The Relief Report ®


A newsletter covering regulatory reform efforts in Washington and across America, published by The National Center for Public Policy Research

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Issue #83 * November 9, 2000 * David A. Ridenour, Editor

SPECIAL SUPERFUND ISSUE

Contents:

The Time is Now for a New Environmental Justice Policy

Cleaning Up Superfund: Five Suggested Steps

Fast Fact: Growth of the Superfund Law

 

It's Time for Superfund Reform

There was a time when the Ciba Specialty Chemicals Corporation in Toms River, New Jersey, employed nearly 2,000 workers. Today it employs none. The plant was forced to shut down operations in 1996 for violating the Environmental Protection Agency's (EPA) controversial Superfund law. But, as is often the case with Superfund violations, Ciba Corporation did not intentionally pollute the area. Indeed, the company had actually been following the law in disposing of its waste products.

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, commonly referred to as Superfund, granted the EPA the authority to list areas where the release of hazardous substances have become a threat to public health. Further, the agency decides which parties are responsible for contaminating the area and holds them liable to fund the removal of the hazardous substances. This is a process that averages a span of 15 to 20 years and $30 million in cleanup and transaction fees, often including heavy litigation and administrative costs when questions of liability arise.

In 1983, the EPA listed the Toms River site on its Superfund National Priorities List (NPL) and, as a result of the company's waste disposal practices, found the Ciba Corporation responsible for contaminating groundwater in Toms River. Since that time, the company halted production while investing upwards of $200 million for cleanup of the polluted groundwater.

Ironically, the company's disposal policy was never illegal. Prior to Superfund, the law permitted Ciba Corporation's disposal methods. But under the Superfund law, the federal government says the company is still liable and must foot the entire bill for cleanup costs, completely ignoring the fact that Ciba's waste disposal was legal at the time it occurred.

Perhaps even more disturbing is that in 1994, nine years after groundwater remediation had begun at the Toms River site, an EPA investigation concluded, "Since no one is drinking the contaminated groundwater, EPA has determined the site does not pose an immediate threat to the surrounding community or the environment." This should be of no surprise given that the EPA need not consider current or future land uses of contaminated sites. Instead, the agency operates on the assumption that residents live at the contaminated site and face "reasonable maximum exposure." This assumption has proven to be wrong time and again. A study carried out by James T. Hamilton of Duke University and W. Kip Viscusi of Harvard University noted that "much of EPA's analyses are based on hypothetical risks so a lot of their analysis is dealing with risks that aren't there today." Furthermore, a National Research Council study found that "in some cases, unnecessary or inappropriate remediation might create more of a hazard than would be caused by leaving such materials undisturbed."

The situation in Toms River exemplifies just some of the problems that have surfaced since the Superfund law was enacted. For starters, Superfund was initially enacted as a five-year, $1-2 billion program. Yet, it still exists today, and is expected to cost a projected $75 billion to clean up the 4,500 sites the Congressional Budget Office has estimated are still in need of remediation. The Superfund program has been so costly and time-consuming for involved parties over the past two decades that the General Accounting Office reported that Superfund "poses significant financial risk to the government and potential waste and abuse."

There are also intangible costs posed by Superfund. For one, the EPA identifies and lists potentially hazardous sites on its Comprehensive Environmental Response, Compensation and Liability Information System (CERCLIS) before ever determining if hazardous substances have contaminated an area. As of May 11, 2000 this list consisted of 11,327 properties nationwide, many of which will never become Superfund sites, but will be wrongly tagged as environmental traps. This causes the property in question to be viewed unfavorably, often resulting in the property value of the site and surrounding properties to plummet. This is detrimental to many urban and minority neighborhoods that are in desperate need of employment opportunities and economic expansion.

Also, contrary to what Superfund advocates preach in regard to implementing the "polluter pays" concept, consumers ultimately bear the clean-up costs by way of higher prices, decreased supplies and higher taxes.

Clearly, there is a serious need for reform of the federal Superfund program. It simply offends basic notions of fairness and justice to punish individuals and companies for waste disposal practices that, until Superfund became law, were perfectly legal. As even President Bill Clinton admits, "Superfund is a disaster."

By Michael Centrone

 

Cleaning Up Superfund Mess: Five Suggested Steps

Superfund, hurried through Congress during the final days of the Carter Administration, was created to force companies to clean up their hazardous waste sites that threaten the public health. However, Superfund has proven to be costly and ineffective at cleaning the nation's worst toxic dumps. From 1980-1995, expenses soared to more than $30 billion, while only a small fraction of the job has been finished.

But Superfund can be more effective and less expensive. Here are five suggested steps for reform:

Superfund's primary focus should be the immediate danger to public health. The process of listing toxic waste sites for clean-up unwisely takes into account hypothetical future risks. Some of the risks considered involve future homes and playgrounds being built on land that previously was an industrial waste site. Although this may seem like "forward thinking," it strays from the primary mission of Superfund -- protecting against the immediate danger to public health. Nearly one-third of all sites currently pose no threat to the public. By squandering limited resources on hypothetical risks, opportunities to save lives are lost.

Appeals should be permitted before mandated clean ups are completed. Individuals who are forced to clean a site can only appeal the government's decision after they've completed the clean-up. The current process is unfair because an individual may be stuck with litigation and clean-up costs even if they prove that they are not the responsible party. This encourages additional litigation costs by forcing one party -- the one ordered by the EPA to pay clean-up costs -- to sue other potentially responsible parties (PRP) for recovery.

States should play a greater role. The federal government currently designates Superfund sites without input from state governments. Yet states can better understand the needs and priorities of local communities, and therefore should be given the option to have authority over the program. Listing a Superfund site is not without consequence. When a site is listed, property values in neighboring communities plummet. For many residents, calling a dump a Superfund site as opposed to just "the neighborhood dump" can mean a difference of thousands of dollars for individual home owners. Allowing states the option to have authority over Superfund will allow communities to play a role in the decision-making process.

The polluter should pay clean-up costs. Superfund's current liability scheme ignores the concept of the "polluter-pays," and instead adopts a witch hunt strategy for the "deepest pocket." A person who may have contributed a very small amount of waste to a site may be held accountable for the entire cost of the clean-up because of his ability to pay. And of course, any person who is identified as "responsible" has the incentive to prove that other parties are liable, so they aren't left paying the entire costs. This means even more litigation.

Retroactive liability should be abolished. Holding parties liable to spend tens of millions of dollars on site clean up for actions that were legal or standard business practice years ago is not only unfair, but stretches the constitution to the point of breaking. After-the-fact law and punishment is forbidden in the U.S. Constitution (Article I, Section 9, Clause 3). In addition, Superfund's retroactive liability scheme sets the stage for the costly and continuous litigation that is the chief cause of its failure. Retroactive liability diverts money from cleaning waste sites to legal teams filing lawsuits.

 

Fast Fact: Growth of the Superfund Law

The Superfund law was 19 pages long when enacted in 1980. After reauthorization in 1986, the Superfund law was 200 pages.



Editorial correspondence to The Relief Report should be directed to: The National Center for Public Policy Research * 501 Capitol Ct., N.E. * Washington, D.C. 20002 * (202) 543-4110 * Fax (202) 543-5975 * E-mail [email protected] * Web http://www.nationalcenter.org. Copyright 2000, The National Center for Public Policy Research. Coverage of meetings, activities or statements in the Relief Report does not imply endorsement by The National Center for Public Policy Research. Reprints of material in the Relief Report permitted provided source is credited. To receive all National Center newsletters free by e-mail, visit http://www.nationalcenter.org or send an e-mail to: mailing [email protected].


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