Discussions > Risk Management

"Reliance" on 3rd Party Reports during due diligence. (7 Comments)

Thu, 07 Jul 2011 15:28:58 +0000

A while ago I read somewhere that relying on the information gathered during due diligence file reviews of reports by others for subsurface work etc was considered reasonable professional practice even in the absence of actual reliance being granted. Does anyone recall whether there have been any decisions to that effect? It seems obvious that this is the practice. For example, I have a site and I do a database search and find a gas station has had a release nearby. I read the reports and see that subsurface work has been done which determined the direction and extent of the release. I use (rely) on that information in my analysis of whether this gas station is a problem for my site.

Reading another thread here about negligently supplied information to others got me thinking about reports that get filed with regulatory agencies. In this case (as opposed to a report in private hands) it seems reasonable to conclude that others will use those reports even though they were created expressly for one's client. In fact, the agencies are going to use them for sure.

So there are two issues to explore here:

1. What about using other's reports in the absence of having been granted reliance? Does it matter if the report was found in a public database versus a copy privately provided probably in violation ot the report's lilmitations? Seems to me it does, being OK in the first case but not clear in the latter case.

2. Does anyone worry about liability for "negligently supplied information for the guidance of others" vis-a-vis reports which will get filed with a regulatory agency and will undoubtedly be relied upon by the agency and probably others down the road?

The Asbestos Business is Booming – But from the Wrong End

Mon, 25 Jul 2011 15:23:38 +0000

Topic by Tony Nocito

Content

I eat dinner some where between 8:30 p.m. and 9:30 p.m. most nights.

Burned out from starting my Blackberry at 6 a.m. and shutting it down at 12 a.m., as well as sitting in front of the computer all day, I do workout, important for everyone to do, and I do speak with my wife, also important, but I tend to watch brainless television while I eat, as well as keep my Blackberry turned on.

I switched channels hoping to see a good movie on HBO, which usually has the same old movies that run for months at a high price. I usually look for a movie to take my mind off my business. When I switched to the first HBO channel it was airing an HBO Documentary series Mann vs. Ford, Mann being Mr. Wayne Mann of the Ramapough American Native Tribe, and of course, Ford being the Ford Motor company.

This series is related to my business, the business of treating hazardous waste to a non-hazardous material. Being the workaholic and craver for more knowledge, I watched the documentary to see if I could learn anything new about hazardous waste.

The documentary’s premise: that Ford was liable for the short life span of the Ramapough people; that dumping of paint toxic sludge was the cause of a cancer cluster in the surrounding area; Ford dumped the toxic paint sludge in the abandon mines and mountains of Ringwood, New Jersey where the Ramapough live.

The documentary goes on to show the history of the dumping, the suffering, poverty and constant fight of the Ramapough to rid the area of the toxic paint sludge.

When Ford closed its facility in Mahwah, NJ, Ford graciously donated the land for low income housing to be built for the Ramapough.

With this donation, the taxpayer gave Ford a huge tax deduction.

When the Ringwood site became a Superfund site, again, the taxpayer, paid for the clean-up, in this case not once, but twice with long term costs for monitoring the site, which means the taxpayer paid twice for the clean-up and continues to pay for the monitoring.

The lead paint’s attorney in the documentary is Ms.Vicki Gilliam.

Ms. Gilliam takes us to site of the cancer cluster to personally meet the residents and to point out the poverty and pain of the Ramapough.

Then, somewhere in the middle of the documentary we get the pain and suffering of Ms. Gilliam, how she was poor growing up on a farm, got married at a young age and had a child while still a teenager. Then her husband left her, she had to live in a trailer, but she was determined to become a lawyer. I am not sure what this portion of the documentary had to do with the Ramapough, because Ms. Gilliam didn’t know them while growing up or while becoming a lawyer.

Lawyers who take on the lucrative environmental cancer and illness cases know that the fees will be high and that they will be there when they finish, no matter how much they win for their clients. Ms. Gilliam stated that legal fees would cost more than a million, possibly two million before the case was over.

My favorite scene, while showing the devastation of the Ramapough in this cancer cluster, takes place in an upscale restaurant at a meal with the lawyers, a consulting doctor and an environmental consultant drinking red wine and bottled sparkling water while discussing the Ramapough case. Of course the meal was tax deductible, charged to the Ramapough account, and partially paid for by the taxpayer.

Then we cut to the court and the Judge all paid for by the taxpayer.

The judge was adamant about not making this a long and drawn out trial.

In the end it was settled, Ford claimed no wrong doing and said that it was legal to dump at the time that it used the site as a landfill.

The total dollar settlement was $11,000,000. 00, less than carry-around pocket change for Ford. The monies paid to the plaintiffs ranged from the lowest $700.00 to the highest $34,000,000.00, a very small amount to pay for good health, something no amount of money can buy.

The lawyers, I would guess, got closer to the million to two million dollar mark and some good meals.

Now take the above law suit and times it by millions of cases with much larger settlements around the world, specifically asbestos cancer cases.

According to the Buffalo News, Ford paid a chemist with mesothelioma who worked for Durez Plastics with a machine manufactured by Ford that filed and ground brake shoes. Mr. Ginter won a $2.5 million settlement of which Ford paid 15%, or $375,000.00.

When asbestos containing materials are removed from our built environment we send it to another built environment, a landfill.

Today it is legal to dump asbestos containing material in a landfill, with two caveats: by law the asbestos containing materials sent to a landfill must have the original owner of the asbestos containing material’s name on the bag it is put in when removed and on manifest this way the lawyers will know who to sue, because there is a sign posted on the landfill that warns of the dangers of asbestos, which indicates that asbestos, although dumped in a legal landfill, can still cause health problems.

We all see the lawyers on television advertising: “if you have been exposed to asbestos, call us.”

We are in the awareness stage of recycling and the scarcity of landfill space.

We are in the awareness stage of toxic material dumping and the consequences of families suffering with illness and loss of loved ones.

We need to start permanently ridding our built environment of toxic materials, like asbestos, and at the same time reduce landfill storage.

There is no price big enough to pay for good health, no matter how good your lawyer is.

And so it goes with hazardous waste, especially asbestos.

Link

http://www.abcov.com

EPA Budget Cuts Spell Stricter Enforcement: Technology the Answer (5 Comments)

Fri, 15 Jul 2011 14:36:14 +0000

Topic by Tony Nocito

Content

How does the Federal Environmental Protection Agency (EPA) receive funding? The simple answer - the taxpayer -from the taxpayer to Congress from Congress to the EPA, the taxpayer being the catalyst.

The economy is in deep trouble; our government is looking at options not to default on our debt, trim budgets and reduce unemployment.

One disturbing factor is that Congress wants to take billions from the EPA budget by weakening part of the Clean Air Act.

The EPA’s job is to enforce environmental regulations passed by Congress to keep us and our country in a healthy and pollutant-free environment by monitoring a myriad of industries, conducting walk-in inspections, audits and investigating record keeping fraud.

In order to effectively do their job, the EPA needs money besides Congressional appropriations. The EPA creates funds by issuing permits, overseeing environmental cleanup projects, criminal punishment and fines, and issuing fines from violation enforcement.

If Congress cuts the EPA budget by billions, the EPA will have to find the money to fund operations. One way would be through dogged-tougher industrial enforcement.

Industry is lobbying Congress to trim down the Clean Air Act, because of the price of compliance. If this happens, what will be the cost to the environment and ultimately humans?

Cost and price are two different things, price is something you pay immediately, but cost is what you pay in the long term. That leads to the question: What does human sickness cost, and even worse, what is the cost of losing a human life?

The question is how industry complies with the EPA, keeping itself intact and financially viable, creating jobs and paying taxes, as well as becoming good corporate citizens, who are socially responsible, and who practice sustainability in their quest for a cleaner and healthier environment.

Instead of paying high-priced lobbyists to lobby Congress to limit environmental regulations, and pay for research and development to create technologies that will prevent environmental releases, have your environmental departments explore existing technologies that can be implemented; fund research and development projects that will create solutions to the environmental problems of your industry:

For stack releases invest in research to create a viable technology that will arrest toxic releases.
Instead of sending toxic wastes, such as Chromium VI soil, heavy metals, asbestos, etc to a landfill, diligently invest in research for new technologies or search for and use existing environmentally safe technology that will stop landfilling of all toxic wastes.

We have become so conscious of environmental issues and green initiatives that we live in a world of corporate and individual social responsibility and sustainability; Not In My Backyard (NIMBY) with landfills and incinerators; landfill mining, which is becoming a trend (digging up landfills and removing the recyclables to make more space) or removing the waste from a truck at the tipping gate to cull the recyclables, and the constant reminder to recycle, reduce and reuse.

Treatment of toxic substances may originally have a higher price to create and to use, and existing technology may be a slightly higher price to implement, but the long-term cost will be a lot less, environmental cleanups will start to diminish, air will start to become cleaner, and people will have a good chance for good health.

Link

http://www.abcov.com

Asbestos and other Hazardous Wastes (2 Comments)

Tue, 21 Jun 2011 16:38:52 +0000

Topic by Tony Nocito

Content

Asbestos has been used in products since the first century as tablecloths, candle wicks, blankets, etc. At that time the advice to slave owners: do not buy slaves who had worked in an asbestos mine, because they died prematurely.

In the early 18^th century asbestos started to be used in building materials and continued in the United States until its use in building materials started to be banned in 1973.

U.S. Public Health Service recommended guidelines on asbestos exposure as early as 1938, but the advent of World War II brought about the abundant use of asbestos containing building and insulation materials.

If you think about the massive amount of asbestos containing material that has been installed in our built environment (meaning all man made asbestos environments, including landfills), it makes you wonder, is there enough money to remove it, and if it is all removed where will we store it and how many deaths will occur from now to then?

In the United States 3,000 people are diagnosed with Mesothelioma each year.
Nearly 125 million people worldwide encounter asbestos in the workplace.
Research estimates that 100,000 people die each year from asbestos-related diseases, and that there will be 5 million to 10 million deaths worldwide from asbestos-related cancers by 2030.
Every year there are more people killed by asbestos than in road accidents.

In what century will we be wise enough to realize we have to permanently rid our built environment of asbestos and other cacogenic-hazardous waste?

The only answer to the aforementioned question is to develop technologies that will permanently eliminate hazard-carcinogenic wastes from our built environment.

There is a proven non-thermal, EPA approved method to rid our environment of asbestos.

The owners of facilities or the CEOs and CFOs should seek out the best possible solution and technologies that eliminate hazardous wastes. This mission should be a priority and should be demanded by the stakeholders of these facilities.

After all, taking care of the earth is our responsibility for our children’s future existence.

Link

http://www.abcov.com

Industry-Government-Pollution-EPA-Money

Tue, 14 Jun 2011 20:32:31 +0000

Topic by Tony Nocito

Content

Industry and Government have been hazardous polluters for decades. Negative Externality (the theory that those who make a decision do not have to pay the negative cost and effect of that decision) is a theory that could well apply to the consequence of previous hazardous pollution in the past.

An example of this is the answer I received after a presentation I gave on a non-thermal, EPA approved process that destroys asbestos. At the end of the presentation I asked the environmental manager if the company was worried about the cradle-to-grave consequences of landfilling asbestos or, for that fact, any hazardous waste.

The answer: Our Chief Executive is not worried about that, he’ll be long retired before there are any consequences of our landfilling of hazardous material.

In other words, he is going to CYA it until it is time to collect his pension

Yes that may be true, but what about his grandchildren?!

This brings us to the EPA and money.

EPA budgets have become limited by financial constraints, as well as the fact that EPA enforcement has become prevalent since the EPA has been sued by environmental groups to enforce Section 108(b), which requires financial responsibility and a secured guarantee for environmental pollution clean-up that a company may cause long into the future.

The enforcement of 108(b) will eventually lessen the Congressional appropriations for the clean-up of polluted sites in the future, therefore easing tax payer liability and creating an efficient EPA that can be the oversight manager of our environment instead of the responsible clean-up contractor.

How does industry constructively deal with 108(b)?

The financial requirement of 108(b) goes directly to a company’s bottom line as a negative liability and future cash requirement.

Industry, through its CEOs and CFOs should instruct their research and development and environmental departments to actively seek out solutions to our hazardous waste problems.

Let’s take a look at the advantages to industry of finding and utilizing solutions that permanently rid our environment of hazardous waste:

1. Elimination of a liability;
2. Elimination of further pollution;
3. Elimination of health risks to humans
4. Good social responsibility;
5. It is the green thing to do;
6. It does not cost them anything, because it is tax deductible, either as a deductible expense or as a deductible capital expense

In this scenario, the company will be financially stronger, good for the stock holders and the CEO and CFO, good for the environment, socially responsible and most importantly, good for our grandchildren.

Link

http://www.abcov.com

Clean Energy Technologies Will Create Waste (2 Comments)

Thu, 02 Jun 2011 15:19:56 +0000

Topic by Tony Nocito

The birth of mitigating our dependency on oil and coal is here. We are rapidly developing energy saving and renewable-energy solutions that are about to transform our lives for the better, bringing a new era of limiting our dependency on fossil fuel, and creating less wastes when generating electricity. But inevitably through this period we will create other wastes, some hazardous.

These changes and growth in renewable-alternative energies will deliver a new era of efficient power generation and a new sector of jobs. Infrastructure building and renovations will have to take place, i.e. transmission lines and sub-stations will require modifications and upgrades and generating stations will be abandoned as retired assets, dismantled and the environmental hazards removed.

It is obvious that the cross over to clean energy will inevitably breed countless environmental clean-up projects. Utilities are notably plagued with many hazardous-waste products such as asbestos, Polychlorinated Biphenyls (PCBs), heavy metals, lead, cadmium, and chromium that will haunt them and us for generations to come if they are not permanently removed from our built environment (meaning buildings, facilities and landfills).

The companies that generate and release these hazardous wastes are being monitored by the Federal Environmental Protection Agency (EPA) who has become stricter in its enforcement of polluters, requiring a guarantee of financial assurance under Section 108 (b) of the Comprehensive, Response, Compensation, and Liability Act (CERCLA). In this section of CERCLA, companies must prove financial stability, long into the future, by acceptable financial vehicles with terms and language incorporated and approved by the EPA and enforced by the National Enforcement Initiatives for the clean-up of environmental hazardous. Therefore it is in their favor to seek out technologies that permanently remove these hazardous wastes from our built environment, which will lesson the financial burden.

The major problems that will develop from this era lay in the fact that landfill space is at a premium and landfill mining (digging up landfills to recycle the buried recyclables) is becoming a way to create landfill expansion. Also, the development of new landfills is becoming almost impossible, due to the ever present: Not In My Back Yard (NIMBY).

Hazardous waste destruction technologies are the future of the waste industry, just as clean energy technologies are the future of the utility industry.

Clean energy and zero waste, non-hazardous and hazardous, must be a vigilant effort. Our goal has to be the development, refinement and implementation of technologies that can support these efforts. This is the best socially responsible sustainable environmental approach.

What will our children do to eliminate waste in their life?

It is up to our generation to set the ground work and emphatically pursue cleaner energy and zero waste technologies, educating the consequences of not continually finding better solutions for our environment, and most importantly, for the health of generations to come.

The Asbestos Debacle

Thu, 09 Jun 2011 15:06:31 +0000

Topic by Tony Nocito

SBA Reliance Letters, Risk (7 Comments)

Wed, 17 Nov 2010 15:32:24 +0000

Topic by Bret

An environmental professional (David Lourie, P.E.) has prepared a white paper entitled: "The Small Business Administration's Reliance Letter: To Sign or Not to Sign?"

If can be found at: http://www.asfe.org/index.cfm?cdid=11360&pid=10344

In summary, the author believes the risk is much higher in the SBA process due to the inflexibility of the SBA reliance letter. There is no doubt the risk is greater if you are using someone else's legal instrument.

While in the past the SBA ws flexable on this issue it appears they no longer are.

- What is your experiences with the risk associated with the SBA reliance letter and the risk associated with this agency (or perhaps any similar Federal agency)?

- Do you agree with the points made by the author?

- Is there a practicle workaround?

Thanks!

UST Pollution Liability Lapsed and car hits the pump (4 Comments)

Thu, 22 Jul 2010 00:09:03 +0000

Topic by mkulka

I have a situation where my customer lost ~700 GALLONS after a vehicle hit his dispenser.

Unfortunately he noticed the second renewal/cancellation notice for the UST pollution liability policy on the desk of his manager while on the property to address the issue.

He would like to pursue the vehicle insurance for some coverage. i have been involved with auto insurance covering the cost of replacement of a remediation shed but not a release.

Any insight to the possibility of coverage from the auto policy would be well received.

Web based or software solutions: Waste Manifest Tracking for Small Generators (2 Comments)

Wed, 31 Mar 2010 22:04:04 +0000

Topic by Harry_Lawrence

RGA is looking for web based or software solution for small hazardous waste generators to track ID Numbers/Manifests for future reference. The example is for Commercial Property Managers/Building Owners. Please let me know if you might know of a solution. RGA currently has a risk management solution for tracking Certificates of Insurance, Job Hazard Analyses, MSDS and Worker Training.