Businesses increasingly face the prospect of disruptions as impacts on public health and the economy continue to grow with the COVID-19 pandemic. Recognizing these difficulties, EPA issued a policy on March 26, 2020 allowing for the agency’s enforcement discretion during the outbreak. The policy signals EPA’s understanding that the pandemic may prevent regulated entities from complying with federal environmental requirements, and EPA’s intention not to seek penalties in response, under certain circumstances. However, EPA’s policy is: (1) limited in scope, (2) conditional, (3) discretionary for EPA, (4) not binding on states, tribes, or localities; and (5) temporary. Therefore, EPA’s new policy is best regarded as a tool for use when compliance is simply not possible due to COVID-19. But, now as always, compliance remains the surest defense against EPA enforcement.
I. Policy Scope.
The policy is limited in scope. It clearly covers routine compliance activities, including testing, monitoring, recordkeeping, and reporting obligations with which compliance is “not reasonably practicable” during the COVID-19 pandemic. But the policy is inapplicable to criminal violations, chemical imports, and accidental releases of oil, hazardous substances, hazardous chemicals, and hazardous pollutants. It also excludes activities that are carried out under Superfund and Resource Conservation and Recovery Act (RCRA) Corrective Action enforcement instruments. On March 30, 2020 EPA issued a statement clarifying the scope and intent of the policy. Responding to criticism, EPA defended the policy in a letter to the Senate dated April 2, 2020 and reiterated the impetus for the policy and its limited scope and duration.
II. Requisite Conditions.
The policy requires that regulated entities use “best efforts” to comply with federal environmental compliance obligations. If compliance is not “reasonably practicable,” EPA will exercise enforcement discretion when a regulated entity can demonstrate it:
- has reason beyond the fact that the virus exists to justify noncompliance;
- minimized the effects and duration of any noncompliance caused by the virus;
- returned to compliance as soon as possible;
- made notice to EPA in certain circumstances; and
- kept contemporaneous documentation of the virus-related cause (including demonstrating why compliance was “not reasonably practicable,” the nature and dates of noncompliance, and the “best efforts” taken to comply “at the earliest opportunity”).
In addition to these general conditions, the policy covers the following circumstances in greater detail:
- Routine Compliance Monitoring and Reporting Obligations.
EPA will not seek penalties for violating routine monitoring and reporting obligations only if EPA “agrees that COVID-19 was the cause of the noncompliance.” These obligations include monitoring, testing, sampling, lab analysis, training, reporting, and certification. EPA does not expect these routine compliance issues to be independently reported; rather, to address these issues, any existing noncompliance reporting procedures mandated by a permit, regulation, statute, or agreement must be followed. Otherwise, to preserve the enforcement discretion, entities must maintain contemporaneous documentation as explained above and be able to provide it upon request.
- Operating Requirements.
The policy indicates that EPA remains particularly concerned with facility operations impacted by COVID-19 that could “create an acute risk or imminent threat to human health or the environment” and sets a higher burden to justify noncompliance. In those circumstances, the policy states that facilities should contact the EPA regional office and relevant state or tribal authorities. EPA will look to applicable permits, statutes, or regulations that address the situation. If none exist, EPA will “work with the facility to minimize or prevent” the impact and return to compliance. EPA promises to “consider the circumstances” when “determining whether an enforcement response is appropriate.”
Where a facility anticipates exceeding an enforceable emission or discharge limit due to an equipment or system failure, it must notify EPA (or the relevant state or tribal authority) as soon as possible and provide detailed information as outlined in the policy.
- Hazardous Waste Generators.
The policy specifies flexibility for hazardous waste generators. Specifically, EPA advises that hazardous waste generators that are unable to timely transfer waste off-site under RCRA due to COVID-19 disruptions may maintain their preexisting generator status if they continue to properly label and store the waste and follow the other conditions in the policy. Small and very small quantity generators may also maintain their status when onsite volumes exceed threshold limits if the inability to arrange for off-site shipping is caused by COVID-19.
- Administrative Settlements and Consent Decrees.
Noncompliance with reporting and monitoring obligations required by federal administrative settlements and consent decrees may qualify for enforcement discretion under the policy. Parties to those agreements should follow the procedures in the agreement to notify EPA of anticipated noncompliance, including notice of force majeure.
III. EPA Retains Enforcement Discretion.
The policy is not a “no action assurance” declaring that EPA will not pursue enforcement of any violation. Although the policy indicates that EPA might consider a tailored “no action assurance” for facilities that qualify as essential critical infrastructure under the Cybersecurity and Infrastructure Security Agency guidance, the policy provides no such globally applicable assurance. Throughout the policy, EPA repeatedly reserves discretion to determine whether – in each given circumstance – an enforcement response is appropriate. Therefore, the policy should not be regarded as either authorization to suspend compliance or as a “get out of jail free” card.
IV. Policy Is Not Binding on States, Tribes, Localities, or Citizen Groups.
Importantly, EPA’s policy does not apply to or bind states, tribes, or localities with enforcement jurisdiction over compliance obligations. This limitation is particularly sensitive for programs, like RCRA, that have been delegated to states for implementation. For such programs, delegated states have independent inspection and enforcement authority, and typically take the lead on enforcement issues. While one would hope that states with delegated authority adopt EPA’s policy and approach, whether they do remains to be seen.
Further, citizen suits remain a risk. Many citizen groups have publicly announced their opposition to EPA’s policy and are likely to remain vigilant during this time.
V. Policy Duration.
The policy is retroactively effective back to March 13, 2020 and will remain in effect until EPA terminates it (EPA promises to provide seven days’ advance notice before doing that). EPA notes, however, that “[a]fter the policy is no longer in effect, the EPA expects full compliance going forward.” That said, “absent exigent circumstances,” EPA said it does not intend to ask sources to “catch-up” with missed monitoring or reporting requirements where noncompliance with those requirements lasts for fewer than three months.
VI. Update 4/7/2020.
On April 1, 2020, environmental organizations submitted a Petition for Emergency Rulemaking (Petition) to EPA. The Petition asks EPA to issue an emergency rule requiring regulated entities to immediately notify EPA and relevant state or regulatory agencies: (i) of any failure to comply with monitoring, reporting, testing, sampling, inspection, or certification obligations, and (ii) when the entity returns to compliance. The Petition also requests that EPA publish those notifications on a searchable online database. The Administrative Procedures Act prescribes notice and comment procedures when federal agencies adopt new rules. However, an agency may waive those procedures upon a showing of good cause, including in emergency situations. If EPA were to accept the Petition, EPA would publish a final rule and solicit public comment at the same time, and subsequently amend the rule in response to comments. EPA must respond to the Petition “within a reasonable time,” but has not responded as of April 7, 2020. 5 U.S.C § 555. The Petition underscores that enforcement waivers granted by EPA may be at risk of citizen suits from watchdog organizations.
VII. Update 4/20/2020.
Recently, EPA elaborated on its enforcement discretion policy offering some insight on how to document non-compliance related to COVID-19. In an April 14 webinar, the director of EPA’s Office of Civil Enforcement, Rosemarie Kelly, explained that the EPA cannot “specify in advance” the documentation entities must provide to demonstrate that compliance with applicable laws and regulations was not “reasonably practicable” because of the pandemic. See supra Section II. Kelly explained that the key information EPA “could” consider – and what regulated entities should document, at minimum – includes:
- the complexity of a facility’s operations;
- the specific environmental requirement;
- the extent of noncompliance; and
- the decisions made to manage noncompliance, including steps taken to address the problem.
Kelly reiterated that EPA will approach enforcement discretion on a case-by-case basis and reminded regulated entities that actual exceedances should be reported to EPA or applicable state agencies “as quickly as possible,” otherwise, “the offer of discretion in the policy does not apply.”
To assist companies with an approach to documentation, Stoel Rives prepared a Compliance Variance Tracking Tool, along with a Draft Notice Letter. Both tools are available for companies to download and use. Considering EPA’s unspecific directions, however, use of these documents does not guarantee enforcement discretion from EPA and entities should closely follow the guidelines in EPA’s policy.