Site Remediation Reform Act: Why is Direct Oversite by NJDEP a Bad Thing?

September 28th, 2009 | Posted by: Christopher DeGrezia 1| comments:

2009-02-17 Transfer 082If things go according to NJDEP’s plans, all but a handful of sites will proceed through remediation at a much faster pace under the direction of newly minted Licensed Site Remediation Professionals (LSRPs) and without intervention by NJDEP (except through performance of the occasional audit).  LSRPs will meet mandatory time frames, implement LSRP-selected remedies or any presumptive remedies, where applicable, and issue the Response Action Outcome (RAO) confirming that remediation is complete.  In a few circumstances, however, NJDEP will remain involved in and have direct oversight of the remediation process.  SRRA makes that oversight mandatory in certain cases. In other cases, NJDEP will be able to assume direct oversight at its discretion.

Given the areas of uncertainty arising out of the new LSRP regime, is there too much risk in proceeding without prior NJDEP buy-in to remedial action?  Some have questioned whether it might not be better to perform a remediation under NJDEP direct oversight.  With such oversight, you will get NJDEP approval of all remediation submittals.  And, the risk of having the RAO overturned in an audit would seem to be substantially diminished, if not eliminated.  While that level of comfort may be attractive to potential buyers, lenders or developers of a contaminated site, the spectre of higher costs, delays and conservative remediation decisions by NJDEP under direct oversight makes it far better for a party to avoid direct oversight if at all possible.

Under SRRA, NJDEP must undertake direct oversight of remediation of a contaminated site where the person responsible for conducting remediation has:

  •  a history of non-compliance with the laws, regulations or rules concerning remediation, that includes the issuance of at least two “enforcement actions” (unilateral administrative order, notice of civil administrative penalty, or court order) during any five-year period after May 7, 2009;
  • failed to meet a mandatory remediation time frame or expedited site-specific time frame established by NJDEP or a schedule established by administrative or court order; or
  • failed to complete a remedial investigation of the entire contaminated site 10 years after discovery of a discharge at the site and five years after May 7, 2009.

In addition, NJDEP is given the discretion to exercise direct oversight when:

  •  the contamination includes chromate chemical production waste;
  • more than one environmentally sensitive natural resource has been damaged;
  • the site has contributed to polychlorinated biphenyl, mercury, arsenic or dioxin contamination in surface water body sediments; or
  • the site is ranked at the highest priority under the NJDEP ranking system.

NJDEP recently issued “Version 1.0” of its guidance on discretionary direct oversight.  The guidance essentially describes the prevailing conditions with respect to each of the four discretionary oversight categories under which NJDEP could exercise its power of direct oversight.  NJDEP’s guidance does not suggest that it will assert direct oversight when these conditions are met only that it may do so.  If these conditions are met, NJDEP will then consider certain mitigating or aggravating factors in determining whether direct oversight will take place.  The guidance does not attempt to list all mitigating or aggravating factors NJDEP will consider or, more importantly, how it will weigh those factors.  Predicting when a case will be placed into direct oversight therefore remains an exercise in speculation.  Nonetheless, the guidance does offer a glimpse at the general direction NJDEP plans to take.

The conditions that must prevail to subject a site (or portion of a site) to direct oversight vary among the four categories.  For sites ranked by NJDEP in the highest priority category under the new ranking system to be developed, the only precondition is that the site be so ranked.  With respect to environmentally sensitive resources, the guidance does clarify how they are to be defined [Footnote 1]  but does not offer any clarity as to what constitutes an “injury.” For the other two categories, NJDEP adopts a concentration limit as the pre-condition for direct oversight.  For sites containing chromate chemical production waste, the trigger for direct oversight is dependent on concentrations of the material in soil (in excess of 20 parts per million or ppm) or groundwater (in excess of 70 parts per billion or ppb).  Likewise, for sites contributing to PCB, mercury, arsenic or dioxin contamination in sediments found in surface waters, direct oversight could be sought where concentrations of the relevant constituent in such sediments exceeds the “Severe Effects Level” for freshwater conditions or the “Effects Range Medium” for saline conditions.

In all cases, the existence of a relevant pre-condition under the guidance still leaves NJDEP with the discretion to assume direct oversight based on the presence of mitigating or aggravating factors.  Some of the factors NJDEP has identified are:

  •  Compliance record. Sites with a positive compliance record could escape direct oversight while cases for which compliance was “less” face a “greater likelihood that remediation will be subject to direct oversight.”
  • Size of a Natural Resource injury. “The larger the extent or size of the injury the greater the likelihood the remediation will be subject to direct oversight.” If a groundwater plume or area of wetland, soil or sediment contamination is greater than five acres, NJDEP considers that “a further aggravating factor.”
  • The magnitude or severity of an injury. “The larger the magnitude or severity of the injury the greater the likelihood the remediation will be subject to direct oversight.”      

           “Further aggravating factors” include:

  1. surface water body sediment contamination for any constituent in excess of the “Severe Effects Level” for freshwater conditions or the “Effects Range Medium” for saline conditions;
  2. contaminants found in a surface water body or discharging from groundwater to a surface water body that exceed the acute aquatic surface water quality standard; or
  3. contaminants (except pesticides) found in soil that exceed the highest value cited in NJDEP’s Ecological Screening Table relevant to soil multiplied by a factor of 100 (for pesticides soil concentrations exceeding 1 ppm are at risk).

Once a site comes under NJDEP direct oversight (whether mandatory or discretionary), a person responsible for remediation must comply with a number of requirements.  You still must hire an LSRP who will be responsible for preparing all submittals (including the RAO), but NJDEP will review each document submitted, and approve or reject the submittal.  NJDEP approval may provide some comfort, but that comfort comes at a price.  Direct oversight will increase NJDEP oversight costs that you will be asked to pay and, of course, you will incur additional costs for your consultant to respond to NJDEP comments.  The likely back-and-forth between NJDEP and the LSRP also increases the possibility of notices of deficiency and/or notices of violation and penalties under the so-called Grace Period Rules. Moreover, the language of the statute provides that all submissions by the LSRP you hire and pay for must be made simultaneously to you and NJDEP.  Does that mean you cannot review and comment on drafts of the submittal before it is given to NJDEP? NJDEP could take that position.  There may be a need to more closely coordinate and meet with your LSRPs before any drafting occurs both to be sure the submittal is complete and sufficient to avoid potential Notices Of Deficiencies or Notices of Violations.  The need for increased contact with your LSRP will also further increase costs.

Among the submittals required will be a feasibility study – a study to develop and evaluate multiple remedial action alternatives and to analyze the engineering, scientific, institutional, human health, environmental and cost impacts of each alternative. NJDEP will select the remedy that must be implemented from among the remedial alternatives presented. Because a site in the direct oversight program, by its nature, is characterized by an issue of special concern to it, NJDEP might fairly be expected to be conservative in its selection process. Moreover, you will need to implement a public participation plan approved by NJDEP to solicit comment from members of the surrounding community.  That plan could well be more onerous than current public outreach regulations require and potentially increase pressure from the community on the remedy selection to reinforce NJDEP’s conservative instincts to choose a more expensive option.

Finally, to fund the remedy you must establish and fully fund a remediation trust fund in the amount of the estimated cost of remediation.  None of the other remediation funding sources (e.g., letter of credit, line of credit, insurance policy or self-guaranty) may be used.  NJDEP also must approve all disbursements from the trust.

At most NJDEP public presentations on SRRA, NJDEP has repeatedly proclaimed that parties do not want to land in the direct oversight program.  Indeed, taken together, the constraints imposed on direct oversight cases promise to delay cleanup, increase costs and lead to selection of conservative remedies.  Whether those risks are outweighed by the value of NJDEP’s imprimatur on your cleanup depends on the given case, but it will be the unusual case that benefits from NJDEP direct oversight.

If you need assistance or have any specific questions, feel free to contact: 

 

 Footnote

  1. SRRA provides that owners and operators of industrial establishments subject to ISRA; persons in any way responsible for a discharge of a hazardous substance under the Spill Act; and owners and operators of USTs that have discharged a hazardous substance “shall remediate the discharge of a hazardous substance.” N.J.S.A. 58:10B-1.3.

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One Response to “Site Remediation Reform Act: Why is Direct Oversite by NJDEP a Bad Thing?”

  • Gina York, P.G.,J.D. says:

    Very informative and informal reading at the same time! Just one of the many topics I am trying to resolve on the Site Remediation Reform Act. Thank you.

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