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Issue

Volume 20, Issue 5 — May 1990

Articles

Trends in Environmental Auditing

by Frank J. Priznar

Editors' Summary: Environmental auditing has proliferated in use and matured in complexity as a tool for detecting and preventing potential environmental problems. As a result, environmental auditing has taken many forms and has produced controversy. Key factors in this controversy include the current environmental regulatory climate, the need for certainty in understanding the potential environmental liabilities involved in decisionmaking, and the lack of uniformity in environmental audits. The following two Articles consider recent trends in environmental auditing and the role of the environmental consultant's opinion letter. Each author's Article provides a succinct analysis of the evolving trends and tools available to modern decisionmakers that are shaping environmental auditing today.

The Environmental Consultants' Opinion Letter: A Step Beyond an Environmental Audit

by Patrick Del Duca

Buyers of any real property, a facility, or a company that owns real property or facilities should understand their potential exposure to environmental liability as a result of such acquisitions before closing any deal. Buyers, sellers, and lenders can avoid onerous demands and outright refusals to undertake a transaction if sufficient information is available to manage, if not eliminate, uncertainties about environmental liability. Quantifying the potential risks of environmental liability serves each of the parties by providing them with the facts necessary to negotiate risk allocation.

An environmental audit,1 prepared by environmental consultants, is the foundation for any negotiation and needs to be intelligible and complete. While lawyers investigate environmental liabilities by inquiring into litigation, administrative investigations, indemnification agreements, and other matters, the parties to a transaction turn to environmental consultants to investigate the physical conditions and regulatory postures that help determine the nature and amount of environmental liability.2 This Article focuses on the environmental consultants' opinion letter, which is increasingly used to focus the environmental consultants' work and to clarify its significance.

Dialogue

Patent Law and the Environment/Technology Paradox

by Michael A. Gollin

Advances in technology bring mixed blessings: technology causes pollution at the same time it raises standards of living. Properly directed, technology can also clean up and control some of the environmental problems it caused in the first place. From an environmental perspective, it is important to distinguish between harmful and beneficial technology. For example, beneficial technology includes pollution control devices, cleanup equipment, industrial processes that minimize resources used and waste produced, and consumer products that are environmentally benign. There is mounting consensus that today's environmental regulations do a passable job at regulating harmful technology but do little to encourage beneficial technology.1

But while environmental law is only beginning to encourage beneficial technology, patent law for centuries has been a dynamic engine of technology innovation. Patents already play a role in the environmental protection business. For example, General Electric contaminated Hudson River sediment with PCBs, then received a patent for PCB-digesting bacteria. ENSR Corp. is defending a lawsuit brought by Unison Transformer Services, Inc., alleging infringement of a patent for cleaning PCBs out of transformers.2

NEPA: Not So Well at Twenty

by Antonio Rossmann

Last year the Supreme Court in Robertson v. Methow Valley Citizens Council1 and Marsh v. Oregon Natural Resources Council2 extended its perfect record in National Environmental Policy Act (NEPA)3 jurisprudence: in the 20 years since NEPA was enacted, the High court has never written to expand NEPA's application and has consistently narrowed or reversed generous rulings by the courts of appeals. In essence, for two decades the Justices have never gotten it right.4

Professor Mandelker in these pages last September argued that Methow Valley and Oregon Natural Resources prove "NEPA Alive and Well."5 As a Westerner who believes the Ninth Circuit generally knows how to look after the resources within its jurisdiction,6 this writer disagrees. The Supreme Court's 1989 decisions unnecessarily threw out sound resolutions of those two disputes, rejected models of pragmatic environmental accountability, discouraged agency initiative to enhance the federal trusteeship over environmental values, and (not unimportant to the citizen-respondents) facilitated the probable destruction of rare natural splendor.