When E1527 was revised in 2000, a new term was added- Historic Recognized Environmental Condition or HREC. The current definition which appears at 3.2.39 is as follows:
" 3.2.39 historical recognized environmental condition— an environmental condition which in the past would have been considered a recognized environmental condition, but which may or may not be considered a recognized environmental condition currently. The final decision rests with the environmental professional and will be influenced by the current impact of the historical recognized environmental condition on the property. If a past release of any hazardous substances or petroleum products has occurred in connection with the property and has been remediated, with such remediation accepted by the responsible regulatory agency (for example, as evidenced by the issuance of a no further action letter or equivalent), this condition shall be considered an historical recognized environmental condition and included in the findings section of the Phase I Environmental Site Assessment report. The environmental professional shall provide an opinion of the current impact on the property of this historical recognized environmental condition in the opinion section of the report. If this historical recognized environmental condition is determined to be a recognized environmental condition at the time the Phase I Environmental Site Assessment is conducted, the condition shall be identified as such and listed in the conclusions section of the report."
This term was meant to apply to releases that had been remediated in the past so that no further work had to be done. The thinking that identifying this prior release as a REC would not only correctly reflect the current conditions of the property but could also unduly complicate transactions.
The HREC term is a potentially valuable tool, especially in this era of risk-based cleanups where engineering/institutional controls are being used in a majority of remedies and need to be maintained to ensure that a cleanup remains protective of human health. Despite the importance and value of this tool, the EP community has used a variety of approaches when dealing with remediated releases. Some have identified the former release as an HREC, some continue to identify it has a REC with an explanation why it does not pose a risk to the site (sort of like pleading guilty with an explanation) and others do not identify the former releases as a REC and explain in the findings section why the former release is not a REC.
This disparate approach is partially due to the fact there is a lot of confusion with the EP community precise circumstances of when a former release can be an HREC. As a result, the ASTM E50 committee has appointed a task group to look at this issue as part of the five year review of ASTM E1527.
There was considerable discussion and heavy email traffic on the HREC issue on exactly what was an HREC and how much work an EP should do to be able to conclude that a former release was an HREC. It also appears that there has been considerable variation in the level of review or effort performed by consultants in determining if a previously remediated release should be an HREC. Some suggested that this was a difficult task to price and preferred that the HREC term be either deleted from E1527 or made a follow-up issue. Others suggested that an HREC was not really part of AAI since it was more about exercising the post-acquisition “continuing obligations/appropriate care” responsibilities that are necessary for maintaining CERCLA liability defenses. There has also been uncertainty about how to deal with “self-directed cleanups” or those done by landowners without any oversight by regulatory agencies.
Regarding the role of HRECs and AAI, I have pointed out that courts have overwhelmingly held that parties that do not identify releases during their due diligence have not performed an “appropriate inquiry” that satisfies the CERCLA landowner protections. Certainly, a landowner who thought a release was remediated only to discover after closing that more work needs to be done would be in the same shoe.
Moreover, EPA referenced historical cleanups in its preambles to the AAI regulation. In the preamble to the final rule, EPA said that the PRIMARY objectives of AAI included " current and past corrective actions and response actions undertaken to address past and ongoing releases of hazardous substances". In the preamble to the proposed rule, EPA said the scope of the inquiries was to "identify releases and threatened releases of hazardous substances which cause or threaten to cause the incurrance of response costs"
The task force has seemed to coalesce on a revised definition of an HREC that will identify minimum steps that an EP must follow to identify a remediated release as an HREC. The level of effort will depend on whether the cleanup was done under regulatory oversight or if the cleanup was self-directed.
For cleanups that resulted in formal closure/NFA letter from a regulatory agency, the EP would need to verify that the property remains in compliance with any engineering or institutional controls (AULs in ASTM terminology). If the EP is aware that the user intends to use the property for a different purpose (e.g., a brownfields redevelopment project where a former industrial site is being redeveloped into mixed use or residential), and where there is likely to be the need to conduct additional investigation or remediation, that HREC now becomes a REC.
For self-directed cleanups, the EP would have review the date/information to verify that the concentrations in the soil and groundwater that were used to establish that the self-directed cleanup was consistent with the applicable standards were in fact correct (e.g., if the maximum allowable concentration for the contaminant of concern in gw was 5 ppb, then the EP would verify that the reported concentrations were in fact below that maximum allowable concentration). Many self-directed cleanups are nothing more than removing visibly contaminated soils and then paving the site to build a big box. If the EP is not provided with sufficient data to verify that the work was done in accordance with applicable requirements, then the prior work would not qualify as an HREC.
Under AAI, the EP has to identify AULs in effect for the property. For a cleanup with AULs to be considered an HREC, it would seem that the EP would need to confirm that any institutional control required by the NFA determination to be recorded was in fact filed (e.g., property only to be used for commercial purposes or no use of gw). If an engineered cap was required to be maintained, then the EP would verify that the cap was in fact being maintained. If an active venting system was supposed to have been installed, the EP would verify that it was in fact installed and operating.
As many EPs no doubt suspect, most users/clients only look at the executive summary or conclusions of the phase 1 report mainly because they do not understand environmental issues. The HREC term can actually help protect EPs by drawing attention to the former release. Without that term, the EP would have to identify a remediate release as a REC thereby creating potential stigma to the property and unnecessarily upsetting a client. If the EP decided not to identify the REC because it was remediated and it turns out that there is a reopener triggered, then the EP could find itself subject to malpractice or breach of contract claim for failing to flag the condition. The HREC is helpful for both the user and the EP.
Finally, the HREC designation helps a client support the liability defenses under CERCLA since the user can now know how to use due care to be able to maintain a third party defense or appropriate care to maintain of the other landowner liability protections. The HREC term enables skilled EPs to provide value to their client. By requiring EPs to seek this specific information as part of the HREC determination, this will help those EPs who are being thorough and thereby perhaps have to charge more to do a diligent job. The extra work associated with this task will also have the benefit of weeding out the rogue elements in this industry who want to charge $700 for phase 1 reports and not have to exercise any professional judgment.
What do you think?
No comments:
Post a Comment