by Peggy Otum, Shannon Morrissey, and Caroline McHugh

The Biden Administration’s “whole of government” approach to advancing environmental justice (EJ) continues apace, with agencies and courts pursuing focused enforcement and environmental review strategies that could affect regulated entities in a number of ways. At a high level, a novel partnership between the US Environmental Protection Agency (EPA) Region 9, the federal EJ leader, and the California EPA (CalEPA) could inform the way that the agencies investigate and enforce violations affecting communities overburdened by pollution. And other federal agencies—not previously known for their attention to EJ—are now taking steps to more thoroughly account for impacts to disadvantaged communities in their environmental reviews and permitting decisions. In light of these recent developments, companies should continue to anticipate increased enforcement of violations affecting overburdened communities and prepare for heightened scrutiny of EJ impacts in environmental permitting reviews.

Federal-State Enforcement Partnership

EPA Region 9 entered a “first in the nation” partnership with CalEPA, designed to help the agencies pursue their shared goal of “promoting environmental justice and enhancing enforcement and compliance assurance in and affecting overburdened communities.”[1] The agencies signed a five-year memorandum of understanding (MOU) on September 10, 2021, outlining an agreement to expand collaboration related to enforcement, inspections, compliance assistance, communication, community engagement and staff training to benefit public health and the environment in overburdened communities. Under the MOU, the agencies intend to:

• Use data to identify overburdened communities and the environmental and climate harms that affect them, and to prioritize enforcement and compliance work accordingly.
• Strategically target inspections in overburdened communities by increasing joint inspections, sharing or jointly developing metrics for determining pollution burdens and vulnerability, and collaborating on staff training.
• Promote coordination of enforcement responses, including joint judicial enforcement actions in overburdened communities.
• Expand engagement with overburdened communities to ensure that enforcement and compliance-related activities are informed by complaint data and community input.

According to EPA Region 9’s acting administrator Deborah Jordan, the partnership “will improve transparency and communication among federal and state agencies to be more accountable and responsive to compliance concerns in overburdened communities.”[2] EPA intends that the agreement will “serve as a model for other EPA and state partnerships” on EJ.

This novel partnership advances federal efforts to strengthen enforcement of violations in disadvantaged communities and complements EPA’s recent EJ-focused civil and criminal enforcement initiatives (which are described in a prior WilmerHale alert). We anticipate that by leveraging data and personnel, these agencies will undertake more inspections and enforcement actions in overburdened communities. Similar partnerships in other EPA regions and states will likely follow, and companies with a strong corporate EJ strategy will be best prepared to adapt to the shifting enforcement landscape.

Increased Attention to EJ in Permitting and Environmental Review

There is also evidence of evolving federal policies and legal requirements regarding EJ analysis in environmental review and permitting, specifically under the National Environmental Policy Act (NEPA), that will affect companies seeking federal permits for proposed projects.

First, agencies are beginning to view EJ as a significant issue that could drive the need to prepare an environmental impact statement (EIS) under NEPA. For instance, the US Army Corps of Engineers (Corps) announced last month that it will prepare an EIS to analyze a petrochemical facility due to potential EJ impacts.[3] The proposed facility would be located in St. James Parish, Louisiana, an area known as “Cancer Alley,” where a high concentration of refineries and industrial facilities currently operate adjacent to Black and low-income residential communities. Community and environmental groups, along with several state attorneys general, highlighted concerns about how air emissions and other project impacts could affect nearby overburdened communities.

In announcing the decision to prepare an EIS, Jaime Pinkham, Acting Assistant Secretary of the Army for Civil Works, noted his “commitment for the Army to be a leader in the federal government’s efforts to ensure thorough environmental analysis and meaningful community outreach,” and concluded that “an EIS process is warranted to thoroughly review areas of concern, particularly those with environmental justice implications.” The Corps’ stated commitment to complete a thorough EIS and “provide opportunities for voices to be heard in an open, transparent, and public way” demonstrates the agency’s alignment with President Biden’s EJ agenda. As the Biden Administration encourages agencies to incorporate EJ into their activities, we expect other agencies to follow the Corps’ example in future environmental review processes.

Similar changes are underway at the Federal Energy Regulatory Commission (FERC), as the agency reckons with its approach to analyzing the EJ impacts of pipeline projects under NEPA. The US Court of Appeals for the DC Circuit last month directed FERC to reconsider the climate and EJ impacts of two proposed liquefied natural gas terminals in Texas.[4] The court found that FERC’s analysis of climate and impacts to EJ communities was deficient and that the agency’s decision to analyze EJ communities within a two-mile radius was “arbitrary” since the EIS disclosed impacts beyond that area. FERC Chairman Rich Glick noted that “[t]his decision clearly demonstrates that the commission has the authority and obligation to meaningfully analyze and consider the impacts from GHG emissions and impacts to environmental justice communities. Moreover, failure to do so puts the commission’s decisions—and the investments made in reliance on those decisions—in legal peril.”[5] This decision highlights how courts are raising the bar for EJ analyses in NEPA, but the methods for preparing a legally sufficient and meaningful EJ analysis are yet unknown.

Legislation or updated regulations could lend some guidance in the coming months. The Council on Environmental Quality is considering revisions that would once again require cumulative impact analysis in NEPA, and EPA plans to release revised guidelines for analyzing cumulative environmental risks by the end of the year.[6] Understanding cumulative impacts is essential to assessing and mitigating environmental health risks to disadvantaged communities, where residents often face complex combinations of exposures and impacts. Further, proposed legislation, such as Senator Cory Booker’s Environmental Justice Act, would require agencies to address EJ in NEPA, among other provisions.[7] Yet even without clear guidance on the methods for analyzing EJ impacts, the Biden Administration and courts are expecting agencies to step up their game.

Takeaways

EJ continues to be a key priority of the Biden Administration, and new enforcement partnerships and the increasing emphasis on analyzing disproportionate impacts in environmental reviews illustrate how agencies are implementing the federal agenda. Through its partnership with CalEPA, EPA Region 9 will advance its experience investigating and enforcing violations in overburdened communities and share strategies with other regions. In addition, it is anticipated that agencies will increasingly consider EJ impacts when determining what level of NEPA analysis is appropriate for a given project and include a more thorough analysis of disproportionate impacts on overburdened communities in NEPA documentation.

As EJ policies continue to take shape at the federal, state and local levels, it is more important than ever for companies to have a sound EJ strategy in place. WilmerHale is closely monitoring these developments and is at the forefront of advising businesses in navigating permitting, enforcement and environmental, social and corporate governance (ESG)-related risks in this space.

Footnotes

[1] Memorandum of Understanding on Collaborative Efforts on Enforcement and Compliance Assurance in Overburdened Communities between the United States Environmental Protection Agency Region 9 and the California Environmental Protection Agency (Sept. 10, 2021), https://insideepa.com/sites/insideepa.com/files/documents/2021/sep/epa2021_1748.pdf.

[2] U.S. EPA, CalEPA Launch Joint Effort to Strengthen Environmental Enforcement in Communities Overburdened by Pollution (Sept. 10, 2021), https://www.epa.gov/newsreleases/us-epa-calepa-launch-joint-effort-strengthen-environmental-enforcement-communities.

[3] Memorandum for Commanding General, U.S. Army Corps of Engineers Re: Formosa Group Chemical Plant Environmental Impact Statement (EIS) and Referral for Decision (Aug. 18, 2021), https://insideepa.com/sites/insideepa.com/files/documents/2021/aug/epa2021_1603a.pdf.

[4] Vecinos para el Bienestar de la Comunidad Costera, et al v. FERC, No. 20-1045 (D.C. Cir. Aug. 3, 2021), https://www.ferc.gov/media/vecinos-para-el-bienestar-de-la-comunidad-costera-et-al-v-ferc.

[5] Appellate Court Remands Brownsville Channel LNG Orders to FERC, FERC (Aug. 3, 2021), https://www.ferc.gov/news-events/news/appellate-court-remands-brownsville-channel-lng-orders-ferc.

[6] Maria Hegstad, EPA Readies Long-Stalled Cumulative Risk Guide For Release By Year’s End, Inside EPA (Sept. 15, 2021), https://insideepa.com/daily-news/epa-readies-long-stalled-cumulative-risk-guide-release-year-s-end?s=na.

[7] Booker Reintroduces Sweeping Environmental Justice Bill, U.S. Senator Cory Booker (Aug. 5, 2021), https://www.booker.senate.gov/news/press/08/05/2021/booker-reintroduces-sweeping-environmental-justice-bill.

Peggy Otum is a partner, Shannon Morrissey is a senior associate, and Caroline McHugh is an associate, at Wilmer Cutler Pickering Hale and Dorr LLP. 

Disclaimer

The views, opinions and positions expressed within all posts are those of the authors alone and do not represent those of the Program on Corporate Compliance and Enforcement or of New York University School of Law.  The accuracy, completeness and validity of any statements made within this article are not guaranteed.  We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the authors and any liability with regards to infringement of intellectual property rights remains with them.