PH COVID-19 Client Alert Series: The State of Environmental Business Operations One Week Into Sheltering in Place in California
By Jill Yung , Ira Klein & Deborah J. Schmall
Over the past week, most economic and business activity in California has been forced to power down almost immediately in response to Governor Newsom’s Executive Order of March 19, 2020 (“Governor’s Order”)
This Client Alert conveys the information we have learned as of this date regarding the continuity of environmental compliance and response operations and environmental due diligence activities. The situation evolves daily, as governmental authorities scramble to provide supplemental formal or informal guidance. We will update this Alert on a regular basis as more information becomes available.
Authorities and Tools Supporting Ongoing Operation of Environmental Work and Laws
While most economic and business activity has come to a grinding halt, the operation of environmental laws and regulations has, in some respects, demonstrated surprising resiliency. Certain activities that require open public forums and input may be delayed as agencies explore and test remote meeting alternatives, but otherwise state and local authorities claim to be capable of carrying on the business of proposing new and implementing existing regulations, undertaking enforcement actions, administering grants, processing invoices, and issuing licenses and permits.
Some of this has been facilitated by teleworking, and perhaps unburdened by in person meetings, agencies have more time to devote to processing requests. In addition to the ongoing operation of state and local government, the Governor’s Order directing Californians to stay at home identified certain sectors as exempt in order to maintain continuity of critical operations and infrastructure. Currently, the Governor’s Order, through incorporation of federal guidance, provides that “[h]azardous material responders” from government and the private sector, “[e]nvironmental remediation/monitoring technicians” in the energy sector, “[e]mployees needed to operate and maintain drinking water and wastewater/drainage infrastructure,” and “[w]orkers who support hazardous materials response and cleanup” are exempt altogether from the shelter in place orders currently in effect. Governor Newsom has reserved the right to “designate additional sectors as critical in order to protect the health and well-being of all Californians.”
But the Governor’s Order only exempted 16 critical infrastructure sectors, whose “assets, systems, and networks, whether physical or virtual, are considered so vital to the United States that their incapacitation or destruction would have a debilitating effect on security, national economic security, national public health or safety, or any combination thereof.”
Permitting Prospects in the Wake and Midst of COVID-19
The good news is that project development is not necessarily dead. Agencies and environmental consultants are well equipped to continue preparing and reviewing document submissions involved in the permitting process. Even the seemingly intractable problem of holding public meetings amidst social distancing requirements has been addressed by Executive Order N-29-20, which significantly loosened the requirements local legislative bodies and executive agencies must meet when holding a public meeting via teleconferencing. While local permitting authorities may need some time to define an implementation plan, agencies have unprecedented flexibility to deal with the current circumstances. Outstanding field work may be the one activity that has not been squarely addressed, and while some might argue that these activities can be safely conducted in accordance with social distancing requirements and exemptions for hiking and similar outdoor activities, it would be prudent to seek clarification from the State or other relevant authorities before undertaking such work.
Meeting Unrelenting Environmental Compliance Challenges While Facing Escalating Hardships and Obstacles
The bad news is that, in the immediate future, there will be no reprieve from obligations to comply with environmental laws, permits, and enforcement orders or the deadlines associated with the same.
Environmental compliance is challenging under the best of circumstances, and some recent disasters, including wildfires and hurricanes with associated flooding, have thrown the critical importance of disaster planning into sharp relief. But the conventional wisdom emerging from these recent experiences—recommendations to have redundancies in place, clear governmental notification procedures, and training to implement the same
Determining Whether Workers and Their Activities Are Permitted Under Operative Orders
Environmental compliance, response, and cleanup often rely on the ability of workers to continue work progress and conduct monitoring. As noted above, “[w]orkers who support hazardous materials response and cleanup” are exempt from shelter in place requirements, but this and other similar exemptions do not, on their face, cover workers who support mitigation and containment of non-hazardous pollutants that might be released into the air or water if not properly maintained or addressed in emergency circumstances. “Environmental remediation/monitoring technicians” are only exempt workers in the energy sector, and, while common sense would suggest that allowing workers to respond to and continue to manage non-hazardous environmental threats as essential operations, existing orders would benefit from some clarifying language on this point.
Upstream and Downstream Reach of Exemptions
Also requiring clarification is how far upstream and downstream exemptions might reach. In the context of essential business exemptions, local orders (e.g., County of Los Angeles) provide some evidence that suppliers of critical infrastructure sectors will be permitted to remain open (“businesses that supply other essential business with the support or supplies necessary to operate”). But how does the idea of “stepping-out” exemptions apply in the context of mandated remediation and environmental compliance monitoring, when coverage for these activities already requires a generous interpretation of the orders? For sampling efforts that require mobilization of significant equipment (e.g., drillers) and subsequent lab analysis, the subcontractors needed to perform the work may be unwilling or unable to assist. For these more complex questions, businesses will need to coordinate with relevant government officials and service provides to secure assurances that specific work can and should proceed (and, as a side note, certain agencies have already proven to be pragmatic and helpful on this score).
Ensuring Worker Safety When Performing Environmental Tasks
Simply because workers can legally conduct environmental compliance work does not, however, mean that operations should proceed under a “business as usual” approach. Employers that require workers to continue in their jobs face an unprecedented host of thorny issues involving worker safety in an era of rampant COVID-19 transmission. The California Division of Occupational Safety and Health has, thus far, released limited guidance regarding how employers must keep employees safe, aside from referencing guidance issued by the Centers for Disease Control and Prevention (“CDC”) and noting that, for general industry, there is no specific standard that covers COVID-19, although some safety standards, such as those for sanitation, personal protective equipment, and the control of harmful exposures may apply.
Funding Ongoing Compliance Work
Finding the resources to meet compliance obligations as normal business operations are restricted or shut down may present other challenges. On this front, however, there may be some unexpected good news. As companies take stock, those with pollution legal liability (“PLL”) policies, likely put in place with very different objectives in mind, should assess whether they might be of use under current circumstances. PLL policies that cover “biological contaminants,” and even some that do not, might apply to the transmission of the COVID-19 virus (as the release of a pollutant), provided that the policy does not contain an exclusion for communicable diseases.
Considerations for Environmental Compliance Heading Into Week Two
Obviously, on most fronts, including environmental permitting and compliance, the situation is very fluid. In his press conference on March 21, the Governor was unable to clarify whether the “essential worker” exemptions under the Governor’s Order and federal guidance are more or less stringent than the preexisting local orders. His office is reviewing this issue further. Meanwhile local governments likewise remain uncertain of the scope of their own orders. For example, although the fact that groundwater monitoring at a contaminated site is exempt seems obvious, counties have said they are not sure. More clarification will be forthcoming and, in some instances, can be expedited on a case-by-case basis by using the hotlines that have been set up by local jurisdictions to field questions. To comply at a minimum with the spirit of the shelter in place orders, all good faith determinations that the performance of a service with health and safety implications is exempt should be implemented in a manner that follows sound social distancing protocols (e.g., avoid having workers use public transportation, conduct activities outdoors or at least in unoccupied structures, wear personal protective equipment, and stay six feet apart). Furthermore, pending further guidance, if the Governor has exempted a particular activity that is required by state laws, regulations, or orders, uncertainties should be resolved in favor of the Governor’s exemptions and the continuation of environmental compliance work. Companies subject to diligence and compliance deadlines should also reach out immediately to relevant authorities to ensure that environmental sampling and mitigation are included in the next round of orders and/or guidance establishing exemptions from shelter in place orders.