Three Things a Phase I ESA Will Not Protect You From

By Tony Anthony

Phase I Environmental Site Assessments (ESAs) are often used to help identify potential environmental concerns associated with current and historical property use.

While these reports do satisfy CERCLA’s “all appropriate inquiry” requirement, they don’t completely shield property owners from liability. Today we’re going to take a look at some greater liability concerns that a Phase I ESA does not protect you from.

1. RCRA Liability

At the top of our list is liability from the Resource Conservation and Recovery Act (or RCRA). RCRA regulates the generation, transportation, disposal and storage of hazardous waste, as well as municipal landfill activity after May 1980. RCRA was created to regulate waste from “cradle to grave,” and includes detailed regulations for investigation, remediation, and closure of contaminated sites.

A Phase I ESA does not provide RCRA liability protection to new purchasers.Property owners can limit their RCRA liability by obtaining any of the following from the EPA:

  • Prospective Purchaser Agreements
  • Comfort Letters
  • No Further Action Letters
  • No Further Interest Letters

CASE STUDY: River Raisin Battlefield Brownfield Development

2. Compliance With Other Environmental Regulatory Bodies

Our government has produced over 10,000 pages of federal regulations designed to protect public health and the environment.  Property owners need to consider potential for liability beyond the CERCLA protection that a standard Phase I ESA provides.

Legislation Not Covered by a Phase I ESA
The Clean Air Act Air emissions permitting
The Clean Water Act Waste water discharge permits, spill plans and storm water management
The Toxic Substance Control Act (TSCA) Asbestos, PCBs and radon
OSHA Standards Workplace safety including employee training, indoor air quality, asbestos, lead, and mold.

This list is by no means comprehensive. Often an inspection for these “out of scope” concerns can be added to your Phase I ESA upon request.

CASE STUDY: Environmental Regulatory Compliance for Automotive Supplier

3. Continuing Obligations

If a Phase I ESA is completed that identifies the potential presence of contamination at a property, the user’s responsibilities don’t end there.  The user of the Phase I ESA may have continuing obligations to properly manage the property in light of that contamination.  These obligations may include evaluation of materiality of the environmental concern identified (i.e., evaluation of exposure risk), legal notices, etc.

CASE STUDY: Piquette Square Brownfield Redevelopment

Conclusion

To learn more about how to protect yourself from these and other environmental liabilities contact us.

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