LSP Bill May Change Relationships

Licensed Site Professional (LSP) Bill May Change the Relationship Between Remediating Parties and Their Environmental Consultants, Increase Site Remediation Costs and Impose Mandatory Deadline for Site Remediation

By John M. Scagnelli

The Licensed Site Professional (LSP) Bill, Senate Bill No. 1897, originally sponsored by Senator Bob Smith, Chairman of the State Senate Environment Committee and revised by the New Jersey Department of Environmental Protection (“NJDEP”), has been designed to eliminate the backlog of contaminated site remediations undergoing review by NJDEP and to expedite the cleanup of contaminated sites through the creation of a Licensed Site Professional Program for environmental consultants working in New Jersey.

LSPs would be licensed by a newly established LSP Board, in, but not of, NJDEP, and would be authorized to undertake the remediation of New Jersey contaminated sites and issue certificates of completion of remediation called “response action outcomes.” NJDEP will retain oversight authority over the LSPs and, in certain cases, directly oversee site remediation work, such as in cases where responsible parties have a history of environmental noncompliance; fail to meet mandatory remediation timeframes; and where sites contain chromium waste, contribute to surface water sediment contamination by PCBs, mercury, and dioxin or are NJDEP high priority sites.

While the objectives of the LSP Bill are sound – expediting site cleanups by outsourcing to LSPs the responsibility for conducting site remediations and approving their completion, and in the process reducing the NJDEP staff burden and case processing delays – the latest February 13, 2009 draft LSP Bill contains provisions which go beyond these objectives. The draft LSP Bill, in its current form, contains provisions which may present significant problems for remediating parties. These provisions include those which may change the relationship between remediating parties and their environmental consultants, increase site remediation costs, and impose mandatory deadlines for site remediation.

These potentially problematic provisions in the February 13, 2009 draft need to be understood and considered by remediating parties, including site owners and operators, prospective purchasers, and others considering acquiring title to contaminated sites. Some of these provisions in the current draft LSP Bill are discussed below.

The LSP Bill May Change the Relationship Between the LSP and the Client: Will the LSP Be More Representative of NJDEP or the Client?

Persons initiating the remediation of a contaminated site must hire LSPs to perform the remediation. There is a 3 year phase-in period for site remediations which are initiated prior to the enactment of the LSP Bill. Sections 30.b, c. Under the LSP Bill, the LSP’s highest priority is protection of public health and safety and the environment. The LSP must notify NJDEP within fifteen days after being hired by a client. The LSP is required to correct any deficiency NJDEP identifies in a document submitted concerning a remediation, and must correct the deficiency within timeframes established by the Department. Section 16.e. No provision is made in the LSP Bill to take into account reasonable questions or disputes regarding NJDEP’s deficiency directives or correction timeframes. It is thus unclear concerning how the LSP Bill affects current Department procedures in administering and implementing the Department’s Grace Period Rule and Technical Review Panel Procedure.
An LSP who takes responsibility for a site remediation from another LSP must correct all deficiencies raised by the Department relating to documents submitted to the Department by the previous LSP and correct the deficiencies within the Department’s timeframes. Section 16.g.
The LSP is required to disclose in any document he submits to the Department any facts, data, information and limitations he knows are not supportive of his own conclusions he reaches in his own submitted document. Section 16.i. The LSP is required, upon learning of a discharge (except related to historic fill) or an immediate environmental concern condition, to immediately notify the Department’s environmental hotline. Sections 16.j, k. The LSP Bill further requires that the LSP, upon learning of a client action or decision that results in a “deviation” from the LSP’s remedial action workplan or other remediation report, notify the Department, in writing, of his client’s “deviation.” “Deviation” is not defined in the LSP Bill. Section 16.l.

These sections in the LSP Bill require the LSP to report on his own client, include facts, data, information and limitations not supportive of the conclusions the LSP reaches, and undertake other actions under penalty of license revocation, administrative orders and penalty enforcement proceedings as provided in the Bill. These sections appear to supersede avenues currently available to a client to challenge the Department’s technical decisions and remediation timeframes. With these requirements, the LSP Bill appears to make the LSP more a representative of the Department than of his client.

Perhaps acknowledging this substantial change in the role of the LSP, the Bill contains a section which states that the LSP shall not state or imply, as an inducement or threat to a client or prospective client, an ability to improperly influence a government agency or official. Section 16.u.

The LSP Bill also requires the LSP to follow technical requirements and standards which may cause the LSP to conduct more extensive, and costly, remedial investigations and remedial actions than those currently required.

The LSP Bill requires that LSP technical remediation decisions be based upon more extensive standards than those required by Department’s Technical Standards for Site Remediation. These broader requirements include new Department adopted mandatory remediation timeframes and presumptive remedies, any available and appropriate Department site remediation technical guidelines, relevant USEPA or other state technical guidances, and “other relevant, applicable and appropriate methods and practices that insure the protection of the public health, safety and of the environment.” Section 14.b., c. Given these broader requirements, LSPs are likely to conduct more extensive, and costly, remedial investigations and remedial actions than those currently required, under fear of license revocation, administrative orders and penalty enforcement proceedings.
LSPs, in issuing certificates of completion of remediation, called response action outcomes, are required to provide their professional opinion that a contaminated site has been remediated so that it is “in compliance with all applicable statutes, rules and regulations protective of public health and safety and the environment.” Section 14d. As such, it seems entirely possible that LSPs may not issue certificates with this broad certification without conducting more extensive, and costly, remedial investigations and remedial actions than those currently required.

As noted above, LSPs are subject to significant penalties for violating LSP Bill requirements. LSPs violate the LSP Bill where they (i) know that their professional services constitute a violation of the Bill’s requirements, (ii) fail to take reasonable steps to avoid or mitigate the violation, and (iii) fail to provide required notifications to the LSP Board or the Department regarding violations, even after the LSP is fired by the client. Sections 15.r, w. The LSP Board has the authority to revoke or suspend an LSP’s license and initiate civil and administrative actions against the LSP, including actions for civil administrative penalties. In cases where an LSP purposely, knowingly or recklessly violates the LSP Bill, including making false statements, representations or certifications in Department filed applications or documents, the LSP can be found criminally liable for a crime of the third degree and subject to a fine of not less than $5,000 or no more than $75,000 per day of violation or by imprisonment, or both. Section 17.a. The LSP Bill attempts to protect the LSP from the client where issues arise between the LSP and client relating to the handling of a remediation project. The Bill contains a provision which prevents any person from taking “retaliatory action” against an LSP for actions the LSP takes under the Bill. Section 26. “Retaliatory action” is not defined in the Bill. Broadly construed, it seems possible that a client may find it prohibitive to replace their LSP and question LSP conclusions and judgments made in the remediation projects for which they are hired. This and other provisions of the LSP Bill may affect the client’s ability to hire and fire LSPs and question their judgments.

The LSP Bill May Increase Site Remediation Costs and Impose Mandatory Deadlines for Site Remediations.

The LSP Bill contains sections which may significantly increase the costs of site remedial investigations and remedial actions and result in the imposition of mandatory deadlines for site remediations. The following are some examples:

LSPs cannot be employed as in-house salaried employees of remediating parties. Section 16.y. Many site owners and/or operators currently employ in-house environmental consultants to reduce environmental costs. The LSP Bill requires remediating parties to hire outside LSPs.
The LSP Bill requires NJDEP to establish a permit program to regulate the operation, maintenance and inspection of engineering or institutional controls installed as part of a remedial action of a contaminated site. Section 19.a. Persons issued permits must maintain insurance, financial assurance or other financial guarantees to ensure funding is available to operate, maintain and inspect installed engineering controls. Section 19.c. Establishing an engineering and institutional control permitting program within the Department will require increased Department staffing in the Site Remediation Program and increase remedial costs for remediating parties.
The LSP Bill gives the Department authority to invalidate the LSP’s certificate of cleanup completion, known as a response action outcome, if the Department determines that the remedial action is not protective of public health, safety or the environment or if a presumptive remedy was not implemented as required. Section 22. This undermines the finality of LSP response action outcomes and may increase pressure upon the LSP to conduct more extensive, and costly, remedial investigations and remedial actions than those currently required.
The LSP Bill directs NJDEP to establish mandatory remediation timeframes and expedited site specific timeframes for (i) receptor evaluation, (ii) control of ongoing sources of contamination, (iii) establishment of interim remedial measures, (iv) addressing immediate environmental concern conditions, (v) performance of each phase of the remediation, including preliminary assessment, site investigation, remedial investigation and remedial action, (vi) completion of remediation, and (vii) any other activities deemed necessary to effectuate timely remediation. Section 28. Imposition of mandatory remediation timeframes will likely create issues on complex remediation sites, particularly brownfields sites.
In cases where the Department undertakes direct oversight of remediation of a contaminated site, the Department is given the authority to select the remedial action for the site. Section 27.c.
Remediation funding sources are now required for all site remediations. Section 30.b. This requirement applies to ISRA sites, Memorandum of Agreement (MOA) cases, underground storage tank (UST), and all other cases not subject to remediation funding source requirements under current NJDEP regulations.

These provisions of the current draft LSP Bill may change the relationship between remediating parties and their environmental consultants, increase site remediation costs and impose mandatory deadlines for site remediation. While the objectives of the draft LSP Bill are sound, these and similar provisions in the current draft LSP may need to be rethought and revised. As written, the provisions may create serious and substantial difficulties for remediating parties, including site owners and operators, prospective purchasers and others acquiring title to contaminated sites.

This Scarinci Hollenbeck Client Alert has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel.

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Peter S. Moeller

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John M. Scagnelli

Environmental and Land Use

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