One principal shortcoming of traditional environmental regulation has been its general ineffectiveness to advance more environmentally benign manufacturing, production, and product use practices in the economy. This results partly from failing to meaningfully evaluate and prevent environmentally harmful or wasteful practices in commerce and instead merely attempting to control resulting pollution through technological fixes at the "end of the pipe."¹

Editors' Summary: Since the 1930s, the Securities and Exchange Commission (SEC) has imposed various disclosure obligations on companies that publicly offer securities. These disclosure requirements are intended to aid investors in making informed investment decisions. Beginning in 1971, the SEC has issued guidance and regulations concerning the circumstances under which companies must disclose environmental liabilities.

Litigation under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)¹ is now a booming business. Most of the lawsuits seek to recover cleanup costs. But attention could soon shift to another class of cases: post-cleanup liability for residual injury to natural resources. These natural resource damage cases may eventually become as prevalent and as costly as cleanup cases.

Congress enacted the Toxic Substances Control Act (TSCA)¹ in 1976 to control risks from chemicals in commerce. TSCA requires the Environmental Protection Agency (EPA) to review most new chemicals while they are still being developed, before they are manufactured.

Editors' Summary: Since its enactment in 1980, lawyers have paid attention mostly to the response authorities and cost recovery sections of the Comprehensive Environmental Response, Compensation, and Liability Act. But there is growing awareness of the power and flexibility of CERCLA's natural resource damage sections, which provide for separate recovery even after cleanup is finished. As with the federal CERCLA, many state "mini-CERCLAs" also have natural resource damage sections, and new awareness of the doctrine's reach could make these a regular enforcement tool.

Editors' Summary: In 1986, the Superfund Amendments and Reauthorization Act (SARA) responded to public pressure to clean up hazardous waste sites and to protect surrounding communities from exposure to hazardous chemicals. In 1989, the Occupational Safety and Health Administration (OSHA) and the United States Environmental Protection Agency complied with SARA statutory directives to write standards to protect private and government workers who perform hazardous waste remedial work.

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.

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

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.

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.