Construction & Public Contract Law Section Blog: Anticipating and Responding to Environmental Issues in Construction :

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  • Construction & Public Contract Law Section Blog
    October
    29
    2019

    Anticipating and Responding to Environmental Issues in Construction

    Sean Frye

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    Environmental issues that arise during construction projects can bring your clients projects to a halt. Sean Frye give tips on preparing and responding when the unexpected arises so your clients can keep their projects on track.

    Encountering environmental issues during a construction project can lead to costly delays for your clients, whether the clients are contractors who might have to suspend work on the project while awaiting a solution or owners who need a project to be completed by a certain date.

    Furthermore, environmental issues may require additional costs for the client, including site remediation or cleanup, environmental consultant fees, contaminant disposal fees, monetary penalties for violations, and litigation expenses.

    Reviewing and understanding environmental requirements before a construction project begins will help identify potential issues in advance.

    However, no matter how thorough environmental due diligence is performed before putting shovels into the ground to begin the project, environmental issues do still arise during construction. Knowing how to respond can help save the client time, money, and keep the project on track.

    Types of Environmental Issues

    Environmental problems can arise in a number of different forms during construction, including issues found on site, or caused by the activities of construction and demolition.1

    Examples include issues on the site, such as contractors who encounter asbestos or Regulated Asbestos-Containing Materials (RACM) while renovating an existing facility or during demolition of an existing structure. Excavation contractors might encounter unexpected soil or groundwater contamination, particularly on sites at or near former industrial and manufacturing facilities, or on sites with or nearby underground storage tanks that leaked and released contaminants. Excavation projects may reveal buried important historical objects, sensitive historic cultural objects, or other significant archaeological findings.

    Sean Frye com sfrye axley Sean Frye, Marquette 2018, is an associate in Axley Brynelson’s Construction and Environmental Practice Group in Waukesha, where he practices in construction, environmental, and water law cases and regulatory matters.

    A contractor may even inadvertently cause the release of contaminants. Fuel spills and spills of used oils, and spills of other solid and potentially hazardous wastes such as cleaners or other organic solvents, paints and paint thinners, and other corrosive and ignitable wastes have been known to occur on construction sites.

    Construction operations often lead to emissions of fugitive dust, particularly when large equipment is moving on soil, gravel, or other unpaved surfaces, or when materials operations occur on site, such as aggregate crushing and sorting or on-site concrete batching. Dust released during demolition operations may contain contaminants, as was the subject of a recent Seventh Circuit decision that involved the release of PCB-containing dust (polychlorinated biphenyls, a known contaminant with serious human health impacts) during the demolition of a manufacturing facility onto neighboring residential properties in Wisconsin.2

    Finally, construction activities that do not use the proper Best Management Practices (BMPs) and control measures often lead to erosion and polluted stormwater runoff. This runoff might then require a discharge permit under the Clean Water Act or equivalent state regulation, such as a permit from the National or Wisconsin Pollutant Discharge Elimination System permits (NPDES or WPDES). If wetlands are present on or near the construction site, dredging or filling the wetlands without the required permit can lead to substantial penalties.

    Assessments Before Construction

    Many of these potential environmental issues may be fleshed out in advance on large scale construction projects, particularly if the project has undergone compliance with the National Environmental Policy Act (NEPA3) and/or Wisconsin Environmental Policy Act (WEPA4) and completed assessments with the Environmental Impact Statement (EIS) or Environmental Assessment (EA). With smaller-scale projects, contractors and owners may not have the means to conduct such an extensive pre-construction review, however. But with the proper preparation, contractors and owners might be able to identify these issues before they occur – or at least be prepared to “expect the unexpected.”

    At the Pre-bidding or Proposal and Pre-construction Stage

    As environmental costs can significantly affect the overall costs of construction projects, this is the time period when contractors and owners can attempt to factor in potential environmental costs of the project by determining applicable environmental regulations and requirements.

    It is critical to ask the right questions about the site, to accurately assessing the potential costs and factoring those into the bid, in order to avoid cost-overruns and loss of profits in the future.

    Some questions to ask include:

    • Are there wetlands in or adjacent to the project area?
    • Will a stormwater discharge or wetlands fill permit be necessary, and if so, will this require implementing BMPs or other potential costs?
    • Are there any other sensitive environmental areas near the project site?
    • What is the site’s history? Is the project located on or near any former industrial or manufacturing sites, gas stations, airfields and military bases, or drycleaners and textile manufacturers?

    It is critical to counsel clients to evaluate the site for existing or previous hazardous substances as defined by Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA5), otherwise known as Superfund.

    Also, before construction, the contractor and the construction manager should assign someone to be responsible for environmental compliance before the start of the project.

    The contractor may also be required to develop and implement an Erosion Control Implementation Plan (ECIP6) for the construction site, which outlines the measures that will be taken to prevent and control erosion of sediment from the excavation area, as well as specify the stormwater control and pollution prevention measures.

    Before construction, the prime or general contractor should meet with subcontractors, construction managers or consultants, project managers or engineers, and owners’ representatives to clearly establish roles and responsibilities for, among other things, environmental compliance during the project. This is also an appropriate opportunity to review project permits to ensure that the required environmental permits have been acquired, bearing in mind that there may be applicable federal, state, and even local permits necessary for compliance.

    Also, it is important to point out that some permits, air permits for one example, need to be initiated very early in the pre-construction phase.

    During Construction: Asbestos

    No matter how much time, preparation, and planning has gone into a construction project, problems still arise in the field during construction, and this certainly includes environmental issues.

    One contaminant in particular, asbestos and RACM, is commonly found in construction projects, predominantly in residential remodels and commercial-industrial remodels and demolitions, and specifically in structures constructed before the mid-1980s. Asbestos can cause serious health issues for employees and users from airborne particle exposure to the respiratory system.

    Therefore, employees should wear appropriate personal protective equipment when performing demolition work, and if asbestos containing materials are suspected or encountered during the project, the contractor should take care to avoid releasing those particles and materials into the environment, particularly the interior environment. The contractor may need to engage a certified asbestos contractor, or Environmental Health and Safety (EHS) consultant, to assist with the abatement of such materials. The Wisconsin Department of Health Services maintains a list of certified asbestos contractors and consultants on its website.

    During Construction: Releases and Spills

    Contractors may also be the cause of contaminant releases or hazardous substance spills into the environment, which are governed in Wisconsin under the Spills Law.7

    Spills or releases generally fall into two broad categories: traditional spills that are observed and require an immediate response, and those that are discovered through soil or groundwater sampling analysis.

    Traditional spills must immediately reported to the Wisconsin DNR using the 24-hour Wisconsin Spills Hotline at (800) 943-0003. Reasons to call include if:

    • there is an impact to human health requiring evacuation;8
    • there is an impact to the environment;
    • there is a fire, explosion or safety hazard9;
    • the spill is not immediately cleaned up;10 or
    • the spill was more than the certain specified reportable quantities.11

    If a spill is suspected in the soil or groundwater, as in the second scenario, sampling and testing would be conducted to determine whether such a spill has occurred. Such sampling can be conducted under attorney/client privilege, such that results will be kept confidential and allow for a determination on how to proceed based upon results.

    It is also important to note that hazardous substance definitions and classification may be different under federal (RCRA) and state law, so it is important to review federal reporting requirements, found on the EPA’s “List of Lists.”

    Dealing with Dust: Liebhart v. SPX Corporation

    Contractors may also cause releases of dust, including dust containing contaminated material. This scenario occurred in a recent Seventh Circuit case which began in Wisconsin, Liebhart v. SPX Corporation.12

    In this case, two defendants were involved in the demolition of a factory previously owned by the principal defendants, SPX Corporation. This former factory, which dated back to the 1920s, used Polychlorinated Biphenyls (PCBs) in the manufacturing of electric power transformers. PCBs were subsequently spread to the Liebharts’ properties adjacent to the factory, allegedly during the demolition of the factory.

    This release occurred despite the defendants having submitted to the EPA a plan to control the cleanup of PCB-containing materials13 as is required under federal regulations.14 The plaintiffs sought injunctive relief under both the Resource Conservation and Recovery Act (RCRA)15 and the Toxic Substances Control Act (TSCA)16 to stop further contamination and enforce the cleanup, in addition to several claims under state law.17

    The primary question on appeal became how “much harm a plaintiff must prove to make out a prima facie violation of RCRA”18 in order to “determine whether alleged contamination ‘may present an imminent and substantial endangerment to health.’” 19 The court, comparing decisions from Third, Fifth, and Ninth U.S. Circuits, stated that “RCRA does not require that plaintiffs demonstrate contamination above some agency-derived threshold level of concentration. It merely requires that they show that contaminants on the property are seriously dangerous to human health (or will be, given prolonged exposure over time).” 20

    The court therefore held that the plaintiffs must only “show that there are PCBs currently on the property that have the potential to substantially threaten their health at some point in the future if they continue to occupy the premises and prolong their exposure,” 21 lowering the threshold for harm that had been established in the lower court decision.

    In summary, contractors should be aware that they may face liability for even moderate releases of hazardous substances, even where there is only a potential for future harm resulting from the release, and should adjust their dust, erosion, and stormwater control plans accordingly.

    In addition, it is important that these plans are communicated to employees to ensure that they are followed, and that, if unintended releases do occur, contractors are proactive in responding to any potential releases to prevent the issue from worsening in the future.

    Plan a Response

    Despite our best planning and engineering efforts in the design phase of a construction project, environmental issues – as with other types of issues – can and do still arise during the construction of a project. Knowing how to respond and being proactive in your response can help save the client time and money, and keep the project on track.

    For further reference, contractors and their advisers can seek online resources for additional information. One helpful website, a collaboration of the U.S. EPA and the Associated General Contractors (AGC), is the Construction Industry Compliance Assistance guide, which provides “plain language explanations of environmental rules for the construction industry.”

    Endnotes

    1 See, generally, Federal Environmental Requirements for Construction, U.S. Environmental Protection Agency.

    2 Liebhart v. SPX Corporation, 917 F.3d 952 (7th Cir., 2019)

    3 42 U.S.C. § 4321, et seq.

    4 Wis. Stat. § 1.11; Wis. Adm. Code Ch. NR 150

    5 42 U.S.C. § 9601, et seq.

    6 Wis. Adm. Code Trans. § 401.04(12); Trans. § 401.08

    7 Wis. Stat. § 292.11; seealso Wis. Adm. Code Chapter NR 706.

    8 Wis. Stat. § 292.01(5).

    9 Wis. Adm. Code NR 706.07(2)(b)(4).

    10 Wis. Adm. Code NR 706.07(2)(b)(3).

    11 Wis. Adm. Code NR 706.07(2)(a)(1-7).

    12 Liebhart at 954-55.

    13 Id. at 955.

    14 40 C.F.R. § 761.61(a)

    15 42 U.S.C. § 6901, et seq.

    16 15 U.S.C. § 2601, et seq.

    17 Liebhart at 955.

    18 Id. at 957.

    19 Id. at 958, citing 42 U.S.C. § 6972(a)(1)(b).

    20 Id. at 959.

    21 Id. at 961.





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