10019941
STATEMENT OF
CAROL M. BROWNER
ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE
SUBCOMMITTEE ON
SUPERFUND, RECYCLING AND SOLED WASTE MANAGEMENT
OF THE
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
U.S. SENATE
FEBRUARY 10, 1994
Introduction
Mr. Chairman and members of the Subcommittee: Thank you for inviting me to
come before you today to testify about the Clinton Administration's Superfund reform
proposal. The Environmental Protection Agency and numerous other departments and
agencies have worked hard for the last nine months to reach this day. I am very proud of
my siiifi and the teamwork shown within the Administration that enable.: ;<<; 10 G-;\elu., ,h,_-
proposal. I also wish to thank you, Mr. Chairman, and the members and staff of the
Subcommittee for working with us over the last several months to help bring this package of
legislative reforms to fruition. I come before you today with a legislative package that
fundamentally will change the way Superfund works. This package is the result of
unprecedented outreach to and involvement of a broad range of groups interested in
Superfund, including industry, environmentalists, community groups, environmental justice
advocates, state and local governments, and the insurance industry. The package the
Administration submits to you today has strong support among these groups, and I look
-forward to working with you over the coming year to see it enacted into law.
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When I appeared before this Subcommittee last May, I set out my plan for reforming
Superfund. While I made clear at the time that legislative changes would be needed to
reform the program, I also committed to announcing and implementing a series of
administrative reforms to the Superfund program. In June, we announced a list of major
improvements to push the program to achieve as much fairness and efficiency as is possible
under the current law. These reforms currently are being implemented. We also initiated an
effort to gather and consolidate the data needed to make educated decisions about possible
changes in Superfund. That effort is now complete.
Most importantly, I convened a group of Superfund stakeholders from a broad range
of backgrounds to advise me on legislative changes needed to rr.ake Superfund more fair and
efficient. This group, under the auspices of the National Advisory Council on Environmental
Policy and Technology and chaired by John Sawhill of the Nature Conservancy, worked
throughout the summer and early fall to develop a package of consensus recommendations.
which were presented to me in early October. These corsen$us recommendations termed the
cornerstone of the Administration's package, and 1 wish to than-: all the people who
participated in the NACEPT process for giving substantial time and effort to make it work.
While the NACEPT process was moving forward, an outside group working under
the auspices of the Keystone Center and the Vermont Lav. School also was working hard to
develop a consensus proposal for Superfund reform. This group, called the National
Commission on Superfund and chaired by Jonathan Lash of Vermont Law School, presented
its conclusions in a report issued last month. This report came to conclusions that were very
similar to the NACEPT group's recommendations.
These two proposals outline a comprehensive detailed approach to Superfund reform.
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The Administration has benefitted greatly from the input of both of these groups, and I think
the prospects for passing Superfund reform legislation in this Congress are far greater
because of their efforts.
The Current State of Superfund
Let me start out by briefly outlining the current state of the program and then move
into the specifics of the Administration proposal.
Superfund was enacted in 1980 in response to public outcry over Love Canal in New
York and the Valley of the Drums in Kentucky, which had become symbols of a widespread
environmental problem that needed national attention. The uncontrolled dumping of
hazardous wastes in some cases was posing serious risks to human health and safety and
threatening valuable natural resources such as groundwater aquifers.
The original expectation was that the universe of sites needing cleanup would be only
a few hundred, and the program would require relatively modest resources and would be
paid for primarily by responsible parties (original budget: SI,6 billion over five years).
Cleanup was to be paid for by the parties responsible for the contamination or, if they
couldn't be found, by a trust fund generated through business taxes, particularly on the
chemical and petroleum industries.
Since 1980, the expectations for Superfund have increased dramatically.
Approximately 1300 sites are on the National Priorities List for Superfund cleanup. It is
estimated that a total of 3,000 eventually will be a federal cleanup priority. Approximately
one of every four Americans lives within a few miles of an active Superfund site.
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Superfund has had many successes during its 13 year tenure. To date, Superfund has
completed long-term cleanups at more than 220 contaminated sites, and another 1100 sites
are in various stages of completion. Additionally, in more than 3500 actions at 2700
different sites across the country', Superfund has led to the emergency removal of hazardous
substances that were posing immediate health and safety risks to neighboring communities.
Superfund was structured on the principle that polluters should pay for cleanup. As a
result of Superfund enforcement actions, responsible private parties now are performing 70
percent of all cleanups, and they have committed $8.3 billion to reduce threats to public
health and the environment, clean up gioundwater. and restore sites to productive use. In
addition, through Superfund over 1600 public health assessments have been completed at
hazardous waste sites, and significant advances have been made in basic and applied
research related to hazardous substances. Superfund also has spurred advances in cleanup
technology. In cooperation with industry and other Federal agencies, EPA has identified
more than 150 innovative technologies now being used to treat contaminated soil,
groundwater, sludge, and sediments.
Despite these accomplishments, Superfund's weaknesses are recognized by virtually
all stakeholders, and they threaten to undermine the efficacy of the statute. Criticisms of
Superfund fall into six broad categories:
1. Inconsistent cleanups: The law currently does not specify a standard level of cleanup
nationwide; instead, it establishes a complex cleanup framework under which
applicable and relevant and appropriate state and federal standards are used to set
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cleanup levels. Consequently, cleanup goals, remedies, and costs differ site-by-site
across the country. This inconsistency contributes to uncertainty, protracted site-by-
site evaluation, debate over cleanup goals, and higher cleanup costs.
2. High transaction costs: Most of the private sector costs not directly associated
with cleanup activities are considered "transaction costs." While transaction costs for
the government have been relatively low, there is wide-spread agreement that
Superfund cleanups generate high transaction costs in private part}1 contribution
litigation and in follow-up litigation between those parties and insurance carriers.
While high transaction costs generally have not been incurred in litigation with the
United States or at the expense of cleanup actions, they do have an adverse social
impact. These, costs are particularly burdensome to small businesses.
3. Perceived unfairness in Lhc liability scheme: Given the nature of the waste and
the information available at most hazardous waste sites, the harm is often
"indivisible." Principles of joint and several liability have been essential to reaching
the current levels of cleanup work and cost recovery from private parties at sites
involving these "toxic soups." However, the liability scheme has often been criticized
as being unfair and economically inefficient. The retroactive component of the
liability scheme has been criticized for penalizing private parties for actions they took
that may have been legal at the time and for encouraging litigation between private
parties and their insurers. With regard to joint and several liability, the parties who
initially bear the cost of cleanup complain that they are forced under the current
scheme to bring additional litigation against other parties. The process in which costs
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are then allocated among multiple parties, either by courts or in settlement
negotiations, has led to endless, and enormously expensive, disputes. This results in
needless litigation and tremendous uncertainty among responsible parties, large and
small, about how much of the response costs they will have to bear,
4. Overlapping federal/state relationship: The federal government has primary
responsibility for implementing the Superfund program, and it has exclusive access to
the money in the Superfund. States, however, play a significant role in the program's
implementation. Certain state standards apply to all cleanups, and states must pay a
share of cleanup costs at non-federal facility sites. In addition, states have significant
input in selecting and carrying out cleanups. Due to this overlapping authority and
responsibility, federal and state governments often disagree over the degree to which .
sites should be cleaned up, the remedy to be used, and the allocation of costs. These
disagreements contribute to the cost and duration of cleanups, and they result in
substantial confusion among all stakeholders.
5. Inadequate community involvement: Many communities near Superfund sites,
including low income, minority, and Native American communities, are not provided
with the opportunity to participate fully in the Superfund process. These and other
communities believe the program does not address local circumstances adequately
when evaluating risk or determining the method and level of cleanup. Consequently,
communities may conclude that the resulting cleanup is overly conservative or
insufficiently protective.
6. Impediments :o economic redevelopment: Current law extends liability to both past
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and prospective owners of contaminated sites. As a result, the market value of older
industrial sites can be depressed, because the specter of Superfund liability diminishes
the attractiveness of investing in industrial areas. Many claim that prospective owners
who want to develop property have an economic incentive to use undeveloped, or
"greenfield", sites to avoid potential Superfund liability, thereby contributing to
suburban sprawl and exacerbating chronic unemployment often found in inner-city
industrial areas.
A Vision of the New Superfund
The Clinton Administration is committed to new Superfund legislation that protects
human health and the environment more efficiently and more fairly than does the current
law. To achieve this goal, the Administration has been guided by four objectives: 1) recuce
the time and costs needed to clean up sites; 2) make the liability scheme more fair and
efficient; 3) greater involvement of communities that live near sites in Superfund decisions;
and 4) remove impediments to economic redevelopment of contaminated properties. These
objectives are the fundamental building blocks of a successful reauthorization proposal, and
the Clinton Administration proposal achieves these goals.
The Administration proposal will shorten the time required to conduct cleanups arid
will make cleanups less expensive by establishing national cleanup levels and generic
remedies, eliminating duplication of state and federal activities, and streamlining the remedy
selection process. Transaction costs will be reduced and greater fairness achieved by
instituting an allocation process and by offering more opportunities for mixed funding
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whereby EPA funds some portion of the orphan share. Joint and several liability will be
retained for those parties who do not accept their allocation and settle with the government.
By exempting "de micromis" parties (truly tiny contributors), expediting settlements for "de
minimis" parties (those whose contribution is small relative to other parties) and certain
parties with an inability to pay for cleanup costs (such as bankrupt parties and small
businesses), providing settlers with greater finality, and capping the liability of generators
and transporters of municipal solid waste, the Administration proposal achieves greater
fairness and reduces transaction costs. The Environmental Insurance Resolution Fund, an
idea developed by insurers and potentially responsible parties (PRPs; will provide responsible
parties with a mechanism for resolving coverage disputes with their insurers through the
insurance resolution fund: holds the potential for significantly reducing the number of disputes
that end up in court, thereby reducing transaction costs for insurers and responsible parties.
The Administration proposal encourages beneficial reuse of contaminated propei ues
by removing disincentives for property transfers and cleanups and by facilitating voluntary
cleanups. It will lead to a more positive relationship between the federal government and the
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states, and it will increase the use of state resources by providing Superfund resources to
qualified states and authorizing those states to conduct cleanups of sues of federal concern.
In addition, it will accomplish more cleanups by more effectively leveraging the combined
resources of EPA, other federal agencies, states, local governments, and private parties.
The Administration proposal addresses the concerns of disacvantaged communities by
building environmental justice criteria into the process for evaluating sites to be placed on the
National Priorities List and by authorizing EPA to undertake a series of environmental justice
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demonstration projects. The Administration proposal provides a strong role for the local
community in future land use determinations and remedy selection decisions, thereby making
those communities more effective participants in the system.
Though provisions concerning improvements to the natural resource damage
assessment process are not included in this bill, the Administration is committed to such
improvements. The Administration is in the process of evaluating and developing
recommendations on these issues and will be providing them at the appropriate time.
I would now like to go into a little more detail on each of the provisions of the
proposal, and then I would gladly yield to questions. The detailed priorities of the
Administration proposal are as follows:
1. Speeding Cleanups. Cutting Costs
The heart of Superfund reform has to be speeding the pace and lowering the cost of
cleanup. Whether one talks to responsible parties, community groups, environmentalists, or
other interested parties, all agree that the process for studying sites and evaluating, selecting
and implementing remedies simply takes too long and costs too much today. Before we can
improve this process, we must decide once and for all: how clean is clean?
The Administration's proposal is premised on the principle that all communities are
entitled to receive the same protection from potential health hazards associated with
Superfund sites. The proposal will reduce cleanup costs by setting national goals for the
protection of health and the environment and setting national cleanup levels consistent with
these goals to be used at individual sites. EPA would set clear na::onai cleanup levels for
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those contaminants found most commonly at sites. These standards would save significant
time and money currently spent on site-specific studies. Some site-specific evaluation still
will be necessary at every site and this evaluation could lead to a modified standard at a
particular site. However, the cleanup levels would allow EPA to standardize much of the
process that currently must be done over and over at each site.
Site-specific risk assessment will continue to be used in certain circumstances where
either national cleanup levels have not been promulgated or where the)' do not apply to a
particular site. EPA will be promulgating a national risk protocol for conducting risk
assessments based on realistic assumptions.
The proposal also would provide a menu of cost effective generic remedies that could
be used at certain types of sites without lengthy study. This -menu of generic remedies has
evolved out of EPA's thirteen years of experience running the Superfund program. At
certain types of sites, we can be relatively certain of the type of remedy most effective for
cleaning up the particular contaminants and media involved. We therefore can avoid
"reinventing the wheel" and save time and money.
At the site-specific level, EPA would base cleanup decisions on future land use. A
community working group that is representative of the affected community would recommend
to EPA a post-cleanup use for the site and develop a site reuse plan. In order to make the
most efficient use of our limited resources, consultation with the community about future
land use is essential. Where a property is located in an industrial area and the community
determines that a factory should be sited on the property after cleanup, there is no reason to
clean the site to residential levels. We must work with communities to design cleanups that
meet their needs arid their reasonably anticipated future uses for sites.
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The requirement for cleanups to meet all relevant and appropriate requirements would
be eliminated. Applicable state and federal requirements would be retained. Relevant and
appropriate requirements have proven to be a source of delay and expense in selecting
remedies. They also have proven to be a significant cause of inconsistency in cleanup levels
around the country. The national cleanup levels would provide much more consistency and
ensure that cleanup standards are risk-based.
The statutory preference for permanence and treatment would be eliminated and
replaced by the concept of long-term reliability and a preference for treatment of hot spots.
Long-term reliability would provide EPA with an impetus to select durable remedies, but it
would not restrict the Agency from considering other factors such as community acceptance
of the remedy, the reasonableness of its cost, and the availability of other treatment
technologies. The preference for treatment of hot spots will ensure that the most
contaminated areas at sites and other areas where contamination cannot be readily contained
will receive treatment.
In making its final remedy selection decision at a site, EPA would weigh the costs of
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each alternative cleanup method. Where EPA determines that current cleanup technologies
are not practicable for a particular waste, EPA could defer final cleanup while new cleanup
technologies are being developed, provided the site has been stabilized and protection of
public health has been ensured by addressing immediate risks.
2. Reducing Transaction Costs and Increasing Fairness
The Administration proposal represents a strong commitment to greatly reducing
transaction costs. The proposal provides special accommodation for small businesses and
contributors of small amounts of v-aste. h will maintain the current level of cleanups
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managed by PRPs, and it addresses the on-going litigation between insurers and policy
holders with cleanup responsibilities. It achieves all these goals without introducing new
litigation issues or expensive administrative adjudication procedures.
Generators and transporters of negligible amounts of waste ("de micromis" parties),
including many small businesses, would be exempt from liability. Generators and
transporters of small amounts of waste ("de minimis" parties), and parties unable to pay their
full responsibility for Superfund cleanups, would be provided an early opportunity to settle
their liability with a full release from the government and protection against suits by third
parties. These provisions include an expedited settlement process for small businesses and
other parties who are financially unable to bear their full share of liability. In addition.
generators and transporters of municipal solid waste would have the opportunity to settle with
the government before the allocation process commences. The liability of these parties
would be capped at 10 percent of costs at the site. Owners and operators of municipal solid
waste landfills would be able to settle early as well, and the amount of their payment would
be subject to an ability-to-pay analysis crafted specifically to consider the special liabilities of
municipal governments.
At every multi-party site where the EPA has taken action, an allocations process
would be conducted by a neutral professional with Superfund expertise to recommend a share
of responsibility for each identified PRP. Let me emphasize here that the Administration
proposal relies on an informal process to perform these allocations. The Administration does
not want to see the allocations process turn into an overly bureaucratic, "big government"
solution. Specifically, we believe an informal process managed by experienced allocators is
preferable to the establishment of a formal istic. legalistic system based on federal
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administrative law judges.
Potentially responsible parties would be provided an opportunity to settle their liability
to the United States based on the recommended allocation and obtain protection against future
liability. Such parties also would have the opportunity to pay a premium and receive a
settlement from the United States absolving them of future liability. To ensure that neither
the allocation process, nor litigation against recalcitrants, will slow the pace of cleanup, EPA
will still retain its authority to issue cleanup orders in all cases. To facilitate settlements,
Superfund resources would be used to cover all the recommended shares attributable to
clearly liable parties thai can be identified but are no longer in business or able to pay their
share. The agreement of the government to pay a large portion of the orphan share
demonstrates this Administration's commitment to reducing litigation and increasing the
fairness in this piogram. • . -
In order to greatly reduce ongoing private litigation, the United States would pursue
non-settling parties to require site response activities, compel the payment of allocated
shares, and recover expended funds. Such actions would be premised on joint and several
liability for the non-settlers, and they could result in the recovery of some or all of the
orphan share if the United States prevails. The retention of joint and several liability is
essential to the new liability scheme to ensure that responsible parties resolve their liability
through the allocation and settlement process rather than through litigation. Again, the
agreement of the government to take on the responsibility of pursuing non-settling parties
represents a commitment to reducing transaction costs and litigation for private parties.
Pursuing non-settlers will be difficult and costly in some cases, but it provides settling parties
with the certaintv that they can settle with the government for their share and not concern
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themselves with going after other parties for contribution or being sued by other parties.
A new Environmental Insurance Resolution Fund (EERF) would be established with
the objectives of ensuring resolution of insurance claims related to Superfund liability for
pre-1986 disposal of waste, and ensuring interstate equity- in such resolutions. The litigation
over these claims is currently a major source of litigation related to Superfund — costing
approximately $ 300 million per year. Based on recommendations from the insurance
industry, the EERF would be financed by fees and assessments on the insurance industry.
The EIRF will be structured to ensure that neither the Superfund nor general revenues may
be used in the claim resolution process.
3. Expanding State Authority
The Administration proposal would enhance the state role in Superfund and limit the
overlap between the federal and state governments at specific sites by establishing the
principle that only one governmental entity would have responsibility for each site. Stales
would be offered the opportunity to assume responsibility and authority for the cleanup of
specific sites within their boundaries. States could elect to take on cleanup responsibilities
for all sites, a few sites, or no sites, depending upon their interest and the capabilities of
their program. EPA would work with the states to help them develop the capacity to take on
more responsibility under the program. To obtain a larger role, a state would be required to
have in place a cleanup piogram substantially consistent with the federal program. States
would be provided federal cleanup funds under certain conditions, but they would have to
pay a percentage of the costs at these sites. While states could require cleanups to meet
more stringent standards, they would have to pay the incremental costs entailed in seeking
cleanups in excess of these standards.
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4. Involving Communities
The Administration proposal is based on the principle that communities must be
involved in the cleanup process from the time a site is discovered to the time it is finally
cleaned up. Superfund, after all, is first and foremost a local program. The Administration
proposal sets out several innovative mechanisms for getting communities involved in the
cleanup process.
Community workgroups would be established as advisory bodies at Superfund sites.
These advisory groups would reflect the racial, ethnic, and economic makeup of the
community, and they would include all community elements affected by the cleanup. The
advice and preferences of these groups would be solicited at every stage of the cleanup
process. Tiie role of the community would be especially important in defining future uses of
restored sites, which will be an important criterion for determining cleanup levels and
technologies.
EPA would help set up and fund community information and access offices in each
state. These offices would serve as information clearinghouses for all the sites in a state. I
believe these offices will provide community groups with the information and assistance they
need to be full players in the cleanup process.
The Administration proposal also would greatly simplify the process for applying for
technical assistance grants to ensure that this important source of funding is more widely
available to community groups who need financial assistance. Communities suffering
disproportionate risks would be eligible for environmental justice demonstration projects,
which would analyze aggregate risk, site rankings, and response activities at specific sites.
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5. Encouraging Economic Redevelopment
The Administration's proposal is designed to reduce current Superfund-related
obstacles to the redevelopment of contaminated sites. Economic redevelopment and
community involvement are two of my personal priorities in this package. The flight of
industry from urban brownfields to suburban and rural greenfields is often noted in the press
these days. Inner cities lose jobs and industry, while previously virgin green space is
converted to industrial uses or suburban sprawl. The Administration proposal addresses this
issue head on.
Currently, parties can be liable under Superfund if they own a piece of contaminated
property, whether or not they owned the property when the contamination occurred or
contributed to the contamination. Although the current statute provides for an innocent
landowner defense, this provision nf the law has not functioned effectively. Superfund
liability for current owners has discouraged prospective purchasers from buying contaminated
property and banks from lending money for such purchases.
The Administration proposal would provide an exemption from Superfund liability for
bona fide prospective purchasers of contaminated property, so long as they did not worsen
the contamination at the site and agreed to either clean up the property or allow the
government or responsible parties access to the site to clean it up. Lenders and trustees
(such as bankruptcy and testamentary trustees) also would be given protection from liability
under certain conditions to remove the current disincentive to making loans and assuming z
fiduciary role with respect to potentially contaminated property.
National cleanup levels also would facilitate economic redevelopment of contaminated
properties by reducing the uncertain".'-1 and costs associated with cleanup. National cleanup
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levels and generic remedies would encourage parties to clean up sites independent of
government supervision. As a result, cleanups would be faster, and remediated sites would
be returned to economic use more quickly.
6. Encouraging Advances in Science and Technology
The Administration proposal would improve the scientific basis for evaluating risks to
public health and the environment posed by hazardous waste sites through a strong
technology development program. It would encourage the development, demonstration, and
commercialization of innovative, efficient, and cost-effective cleanup technologies.
Environmental technology development must be nurtured and encouraged if we are to make
great strides in the coming years. Government must share some of the risk in this area.
Under the Administration proposal, the government would share with "private parties the risk
of employing innovative technology to cleanup sites. Specifically, the Superfuno trust fund
would contribute a percentage of the costs of any additional remedial action required due to a
failed innovative remedy, as opposed to placing that burden entirely on private parties.
Conclusion
In conclusion, the Clinton Administration has developed a package of Superfunti
reforms with the cooperation of a broad range of interested parties. We believe our proposal
would make the program more efficient and fair, increase community involvement in the
program, and remove the barriers to economic development that currently exist in the statute.
The Administration is committed, and I personally am committed, to working with the
Congress over the coming months to ensure that meaningful reform of Superfund is passed
this year.
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Mr. Chairman, thank you for this opportunity to address the Subcommittee. Now I
will be happy to answer any questions you may have.
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