The Governmental Regulatory System: Panel Discussion

DAVID MORELL, Ph.D., President, EPICS InternationalPATRICK PARENTEAU, Commissioner, Department of Environmental Programs, State of Vermont

[20 ELR 10527]

DAVID MORELL: Let me begin by saying that, outside Washington, D.C. you will find that the Environmental Protection Agency (EPA) is a relatively minor player. The federal, state, and local regulatory systems are dominated not by the federal agency, but by many actors who engage in many activities. There are 50 sovereign entities operating in different ways, and literally thousands of municipalities and communities that go either in no direction at all or in their own directions.

As an example, consider the impact of SARA Title 3, in the state of California. We were unconcerned by Title 3 because two years prior to its enactment, the California legislature passed the La Follette bill requiring a risk management and prevention program for each firm using more than fairly small threshold quantities of any of the SARA Title 3 chemicals. Therefore, we had detailed regulations for all of those chemicals. The reporting standards required by Title 3 were a minor aspect.

SARA Title 3 threshold reporting requirements, however, were defined differently from the state's requirements. SARA does not provide for delegation to the states, even informally. So we operated two separate programs, even though SARA Title 3 did not add to what we were doing in California.

There are dozens of examples of this lack of coordination, from permit programs that don't dovetail to air enforcement programs that don't coincide, to pollutants that cross state lines. That is what a national system is supposed to accomplish with pollution problems.

Federal laws typically require delegation. For example, we delegate permit programs under the National Pollution Discharge Elimination System (NPDES). We delegate Clean Air Act responsibilities.

The crucial question is, who implements these regulations? The answer is, primarily states, with further delegation to localities of many specific programs in many states, although not all. The states implement the federal laws, to the degree that they are implemented at all. And state agencies are also implementing many state laws, from ECRA — the site assessment requirements in New Jersey — to the La Follette bill in California to ground water standards in Connecticut and Wisconsin, and so on.

In addition to the numerous state laws, we have many local laws, implemented through ordinances at the local level. For example, think of the impact of land use regulations on everything from air quality to the permitting and siting of the treatment facilities needed to phase out the leaky landfills of the past under RCRA. Local permits under land use authority are nowhere preempted in the system. Think of the uniform fire code, adopted as a uniform standard for consideration by each city council. It has a tremendous impact on the above-ground storage of hazardous materials, underground tanks, and so on.

To develop a clear sense of all the regulatory requirements in this area. I was challenged about a year and a half ago to put all the state and local regulations on one piece of paper. It turned out to be a fairly large piece of paper. What we produced is a matrix supplemented by a commentary document. The matrix and commentary system cover several different states. From my point of view, a national matrix is not possible. In fact, the matrices even missed some of the vagaries of the local systems.

We have produced these for California, Texas, New Jersey, Florida, Illinois, and Pennsylvania. Forthcoming are New York and Ohio. The commentary document is a more substantive one, keyed to the blocks on the matrix, and is a reference document. They are both updated about every six months.

This brings me to the next part of my discussion: the question of what communication systems are available between the myriad agencies and governments regulating environmental protection. I would like to think that my indexes are typical of the new kinds of regulatory compliance information being made available. Ignorance of the law may not be an excuse, but it is the dominant reason for non-compliance.

In Alameda County, California, we identified 7,000 generators of hazardous waste, of which only 700 are recorded in the manifest system. Of those 700, only 29 have treatment, storage and disposal (TSD) permits issued by the California Department of Health Services, Toxic Substances Control Division, under delegated authority from the U.S. EPA. And according to the state regulatory agency, for those 29, inspections occur, on average, once every 24 months.

If we expect real compliance, we must get information to the small firms. They need information on regulations, on technologies, on waste minimization and pollution prevention. They need, not jargon, but information that is comprehensible and reasonably up-to-date (recognizing that regulations and possibilities change all the time). Finally, they need information structured so that response, like reporting or permit applications, is at least feasible by a well-meaning individual. That is not always the case today.

There are a number of other documents of the type I've produced. For instance, ERM produces the INFLEC system. Another company sells SARA reporting formatted on a computerized system. BNA produces a number of reports. And EPA has an 800-number hotline for CERCLA/RCRA.

Some other new concepts are beginning to come into being as well. For example, we have produced for Shell Oil in the Los Angeles area a compliance manual at the gas station level, designed to be readable at 2 am inside the kiosk by the average gas station attendant when it begins to blow up around him or her. The manual tells them what to do and whom to call. It is meant not simply for dealing with worst case scenarios such as explosions, but also to provide the employee in the glass booth with the necessary information concerning whom to notify and when and what further measures are required in a full range of situations — from gas leakages onto the surface to leakage contaminating water supplies.

[20 ELR 10528]

This kind of compliance manual — written in the kind of language and tone that people can use, without being paternalistic — is essential.

We are beginning to apply the idea used in our matrix and commentary to specific industry groups, such as electroplaters or metal finishers, combining it in the same volume with compliance and waste minimization information. The idea is to incorporate in one volume both the carrot and the stick by saying, "You can save money through waste minimization. A law you should be following will move you toward waste minimization as a way to lessen the burdens of that law. How do the two work together?"

We have developed a computerized system which we call EPICS, the Environmental Programs Information Compliance System, designed more broadly to provide compliance information on a regular basis so that, at the individual facility level, one can keep abreast of requirements.

We also have been working on the concept of a regulatory and waste minimization information center. We have drafted for the city of Los Angeles a proposal — which may or may not be adopted next year — for outreach to small businesses through newsletters and brochures, providing information on technologies and regulations.

In addition, we are working with some TSD applicants in the Bay Area who are finding that their community if full of "NIMBYs" ("Not In My Back Yard"). What we have suggested is that this community needs information for their small businesses on waste minimization, new technologies for recycling, and all of the relevant laws. One TSD permit applicant is considering forming a regulatory information center in its own facility as a way to meet that need in the community.

We also, of course, need information for the public, not just soothing noises. There isn't much trust out there. The general public needs credible assurances that meaningful standards are in place and that they are being obeyed.

What about the compliance and enforcement roles of respective agencies? I have talked a lot about information. What about inspections? Is it possible to coordinate federal, state, and local inspection requirements? Can we get the sewage treatment plant industrial waste inspectors to understand enough about RCRA that they can assist on the hazardous waste side? Can we teach the air quality inspectors enough about sewage and RCRA to be effective in our use of scarce resources? Can we develop cross-media permitting and inspections? Perhaps that is a naive hope.

Attempts to formulate responses to these questions or to develop the information and compliance structures lead me, again, to conclude with a question rather than an answer. Who is this regulatory system, as a system, really serving?

PARENTEAU: I will address three questions: the relationship between EPA's Washington office and its regional offices in terms of communication and consistency; the phenomenon of "bean-counting"; and the reason for all these records and paperwork.

Do EPA personnel — meaning headquarters and the regional offices — communicate effectively regarding regulatory implementation and enforcement, and are understandable and consistent messages being sent to the regulated community? The answer to that question is, yes. Do regional personnel themselves adequately understand the complex regulatory requirements? I believe they do.

This is a difficult area. Writing regulations, policy and guidance, trying to predict all the different circumstances and situations within which policy guidance is going to be required, trying to anticipate questions and answers before they are asked, trying to anticipate when a certain amount of firmness is called for and when a certain amount of discretion is needed, is very difficult. That is what makes things so confusing. The hard questions are not answered by legislation. Only the easy questions are dealt with and resolved at the legislative level. Some of the difficult questions, but not the most difficult, are answered at the rule-making level. Most of the difficult questions are passed down the line to the site-specific instances where reality sets in.

The regulated community insists upon certainty while in the same breath demanding flexibility. If it serves their interests and results in the permit sought, they want the regulations to be absolutely certain; if it doesn't serve their interests, then they want the standards to be flexible. That is human nature — to be schizophrenic. EPA is schizophrenic. The regulated community is schizophrenic.

EPA is not a monolith, nor is the regulated community. We have a heterogeneous, egalitarian, pluralistic society. What this suggests is that, although we need to strive for consistency, predictability, uniformity, clarity, and simplicity, we won't ever reach that goal. This problem is not one of substance, but of process.

The emphasis needs to be on creative and collaborative problem-solving, interest identification, negotiation skills, techniques for communicating and identifying both sides' underlying interests and creating options to meet those interests, not committing until one is done inventing, and not taking positions until one understands all the facts of everybody else's interests.

Interaction between the government and the private interests calls for highly skilled processes and an awareness of the relationships created at different points in time and what those relationships mean. It calls for an ability to know why those relationships become adverse, and when they needlessly have been made adverse. It calls for being less adversarial than we are now.

I don't have a solution to how EPA might organize itself differently in an effort to send more consistent messages. We are all familiar with the Shakespeare character's reference to foolish consistency being the hobgoblin of small minds. I strongly believe that. The need to develop methods for distinguishing factual situations and shaping appropriate solutions to different fact situations is much greater than the need to anoint someone to reduce all of this to a simple, single rule. I don't think any one individual can do this. The collective wisdom of the people who struggle with these complicated systems is the only hope of reaching more rational decision-making. It is not going to happen in just one part of our multi-party process.

EPA clearly is a Tower of Babel. Five different law offices speak on its behalf: the Regional Counsel's office, the Office of General Counsel, the Office of Enforcement and Compliance Monitoring, lawyers in the program offices, and the entire Justice Department. So if you have five lawyers competing for the microphone, is it any wonder you can't understand what they are saying?

DISCUSSION:

PARTICIPANT: I would like to suggest a new paradigm and then ask Commissioner Parenteau and Lisa Friedman to [20 ELR 10529] comment on it. The regulations are complicated, in part, because they attempt to anticipate a large range of special circumstances. What would be your view of an institutional change to have regulations only generally anticipate problems, and to substitute a group within the agency to review special circumstances, interpreting the regulations more specifically only after issues arise? Why not regulate at a general level and delegate further interpretation to a standing group within the Agency working on that regulation?

LISA FRIEDMAN: As Associate General Counsel at EPA, my general reaction is that your suggestion is not realistic, at least in the RCRA program, given the size of the regulated community.

In the generator area, for example, hundreds of thousands of generators are subject to regulation. The amount of work that goes into obtaining a single permit for a facility — despite the fact that the regulations spell out things in some detail — is enormous. With our program, for the specificity necessary for enforcement, if it were not incorporated in the regulations from the outset, we would need hundreds, perhaps thousands, of people to perform the task of interpretation you are suggesting — making case by case decisions or issuing permits better describing specific responsibilities. I don't see Congress giving us the kind of money needed to implement that type of program. For the duration of RCRA, certain elements of the program are going to have to be self-implementing. That is what necessitates a large degree of the complexity.

PARENTEAU: This is a state-level point of view: the opportunity for experiments of this sort exists at the state level. In Vermont, for example, we have moved from the prescriptive approach of rule-making to the performance standard approach, backed up by guidelines that are subject to changes — in both technologies and information. For routine permits this works very well.

For complex projects, we have appointed a problem-solving team with multi-media members. When a project doesn't fit within the prescribed outline of the rules, we acknowledge this rather than trying to force it to fit.

That is more difficult with a national program. But the states are supposed to be the laboratories. I would love to see ideas like yours attempted at the state level because, ultimately, more and more of these programs are going to find their way into the hands of the states. States are able to respond more quickly to changing circumstances than is EPA.