ENVIRONMENTAL LAW AND BUSINESS

Environmental laws and regulations deal with myriad pollution problems, including the contamination of our air, surface waters, drinking water, ground waters, and land. Pollution or contamination of the environment is found inside as well as outside the walls of factories and other business facilities Those affected include workers and their families as well as other members of their communities. In addition, as U.S. businesses increase their participation in a global marketplace, it is becoming increasingly clear that environmental contamination extends beyond local and regional concerns; its effects are international and even global.

Every business in this country is affected by environmental laws, and many businesses deal with one or more environmental laws and the administrative agencies that enforce them on a daily basis. For example, businesses must inform and educate their employees about hazardous materials in the workplace as required by the Occupational Safety and Health Administration (OSHA), and they must inform their communities about such materials on their premises pursuant to the Comprehensive Environmental Response, Clean Up, and Liability Act (CERCLA—the Superfund Program). Manufacturing facilities must apply for and adhere to permits from the federal Environmental Protection Agency (EPA) regarding emissions into air and water. Businesses generating hazardous wastes must comply with the EPA's manifest system (a record-keeping system), and the disposal of both hazardous and non-hazardous waste is regulated extensively. Businesses are increasingly being required to clean up or pay for clean up of environmental contamination caused by their past acts and practices. Further, businesses are now being required to monitor their production methods and seek ways to prevent pollution.

Environmental regulations are constantly changing and, as J. Stephen Shi and Jane M. Kane noted in Business Horizons, "businesses, especially small-to mid-sized businesses, understandably have a hard time staying abreast of all rules and regulations. [But] whether or not a firm knowingly violated a regulation or was not aware of the violation is irrelevant. Businesses, in the eyes of the law, have a duty to find out what regulations apply to their industry and comply with them." Therefore, for any business person, it is helpful to be familiar with the problems addressed by our environmental laws, the provisions of those laws, and the kinds of mechanisms and administrative agencies through which those laws are enforced.

EVOLVING APPROACHES TO ENVIRONMENTAL PROTECTION

A great deal of the environmental legislation affecting small businesses today originated in the 1970s. In fact, 1970 has been called the "year of the environment." On April 22, 1970, the first celebration of "Earth Day" took place. Also that year, the National Environmental Policy Act was passed by the U.S. Congress, the EPA was created, and OSHA was established. Various U.S. environmental laws predate 1970, but those laws have been developed extensively since that year, and the enforcement of those laws has changed the way business "does business."

Individuals and groups of concerned citizens have long relied upon the legal system to compensate individuals who suffered harm due to exposure to toxic substances, to provide a mechanism for clean up of environmental contamination, to protect citizens from exposure to hazardous substances, and to prevent further contamination of the environment.

In recent times, the United States has moved away from the "reactive" approach of tort law—which is used to compensate victims after harm has occurred—to a more proactive statutory approach—through which future contamination is prevented and existing contaminated sites are cleaned up. Administrative (or regulatory) agencies have been set up by Congress to deal with environmental problems. Through a statute (or statutes) called "enabling legislation," each agency is charged with planning, creation of regulations (or standards), and enforcement of those standards relating to a specific set of environmental problems.

ADMINISTRATIVE AGENCIES

The federal Environmental Protection Agency (EPA) and its state counterparts are the primary enforcers of environmental laws in the United States. Each of the fifty states has an administrative agency which serves as a counterpart to the federal EPA. The state agency is often the primary environmental lawenforcing agency with which businesses deal on a daily basis. However, it must be recognized that environmental law is not exclusively the domain of the EPA. Various other administrative agencies, both state and federal, enforce laws that are related to the environment. Further, the EPA often coordinates its enforcement efforts with those of other administrative agencies whose missions complement or even overlap with those of the EPA. Some of the federal administrative agencies which are engaged in such environmentally related missions include:

* Occupational Safety and Health Administration—Regulates to protect the health and safety of workers within workplaces (excluding mining).
* Mine Safety and Health Administration—Regulates to protect the health and safety of workers in mines and to protect the public from hazards associated with mining.
* Bureau of Land Management—Manages federally owned lands, which total over 350 million acres, as well as the resources on those lands, including timber; oil, gas and minerals; rivers and lakes; plants, animals, and fish and their habitats.
* U.S. Fish and Wildlife Service—Manages the National Wildlife Refuge System.
* National Park Service—Charged with managing the various parks that comprise the nation's national park system.
* U.S. Forest Service—Manages public forest resources for lumbering, mining, farming, grazing, and recreation.
* Council on Environmental Quality (CEQ)—Oversees compliance with the National Environmental Policy Act (NEPA) by agencies throughout federal government.
* Consumer Product Safety Commission—Charged with enforcement of various enabling acts designed to protect consumers, including responsibility for protecting consumers from toxic (hazardous) chemicals.
* Food and Drug Administration—Charged with enforcement of statutes designed to protect the public from harmful food or drugs. Also works with the EPA to protect the public from hazards associated with pesticide residues in food.
* Nuclear Regulatory Commission—Regulates nuclear facilities and handling and disposal of nuclear materials.
* Federal Energy Regulatory Commission—Regulates dams and hydroelectric power.
* Federal Maritime Commission—Certifies that ships carrying oil and hazardous materials have the ability to cover the cost of any spills.
* Army Corps of Engineers—Regulates construction projects on navigable waters; coordinates administration of Superfund cleanups; engages in construction projects to protect wildlife on shorelines and in navigable waters; and other projects.
* National Institute for Occupational Safety and Health (NIOSH)—Under jurisdiction of the Centers for Disease Control (CDC), conducts research on the effects of toxic substances on humans, the results of which are used by OSHA, EPA, and other agencies.

TYPES OF ENVIRONMENTAL REGULATIONS

One of the nation's first environmental laws was the National Environmental Policy Act (NEPA) of 1970, which requires that all federal administrative agencies prepare an Environmental Impact Statement (EIS) before undertaking any major action which is likely to have a significant effect on the environment. Although the utility of the EIS in protecting the environment has been debated by scholars in law and economics, the high ideals represented by NEPA have earned the statute the label "Environmental Magna Carta." Since then, various kinds of regulations have been developed to deal with varying environmental concerns, such as cleanup procedures for past environmental abuses, recordkeeping programs that detail the use and storage of toxic wastes, and regulations governing emissions of pollutants into communities and natural areas.

REGULATIONS PROTECTING CITIZENS One major area of regulatory concern is to protect workers and other citizens from toxic materials used by industry. In the 1970s, the majority of environmental regulation applied to business facilities could be described as "command and control" regulation. Such regulation, most of which is still in effect, consists of detailed standards set down by an administrative agency. For example, if a business applies for an emissions permit pursuant to the Clean Air Act, the EPA will base the terms of that permit on EPA regulations (standards) for that chemical. The permit will specify what chemicals can be emitted and in what amounts. If a business exceeds the limits of its permit, it is subject to civil or criminal penalties.

During the 1980s, "command and control" regulations began to be supplemented by a new kind of regulation known as "Right to Know" (RTK). In the early 1980s, workers advocated the adoption of Worker Right to Know laws, which were designed to give workers access to information about the presence and identities of toxic chemicals in the workplace. OSHA formalized Worker RTK laws across the nation under its Hazard Communication Standard (HCS) in 1984, and by 1989 coverage had been extended to protect workers in all public businesses. Following the example of workers, environmentalists began to advocate Community Right to Know laws during the 1980s. Community RTK on the federal level was created through the 1986 Superfund Amendments and Reauthorization Act. Such laws give citizens access to information about chemicals located on the premises of businesses in their communities.

Worker RTK and Community RTK laws place duties on employers and businesses to provide information to workers and communities through documents called Material Safety Data Sheets (MSDS), which describe chemicals, their properties, and the hazards associated with their use. Further, the Community RTK program requires that a business inventory toxic materials on its premises and document all releases into the environment of such materials. That information, in turn, is made available to citizens and various committees and regulatory bodies. Thus, RTK is primarily an information policy that allows citizens, including workers, to make better-informed decisions about dealing with toxic (hazardous) materials in their workplaces and communities.

Pollution prevention statutes are designed to prompt business facilities to examine their production processes and change those processes to reduce their use of toxic chemicals. Some comprehensive statutes impose planning and reporting requirements on business facilities with respect to toxic chemicals used. Such statutes also cover: 1) protection of the business' proprietary interests; 2) worker and community involvement in planning processes; 3) technical assistance and research to assist business facilities and funding for such programs; and 4) enforcement mechanisms and penalties for non-compliance.

REGULATIONS RELATING TO DISPOSAL AND CLEANUP OF TOXIC SUBSTANCES A variety of other environmental laws and statutes regulate businesses' handling of toxic substances. Laws such as the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Toxic Substance Control Act (TSCA), for example, regulate the manufacture of economic poisons and other chemicals. Such laws require approval and licensing by the EPA before a chemical product can be produced and marketed. The Comprehensive Environmental Response, Clean Up, and Liability Act (CERCLA—the Superfund program), meanwhile, is a program that aims to identify, evaluate, and clean up hazardous waste sites. The program relies on public funds, taxation of the chemical industry, and a "polluter pays" principle (collection of cleanup costs from those who contributed hazardous wastes to the site) as funding sources. To prevent the creation of future "Superfund" sites, the Resource Conservation and Recovery Act (RCRA) requires licensing and close monitoring of hazardous waste generators, transporters, and disposal or treatment sites. The program creates a "cradle to grave" written record of each and every batch of hazardous waste produced by a business facility in the United States.

LOOKING AHEAD

As businesses enter the twenty-first century, they will deal increasingly with the environmental laws of other countries and with the ramifications of international treaties dealing with both trade and the environment. For example, the environment is one of the major areas of public debate regarding the North American Free Trade Agreement (NAFTA). Expanded industrialization in underdeveloped countries resulting from such trade pacts is accompanied by serious concerns about the environmental effects of such industrialization. In 1994, such concerns were included in what are known as the "Uruguay Round" of negotiations regarding the General Agreement on Tariffs and Trade (GATT). Further, President Clinton's administration has already called for a future "Green Round" of the GATT at which various environmental concerns would be addressed. Such concerns include the need for upward harmonization of health, safety, and environmental standards as well as the need to adopt dispute resolution processes that will result in rulings that are more protective of the environment than those currently in effect.

Overall, consideration of the environment and adherence to environmental laws and regulations have become important in the day-to-day conduct of business in the United States and throughout the world. Many businesses today conduct "environmental audits" to determine whether their facilities and operations meet the requirements of all applicable environmental laws and regulations. One of the main lessons that has been learned is that businesses, workers, environmentalists, and government officials need to work together to find economically sound ways of reducing the amounts of toxic substances released into the environment.

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