Diversified Industrials

A Path Forward on PFAS and CERCLA: Assessing Risks For Potential Superfund Designation and Impacts on Superfund Sites

One of President Biden’s core campaign promises on the environment was to regulate per- and polyfluoroalkyl substances (PFAS), a class of thousands of chemical compounds that have been manufactured in the U.S. since the 1940s. Notably, in his campaign’s Environmental Justice Plan, President Biden pledged to tackle PFAS by designating the chemicals as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act, “CERCLA”. The EPA has already reissued regulatory determinations under the Safe Drinking Water Act (SDWA) for the two most studied PFAS compounds, PFOA and PFOS, a move which will further regulate the two chemicals under the national primary drinking water standard. Newly seated EPA Administrator Michael Regan is also taking action, as evidenced by the creation of a new EPA Council on PFAS. Further, President Biden has earmarked $10 billion in the American Jobs Plan for monitoring and remediating PFAS in drinking water. While PFAS actions are being prioritized by the federal government, the question remains whether a hazardous substance designation under CERCLA is imminent, as well as whether such a designation would include all 5,000-plus PFAS compounds or target just a notable few. Despite the absence of federal regulations to date, PFAS regulation is quickly moving forward at the state level, as nearly 20 states have developed, or are in the process of developing, their own policies to regulate PFAS compounds. Michigan, California and New Jersey have led the way in crafting PFAS-related policies stricter than current federal government guidance.

Ahead of the potential designation of PFAS chemicals as hazardous substances under CERCLA, companies involved in the historical manufacture, use, transportation, or disposal of these chemicals should assess their operational portfolios to determine potential regulatory and legal exposure and consider how to strategically engage with regulators, state and federal officials, communities, and other interested stakeholders.

CERCLA, commonly referred to as Superfund, was passed by Congress in 1980 to protect human health and the environment at polluted locations and to ensure that the “polluter pays” for contamination. Today, there are more than 1,300 sites listed on the Superfund National Priorities List that are undergoing remediation and/or ongoing monitoring. While PFAS are not currently considered hazardous substances under CERCLA, if it is determined that there is an “imminent and substantial danger to the public health or welfare” due to their presence, it must be addressed in Superfund site remediations.

As the EPA considers designating PFAS chemicals as hazardous substances under CERCLA, companies might consider the following questions:

  1. What is the impact of a potential CERCLA designation on current and formerly owned and operated industrial sites?
  2. How might designating PFAS as hazardous substances under CERCLA impact the company?
  3. How can an effective stakeholder engagement strategy mitigate potential operational, financial and legal risks?

What are the potential risks for businesses with PFAS exposure?

Before companies voluntarily phased out the manufacture and use of perfluorooctanesulfonic acid (PFOS) and perfluorooctanoic acid (PFOA) in 2002 and 2015, respectively, these chemistries were the most extensively produced PFAS compounds in the U.S. The EPA’s ‘PFAS Action Plan’, initially released in 2019 under the Trump Administration, highlights that the agency will use a tailored approach to regulating PFOA and PFOS under CERCLA rather than attempting to regulate the entire class of PFAS chemicals. A designation of PFOA and PFOS as hazardous substances could significantly – and swiftly – increase the number of remediation activities at Superfund sites given the myriad and widespread historical uses of the chemicals. Additionally, a CERCLA designation of PFOA and PFOS as hazardous substances could potentially impact thousands of public and private entities, each of which – according to the statute – could be held jointly and severally liable for 100% of cleanup costs at designated sites. These entities, referred to as ‘Potentially Responsible Parties’, may include historical manufacturers of PFOA and PFOS, users of PFOA and PFOS (both as chemical intermediaries and in finished products), wastewater treatment facilities, waste management companies, and transporters, among others.

For Superfund sites that are nearing ‘closure’, adding PFOA and PFOS to the list of CERCLA hazardous substances may push back the timeline of the project, add significant costs and testing protocols, require new treatment technologies, and prolong site monitoring. A hazardous substance designation may also increase the likelihood of previously closed Superfund sites being “reopened” in order to remediate PFOA/PFOS contamination to ensure that the site remedy is appropriately addressing human and environmental health risks.

Effectively Communicating Around Increased Regulation and a Hazardous Designation

As the likelihood of more stringent regulations on PFAS increases and the class of corporations that may be deemed potentially responsible expands, a broader array of companies will find themselves in the crosshairs of special interest groups, State Attorneys General, impacted communities, and others. It would be wise for companies to conduct a portfolio assessment to understand where potential vulnerabilities exist and align the operational and legal response to these sites with a strong communication and public and government affairs strategy that helps to mitigate uncertainty surrounding future regulations. Then, companies should begin to proactively engage with critical stakeholders, including the communities in which they operate, to establish lines of communication and lay a positive foundation for future public involvement in site remediation.

From a public and government affairs perspective, direct engagement with policymakers, subject matter experts, and influencers can help to ensure that any potential commercial and economic impacts of proposed regulatory actions are well-understood and reflected in final policy decisions. Superfund sites, which companies have typically considered to be a location-specific issue, must now be looked at from a multi-stakeholder viewpoint. For example, investors are increasingly considering environmental risks, including PFAS exposure, in evaluating investment decisions.

Project-specific operations under CERCLA are ongoing and evolving, requiring research, long-term solutions and scenario planning. This same approach is required for successful communication and stakeholder engagement in communities where current or former operations exist. It is our viewpoint that, for potentially impacted businesses, taking a step back, conducting research and weighing possible risks through scenario planning are vital. Just as project teams prepare for the technical impacts of potential crisis situations, it would be prudent for these teams to prepare communication and community engagement strategies as well. In our experience, there are several critical steps to informing a successful communication and community engagement foundation, including:

  • Establishing a baseline to understand how impacted communities perceive local operations. How can the interactions and experiences of residents, local officials, and other audiences inform communication around areas of interest and opportunities for improvement and engagement?
  • Sharing the results with internal partners (legal, government and public affairs, operations) to help ensure strategic alignment, and establish core areas for improvement, can inform decisions around community engagement and messaging that connects with broader business strategy and objectives.
  • Conducting a stakeholder mapping and landscape analysis to identify target audiences and uncover key details for strategy and positioning. A foundational understanding of the following questions will be critical to developing an effective community outreach strategy: What are the drivers of local community challenges? What local entity or event is the pride of the community? What are the economic drivers in the region? Who are the community leaders, elected officials and third parties who might be partners in your efforts? What are their trusted sources for information and how can those platforms be leveraged?

Regardless of whether a hazardous designation is proposed for all PFAS chemicals or just for PFOA and PFOS, recognizing and effectively communicating around PFAS exposure from multiple perspectives – operational, financial, regulatory, legal and reputational – will help companies prepare for potential actions being considered by a variety of stakeholders and influencers.

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