Yesterday, March 26, 2020, the U.S. Environmental Protection Agency (EPA) published a memorandum titled COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program. This guidance comes at a time when the Coronavirus Disease 2019 (COVID-19) has upended ‘business as usual’ throughout the country and the world. Consumers empty shelves of hand sanitizer, health care workers face shortages of personal protective equipment, and ventilators for patients are in short supply. Many industries are pivoting, altering their processes to provide these much-needed products. For instance, though major car plants in the U.S. (as well as Europe and Asia) have halted production in an attempt to prevent the spread of COVID-19, car manufacturers have pledged their support to offer resources to make more ventilators. Similarly, both small, local distilling companies and internationally recognized distilleries and perfumeries are taking part in producing hand sanitizer following the U.S. Food and Drug Administration’s (FDA) announcement last week that the agency will permit certain facilities and licensed professionals to produce hand sanitizer, so long as they follow the agency’s prescribed recipe. Companies in the textile industry that have never manufactured medically related products such as gloves, face shields, surgical gowns, and masks are considering doing so to meet the current demand.
If you are environmental, health, and safety (EHS) counsel or general counsel for a company considering a similar change, you may find it helpful to consider the following ways to address environmental requirements that accompany a new or significantly altered manufacturing process.
Making the ‘Right Stuff’: Considerations for Product Requirement Compliance
Companies making changes to their process should become and be well-versed in the regulations and guidance documents that apply to those products and determine whether the company’s facilities are capable of complying with the federal, state, and local standards. For instance, when a nonmedical-grade manufacturing plant retools its process to make surgical masks, the plant may find it is producing nonmedical-grade products while awaiting regulatory approvals from the FDA. There is some risk posed by running afoul of these requirements, including penalties or facing a future suit from the government or private parties, especially if it turns out that the plant produced materials that do not meet the relevant standards. To reduce this risk, companies may want to consider requesting that the relevant agencies exercise enforcement discretion to permit the plant to proceed with protection from later litigation.
Getting the ‘Right Permits’: Considerations for Environmental Compliance
If your company intends to make substantive changes to its operation, the new process may impact a facility’s emissions, effluent, and waste composition. Companies would do well to evaluate whether these changes require an alteration or modification of an existing permit, or an entirely new permit. As one example, manufacturing facilities that generate hazardous waste are potentially subject to Resource Conservation and Recovery Act (RCRA), 40 CFR pt. 260-279, or its state analogues. A company that increases the amount of waste generated as a result of ramping up operations may go from being a Small Quantity Generator (SQG) to a Large Quantity Generator (LQG), and would ordinarily be required to follow standards applicable to the new status. However, EPA’s March 26 memorandum notes that it will be exercising enforcement discretion for civil violations, so long as entities make every effort to comply with their environmental compliance obligations and, if compliance is not reasonably practicable, facilities with environmental compliance obligations should (according to the EPA):
|a.||Act responsibly under the circumstances in order to minimize the effects and duration of any noncompliance caused by COVID-19;|
|b.||Identify the specific nature and dates of the noncompliance;|
|c.||Identify how COVID-19 was the cause of the noncompliance, and the decisions and actions taken in response, including best efforts to comply and steps taken to come into compliance at the earliest opportunity;|
|d.||Return to compliance as soon as possible; and|
|e.||Document the information, action, or condition specified in a. through d.|
Though EPA’s March 26 memorandum has relaxed many requirements at the federal level, companies should still consider the implementation of state and/or local requirements. In the RCRA example, additional regulatory requirements, such as a reduction in the time waste can be stored on site, additional technical compliance standards for accumulation of waste, air emissions controls, and reporting and planning obligations, may be imposed. Violation of these requirements may result in civil or criminal penalties at the state level. Furthermore, EPA’s March 26 memorandum specifically notes that criminal penalties will still be authorized for facilities that display “an intentional disregard for the law.” Consideration should be given to complying with the most stringent set of requirements to reduce the risk of future penalties or suits.
If your facility needs to obtain a new environmental permit, it may find it difficult to get one promptly due to government agencies working remotely, with reduced capacity, and/or being delayed due to a surge in applications. If you do experience delays, two things to consider:
- In addition to EPA, many other agencies have significant enforcement discretion and may be more willing to exercise discretion when a company provides notice to the agency and is fully transparent about its change in operations.
- It may help to reevaluate your EHS management system to ensure that it is robust and can adequately identify and address any risks posed by the new manufacturing process.