On January 20, 2021, President Biden issued Executive Order (“EO”) 13,990, an expansive directive which resets the Federal Government’s vision for implementing nearly the entire gamut of environmental programs, including the Government’s approach to the incorporation of science in decision-making; public health; air, water, and chemical regulation; enforcement; environmental justice; climate change; and natural resource protection.
Of immediate consequence, section 2 of the EO requires that Federal agencies conduct a review of Agency actions taken between January 20, 2017, and January 20, 2021, including all existing regulations, orders, guidance documents, and policies. Any agency action viewed as inconsistent with the broad policies outlined in EO 13,990 are to be considered for suspension, revision or recission.
The Dept. of Justice (“DOJ”), in implementing this mandate, withdrew nine documents:
- “Enforcement Principles and Priorities,” January 14, 2021
- “Additional Recommendations on Enforcement Discretion,” January 14, 2021
- “Guidance Regarding Newly Promulgated Rule Restricting Third-Party Payments, 28 C.F.R. § 50.28,” January 13, 2021
- “Equitable Mitigation in Civil Environmental Enforcement Cases,” January 12, 2021
- “Civil Enforcement Discretion in Certain Clean Water Act Matters Involving Prior State Proceedings,” July 27, 2020
- “Supplemental Environmental Projects (“SEPs”) in Civil Settlements with Private Defendants,” March 12, 2020
- “Using Supplemental Environmental Projects (“SEPs”) in Settlements with State and Local Governments,” August 21, 2019
- “Enforcement Principles and Priorities,” March 12, 2018; and
- “Settlement Payments to Third Parties in ENRD Cases,” January 9, 2018.
The withdrawal of these documents has the practical effect of resetting many of DOJ’s environmental policies to those in effect under the Obama Administration. This suggests a return to increased levels of inspections and enforcement, both civil and criminal, after a comparatively significant drop during the Trump Administration (see Table 1 below).
While this may not be welcomed news for businesses still struggling during the COVID-19 pandemic, businesses should be pleased with the return of Supplemental Environmental Projects (“SEPs”). SEPs are environmentally beneficial projects not required by law, but that a business agrees to undertake as part of the settlement of an enforcement action. SEPs are a popular option for both industry and regulators since it encourages projects that improve the environment that would otherwise go unfunded in exchange for a reduced civil monetary penalty. As we reported previously, DOJ rather abruptly ended the use of SEPs in Federal enforcement actions in March of 2020, seeing it as a misdirection of funds that otherwise should be payable to the Federal Government.
The withdrawal of DOJ’s prohibition on the use of SEPs restores this otherwise long-standing and flexible option to resolve environmental violations that can reduce a business’s pecuniary liability while bringing tangible environmental or public health benefits to local communities. As we noted previously, Virginia has codified the availability of SEPs in Section 10.1-1186.2 of the Virginia Code. Therefore, businesses in Virginia should not see a change in state-led enforcement actions.
Overall, however, businesses should be prepared for a renewed emphasis on environmental compliance and enforcement at the Federal level. This could also bring increased pressure on state regulators that manage delegated environmental compliance programs, such as air, water, and hazardous waste permitting. Consequently, now is the time to assess the current state of your business’s environmental compliance program, particularly when such programs may have struggled to remain fully effective during the pandemic.
Table 1: EPA enforcement for the four most recent fiscal years to the 20-year average, and periods under prior administrations
|FY 2020||FY 2017-2020 Average (Trump)||FY 2009-2016 Average (Obama)||FY 2001-2008 Average (Bush)||20-year Average|
|Civil Case Conclusions||82||94||156||189||157|
|Civil Case Referrals||81||106||211||278||217|
|Injunctive Relief (non-Superfund) (Millions)||$2.514B||$8.084B||$11.92B||$8.813B||$9.910B|
|Civil Penalties (excluding individual cases recovering more than $300 million in penalties).||$174M||$141M||$202M||$159M||$173M|
|Criminal Polluters Charged||91||118||226||282||227|
|Criminal Cases Opened||247||165||297||400||312|
|Criminal Fines and Restitutions||$42M||$853M||$312M||$93M||$333M|
|Criminal Fines and Restitutions Penalties (excluding individual cases recovering more than $1 billion in penalties).||$42M||$139M||$146M||$93M||$124M|
|Total Superfund Money||$815M||$999M||$2.045B||$1.485B||$1.612B|
(From Environmental Integrity Project, Jan. 2021)