Superfund, the nation’s preeminent law for cleaning up our country’s most heavily contaminated toxic waste sites, is heading for serious trouble. Since 1980, Superfund has cleaned up a steadily increasing number of sites, which has translated into tangible public health and economic benefits for communities across the country. Conversely, the recent and dramatic decline in the pace of cleanups could portend a continuation of serious public health and environmental threats and delayed economic revitalization for communities and people across the country.
Toxic waste sites are a significant and widespread threat to public health and environmental quality. While the Superfund program has made great strides in expediting the remediation process, there are still hundreds of sites in Superfund’s pipeline that must be cleaned up. Resources for the Future’s report to Congress noted that EPA officials expected a dramatic increase in the number of annual listing, to around 50 sites per year in some cases. This nation’s industrial development, aided by industry’s poor management of its toxic wastes, has created a legacy of sites that EPA and state officials recognize will not soon disappear. The nation must vigorously respond to this public health threat by redoubling its dedication to cleaning up toxic waste sites.
By contrast, the Bush administration has presided over a greater than 50 percent decline in the pace of cleanups in just two years. During this decline, the administration has under funded the Superfund program by $1 to $1.4 billion from 2001 to 2003. Superfund’s surplus, which has fueled cleanups since Superfund’s taxes expired in 1995, will have dwindled from a high of $3.6 billion in 1995, to only $28 million in 2003. In short, the future of Superfund’s ability to protect public health and environmental quality from the nation’s worst toxic waste sites is in jeopardy.
Thus far, the Bush administration’s response has included denying that any sites have been affected, claiming that any problems are related to the increased number (or percentage) of mega-sites in the program, and opposition to any reauthorization of Superfund’s polluters-pay taxes unless the program is “reformed”, a term often associated with weakening the program’s protections. All three responses ignore facts that naturally lead to a more satisfying and complete answer.
The pace of clean ups has dramatically slowed down without any appreciable change in the composition of sites in Superfund’s pipeline over the last two years. The administration should acknowledge this and respect the public’s right-to-know about the impacts of policy decisions on their communities. Therefore, the administration should tell the public which sites might be affected by a lack of clean up resources. The administration should also preserve Superfund’s protections by working to reauthorize Superfund’s polluters-pay taxes, without any associated proposals that weaken protections. And finally, the administration should acknowledge that the composition of Superfund’s pipeline has not changed so dramatically in less than two years, but rather, the administration has simply under funded cleanups.
II. Superfund Sites Threaten Public Health
There are about 600,000 toxic waste sites across the country. About 1,223 are currently listed for clean up under the Superfund. One out of four people in America lives within one mile of a Superfund site. Eighty-five percent of all Superfund sites have contaminated groundwater. Fifty percent of people, and virtually 100% in many rural areas, rely on groundwater for drinking water. Children born to parents who live within one-quarter mile from toxic waste sites have an increased risk of birth defects, including heart defects. Many Superfund sites are located in urban areas, are accessible to children, and expose people to dangerous contamination. Others are located in our rivers and water bodies, where they pose a risk to the environment and to people who eat the fish from such waters. Furthermore, people are moving into contaminated areas where officials did not contemplate communities 20 years ago. This occurs in urban settings, where old industrial parks become new condominiums, and rural areas where sprawl spreads into regions impacted by past mining activities.
Superfund had steadily increased the pace of cleanups until 2001. In its early years, Superfund got off to a slow start, due in part to mismanagement and the difficulty of creating a new national program to clean up the nation’s worst toxic waste sites. From 1980 to 1990, Superfund cleaned up an average of only 6 sites per year. In 1989, EPA initiated its “enforcement first” policy, where EPA would undertake a thorough search for all of the PRPs at a site, and then issue a unilateral administrative order directing them to clean up their contamination. If the PRPs disobeyed the order or negotiated with EPA in bad faith, then the agency would cleanup the site and charge the PRPs up to three times the cleanup costs, plus penalties. This policy, the success of which is predicated upon EPA having adequate resources to conduct cleanups, helped dramatically increase the pace of the program, from cleaning up an average of 6 sites per year to an average of 70 per year, from 1991 to 1995. In 1995, EPA undertook a series of reforms and made good use of available funding to increase the pace of cleanups to an average of 86 per year, from 1996 to 2000. However, the pace of cleanups has dramatically declined to an average of 42 cleanups per year, from 2001 to 2003 (2002 and 2003 are estimated).
1. The Bush Administration’s Response Inadequately Describes The Cause Of This Slowdown
The Bush administration’s response has been to deny that any sites have been affected, claim that the program is now cleaning up more mega-sites than previously envisioned, and oppose any reauthorization of Superfund’s polluters-pay taxes unless the program is “reformed”, a term often associated with weakening the program’s protections.
U.S. PIRG doubts the administration’s response that no sites have been affected by a lack of funding. For example, on February 24, 2002, the New York Times quoted EPA’s head of the Superfund program for Region 6 as saying that he did not have adequate funds to move forward on five cleanups. Waste News flagged one of these sites as the Delatte Metals site in Ponchatoula, La., back in November 2001. On March 13, 2002, The Post and Courier quoted an EPA Regional Project Manager as saying that he did not have adequate funding to move forward with a cleanup in South Carolina. Then, on March 22, 2002, ABC News highlighted a site in New Jersey that EPA could not clean up due to a lack of funding. Clearly, Superfund’s ability to clean up sites has been affected by a lack of funding.
1) The Bush Administration Has Avoided Giving The Public Information About Affected Sites
During the week of February 25, 2002, U.S. PIRG called EPA personnel in every region to ask which sites were affected by a lack of funds. At first, EPA officials were forthcoming, and said that they would give me the information. However, when I later called back to follow up with some offices and got around to calling other offices, EPA personnel told me that EPA headquarters had told them that they were not to talk to anyone about the impact of funding on sites, and that they were to direct all such calls to Joe Martyak, EPA spokesperson. I subsequently called Mr. Martyak and asked him the same questions that I had posed to EPA regional officials. While he stated that he would get back to me, after I called several times to follow up, Mr. Martyak never called me back. Similarly, in early March, I received a call from the staff of Marianne Lamont Horinko, who asked me to describe the specific information that I wanted. I conveyed this information but, after I called a number time to follow up, her staff never contacted me with the information.
U.S. PIRG also doubts the administration’s claims that the slowdown in cleanups is a result of the program unexpectedly cleaning up more mega-sites than earlier in the program. The pace of cleanups has declined by over 50 percent in less than two years. From 1996 to 2000, the program cleaned up an average of 86 sites per year. Now, only two years later, the program is slated to clean up 40 sites. The average Superfund site takes about 9 to 12 years to clean up. Therefore, the types of sites in the pipeline would not change so dramatically in such a short amount of time.
However, a 2001 report by Resources for the Future predicted that Superfund might list a higher percentage of complex sites, but not necessarily mega-sites, in the future. However, it will be years before future listing begin to impact rates of cleanups. Therefore, unless EPA vastly underestimated the number of mega-sites in the program, and upon discovering the increased number of sites EPA decided to shift substantial resources to cleaning them up, rather than remediating sites that were almost at the construction complete stage, new mega-sites should not impact sites at the end of Superfund’s pipeline.
Further, EPA predicted in 2000 that it would clean up 900 sites by 2002 based on timely and accurate data derived from decades of experience cleaning up sites. In less than two years, it is clear that the Bush administration will miss this target by over 50 sites. For example, the administration missed its projected cleanup target of 75 sites in 2000, by only cleaning up 47 sites. The administration also revised its initial cleanup target of 65 sites for 2002, to only 40 sites.
C. The Administration’s Under Funding Of The Program Provides A Far More Plausible Explanation
The administration has under funded the Superfund program by at least $1 to $1.4 billion from 2001 to 2003. This under funding provides a far more plausible explanation than a dramatic and unexpected transformation of the types of sites cleaned up by Superfund in less than two years. If the administration does not give Superfund adequate resources, then the program cannot protect public health and environmental quality from the nation’s most heavily contaminated toxic waste sites.
The success of other federal and state programs heavily depends on the federal Superfund program providing a credible deterrent against polluters who refuse to clean up sites under state programs. For example, politically powerful polluters may negotiate in bad faith with state clean up officials over how to conduct cleanups. With an effective Superfund program, the state officials can threaten to request that EPA clean up these sites using Superfund. This threat makes polluters negotiate in good faith with state officials.
However, Superfund is only a credible deterrent if the program has money to conduct cleanups, since EPA must spend money on a cleanup before it can sue a polluter. For example, EPA can use its Superfund authority to order a polluter to clean up its contamination. If the polluter refuses to comply with the order, EPA can spend money—if it has funds—to clean up the contamination. Thereafter, EPA can sue the polluter for up to three times the cleanup costs plus penalties. However, if EPA does not have the money to conduct clean up activities, the agency cannot sue the polluter to recover costs.
Federal cleanup officials in other programs also rely on Superfund to provide a deterrent effect on polluters. Fro example, the Resource Conservation and Recovery Act’s Corrective Action Program uses the threat of a Superfund listing to spur intransigent facilities to clean up their contamination. Therefore, a crippled Superfund program will have a cascading effect that debilitates other federal clean up programs.
Data on state programs also demonstrates that numerous states lack adequate financial resources for, and assurances of public participation in, cleaning up hazardous waste sites. A well-funded Superfund program provides a vital federal safety net that can protect public health when states do not have the technical ability or financial means to protect communities from toxic waste sites. State officials openly acknowledge that their programs need Superfund’s financial assistance, technical support, and program guidance. Therefore, reducing the effectiveness of Superfund adversely affects the ability of state programs to clean up contaminated sites.
The Bush administration should tell the public which sites will or may be impacted by a lack of funding. The public has a right-to-know if Superfund sites in their communities may sit idle or if EPA intends to decrease the amount of oversight given to PRP clean up activities. People who have lived with the dread of a toxic waste site in their midst deserve no less than complete openness from this administration, which thus far has been lacking.
Superfund’s surplus, which has fueled the program’s success in getting sites cleaned up since 1995, is disappearing. From a high of $3.6 billion in 1995, the last year that the federal government collected Superfund’s polluters-pay taxes, the amount of money in the fund has steadily declined: the surplus was $860 million in 2001, $427 million in 2002, and will shirk to an expected $28 million in 2003. A large surplus is critical because it allows the administration to request and Congress to appropriate increased funds to ensure the program in protecting public health.
Without a surplus, the Bush administration has essentially three funding choices. First, they can take an increasing amount of money from taxpayers, which could jeopardize protections under other programs paid for with discretionary funds, such as drinking water and clean air act programs. The administration can continue making taxpayers pay the already exorbitant amount of $700 million per year, turning Superfund’s polluter pays principle on its head and slash the pace of cleanups even further. Alternatively, the administration can work to reauthorize Superfund’s polluters-pay taxes and maintain Superfund’s record of success.
Thus far, the Bush administration’s response is to disavow the founding principle of the Superfund, that polluters—not innocent taxpayers—should pay to fund cleanups when EPA cannot locate polluters or when polluters refuse or do not have the funds to conduct clean up activities. This principle is largely responsible for the programs past success in cleaning up toxic waste sites. By eschewing the most direct, efficient, and common-sense approach to funding cleanups, the administration is needlessly jeopardizing Superfund’s ability to clean up toxic waste sites.
1. The Bush Administration Can Easily Solve This Problem
The solution to this problem is rather simple. The Bush administration should support reauthorization of Superfund’s crude oil, chemical feed stock, and the corporate environmental income taxes. Former Presidents Reagan, George H.W. Bush, and Clinton all collected and supported reauthorization of Superfund’s polluter pays taxes. The taxes expired in 1995, and thereafter President Clinton urged their reauthorization. The Congress refused to work with President Clinton to reauthorize the taxes, demanding that the program first show results.
However, there is a new administration in the White House that can work more closely than its predecessor with the House. The Senate is more likely to support reauthorization if it ensures the program continues to clean up sites. Also, Supefund has demonstrated it can quickly clean up sites.
Failure to reauthorize the taxes continues a taxpayer-subsidized holiday for polluting industries. Since these taxes expired in 1995, polluters have enjoyed a $4 million a day tax holiday, totaling over $10 billion. Instead, the Bush administration has taken increasing amount of taxpayer money to fund the program: $634 million in 2001, $635 million in 2002, and a projected $700 million in 2003. This means that taxpayers, who paid about 18 percent of Superfund’s costs in 1995, will pay 54 percent in 2003.
If reauthorized, these taxes will once again provide Superfund with the resources to protect communities across the nation by cleaning up toxic wastes sites and conducting appropriate oversight activities. It will ensure that Superfund continues to provide other federal and state cleanup programs with an unspoken, yet credible deterrent that those programs use to make intransigent polluters clean up their mess. Reauthorizing the taxes can also put back into place important disincentives on the use of products and undertaking of activities that create toxic wastes sites. Using taxes to leverage market forces for promoting good behavior and deterring bad behavior is good policy, and makes good economic sense.
2. The Bush Administration Is Threatening To Weaken Superfund’s Protections
Rather than embracing these common-sense solutions, the Bush administration appears to be dragging this nation back to a time when battles raged between industries that wanted to weaken Superfund and people who wanted to preserve its protections. The administration has stated that it opposes reauthorizing any of Superfund’s polluter-pays taxes unless Superfund is “reformed”. This statement sounds similar to industry’s call to weaken the program by gutting its liability and clean up standards and natural resource damages provisions.
The administration’s statement ignores the over 30 reforms implemented administratively and legislatively—including some of the more sweeping reforms that members on this committee drafted in 2000 and 2001, and which this administration signed into law at the beginning of 2002—over the last eight years. Under the Small Business Liability Relief and Brownfields Revitalization Act, Congress reformed Superfund to reduce liability for small parties (including small businesses and developers), protected people and small businesses from being sued by big polluters, exempt developers of brownfields and landowners who unknowingly purchased contaminated property from liability, and expedited settlements for polluters, among other reforms. In other legislation, Congress has protected financial institutions and legitimate recyclers from Superfund liability.
Further, EPA has initiated three rounds of reform since 1995 that have transformed many aspects of the program. EPA has reformed Superfund’s enforcement program to reduce litigation and expedite settlements. This includes EPA agreeing to pay 25 percent of the response costs at a site, if this does not exceed the orphan share amount, or the total past and future oversight costs, if the polluter agrees to conduct clean up operations. EPA has also reformed Superfund’s clean up process, to expedite the pace of cleanups and reduce litigation. This includes EPA decreasing costs by treating only “principle threats”, using institutional controls, and heavily increasing the use of natural attention. Further, EPA has streamlined the clean up process by reducing oversight and designating one state or federal agency as the “lead agency” to oversee clean up work at the site. EPA also uses a “risk-based” priority setting process, where the agency reviews and compares public health and ecological risks, stability and toxicity of contaminants, and economic, social, and program management considerations when deciding to list sites under Superfund. (Please note that U.S. PIRG does not necessarily endorse these reforms, including EPA’s interpretation and implementation of its “principle threats” policy.)
In 2001, the General Accounting Office (“GAO”) removed Superfund from its list of “high priority” sites for waste and mismanagement. The GAO had originally put Superfund on this list in 1990 because the GAO did not believe that EPA was correctly prioritizing cleanups, recovering appropriate amounts of money from PRPs, and effective controlling contractor costs. However, in January 2001, the GAO stated, “Because of the progress that [EPA] has made in addressing the management problems we have identified [ ] we are removing our designation of high risk for the Superfund program.” GAO, High Risk Series: An Update, 17 (2001).
The Bush administration has already given some examples of reforms that it desires. For example, the administration has stated that Superfund must be reformed because “it has become a haven for lawyers.” However, this administration has already signed into law substantial reforms that expedite the settlement process and reduce settlement amounts, protect small parties from being sued by big polluters, and eliminate liability for contributing small amounts hazardous and solid waste, among other provision. If further reforms are undertaken, they will likely only benefit big, corporate polluters who often sued small parties in contribution claims, in an effort to discredit the program as one that hurt the “little guy”.
The administration’s call for “reform” presents a false choice between maintaining Superfund’s protections for public health and environmental quality (while losing the financial capability to vigorously enforce such protections) or reauthorizing Superfund’s polluter pays taxes to fund a substantially weakened Superfund program. The public should not have to choose between maintaining protections without funding or making polluters pay their taxes while weakening clean up and liability standards. Indeed, U.S. PIRG believes that the federal government can and should maintain all existing protections while reauthorizing Superfund’s taxes. This would also ensure that Superfund has adequate resources to pay for cleanups, which would maintain the trust and certainty between states and EPA that has developed over the years on clean up issues. It would also create disincentives for the use of products and undertaking of activities that are environmentally harmful, while also increasing funds for programs that protect public health and environmental quality.
V. EPA Should Be Wary Of Reforms That May Increase Costs And Weaken Protections
There are a number of reports that EPA is considering various reforms to Superfund that may ultimately cost the program more money that it saves, and which may weaken protections for public health, environmental quality, and public participation in the clean up process. For example, EPA may consider creating a new administrative program for mining and contaminated sediment sites, a waiver of liability in conjunction with insurance policies that provide a finite amount of long-term funding, and consent decrees that may usurp Superfund’s Congressional mandated prioritization process for cleaning up toxic waste sites. Rather than attempting to get around Superfund’s process for cleaning up sites and making polluters pay, EPA should work to vigorously apply these tools at these sites. This would maintain an equal level of protection for communities who live near or on Superfund sites, while ensuring that EPA does not send the wrong signal by weakening Superfund’s liability provisions and clean up standards for polluters who create the biggest problems.
1. A New Administrative Program Could Weaken Protections
EPA may be considering the creation of a new administrative program for contaminated sediment sites and mining sites. While the contours of this program are not yet clear, the potential ramifications of this action are disturbing. For example, at contaminated sediment sites, EPA may choose to create a new program that does not have apply Superfund’s liability or clean up standards. It is conceivable that such this administration may chose to emphasize cooperative and voluntary clean up agreements with polluters under such a program. Further, it may also choose to grants waivers of liability for participating in the voluntary program. In these instances, if clean up costs are greater than expected, taxpayers could ultimately pay to clean up these large mega-sites. Further, since many of these agreements would like be negotiated between EPA and the polluters, the public may lose Superfund’s provisions that ensure the local community has the ability to affect the clean up plans.
If the agency is concerned about big polluters dragging small parties into litigation at contaminated sediments sites, then the agency should use its recently enacted authority to exempt small parties from such litigation. If the agency is concerned about PRPs absconding with assets oversees, then the agency should use existing law to put a stop to such practices. If the agency is concerned about the large number of bankrupt PRPs at mining sites, then as a true advocate for the program, it should push for increased funding, paid for by polluting industries associated with the activities and products that cause toxic waste sites.
2. EPA’s Use Of Insurance Policies And Liability Waivers At Mining Sites Could Leave Taxpayers Paying For Perpetual Clean Up Activities
In October 2000, EPA agreed to let Aventis CropSciences USA (Aventis) invest a sum of money with an insurance company to pay for clean up and operation and maintenance activities at the Iron Mountain Mine Superfund site, rather than paying for the upfront costs of the cleanup. Aventis agreed to pay $164 million AIG insurance company $80 million to invest, and which AIG expects will provide funding in the hundreds of millions of dollars over the next 30 years. Aventis also gave AIG a $64 million balloon payment, which AIG expects will provide $514 million for operation and maintenance costs beginning in 2030. Aventis also paid EPA $8 million and the trustees $10 million. In return, EPA released Aventis from liability for future costs overruns and waived $150 million in past costs. Aventis will only be liable if there is a shortfall in expected returns.
There is nothing intrinsically inappropriate with allowing PRPs to give insurance companies money to invest, and which EPA, states, or PRPs can later use for costs associated with a cleanup. However, a PRP already derives a tremendous benefit from such an agreement, since the party only pays a percentage of the actual expected costs. There is no reason for EPA to sweeten the pot by eliminating the polluter’s liability and transferring it to innocent taxpayers or, assuming Superfund’s polluters-pays taxes are reauthorized, using trust fund resources that should go to clean up sites where EPA cannot locate any PRPs or polluters refuses to clean up their contamination.
EPA should allow the funding mechanism, but not waive future liability. The financial markets and corporate America have been rocked by too many scandals. Insurance companies can over commit their resources to one particular industry or geographic region. In these instances, a crash in the price of a commodity or an earthquake or hurricane can seriously undermine an insurance company’s financial stability. Alternatively, insurance companies can get caught in reinsurance schemes, where the bankruptcy of one institution can weaken many others. This combined with the fact that acid mine drainage can get worse over time and may require perpetual treatment means that taxpayers may have to pay for the costly and perpetual treatment of mining sites that use this funding scheme. EPA should not willfully strap taxpayers with the potentially huge cost burdens associated with these types of sites by waiving a polluter’s liability.
3. EPA Should Not Enter Into Consent Decrees And Use NPL-Caliber Designations That Weaken Protections
EPA recently entered into a consent decree with Monsanto and Solutia that could seriously undercut local citizens’ efforts to make these PRPs clean up PCB contamination in Anniston, AL. It may also usurp Congress’s prioritization scheme embodied in the National Priorities List. EPA should try to avoid both of these results.
After years of inaction by state clean up officials, EPA appropriately stepped in to oversee future clean up operations in Anniston. However, EPA chose to file a consent decree that may jeopardize a suit brought by citizens against Monsanto and Solutia. Citizens in Anniston were successfully prosecuting a suit seeking compensation for health and environmental damage left behind by the company’s production of PCBs. As part of the damages phase of this suit, the citizens could have asked for a variety of remedies that would have addressed community concerns about irregularities and inadequacies of past testing, the establishment of a community health center, and clean up of the site under the protections afforded by the Superfund program. Instead, EPA’s consent decree may actually provide Monsanto/Solutia with an opportunity to argue that the citizens have no right to many of these remedies.
This type of consent decree could be used to frustrate common law claims brought by citizens against polluters at other sites. EPA should take some common sense steps to ensure this does not occur. First, EPA should always act to expeditiously protect public health. However, where citizens are pursuing a private cause of action that could result in a desired cleanup, and EPA retains the right to order a future clean up if the initial work is inadequate, then the agency should consider allowing the community’s litigation to run its course. Alternatively, the agency should, at a minimum, work with the affected community to ensure that their concerns are addressed in any consent decree.
Thank you very much for the opportunity to present testimony on these important issues.
U.S. Public Interest Research Group