From the 1980s, when the U.S. Environmental Protection Agency (Washington, D.C.) named the first scrap companies as potentially responsible parties in a Superfund case, through the 1990s, Superfund was the bane of the recycling industry. The possibility of being named a PRP imposed such a heavy economic burden on the industry that it was fighting for its life until Congress enacted the Superfund Recycling Equity Act in November 1999.
SREA gave the industry relief from Superfund liability, but its protections aren’t free. To benefit from the law, a recycler must, by a preponderance of evidence, show that the recyclable material it shipped met a specification grade; a market existed for the material; a substantial portion of the recyclable material was made available for use as feedstock for the manufacture of a new, salable product; and the recyclable material could have been a replacement or substitute for virgin material or the product made from the recyclable material could have been a replacement or substitute for a product made with virgin material. Meeting these criteria provides SREA protection for transactions prior to Feb. 27, 2000, but for transactions after that date, there’s one additional requirement: Recyclers must prove they exercised reasonable care to determine that the consuming facility to which they shipped was in compliance with substantive provisions of federal, state, and local environmental laws and regulations applicable to the handling, processing, storage, reclamation, or other management activities associated with the shipped recyclable material. Reasonable care, as stated in SREA, means that the recycler made inquiry of the relevant federal, state, and local authorities charged with enforcing the laws in the jurisdiction where the consuming facility is located.
Fast forward to November 2011, when the EPA named 115 entities PRPs at the Chemetco Superfund site in Hartford, Ill. This was the first time the EPA had named recycling companies that shipped materials to a consuming facility after Feb. 27, 2000, PRPs. It recently named an additional 1,400 entities as Chemetco PRPs and sent special notice letters to about 470 entities (including those from 2011) requesting that they either agree as a group to pay for the remedial investigation and feasibility study for the site or arrange to do the work themselves with EPA oversight. ISRI helped form a PRP group in early 2012 with 39 of the original 115 named entities, and that group now invites the new PRPs to join.
Does SREA protect recyclers that are named Chemetco PRPs? That remains to be seen. Because this case involves “post-enactment” transactions, SREA only protects recyclers that meet the five criteria outlined above, including having inquired into Chemetco’s environmental compliance record.
Here’s the moral of the story: Make sure you’re doing your due diligence on the consuming facilities to which you ship so you can take advantage of SREA’s protections. ISRI created the SREA Due Diligence Compliance program to help members meet their SREA obligations in an easier, more economical fashion.
Scott Horne serves as ISRI’s vice president of government relations and general counsel. This entry is taken from his “Political Pulse” column in the upcoming March/April edition of Scrap Magazine.
Editor’s note: More information on ISRI’s SREA program can be found in the March/April edition of Scrap Magazine.