2009 Closes with the Opening of Public Comment Period for EPA’s Expanded Financial Assurance Proposal

EPA published an Advanced Notice of Proposed Rulemaking (ANPRM) to expand the universe of industries, operations and sites subject to federal financial responsibility requirements.  EPA has identified the following industry sectors, and one group of facilities because they comprise 1,073 sites, or approximately 70 percent of all non- Federal, proposed, finalized, and deleted sites on the NPL.

-       the Chemical Manufacturing industry (NAICS 325),

-       the Petroleum and Coal Products Manufacturing industry (NAICS 324),

-       the Electric Power Generation, Transmission, and Distribution industry (NAICS 2211),

-       the Waste Management and Remediation Services industry (NAICS 562) (including municipal and industrial landfills),

-       the Chemical Manufacturing industry (NAICS 325),

-       the Wood Product Manufacturing industry (NAICS 321),

-       the Fabricated Metal Product Manufacturing industry (NAICS 332),

-       the Electronics and Electrical Equipment Manufacturing industry (NAICS 334 and 335),

-       the Petroleum and Coal Products Manufacturing industry (NAICS 324), and

-       facilities engaged in the recycling of materials containing CERCLA hazardous substances.

EPA is requesting comments on a wide range of information, including critical environmental risk-oriented information.  Some of this requested data may not be formalized – or even exist – within all companies potentially subject to the future rule.  For instance, the Agency requests the following information (for any or all of the industry categories discussed in this notice):

-       Data on facility operations within these industries, and on the classes within these industries.

-       Data on the risk profile for facilities in the various industries, including data addressing the scope of past and expected future environmental responses.

-       Data on the risk evaluation approaches used by various industries (or by industry insurers) when seeking (or providing) insurance or bonding coverage.

-       Data explaining how frequently various financial assurance mechanisms are used by the various sectors, and the factors causing some to be chosen over others.

-       Information on the reliability, availability, and affordability of existing financial responsibility mechanisms. For example:

• What factors or information are used by issuers to determine the amounts of coverage provided?
• How are fees or coverage amounts adjusted to account for risk information, such as from risk assessments, site-specific exemptions, or positive risk management incentives?

A 30-day public comment period begins the day of publication of the ANPRM in the Federal Register.

EPA Says Happy Holidays in Their Own Way

In case you haven’t yet seen it, EPA wrapped up the year with three significant announcements.

First, the Agency published its 2009 compliance enforcement results.  The summary statistics are here.   A few points from their website

• In fiscal year (FY) 2009, the Environmental Protection Agency’s enforcement and compliance program concluded civil and criminal enforcement actions requiring polluters to invest an estimated $5.4 billion to reduce pollution, clean up contaminated land and water, achieve compliance and fund environmentally beneficial projects. Civil and criminal defendants committed to reduce pollution by approximately 570 million pounds annually once all required controls are fully implemented.

• Approximately 57% of pollution reductions and 71% of pollution control investments obtained through the Agency’s FY 2009 enforcement actions focused on water and air pollution priority problems.
• In FY 2009, EPA opened 387 new environmental crime cases, the largest number of criminal case initiations in five years.

Second, EPA announced it has settled with Duke Energy to resolve violations of the Clean Air Act’s new source review requirements found at the company’s Gallagher coal-fired power plant in New Albany, Ind., located directly across the Ohio River from Louisville, Ky.   The lawsuit was filed in 1999.

Under the settlement, Duke will spend approximately $85 million to reduce air pollution at the plant through a combination of fuel switching and air pollution control equipment, $1.75 million on the civil penalty, and another $6.25 million on environmental mitigation projects.

The Duke settlement is the 17th settlement secured by EPA and DOJ as part of a national enforcement initiative targeting coal-fired power plants under the Clean Air Act’s New Source Review requirements.  See the press release.

Lastly, EPA announced it is delaying a decision on the regulatory determination for coal ash.  No timeframe or deadline was offered by EPA.  Read the press release.

The Elm Consulting Group International, LLC to Participate in the 2010 Hospitality Law Conference

Lawrence Heim, CPEA, Director with The Elm Consulting Group International LLC, will speak at the 2010 Annual Hospitality Law Conference on February 3-5, 2010 in Houston.

Mr. Heim’s presentation will be part of the “It Ain’t Easy Being Green” track at the annual conference.  The presentation will review business risk concepts to be considered when evaluating when and how to develop and implement a sustainability program in the hospitality sector.  Topics covered include relevant activities and exposures to be condered within such a risk assessment considerations and scoping and ideas for quantifying the economic value of reducing identified environmental, helath and safety (EHS) risks.  In addition to presenting, Elm will also be an exhibtor at the conference, showcasing the company’s EHS and sustainability consulting expertise.

Elm is the only EHS/sustainability consulting service provider partipcating in the exhibition and conference presentations.

The Annual Hospitality Law Conference is a one-of-a-kind opportunity that brings together more than 350 private attorneys, human resource professionals, in-house counsel, loss-prevention personnel, risk managers, and hospitality owners and operators to learn about a host of legal issues pertinent to the hospitality industry.

The 2010 Hospitality Law Conference covers the areas of lodging, food and beverage, human resources, and loss prevention.

PCAOB Announces Public Meeting on Reproposal on Risk Assessment/Auditing Standards

According to WebCPA, the Public Company Accounting Oversight Board has scheduled an open meeting for Thursday December 17, 2009 in order to consider reproposing certain auditing standards and related amendments.

The standards, originally proposed in October 2008, would revise the requirements for assessing and responding to risk during an audit.

The original proposal was a bloc of seven new auditing standards that were designed to provide direction on audit procedures performed throughout the audit, from the initial planning stages through the evaluation of the audit results in forming the opinions in the auditor’s report.

Those proposed standards included:

• Audit Risk in an Audit of Financial Statements;

• Audit Planning and Supervision;

• Identifying and Assessing Risks of Material Misstatement;

• The Auditor’s Responses to the Risks of Material Misstatement;

• Evaluating Audit Results;

• Consideration of Materiality in Planning and Performing an Audit; and,

• Audit Evidence.

The meeting is open to the public and will take place in the board’s meeting room at 1666 K St. N.W., Washington, D.C.

It also will be webcast via a link on the PCAOB Web site and available via podcast later in the day.

Upcoming EHS Risk Auditing Conference

The Auditing Roundtable
 Winter 2010 Meeting, Exposition, and Training  
“Incorporating Risk Management into EHSS Auditing” will be held in Phoenix January 11-13, 2010.

Laws, regulations, and standards keep changing, as to business goals, capabilities of IT, communications methods, and stakeholder expectations.  EHSS auditors fulfill a critical role in maintaining compliance with EHSS laws, regulations, and standards.  This meeting will focus on how EHSS auditors can help identify, evaluate, and help organizations manage risk in uncertain times.    Presentations will also focus on risk transfer and management, moving beyond compliance into risk management, auditing risk, and using risk-based approaches to managing audits and conducting auditing programs.  Regulations designed to reduce risk (including Homeland Security and Process Safety) and Business Continuity Planning will also be discussed.

Mr. Lawrence Heim of Elm is currently scheduled to speak on Merging Risk Management, EHS and Auditing Concepts.

The meeting will also continue with standard features, including industry sector break-outs, topical interest groups, and ample time to mix and mingle with EHSS auditing and management professionals.

The AR is also offering training courses on Basic Auditing Skills, Environmental Auditing, and Health & Safety Auditing.  Developed by request of membership, these courses offer the opportunity to brush up on basics, or to achieve greater proficiency.  These courses qualify for Continuing Professional Development credit for CPEAs, and applicants will find them to be a good resource in preparation for the Certified Professional Environmental Auditor (CPEA) exams offered by the Board of Environmental, Health & Safety Auditor Certifications.

For more information, click here.

Will SEC Heed $500 Billion?

Under current SEC regulations, companies are required to disclose material information or information that an investor should posses in order to decide whether to buy a company’s stock.  But these companies do not routinely include climate-related risks in their filings, nor is the information consistent when it is provided at all.

The California Public Employees Retirement System, which manages $202 billion of assets, and the California State Teachers’ Retirement System, which manages $130 billion of assets, are among 20 investors and groups that petitioned the U.S. Securities and Exchange Commission to issue guidance telling companies to include risks related to climate change in their quarterly and annual filings.

“The SEC should strengthen and enforce its current requirements so investors’ decisions fully account for climate change’s financial effects,” Calpers Chief Executive Anne Stausboll said in a statement.

The initiative hopes to make the most out of the Obama administration’s renewed emphasis on environmental protection, climate change rhetoric and plans to propose an emissions reduction target at the December climate change conference in Copenhagen.

SEC Commissioner Elisse Walter, one of five members who makes decisions on federal securities rules, has said she believes that climate change is a very serious issue and this is the time for the SEC to issue so-called ‘interpretive guidance’ on this topic.

“This (petition) will be taken seriously and be one more piece of influence on the commission, to perhaps get bit more instructive on considering these issues,” said David Martin, a former SEC director of corporation finance — the division in charge of overseeing corporate disclosures. Martin is now in private practice at law firm Covington & Burling.

EPA Finalizes New Stormwater Requirements for Construction Sites

The U.S. Environmental Protection Agency today issued a final rule to help reduce water pollution from construction sites. The rule takes effect in February 2010 and will be phased in over four years. 
This is the first time that EPA has imposed national monitoring requirements and enforceable numeric limitations on construction site stormwater discharges

The final rule requires construction site owners and operators that disturb one or more acres to use best management practices to ensure that soil disturbed during construction activity does not pollute nearby water bodies.

In addition, owners and operators of sites that impact 10 or more acres of land at one time will be required to monitor discharges and ensure they comply with specific limits on discharges to minimize the impact on nearby water bodies.

EPA Writes Another Chapter in the SPCC Rule Novel

Today, EPA announced a final regulation that amends certain requirements for facilities subject to the Oil Spill Prevention, Control and Countermeasure (SPCC) rule.  The amendments clarify regulatory requirements, tailor requirements to particular industry sectors, and streamline certain requirements for a facility owner or operator subject to the rule.

This rulemaking marks the completion of the SPCC action, which was proposed on October 15, 2007, finalized on December 5, 2008, and for which the agency requested public comments again on February 3, 2009.

In general, this final rule retains most of the December 5, 2008 provisions, with 3 major differences.  EPA has eliminated the exemptions for:

• certain produced water containers;
• the alternative criteria for oil production facilities to be eligible for self-certification of their SPCC plan; and
• the exclusion of oil production and farm facilities from the “loading rack” requirements.

The amendments do not remove any regulatory requirement for owners or operators of facilities in operation before August 16, 2002, to develop, implement and maintain an SPCC plan in accordance with the SPCC regulations then in effect.  Such facilities continue to be required to maintain their plans during the interim until the applicable date for revising and implementing their plans under the new amendments.

The effective date of this final rule is January 14, 2010.

See the official pre-publication version of this final rule here.

Largest Fine in the History of OSHA Announced Today

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) today announced it is issuing $87,430,000 in proposed penalties to BP Products North America Inc. for the company’s failure to correct potential hazards faced by employees. The fine is the largest in OSHA’s history. The prior largest total penalty, $21 million, was issued in 2005, also against BP.

BP entered into a settlement agreement with OSHA in September 2005, under which the company agreed to corrective actions to eliminate potential hazards similar to those that caused the 2005 tragedy. Today’s announcement comes at the conclusion of a six-month inspection by OSHA, designed to evaluate the extent to which BP has complied with its obligations under the 2005 agreement and OSHA standards.

For noncompliance with the terms of the settlement agreement, the BP Texas City Refinery has been issued 270 “notifications of failure to abate” with fines totaling $56.7 million. Each notification represents a penalty of $7,000 times 30 days, the period that the conditions have remained unabated. OSHA also identified 439 new willful violations for failures to follow industry-accepted controls on the pressure relief safety systems and other process safety management violations with penalties totaling $30.7 million.

Elm Initiates Program to Support Procurement Streamlining

Today The Elm Consulting Group International, LLC announces a program that allows clients to process contracts, invoices and payments far more efficiently than in the past.

“In recent years, many companies have undergone internal business process reviews that included streamlining their procurement and payment systems,” said Robert Bray, Managing Director of Elm.  “As a result, several clients asked us if we could align our contracting and invoicing systems with their streamlined processes.  And we have.”

Effective immediately, Elm is able to accept corporate P-card payments for invoices.  For many companies, P-card use significantly reduces the administrative effort required to approve and process bills.