EPA’s New Kafkaesque Self-Disclosure Website

doorchainYou want to file something with the EPA. But in order to file it, you must first be registered with the EPA.  Can’t figure out how to get registered? No problem, enter your user name and password on the form and you will be allowed to see the instructions! What? You don’t have a user name and password already because you are not registered yet? Welcome to the EPA’s new CDX Self-Disclosure Policy website.

Many companies have utilized the EPA’s self-disclosure policy. This policy encourages companies to voluntarily self-disclose violations that they find during audits and under certain other circumstances. The system has worked for many years. However, on December 9, 2015, the EPA scrapped the old program and replaced it with a centralized web-based “eDisclosure” portal to “automatically process self-disclosed civil violations of environmental law.”  If attorneys and compliance professionals are not aware of this change and mail in their usual disclosure then they run a risk of missing the short 21-day disclosure deadline and being subject to the full weight of EPA’s penalty fury.

The barriers erected by the EPA to make it as difficult as possible to actually file a self-disclosure are immense.  Here are some steps that the EPA has taken:

  1. Require everyone to register through the EPA’s CDX Central Data Exchange. This is a classic federal system with the usual security protocols that make it take 10 times longer to do anything — great if you are getting paid by the government, but terrible if you are billing your poor client by the hour.
  2. Hide all registration question FAQs so that only those people who have already registered can see the FAQs. That is right. You need to already be registered before you can find the directions on how to get registered. Don’t have a user name and password in the system? Call the help line during regular office hours and have the contractor send you the information. The EPA did call me and tell me that a separate website does have training and background information. http://www.epa.gov/compliance/epas-edisclosure
  3. Require a user name in order to begin the registration. It turns out that you can pick any name you want, though “EPASucks” was already taken. My compliant is that the website does not tell you that you can pick your own name. I had to lose almost one day waiting for the help desk to call me back with the answer to that question.
  4. Require that your identity be verified by Lexis/Nexis. I flunked this test on the first try, so I started all over again and for some reason was verified. If you cannot be verified, then you have to fill out a form where you promise the EPA that you are who you say you are and then mail it in. If that is your situation, note that you can continue with the self-disclosure process. You will have to keep in mind that you need to get your identify verified before the next deadline, which is compliance.
  5. Have the shortest inactivity time out clock I’ve ever seen (five minutes). Here I am, trying to fill out a long complicated form, and everytime I went back to the form to click another box I found that the timer had expired and all of my previous work was gone! That is extremely frustrating. I’m sure that this is a feature of the CDX system that EPA won’t change. But I should not have to click on the site every five minutes in order to keep it active.
  6. There is no way to add any information regarding the alleged violation when you first file. Only after you file your disclosure are you allowed to provide some information regarding the circumstances.
  7. There is no way to upload any documents when you first file the disclosure.  Their website says you can, but the option did not appear until after the disclosure is made.

doorchain

James Pray

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EPA releases video of the Animas River Disaster.

00969979An interesting video montage of the Animas River disaster. The first half is the EPA’s explanation of how they created this problem. The second half is the actual creation of the disaster filmed while it happened.

EPA’s data dump of videos:

http://www2.epa.gov/goldkingmine/gold-king-mine-videos

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The EPA’s Epic Animas River Spill

00957918The August 5, 2015 Gold King Mine spill by the EPA created what has to be some of the most epic visuals in environmental history. That this spill was done by the EPA (or its contractor) is probably beyond belief by most citizens. After all, the EPA is supposed to clean things up, not make them worse. But beyond the cause of the accidental spill, the EPA’s lack of clarity in its disclosure to the public is also beyond belief. You can scour the EPA’s website on this disaster, and there is no yellow water to be seen. Just crystal clear mountain water. Of course, that water was anything but crystal clear when it charged down the hill and into the Animas river. Test results by the EPA disclose toxic levels of copper, arsenic, and antimony, to name but a few of the compounds. What is also interesting is that if you go to the EPA’s page with a summary of test results, they omit arsenic and antimony from their charts.  I understand that the EPA’s goal in the document linked below is not to disclose the actual threat posed by the contaminates but to explain that the levels have returned to their previous levels before the “blowout.”

Example of EPA test results.

The frequently asked questions page posted by the EPA downplays any real effect on the river or aquatic life.  Of course, if this yellow water was safe, then why was the EPA poking around the mine to begin with?

There are two additional issues that the EPA needs to address. First, there is the claim that the EPA waited a whole day before notifying downstream residents that the water was contaminated. If true, that is unforgivable.

Second, there is the question of financial responsibility. It is unlikely that the contractor that is reported as having actually caused the spill (Environmental Restoration, L.L.C. by some accounts) has enough insurance coverage to cover this claim. Some reports, probably sensationalist,  peg the cleanup in the billions.  I have information to lead me to believe that the contractor has at most $7M in total coverage. That may seem like a lot, but when the EPA conducts a removal action, its costs are usually astronomical, and several times higher than what a typical contractor would charge. I know that if one of my clients caused a spill of this magnitude the Justice Department would be all over this with indictments and subpoenas. Unless the individual states take action, I doubt that we will see the same level of concern or urgency by the Federal government that I see displayed when my own clients re accused of violating a law or permit. Who is to blame here? I have personally watched the EPA work with this particular contractor on a cleanup and I can assure you that Environmental Restoration L.L.C. does not do anything that the EPA project manager does not tell them to do.

 

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Supreme Court puts the brakes on the EPA’s Power Plant MACT rule in Michigan v. EPA

epalogo (00822922x9F897)The Clean Air Act that we know today was passed in 1970 during the Nixon administration. Since that time, the EPA has been hard at work passing regulations aimed at cleaning the nation’s air. Its efforts have been extremely successful. I recall living in the D.C. area in the early 1970s before most of those regulations really took effect and the air was so polluted that on some days you could see the smog just looking across the street. I can’t describe what it was like as a kid in a car while going through Newark in the 60s on the elevated turnpike and going straight through huge clouds of sulfur dioxide and other hazardous air pollutants being belched by smokestacks next to the turnpike.  I doubt that kids growing up today have any understanding how clean the air is now.

One problem, however, is that the Clean Air Act really does not have any brakes. The EPA continues to look for any potential effect on human health and passes regulations requiring that the emissions be eliminated, in some cases, even though the cost far outweighs the benefits. Today the United States Supreme Court dealt a rather stunning blow to the EPA’s rulemaking authority in its June 29, 2014 decision in Michigan v. EPA. At issue was whether the EPA had to consider the economic impact of its hazardous air pollutants (“HAP”) emission standard for mercury emitted by electric power plants. The EPA regulates HAPs for stationary sources. A source that emits more than 10 tons of a single HAP or 25 tons of HAPs in combination is a major source. Power plants are also required to meet additional requirements. One of those requirements directed the EPA to perform a study of the hazards to the public health reasonably anticipated to occur as a result of power plant emissions of HAPs. The rule at 42 USC § 7412(n)(1)(A) also provides that if the EPA finds that regulation is “appropriate and necessary” after considering the results of the study then it shall regulate the power plants.

Justice Scalia focused on the “appropriate and necessary” language and held that this means that the EPA must consider the economic impact before imposing certain new emission standards on power plants.  The EPA’s own regulatory impact analysis estimated that the cost of the new standard would be about $9.6 billion per year. I know that this is a laughably ridiculous underestimation of the actual economic costs. Even so, the benefit was estimated by the EPA to be no more than $6 million per year. Again, this is probably a gross overestimate by the EPA. Justice Scalia noted that using these figures the costs exceeded the benefits by at least 1,600 times.

A majority of the court agreed with Justice Scalia’s conclusion that the EPA is directed to engage in some sort of economic analysis before imposing the new standard on power plants.

What is the importance of the case? First, it may have application to other areas of air pollution regulation outside of HAPs for power plants. The majority opinion’s broad conclusion that the “appropriate and necessary” language sends a clear signal that attorneys should consider the fact that the Supreme Court is willing to read into the Clean Air Act requirements that the EPA act reasonably.  Second, the decision was reached after the EPA published the rule in 2012 after notice and comment. Challenging an EPA rule is a complicated process that actually starts at the Circuit Court level. It can be difficult to raise a challenge after the appeal period has expired.  In other words, this law may have more prospective effect on the EPA than retroactive effect. Third, it may be too late. Utilities have already shuttered plants based, in part, on the difficulty in retrofitting those plants with the necessary emission controls for mercury.

Copy of Supreme Court decision: HERE

James L. Pray

SupremeCourt (00924595x9F897)

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Wikileaks: Environmental Implications of the TPP

Despite the Administration’s best efforts to keep the details of the Trans-Pacific Partnership secret, Wikileaks obtained and published several sections of the document several months ago. Because it now appears that the TPP will likely get passed into law, it is worth speculating about its potential implications in the field of environmental law.

In its press release trumpeting the release of a copy of the Investment section of the TPP, Wikileaks focuses on  what it calls “an unaccountable supranational court for multinationals to sue states.”  By signing the deal, the U.S. would agree to submit itself to the jurisdiction of this tribunal. Interestingly, Australia is listed in a footnote to the section as refusing to submit to the jurisdiction of the tribunal. Wikileaks goes on to report that this tribunal, which is called an “investor-state dispute settlement (ISDS) tribunal” overrides national court systems and that the ISDS tribunals introduce a mechanism by which a multinational corporation can force governments to pay those corporations. Australia lost a case filed against it by Philip Morris for tobacco packaging laws, which is one reason Australia may be bowing out of this section.

I reviewed the provisions and it does appear that the language says what Wikileaks says it says, though without the spin. There is a new tribunal that is set up. The legal process, though ponderous, is remarkably free of any reference to either the common or civil law. The arbitrators appear to be free to examine the dispute on their own terms, unhindered by precedent.

For lawyers (and especially environmental lawyers), passage of this section of TPP by the United States would certainly be interesting. Keep in mind that multinational corporations are not necessarily “American” and with the flight of companies to Ireland and other countries many are no longer as “American” as we may assume. Instead, any regulations that affected Sinopec, China Mobile, Roche, and other companies you may never heard of could seek compensation and other relief from the U.S.

Note that this leaked version may not bear any similarity to the version currently being considered.

You can download a copy here: Wikileaks Draft of TPP Investment Chapter

James Pray

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Shipping chemical samples or small quantities? OSHA has a special plan for you.

BRAINLESSHere is a really dumb rule. OSHA has a rule at 29 CFR § 1910.1200 that requires that all containers of hazardous chemicals comply with the “United Nations Globally Harmonized System of Classification and Labeling of Chemicals, Revision 3”, if that container will be in a workplace.  This OSHA rule is still being rolled out, but as of June 1, 2015 all chemical manufacturers, importers, distributors are subject to the rule except that distributors may follow the previous system until December of 2015. After June 1, 2016 all employers will be subject to all aspects of the rule. Training was supposed to be undertaken by December 1, 2013. If the MSDS sheets need to be included, the new labels can run many, many pages of fine print. The new rule is estimated by OSHA to cost $201 million every year. That means that after ten years industry, will pour 2 billion dollars into affixing gigantic labels on bottles and containers.  OSHA claims that 40 plus lives will be saved per year because we all know that booklets written in 8 point type are compelling reading by workers and they will actually read and understand warnings such as:

It is also interesting that the warning level system has been reversed. So a 1 is now bad where as before it was good. Silly me for thinking that this single change will probably kill more workers than the rule is designed to save. And why do that? Because that is how they do it in Italy and Slovenia. This reminds me of a client of mine that was bought be a Japanese conglomerate. One of the first things that they wanted the plant to do was to change all of the red warning buttons to green. All because that is how they do it in Japan. Sure, reverse a lifetime of warning labels so that it we match the United Nations standard — because we send our workers to work all over the world.

ampoule

But the most perplexing aspect of this new regulation is the inflexibility of OSHA when asked if it is really necessary to attach giant labels to chemical ampules the size of a thimble. In a letter dated June 4, 2013, OSHA responded to a letter from the National Institute of Standards and Technology that had asked if an exception could be made for the labeling requirements for the tiny vials or ampoules that the Institute sends to labs as standard reference materials. OSHA responded by stating that: “Ampoules/bottles of the hazardous chemical must be labeled with the hazard information required by HCS 2012.” As a “practical accommodation,” OSHA offered to allow a smaller label with only five sets of statements and pictograms, as long as the ampoules were placed into a larger container that contained the entire warning, including a warning that the “small container must be stored in the outer container bearing the complete label.” Practically, this means that a tiny ampoule holding not much more liquid than the tears running from a crying politician’s cheek must be placed into yet another container with strict instructions that the small container never be removed from the larger container.

Here is the link to the crazy

letter: OSHA Standard Interpretation 1910.1200

This is absolutely insane. And this was one federal government agency providing direction to another federal agency.

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The FCC tolls the death knell for the Internet as we know it – February 26, 2015

On February 26, 2015 the FCC voted to approve the Report and Order on Remand, Declaratory Ruling, and Order (FCC 15-24), also known as the “Open Internet Order.” The Order reclassifies the “internet” as a “telecommunications service and allows the FCC to impose strict regulations on Internet Service Providers (ISPs). What is interesting is that there are no rules that have been made public. The rules will follow later. The internet is rife with summaries of what the Order will accomplish, so I won’t use this post to go into those details. What I will do is to explain why I believe that this Order tolls the death knell for the internet as we know it.

When I first started practicing law three decades ago, I handled the disposition of assets for two bankrupt railroads, the Rock Island and the Chicago Milwaukee and Pacific. I also handled regulatory work for a third railroad that managed to avoid bankruptcy, the Chicago and Northwestern (later swallowed up by the Union Pacific). I learned a lot about railroads and I learned a lot about federal regulations. Here is some of what I learned. The railroads had a good thing going in the 1800s and early 1900s but destroyed it through monopolistic practices, suppression of innovation, terrible customer relations, price gouging and lowered levels of service. As a result of the public outcry about the railroads, the Interstate Commerce Commission and every state adopted draconian regulations to protect the public and shippers, to keep prices low, and to increase competition. The result was exactly opposite of what was intended.

Because railroads were now fully regulated, they could not do anything unless they plodded through years and sometimes decades of litigation. Investment dried up, tracks began to fall apart, and railroads found themselves totally unable to compete with the new trucking industry. The trucking industry had the competitive advantage of not having to pay for the billions of dollars that the US Government spent on the brand new interstate highway system outside of a modest fuel tax.

Between the death grip of burdensome regulation and heavily subsidized trucking, the railroads had no chance. One after another huge operations went into bankruptcy. As a result, Congress was forced to pass the Railroad Revitalization and Regulatory Reform Act of 1976. However, it was too little too late. The Staggers Rail Act of 1980 was another effort to save the dying industry but by then most of the major railroads were bankrupt. Finally, in 1995 Congress abolished the ICC altogether. Out of those ashes rose a revitalized railroad mostly free of government regulation.

So why do I talk about railroads when talking about the internet? Let me swap out the railroad terms for the situation that we find ourselves in now.

The major ISPs (telecom and cable companies) had a good thing going in the 1990s and early 2000s but destroyed it through monopolistic practices, suppression of innovation, terrible customer relations, price gouging and lowered levels of service. As a result of the unprecedented public outcry, primarily about mindbogglingly hateful anti-customer behavior, the Federal Communication Commission adopted draconian regulations to protect the public, to keep prices low, and to increase competition. The result was exactly opposite of what was intended.

Because the ISPs were now fully regulated, they could not do anything unless they plodded through years and sometimes decades of litigation. Investment dried up, switching facilities and fiber optic lines began to fall apart, and the IPSs found themselves totally unable to respond to new forms of communication. One by one they filed for bankruptcy, leaving consumers with no choice, high prices, and slow connections.

Do I blame the FCC for taking the action it did? Not really. I blame the ISPs for treating their customers so poorly that the American public demanded action. However, increased regulation is rarely a recipe for innovation or economic progress. One exception is breaking up natural monopolies that only work to stifle progress and competition. The one partial success story I can think of was the breakup of Bell Telephone in 1982. Had that hide-bound monopoly not been broken up we would still be using rotary phones to communicate. This is why I believe that parts of the FCC’s Order are misplaced. While it is good to prevent government from protecting monopolies and to encourage competition, it is usually the death of innovation to regulate prices and services. As they say, be careful what you ask for as we may actually get exactly what are demanding — the internet of 2008 — frozen in place for the next twenty years.

James Pray

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