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CERCLA Historical Background

2013: ASTM E 1527-13: The standard methodology for performing Phase I’s has been updated for the first time since 2005. The new standard became official on November 13, 2013.  The major changes in the new revision include the following:

  • New definitions for Recognized Environmental Conditions (RECs)
    • Historical RECs – must be cleaned up so that no “activity or use limitations” remain on the property. This means that the site must at least meet residential use contamination screening limits, or the former HREC will now be considered an REC
    • Controlled RECs – this is a new term created for past contamination that has been remediated to the satisfaction of the oversight agency, but some contamination remains on the site that pose “activity or use limitations.” Examples could be a site that  could not be converted to residential use or have subsurface disturbance without additional environmental investigation, oversight or controls. The Controlled REC is listed under the recognized environmental condition
    • RECs – the definition has been simplified and the new category of Controlled REC has been added.
  • Files Reviews are No Longer Discretionary
    • In the past, some environmental firms, in an effort to minimize cost and/or time, have skipped performing agency file reviews. This step is no longer discretionary in the new standard. (Note: HLENV has always performed agency file reviews for Phase I Reports.)

2005: ASTM E 1527-05: The Federal EPA  finalized “Standards and Practices for All Appropriate Inquiries,” published in the Federal Register, Part III Environmental Protection Agency, 40 CFR Part 312 dated November 1, 2005. 

  • The effective date for these regulations is November 1, 2006. The EPA specified ASTM 1527-00 for Phase I Site Assessments as the designated “interim standards.”
  • After November 1, 2006  only ASTM E 1527-05 will meet the AAI regulations.

2002 Brownfields Amendments: The passage of the Small Business Liability Relief and Revitalization Act, the Federal “Brownfields Act,” an amendment to CERCLA, required EPA to develop standards and practices for conducting “all appropriate inquires.” The ASTM E-1527-97 and -00 were found to be inconsistent with applicable law because neither met the statutory criteria.

  • The 2002 Brownfields Amendments added potential liability protections for “contiguous property owners” and “bona fide purchasers” who also must demonstrate they conducted all appropriate inquiries, among other requirements, to benefit from the liability protection.

1993: American Society for Testing and Materials (ASTM) published the ASTM E-1527 Standard Practice for Phase I Environmental Site Assessments and ASTM E-1528 Standard Practice for Transaction Screens. These standards were the accepted standards for the minimum levels of environmental due diligence within both the environmental consulting, legal, and financial services industries.

1986: Congress passed the “Superfund Amendment Reauthorization Act,” aka, SARA. As part of SARA, the EPA included liability protection known as the “innocent landowner provision” for purchasers of property, as long as the purchaser completed “All Appropriate Inquiry” consistent with “good commercial real estate practices.” Congress created the “innocent landowner” provisions in 1986.

1980: The Comprehensive Environmental Response Compensation and Liability Act (CERCLA) passed by Congress, aka, SuperFund. The law gave the EPA broad powers to investigate and remediate the worst contaminated sites in the country. The initial investigation consisted of a detailed review of the available background information, inspection of the off-site area and inspection of the on-site area. This process was known as “Preliminary Environmental Site Assessment” or “environmental due diligence.” This is the precursor to the Phase I Environmental Site Assessment process.

  • CERCLA contained a concept called “strict liability” – liability without fault. This meant that an “innocent purchaser” of a property could be held liable although they did not cause the contamination.

Key Differences: AAI and ASTM E 1527-00

Key differences between AAI and ASTM E 1527-00:

The EPA specified ASTM E 1527-00 for Phase I Site Assessments as the designated “interim standards.” Since then ASTM issued the ASTM E 1527-05 which meets and surpasses the new regulations.

The key differences between All Appropriate Inquiries standard specification and the old ASTM E 1527-00 are summarized in the table below. 

CERCLA Background
Overview of All Appropriate Inquiries Requirements for Phase 1 site assessments
AAI & ASTM E 1527-00: Key Points | Chart of Key Differences
AAI & New ASTM E 1527-05: Key Difference – Petroleum
40 CFR Part 312: Standards and Practices for All Appropriate Inquiries

Table 1. Key Differences between the Final All Appropriate Inquiries Regulation Specification and the Previous Specification Standard

Investigative Criterion AAI Specification November 1, 2006

Previous Specification (ASTM E1527-2000)

Definition of Environmental Professional Specific certification / license, education and experience requirements. No specifications
Interviews of current owner and tenants Mandatory. A “reasonable attempt” had to be made.
Interviews with former owners and occupants Interviews must be conducted to achieve the objectives and performance factors of the AAI and E-1527-05 § 312.20 (e-f) Not required, but must inquire about past uses of the subject property when interviewing current owner and occupants
Interview with neighboring or nearby property owners or occupants Mandatory at abandoned properties Discretionary
Review of Historic Sources: Period to be covered From the present to when the property first contained structures or was used for agricultural, residential, commercial or any other purpose. Formerly the historic investigation was to first use or 1940.
Records of Activity and Use Limitations (e.g., Engineering and Institutional Controls) and Environmental Cleanup Liens No requirement as to who is responsible for the search; however, results must be reported to the environmental professional. This was the user’s responsibility with results reported to the environmental professional.
Scope of environmental cleanup lien search includes those liens filed or recorded under federal, state, tribal or local law.
Government Records Review Records from Federal, State, Local and Tribal sources are to be investigated. Federal and State records were required with local records being at the discretion of the investigator.
Site Inspection Visual inspection of subject property and nearby properties is required; some exceptions are allowed if property cannot be visually inspected. No specific requirement to inspect nearby properties.
Contaminants of Concern For parties seeking CERCLA protection, the CERCLA hazardous substances are considered. CERCLA hazardous substances and petroleum products only.
Brownsfields Grant Recipients: CERCLA hazardous substances, petroleum and petroleum products, controlled substances.
Data Gaps Requires identification of sources consulted to fill data gaps and an explanation of why there are gaps and if they are significant. Historic investigation was subject to the discretion of the investigator and sources that produced no findings had to be documented
Shelf life of the Written Report One year with updates after 180 days. Updates of specified activities after 180 days.

CERCLA All Appropriate Inquiries compared to ASTM E 1527-05 Key Difference: Petroleum

The basic difference between CERCLA All Appropriate Inquiries and the new ASTM E 1527-05 is the extent of the definition of hazardous substances. Under the petroleum exclusion of CERCLA Section 9601(14), petroleum and crude oil have been explicitly excluded from the definition of hazardous substances. However, ASTM E 1527-05 includes petroleum products  because they are of concern in many commercial real estate transactions and current custom and usage is to include an inquiry into the presence of petroleum products in an environmental site assessment.

As noted above, the State of California now recognizes the Innocent Landowner Protection, the Contiguous Landowner Protection and the Bonafide Purchaser Protection. Thus, while CERCLA does not include petroleum products, that omission is picked up by the State of California.

AAI Overview and Key Points Chart

Key Differences between All Appropriate Inquiries (AAI) and ASTM E 1527-00

The EPA specified ASTM E 1527-00 for Phase I Site Assessments as the designated “interim standards.” Since then ASTM issued the ASTM E 1527-05 which meets and surpasses the new regulations.

The key differences between All Appropriate Inquiries standard specification and the old ASTM E 1527-00 are summarized in the table below. 

CERCLA Background
Overview of All Appropriate Inquiries Requirements  for Phase 1 site assessments
AAI & ASTM E 1527-00: Key Points | Chart of Key Differences
AAI & New ASTM E 1527-05: Key Difference – Petroleum
Federal Register PDF Document: 40 CFR Part 312 Standards and Practices for All Appropriate Inquiries; Final Rule

Table 1. Key Differences between the Final All Appropriate Inquiries Regulation Specification and the Previous Specification Standard

Investigative Criterion AAI Specification November 1, 2006 Previous Specification (ASTM E1527-2000)
Definition of Environmental Professional Specific certification / license, education and experience requirements. No specifications
Interviews of current owner and tenants Mandatory. A “reasonable attempt” had to be made.
Interviews with former owners and occupants Interviews must be conducted to achieve the objectives and performance factors of the AAI and E-1527-05 § 312.20 (e-f) Not required, but must inquire about past uses of the subject property when interviewing current owner and occupants
Interview with neighboring or nearby property owners or occupants Mandatory at abandoned properties Discretionary
Review of Historic Sources: Period to be covered From the present to when the property first contained structures or was used for agricultural, residential, commercial or any other purpose. Formerly the historic investigation was to first use or 1940.
Records of Activity and Use Limitations (e.g., Engineering and Institutional Controls) and Environmental Cleanup Liens No requirement as to who is responsible for the search; however, results must be reported to the environmental professional. This was the user’s responsibility with results reported to the environmental professional.
Scope of environmental cleanup lien search includes those liens filed or recorded under federal, state, tribal or local law.
Government Records Review Records from Federal, State, Local and Tribal sources are to be investigated. Federal and State records were required with local records being at the discretion of the investigator.
Site Inspection Visual inspection of subject property and nearby properties is required; some exceptions are allowed if property cannot be visually inspected. No specific requirement to inspect nearby properties.
Contaminants of Concern For parties seeking CERCLA protection, the CERCLA hazardous substances are considered. CERCLA hazardous substances and petroleum products only.
Brownsfields Grant Recipients: CERCLA hazardous substances, petroleum and petroleum products, controlled substances.
Data Gaps Requires identification of sources consulted to fill data gaps and an explanation of why there are gaps and if they are significant. Historic investigation was subject to the discretion of the investigator and sources that produced no findings had to be documented
Shelf life of the Written Report One year with updates after 180 days. Updates of specified activities after 180 days.

CERCLA All Appropriate Inquiries compared to ASTM E 1527-05 Key Difference: Petroleum

The basic difference between CERCLA All Appropriate Inquiries and the new ASTM E 1527-05 is the extent of the definition of hazardous substances. Under the petroleum exclusion of CERCLA Section 9601(14), petroleum and crude oil have been explicitly excluded from the definition of hazardous substances. However, ASTM E 1527-05 includes petroleum products  because they are of concern in many commercial real estate transactions and current custom and usage is to include an inquiry into the presence of petroleum products in an environmental site assessment.

As noted above, the State of California now recognizes the Innocent Landowner Protection, the Contiguous Landowner Protection and the Bonafide Purchaser Protection. Thus, while CERCLA does not include petroleum products, that omission is picked up by the State of California.

Lenders can Maintain CERCLA Exemption by Following Ownership/Liability Tests

by Robert S. Harris

The EPA Lender Liability Rule does not encourage controlling borrowers but rather it supports proper loan management.

Also see: Environmental management for banks, financial institutions & other lenders

It may appear the EPA holds financial institutions responsible for the failings of others because lenders have attempted to be responsible in their dealings with developers on environmental issues. However, we must keep in mind that the EPA is responsible for defining and identifying responsible owners and operators in order to assign responsibility for environmental failures, which can have long-lasting and far-ranging effects.

Indeed, the EPA has, on occasion, ruled that lenders have been too involved in the daily operation of a company and, therefore, have been given the responsibility for clean up. Ongoing daily involvement, even if initiated more recently than the violations, confers responsibility because it also suggests some knowledge or awareness of the failures.

Lenders that have failed to conduct due diligence or which were not thorough in protecting their security interests have inherited huge environmental liabilities under CERCLA.

There are, however, important and appropriate lender activities as an owner or operator which are shielded from CERCLA (1980) liability under the secured creditor exemption. The Lender’s Exemption provides that the term “owner” or “operator” specifically does not include a person, who “without participating in the management of a…facility, holds indicia of ownership primarily to protect his security interest in the…facility.” 

The stated purpose of the EPA Lender Liability Exemption is to define and specify the range of permissible activities a lender may conduct without exceeding the bounds of exemption.

The EPA has defined three key and identifiable elements of activities which lenders may conduct without being deemed to have exceeded the bounds of CERCLA exemption. Those elements are: “indicia of ownership”; the requirement that ownership be held “primarily to protect security interest”; and, the prohibition of secured creditors from participating in the management of a facility.

The key elements, all of which must be in place for the lender to avoid liability, are expanded for clarification:

“Indicia of ownership” is defined by the EPA rule as “evidence of interests in real or personal property.”  Qualifying indicia of ownership include a mortgage, deed of trust, legal or equitable title obtained through foreclosure, a guarantee of an obligation, an assignment, lien, pledge, or other right or form of encumbrance against the property.                     

To avail itself of the exemption, a lender must prove it holds the indicia of ownership principally for the purpose of securing payment, or performance of a loan or other obligation.

There is a two-pronged test for identifying when a lender has crossed the lines and can be deemed to be “participating in management.” Activities of management the secured creditor is prohibited from include: a) exercised decision-making control over the borrower’s environmental compliance; or, b) assumed overall management responsibility encompassing the day-to-day decision-making of the borrower’s enterprise.

Acceptable Participation

How can lenders protect their loans if they cannot exercise some control over borrowers? The EPA Lender Liability Rule does not encourage controlling borrowers but rather it supports proper loan management.

The United States Environmental Protection Agency has defined four areas where lenders can be involved in environmental inquiries and loan management without being labeled as having “participated in management” of a borrower’s company.

Acceptable loan management activities from an environmental standpoint may occur:                 

  • Before the loan transaction takes place, or at the inception of the loan
  • During the tenure of the loan
  • While undertaking a financial workout with a defaulting borrower                     
  • At foreclosure and when preparing the facility for sale or liquidation

Financial institutions serious about avoiding “unacceptable participation” rulings design and implement their own Lender Loan Management Programs to coincide with the four areas of acceptable participation defined by the EPA. The two most important focused objectives of such a program are to minimize environmental liabilities throughout the life of each loan, and to maintain the Lender’s Exemption when borrower viability appears to be at issue.

A solid Lender Loan Management Program addresses lender conduct from the onset of lending conversation, perhaps even before application, and all the way through to loan termination.

Look before leaping: Lender Loan Management Program

There are several tools and a number of procedures for the various phases of loan management which comprise an effective Lender Loan Management Program.

At the inception of the loan transaction, a Transaction Screen Questionnaire (defined by the ASTM in protocol E1528-93) is used to determine if a Phase I Environmental Site Assessment will be necessary. It is rare that some form of in-depth evaluation is not required on commercial property. Furthermore, it is inaccurate and can be risky to view the Transaction Screen as a shortcut or substitute for a Phase I Environmental Site Assessment because, performed according to ASTM protocol, there are many points where the screen leads directly to a full Phase 1 environmental site assessment.

An intermediate tool devised by Harris & Lee Environmental Sciences, LLC is a modified or abbreviated environmental site assessment report. It includes a summary computer data radius report, a brief site reconnaissance, and investigative inquiries into historical use. It is performed in conformance with ASTM protocol, and when performed by experienced senior personnel to draw comprehensive conclusions, it will indicate additional environmental conditions which warrant a Phase I environmental site assessment. Not only is the client assured costs will be kept to a minimum, the report can be expanded if considerations require additional detail. Though components of the modified assessment are done in compliance with ASTM standards, it does not technically meet ASTM standards because it is abbreviated. Even so, this abbreviated environmental site assessment will satisfy due diligence requirements for the first phase of the Lender’s Exemption rule.

Finally, ONLY the All Appropriate Inquiries – Environmental Site Assessment, Phase I Investigation satisfies the requirement for one of the three landowner liability exemptions provided by the CERCLA Brownfields Amendments. It must be performed in accordance with ASTM E 1527-05. The advantage for lenders is that these landowner exemptions protect the borrower and collateral in commercial real estate loansTenant Assessment vs. Tenant Compliance

The technical term for that time when a facility undergoes a detailed audit in which all phases of environmental compliance are investigated is “multimedia environmental compliance audit.” Put simply, it means the auditor’s investigation will include all areas for which the potential of contamination exists: soil, air, and occasionally, employee safety and health. The Tenant Environmental Compliance Audit examines not only the paper trail, but chronicles the actual daily practices to minute detail. It is a comprehensive audit process which is important in that it detects noncompliance with numerous and varied regulations, many of which impose heavy fines and cleanup requirements.

A Tenant Assessment is not intended to prevent the facility from minimizing fines due to faulty practices, but rather to identify and to prevent faulty management practices which are likely to create liability by extension to the Lender. An example of the difference in tenant assessment vs. tenant environmental compliance would be incorrect completion of a hazardous waste manifest, as opposed to the outright disposal of hazardous waste without any manifest. Incorrect completion of the manifest could lead to financial fines to the facility, but disposal of the hazardous waste without a proper manifest implies an illegal disposal practice which may be viewed as a criminal offense.                   

The assessment requires an experienced environmental auditor with a broad philosophical outlook because the hazardous waste was generated from the property, the property owner, or  the lender in some cases, could be held responsible.

New vs. Existing Tenant

Potential environmental risk is minimized when, prior to lease development, a visit is made to the potential tenant’s existing facility. A review of relevant processes and how they are presently handled is the best indicator of how the operation will be run  once the tenant is situated on the new property. The hazardous waste materials management plan and tools are reviewed and a determination is made as to how well it is followed. Specific issues regarding future compliance can be identified for coverage in the lease agreement.

Lenders should expect to monitor ongoing compliance at tenant facilities on a regular and agreed upon basis. Such monitoring protects the long-term value of the property. The most important aspect of tenant monitoring is to identify and document potential environmental problems which will or may devalue the property, or cause the extension of liability ownership to the Lender.

Depending on circumstances, the EPA has assigned liability of previous owners and lenders to the current occupant of a property. However, because previous tenants and lenders can be assessed penalties, lenders are urged to have pre-evacuation and pre-lease termination assessments of the property. Doing so minimizes the owner and lender exposure by documenting the tenant’s departure activities. It may, on occasion, be prudent to require a tenant to develop a comprehensive closure plan, and to police the implementation of that closure plan, as well as to monitor the effectiveness of such a plan. It is helpful to stipulate and draw a prospective tenant’s attention to this lender option in the lease. The intention is that tenants who are aware they will be monitored are more likely to be well-prepared, and lease termination may be more manageable.

When Borrowers Default

The EPA rule does permit a lender to take necessary steps to protect collateral. For loans threatening default or already in default, borrowers may need professional consultation, which can come at the request of the lender. Lenders may foreclose and not be considered owners for purposes of CERCLA liability.  The lender may avoid liability if it undertakes to sell, release or otherwise divest itself of the property in a reasonably expeditious manner. In foreclosure, a property may be operated by a lender under the exemption so long it, as the holder, does not improperly arrange for disposal of hazardous substances at the facility or for transport and disposal at the facility.

Essentially, all EPA rules which applied to the previous tenant apply to the lender as holder in a foreclosure.

Use of Expert Support

The term “participating in management” as applied by EPA is broad and difficult to interpret. Expert support offering a thorough understanding of the processes and their relationship to all parties is essential to assist lenders in upholding their responsibilities without crossing the line.  Technical environmental support should also include appropriate legal assistance to interpret vague language and to assist in refining procedures.

Also see: Environmental management for banks, financial institutions & other lenders

Robert Harris is the senior scientist of Harris & Lee Environmental Sciences, LLC, an environmental consulting firm. He holds degrees in chemistry and biochemistry, and has 32 years experience in environmental analytical chemistry and environmental toxicology.  Mr. Harris has established and operated large laboratories and has developed several ground-breaking methodologies for environmental analysis, including the standard method for analysis of polychlorinated biphenyls in water, soils and oils. His firm has saved lenders, insurance, real estate and law clients millions of dollars, including conversion of waste costing $120,000 per month to a usable fuel.

CERCLA Liability Limits – Landowner Liability Protections

Key Points

Under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), persons may be held strictly liable for cleaning up hazardous substances at properties that they either currently own or operate or owned or operated at the time of disposal. Strict liability in the context of CERCLA means that a potentially responsible party may be liable for environmental contamination based solely on property ownership and without regard to fault or negligence.

However, the CERCLA Brownfields Amendments provides three landowner liability exemptions:

  • Innocent landowner
  • Bona fide  purchasers
  • Contiguous property owners

There is no protection under CERCLA for a current property owner when hazardous substances are released.

CERCLA Background

Overview of All Appropriate Inquiries (AAI) Requirements for Phase I Site Assessments

Innocent Landowners, Standards for Conducting All Appropriate Inquiries: 40 CFR Part 312

Innocent Landowner Protection

In 1986, the Superfund Amendments and Reauthorization Act (SARA) created an “innocent landowner” defense to CERCLA liability by adding Section 101(35)(B). This section states: “for those persons who could demonstrate, among other requirements, that they “did not know and had no reason to know” prior to purchasing a property that any hazardous substance that is the subject of a release or threatened release was disposed of on, in, or at the property. Such persons, to demonstrate that they had “no reason to know” must have undertaken, prior to, or on the date of acquisition of the property, “all appropriate inquiries” into the previous ownership and uses of the property consistent with good commercial or customary standards and practices.

Brownfields Amendment Liability Limitations

The Brownfields Amendment clarified liability provisions for innocent landowners and added protections from liability for bona fide purchasers and contiguous property owners who meet certain statutory requirements. The All Appropriate Inquiries Rule issued by the U.S. Environmental Protection Agency on November 1, 2005 established the specific regulatory requirements and standards for conducting All Appropriate Inquiries.

Generally, under the CERCLA Brownfields Amendments, the following conditions would minimize a purchaser’s exposure to liability for past environmental contamination. The advantage for lenders is that these landowner exemptions protect the borrower and collateral in commercial real estate loans. 
For the Innocent Landowner Exemption:

  • Did not cause or contribute to hazardous substances
  • Property acquired by inheritance or bequest
  • After completing All Appropriate Inquiries & ASTM E 1527-05 did not know and had no reason to know of “release or threatened release” at the time of acquisition

For the Bona Fide Purchaser Exemption:

  • Acquires ownership after 1/1/05
  • Hazardous substances released before purchase
  • No potential liability or connection with Potentially Responsible Party other than through purchase agreement
  • Rigorously completes All Appropriate Inquiries & ASTM E 1527-05
  • Appropriate care in dealing with hazardous substances
  • Cooperates with regulatory agency’s mandated remedial work, contractors, etc.

For the Contiguous Landowner Exemption:

  • Adjacent Property Owner
  • Did not cause, contribute, or consent to release or threatened release
  • After completing All Appropriate Inquiries & ASTM E 1527-05 did not know and had no reason to know of “release or threatened release” at the time of purchase
  • No potential liability or connection with neighboring Potentially Responsible Party

Harris & Lee Environmental Sciences, LLC strongly recommends purchasers seek legal advice before acquiring a property with known environmental damage. This information should not be construed as legal interpretation or legal advice. Our intent is to simply point out that these exemptions exist.

Residential Uses

In the case of property acquired by a non-governmental entity or non-commercial entity for residential or other similar uses, the current standards (ASTM and AAI) may not be applicable. For those cases, the Brownfields Amendments to CERCLA establish that a “facility inspection and title search that reveal no basis for further investigation shall be considered to satisfy the requirements for all appropriate inquiries”.

  • The definition of “facility inspection” is open to conjecture. It can mean more than just inspecting; it may include an investigation into nearby environmentally active sites.

All Appropriate Inquiries (AAI)


Key Differences between All
Appropriate Inquiries (AAI) and ASTM E 1527-00

The EPA specified ASTM E 1527-00 for Phase I Site
Assessments as the designated "interim standards." Since then
ASTM issued the ASTM E 1527-05 which meets and surpasses the
new regulations.

The key differences between All Appropriate Inquiries standard specification and
the old ASTM E 1527-00 are
summarized in the table below.

CERCLA Background
Overview of All Appropriate Inquiries Requirements
 for Phase 1 site assessments
AAI & ASTM E 1527-00:
Key Points |
Chart of Key Differences
AAI & New ASTM E 1527-05:
Key
Difference – Petroleum
Federal Register PDF
Document
:
40 CFR Part 312 Standards
and Practices
for All Appropriate
Inquiries; Final Rule

Table 1. Key Differences between the Final All
Appropriate Inquiries Regulation Specification and the Previous
Specification Standard

Investigative Criterion AAI Specification
November 1, 2006

Previous Specification
(ASTM E1527-2000)
Definition of Environmental Professional Specific certification / license, education and experience
requirements.
No
specifications
Interviews of current owner and tenants Mandatory. A
"reasonable attempt" had to be made.
Interviews with former owners and occupants Interviews must be conducted to achieve the objectives and
performance factors of the AAI and E-1527-05 § 312.20 (e-f)
Not
required, but must inquire about past uses of the subject
property when interviewing current owner and occupants
Interview with neighboring or nearby property owners or
occupants
Mandatory at abandoned properties Discretionary
Review
of Historic Sources: Period to be covered
From
the present to when the property first contained structures or
was used for agricultural, residential, commercial or any other
purpose.
Formerly the historic investigation was to first use or 1940.
Records
of Activity and Use Limitations (e.g., Engineering and
Institutional Controls) and Environmental Cleanup Liens
No
requirement as to who is responsible for the search; however,
results must be reported to the environmental professional.
This
was the user’s responsibility with results reported to the
environmental professional.
Scope of environmental cleanup lien search includes those
liens filed or recorded under federal, state, tribal or local
law.
Government Records Review Records
from Federal, State, Local and Tribal sources are to be
investigated.

 

Federal
and State records were required with local records being at the
discretion of the investigator.
Site
Inspection
Visual
inspection of subject property and nearby properties is
required; some exceptions are allowed if property cannot be
visually inspected.
No
specific requirement to inspect nearby properties.
Contaminants of Concern For
parties seeking CERCLA protection, the CERCLA hazardous substances
are considered.
CERCLA
hazardous substances and petroleum products only.
Brownsfields Grant Recipients: CERCLA hazardous substances,
petroleum and petroleum products, controlled substances.
Data
Gaps
Requires identification of sources consulted to fill data gaps
and an explanation of why there are gaps and if they are
significant.

 

Historic investigation was subject to the discretion of the
investigator and sources that produced no findings had to be
documented
Shelf
life of the Written Report
One
year with updates after 180 days.
Updates
of specified activities after 180 days.

CERCLA All Appropriate Inquiries compared to ASTM E 1527-05
Key Difference: Petroleum

The basic difference between CERCLA All Appropriate Inquiries and the
new ASTM E
1527-05 is the extent of the definition of hazardous substances. Under
the petroleum exclusion of CERCLA Section 9601(14), petroleum and crude
oil have been explicitly excluded from the definition of hazardous
substances. However, ASTM E 1527-05 includes petroleum products
because they are of concern in many commercial real estate transactions
and current custom and usage is to include an inquiry into the presence
of petroleum products in an environmental site assessment.

As noted above, the State of California now recognizes the Innocent Landowner Protection, the Contiguous Landowner Protection and the Bonafide Purchaser Protection. Thus, while CERCLA does not include petroleum products, that omission is picked up by the State of California.

Contaminant Sleuth Robert S. Harris detects toxins in food, wine, soil

Reprinted with permission from Sonoma Business Magazine, June 1998

“After two years of work, they collected four ounces of oil.” Regulators default to their “rule books,” but the books do not take into consideration all possible chemical phenomena.

Years ago at a Modesto winery, a pesticide called DBCP had contaminated some of the wine. The chemical was suspected of causing male infertility, among other ailments. Though only tiny amounts were thought to be present in the wine, not enough to be smelled or tasted, toxicologist Robert Harris was hired to perform a chemical analysis of the wine. His laboratory was able to detect the pesticide down to .01 parts per billion–the equivalent of one second in 3,200 years. “You can’t taste that,” says Harris, who holds a master’s degree in biochemistry, “but it’s enough, as it accumulates, to eventually have an impact on you.

It was later discovered that the DBCP had entered the wine through the winery’s water supply, which had been contaminated from the heavy pesticide spraying in the agrarian Central Valley. The poisoned wine was discarded and the problem rectified.

Testing food and wine is just one chemical feat in Harris’s bag of tricks. He is a partner in Santa Rosa’s Harris & Lee Environmental Sciences, LLC. In another case, Harris was hired by a Sonoma County winery to test for possible contamination. The winery stored its wine in large stainless steel vats with “jackets” on the outside which circulate a coolant. The winery had reason to believe that some of the coolant had leaked into the wine and hired Harris to test it. He detected the coolant in several vats, and the wine was destroyed. Harris characterizes wineries as “fairly conservative” with their manufacturing process, testing wine if there is even a slight suspicion of contamination.

Harris formerly owned a Santa Rosa-based laboratory called Multi-Tech where he tested foods and wines for toxic residues. While oenologists at wineries closely monitor wine throughout the production process, toxicologists like Harris are called when a foreign substance is suspected. Harris has worked for most of the major wineries in Sonoma and Napa counties.

Makers of food and drink face tremendous legal exposure if their products cause food poisoning, says Harris. Despite the often-used defense by restauranteurs that customers did not suffer food poisoning but were coming down with the flu, Harris asserts that cases of food poisoning are not difficult to prove. Certain viruses can only be transferred through food, he says, so if someone shows symptoms of the virus, there may be no other way the person could have acquired it.

Today Harris is primarily an environmental consultant, testing soil instead of food. Harris works for attorneys, banks, insurance companies and real estate developers, offering expert testimony and writing legally defensible chemical analysis reports.

Several years ago Marv Soiland, a former client of Harris’s, was developing a 13-acre piece of land north of the Santa Rosa Airport. He had already spent $100,000 to clean up what he was told was motor oil, considered an environmental health hazard. Harris ran some tests and soon surmised that the substance was not motor oil. It turned out that the property was near a cabinetmaker’s shop, which emitted large amounts of sawdust into the air. The sawdust blew onto the land and, its decaying chemical composition was read by the previous laboratory as motor oil. Harris says Soiland shrugged his shoulders and chalked up the $100,000 blunder to experience.

“We see a lot of things like that,” states Harris, “where sites appear to be contaminated, and they’re not. Or if they are contaminated, is there a real risk there?” Harris works frequently for Exchange Bank and National Bank of the Redwoods. Federal statutes provide that if a bank lends on a commercial property that later turns out to be contaminated, the bank faces reduced liability if it shows that it performed an adequate level of due diligence before finalizing the loan. This includes investigating the history and uses of the property as well as testing it for pollution. “If they don’t do anything,” says Harris of banks, “then they can inherit the liability because they were reckless.”

Harris’s reports must be legally defensible, which means they must stand up to certain scientific criteria. Harris was once hired by Mendocino-based Thanksgiving Coffee Company, which suspected contamination from the chemical it uses to de-caffeinate its coffee. Harris performed a series of tests on the coffee, including a test of the sample, a test on a “blank” (everything in the process but the sample itself) and a test on the sample, after deliberately adding the chemical he was looking for, to make sure he found it.

Today Harris doesn’t get dirty collecting soil samples or don a white lab coat and spend long hours with advanced scientific instruments. Instead he oversees projects like a field marshal and analyzes the findings.

If a remedial program must be instigated, the first task is to remove the source of contamination. Some removal processes involve a combination of blowing air into the soil at one end and vacuuming it up at the other. Other techniques involve sending micro-organisms into the ground to clean up the contaminant. All remedial techniques must be approved by the U.S. Environmental Protection Agency. “Nobody just runs out and starts drilling holes and pumping air,” he says.

Federal regulators are “great people!” Harris says with an ironic laugh. “I’d say the vast majority of the time,” he adds in a more serious tone, “the regulators really make a sincere effort to understand the problem and deal with it appropriately. But it’s also true that sometimes their judgment calls are questionable, and you wonder what they’re based on.”

There is often infighting in the environmental industry between civil engineers, geologists and the few chemists like Harris. But the issues at hand primarily involve chemical phenomena based on what exactly is the contaminant and whether or not it is a viable hazard.

One such contamination contention involved a legal case in which a large organization spent nearly $2 million to clean up some toxic soil. Harris says the organization’s engineers said it was necessary to remove some oil that had leaked from an oil tank decades previously. The land was beneath a multi-story commercial building. After two years of sucking the soil, “they pulled out a grand total of about four ounces,” says Harris, pointing to his half-empty cup of coffee for emphasis.

Petroleum occurs naturally on the earth and forms the basis for many subterranean micro-organisms, Harris explains. It generally degrades over time, but under certain conditions it can polymerize and become tar. When tar mixes with dirt, it becomes asphalt. So the company had been trying to vacuum up asphalt, something akin to raising the dead. “They could suck to the middle of the next millennium, and they’d never get it out,” he says. Harris testified to prove that the petroleum had become asphalt, which is not considered toxic; and as far as he knows, the case was then closed.

Regulators default to their “rule books,” but the books do not take into consideration all possible chemical phenomena, notes Harris.

Since Harris is often the bearer of bad news, dealing with people is often more challenging than analyzing chemical data, he notes. “Some people have a shoot-the-messenger mentality,” he says. “It’s like the accountant who tells his client he has to pay a lot of taxes, so the client gets mad at the accountant. I’ve had cases where clients went absolutely ballistic on me and blamed me for the problem.”

Harris says he feels great sympathy for his clients when he tells them they’ll need to spend $50,000 for something they can neither see nor smell, and the only reason they know it is there is because he told them so. “Candidly, this profession is not very well-respected,” he says. “Most people see environmental consultants as kind of like leeches.”

He considers global warming and ozone depletion to be earth’s most serious environmental problems, and petroleum contamination the most overrated. “A lot of people have had to pay a lot of money to clean up things that probably could have been left alone. The regulatory community, which is driven by the political community, has been a little overzealous in pursuing underground tanks,” he says.

Harris concedes that many properties have environmental risks. As an extreme example, Harris notes the detection of PCBs on both polar ice caps. “Man has left his mark from the bottom of the deepest oceans to the tops of the highest mountains. We spread contamination all over the globe.”

Located in Sonoma County, California Harris works for attorneys, banks, insurance companies and real estate developers, offering expert testimony and writing legally defensible chemical analysis reports.

Also see:

More Investigation & Assessment
Environmental consulting services
Toxic Tort / environmental litigation support & expert witness testimony
Environmental risk management services for banks and other lenders

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