quantities of hazardous waste generated to see whether a store or other facility qualifies as a “conditionally exempt small quantity generator” (generating less than 100 kg/month), “small quantity generator” (generating between 100 and 1000 kg/month), or “larger quantity generator” (generating more than 1000 kg/month), as the requirements for each differ, including whether the store/facility needs to obtain a RCRA identification number, how long they can store those wastes on site and whether they need to manifest their hazardous waste off-site.
  • Examine how your stores are managing their wastes.
    Are wastes being segregated appropriately and stored in the right kind of containers?  Are the stores properly marking those containers and tracking when  accumulation of the waste begins (to avoid storing the wastes for more than 90  or 180 days and potentially being subjected to treatment, storage or disposal (TSD) facility requirements)?  Do they have a RCRA generator number if they are required to, and are they properly manifesting off-site transportation of those wastes?  Before designing a program for managing wastes, you need to know the current lay of the land, including what steps are needed to bring your stores into compliance.
  • Examine your employee training.
    EPA’s hazardous waste management regulations require that employees be trained in waste management and emergency response requirements relevant to their responsibilities.  Any good management program includes a solid training program, for it is your employees that have to manage wastes on a day-to-day basis,  The retailer settlement mentioned above contains detailed employee training requirements, showing that EPA places importance on employee training.  Your employees need to know what they have to do to properly manage wastes, returns and unused products to help you avoid enforcement.
  • Examine how you are managing returns, unused products, and reverse logistics.
    If you operate distribution centers that receive used or waste materials from your retail stores, these centers could be considered TSD facilities.  That is a designation you would prefer to avoid, as the standards and requirements applicable to such facilities are complicated and onerous.  Retailers need to consider implementing a system which segregates hazardous waste at the retail location so that it is manifested and disposed of at a permitted TSD facility and not returned to distribution centers.  You may need to reconsider how you are managing these materials to avoid becoming subject to TSD requirements.
  • Examine and revise your management program for hazardous wastes.
    If you don’t already have a company-wide management program for managing wastes, you need to develop one.  This program should identify applicable requirements, processes for ensuring compliance with such requirements, specification of compliance responsibilities of management and employees, requirements for managing returns and unused products, steps to ensure requirements are satisfied, including employee training, tracking, recordkeeping and reporting, and periodic reviews and audits of the system to ensure that it is achieving compliance.

In addition to examining your own situation, you may want to review the EPA notice, which describes the issues in which EPA is interested and provides some insight into EPA’s thinking.  The mistake you don’t want to make is to think this will all go away.  Be active now to avoid problems in the future.



DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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