The Black & Decker name is one of the most widely known brands in the world. Headquartered in Towson, Maryland, Black & Decker manufactures and markets products and services in more than 100 countries and is the world's largest producer of portable electric power tools, power tool accessories, residential security hardware, and electric lawn and garden tools. It is also the largest global supplier of engineered fastening systems to the automotive and other markets we serve. Our household products business is the North American leader and a major global competitor in the small electric appliance industry, and our plumbing products business is one of the three largest faucet manufacturers in North America. Black & Decker also produces products as diverse as golf club shafts and glass container making equipment. We employ several thousand people at more than 30 manufacturing facilities in 16 States in the United States and at Black & Decker Service Centers throughout the country.
Black & Decker's manufacturing operations are not heavy industry, and with one exception Black & Decker is not the owner, operator, or a predominant generator at any Superfund National Priorities List site. Nevertheless, because of our well-known name and the perception that we are a deep pocket, we have been forced to devote very substantial resources, in the range of tens of millions of dollars, to what often should be relatively straightforward or low priority environmental problems. A large part of our expenses and energies in this field have also been spent on litigation in connection with private cleanup sites that are not on the National Priorities List and with our insurance carriers over their contractual obligations to cover Superfund cleanup expenses.
I am pleased to participate in this Hearing because I believe that, for Black & Decker and for many other American businesses, the existing Superfund law frequently misdirects our energies and our resources. The problem of cleaning up old hazardous waste sites is important, but existing law causes us to proceed too slowly on many serious sites, while at the same time causing us all to spend too much time and money on low-priority environmental concerns and far too much money on legal proceedings. While the EPA has made increasingly vigorous efforts to reform Superfund by administrative action, apparently with some success, the most important failings of the Superfund law and program can only be cured by Congress.
Black & Decker has no Washington office and no full-time lobbyists, but we have devoted significant efforts to Superfund reform for the last several years, working with the Superfund Action Alliance, the National Association of Manufacturers, and other trade associations to promote comprehensive improvements in this law. Frankly, we are quite disappointed and frustrated by the failure of the 103rd and the 104th Congresses to resolve these urgent issues. We hope the 105th Congress can find the middle ground and finish reauthorization this year, before electoral politics once again polarizes all discussion of this issue.
From what we can see, the Senate is off to a good start in 1997. Superfund has been identified as a high-priority objective by the Majority Leader, and the Members and staff of the Environment and Public Works Committee from both parties appear to be moving forward constructively. We hope that the early introduction of S. 8 by the Majority, followed closely by the introduction of S. 18 by the Minority, will set the stage for prompt action. Our own reading of S. 8 leads us to believe that it is a balanced and thoughtful attempt to resolve the crucial problems that bedevil the Superfund program. We understand that it reflects the months of negotiations between Majority and Minority staffs and the Administration last year. We commend the Committee and its staff for their diligent efforts to craft a workable approach that can attract bipartisan support.
Like every interested party in this process, we would of course prefer certain changes in S. 8, and I will mention a few of them in this testimony. But the desire for a more perfect bill should not obscure the fact that overall, S. 8, just as currently written, would be a vast improvement over existing law. We believe it deserves careful consideration by every Member of this Subcommittee, and prompt action to make whatever changes are necessary and reauthorize the law.
The two areas that I will address in some detail are the liability scheme and the remedy selection criteria. In each of these areas, the existing Superfund law is seriously flawed and needs immediate repair.
With respect to liability reform, let me say at the outset that Black & Decker accepts that it should bear a reasonable portion of clean-up costs where it contributed hazardous substances to a disposal site that has become an environmental hazard. We also recognize the necessity for the business taxes that support the Superfund, and we urge their reauthorization as a reasonable means of financing the Superfund clean-up program. Black & Decker has not advocated an across-the-board repeal of retroactive liability. Moreover, we recognize that in some contexts the strict liability system has a salutary effect in facilitating cleanup; for example, to reinforce the viability of the allocation system proposed in S. 8.
But the price of the current retroactive strict joint and several liability system is simply too high. This Subcommittee has heard extensive testimony over the past four years about the adverse consequences that flow from the existing liability scheme, and I will not repeat those facts here. It is sufficient to say that in practice the structure of the current law delays cleanups, misdirects the focus of responsible party activities, and generates enormous transaction costs.
The liability title of S. 8 would significantly reduce those costs. First, it would free a great many small contributors from the legal tangle of strict joint and several liability. The exemptions for one percent (1%) de minimis parties, de micromis parties, generators and transporters of materials sent for recycling, municipal waste, and certain small businesses, along with the limitations on liability for municipalities, will remove the threat of liability for thousands of parties at hundreds of Superfund sites. The small quantity exemptions are particularly appropriate because their volumetric contribution is virtually always of minimal environmental significance, and their participation in the planning and management of the site is non-existent.
These changes alone will eliminate an important part of the aggravation associated with Superfund for Black & Decker. We accept the necessity of participating in the cleanup of sites where we were a significant generator. But the necessity, because of joint and several liability exposure, to participate actively on clean-up committees at sites where Black & Decker has de minimis status is disproportionately expensive and a frustrating headache.
For the greater-than-one-percent responsible parties who remain liable for National Priorities List sites, the allocation system proposed in S. 8 promises to be an enormous improvement over the current litigation-laden approach to allocation. The explicit provisions for orphan-share funding should also greatly facilitate settlements on terms that responsible parties will consider reasonable. S. 8 would be fairer to responsible parties if it expanded the orphan share to cover fully the unallocable shares, not just shares of known insolvent parties and parties whose liability is capped or eliminated by the bill. But even as written S. 8 will ameliorate much of the unfairness inherent in the current system.
There is one aspect of the liability system that S. 8 does not address: as written, the small-party exemptions and the allocation system only apply to National Priorities List sites. Other sites, which have been the subject of a tidal wave of private litigation, would still be governed by the inequitable retroactive strict joint and several liability provisions of the existing law. We believe that for these sites the best solution to liability reform is to return this lawmaking power to the States. S. 8's provisions for expanded State responsibility and the proposed limitations on the number of sites that can be added to the National Priorities List reflect a Congressional desire to transfer to the States as much of the hazardous waste cleanup responsibility as possible. As part of this objective, Congress should also turn over to the States the crafting of the liability scheme for non-NPL sites. It could accomplish this result by limiting the application of Section 107(a) to National Priorities List sites and other sites where the Federal government has either conducted or ordered remediation or restoration activity under Superfund. Almost all States currently have Superfund-type legislation with similar, though not identical, liability provisions, so the short-term impact of this change would be relatively small. But over time, State legislators could decide for themselves the extent to which they believe that retroactive strict joint and several liability, with or without various exemptions, is appropriate. Without this change, the reforms in S. 8 will fail to address a large segment of the litigation that the existing law generates.
Again, our desire for changes to the proposed liability title of S. 8 does not detract at all from our enthusiasm for S. 8 as compared to the status quo, and we urge Congress to proceed as quickly as possible to mark up this title and enact the needed reforms.
Selection of the most appropriate remedy for each site is the heart of the Superfund program. The choice of remedy determines what benefits will be achieved, how much will be spent, and what it will be spent on. When Superfund was enacted in 1980, Congress gave the EPA little guidance on how to determine the desired cleanup levels and how to relate those levels to cost and technical feasibility constraints. The Agency, itself relatively inexperienced in these matters, borrowed a variety of existing legal standards, some of which were designed for very different contexts, to fill this gap. Then in 1986 Congress codified those standards and added others, creating a series of arbitrary rules requiring a preference for permanence and treatment, compliance not only with applicable State and Federal laws but also with "relevant and appropriate regulations," and a groundwater requirement that has been read to mean that, with few exceptions, all potentially usable groundwater at Superfund sites must meet drinking water standards in the ground as soon as possible. These inflexible remediation standards have contributed significantly to the misdirection of resources into remedial activities that produce little or no benefit to public health or the environment.
In reality, Superfund sites vary widely in the nature of the risks they present and in the nature of the geological, land use, locational, and other circumstances that fundamentally shape what remedial technologies can usefully be employed. In many cases, the EPA and State personnel know full well that the remedies they are now requiring have little practical utility, but they are driven by the requirements of the Act to impose them anyway.
S. 8 fundamentally changes this approach by dropping most of these arbitrary requirements. It directs the EPA and the States to focus on the real risks to public health and the environment posed by each site using site-specific data wherever possible, and to ameliorate those risks and meet the protectiveness standards within the bounds of technical practicability and reasonable cost, taking into account reliability, effectiveness, public acceptability, the nature of existing land and water uses and the nature and timing of reasonably anticipated future uses.
In particular, the role of cost considerations in remedy selection is, with a few exceptions, appropriately addressed in S. 8. Cost is one of several co-equal factors to be balanced in the good judgment of the Agency in selecting the remedy. It is not an overriding consideration, and there is no mandate to choose the most cost-effective solution, but neither is it a subordinate or irrelevant factor in remedy selection, as is so often the case under the present law.
Unfortunately, S. 8 does not appear to carry through fully with this risk-based approach with respect to groundwater. While it is true that, unlike soil, groundwater moves and that in the long run many aquifers are interconnected, the same intellectual inquiry and the same criteria should apply to remediation of groundwater as apply to other media and other exposure risks; namely, what real risks to existing and reasonably anticipated uses of the resource can be identified, and what remedial measures should be employed to ameliorate those risks within the bounds of technical practicability and reasonable cost. The notion that certain natural resources should be preserved for their own sake independent of any measurable risk to human health or the environment or entirely without regard to cost or feasibility considerations is a prescription for irrational expenditure of funds, whether public or private. We urge the Subcommittee to take a hard and skeptical look at inflexible rules for remedy selection, whether with respect to groundwater or any other medium.
Finally, the provisions in S. 8 for the review of remedies already selected for Superfund sites under the existing law are a crucial element of remedy selection reform. Having learned from more than a decade of experience that our existing remedy selection criteria are not well suited to the task, it would be foolish not to direct the EPA to reconsider previously-selected remedies, at least where significant cost savings could result from applying the new criteria that this Congress establishes. While we cannot recover funds already misspent, there is no reason to extend the mis-expenditure into the future. The EPA has recognized this fact in its recent administrative reform on "relooking at existing remedies." The provisions for objection by the State Governor in case of unreasonable delay provide additional, though perhaps not necessary, protection against abuse.
As it should, S. 8 also addresses brownfields, State roles, community participation, Federal facilities, natural resource damages, government contractors and funding. None of those issues has a particular impact on Black & Decker, but each of them deserves your attention as part of a coherent reshaping of this program. Attention should also be directed to those elements of the program that will grow in importance in the future, such as long-term operation and maintenance costs, delisting, and site reuse.
As I mentioned, Black & Decker is participating actively in the Superfund Action Alliance, which recently adopted the attached "Superfund Fundamentals," a set of principles that address many of these concerns. We believe that the SAA Superfund Fundamentals are practical, well-reasoned policy recommendations, and we encourage the Congress to use them as a guide in its work on Superfund reauthorization.
In conclusion, let me reiterate the important point: it is time for Congress to act. We need to get past polarization and on to consensus and compromise. The years of serious criticism of the existing Superfund program from virtually every segment of the political spectrum have damaged its credibility and periodically paralyzed its progress. While the EPA's administrative reforms have helped in some respects, only Congress can correct crucial deficiencies and put the Superfund Program back on track. The Superfund Program needs a new Congressional imprimatur, public support, and assured funding. I hope that this Subcommittee and the 105th Congress can finally succeed in this effort where the 104th Congress and 103rd Congress could not.
I commend the Subcommittee for its work and thank you again for this opportunity to present our views.