“All Appropriate Inquiries” - New Standard for Environmental Due Diligence
The attached file, “All Appropriate Inquiries - New Standard for Environmental Due Diligence” was written by the smart folks over at Winston & Strawn LLP (www.winston.com). Contact info for specific attorneys/contributors can be found at the bottom of the article.
To qualify for defenses to CERCLA’s “strict liability”, one has to show they’ve made “all appropriate inquiries” that reflect generally accepted good commercial practice. That was formerly proven by identifying recognized environmental conditions. The EPA’s new rule, effective 11/1/06, mandates that not only do you need to recognize conditions, you also need to achieve certain objectives and performance standards. The old ASTM standards have been updated to reflect EPA’s new guidelines.
Comment: I don’t know if the new ruling has changed this situation, or whether this situation was always in place. But I find it interesting that landowners could be deemed to have failed “all appropriate inquiries” if the consultant they hired doesn’t adequately consider “data gaps.” So it appears it’s not enough to hire a qualified consultant, you also have to hire one you’re sure will get it right.
Question: Clearly, Phase I costs depend on the particular assignment, so it would be difficult to estimate the EPA’s new ruling effect on costs, on an absolute $ basis. But does anyone dare to take a shot at generalizing how much Phase I costs will increase, on a percentage basis?
Call for Discussion: Any Phase I consultants care to chime in with what you’re doing to be prepared to meet the new ASTM/EPA standards? This article was written in November, 05 - does anyone know whether financial institutions are gearing up to impose the new standards in their underwriting requirements?
Download all_appropriate_inquiries_winston_strawn.pdf
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on Thursday, August 3rd, 2006 at 8:43 pm and is filed under ●Brownfields Developer's Corner, ●Environmental Agencies, ●Environmental Engineering.
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August 4th, 2006 at 4:50 pm
We have found that conducting Phase I’s in accordance with the new AAI requirements can cost anywhere from a minimum increase of 15% to as much as double the standard Phase I. AAI protocols are very site sensitive and if a substantial body of information exists, preparing a legally defensible document is quite detailed and time consuming.
We are still of the opinion that very few sites need this level of detail and once the ‘trade’realizes how much more they are going to cost, they’ll back down and just simply request the normal Phase I protocol.
August 4th, 2006 at 5:23 pm
Thanks Ken for your input. It’s always helpful to hear from someone like you who is dealing with this issue day in and day out.