There's no justice in EPA's environmental justice policy

Jonathan

ENVIRONMENTAL POLICY

H. Adler

There’s No Justice in EPA’s Environmental Justice Policy By Jonathan

H. Adler

EPA’s environmental justice policy is based on the p-emise that intentional or institutional racism has resulted in siting of industrial facilities and environmental hazards in low-incomeand minority communities. In the spring of 1998, ERA issued an Interim Guidance for investigating Title VI of the Civil Rights Act of 1964 to ensure that the issuance of pollution control permits does not negatively impact lowincome and minority commu-

lans for a new $175-million steel mini-mill in Genesee County, Michigan were moving ahead until the U.S. Environmental Protection ,4gency (EPA) announced an investigation of the plant’s impact on “environmental justice.” According to some local environmental activists, Michigan regulators’ approval of the mill would have a disparate impact on minority groups and, therefore, would violate Title VI of the 1964 Civil Bights Act.’ Title VI explicitly prohibits discrimination by entities, including state regulatory agencies, that receive federal funds. In recent years, civil rights activists have claimed that Title VI also prohibits those policies that have disproportionate negative impact, or “disparate impact,” on minority groups, even where there is no evidence of discriminatory intent.2 This is the approach adopted in EPA’s policy on “environmental justice.”

P

nities. While there is no doubt that racism exists and evidence suggests a significant percentage of industrial facilities in low-income neighborhoods, this article will discuss cases lacking evidence that “‘environmental racism” is responsible. These cases, severely impe&d by EPA’s policy, have evoked strong responses by environmental activists, citizens, civil right activists, corporate officials and state agencies with a large percentage of them in e#osition

to the policy. One group in opposition

to the policy, The Environmental

Council of the States

(ECOS), which represents forty-nine of thefifty state environmental agencies, passed a resolution calling on EPA to withdraw the guidance because it would impose burdens on state agencies and hinder the operation of environmental permitting programs.

All parties are seeking to

&termine if there is justice in EPA’S environmental justice policy.

Jonathan H. Adler is Senior Director of Environmental Policy at the Competitive Enterprise Washington,

Institute in

D.C., and the author of Environmentalism

at the Crossroads: Green Activism in America (Capital Research Center, 1995). He has written articles on environmental

and regulatory policy that have appeared in

such publications

as The Wall StreetJournal;

The

Washington Post; The Los Angeles Times; The Public Interest, Regulation, and Policy Review, among many others.

Vol. 6, No. 2 1999 OElsevier Science Inc. 1066-7936/99/$19.l!O+$5.50

As EPA’s investigation proceeded, the mill’s plans were put on hold, and company offtcials began to consider an alternative site in Ohio. If EPA did not resolve its investigation quickly, off& cials representing Select Steel said, they would be Democratic forced to invest elsewhere. Congressman James Barcia, who represents the district in which the mill was planned, was understandably upset. “The economic future of the 200 families who might get those jobs is on the line,” he told the press.3 In October 1998, the Environmental Protection Agency found the complaint to be baseless and closed the investigation. EPA staffers maintained that the complaint raised, “serious and important issues that merited a careful review,” yet the Agency never bothered to analyze whether the proposed mill was even in a predominantly minority community. Had EPA given the community’s demographics even a cursory review, the allegations of environmental racism could have been immediately dismissed, because approximately ninety percent of the families living within a mile of the facility are white. Instead, EPA’s review dragged on for months, and the complaint was dismissed on the eve of Select Steel’s deadline. 183

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Jonathan

EPA’s eventual dismissal of the complaint was too little, too late for the people of Flint, Michigan. Citing regulatory delays and environmentalist objections, Select Steel announced in March that it would locate the plant near Lansing instead. The Select Steel matter encapsulates all that is wrong with EPA’s environmental justice policy: it is an overly bureaucratic solution in search of a problem that will do more harm than good to the very communities it is supposed to help.

The Select Steel matter encapsulates all that is wrong with EPA’Senvironmental justice policy: it is an overly bureaucratic solution in search of a problem that will do more harm than good to the z.‘erycommunities it is supposed to help.

The Originsof Environmental

Justice

EPA’s environmental justice policy is based on the premise that intentional or institutional racism has resulted in the disproportionate siting of industrial facilities and environmental hazards in lowincome and minority communities. While there is no doubt that racism exists, and that there is evidence suggesting a confluence of industrial facilities and low-income neighborhoods, there is no evidence that “environmental racism” is responsible. Indeed, those studies that have examined historical land-use patterns and neighborhood composition at the time the facilities were sited have found little, if any, evidence, that siting and permitting decisions are responsible for the existence of industrial facilities in low-income and minority communities. Bather, they have found that the prevalence of 184

H. Adler

industrial facilities in particular areas has tended to drive down neighboring property values, encouraging those with the financial ability to move to more desirable neighborhoods and inducing an influx of low-income residents.4 As Harry Alford of the National Black Chamber of Commerce testified to the Senate Environment and Public Works Committee in April 1997, “The coincidence of environmental hazards in minority communities is a matter of economics. Property values and shifts in desirable business properties are the main reasons.” EPA’s own internal studies have reached similar conclusions. Congressional investigations in 1998 uncovered studies of EPA enforcement patterns and Superfund sites that discount charges of “environmental racism.” Contrary to the claims of some activists, Superfund sites are not significantly more likely to be found in minority communities. Internal EPA reviews also disproved charges that environmental enforcement was weak or less prompt in minority neighborhoods. Yet until members of Congress and skeptical reporters began asking questions, EPA did not release the study results. Based on these findings, there is little reason to believe that improper or institutionally racist permitting and siting processes have led to the prevalence of industrial facilities in low-income or minority neighborhoods. Nor is there proof that requiring states to consider the racial composition of proposed host communities when evaluating permit requests will do anything to address this concern. “Though activists have a hard time accepting it, racism simply doesn’t appear to be a significant factor in our national environmental decision Foreman of the making,” notes Christopher Brookings Institution, author of The Promise and Peril ofEnvironmental

Justice.5

EPA’s Title VI Policy In the spring of 1998, EPA issued its Interim Guidance Complaints

for

Investigating

Title VI Administrative

Challenging Permits (see

CORPORATE

sidebar).

ENVIRONMENTAL

The

STRATEGY

Jonathan

ENVIRONlvlENTAL POLICY

H. Adler

The Environmental Protection Agency’s Interim Guidance fm- Znvestigating Title VZ

Administrative

Complaints Chu&nging Permits

EPA’s Interim Guidance outlines the following procedure for processing Title VI contplaints alleging *either discriminatory intent and/or discritninatory effect in the context of environmental pertttilting” by state regulatory agencies. This process is not EPA reserves guidance. ” if warranted itt

formal or enforceable, however, as the right “to act at variance with the it determines that such a course is any given case.

Step 1: Acceptance of the (:onlplairtt--Upott recc%ittg a Title VI cotnplaitit, EPiYs Office of (Xl Rights revitws the c-omplaitrt 1.0 set whether it states a valid claim. If so, Ef’A will notify the cotnplainant and the state agency that issued the Iwent\ ,.. challenged permit within davs (Iontplaittts that do 1101 state a valid claim are rejt~ctetl. Step 2: Investigation--EPX’s Offkc of (kil Kights conducts art investigation IO see if the pertttit(s) ;tt issue will have, or does cotttribute to a disparate impact on tninot-itv groups. A permit that tncets the base public health and cttvironmental protections sczt. forth in the applicable crtvirotttnc~tttal statutes and rc*gulations may still be f?~tid to cause a tlisparatc impact ott tnirtority gl‘""ps. Step 3: Rt.))tttc;tl/Mitigarion-if EPA finds that the permit will have a disparate impact, the state agency may rebut EPiZ’s finding or propose ;I plan fi)t- mitigating the impact 011 trtittority cottittiuttitics. If the rebuttal or mitigation platt is accepted. there is no litrttter aclioti.

Step 4: ~Jits~ificatiott-.~ti~, state agcttcy ma) “seek to demonstrat(~ that ir has a substantial, legitimate interest 1hat justitks the tkc~isiott to proceed with the I)ct.tllir‘not\citt,st~tttdittg the disparart~ ittipact.” Such a justification will only be ac.crptc*cl if the agency has no altcrnativc means of ftilfillittg its itttcrest without itiipositig ;t disto EPA “ttterel~ itnpact . According para1t demonstrating that the permit complies with

Vol. 6, No. 2 1999

applicable environmental regulations will not ordinarily be considered a substantial, legitimate offered ~justilicatioti.” Moreover, “a justification will not bc considered acceptable if it is shown that a less discriminatory alternative exists.” .‘,: Fitiding of’ Prrlitiiinary Step Soncontl)liaiice-If the state agctnc’y fails to rebut EP,\‘s findittg attd can tteithrr mitigate nor justify the disparate itnpact, the Office of’ Civil Right5 will issue a prclitninary fittding of nottcotnpliattce to the U.S.Justicr Ikpartrrtettt withiti 180 calendar days of the start 01‘EPA’s complaint invcstigatiott. This fittding may ittclttde voluntatv compliance r~,conlme:nd;ltiotis. Dctc.rtninatiott 6: Formal 01‘ St"lJ Noncotttpliatice--If the state agency does not accept EPA’s recotntnrndatiotts, ofkr an alternative cotnpliatice stratc~~, or rebut EP,-\‘s prclittiinary finding withitt lift): calendar days of the prclitninary finding. EPA will issue a fi~rtnal written detertttinatioti of ttoticotrt~,li;ttic~c- to the K.S. ,Jttstice Dcpnrtntettt. Step 7: Volutttar) (:otnpli;tticc,-Tli(t stale agettcy has tctt day.4 front the issuattcc of‘the fortttal written detertttinatiott of’ t~ottc~ompliattce to come into volittitat?~ cotnpiiattce. If the stair agency does ttot c~otnply, EP,\ will initiate procedures to s~tspetid 01 1et~niitialc 1CP.A tittiding and /or t~~otnt~t~t~d litigatiott b\ the L.S.Jttsticc lkpartnictit. T~tt~orq$ottt this ~~~x~c~~ss, EPA's Office of (Xvi1 “to purstte ittfi)rtnal rcsoluRights is ittstructcd lion of‘adttiitiistrativc~ cotnplaitirs wlic*rever pramat ticable.” ‘l‘htts. the process may be terntinated any point if’EPA, the stat{’ agetic\ ;ttid “affccled stakeholders” can resolve the icsut3 rakd itt the cotnplaittt.

185

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guidance responds to the growing number of complaints by communities and environmental activist groups alleging discrimination under Title VI of the Civil Bights Act of 1964. In particular, these groups claim that state regulatory agencies, most of which receive EPA funding, are discriminating in the issuance, renewal, or modification of pollution control permits, thereby subjecting minority communities to disproportionate amounts of environmental pollution. The Interim Guidance outlines a framework for the processing of complaints that allege discrimination or discriminatory effects in permitting by those agencies that receive EPA funding (see box). According to the Interim Guidance, “Facially-neutral policies or practices that result in discriminatory effectsviolate EPA’s Title VI regulation unless it is shown that they are justified and that there is no less discriminatory alternative.“” The failure of a state or local agency to comply with EPA’s interpretation of this vague standard will result in the suspension or termination of EPA funding and, potentially, in federal litigation to obtain injunctive relief. In other words, EPA is creating a new opportunity for activist groups and bureaucrats to interfere in the permitting process. EPA’s Interim Guidance is based on an expansive reading of Title VI of the Civil Bights Act of 1964. Under Title VI, recipients of federal funds may not discriminate on the basis of race. Traditionally, courts have held that a violation of Title VI requires a showing of discriminatory intent. However, in Guardians Association v. Civil Service Commission of the City of New York,’ the Supreme Court narrowly held that in the employment context, “those charged with enforcing Title VI” could promulgate administrative regulations that prohibit those policies that have a disparate impact on minority groups. Under the Guardians Association case, no evidence of discriminatory intent is required; a showing of disparate impact is enough. Yet few legal analysts believe that existing Supreme Court precedents support the application of a disparate impact standard in areas other than employment law. Indeed, the Supreme Court is 186

Jonathan

H. Adler

clearly hostile to the use of race-conscious analyses of this sort.8 Under the guidance, “merely demonstrating that the permit complies with applicable environmental regulations will not ordinarily be considered a substantial, legitimate justification.” In other words, it is not enough to comply with the law to get an environmental permit. To get government approval, the company in question must also demonstrate that its facility, in conjunction with other facilities that are already in the area, does not impose a disparate impact on a local minority population, and that there is no “less discriminatory” alternative. Additional uncertainty is created by EPA’s determination that “permit renewals should be treated and analyzed as if they were new facility permits, since permit renewal is, by definition, an occasion to review the overall operations of a permitted facility and make any necessary changes.” In other words, EPA, under the guise of ensuring that there is no discrimination in the permitting process, will evaluate whether allowing the continued operation of a sited and previously permitted facility has a discriminatory impact. Because of changes in local land use, a company that sites a facility in a low population density area without imposing any adverse impact on a low-income or minority community could suddenly be the source of an adverse impact even though nothing at the facility has changed. The Interim Guidance also reserves EPA’s right to consider Title VI complaints about permit modifications, even though many modifications result in emission reductions or simply entail administrative changes. Thus, even a facility that is reducing the exposure of nearby communities to environmental pollutants can be subject to a Title VI complaint under the Interim Guidance.

Opposition to EPA’sJustice Policy EPA’s new justice policy has state environmental officials up in arms. In 1998, the Environmental Council of the States (ECOS), which represents CORPORATE

ENVIRONMENTAL

STRATEGY

Jonathan H. Adler

forty-nine of the fifty state environmental agencies, passed a resolution calling on EPA to withdraw the guidance altogether. ECOS labeled the guidance unworkable and charged that it would impose sub stantial new burdens on state agencies and obstruct the operation of environmental permitting programs. “If a company can’t get a permit from my agency in a reasonable time frame, it can’t stay competitive in a global situation,” commented director of the Michigan Russell Harding, Department of Environmental Quality, to Investor’s

ENVIRONMENTAL POLICY

“theworst of both worlds”as it’s “tooweak to protect minorities and it’s too vague for businessesto know what they should do to abide by the law. ”

Business Daily.g

ECOS is far from alone in its opposition to the policy. Other groups that have called on EPA to go back to the drawing board include the U.S. Conference of Mayors, the National Black Chamber of Commerce, the National Association of Black County Officials, the Western Governors Association, and the National Black Caucus of State Legislators (NBCSL). As NBCSL member Bob Holmes (D-GA) explained, the policy is “the worst of both worlds” as it’s “too weak to protect minorities and it’s too vague for businesses to know what they should do to abide by the law.” If left in place, the policy will serve as yet another disincentive to locating businesses in minority communities. While “enterprise zones” and numerous other policies seek to steer economic investment into impoverished communities, EPA’s environmental justice policy will work to keep such investment out.

Down in Louisiana Some private firms are already introducing concerns about EPA’s environmental justice policy into their siting and investment decisions. Consider the recent events in St. James Parish, Louisiana. St. James was to be the home of a new $700 million Shintech plastics manufacturing plant. For a community in which approximately one in three people lives below the poverty line, the new facility was a blessing. It would create over 150 well-paying jobs and substantially increase the local tax base. Indeed, polls indicated that a majority of parish residents supported the plant. Vol. 6, No. 2 1999

While “enterprisezones”and numerous otherpolicies seek to steereconomicinvestment into impoverishedcommunities, EPA’Senvironmentaljus tice policy will work to keep such investment out. Yet, St. James Parish is predominantly black, and local environmental activists, aided by students at the Tulane Environmental Law Clinic, charged that allowing the facility to go forward would violate Title VI of the Civil Rights Act of 1964, because it would contribute to a “disparate impact” on local residents. EPA put a freeze on the Shintech facility’s permits pending further review by EPA’s Office of Civil Rights. In the meantime, environmental activists from Greenpeace pounced, seeing an opportunity to prevent a plastic plant from opening. Their efforts paid off as Shintech withdrew its proposal for the plant in favor of opening a smaller facility nearby. One consequence of the change will be less economic development for the area, as the new proposal calls for 140 fewer jobs. Nonetheless, EPA heralded the Shintech experience as a “blueprint for dealing with environmental justice issues across the nation.” What EPA Secretary Browner 187

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called evidence that “environmental protection and economic growth can go hand in hand” was the loss of over one hundred well-paying jobs in a community where poverty is probably a greater problem than pollution.

Wealthier Is Healthier Even if the change in Shintech’s siting results in a reduction of industrial emissions, and similar EPA efforts produce similar results, there is still little justification for EPA’s policy. The prevalence of industrial facilities in a given area is a poor proxy for environmental exposures or risks to public health. Compiling aggregate data about the volume of reported or permitted releases within a particular zip code, Congressional district or census tract reveals no meaningful information about actual exposures to environmental contaminants. Such information, without actual exposure data and information about the relative toxicity of the substances involved, cannot be used to meaningfully improve the protection of public health and the environment. Yet, insofar as such information serves as the basis for disparate impact analyses used to reject permit applications and renewals, and discourage economic development, it can actually do more harm than good. Study after study indicates that wealthier populations are healthier populations. Diminishing the wealth of a regional economy through unnecessary environmental regulation can have the perverse . effect of actually increasing mortality. It has been estimated that “each $7.5 million of costs generated by regulation may, under certain assumptions, induce one fatality.“‘O This occurs because funds have been diverted from those pursuits that can improve health and well-being.rl A similar impact on human health can be observed from unemployment. Studies have demonstrated conclusively that higher unemployment and lower levels of economic growth correlate with increased mortality and morbidity.‘* Thus, insofar as environmental regulation reduces employment levels or increases in family income, it is likely to have a negative impact on human health.13 188

Jonathan

H. Adler

The relationship between economic activity and public health has been observed in the environmental justice context. In southern Louisiana’s infamous “Cancer Alley,” there is substantial environmental pollution from industrial facilities. Mortality rates for several types of cancer are also above the national average. However, while some cancer death rates are higher, the incidence of cancer is not.14 In other words, people in southern Louisiana are not more likely to get cancer than others, but they are more likely to die from it. This suggests that the problem is not environmental exposure, or any disparate impact caused by industrial facilities, but a lack of health care. The problem in “Cancer Alley” and many similarly situated communities is not so much environmental as it is socioeconomic. The remedy is not yet another regulatory hurdle to the permitting of new and existing facilities. The solution lies in encouraging community development and empowering communities to have greater control over their economic destiny.

What Comes Next ? The stated aim of EPA’s Interim Guidance is to ensure that the issuance of pollution control permits does not cause adverse impacts on low-income or minority populations. As written, however, the guidance will do nothing to advance this aim. It may even be counterproductive, increasing risks to human health and the environment in affected communities. If EPA is truly concerned about environmental justice, the guidance will be withdrawn. In the meantime, corporate executives and state officials will have to deal with EPA’s policy and the uncertainty it generates. This policy climate makes efforts to develop local community support for industrial projects more important than ever. Although a handful of activists can trigger an EPA as occurred in Michigan and investigation, Louisiana, the more local support for, and understanding of, a project, the more likely it is to go through. Indeed, local support for Shintech is largely attributed to the fact that company officials were far more proactive than prior investors in the area. Yet as the Shintech and Select Steel cases show, local CORPORATEENVIRONMENTAL STRATEGY

Jonathan

ENVIRONMENTALPOLICY

H. Adler

support is still no guarantee that a project will not be delayed or blocked by environmental justice rules. Regrettably, this means that for many companies, the least attractive communities for development will often be those that need it most. *

Endnotes

8. See, e.g., Adarand Constructor,s, Znr. v. Pena, 115 S.Ct.

2097 (1995). 9. Quoted in Laura Litvan, “Fighting Racism: EPA’s New Role?’ Investor’s Business Daily, March 25, 1998. 10. International

Union v. OSH‘4, 938 F.2d 1310, 1326 (citing Ralph

(D.C. Cir. 1991) (Williams, J., concurring) 1. Title VI of the Civil Rights Act provides that “No per-

L. Keeney,

son in the United States shall, on the ground

Expenditures,”

of race,

“Mortality

Risks Induced

by Economic

Risk Analysis, Vol.10 p. 147- 155)

color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrim-

11. For articles discussing the impact of regulation

ination under any program or activity receiving financial

health

assistance.” 42 U.S.C. 8 2000d.

Environmental

and

mortality,

see Frank

Regulations

B. Cross,

on

“When

Kill: The Role of Health-

Health Analysis,” Ecology Law Quarterly, Vol. 22 p.729; Guardians

2. See, e.g..,

Association

v. Civil

Service

Commission of the City of New Ymlz,463 U.S. 582 (1983).

Randall Lutter and John F. Morrall III, “Health-Health Analysis: A New Way to Evaluate

Health

and Safety

Regulation,” Journal ofRisk and Vncertainty, Vol. 8 p. 43; 3. David Mastio, “EPA Expedites

Plant Investigation,”

Ralph L. Keeney, “Mortality Risks Induced Daniel

4. Examples

of studies that demonstrate

dynamics, and not environmental ble for any disproportionate

Inequity: Journal

and

presence of industrial facil-

Christopher

Economic

Mitchell,

“The

Deadly

Impact

of Federal

Regulations,” Journal of Regulation and Social Costs, June 1992; Ralph L. Keeney, “Mortality Risks Induced Economic Expenditures,”

by

Risk Analysis, Vol. 10 p. 147.

include: Thomas

Boerner,

“Environmental

Causes, Economic

on Regulation,

that market

racism, are responsi-

ities in poor or minority communities Lambert

by the Costs

of Regulation,” Journal of Risk and Uncertainty, Vol. 8 p.95;

Detroit News, October 2, 1998, p. Bl.

Solutions,”

Yale

Vol. 14 p.195; Vicki Been and

12. Books and articles from the voluminous

literature on

this subject include Aaron Wildavsky, Searching for Safety, Transaction

Books, New Brunswick,

NJ.,

1988; Jack

Francis Gupta, “Coming to the Nuisance or Going to the

Hadley, More Medical Care, Better Health: An Economir

Barrios?

Analysis

A Longitudinal

Analysis

of Environmental

Justice Claims,” Ecology Law Quarterly, Vol. 24 p. 1; Brett

of

Mortality

Washington,

Rates,

The

Urban

Institute,

1982; Harriet 0. Duleep, “Measuring the

Baden and Don Coursey, The Locality of Waste Sites Within

Effect of Income on Adult Mortality Using Longitudinal

the City of Chicago: A Demographic, Social and Economic

Administrative

Analysis, The Irving B. Harris School of Public Policy

Vol. 21 p 238; C.P. Wen, et al., “Anatomy of the Healthy

Studies,

Worker Effect: A Critical Review,” Journal of Ocrupational

Been,

University

of Chicago,

“Locally Undesirable

Chicago,

Land

1997; Vicki

Uses in Minority

Yale Law Journal, Vol. 103 p.1383.

Neighborhoods,”

Medicine,

Record Data,” Journal ofHuman Resources,

V’ol 25 p. 283; and

Economic

Committee,

U.S. Congress,

Joint

Estimating the Effects of Economic

Change on A;ational Health and social WelZ-Being,J842-38 5. Christopher

H. Foreman, Jr., “The Clash of Purposes:

Environmental

Justice and Risk Assessment,” Risk Policy

Washington:

U.S.G.P.O., 1984)

Report, March 20, 1998, pp. 347 (emphasis added).

13. See infra note 9 and the sources cited therein

6.

14. This information

U.S.

Environmental

Guidancefor

Protection

Agency,

Interim

Investigating Title VZAdministrative Complaints

Challenging Permits, p. 3 (emphasis added).

Committee

is summarized in Louisiana Advisory

to the US. Commission on Civil Rights, The

Battle for Environmental

Justice

in Louisiana

Government, Industry and the People, Washington, 7. 463 U.S. 582 (1983).

Vol.6, No. 2 1999

D.C., U.S.

Commission on Civil Rights, September 1993, pp. 33-41. 189