The U.S. Environmental Protection Agency (“EPA”) has recently announced that it would take steps to finalize rules establishing financial responsibility requirements for hard rock mines under section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”).
Section 108(b) gives the EPA the authority to require certain facilities to have some type of financial security mechanism in place – such as a bond or insurance policy – that can be used to pay for spills or cleanups should a mining or mineral processing company declare bankruptcy or be otherwise unable to conduct necessary response activities. CERCLA requires the financial responsibility to be consistent with the degree of risk associated with the production, transportation, treatment, storage or disposal of hazardous substances.
In 2009, the EPA published a notice in the Federal Register designating the hard rock mining industry as its priority for the development of financial responsibility requirements. In making this determination, the EPA cited a heightened “risk” associated with hard rock mining which increase the likelihood of releases of hazardous substances.
The framework for the new regulations assigns financial responsibility amounts based on a facility’s characteristics (i.e., open pits, waste rock, tailings, heap leach, process ponds, water management, and operations, maintenance and monitoring). Natural resources damages and health assessment costs would be separate fixed amounts imposed on each facility. The financial responsibility requirements are intended to be separate and distinct from other federal closure and reclamation bonding requirements imposed under other statutes.
Hard rock mine operators may not be the only group concerned about the new regulations, states and local governments may also be impacted. Under section 114(d) of CERCLA, an operator who establishes evidence of financial responsibility in accordance with section 108(b) is not required under any state or local law “to establish or maintain any other evidence of financial responsibility in connection with liability for the release of a hazardous substance from such vessel or facility.”
To avoid this potentially heavy-handed blow to state and local governments, the EPA claims that state financial responsibility requirements are designed to assure compliance with state regulatory programs, and thus are not contemplated “in connection with liability for the release of a hazardous substance” under Section 114(d). However, this distinction seems labored at best.
The EPA plans to hold a webinar on September 29, 2015 at 2:00 pm EDT to provide stakeholders with further information on the proposed regulations.
