Iowa DNR Antidegradation Policy – IDNR Accepting Comments on Draft Policy

The Iowa Department of Natural Resources (IDNR) is proposing changes to its “Antidegradation Policy”. The changes can impact any wastewater discharger in Iowa, but especially new permittees or existing permittees that may wish to increase their discharge in the future. The changes being proposed include:

• Incorporate by reference the document entitled “Iowa Antidegradation Implementation
  Procedure,” which proposes an approach to assessing and minimizing degradation of Iowa’s surface waters,
• Update antidegradation policy language with four tier approach,
• Remove High Quality (Class HQ) and High Quality Resource (Class HQR) designated uses and add several waters to the newly proposed Outstanding Iowa Water (OIW) category.
  

The purpose of the antidegradation policy is to set minimum requirements to conserve, maintain, and protect existing uses and water quality for water bodies that currently meet their water quality standards. The department is required by Clean Water Act to develop and adopt a statewide antidegradation policy and to identify procedures for implementing the policy. Comments on the draft policy are being accepted through January 29, 2009.

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Auxiliary Facilities – TRI Reporting Requirements Under New NAICS System

In 2007, EPA issued a final rule requiring that facilities reporting under Section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA), commonly called the toxics release inventory (TRI), identify the nature of their business by using North American Industry Classification System (NAICS) codes. Beginning with reports submitted 2007, NAICS codes replaced Standard Industrial Classification (SIC) codes that have been in use since TRI was initiated in 1987.

Both the SIC and NAICS systems were developed to organize and track information the US economy. The basic difference in approach to the two systems is that the SIC system classifies establishments based on their economic output (i.e, what they produce or provide), and the NAICS classifies establishments according to the processes used to produce goods and services (i.e., what they do). With one exception, the switch to NAICS did not affect facilities already required to report under TRI. No industry groups were added to or deleted from the list as a result of the change.

The exception involves businesses classified as "auxiliary facilities" which, under SIC, are those facilities that provide support functions for a manufacturing activity. For example, a distribution center operated by a paper products manufacturer was assigned the same SIC code as the manufacturing operation it supported. Under NAICS, the same distribution center would be assigned a code reflecting the warehousing and logistics operations.

Auxiliary facilities traditionally reported to TRI using the SIC code of the establishment they supported. NAICS did not adopt the SIC concept of auxiliary establishments. Under NAICS, these facilities now report their TRI according to their own activities.

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Mercury Source Reduction Sectors - Draft GLRC Priority Sectors

In 2008, the Great Lakes Regional Collaboration (GLRC) Executive Committee directed that a Great Lakes Mercury Emission Reduction Strategy be developed with a goal of producing institutionalized activities to sustain mercury emission reductions from unregulated sources, and regulated sources with potential for additional reduction. The strategy would produce recommendations or options for state action. A workgroup was formed in April 2008 to develop the Strategy.

In November 2008, the work group released several draft documents which will be part of the overall Draft Mercury Emission Reduction Strategy Report. These documents have been made available for public comment until December 17, 2008.

A key document out for review is the draft listing of priority source sectors to be addressed. These sectors were selected based on a set of criteria (which are also being published for public comment) and using existing information of mercury sources. The priority source sectors are:

• Utility boilers
• Metals production
• Waste incineration
• Cement production
• Non-utility fuel combustion
• Mercury cell chlor-alkali plants
• Mercury emission related to product use and disposal
  

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Proposed Revision to South Dakota (DENR) Water Quality Standards

The South Dakota Department of Environment & Natural Resources (DENR) has proposed revisions to the State water quality standards.

Link to proposed SDDENR water standards

Many of the revisions being propsed relate to the application of dissolved oxygen (DO) standards to lakes and rivers.

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Audit Policy - EPA Policy Changes Regarding New Owners

Since 2000, US EPA has offered reduced enforcement for self-disclosure of environmental compliance violations. EPA’s policy document, “Incentives for Self-Policing: Discovery, Disclosure, Correction, and Prevention of Violations” is commonly known as the “Audit Policy”. On August 1, 2008, the EPA published an interim approach to applying the Audit Policy to new owners that allows new owners to make a fresh start with the EPA.

With the interim approach, the EPA recognizes that a new owner should not be penalized for the economic benefit component relating to violations that arose before a facility was under its control, as long as the new owner is willing to correct issues promptly and institute preventive measures.

Some key elements of the interim approach include:

• Defining a “new owner” to ensure that the violations disclosed originated with the prior owner, and that the new owner was not responsible for the non-compliance disclosed;
• Extending the time for reporting for up to nine months after closing the transaction;
• Relief from the economic benefit component of the penalty for new owners; and
• Applying five of the nine qualifying conditions differently to the new owner.
  

One of the important aspects of this policy is that non-compliance at the Seller’s facility can be reported to regulatory agencies before or soon after property transfer. In making the disclosure, the new owner can make the previous owner responsible for penalties, etc., especially associated with economic benefit component, related to the non-compliance.

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Demolition Wastes - Proposed MPCA Rule

The Minnesota Pollution Control Agency (MPCA) has published draft rules relating to assessment and removal of certain items and materials prior to the renovation and/or demolition of structures.

For the purposes of the draft rule, renovation/demolition is defined as “physical alteration of the interior or exterior of a structure for the purpose of renovating or removing the structure, and includes alteration or removal of walls, ceilings, floors, or roofs or associated structural components”. Structures subject to the draft rule include residential, recreational, governmental, agricultural, commercial, or industrial and other buildings.


The draft rule lists specific items and materials that must be characterized, tested, managed, and disposed of, reused or recycled before renovation and demolition:

• items that would normally be disposed of as mixed municipal solid waste ;
• household hazardous waste;
• industrial solid waste or hazardous waste;
• waste tires;
• major appliances;
• items that may contain elemental mercury;
• items that may contain PCBs;
• items that may contain CFCs;
• oils;
• lead-containing items;
• electronic products containing a cathode ray tube;
• electronic products containing a circuit board;
• asbestos;
• material trapped in sumps and traps;
• radioactive waste; and
• other materials or items that are prohibited at the demolition waste facility.
  

Some exemptions are included in the draft rule, such as when the structure is unsafe to enter as determined by a local government authority.

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Environmental Compliance Audits - Role in Environmental Due Diligence

"Should I include a compliance audit as part of my environmental due diligence?”
This question arises frequently during environmental due diligence for mergers and acquisitions. The answer is actually relevant to many types of transactions, whether a business is being acquired, or if “assets only” are being purchased.

Compliance with applicable regulations can have a significant financial impact on a business transaction; however, separating and focusing on key issues will reduce the level of effort required and eliminate spending time and resources collecting information that has very little impact on the transaction.

Many of the “best-in-class” companies conduct routine environmental compliance audits of their operations. The important point is that even the best run companies will find compliance issues at their facilities and will routinely be in corrective action to improve their operations and address any deficiencies. Often, these non-compliance issues are administrative, such as maintaining required documentation, or training-related. Once the deficiency is identified, it can be quickly remedied at little or no cost.

While considering using a formal Environmental Compliance Audit during due diligence, it should acknowledged that most audits will identify some areas of improvement within the organization. Given this, careful consideration should be given to how this information will be used in the due diligence effort. Given the time frame typically allowed for due diligence, it is often difficult to conduct a formal compliance audit. Beyond the time constraints, confidentially concerns may limit access to facility staff who would typically be an integral part of the audit process. And in the end, the the most important consideration will be whether or not the information gathered will be useful to business decisions regarding the transaction.

In many cases, a COMPLIANCE ASSESSMENT is more useful that a COMPLIANCE AUDIT. For more information:

Article comparing Environmental Compliance Assessments to Compliance Audits

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