What right-to-know means for environmental strategies

CONCLUDING

REMARKS

What Rightto-Know Means for Environmental Strategies BY JOHN S. GUTTMANN,

ESQ.

T

hose affected

that will be of importance

community,

regulators,

may eventually ronmental towards

During

attention

in addition “command incentive

of environmental regulation

controls

in envion moves

regulation of products,

over manufactur-

and waste disposal,

and control”

and a move from

systems to market based or

driven systems. There is, however, anoth-

er significant noticed.

changes

they

the last several years,

increasing

to traditional

ing processes

to the regulated

has been focused

globalization

and management,

shift

A change

underway

regulatory

that

is occurring

of public participation

ronmental

Every environmental strategist spends time trying to anticipate environmental regulation. John S. Guttmann, director of the law firm Beveridge 6 Diamond based in Washington, D.C., provides CES readers with a quick study into the significant changes that are occurring in the nature and extent of public participation. Guttmann explains how the expanding nature of community “right-to-know” and direct public involvement are becoming drivers for regulatory change. His concluding comments blends critical analysis of current U.S. Environmental Protection Agency information on disclosure initiatives with an evaluation of recent EPA public involvement programs. Guttmann identifies how these changes might impact corporate disclosure, and offers valuable insight on the pitfalls of attempting to satisfy the growing public demand for information and involvement.

regulatory

and the public because

lead to significant

regulation.

considerable

extent

by environmental

schemes are always on the lookout for trends

has been

less

in the nature

and

in the American

envi-

process.

Historically, most key environmental decisions have been made either by legislators or regulators. Both decision-making processes have, of course, always included public input. At the legislative level, environmental decision making is a political process in which public interest groups, such as environmental organizations, and the regulated community Traditionally,

have sought input into the process. at the regulatory level, public input

has centered on the provision of opportunities for members of the community to express their views to the regulators who then make the decisions. Now, however, there are significant moves on a number of fronts both towards the provision of more-and hopefully better-information to the public and to direct public decision-making on environmental questions.

This movement

should

strategists

in three dynamic

contexts.

be explored

by

Expansion of the “Right-to-Know” Agenda The phrase community “Right-to-Know” speaks for itself. The Emergency

Planning

and Community

Right-to-Know Act (EPCRA), 42 U.S.C. f 11023, et seq., and other statutes illustrate a move over the last decade toward the provision of significant amounts of raw data about environmental matters that had not previously been readily available. One JOHN S. GUTTMANN is a director of the law firm Beveridge & Diamond, PC., and practices out of the firm’s Washington, D.C. and New York offices. From 1990 through 1995 he was Managing Director of the firm and has since returned to full time practice in the areas of environmental, commercial, and health insurance litigation. 82

underlying premise of such legislation is that expanding and improving upon the information provided to the community will give the public a better understanding of the factor influencing environmental decision-making and improve the qualiCORPORATE ENVIRONMENTAL STRATEGY

CONCLUDING

ty of public

input

processes. Another agenda,

to-Know” Environmental

into legislative

aspect of the expanding “Righthowever, is that the

Protection

using public information untary the

Agency

in environmental

by the regulated

Toxics

EPCRA,

Release

community.

Inventory

which requires

tain environmental

companies

emissions

perforportion

to publish

of cer-

data, is intended

provide the public with information

constrained

resources

to explain,

neous information.

to

that it can USC

ciated

with

complained

rate and presented simple mistakes, complained

of those

context presented

and, as a result, management

prompts

of reportable

improved

toxics

environmental

systems. Thus, this expansion of the agenda is intended to influence

“Right-to-Know”

both the public and the regulated

community.

being

that much

groups assoincluded

have

of the mforma-

into the system is inaccu-

in misleading the regulated

wavs. Apart from

community

that the hazard ranking

ed in the SFIP proposal

for com-

groups have also

Industry

the five sectors vigorouslv

protection

and clarify the crro-

Many industry

tion that EPA is inputting

performance

panies to reduce their emissions

environmental correct,

to the SFIP project.

TRI thus creates an incentive

to assess the environmental companies.

vol-

For example,

(TRI)

draining

objected

is increasingly

as a tool to encourage

improvements

mance

and regulatory

REMARKS

has also

system includ-

does not provide

a proper

to enable people to assess the degree of risk by different

have also criticized guish

meaningfully

ones.

Nevertheless,

facilities.

Industry

groups

the program for failing to distinserious

violations

from minor

EPA is committed

to

this

process as part of its effort to improve public particclccision-making and to ipation in regulatory

EPA is now introducing its Sector Facility Iiidexing Project (SFIP), which will combine numerous databases to produce profiles of all major

increase incentives expand

the data included

in the SFIP project

facilities in certain industrial sectors. It will include comparisons of their relative environmental perfor-

cxtcnd

it to other industry

sectors.

mance.

Five industry

SFIP program

They

are automobile

assembly, iron and steel, petroleum refining, primarily nonferrous metals, and pulp mills. The profiles Mill detail facility production or capacity, TRI relcases, TRI releases weighted by toxicity factors, inspection, compliance and enforcement histories under the Air, Water and RCRA statutes,

and demograph-

ic data. In early 1998, EPA will release its SFIP profiles on the Internet. is intended

to provide more

information to the public to facilitate better public input into environmental decision-making. It is also intended

to provide further

incentives

improvements

Over time, EPA will and

However, these objectives

The regulated community has also complained that the hazard ranking system included in the SFIPproposal does not provide a proper context to enable people to access the degree of risk presented by different facilities.

to voluntary

improvements in environmental performance beyond those that are already prcscnt in the TRI program.

towards voluntary performance.

sectors will bc covered by the

at the outset.

The SFIP program

in environmental

will be met only

Expansion of Public Participation Government Decision-making One can only hope that the additional

if the data provided to the public through the SFIP is valid and presented fairly. Serious questions ha\ze

mental

consistent

high quality because

been raised about whether

ing trend.

The

the program,

Iv structured, will create mischief desired results.

rather

as currentthan

the

in

information

cnviron-

provided to the public will be of

concept

of another

of public

devclop-

participation

government decision-making in the IJnitcd appears to be evolving from one of public

in

States notice

In September, 1997, nineteen states asked EPA to delay the SFIP claiming that as proposed it could provide misleading and inaccurate information

towards actual citizen decision making in the environmental context. As noted above, traditionally public participation has meant giving the public

about

notice

local industrial

facilities,

thus

CORPORATEENVIRONMENTALSTRATEGY

unnecessarily

of pending

governmental

decisions

and pro83

CONCLUDING

REMARKS

viding it an opportunity ings or in writing. been given a defined ulatory and

concept

policy

Recent

discussions

of public participation

For example,

in Congress

Superfund

program,

involvement

about

making

proposals

expand

this

Organizations

future

EPA in consultation

the alternative

compliance

the company

to the

consent.

would

stakeholder

that

processes.

in both

would remain

ways,

in part on the by

with each CRO. The practical

effect of these proposals would be that before EPA would agree to factor in some sort of land use controls to lower the cost of clean up, the CR0 must reach something close to consensus on the proposed

decision

have little

two examples

While

As a practical

illustrate

gave their the emerg-

in decision-making

cases the final decisions

with EPA, some key element

must be accepted

of

compli-

groups

by a stakeholder

of that or com-

munity group before EPA would grant any relief to industry. The same is becoming true in environmental rulemaking on major issues, as EPA more and more convenes stakeholder groups” and seeks their consensus before making significant decisions that could result in regulatory

relief to industry.

The trend towards increased

public involvement

in decision-making processes can be seen in a number of EPA’s initiatives as well. For example, the agency’s Project XL, is intended to allow responsible companies

to replace administrative

requirements

and regulatory

with their own alternatives,

future use of the site. CROs would also have meaningful input on other aspects of the remedy chosen

among its criteria for assessing proposals

to clean up the site.

not stakeholder

To date, the requirement of consensus among stakeholders has proven to be an impediment. Consensus has been interpreted a virtual unanimity. For the CSI to work, this must change, which is a fact that EPAhas recognized.

chance

for such an alternative

unless

These

participants.

participation

of the local commu-

use of a site as determined

ance strategy

approval of

strategy by a broad con-

ing role of public

on community In various

approval

com-

compliance

In some cases, the leg-

and

nity during the clean up process. The final clean up anticipated

could be entered.

receiving

never ending

alternative

an alternative

islative proposals would require advance

matter,

(CROs) at each Superfund

level at each site would be based

agreement

any proposed

before

process in a

proposals would create Community

site to act as the representative

strategy

of stakeholder

reform legislation sites.

pliance

sensus

Democrats

major new provisions

process” to consider

of

amendments

both

at Superfund

these legislative Response

would

a reg-

way than ever before.

have proposed

would include

legislative

during the seemingly

discussions Republicans

to influence

to make members

the public part of the decision much more fundamental

at public hear-

has, in other words,

opportunity

decision-maker.

public

to comment

The public

support

includes whether

for the proposal

or

is present.

EPA’s April 23, 1997, Guidance for Project XL states that the stakeholder process must include: (1) local stakeholders; (2) those with a broader interest in the XL concept; and (3) those with a broader interest in the matter

being

tested.

The jury remains

out on

the ultimate nature and success of Project XL. Similarly, the EPA’s Common Sense Initiative (CSI), intended t o b e a different system of environmental pollutant approach,

protection

that

replaces

the

pollutant

by

approach with an industry by industry requires that the process of developing

consensus based changes in how industry sectors will be regulated. Included in these changes will be environmental groups, environmental justice advocates, as well as other interested

parties. To date, the

Other legislative proposals would allow individual industrial facilities to petition EPA to enter

requirement of consensus among stakeholders has proven to be an impediment. Consensus has been

alternative compliance agreements in lieu of traditional environmental operating permits. Each facili-

interpreted as work, this must recognized. In succeed and is

ty seeking an alternative compliance agreement would have to establish a “stakeholder participation 84

virtual unanimity. For the CSI to change, which is a fact that EPA has any event, even if the CSI does not replaced by some other future initiaCORPORATEENVIRONMENTALSTRATEGY

CONCLUDING

tivc, the important

role of stakeholder

mental

participation

w111be a given as any future initiatives are framed. The trend toward expanded public participation in government

decision

issues is an important providing

making

of

is not new. Over thirty

Carson

argued

regulation

years ago, Rachel

that the legitimacy

be lessened

if to

the introduction

ronment.

wo;ld

of chemicals

The changes

into the envi-

that WC arc seeing now are

just further moves in the direction

that she and oth-

ers have long urged. For this expanded public role to bc both meaningful and positive, the information provided sented

to citizens must be both accurate in context.

Otherwise,

and pre-

a more central

role in the process will be disruptive results counter

to the legitimate

public

and lead to

public interest.

Environmental Audits, Voluntary Disclosure, and the Battle Over Confidentiality For the last several between hand

EPA and

and industry

the propriety

ing confidentiality

to internal

state

for the

While

22, 1995, eliminate

environmental

audit

community,

any

privilege

however, disagrees.

EPA may have a stated policy of not using environmental

enforcement

audit

proceedings,

reports

to initiate

that polic!; dots not prc-

EPA, as a matter of policy, opposes all state audit privilege laws in any form. In opposing specific state statutes that create an audit privilege, EPA has focused its criticisms on the potential impact of the audit law on its enforcement programs. elude environmental the public,

a battle

environmentalists

and the states

other concerning

years,

on December

need

policy, which

of government

the public were denied an active role in decisions permit

of the environment

disclosure

was published

internal

a more central public role in such decision

making

audit and voluntary

laws. The regulated

on environmental

one. Moreover, the concept

REMARKS

has raged on the

groups

one

on the

of state laws affordcorporate

cnviron-

organizations

who see thcmsclvcs

and members

of

as “stakeholders”

with a Right-to-Know

and the right-to-be-involved

in decision-making,

from seeking a company’s during a citizen’s suit and

internal

audit

using those

reports

reports

to initiate

additional

citizen’s

suits or from disseminating them more broadly. EPA has largely ignored the threat of such USC of

audits mental and compliance programs. Proponents of an environmental audit privilege

internal audit reports bv self-defined in its opposition to state environmental

argue

internal efforts by companies to discover and correct violations of environmental requirements will bene-

ilege laws. The potential for such USC is, however, quite obvious. That being said, it is not unreasonable to include EPA’s opposition to state environ-

fit the public b,!, encouraging

mental

that

problems

affording

confidentiality

and fix them.

to systematic

companies

EPA, as a matter

to uncover of policy,

trend

stakcholders audit priv-

audit privilcgc laws as a final example towards

an expansion

of the

of the Right-to-Knou,

opposes all state audit privilege la\vs in any form.

concept

In opposing specific state statutes that.create an audit privilege, EPA has focused its criticisms on the

ticipation in environmental decision making, from one of public notice tolvards mc of actual citizen

potential

decision

programs.

impact of the audit law on its enforcement At the same time,

however,

and a change

making.

in the nature

of public

par-

*

in what it

describes as an effort to address the concerns of states and the regulated community, the E:PA has indicated

that utilizing

its enforcement

discretion

\\,ould not request or use an environmental audit report to initiate a civil or criminal investigation of a regulated ent-ity, although it reserves its right to use such a report within an investigation that is commenced on some other basis. EPA argues that this fact combined

with other aspects of its environ-

CORPORATEENVIRONMENTALSTRATEGY

85