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Good Neighbor Agreements: a tool for environmental and social justice.

Introduction

A community is - within limits - the master of its own environment and economy (Schad v. Borough of Mount Ephraim, 101 S.Ct. 2176 [1981]). Today, however, communities face a dilemma: all too frequently, the drive for economic welfare sacrifices public health and damages the environment. As the health and environmental hazards of industrial production become publicized and as downsizing and layoffs have escalated out of control in the U.S., communities have come to be more aware of the negative role corporations may play in undermining community welfare. Because there is little real corporate accountability for decisions that affect local communities, citizens groups throughout the U.S. have organized to combat some of the detrimental effects of exploitative industrial practices. The demands of these groups vary from place to place; in some instances, the emphasis is on environmental concerns, while in others it is on jobs and economy-related concerns. In a few communities, both types of concerns have emerged, in tandem.

Communities have applied both legal and nonlegal tactics to increase industrial accountability. Some of the legal approaches that have been effective in increasing community control over its health and environment include zoning, permits, and NGO-company contracts. A separate economic accountability movement has attempted to build accountability for promises of jobs by placing new conditions on corporate subsidy agreements.

These accountability strategies are increasingly coming together in the form of citizen groups' efforts to build NGO-company contracts into their community empowerment strategy. These "Good Neighbor Agreements" evolved originally as a nonlegal tool for developing a partnership between companies and communities as a response to this community welfare dilemma.(1)

The purpose of this article is to explore the value of Good Neighbor Agreements. The first part will briefly describe the political context in which Good Neighbor Agreements emerged as a tool for community empowerment. Next, it zeros in on the different types of Good Neighbor Agreements, distinguishing them by the legal and nonlegal enforcement mechanisms. That section discusses alternative dispute resolution and good faith clauses, which serve as legal handles to many of these contracts. A brief discussion of the relationship between Good Neighbor Agreements and public policy in contract law concludes the section on enforceability. Section three identifies ways to augment the effectiveness of Good Neighbor Agreements and increase their acceptability and use by communities and corporations.

Sketching Community Empowerment in the 1990s

It is no longer a secret that economic development in the United States has generated as a by-product an enormous amount of pollution and hazardous waste. In 1986, according to Environmental Protection Agency's Toxic Release Inventory, the waste created by the chemical industry's top 50 products amounted to 539 billion pounds of toxins and hazardous substances discharged into the environment (Commoner, 1992: 89). In the last decade, global conferences have formally recognized industry's detrimental effect on the environment and called upon each country to preserve the environmental integrity of the future while raising current living standards (Rio Earth Summit, Agenda 21, 1992). Meanwhile, the public is increasingly aware of the effects of industrial production on the environment and the public welfare. Despite corporate public relations efforts, polls show that a large number of people in the United States are growing increasingly distrustful of anything corporations say (Meeker-Lowry, 1995: 76).

The U.S. government has made attempts at responding to the crisis, but has been generally unable to address the environmental and health hazards endured by local communities at the hands of corporations. Over the last quarter of a century, Congress has passed scores of statutes piecemeal in reaction to highly publicized crises (e.g., Love Canal, Bhopal, the Exxon Valdez oil spill). However, regard for how each specific emergency response could be melded into a coherent environmental management system has been insufficient (Futrell, 1994a: 17). Starting in the 1970s, a series of legislative initiatives regulated, controlled, and monitored toxins, pollution, worker safety, and the like (Hawken, 1993: 108). Some observers have suggested that this "piecemealism" has resulted in a checkerboard of conflicting, confused over-regulation for some activities and gaps where major environmental insults go unchecked by law (Futrell, 1994a: 17). For instance, different standards for the same hazardous chemicals are promulgated by the EPA and the Occupational Safety and Health Administration (Ibid.).

Inefficient though they may be, these regulations have been viewed by polluters as government mechanisms for stifling their profitability. As a result, corporations have not sat idly by watching these dramatic challenges to their power go unchecked (Hawken, 1993: 108). With the growth of environmentalism, industry's political action committees launched corresponding lobbying efforts. The corporate lobbies have wielded influence by aggressive campaign donations in support of politicians who support their positions. Lobbying also takes other forms of influence-building. For instance, from 1989 to 1990, U.S. House members took nearly 4,000 privately funded trips, often to resorts and vacation spots (Levine, 1992: D3). Two-thirds of these were paid for by corporations and trade groups (Ibid.). During 1995, it appeared to many that Congress had begun to undertake a task of entirely neutralizing environmental regulations. The House of Representatives approved an appropriations package for the EPA and other federal agencies that prevents the enforcement of many sections of the Federal Water Pollution Control Act and the Clean Air Act, and weakens enforcement of other environmental regulations (Citizens Clearinghouse for Hazardous Waste, 1995: 7). However, public sentiment in the U.S. remains solidly in favor of continued protection of the environment; as a result, some of the worst provisions proposed during 1995 were buffered by Senate responses and a presidential veto. Besides exerting their political muscle on government, many corporations have responded to communities' expressions of their environmental concerns by "greening" public relations. Some companies have established public panels to address environmental or safety concerns and advanced these as a model for involvement of the public or the work force in key environmental decisions (Lewis, 1992: 2-56). The Chemical Manufacturers Association's "Responsible Care" program is the leading driver of this activity (Ibid.: 2-57). CMA launched "Responsible Care" in response to the deepening crisis of public confidence, as well as to the slumping self-images and morale of many personnel in the industry itself after Bhopal. Under this program, CMA encourages member companies to establish community advisory panels (Ibid.). However, most of the panels' members are hand-picked by the corporation or its consultants, agendas are often set by the company, and critics are kept out or outnumbered 10 or more to one (Ibid.: 2-58). The panels also generally are not provided with the independent technical support needed to evaluate corporate performance. Thus, the role of these panels in serving as an accountability mechanism has been less than one might expect. Some examples indicate that corporate America has responded to the dilemma with some substantive changes, especially reduced pollutant emissions at many plants; however, industry's "self-policing" is insufficient (Hawken, 1993: 108).

The development of "socially responsible investing" demonstrates the inherent challenge of self-policing. In their "double bottom-line" approach, for instance, Calvert Social Investment Fund demonstrates the tenuous balance between the twin goals of profit and social responsibility. In this approach, the fund measures returns in traditional financial analysis first (Calvert Group, 1995: v). Then, if the company is determined to be of interest financially, it is evaluated for its social and environmental policies and actions (Ibid.). Primacy of the profit motive virtually precludes adequately prioritizing community health and welfare. This approach is probably leading to increased investment in the "most green of the dirtiest" industries in America, such as Sun Oil and General Motors. These two companies, both notorious polluters, have endorsed a "green pledge" known as the CERES Principles, which has been endorsed by social investors. Yet the two companies and many other CERES endorsers continue to engage in demonstrably destructive environmental operations that contradict the high-sounding language of the code. In short, despite the "green" trend in the United States, government and corporate response to community environmental concerns remains limited and does not coincide with individual community needs for sustainable development.

Rather than relying on top-down government control to address specific needs, communities themselves are learning how to supplement the need for direct government or corporate assistance in addressing community development. The emerging environmental justice movement, for instance, has engendered a shift in local leadership as women, people of color, and indigenous people play a more active role in their communities (Collin and Collin, 1994:1173). This movement has continued to expand as race has been shown to be the best predictor for the location of a hazardous or toxic waste site - better than income, topography, or hydrology (Ibid.: 1175).

In addition, communities now have a little more information for attending to local business issues because of the federal Community Right-to-Know and the 1990 Toxic Pollution Prevention Act (Sobol, 1991). The Right-To-Know law requires manufacturers to report their emissions to air, land, and water of over 300 toxic chemicals (Emergency Planning and Community Right-to-Know Act, 42 U.S.C. ss. 11001-11050 [1988 and Supp. V 1993]). The Toxic Pollution Prevention Act requires that any facility that is required to report data must also report on its toxic pollution prevention (Pollution Prevention Act, 42 U.S.C.A. ss. 13101 to 13109). The growth in available information has provided a powerful tool for exposing the truth of environmental degradation. For example, information has exposed environmental racism.

Thus far, tools that have been useful in increasing community empowerment have included both legal and nonlegal approaches. Information dissemination and boycotts are examples of nonlegal tools that have been used quite effectively to encourage company accountability (Meeker-Lowry, 1995: 98). A community may also resort to several forms of legal recourse. Zoning, for instance, has enabled communities in the U.S. to control industrial development within their locales (Village of Euclid v. Ambler Realty Co., 272 U.S. 365 [1926]). Under nuisance law, a party may sue for harm caused by another's polluting activity, and a court may require a cessation altogether of the operation (Boomer v. Atlantic Cement Co., 362 N.E.2d 968 [1977]). Citizen suit provisions in various environmental statutes have also provided a vehicle for citizens to force federal agencies to comply with federal pollution standards (Percival et al., 1992: 995). However, the Clean Water Act and the Emergency Planning and Community Right-to-Know Act have been found not to authorize citizen enforcement suits for past violations that have been cured by the date the suit is filed (Atlantic States Legal Foundation, Inc. v. United Musical Instruments, 61 F.3d 473 [1995]). This restrictive precedent would constrain the future use of citizen suit provisions if it is followed in other courts.

Contract law provides a possible tool for problem solving and legal recourse for community groups. The law provides a remedy for the breach of a contract, or set of promises, the performance of which the law may recognize as a duty (Pollution Prevention Act, Restatement [Second], Contracts s. 3 [1979]). The private nature of contractual agreements provides an avenue for legal enforcement that can be as flexible and creative as the parties intend, but that remains legally binding.

Good Neighbor Agreements

Good Neighbor Agreements are instruments that provide a vehicle for community organizations and a corporation to recognize and formalize their roles within a locality. The purpose of these agreements is to foster sustainable development in a community by reconciling economic development with the community's welfare, including the health of its environment and its individual members. Since the first such agreement was signed in 1978 in Worcester, Massachusetts, several agreements have been signed in the U.S.

As distinct from other methods that seek to increase corporate accountability, Good Neighbor Agreements seek to promote broadly defined sustainability. The Good Neighbor Project, a leading proponent and support organization for the establishment of Good Neighbor Agreements, defines "sustainable" industry as operations that are "clean, stable, and fair" (Lewis, 1992: 4). Fairness in this context means that "human health, environment, labor resources, and the capital resources and materials within a local community would be treated in a manner to ensure their continued viability for the long term" (Ibid.). A variety of industry sectors have entered Good Neighbor Agreements in the U.S., including chemical plants, oil refineries, and foundries. Though several agreements have arisen after industrial accidents, others are negotiated before such a crisis has occurred, or in response to chronic issues such as pollution emissions or job concerns. The philosophy common to all Good Neighbor Agreements is the industry's and community organization's mutual acknowledgment of the need to build a relationship responsive to community and industry needs.

The Process of Forging a Good Neighbor Agreement in a Nutshell

Forging and implementing a Good Neighbor Agreement is a several-step process that requires the commitment of a citizens group made up of members of the community and of a plant manager, in particular. The process proceeds as follows. First, members of the citizen group meet, discuss, and delineate the issues they would like to resolve with the company. This early stage may also involve identification of additional stakeholders who should be brought into the process of development of the agreement - especially the potential role of organized labor, as well as other civic organizations and community leaders.

After identifying the issues and potential solutions, an initial meeting with the company management takes place, followed by a joint assessment of the situation by the citizens group and the company. Over a period of successive meetings, the parties further clarify issues and the relevant details involved, toward the formulation of principles and provisions for inclusion in a formal agreement. The parties then sign and ratify the contract. Finally, the process of implementing the agreement terms begins, or in some cases, continues.

The Provisions of Good Neighbor Agreements

Various types of conditions have been negotiated in Good Neighbor Agreements. Some of the key terms that have been sought or negotiated have included the following:

(1) Community access to information: A company will place on reserve at a local library specified information. This is defined differently in the various agreements. Good Neighbor Agreement requests and provisions have included information required to be filed under state and federal law, results from environmental and safety audits and inspections, plant safety manuals and procedures, corporate annual reports and SEC filings, and a list of a plant's workers with their addresses. Although many federal environmental statutes require that information reported be made publicly available, only those members of the public who are specifically aware of the statute and the disclosure requirement have ready access to the information (Bagby et al., 1995:14 Va. Envtl. L.J. 225, Part 6). Even the most diligent investor would have a difficult task uncovering the range of needed environmental information concerning a particular firm (Ibid.: 225, conclusion).

(2) Right to inspect the facility: Depending on its content, an inspection clause may permit community members to inspect a plant and be accompanied by an expert and a plant worker of the community's choice. Such a provision may be particularly strong because the law does not require that a plant routinely allow community members into a facility to conduct a physical inspection (Interview with Rick Abraham, Texans United, concerning the Rhone-Poulenc Good Neighbor Agreement, October 1995). Similar types of inspection conditions (rights to accompany government inspectors and for a union to have its own inspection capacities) are commonly adopted in labor unions' collective bargaining agreements.

(3) Accident preparedness: A company must prepare a plan for procedures it will undertake in case of accident and make this plan available for review and input by the public. A chemical accident may pose severe hazards to the community, yet existing and proposed federal regulations contain no explicit requirements for involvement of neighbors and the community in the planning process (Lewis, 1993: 83).

(4) Pollution prevention: A company will plan to reduce its use of toxics or its toxic waste and emissions over a scheduled period. Various experts, including in many cases specially retrained retired engineers, can go through a plant and develop pollution prevention recommendations (Jo Haberman and Amy Middleton interviewed by Paul Orum, Working Notes on Community Right-to-Know, Working Notes on Our Right-to-Know About Toxic Pollution, November-December 1994, Appendix C-1). These experts must be accountable to the community and work force, not to the management of the company; how the funding is raised to pay for them may be one of the topics of negotiation.

(5) Good jobs, local jobs, union jobs: The company may commit to gearing its hiring and training processes to community needs by recruiting local people for new openings. Strides can also be made toward unionization of the work force through neutrality commitments and agreement to a simple "card-check" election process for determining if the work force decides to unionize.

(6) Local economic needs: The company may commit to establishing a special community benefits fund, with discretionary spending to be determined and overseen by the affected stakeholders. Expanded funding of local infrastructure needs such as roadways may be part of the program.

(7) Citizen group concessions: In return for company commitments such as those described above, members of a citizens group may settle ongoing litigation or permit challenges, end protests or negative publicity, or even generate positive publicity about the company. The citizens group also may commit to protect a company's trade secrets, through specific provisions on trade secrets protection.

The Range of Good Neighbor Agreements: Enforceable or Commemorative

The form and content of Good Neighbor Agreements have varied according to the philosophies of the citizen groups involved, the corporate culture of the company, and the forces motivating the parties to agree.

NON-ENFORCEABLE GOOD-NEIGHBOR AGREEMENTS

Early Agreements - Citizen Inspections: The phrase "Good Neighbor Agreements" was coined in neighborhood-based campaigns in the early 1980s that resulted from community groups' inspections of local industrial facilities. In these campaigns, community groups negotiated an informal "right" to inspect a local industry. After winning such an inspection, they sought subsequent negotiation of a Good Neighbor Agreement that would consist of follow-through action commitments based on the recommendations that emerged from the inspection. In more recent years, the concept of a Good Neighbor Agreement has begun to evolve in various other directions.

Minnesota Model - Reducing Nonbinding Goals to Writing: Citizens for a Better Environment, a Minnesota environmental watchdog group, bases the Good Neighbor Agreements it facilitates on a relationship-building model in which the agreements contain no legally binding language. Community members and management from a "polluter" company sit down and discuss the community's pollution concerns and other problems before there is a crisis. The goal of these dialogues is to establish mutually agreed-upon pollution reduction goals that go beyond the legal requirements (Doerr, 1994) and to commemorate those goals in a Good Neighbor Agreement.

A Good Neighbor Agreement between People of Phillips (Minnesota) and Smith Foundry is an example of CBE's nonadversarial facilitation (Smith Foundry Good Neighbor Agreement with People of Phillips and Citizens for a Better Environment, signed in October, 1995). The Smith Foundry is an example of an industry that, while usually functioning within legal guidelines, still may be polluting the neighborhood. According to the Minnesota Pollution Control Agency (MPCA), the foundry, which produces "gray" metal, a type of heavy metal used in the production of metal products, conformed to PCA standards. However, the MPCA received over 20 complaints from area residents about odor coming from the foundry. The foundry was cited by OSHA in 1988 for several violations of employee safety standards, such as exposing workers to respirable silica in excess of the permissible limit. In 1989, there were complaints of white dust and black soot being blown from the building (Sobol, 1991).

In April 1995, CBE helped area residents organize and enter into a Good Neighbor Agreement with Smith. "The agreement did not focus only on pollution prevention, but also dealt with employment issues in the community" (Jo Haberman, Citizens for a Better Environment, interviewed on October 10, 1995). One such issue arose out of concerns that the number of Native Americans employed at the foundry was disproportionately low in comparison to the percentage of Native Americans living in the community. Agreement negotiations revealed that the Native Americans living in town were unable to learn of foundry openings listed at the foundry's screening service in the suburbs. A relocation of the service seems to have resolved the employment issue.

Six months later, the groups are due for a follow-up meeting to assess the foundry's progress, the results of which CBE predicts will be positive for the people of Phillips. In addition, the signing of the agreement will have generated excellent publicity for Smith. As an outcome of negotiations and follow-up meetings, the foundry adopted a five-year approach to pollution prevention. Under the plan, pollution prevention would fit into the business' existing framework (Ibid.).

According to CBE, there were two key factors to the success of this agreement, like all the Good Neighbor Agreements they facilitate. One was the fact that the owner of Smith Foundry was personally very committed to cooperating with the community to reduce pollution and improve employee relations. The other was Phillip's "extremely sophisticated" neighborhood organization (Ibid.).

The CBE example raises a potentially troubling issue of enforcement: What happens if the company doesn't fulfill its obligations under the agreement? Although the Minnesota groups have not yet had to confront this issue, other communities have been "burned" by nonbinding agreements that have been discarded by company officials - for example, when the plant's manager has changed. If a company purposefully disregards an agreement, in the context of a nonbinding agreement the recourse of the citizens group is limited to becoming more adversarial, such as launching a campaign of negative publicity or challenging permits or licenses. The voluntary non-enforceable approach only works as long as the company and community place sufficient value on their relationship to keep to their commitments.

Essential to continued compliance is regular communication. The Smith agreement provides for meetings, "as needed, but not less than twice a year," but requires no written accountability. However, CBE agrees that agreements should provide a mechanism for yearly reports as a means of maintaining this communication and of informing the parties of changes affecting the contract. A regular report would also assist the community in keeping track of the company's activities even after the citizen group has disbanded or moved on to other projects (Ibid.).

ENFORCEABLE GOOD NEIGHBOR AGREEMENTS

In contrast to the above approaches, most Good Neighbor Agreements currently sought or reached throughout the U.S. are legally enforceable. In some situations, a Good Neighbor Agreement is linked to an environmental permitting process. Local governments issue a wide range of permits for construction, digging, filling, and many other activities. Most companies need some form of local permit to operate. These permits can be used as handles giving citizens groups leverage in confronting a company (Lewis, 1990: 252-253). Good Neighbor Agreements may also serve as a settlement agreement in the aftermath of an industrial accident.(2) Some require that alternative dispute resolution be the mechanism used to resolve disputes under the agreement. Litigation and forum selection clauses have also been specified as enforcement tools in Good Neighbor Agreements) Finally, many Good Neighbor Agreements require that parties negotiate and perform their obligations in "good faith."

Legally Binding Approaches: Examples

Approach 1 - Oversight Agreements: An example of an oversight agreement emerged at the Rhone Poulenc plant in Manchester, Texas. Manchester sits along the notorious Houston Ship Channel, home to the nation's largest concentration of petrochemical companies, Like so many communities under the stacks of major polluting industries, Manchester is a predominantly minority community (Hispanic). In June 1992, a serious accident occurred at the plant - a release of poisonous sulfur dioxide. At least 27 people were sent to area hospitals. The Manchester community decided to take action. With the assistance of an environmental organization, Texans United, the community won an agreement that gave the community specific rights never before recognized in Texas.

Rhone Poulenc agreed to pay for an independent environmental audit by an expert selected and supervised by a panel of community residents and a statewide organization, Texans United. Among the features of this oversight agreement are:

* The committee was selected by the community, not the company. Elsewhere, corporations have been hand-picking the membership of advisory committees to which they will ostensibly be accountable. This agreement set a new direction for local communities by keeping the designation of a representative group in the community's hands, rather than the company's.

* The agreement requires a broad audit including review of regulatory compliance, safety training, accident prevention, emergency response, waste analysis and information systems, monitoring programs, and waste minimization practices. In contrast, some companies have tried to limit local citizen oversight to a quick walk-through tour of a facility, followed by a slide show of issues that the company's P.R. department wishes to highlight.

* The agreement requires public disclosure of company documents in a public library, including hazard assessment and risk analysis, lists of accidents, upsets, near-misses, and corrective actions, as well as waste minimization and reduction plans;

* The company commits to "negotiate in good faith" on the audit recommendations;

* Citizens are entitled to accompany the auditor and conduct other inspections by appointment;

* The agreement is legally binding because it is integral to the firm's operating permit. As such, it can be enforced either by local citizens or by state officials.

Approach 2 - Union Collective Bargaining Agreements: Labor unions have a long history of on-site tracking of corporate performance on occupational safety and health issues. Unions' "safety stewards" are rank-and-file workers with the training to watchdog occupational health and safety issues that arise on the shop floor. Stewards are aided by professional industrial hygienists who work for the local or international unions. Union health and safety committees discuss any problems identified and raise the issues in negotiations with management or in communications with appropriate government oversight bodies.

One of the most advanced environmental oversight precedents for organized labor emerged at Harvard Industries, in New Jersey. There, the United Auto Workers negotiated the establishment of a "hazard prevention" committee. The union's committee has a right to shut down any operation in the plant that presents a danger to worker health or safety or to the environment.

Approach 3 - Specific Corporate Commitments: In contrast to the above examples of establishing more effective "stakeholder oversight processes," some of the new agreements establish specific corporate commitments to environmental or safety goals. For example, Chevron Refining is the biggest industry and polluter in Richmond, a predominantly low-income African-American community in Contra Costa County, California. Chevron has had innumerable accidents at the site and has been cited for serious violations of almost every conceivable environmental law. The West County Toxics Coalition, with the support of the statewide organization Citizens for a Better Environment (CBE), has been working to change this. After struggling for 10 years on numerous fronts, including protests, pressure on elected officials, permit challenges, and shareholder resolutions, the company finally agreed to a Good Neighbor Agreement committing to:

1. Install 350 "leakless" valves in the new project and retrofit 200 to 400 valves in the existing refinery;

2. Continue to reduce toxic emissions from the refinery beyond the 60% achieved between 1988 and 1992;

3. Contribute two million dollars to a local health center;

4. Install sirens and computers, train emergency workers, and establish and fund a city Emergency Services coordinator position for five years.

Approach 4 - Toward a More Comprehensive Approach: The Chevron agreement differs from past resolutions in that until recently, most agreements that have been reached have focused either on environmental or economic concerns. Yet a new and important trend is the formation of coalitions consisting of both economically and environmentally affected populations, i.e., workers and plant neighbors, who are prepared to make joint demands in both arenas. The Unocal agreement reached in Rodeo, California, exemplifies this powerful new approach.

In September 1994, Crockett and Rodeo, California, residents were inundated by two separate chemical releases due to leaks from the Unocal Refinery in Rodeo. The first involved a brown chemical substance, the second a spill of the potentially deadly chemical hydrogen sulfide that hit the Hillcrest School in Rodeo, sickening scores of children and teachers.

Unocal was unresponsive to community concerns and complaints after both incidents. As community outrage and demands for action grew, there were several public meetings and strategy sessions by community leaders, environmental groups (CBE-California), and labor unions. The strategy that resulted was one intended to force the company to upgrade the plant, preserve jobs, and give the community and work force more ability to safeguard activities on the site. In the end, the company was forced to sign a legally binding "Good Neighbor Agreement" in order to receive land use approvals that were a precondition to continued operations. What sets the Unocal agreement apart from most others is the breadth of issues that the community required Unocal to address. Following are highlights.

Environmental and Health Issues

* Unocal committed to test and install an improved air pollution monitoring system. All data collected will be made available to the public.

* Unocal will fund an independent audit of the refinery. The audit will cover the refinery emergency response plan, emergency notification procedures, safety management program, and the results of the Process Hazards Analyses performed as part of the Process Safety Management Program.

* A community-based Audit Committee will oversee the independent audit, including selection of the auditor. The committee's composition was determined in the agreement.

* Unocal is responsible for deciding whether and how to implement any of the recommendations contained in the final audit report.

* Unocal agreed to monthly monitoring of valves and pumps to achieve on-site emissions reductions for volatile organic compounds (VOCs). Results of the tests will be available to a Community Advisory Panel.

* Unocal agreed to fund an independent health risk assessment, and to fund a medical clinic for the diagnosis and treatment of people affected by the Unocal Catacarb release.

* Unocal contributed funds for an Emergency Response Van that will provide mobile, on-site medical services during chemical emergencies.

* Unocal agreed to establish a database of health effect information, including recommended evaluation and treatment measures, for chemicals used at the refinery.

* Unocal made a commitment to implement and fund a community-based information and notification system that provides information about unusual events and other items of interest that occur at the refinery.

* Unocal agreed to install a permanent monitoring station to detect sulfur compounds at the Hillcrest School and to provide training to teachers and students on how to respond to a chemical emergency.

* Unocal pledged to spend $30,000 per year for nine years to further vegetate appropriate areas of its property.

* Unocal agreed to construct a bike path through its property.

Economic Issues

* Unocal made a long-term financial commitment to the Vocational Training Program at the local high school.

* Unocal agreed to announce new job opportunities at the refinery in local newspapers, schools, and community organizations and to give hiring preference to local applicants when all other hiring factors are determined equal, and to work with the Building Trades Union to promote local hiring on construction jobs.

* Unocal committed $4.5 million to Contra Costa County to be dedicated for improvements and/or upgrades to the local transportation infrastructure within 1.5 miles of the refinery.

* Unocal agreed to redesign its Reformulated Gasoline Project to avoid the use of anhydrous ammonia and to replace all bulk deliveries of anhydrous ammonia with aqueous ammonia at the refinery by December 31, 2001.

* Unocal promised $300,000 annually for a period of 15 years to benefit funds for two local communities and for the school district's vocational training program. Funds are to be used for appropriate projects of general benefit to the community in the areas of environment, recreation, economic development, community infrastructure projects, community services, and community functions.

Aftermath of the Unocal Agreement: Did the Agreement Address All It Needed To?

Several post-agreement developments at Unocal provide further food for thought. It has come to light in a government follow-up investigation and in a public statement by the work force that Unocal had allegedly failed to heed repeated work force warnings that the plant was operating dangerously. Workers said that they warned lower-level management, but stopped pressing the issue, fearing reprisals if they continued to press the issues after they were ignored by their supervisors. According to 15 workers in the plant's OCAW union newsletter:

We were not willing to jeopardize our jobs by individually insisting on the shutdown of a unit making a quarter of a million dollars daily when the company and all their experts said it was safe to keep it going.

The Unocal agreement contains a clause to protect workers who speak up in the course of an audit against employer retribution. It also provides for confidential worker consultations with the independent auditor. The independent audit undertaken under the agreement noted that the company appeared not to be effectively utilizing even its own preexisting participatory processes (safety committee) as a means of following through on identified safety measures. Perhaps the checks and balances provided by outside scrutiny will serve to hold management more accountable with regard to safety issues, where a prior internal process failed to do so; the proof of this, however, will come in the longer-term implementation of the agreement.

About two months after the Unocal agreement was signed, the plant experienced another serious accident. Many of the residents who were sickened in one of the earlier incidents were now evacuated for several days. Local officials began to reconsider whether they really need to close the plant down after all, until it can be proven to be safe. Yet the desire to preserve jobs led them to stop short of closing the plant. Instead, they ordered a further county review of accident prevention measures.

Conclusions

(1) Neighbors and workers are winning more control over corporate activities through these agreements. Although these agreements are no panacea for the ills that corporations impose on local communities, they can represent significant advances in community empowerment. The strength of this approach is that a community may begin to exert much greater sovereignty over the activities that occur within its borders. Local residents and workers who are considering a campaign for such an agreement would do well to ask whether and how they may actually improve corporate activities or community oversight beyond the weak federal and state regulatory system. What may they have to put up with if such rights and commitments are not attained? Can the community also establish some broader reforms that address the underlying problems of locally operating corporations, rather than only struggling through the issues on a case-by-case basis?

(2) Because the strategy is experimental, it has potential for innovation and refinement. There are opportunities and needs to apply the concepts developed in these agreements in new contexts. Examples of areas of active exploration by grass-roots groups and leaders include multiplant agreements, corporation-wide agreements, and linking the broad terms of such agreements to new plant approvals by local governments. The range of terms and conditions in the agreements is subject to broad expansion and experimentation, as each community develops agreements suited to their economic and environmental needs.

For agreements to yield the greatest possible benefits, worker participation must be secured. Participation processes in these agreements often contemplate worker involvement, but the potential for applying really independent work force views is almost impossible in the absence of a unionized work force. The presence and active participation of a union appear to be a necessary precedent to a truly tripartite process and to in-depth stakeholder understanding of plant issues and processes. Unionization of a plant, or a commitment to employer neutrality in union organizing, may become a central element of some of these agreements in the future - thereby expanding the potential for new community-labor alliances.

Further consideration is also merited as to the potential to apply some of the content of such agreements (both participatory rights and the corporate commitments and incentives) to public policy discussions regarding regulatory reform, sustainability, fair trade, and the right to know.

(3) Legally binding agreements create predictable kinds of benefits and dilemmas. Although some communities have entered into nonbinding agreements with corporate officials, based on longstanding or recently emerged relationships with management personnel, there is reason to be concerned about the viability of such agreements. Other communities have insisted on legally binding and enforceable agreements, because they are aware that personnel at these facilities, even plant managers, come and go, and their nonbinding commitments often may go with them.

There are many scenarios under which such agreements can be made enforceable, provided that the community has built the power needed to force the corporation into a binding agreement. After 10 years of grass-roots experimentation with this strategy, it is apparent that no corporation has signed a binding agreement unless the community or work force had established a bottom-line reason why the management needed to do so - for example, because it could alleviate some costs of delay brought on by community resistance to specific permits.

Even a binding agreement does not necessarily mean that the firm will in reality be a "good neighbor." Corporations that enter into these agreements are often multinational corporations operating at multiple sites. Thus, not only are these corporations not "people" except in the fictitious sense awarded by some courts, but they are also not really "neighbors." Often they are far from "good"; many corporations that have signed agreements continue to endanger their community and work force. Some, such as Unocal, have also interpreted certain agreed-upon obligations in the narrowest possible manner, and have even delayed implementation of other clauses. Such actions are undertaken in striking contrast to the neighborly spirit of the agreement. Informed by such experiences, we suggest that a "corporate-community compact" may be a more appropriate and neutral term for describing these agreements. These agreements are simply as strong as what a community insists upon, given the range of circumstances that it faces; a corporation should not necessarily be labeled a "good neighbor" simply because it persuaded locals that they are better off with an agreement than relying solely on federal or state bureaucrats.

(4) Corporations still "call the tune" in most communities. Although there have been some striking successes, numerous communities have unsuccessfully sought such agreements with corporations and have lost the fight. This should come as no surprise to anyone acquainted with the power wielded by industry within such communities. It requires mustering of extensive political and legal power to lay down such new rules; many corporations have grown larger in size and power than some states and even some nations. Big corporations act like "800 pound gorillas" who know they are free to decide where and how they will "sit down."

People who wish to change this situation must find whatever leverage is available to support local pressure to negotiate. For instance, federal and state officials can and should be encouraged to support local citizens to effectively negotiate with companies by withholding approvals or assessing enforcement penalties until local needs are met; unfortunately, those agencies often serve as a "buffer" that protects corporations more than the communities placed at risk. These agencies negotiate for placing only the most minimal conditions on corporate behavior, which corporations may hide behind rather than really being accountable to neighbors and workers.

Finding the right level at which to govern corporate behavior is an important challenge for activists, lawyers, and policymakers. These agreements are a supplement, not an alternative, to effective federal and state regulation and enforcement; they also cannot solve national and international policy gaps such as the worker job losses that may occur when major environmental or economic policy decisions by government and corporations lead to a phase out of particular operations.

Other tools are needed - such as new laws that grant local, affected citizens nonnegotiable rights - to oversee industries that endanger them and to assure job and income security when dangerous or antiquated operations must be closed. New institutions are also needed to undertake periodic public review of an entire corporation's behavior and to impose new corporation-wide conditions or take disciplinary action when corporations act contrary to the public good. Today's local agreements are merely one emerging chapter in a much larger "book" of strategies for corporate governance that will need to be written from the grass roots in the coming years.

NOTES

1. The first Good Neighbor Agreement was formed in 1978 between Worchester, Massachusetts, and Fair Share and Standard Foundry. Source: James O'Connor, interview question (October 1995).

2. According to Denny Larson of California's Communities for a Better Environment, the political leverage that the Crockett/Rodeo Coalition and Shoreline Environmental Alliance citizen groups exercised in opposing Unocal's permit renewal evened the playing field between Unocal and the community.

3. An agreement drawn with Formosa Plastics Corporation identifies litigation as the primary enforcement tool. A contract between Intel Corporation and the Corrales Residents for Clean Air and Water specifies that all disputes be resolved in the district court for Sandoval County.

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Bagby, John et al. 1995 "How Green Was My Balance Sheet? Corporate Liability and Environmental Disclosure." 14 Va. Envtl.L.J.225, at Part 6.

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Citizens Clearinghouse for Hazardous Waste 1995 Everyone's Backyard. Washington Politics.

Cohen, Gary and John O'Connor (eds.) 1990 "Local Campaigns and the Law." Fighting Toxics. Washington, D.C.: Island Press.

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1995 Atlantic States Legal Foundation, Inc. v. United Musical Instruments. 61 F.3d 473.

1977 Boomer v. Atlantic Cement Co. 362 N.E. 2nd 968.

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SANFORD LEWIS is an environmental attorney and the director of the Good Neighbor Project for Sustainable Industries. In addition, he is an instructor in Environmental Law and Pollution Prevention in graduate departments at Tufts University and UCLA.

DIANNE HENKELS is a law student at the University of Vermont. The authors were assisted by Greta Kirschenbaum in the final preparation of this article. For additional information or a publications list contact: The Good Neighbor Project, P.O. Box 79225, Waverly, MA 02179; (617) 354-1030; fax: (617) 492-1635; email: sanlewis@igc.apc.org.
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Publication:Social Justice
Date:Dec 22, 1996
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