Inspector General Cites Flawed Oversight Of Brownfields Site Investigations

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The Environmental Protection Agency's oversight of investigations of brownfields sites for potential environmental contamination is flawed because the agency does not review site assessments to ensure they meet federal requirements, according to a report released Feb. 15 by the agency's Office of Inspector General.

If the “all appropriate inquiry” investigations are not conducted properly, there is a risk that the environmental conditions of a property have not been adequately assessed, which could lead to improper decisions about appropriate uses of brownfields properties, the report said.

Ultimately, threats to human health and the environment could go unrecognized, according to the report, EPA Must Implement Controls to Ensure Proper Investigations Are Conducted at Brownfields Sites..

The report said EPA does not review the “all appropriate inquiries” reports submitted by persons receiving assessment grants under the agency's brownfields program to assure the assessments comply with federal requirements. Instead, the agency has relied on the environmental professionals conducting the all appropriate inquiries investigations to self-certify that requirements are met.

All appropriate inquiries, also called environmental due diligence, is the process of evaluating a property for potential environmental contamination and assessing potential liability for contamination.

Federal requirements for conducting an all appropriate inquiry investigation are set forth under a final rule 40 C.F.R. Part 312 issued by EPA in November 2005. The rule took effect in November 2006 (210 DEN A-6, 11/1/05).

The rule addresses due diligence activities such as site reconnaissance, records review, interviews, and documentation of recognized environmental conditions.

No Reports Show Compliance.

In its review, the inspector general said it looked at 35 all appropriate inquiry reports, which were randomly chosen, and none contained all the required elements to document the inquiry was done in compliance with federal requirements.

This happened because EPA does not have management controls to document that the investigation was done in compliance with federal requirements, the inspector general said.

If EPA is aware of noncompliance, it is authorized to take back funds from grantees, refuse reimbursement, and deny future grants, the report said.

To be eligible for an EPA grant to clean up a brownfields site, parties must show they are not liable for contamination under the Comprehensive Environmental Response, Compensation, and Liability Act, the report said.

All appropriate inquiries, which must be conducted before acquisition of a property, provide liability protection under superfund to landowners, property owners, contiguous property owners, or prospective purchasers, including state and local governments, according to the report.

In its report, the inspector general recommended that EPA develop accountability for all appropriate inquiry reports, develop a plan to review the reports to determine their compliance with documentation requirements, and establish criteria to determine whether noncompliance grantees should return grant money.

The inspector general said EPA did not clearly agree or disagree with the draft report's recommendations. In EPA's response to the final report, the agency should make its views clear and, if appropriate, provide a corrective action plan to address the recommendations, according to the OIG.

EPA said in an e-mailed statement Feb. 15 that he report raised valid issues regarding certain documentation processes under the all appropriate inquiries rule. The brownfields program is confident that the AAI rule is meeting its intended goals, and that assessment and cleanup activity funded under the program are fully protective of human health and the environment, the statement said.

The program will work with the Office of General Counsel and the OIG to fully respond to the report's findings and to develop and implement appropriate actions to address the OIG's recommendations, the agency said.

Diluted Definition of Environmental Professional.

Lawrence Schnapf, principal with the Schnapf Environmental Law Offices in New York City, was critical of the all appropriate inquiries rule and of environmental professionals. “I knew the situation was bad, but I didn't think it would be this bad,” Schnapf told BNA. “Thirty-five [AAI reports] out of 35. That's a pretty powerful statement,” he said.

“EPA has facilitated a moral hazard by diluting the definition of an environmental professional” in the 2005 rule, he said.

Because of the rule's “watered down definition” of an environmental professional, “substandard reports are spit out,” and the reports have been made into a commodity that can be offered for as little as $700, he said. “When you're dealing with brownfield sites, you can't be dealing with commodity reports,” Schnapf said.

Requirement for State Licensing.

To address the poor quality of AAIs, all states should require licensing of environmental professionals, such as Connecticut, Massachusetts, New Jersey, and Ohio already do, he said. Licensing should entail minimum requirements for education and training and if all federal requirements are not met, environmental professionals should lose their license, Schnapf said.

In addition, EPA should re-examine the 2005 rule, he said. In one area, the rule should be strengthened to require sampling of a site before a party buys it, he said. Without sampling, an investigation could miss polychlorinated biphenyls at a site or not evaluate potential vapor intrusion coming onto the property, he said.

Finally, EPA should audit all reports associated with AAI grants, Schnapf said. “We're not talking about a large universe.”

Lenny Siegel, executive director of the Center for Public Environmental Oversight, in Mountain View, Calif., told BNA the inspector general's report is useful because it shows the shortcomings of the program.

“That's always been a worry--that the AAI is in most cases a voluntary exercise,” Siegel said. “It only comes back to bite you if someone takes you to court.”

Siegel, who was on the negotiated rulemaking committee that developed the 2005 rule, said two negative things could result from inadequate inquiries. First, property may not be identified as contaminated and people could later be exposed to hazardous substances, he said. Second, a project could be abandoned if the property is later found to be contaminated, he said.

By Patricia Ware

The OIG report, EPA Must Implement Controls to Ensure Proper Investigations Are Conducted at Brownfields Sites, is available at