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Update to Federal and California Environmental Agencies’ Steps to Advance Environmental Justice

By Steven Farkas and David McGrath, Manatt, Phelps & Phillips

Environmental officials from the federal Environmental Protection Agency (“EPA”) and the California Environmental Protection Agency (“CalEPA”) have recently taken steps to further incorporate the concept of environmental justice into their rulemaking and enforcement policies.  EPA defines environmental justice as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.”  California uses a parallel definition of environmental justice, codified in statute as “the fair treatment of people of all races, cultures, and incomes with respect to the development, adoption, implementation, and enforcement of environmental laws, regulations, and policies.”

On May 23, 2016, EPA released the final version of its Environmental Justice 2020 Action Agenda (“EJ 2020”) and has extended the comment period to July 28, 2016.   Meanwhile, CalEPA released a report in June 2016 reviewing the past three years of its efforts to advance environmental justice.  In furtherance of one of the agency’s goals for environmental justice, CalEPA’s Department of Toxic Substances Control (“DTSC”) recently touted a new Supplemental Environmental Projects Policy (“SEPs Policy”) that will direct funds from fines and penalties to improving public health and the environment in impacted communities.

EPA’s EJ 2020 Action Agenda

EJ 2020 is a follow up to EPA’s EJ 2014, where EPA established a foundation for incorporating environmental justice into its programs, policies, and activities.  The final version of EJ 2020 is now available for public comment with EPA anticipating a large number of submissions.  The draft EJ 2020 received over 600 formal comments last year, evidencing the significance of this concept to various stakeholders.  Although EJ 2014 developed an Environmental Justice Screening Tool, EJ 2020 was introduced in part to reinvigorate EPA’s efforts to pay closer attention to the impacts that rulemaking and enforcement priorities have on underserved communities.  EPA makes clear that EJ 2020 is not a rule, but instead a strategy for advancing environmental justice.  EPA’s EJ 2020 strategy consists of three goals as outlined below:

Goal 1 of EJ 2020 is to deepen environmental justice within EPA’s various programs to improve the health and environment of overburdened communities.  EPA aims to achieve this goal by promoting environmental justice in four principal areas of agency activity: (1) rulemaking, (2) permitting, (3) compliance and enforcement, and (4) science. 

Goal 2 of EJ 2020 involves working with other federal agencies as well as state and local governments to further expand the use of environmental justice analysis in areas not fully controlled by EPA.  For example, EPA wants to instruct other federal agencies on how to strengthen considerations relating to environmental justice in the National Environmental Policy Act process.  A key component of EJ 2020’s Goal 2 is to continue with community-based outreach efforts to support communities’ day-to-day needs and to assist with community revitalization efforts.

Goal 3 of EJ 2020 is for EPA to demonstrate progress on significant environmental justice challenges, which for purposes of EJ 2020 are: (1) eliminating disparities in childhood blood lead levels by identifying geographic areas with the greatest lead exposure and reduce sources of lead contamination, (2) working to ensure that water systems have safe and healthy drinking water with special emphasis on underserved communities, (3) ensuring that air quality in low-income population areas comply with national ambient air quality standards no later than the statutory attainment date, and (4) reducing exposure to contamination at hazardous waste sites and better understanding the impact that such sites have on vulnerable communities.

EPA’s efforts to rededicate itself to environmental justice may have come in response to recent analysis showing that prior efforts to consider environmental justice have failed miserably.  In 1994, President Bill Clinton first recognized the need to include environmental justice analysis on issues of community health and safety.  President Clinton, via Executive Order, cited Title VI of the Civil Rights Act of 1964 as the legal basis for his directive, ordering that each federal agency ensure that all programs or activities receiving federal financial assistance that affect human health or the environment do not directly, or through contractual or other arrangements, use criteria, methods, or practices that discriminate on the basis of race, color, or national origin.  Each federal agency was to analyze the environmental effects, including human health, economic and social effects, of federal actions, including effects on minority communities and low-income communities.

To ensure compliance with Title VI, EPA established an Office of Civil Rights whose main task is to police EPA funding to ensure such funds are not expended in a discriminatory manner.  As President Clinton noted, this provision presents a significant legal tool for combating environmental injustice.  Unfortunately, a study released in 2015 by the Center for Public Integrity and NBC News showed that in its 22-year history of processing 268 environmental discrimination complaints, the Office of Civil Rights has never made a formal finding of a Title VI violation.  Upon release of this report, it became clear why EPA needed to rededicate itself to the stated goal of incorporating environmental justice into all facets of its decision making and to work with other federal and state agencies to accomplish it.

CalEPA’s Environmental Justice Update & SEPs Policy

In June 2016, CalEPA released its Environmental Justice Program Update (“CalEPA EJ Update”) summarizing the agency’s progress toward implementing environmental justice reforms, a report required every three years by law. 

Among its findings, the 80-page CalEPA EJ Update shows that the agency made significant progress in implementing the Intra-Agency Environmental Justice Strategy that was adopted in August 2004.  One of the more notable findings on this front concerns Cap-and-Trade auction proceeds, which are deposited in the Greenhouse Gas Reduction Fund (“GGRF”) and provide an opportunity for the state to invest in actions that reduce greenhouse gas emissions with an emphasis on the most disadvantaged communities.  The suite of implementing legislation establishing the GGRF includes California Senate Bill 535, which requires the California Department of Finance to allocate at least 25 percent of GGRF funds to projects that provide benefits to disadvantaged communities, with a minimum of 10 percent of these funds earmarked for projects located within a disadvantaged community.  According to the CalEPA EJ Update, as of December 2015, 51 percent ($469 million) of the $912 million implementing California Climate Investments are funding projects that provide benefits to disadvantaged communities; 39 percent ($356 million) of the $912 million are funding projects located within disadvantaged communities.

One of CalEPA EJ Update’s future environmental justice goals is to promote Supplement Environmental Projects (“SEPs”) that improve, restore, protect, or reduce risks to public health and/or the environment beyond compliance with environmental laws.  In furtherance of this goal, on May 10, 2016, CalEPA’s DTSC released its SEPs Policy, which states that up to 50 percent of fines and penalties could be directed to projects that improve public health or the environment.  The SEPs Policy prioritizes the use of SEPs in communities where a violation occurred and in environmental justice communities.  DTSC’s SEPs Policy also describes the types of potential SEPs and requires accountability for all funding, thereby continuing to further CalEPA’s goal of promoting environmental justice.  Tools and policies such as DTSC’s SEPs Policy will likely continue to develop as the issue of environmental justice becomes more engrained at state and federal agencies across the country.

Steven Farkas is of counsel in the Los Angeles office of Manatt, Phelps & Phillips, LLP.  With nearly 25 years of experience working in-house for petroleum companies, he has handled the full array of issues that confront the heavily regulated industry. Mr. Farkas has advised on numerous asset sales and acquisitions, environmental compliance, investigations and enforcement actions. He can be reached at (310) 312-4137 or sfarkas@manatt.com.

David McGrath is an associate with Manatt, Phelps & Phillips. His practice focuses on regulatory and transactional matters involving land use and development, air quality and climate change, energy projects, water quality, hazardous waste, and related government compliance issues. Mr. McGrath can be reached at (310) 312-4147 or dlmcgrath@manatt.com.

This column is part of a series of articles by law firm Manatt, Phelps & Phillips, LLP’s Energy, Environment & Natural Resources practice. Earlier columns in the sixth edition of this series discussed Regulation of Methane Emissions, EPA’s Chemical Data Reporting Rule, California’s Global Warming Solutions Act, Evaluating Traffic Impacts of Projects, California Water Bond Funding and Export of US Crude Oil.

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