Businesses must consider impact of environmental laws

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The number of environmental laws on the books is expanding at an ever-increasing rate. Federal laws such as the Comprehensive Environmental Response Compensation Liability Act of 1980, and their state law counterparts, impose responsibility for cleanup of environmental contamination on individuals and companies that own or operate, or formerly owned or operated, facilities from which hazardous substances have been released.|ret||ret||tab|

As a result, corporations must be aware of environmental laws and take care to comply with all pertinent regulations regarding treatment of hazardous materials.|ret||ret||tab|

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Liability factors|ret||ret||tab|

Corporate liability may result not only from the release of contaminants, but also from the storage, use, transportation, discharge and disposal of hazardous materials. |ret||ret||tab|

A company may even be liable for turning the hazardous materials over to a waste disposal company that is not competent. |ret||ret||tab|

The tentacles of liability are thus very far reaching, sometimes ensnaring corporations that merely lease a facility that contains hazardous materials, such as asbestos, or that has an on-site source of contamination, such as an underground storage tank that leaks toxins.|ret||ret||tab|

The cost of remedial action may be enormous. |ret||ret||tab|

Liability for the cleanup may be imposed upon all who actively or passively participate in an activity resulting in the need for remediation, and on those who have profited or will profit financially from the activity. |ret||ret||tab|

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Protection|ret||ret||tab|

A corporation may, however, take concrete steps to limit its exposure to such environmental cleanup costs.|ret||ret||tab|

First, corporations should have Phase I environmental audits conducted of all sites considered for lease or purchase if there is any indication that manufacturing or other industrial activity took place that might have resulted in contamination. |ret||ret||tab|

A title search showing the chain of ownership will at least reveal who owned the property. |ret||ret||tab|

Such an audit also will review all governmental records to see if there is any known contamination on the site. |ret||ret||tab|

An on-site visual examination of the property is also a part of the Phase I audit. If any issues are identified, a company's environmental engineer team may recommend a Phase II audit, which would include sample soil borings and groundwater tests. |ret||ret||tab|

If concerns persist or if contamination is identified, the corporation may wish to consider alternative sites for its business.|ret||ret||tab|

Second, lessees and purchasers should seek reasonable indemnification provisions from lessors and sellers in the event contamination is later detected which requires remedial action.|ret||ret||tab|

Finally, if your company handles any hazardous materials, you should follow all governmental regulations regarding their use, storage and disposal. |ret||ret||tab|

Environmental liability, while potentially devastating to a corporation, may be managed, limited and controlled. |ret||ret||tab|

A program designed to proactively evaluate risks on a continuing basis is your best protection against environmental response costs.|ret||ret||tab|

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