Overhauling a little-known policy that could be instrumental to advancing President Biden’s environmental justice goals has been stalled for the last year, prompting questions about why the administration is holding up a key tool.
At issue is a long-standing popular Justice Department policy “supplemental environmental projects,” or SEPs used when companies guilty of environmental crimes agree to offset the harms in communities rather than simply paying a fine (Greenwire, Aug. 21, 2019).
The Biden DOJ SignaledLast February, it was announced that the Trump administration would reinstate the practice.
Simone Jones, a partner with Sidley Austin LLP, stated that it is difficult to understand why it takes so long. It’s not difficult.
She said, “We are at a time when SEPs can really help to advance the administration’s stated environmental justice agenda.”
SEPs have received broad support from both environmentalists as well as oil executives. However, the Trump administration has rescinded this policy after Jeff Sessions, the then-Attorney general, banned DOJ’s entry into settlement agreements that included payments made to third parties.GreenwirePosted on March 13, 2020
Trump tried to block a DTE Energy Co. and Sierra Club legal settlement that would have required Detroit-based utility DTE Energy Co. to close three coal fired power plants and pay $2,000,000 for environmental improvements. These projects were in addition a $7 million fine.
In 2020, a federal court dismissed the Trump DOJ objection. Biden DOJ did not appeal this decision. Now, legal experts are speculating on what the DOJ will do in its enforcement cases and with the larger policy. This will require rulemaking that is subject to comment and notice.E&E News PM, Feb. 4, 2021).
I think people thought. [SEPs]Jeff Wood, a Baker Botts partner who led the Trump DOJs natural resources and environment unit for two years, stated that they would return relatively quickly.
Practically, EPA refers enforcement case to the Justice Department for prosecution in civil or criminal court. EPA may push for certain agreements but DOJ will ultimately make the call.
EPA also handles administrative cases that are smaller in size. These may include environmental improvement projects and other agreements.
Last week, EPA referred questions regarding SEPs to DOJ. However, its fiscal 2021 enforcement report contained seven agreements by the violators to conduct SEPs totaling $12.3million. It is a fraction compared to recent years and the report states that the agency’s ability use SEPs in settlements was severely limited by Trump DOJ policies.
So far, the DOJ has been quiet about its plans. Todd Kim, the top environmental prosecutor at DOJ, briefly mentioned SEPs late last year in a speech by the American Bar Association, but did not give any indications about upcoming DOJ policies.Greenwire, Dec. 14, 2021).
Some believe the administration may be waiting for confirmation of David Uhlmann as EPA enforcement chief. Sen. Cynthia Lummis (R.Wyo.), has resisted his nomination. Concerns about the fate of a power station in her state have led to his nomination being stalled.
Experts emphasize that SEPs have important environmental justice implications.
Sam Sankar, an attorney with Earthjustice, stated that if an industry has blighted an environment, they have a responsibility for restoring it. It’s more than simply nonpolluting the way they have done it for many years.
Jones of Sidley stated that she is currently working for a client where a supplement environment project might be appropriate, but it is unclear what role SEPs may play, if any. She explained that SEPs were favored by polluters because they can help communities that are adversely affected.
The agreement would need to establish a connection between the violation of the Clean Air Act and the remedy. For example, installing air monitors at a community that has facilities that violate Clean Air Act laws.
Some wondered if the long-standing Republican opposition to SEPs was contributing to the delay. GOP lawmakers argued that SEPs are slush funds and passed a bill to prohibit third-party payments and specify that SEPs fell into this category. They claimed that SEPs sent illegally to communities money that would have otherwise gone into general federal coffers.
Jones stated that SEPs can often be more expensive than if a company paid a fine. However, Jones noted that she could envision opposition from the right similar to the one that could arise in response to the Justice40 initiative of the Biden administration. This initiative directs 40 percent climate-related investments benefits to communities already afflicted by pollution.