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?
