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Brushing up on RCRA Basics and Compliance Tips

February 13, 2014

Presented By: Lydia B. Duff, Esq.

Assistant General Counsel – EH&S, W. R. Grace & Co.

Lynne Durbin, Esq. (Moderator) President and General Counsel, InLine LLC

Pamela D. Marks, Esq.

Beveridge & Diamond, P.C.

Association of Corporate Counsel www.acc.com

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Overview

•  RCRA Subtitle C Refresher – Focus: what wastes are regulated?

•  Enforcement Update •  Practical Tips

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RCRA Subtitle C Refresher •  Subtitle C of the Resource Conservation and

Recovery Act is a “hazardous waste program” •  States are generally authorized for much of

program; EPA retains enforcement authority; states can be more stringent

•  A “cradle to grave” program •  This refresher will focus on the generator

requirements and the initial waste determination: what is regulated as a solid waste under RCRA?

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RCRA Subtitle C Applicability

•  Threshold questions: – Is a material a solid waste? – If so, is it a hazardous waste?

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What is a solid waste? Solid waste is defined as any solid, liquid, or contained gaseous material that is being discarded A discarded material is any material that is: • Abandoned (disposed, burned or incinerated) • Inherently waste-like • Recycled? Maybe a solid waste, depending upon:

•  The nature of the material •  The manner in which it is going to be recycled

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Often unclear whether a material is a regulated solid waste. Some recent court decisions (2013/2014): • Wood preservative that escaped from utility poles through normal wear & tear? Used for intended purpose; not discarded Ecological Rights Found. v. Pac. Gas & Elec. Co., 713 F.3d 502 (9th Cir. 2013) • Carpet selvedge with a known use, reuse, or recycling? Not solid waste Premier Assocs. v. EXL Polymers, Inc., 507 Fed. Appx. 831, 835 (11th Cir. 2013)

• Leaking and “past life expectancy” PCB-containing ballasts? Waste, but court did not address intact ballasts

N.Y. Cmtys. for Change v. N.Y. City Dep't of Educ., 2013 U.S. Dist. LEXIS 47199 (E.D.N.Y. Mar. 26, 2013)

• Gas condensate with benzene contamination that was used in product? Not waste United States v. Mt. State Carbon, LLC, 2014 U.S. Dist. LEXIS 4323 (N.D. W. Va. Jan. 14, 2014)

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Dante’s circles? Are you in or out of RCRA?

•  Solid waste

RCRA Hazardous waste

Solid waste

Byproducts and recyclable material that can be used, reclaimed, burned for energy recovery

Stuff – Raw Materials, Intermediates, Finished goods

Exclusions 8

Examples: difficult to classify materials

•  Commercial Chemical Products that may appear to be accumulated for disposal or abandoned

•  Co-products v. By-products •  Recyclables

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Commercial Chemical Products •  Burden seems to be increasing to demonstrate that

stored materials ARE NOT WASTE

•  April 2013: EPA issued a checklist for inspectors to guide this evaluation

Management or Use Is it a solid waste? CCPs in use No CCPs appropriately stored and managed for use or legitimate reclamation

No

CCPs that may are accumulated for disposal or abandoned

Maybe yes

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Photo from EPA CCP Checklist (April 2013)

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CCPs – do they appear to be waste? EPA checklist criteria (examples): • “Are the containers used to store the material in good condition (vs. crushed, bulging, corroded, dusty . . .” • Where are the containers stored? Locked? Open to the elements? • Are the containers labelled as “product”? • Can the facility support a claim that the contents are products? PRACTICAL TIP: housekeeping and labelling is important. Messy storage increases the risk that a facility may need to prove that stored materials is not waste

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Co-products v. By-products

Material Is it a solid waste?

Co-product No

By-product Often yes

•  Co-products are materials produced intentionally, and which in their existing state are ordinarily used as commodities in trade by the general public

The distinction may depend on whether one can document and prove that a material is a legitimate co-product

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When Does RCRA Regulate Recycling? EPA categories of recycling are used to determine whether the material being recycled is a “solid waste (261.2(c)) • Use on the land in a manner constituting disposal • Burning for energy recovery • Reclamation: Processed to recover a usable product, or if it is regenerated (e.g., regeneration of spent solvent) • Speculative accumulation • Direct use/reuse (without reclamation): Employed as an ingredient in an industrial process to make a product

–  Used or reused as an effective substitute for a commercial product

–  Returned to the original process from which generated, without being first reclaimed or land disposed

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Use Constituting Disposal 261.2(c)(1)

Burning for Energy Recovery 261.2 (c)(2)

Reclamation 261.2(c)(3); 261.1(c)(4)

Speculative Accumulation

261.2(c)(4); 261.1(c)(8)

Direct Use/Reuse 261.2(e); 261.1(c)(5)

Excluded Materials 261.4

Spent Materials 261.1(c)(1)

WASTE WASTE WASTE WASTE

Listed Sludges 260.10

WASTE WASTE WASTE WASTE

Characteristic Sludges 260.10

WASTE WASTE WASTE

Listed By-Products 261.1(c)(3)

WASTE WASTE WASTE WASTE

Characteristic By-Products 261.1(c)(3)

WASTE WASTE WASTE

Commercial Chemical Products 261.33

WASTE WASTE

Scrap Metal 261.4(a)(13); 261.1(c)(6)

WASTE WASTE WASTE WASTE

Inherently Waste-like Materials 261.2(d)

WASTE WASTE WASTE WASTE WASTE

Blank = not a solid waste

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Recycling: Regulatory Concern •  Regulators are trying to avoid sham recycling •  Where a secondary material is “only marginally effective

for the claimed use, the activity is not recycling but surrogate disposal. An example . . . [is the] use of certain heavy metal sludges in concrete. The sludges did not contribute any significant element to the concrete’s property.”

50 Fed. Reg. at 638 (cited in United States v. Mt. State Carbon, LLC, 2014 U.S. Dist. LEXIS 4323 (N.D. W. Va. Jan. 14, 2014) (condensate with benzene contamination ).

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Sham Recycling (as summarized by EPA) •  Sham recycling may include situations when a secondary

material is: –  Ineffective or only marginally effective for the claimed use (e.g.,

using certain heavy metal sludges in concrete when such sludges do not contribute any significant element to the concrete’s properties)

–  Used in excess of the amount necessary (e.g., using materials containing chlorine as an ingredient in a process requiring chlorine, but in excess of the required chlorine levels)

–  Handled in a manner inconsistent with its use as a raw material or commercial product substitute (e.g., storing materials in a leaking surface impoundment as compared to a tank in good condition that is intended for storing raw materials)

EPA RCRA Orientation Manual 2011 17

Summary: Determining what is a RCRA regulated waste •  Obligation is on waste generator to make the waste

determination –  Is it a solid waste? Overarching principle is whether the

material was discarded –  Is the waste excluded? –  Does it have a hazardous characteristic (ignitability,

corrosivity, reactivity, or toxicity)? –  Is it a listed waste?

•  Can use testing or knowledge of process

PRACTICE TIP: know and be prepared to show the basis of the waste determination

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Other Challenges posed by waste definitions

•  Categories of materials and recycling processes are unclear and often overlap (i.e., what is a spent material as opposed to a sludge or by-product)

•  EPA regulatory interpretations must be consulted, they can be confusing and contradictory

•  Point of generation often unclear •  Result may undermine legitimate recycling

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Anticipated Changes

•  EPA has been working on revising the definition of recycling. –  2008: EPA revised definitions to encourage recycling of

hazardous secondary materials –  2011: EPA proposed additional restrictions –  2014? We could see a new Definition of Solid Waste

(DSW) rulemaking

Further adjustment to the definition of solid waste

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Universal Wastes •  Streamlined hazardous waste management

requirements for certain designated materials – Batteries – Pesticides – Mercury-containing equipment – Bulbs (lamps)

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Universal Wastes (cont) •  Reduces Certain Requirements During Waste

Generation, Collection & Transport: –  Handler storage for 1 year (not just 90 days) –  Label as universal (not hazardous) waste –  Transportation using common carrier –  No hazardous waste manifest (although large

handlers must keep records) –  Reduced training, emergency preparedness and

contingency planning provisions •  Wastes Ultimately Must Be Recycled or Disposed in

Accordance with RCRA Requirements

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Sources of guidance

•  State and federal rules and regulatory history •  Case law •  Administrative decisions •  EPA and state guidance documents, such as formal

guidance and letters found on RCRA online –  http://www.epa.gov/epawaste/inforesources/online/index.htm –  http://www.epa.gov/osw/hazard/dsw/compendium.htm

Remember: State requirements can be more stringent

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Enforcement Update

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Some typical enforcement actions •  Record-keeping •  Satellite accumulation •  Universal waste •  Disagreement as to whether a material

is solid waste, or instead is a useful product or is otherwise outside the scope of regulation

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Enforcement Stats – Does EPA enforce RCRA? EPA RCRA Penalties

(value in $ millions, adj. for inflation)

Source: http://www.epa.gov/Compliance/resources/reports/endofyear/eoy2011/eoy-trends.html

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Enforcement . . . What’s next?

•  EPA’s draft strategic plan for 2014-2018 anticipates: –  Possible decline in inspections, coupled by increase

in focus on self-reporting and possible emphasis on criminal enforcement for most serious violations

•  Next Generation Compliance “new paradigm” (per EPA) –  Promoting the use of advanced monitoring and

electronic reporting –  Example: 2012 Hazardous Waste Electronic Manifest

Establishment Act to improve and modernize hazardous waste transportation and tracking

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Sources of Information that Could Trigger Enforcement

•  Agency Inspections •  Permit Compliance Reporting •  Self-Disclosures •  Agency Information Requests •  Citizen Groups •  Disgruntled Employees •  Whistleblowers •  Anonymous Tips

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Citizen suits 42 U.S.C.S. § 6972 •  Can be brought against any person

–  who is alleged to be in violation of RCRA –  who has contributed or is contributing to the handling

or disposal of waste which may present an imminent and substantial endangerment to health or the environment

•  Courts may award costs of litigation (including

reasonable attorney and expert witness fees) to the prevailing party

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More Practical Tips

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Structures that support compliance •  Communicate with and gain support of management •  Develop a strong and valued compliance staff •  Develop and implement compliance/audit plan •  Implement an environmental management system

that encourages attentiveness to compliance •  Document compliance efforts •  Maintain good relationships with regulators,

employees and community •  Be prepared to respond quickly and appropriately if

receive enforcement actions (from administrative notice of violation up through search warrant or grand jury subpoena)

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Preparing for inspections •  Inspection Readiness

•  Have a protocol – – Who will respond? – Will another person take notes? – What if designated person(s) are not present?

•  How do you address questions? – Verbal during inspections – Follow up written requests

•  Beyond inspections: Recognize EPA focus on self reporting and pay attention to record-keeping and electronic report contents

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Question assumptions / Be curious •  Ask what is in that tank / bin / pile / drum . . . ?

What if the material is not declared a "waste" but is not clearly a usable product? ("we'll find a market for this eventually. . . ")

•  Ask when does this material first become a waste That's when the management obligation begins

•  Ask how do you know whether the material is hazardous? –  Is this a recent assessment? –  Have staff, ingredients, processes changed?

•  Learn where records are kept and look at them •  Assess basic housekeeping 33

Questions?

Lydia B. Duff, Esq. Assistant General Counsel – EH&S, W. R. Grace & Co.

Lydia.Duff@grace.com

Lynne Durbin, Esq. (Moderator)

President and General Counsel, InLine LLC ldurbin@inlinellc.net

Pamela D. Marks, Esq.

Beveridge & Diamond, P.C. pmarks@bdlaw.com

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