Panel Discussion

ROBERT FRANTZ, Assistant General Counsel, Chemical Manufactures Association

STEVEN CRAMER, Commissioner, Adams County, Brighton, Colorado

B. SUZI RUHL, Executive Director and General Counsel, Legal Environmental Assistant Foundation, Tallahassee, Florida

ROBERT FRANTZ: I would first like to comment on Gail Bingham's observation that those who are faced with a potential site are not irrational in their opposition to the site. In many siting attempts, the benefits of a facility do not affect the host community. The site is often serving a major generator located elsewhere, so that employment opportunities and increases in the tax base from continued or expanded operation are never seen by the host community. We must develop a means of equalizing the burdens of a site with the benefits, as with a transfer payment or similar mechanism. Some community concerns are very difficult to treat, however. Ms. Bingham suggested transfer payments directed toward the particular problem or concern. If the public is concerned about long-term health risks, an offer to provide increased local health care for residents would be a logical response. I am not suggesting that this is the Chemical Manufacturers Association official position — this alternative is quite expensive — because even though the concept makes sense, a distinction must be made between actual and perceived risks. If perceived risks are to be addressed with transfer payments, we may find the process too expensive to be feasible.

The insurance issue poses some very important questions, particularly with respect to bonding and surety requirements imposed by EPA and state regulations. Pennsylvania recently proposed new financial assurance regulations that would abolish self-insurance; a showing of financial security is no longer sufficient to waive the bond requirement. A bond is absolutely required and must be non-cancellable, even for nonpayment. I don't believe that any insurance company will provide that type of coverage. Insurance must be available, workable, and reasonable.

Finally, let me turn to Bill Rosbe's very interesting discussion of routing. As a matter of policy, EPA requires that a permit application include route proposals. EPA wants to be able to notify adjacent communities that trucks may be travelling through their towns and give them the opportunity to participate in public hearings. One or two routes are then chosen. In many situations, however, this process isn't suitable. A generator may store waste on-site for 90 days or more and then ship it in full truckloads to a hazardous waste management facility. EPA takes the store's best estimate of where the transporter will travel and what route will be taken, and incorporates it into the final permit. This results in the storer guaranteeing the transporter's routes. What about detours? How can the storer control the transporter's action? Is the storer then liable if the transporter violates the routing agreement?

EPA regulations also require that the applicant provide design capacities for the roads on which hazardous waste will be travelling. When this regulation was proposed in May of 1980, the industry thought EPA meant the roads on which the hazardous materials would be travelling within the facility. EPA is construing its regulation to mean roads in the surrounding communities and, in some cases, the local interstate highway. Industry is finding this and similar transportation requirements unworkable.

B. SUZI RUHL: I would first like to address Gail Bingham's comments on environmental conflict resolution. In addition to mediation and negotiation, methods such as facilitation relate directly to our roles as lawyers and should be further explored. It is important to move away from the adversarial context and toward conflict resolution, especially in the area of hazardous waste siting. Many opportunities are available for lawyers in many different capacities in the conflict resolution field. I describe conflict resolution in terms of mitigation, an action that prevents or reduces the impact; compensation, payment for an unavoidable, intangible, and often-times unpredictable impact; and incentives, benefits above and beyond the actual cost that improve the community. A variety of economic tools can be used to deal with community impact and should be considered during conflict resolution.

Regarding torts and insurance, I believe that the area of toxic torts is expanding rapidly to compensate for inadequacies in statutory law, and caution is needed if we are to maintain consistency and equity. We have already discussed the difficulty of combining law and science. It is important that we, as lawyers, explore the scientific realm and understand the different disciplines available to us within the scientific community.

It is very important to recognize and use expert witnesses appropriately in hazardous waste cases. Several distinctive disciplines should be considered. These include epidemiology, toxicology, and clinical science and environmental health science. The issue of causality must be fully explored. Most scientistsinsist that causality can never be proven and don't even attempt an analysis. Lawyers, then, need to consider factors of causality such as biological plausibility, relative risk, and reproducibility in order to clarify the relationship between exposure to chemicals and the onset of disease. There are several possible bases for assessing the potential human health risks resulting from exposure to environmental agents. These include short-term testing systems for genotoxicity and carcinogenicity utilizing bacteria and tissue culture; toxicological studies, where groups of several species of animals are intentionally exposed in controlled laboratory experiments in order to assess potential health effects; clinical studies, where individuals are studied for chromosomal damage, organ dysfunction, and changes in enzyme levels; and epidemiological studies, where populations exposed in [15 ELR 10259] their occupations or through contamination of food, drinking water, or community air are studied. Each type of information has benefits and limitations that should be considered in order to maximize its contribution to the effort.

As the public recognizes the inadequacies of current statutory law dealing with hazardous waste, they will resort to the common law and tort claims. The case of Village of Wilsonville v. SCA Services¹ should attract the attention of all those in the hazardous waste management field. There, the Supreme Court of Illinois ordered a permanent facility, permitted by EPA and the state, to cease operation and clean up its wastes. Their reasoning was not based on imminent harm but on the risk of future harm. This holding could have a significant impact on all hazardous waste facilities.

An example of the problems in the insurance area is the fire at the American Electric facility in Jacksonville, Florida, which left toxic ashes and soot on people's homes, cars, swimming pols, trees and lawns. This case has raised serious questions of insurance coverage. Regardless of the health and hazardous waste issues, the sludge damage led to property damage claims. The insurance company's first response was that they shouldn't be involved and had no legal liability because the federal minimum PCB contamination standard of 50 parts per million had not been exceeded. Public outcry forced their eventual involvement. Questions of the protocol for cleanup, what constitutes clean, and what is done with the waste from the cleanup were raised and have not been answered, so that citizens remain dissatisfied and are seeking remedies through tort law.

Regarding transportation of hazardous waste, I would like to emphasize several of Bill Rosbe's comments. First, the attention, or lack thereof, given to abutting communities should be the topic of more concern. For example, close to $1 million a year is being given to Sumter County, Alabama, from a tipping fee at the Chemical Waste Management, Inc., hazardous waste facility located there. It is used for a variety of purposes, many of which are irrelevant to the facility. The neighboring county has an increased risk from the facility, but is receiving no monetary assistance, has not received any emergency response training, and receives no guidance from the state. That county needs recognition and assistance. Second, the benefits and impediments resulting from a pre-notification clause should be fully considered before implementation. A group of citizens concerned about the transportation issue introduced a pre-notification clause into the siting regulation in Alabama. It increased the burden on the regulatory agency and industry, but did not provide significant improvement in protection. Consequently, one must consider the best use of regulatory resources. Federal minimum transportation standards requiring state enforcement, not merely authorizing it, should be instituted to provide protection against transportation problems.

Finally, there is much discussion about the transportation of hazardous waste and the significance of the problem, but many in the public realm do not consider that transporting hazardous materials is as great or greater a risk. Statistics indicate that 99 percent of the problems caused by accidents are not from hazardous waste but from hazardous materials. Therefore, it is important to understand, and to disseminate as much factual information about the issue as possible.

STEVEN CRAMER: Responding to Gail Bingham's presentation, I think it would have been very difficult for anyone to step in to bring BFI and the Last Chance community together. Besides concerned local citizens, we also had to contend with two out-of-town professionals who, with their reputations and objections, had the people absolutely terrified. They left no common ground for mediation of anything. Informal negotiation got us through the process, and resulted in the granting of the final Certificate of Designation.

The insurance issue was probably the most nebulous and complex portion of our process. We had to hire someone else to analyze the insurance proposal and give a recommendation. Insurance is an extremely difficult issue for a local or state body to handle.

Colorado state law requires a complete transportation analysis of all roads within a fifty-mile radius of a proposed site. Our study was very enlightening because we found that hazardous material vehicles were travelling through the area at a rate of five times the number required to bring in hazardous waste. Many people confuse hazardous materials with hazardous wastes. When we drive down the freeway next to a gasoline truck, we don't think of it as carrying hazardous material, but if the labels read "hazardous waste" instead, people would be scared to death. Public education needs to be provided to make these distinctions understood.

Many local governments are not capable of instituting these programs. They don't have the expertise or the funds. It is absolutely necessary for the state to step in and lend its support in such circumstances.

Our study of the Browning-Ferris Industries (BFI) proposal showed that the site would increase the chances of a major accident within a fifty-mile radius to one in ten years. BFI is purchasing emergency response vehicles that will give two of the closest communities, about 30 miles away, the capability to handle the large number of hazardous materials coming through the area, as well as prepare them for a hazardous waste accident. They have also entered into mutual aid agreements with every fire department in Adams and the adjacent county, and have volunteered to train those personnel who have not been through hazardous waste emergency response courses. Routing is important, and will, in any siting process, take a good deal of time to resolve.

GAIL BINGHAM: I'd like to comment first on Steven Cramer's remarks. I believe that what you did was negotiation in the Last Chance siting process. The County was duly represented by its elected officials in negotiations with the developer. What one hopes for in situations like yours is that a representative body of the public negotiates an acceptable set of conditions, and it sounds like that is exactly what you did.

Suzi Ruhl and Bob Frantz mentioned distinguishing between mitigation, compensation, and incentives, but trying to find external or objective ways of distinguishing them is not really practical. To negotiate effectively, or to create a process in which people can negotiate effectively, [15 ELR 10260] one must stand in the other parties' shoes and look at the choices they perceive as available to them. Most local citizens see only problems. The distinction between a problem that can be solved through mitigation (such as the facility design) and a problem that can be solved through compensation is not relevant to them and therefore not particularly helpful for designing a negotiating process.

Distinctions between actual and perceived risks are not helpful either. People perceive the risk that their property values will decrease. Lower property values are not an actual, present danger, but just because they are perceived risks does not make them any less real to the residents to whom lowered property values is a problem. The same is true of unmitigated risks — those with a low probability of occurrence but high magnitude of damage. People will not be presuaded by risk assessments; they want a solution to the problems they face. Although expensive, health insurance is one such solution. With transportation controversies, neither compensation nor incentives are appropriate to solving the perceived problem; agreement on a route is necessary.

A situation like that in Adams County is a good one. The Last Chance community arrived at the best compromise they could hope for, given the risks associated with not agreeing. Instituting state criteria for denial, as opposed to criteria for approval, wa very effective and protected the local decisionmakers. They could honestly come forward and state that their siting agreement was the best possible and that approval was out of their hands. When the process was complete they had in fact met the old criteria for approval. When the decision is placed in the hands of those affected and risks for not agreeing are created, people become quite national and negotiate the best deal possible.

MICHAEL LAST: Someone asked me why, if claims aren't being filed under EIL insurance, is the London Group getting out of the market? From my experience with Superfund sites, a lot of companies never carried EIL. Being less versed in that type of insurance than large chemical companies, their claims have been made more frequently under comprehensive general policies. However, chemical and other large producing companies are more sensitized to the risks and purchased EIL. Insurance companies can read the handwriting on the wall, and as more and more risks are brought to the public's attention and more avenues for claims are developed, they will no longer provide EIL coverage. This clean break is possible because EIL is a claims-made, rather than occurrence-made policy.

Gail Bingham remarked on the Warren experience and its relationship to structure and compensation. Warren is a town of only a few thousand, located in south central Massachusetts. Standing alone, it has virtually no need for a treatment facility. Its one or two industries, could never generate sufficient hazardous waste to justify the large incinerator (rotary kiln) and other treatments proposed. Warren will be taking waste from the entire region for treatment. What incentives can persuade residents even to remotely consider this facility?

First of all, they don't have much choice. Under the state siting process, because Warren had no zoning ordinance before the filing of the IT Corporation's application, they can not now institute land use control to zone the facility out. They have to bargain, they have to negotiate. I guess you can call this a stick. They know that they have to negotiate actively because if negotiations hit an impasse they are subject to binding arbitration. They are most concerned that, to ensure public health and safety, the siting agreement contains very stringent controls regarding construction, operation, closure and post-closure control and monitoring. Any agreement reached will have to include these topics. We have decided not to rely at all on state and federal laws or regulations because they can change or not be enforced. We intend to write into our siting agreement all of the legal protections set forth in the laws and to create an independent enforcement mechanism.

We are also making sure that direct financial impacts on the town like providing additional emergency response capability are more than adequately compensated. The volunteer fire chief has identified the types of equipment and training that should be addressed in our siting agreement. Finally, we are anticipating negotiated compensation or incentives. I don't think "bribe" is appropriate because these people are being asked to absorb a tremendous set of risks that, by all notions of equity, they shouldn't have to accept. That part of the package has not yet been formulated, but will clearly include funds to compensate for the greater burden and risk of loss. We will take this preliminary plan with us when we enter the formal negotiation process.

BINGHAM: I have two questions to ask of Michael Last. First, how did the people in Warren deal with representing all the diverse interests, and to what extent has the Local Assessment Committee been able to manage that diversity internally? Second, would you address the problem of the neighboring community of Brimfield and their feelings of inadequate representation?

LAST: I'd be glad to. The statutory requirements for the Local Assessment Committee specify five members, including the heads of the Planning Board and Conservation Commission (responsible for waterways and wetlands), the chairmen of the Board of Selectmen and Board of Health, and the fire chief. The Board of Selectmen votes and elects four people to the committee and the five statutory members select the other four. The process is somewhat democratic and is designed to provide broad political representation. In practice, however, depending on who holds what office, unbalanced representation is possible. In the two and one half years I have been involved, a reasonable cross-section of opinion has been maintained. Unfortunately public attendance at our meetings had been very poor. Committee members attend quite regularly. For a long period of time we met every week and all committee members were in attendance. Community prople very rarely come, though, and the media coverage is minimal. At our public hearings, people acted exactly as Gail described, taking radical positions and playing to the media. Voices that began in normal speaking tones ended up in hysterical shrills. Her discussion of the process was quite accurate.

Regarding Brimfield, one of the criticisms of our siting process is that the host community, although bearing the brunt of risks and costs, is not the only one affected. The towns surrounding Warren have formed their own Local Assessment Committees and are receiving state grants to conduct independent evaluations. At first Brimfield [15 ELR 10261] refused to participate and turned down state grant money. When they finally became involved they decided that they should be treated as a host community because some conduits and pipes might run through their town. Whether the existence of those pipes is sufficient to qualify Brimfield as a host community is now being litigated. Negotiation occurs most directly between the host community and the developer, so the compensation packages for the other communities are less negotiated and less in their control. This reality has become an issue of contention in the abutting communities.

WILLIAM ROSBE: Suzi Ruhl talked about a need for minimum federal standards. Would those standards go to safety, routing, or process minimum requirements?

RUHL: As you made clear, safety standards for packaging and labeling are quite sufficient. The routing issue, however, requires federal assistance, especially for certain population densities.

ROSBE: Steven Cramer referred to a fifty-mile radius for transportation analysis under the Colorado criteria. How was that fifty-mile radius chosen, and how important were the transportation questions in the Last Chance proceedings?

CRAMER: I would guess that fifty miles was decided on because it seemed to make sense. If the radius were extended to seventy-five miles, Denver would be included, and I don't think anyone wanted to attempt a transportation study of the city. Transportation played an extremely important role in the first proposal because the applicant submitted a shoddy transportation impact study and prompted our denial. The second proposal contained a complete and thorough transportation study, and its presentation was so good that many of the public's fears were allayed during the hearing. The two closest communities threatened to sue us after we approved the proposal, but when we showed them the siting agreement stipulations, including the transportation clauses, they withdrew their objections on the spot.

PARTICIPANT: What role did road maintenance play in the ultimate approval of the Last Chance site?

CRAMER: It was important enough that if it hadn't been handled correctly that criterion alone would have been sufficient to turn it down. In the final certificate, we have a cost mitigating package through which the County will receive a portion of incoming facility funds earmarked especially for roads closest to the facility. The agreement also stipulates that waste carriers can travel a maximum of six miles on County roads. The remaining will be on the interstate or state highways. The entire application was evaluated and approved by the Colorado State Highway Department. With the siting agreement, we are now in a position to improve existing roads and bridges and perhaps begin new construction where people are directly affected.

PARTICIPANT: After our discussion of the Alberta process, what is the feasibility of going into one of the western states and asking each community in a geographic area what they would accept in exchange for a facility?

RUHL: That system is now in place in Mississippi and perhaps Tennessee. One million dollars was offered to the community that would accept a facility. The offer was perceived as bribery and didn't work. Perhaps if it had been rephrased there would have been a different reaction.

BINGHAM: The authors of "Not In My Backyard You Don't" suggested precisely this approach, often called an "auction" approach. They were influential in designing the Massachusetts statute but were overruled every time they proposed the notion of such an "auction." I think they still want to try it but no one has taken them up on it.

OWEN OLPIN: There is an emotional component that makes the offer difficult to articulate. You do have to choose your words carefully.

PARTICIPANT: Apparently it was phrased fairly well in the coastal zone off-shore drilling instance. The site was to go to one state until an adjacent state offered money and other benefits to lure the developer away.

PARTICIPANT: To use that approach, the sites would have to be blocked off with options and bids, because if community approval were necessary before purchasing land, it would be very difficult to negotiate with the landowner to get the property.

OLPIN: The problem might be a little easier in the West where almost all the land is owned by the federal government. Instead of approaching a landowner, we go to the Bureau of Land Management, and under FLIPMA work out a license or permit for the land.

I want to say that I am delighted with both today's speakers and with the audience. The topic has been interesting, and discussion on both sides of the table very sharp. I declare this Thirteenth Annual Airlie House Conference on the Environment adjourned.

1. 86 Ill.2d 1, 426 N.E.2d 824, 11 ELR 20698 (1981).