Environmental Considerations for Superstorm Sandy Recovery

November 7, 2012
MGKF News Flash

It has been one week since Superstorm Sandy plowed into the East Coast and wrought almost unimaginable devastation. Although hundreds of thousands of people are still without power, millions more across the Northeast are in the beginning stages of assessing the damage at work and at home. As you take steps to clean up, resume operations, and repair/rebuild, here are some key environmental considerations to keep in mind.

1. Assess the environmental impacts and document your losses. You have no doubt already notified your insurance carrier of property damage and/or financial losses associated with the inability to conduct business for days, loss of inventory, and damage to operating equipment and fleets. With regard to environmental issues, the documentation of your losses should include an assessment of the environmental impacts as well. Were storage tanks damaged by flooding? Did floodwaters contain unknown hazardous substances or petroleum products? Did storm or water damage provide conditions for mold growth? Was your water supply impacted? It may be appropriate to enlist an environmental professional to take samples of soil, water, and surface impacts.

2. Evaluate your compliance with permits and regulations. Human safety is always the most critical concern, but when the danger has passed you should evaluate how storm damage has affected your ability to comply with permits and any other applicable environmental requirements. Every circumstance is unique and requires independent evaluation. For instance, you may need to review and update your Spill Prevention, Control, and Countermeasure (“SPCC”) plan to ensure that it sufficiently addresses emergency events. Releases of various substances into the environment and/or permit bypasses and exceedances demand notification to federal and state agencies. With regard to Clean Water Act compliance, it is possible that samples kept under refrigeration have been compromised. With regard to Clean Air Act compliance, the power failures may have resulted in a shutdown of air pollution control equipment, which could cause violations. Thus far, the agencies seem to be working to support the regulated community and show flexibility; for instance, the U.S. Environmental Protection Agency has granted fuel waivers for several states where facilities are unable to get compliant fuel to combust in emergency generators and other emergency response equipment. But we do not expect the agencies’ support and flexibility to be limitless. Releases of substances into the environment as a direct result of Sandy will in all likelihood not result in enforcement action; however, the failure to take reasonable steps to assess, report, and remediate those releases as quickly as possible could.

3. Evaluate your contracts. Most contracts contain a Force Majeure provision that dictates how obligations will be handled if an Act of God occurs. Review your contracts to determine if Force Majeure or other provisions have been triggered by Sandy and take steps to follow the process for invoking Force Majeure.

Sandy’s ferocity will be felt for weeks and months -- and for those most severely hit, for years. If we can be of any assistance as you work to return to normal (or perhaps a “new normal,” as Governor Christie rightly called it), please let us know.