Some organizations continue to believe a persistent myth that a Licensed Site Remediation Professional (LSRP) is required to report all discharges to the New Jersey Department of Environmental Protection (NJDEP) Environmental Action Line. Although much has been written to debunk it, the myth persists.
As a result of the reporting myth, the use of LSRPs or their firms for due diligence, even though the LSRP meets the Environmental Professional definition in accordance with the USEPA All Appropriate Inquiry Rule, is often precluded in the governing contract.by the seller or by the facility operator. This is also extended to other on-site environmental consulting tasks because of the same misconception. Not using the most qualified environmental professionals in these instances is short-sighted decision making that often results in delays, duplication of effort and significant added costs to all parties.
In actuality, the blanket reporting requirement of any quantity of a “known or suspected” discharge of a hazardous material falls to all owners and operators under the 1976 New Jersey Spill Compensation and Control Act and NJDEP regulations. In addition, licensed contractors and subsurface evaluators are required to report discharges associated with underground storage tanks (USTs) under the 1986 Underground Storage of Hazardous Substances Act and associated NJDEP UST regulations. These reporting requirements were not changed by the Site Remediation Reform Act (SRRA) that created the LSRP program. Rather, SRRA differentiated the LSRP’s reporting obligations, and made an important exemption.
- An LSRP may observe a discharge during due diligence for a prospective purchaser, but is not required to report it to NJDEP. This exemption was made by the legislature in acknowledgement that LSRPs should be able to perform due diligence to provide the buyer with the documentation necessary to establish the innocent purchaser defense through completion of a Preliminary Assessment (PA) and, if indicated by the PA, a Site Investigation. This exemption has been upheld by the Site Remediation Professional Licensing Board (SRPLB) in dismissing a complaint against an LSRP that a discharge was not reported during due diligence.
- SRRA requires that the LSRP report discharges not previously known to NJDEP “…at sites for which he[/she] is responsible.” The term “LSRP of record,” as it has come to be used, was not in existence when SRRA was written and the concept of being responsible for the site or being “of record” was not defined in the statute. Being responsible for the site may be reasonably interpreted to mean that the LSRP has been retained to perform the investigation or remediation (together “remediation” as defined by NJDEP) of an Area of Concern (AOC) or the entire site, depending on the situation. The SRPLB did not clarify the legislative intent further when promulgating their regulations governing LSRPs. However, NJDEP has recently stated that an LSRP retained for a specific AOC is not required to report a discharge on another part of the property. Thus, an LSRP or firm that has been engaged to perform non-remediation related services such as geotechnical engineering, air permitting, or site planning would not be required to report a discharge discovered during the performance of these services unless also retained to perform the remediation.
- SRRA also requires that an LSRP report all Immediate Environmental Concerns (IECs) not previously known to NJDEP, regardless of whether the LSRP is responsible for the site or a related AOC. However, without the benefit of reliable laboratory data and known discharge, IECs are not readily discernable and are, therefore, highly unlikely to be encountered during due diligence or other non-remediation related site work.
In our practice, we often have been prevented from involvement in pre-purchase due diligence, or from even being on-site during sample collection, or even walk-through inspections prior to purchase, because of the seller’s unnecessary reliance on the discharge reporting myth. A seller’s reluctance to the disclosure of remedial needs concerning a property is understandable. Such revelations can adversely affect the real or perceived salability of the site or the possible sale price. Regardless, contracts can be prepared to acknowledge the LSRP’s role on behalf of the purchaser, i.e., that a suspected discharge does not need to be reported to NJDEP or even to the property owner, without exposing the seller to additional risk.
In cases where another firm has performed the due diligence, the LSRP’s subsequent review has often identified additional AOCs or determined that some AOCs were not investigated or remediated consistent with NJDEP’s regulations and guidance, resulting in additional delineation and remediation efforts, time and costs. In many cases, the length of a due diligence period does not allow for complete records collection and/or historic usage review. Such matters are addressed in a Phase I Environmental Site Assessment as “data gaps;” however, the LSRP’s responsibility for the site does not allow for data gaps and filling in those gaps can result in the identification of additional AOCs. If such AOCs existed but were not identified or investigated prior to the purchase of the property, they may become the responsibility of the purchaser due to the failure to conduct a full PA/SI and perfect the innocent purchaser defense. In that case, these additional investigation and remediation costs are unlikely to be recoverable after the fact.
A more sophisticated understanding of SRRA can allow the buyer and seller to dispel the reporting myth, develop a purchase contract that provides for proper due diligence and allow the experts of site remediation, the LSRPs, to function as intended by the legislature on behalf of the buyer. All of this will reduce the unnecessary duplication of effort, added time, and extra expense that is now commonplace. Further, performing other environmental services does not automatically trigger the discharge reporting obligation if the LSRP has not been retained to perform investigation or remediation of contamination at a site. There is no reason to preclude the LSRP as an environmental professional to perform due diligence.
– Rodger A. Ferguson, Jr., LSRP
PennJersey President Rodger Ferguson is an active member of the LSRPA Steering, Risk Management and Loss Prevention, and Regulatory Outreach Committees, and currently serves as the Treasurer of the organization and on its Board of Trustees. Mr. Ferguson is a key participant in NJDEP stakeholder groups established for the Technical Requirements for Site Remediation, Remediation Standards, and guidance documents, including the committees established to evaluate alternative and clean fill material protocols (as stakeholder co-chair) as well as the quality assurance and analytical laboratory methodologies required for the investigation of contaminated sites. Mr. Ferguson earned his Bachelor of Science degree in Analytical Chemistry from Ursinus College in 1983 and has 30+ years’ experience in the environmental field. When Mr. Ferguson isn’t at the helm steering PennJersey, he enjoys spending time with his family, rescuing old houses, coaching lacrosse, and suffering with Philadelphia’s professional sports’ teams.
• Licensed Site Remediation Professional 573794
• UST Closure and Subsurface Evaluator 455706