Home > Uncategorized > Inspector General Launches Probe Into EPA Financial Assurance Programs – Does EPA Enforce Superfund and RCRA Requirements?

Inspector General Launches Probe Into EPA Financial Assurance Programs – Does EPA Enforce Superfund and RCRA Requirements?

Investigation Will Examine How Corporate Polluters Shift Costs To Taxpayers

Does EPA Aggressively Reduce Taxpayer Environmental Liability?

Back in January, we reported that EPA was reviewing the Dupont spinoff of Chemours, including consideration of compliance with RCRA financial assurance requirements, see:

Our key concern was to hold Dupont accountable and avoid abuse by shifting costs to taxpayers. We noted that:

The primary purpose of the financial responsibility requirements for corrective action is to assure that funds will be available when needed to conduct necessary corrective action measures. The intent of the RCRA financial responsibility requirements is, in part, to reduce the number of TSDFs that are insolvent or abandoned by their owners and operators, leaving the costs of corrective action to be borne by the public.

EPA policy explicitly anticipates bankruptcy abuse:

Financial assurance is an important aspect of the corrective action program. This document provides decision makers guidance in the implementation of financial responsibility requirements to ensure that owners and operators provide evidence of financial responsibility for corrective action that may become necessary in the future. …

In some cases there may be some facility owners and operators that are unable or fail to provide financial assurance. Prompt enforcement action against non-compliant, financially viable entities is generally appropriate. We recognize that facility owners and operators that are bankrupt or have other financial problems may have difficulty securing financial assurance.

Since then, EPA has been evasive and denied specific requests from Pompton Lakes residents to provide specific and concrete assurances that the spinoff will not disrupt, delay, or derail the cleanup; shift cleanup costs to taxpayers; or let Dupont off the hook for huge liabilities there.

Confirming the concerns we raised in January,  EPA Inspector General just announced a far broader investigation of these issues:

The Office of Inspector General (OIG) for the U.S. Environmental Protection Agency (EPA) plans to begin preliminary research on the EPA’s progress in reducing taxpayer liabilities through the use of financial assurance instruments for Resource Conservation and Recovery Act (RCRA) facilities and Superfund sites. This project is included in our fiscal year 2015 annual plan.

The OIG’s objectives are to answer the following questions:

  1.  Does the EPA review nationwide RCRA and Superfund financial liabilities for companies with multiple facilities/sites to verify that financial assurance mechanisms are valid?
  2.  Are all environmental liabilities (from both RCRA and Superfund programs) included in financial assurance evaluations?

This is a hugely significant IG investigation.

This investigation is very likely to document lax enforcement of financial assurance requirements by EPA and numerous corporate abuses.

The probe also could influence EPA’s review of the Dupont Chemours spinoff and the pending transfer of numerous EPA permits and approvals from Dupont to Chemours.

I immediately wrote to the EPA IG lead investigator and urged them to expand the scope of the investigation to include failure by State’s to enforce State cleanup requirements and block corporate abuses that lead to sites being abandoned and shifted to the federal Superfund program.

A prime example of that kind of abuse is NJ’s newest Superfund site, EC Electroplating in Garfield.

NJ DEP has failed to enforce financial assurance requirements and as a result, taxpayers have picked up the tab.

At that site, the NJ DEP failed to require financial assurance or enforce NJ’s clean laws – as a result, the owner now claims a lack of resources and taxpayers are paying for the cleanup under the federal Superfund program.

Perhaps the Bergen Record’s cracker jack reporting staff can connect the dots of 2 major sites in their backyard – Pompton Lakes and Garfield.

We will keep you posted as this EPA IG investigation progresses.

[End Note:  Investors, as Wall Streeters like to say, have lots of skin in this game.

IG investigations frequently lead to EPA reforms, like more aggressive enforcement, and, depending on the magnitude of abuses documented, can lead to Congress strengthening the law or EPA tightening the regulations.

So, if government financial assurance is first in line creditor, that means investors are subordinate debt.

Investor beware! ]


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  1. June 12th, 2015 at 15:12 | #1

    It is about time someone stops to take a look at this company’s track record when it comes to people & their collective corporate fortunes. It is clearly obvious that this company puts their fortunes ahead of the well being of people & not just in America but around the world. This company needs to be put in it’s place & hit where it hurts , their wallets. What is happening here in Pompton Lakes is nothing short of a nightmare. Our neighbors living quite literally in a toxic environment & for years nothing but useless pilot studies & now a potential “pipeline” that could very well flood nearby & surrounding homes!! This company needs to be taught a harsh lesson that they cannot “buy themselves” out of THEIR responsibilities !! We deserve better & I hope their purposed “spin off” flops as dead as the poisoned fish in our lakes & rivers !!

  1. July 5th, 2016 at 10:08 | #1
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