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The effects of the Right to Know More Act.

IN A RECENT ENSR newsletter, Joseph Curreri, vice president and manager of air quality studies at ENSR's Consulting and Engineering practice in Boston, asked readers to "consider the compliance requirements of a large corporation consisting of several companies, each conducting a different business at separate facilities. These facilities may need to install pollution control equipment, implement enforceable operating practices, phase out use of ozone-depleting substances, conduct compliance studies and provide regular, publicly available reports on emissions and compliance status to regulatory agencies." Now, consider the ramifications of compliance requirements for a risk manager in a smaller operation, perhaps in the service industry, where the use of some chemical products may seem innocuous.

In light of the never-ending list of new environmental compliance regulations and requirements coming from Congress, federal and state agencies and state legislatures, companies lacking legislative foresight must shift long-term strategies with each new development. But recently proposed federal legislation would have it that a broader universe of facilities, as yet unregulated, be brought into environmental compliance as well. This poses greater responsibility and liability upon the risk manager, and will force most risk managers that rarely had to consider environmental issues to think "greener" than ever.

The legislation in question, the "Right to Know More Act of 1991(S.2123), was proposed by U.S. Senator Frank Lautenberg (D-NJ) and introduced on November 27, 1991. It presently waits discussion in the Committee on Environment and Public Works. As written, the "Right to Know More Act of 1991" would require Toxic Release Inventory (TRI) reports for calendar year 1993 to be filed by July 1, 1994, in the same manner as currently called for under the Emergency Planning and Community Right to Know Act [EPCRA Superfund Amendments Reauthorization Act (SARA) Title 111, Section 3131 but with certain significant changes.

Expanding Regulation

AT PRESENT, the existing law only covers those companies that have SIC codes 20 through 39, more than ten full-time employees and produce, process or use regulated chemicals above established thresholds. According to the proposed legislation, any facility that "uses, manufactures, or processes the chemical ... or releases to the environment or transfers to an offsite facility any chemical" that is regulated under this act above certain thresholds, and employs ten or more people full time, would be subject to TRI reporting.

Unless otherwise amended, the proposed legislation would also lower the current manufacturing and processing threshold of 25,000 pounds per year, and other "uses" threshold of 10,000 pounds per year, to 100 pounds per year in the case of a metal or metal compound and 2,000 pounds per year for any other regulated chemicals.

Furthermore, the group of 320 toxic chemicals that presently necessitate TRI reporting will be markedly increased (some estimate by 500) to encompass other chemicals listed under such laws as the Clean Air Act, Federal Water Pollution Control Act, Safe Drinking Water Act, Resource Conservation and Recovery Act (RCRA) and Solid Waste Disposal Act.

More Paperwork

THE INFORMATION that must be reported by each facility subject to the requirements of the Right to Know More bill must include, among other things, a "compilation of annual input, accumulation, and output quantities of each chemical subject to reporting requirements under this Act at the facility, including the quantities produced, used, generated as byproduct, consumed, recycled onsite but out-of-process, transferred as product, or transferred as a constituent in products." Under the present system, failure to do so could result in fines of $25,000 per day, per chemical violation, depending on the nature, circumstances and degree of culpability. in the case of a second violation, a fine of up to $75,000 per day may be imposed at the discretion of the EPA's Office of Enforcement.

Entirely new considerations for some risk managers could result from increased environmental regulation. The potential ramifications of this bill, and other like legislation, for the risk manager, will embrace such added burdens as new or expanded monitoring, enforcement, information gathering, and reporting duties.

The general population's free access to such information, as intended under the Right to Know More bill, may open up a company to costly litigation from public interest well as present public relations problems (or benefits, depending on the environmental stance the company takes).

A number of firms that do not use, manufacture, or process large quantities of toxic chemicals may suddenly find themselves out of environmental compliance when the thresholds are lowered and the scope of facilities with 10 or more full-time employees is fully opened up to public scrutiny. Also, companies in sectors, such as the service industry and agriculture, would now be subject to SARA Title Ill reporting. Such an expansion of the SIC code range would rein in nonmanufacturing facilities involved in, for example, oil and gas extraction, mineral mining and processing, industrial dry cleaning, farming, and transportation, which would include truck, bus and taxi fleets, making it a whole new ball game for some risk managers.

Joseph Laznow, president of JL & Associates, a consulting firm based in Raleigh, North Carolina, points out that, "one should have been able to see the changes eventually coming with the first writing of SARA, which looked at the entire emissions picture with respect to air, water and solids. Also, with reporting, one can expect to observe at some future time emission taxes or permit fees, as well as mandated reductions." One U.S. Senate Environment and Public Works Committee staffer predicted that every plant may soon be required to prepare a pollution prevention plan as proposed in the RCRA reauthorization bill which was introduced last year. indeed, risk managers should have some form of information network, be it through an inhouse legal department or through industry trade associations, so that they are in a position to "see" what risks loom on the horizon, and develop strategic planning with those forecasts in mind in order to minimize liability and costs.

Proactive Approach

IN THE LATE 1980s, the larger corporations, looking at the environmental legislation that was being proposed, instituted their own proactive toxic emission reduction programs, pre-empting any government action that at other times or under different circumstances may have been costlier to the company. AT&T of Basking Ridge, New Jersey, is a case in point. David Chittick, AT&T's environmental and safety engineering vice president, reported a toxic air emissions reduction from 6.4 million pounds in 1988 to 2.1 million pounds in 1990, or a 66 percent reduction. The company is also striving for a "zero-emissions" goal for air toxics by the year 2000.

The Environmental Protection Agency is also promoting an environmentally proactive stance for companies through its "33/50" program. Companies are encouraged to achieve emission reduction targets of 33 percent by 1992 and 50 percent by 1995, of 17 targeted chemicals. According to David Sarokin, an EPA environmental specialist, the 33/50" program encourages rapid reductions in certain toxic emissions, as opposed to the reductions asked for under the Clean Air Act, slated over a timetable of 10 to 15 years.

Because state environmental laws normally supercede federal regulations, the efficacy of a firm joining such a program must be carefully determined. For instance, a particular state's laws may be substantially more stringent or require reductions in other toxic chemical emissions that would require the devotion of more company resources to tackle that specific job. On the other hand, diverting resources toward a specific technology to attain a 50 percent reduction may be costly if it is reasonable to expect states to impose considerably more stringent reduction requirements that would require other technology.

Still, there are other government incentives for companies to speed up voluntary air toxics reduction, such as granting companies a six-year compliance extension for installing EPA-designated pollution control equipment. When these voluntary efforts are "coordinated with EPA and state schedules for proposed and final rules,' notes Mr. Curreri, "they can eliminate or delay the need to install costly control equipment or implement disruptive operational or process changes."

It is imperative that risk managers in all sectors of the economy be informed about environmental legislation and its potential impact. The risk manager must also look at legislative trends and determine which path future legislation will follow; in the instance of the Right to Know More Act of 1991, one can expect in the not-too-distant future governmental mandates, complete with non-compliance penalties, on specific reductions of those toxic chemicals that companies are only now required to report.
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Title Annotation:law restricting industrial waste
Publication:Risk Management
Date:Mar 1, 1992
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