Late last week, the U.S. Fish and Wildlife Service withdrew two environmental policies adopted in late 2016 by the Obama administration that address mitigation for impacts to natural resources. These two policies established a broad “net conservation gain” goal (or a minimum of a no-net-loss) for mitigating the adverse impacts of land and water developments.
The two policy withdrawals, on the Service’s general mitigation policy and its Endangered Species Act (ESA) compensatory mitigation policy, were published in the Federal Register on July 30, 2018, and are immediately effective.
The Service also reinstated all prior mitigation policies that had been superseded by the two 2016 policies, including an overall mitigation policy from 1981. This reinstated mitigation policy focuses on mitigating losses to habitat value caused by a particular project and defines four resource categories based on the fish and wildlife resource values involved to guide recommended mitigation. The categories range from “unique and irreplaceable” habitat at the most protective, for which the mitigation goal is “no loss of existing habitat value,” to “medium low value habitat,” at the least protective, for which the goal is to “minimize [the] loss of habitat value.”
In this brief update, we look at the basis for, and implications of, these policy actions.
Withdrawal of Mitigation Policies by U.S. Department of the Interior Agencies
The Service’s two mitigation policies outlined guidance for Service personnel for all investigations and recommendations for mitigation under relevant Service authorities, including the Fish and Wildlife Act, National Environmental Policy Act and the ESA. In withdrawing the two 2016 policies, the Service determined that the “net conservation gain” standard underlying them was inappropriate, beyond its statutory authority, inconsistent with executive branch policy and of doubtful legality. In this last regard, the Service pointed to Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), a U.S. Supreme Court decision that held that agencies requiring off-site mitigation as a condition of granting a permit must show “a ‘nexus’ and ‘rough proportionality’ between the government’s demand and the effects of the proposed land use.” “At times,” the Service explained, “the nexus between a proposed undertaking and compensatory mitigation requirements is far from clear,” thus raising “serious questions” about the constitutionality of the two 2016 policies.
The Service also declared that because compensatory mitigation “does not directly avoid or minimize the anticipated harm, its application is particularly ripe for abuse.” It called these concerns “particularly acute when coupled with a net conservation gain standard, which necessarily seeks to go beyond mitigating actual or anticipated harm to forcing participants to pay to address harms they, by definition, did not cause.” While the Service did not further discuss the basis for its concerns, in a related guidance memorandum, the administration characterized compensatory mitigation as a potentially extortionary cudgel, which project proponents “go along with” when it is “forced upon them,” if “the overall benefits of the project authorization outweigh the costs.”
The Service’s policy withdrawals followed a parallel move by the U.S. Bureau of Land Management, another agency within the Department of the Interior, which last week issued guidance reversing its position on the imposition of offsite compensatory mitigation under the Federal Land Policy and Management Act of 1976 (FLPMA), as a required condition to use public lands. In its guidance, BLM stated that the agency can no longer require compensatory mitigation but noted that project proponents could still voluntarily undertake such activities. Like the Service, BLM found “the nexus between a proposed public land use and compensatory mitigation requirements is far from clear,” and concluded that [t]hese concerns are particularly acute when coupled with the ‘net conservation gain’ standard” that “forc[es] participants to pay to address impacts they did not cause.” As noted above, BLM further explained that “project proponents have [had] every economic incentive to go along with these compensatory mitigation plans, if forced upon them, effectively treating them as a cost of doing business ….”
While BLM noted that project proponents could voluntarily complete compensatory mitigation, it made clear that the agency must “ensure compensatory mitigation is voluntary” by neither “explicitly or implicitly suggest[ing] that project approval is contingent upon proposing a ‘voluntary’ compensatory mitigation component.” To further minimize the “risk of misuse,” the guidance also mandates that “[i]n no circumstance may BLM agree to accept a monetary contribution for the implementation of compensatory mitigation.”
Impacts of Policy Changes
These shifts reflect changes sought by industry groups, which considered a “net conservation gain” goal to be potentially a coercive, disproportionate and illegitimate means to saddle project proponents with the costs of ameliorating harms they did not cause. By returning to the mitigation policy of 1981, the Service will again focus on mitigating impacts to habitat value caused by, and limited to, the project. Accordingly, agencies will have less leverage in seeking to offset environmental impacts beyond those caused by a project, and, for new projects, proponents will likely encounter a softer agency approach to offsetting the environmental harms of development. But it is less clear precisely how these changes will be folded into projects currently under consideration. Nor is it evident that other agencies that often require compensatory mitigation, including the U.S. Army Corps of Engineers, will follow suit, leaving project proponents to contend with a variety of agency approaches.
Overall, however, these changes reflect the administration’s continuing efforts to lower regulatory burdens on natural resource and project development. The policy withdrawals will likely decrease costs to project proponents going forward, as they are no longer required to undertake compensatory mitigation for activities under BLM’s purview or pursue a net conservation gain goal that the Service had previously been seeking to advance.
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