FMGT 4710

Financial analysis for facilities managers II

Richard Granados
Professor Lisa Bradley
April 4 2019
Homework: Environmental law questions.

1: What types of potential punishment a company can face if an environmental accident

occurs?

The constitution, by and large, omits environmental law. As such, their regulations and
penalties derive from statutes, administrative laws and common law. These laws developed
through time to address societal developments with little to no precedents such as the
industrial revolution and also changes to the land, air and sea. All this results in punishments of
environmental law, of which there are many, are varied depending on the state you stand
upon. In fact, the law here is nebulous and contextualized to the extent where generalizing a
penalty is difficult to define. Combined with the fact that environmental crimes often lack direct
perpetrators, with negligence or incompetence superseding criminal intent in cases where the
proximate cause was determined to result from a pollutant (no stabbings or shootings), there is
always just enough room for plausible deniability afforded to those who wish it.

Nonetheless, if compliance statutes are violated, one is liable for civil and criminal penalties. To
make matters worse, the state can give you a superlien; a lien that preempts the rest and must
be remediated through negotiations with the EPA or any regulatory body with jurisdiction.
Again, civil and criminal charges are to be anticipated and be taken into consideration when
these laws are violated.

2: What type of environment liability is the facility manager typically exposed to?

On the whole, a facility manager must be up-to-date and be expected to be aware of law
changes in regards to newly named pollutants.

3: Name three common environmental violations

1. Mismanagement of hazardous waste, such as storage, disposal record keeping and

keeping forgotten storage containers.
2. Improper renovation, including the improper handling of lead-based paint (LBP)
3. Not checking to see if state environmental regulations are stricter than federal
regulations

4: If a state law has a stricter standard for disposing hazardous waste than the federal statues,
which law should the facility manager follow? Explain your answer
Although, the rule of thumb is to follow the stricter law, be it federal or state, there are
exceptions to this rule. One need only mark closely if the federal government places a law that
it believes to be so important as to preempt state law (regulations). In this situation, the federal
law is acting as a floor—having stricter regulations than the state law and thus rendering the
state law obsolete. Given that the disposal of hazardous waste is one with its fair share of
precedents, it’s logical to conclude that the matter of this question has been settled by
common law. As such, it’s best if the facility manager adheres to the federal statutes. The rule
of thumb does indeed imply here.

5. What are the three categories of environmental laws?

The trifecta of environmental laws may be segmented to the following categories: prevention,
environmental waste clean-up, and compliance.

Prevention laws are preemptive measures and regulations meant to prevent unneeded
pollution.

Environmental waste clean-up laws are those that regulate pollution clean-up. Also known as
remediation, it tries to punish those who don’t clean up after themselves with the goal to place
liability on those who don’t dispose their waste up to code.

Compliance laws make up the bulk of environmental laws as they focus on ongoing pollution
and target those who create waste and contamination through their regular operations (a big
HVAC company that permits their workers to release Freon to the atmosphere). These laws
carry civil and criminal penalties because they often visibly affect the health and well-being of
ordinary citizens.

6: In your opinion, which type of environmental law is most effective? Explain your answer.

The optimist within every honest soul whispers that prevention law would be the most
effective as it endeavors to nip the problem in the bud. However, prevention could only go so
far without impeding on the rights of companies and individuals to make a profit without being
strangled by what they see as excessive regulation. In addition, prevention laws concern
themselves more with hidden costs and avoiding future cost hazards.
These sap the interest of the general public and causes a loss of perspective. Therefore, I must
say that I believe compliance laws are more effective as they are more direct and capture the
public’s imagination/attention to the point in which it shapes public practices and attitudes
towards pollution.
It must be said, regardless, that prevention provides a perhaps more effective systematic
approach towards reducing pollution but compliance is more radical when it comes to enacting
new laws as it is akin to a judge setting a new precedent in common law. It also better adapts to
changing developments.
7: Is the concept of holding all potentially responsible parties financially responsible for
hazardous waste clean-up reasonable? Explain your answer.

it is better that potentially responsible parties be held financially responsible to the degree of
their culpability and their distance to the actual cause of the crime. In other words, there
should be a scale of payment, with those who played a greater role paying a greater share. Even
parties who were hardly linked to the pollution should be held financially responsible. However,
the sum should be insignificant in this case and nominal in nature.

8: Illustrate the overlap between the Clean Water Act, RECRA and CERCLA.

The older statutes such as CERCLA and SDWA were remediation laws and reactive in nature;
who’s paying for this? Etc. All these acts were enacted in the mid 70’s with RECRA being more
detailed than the former two besides belonging to compliance law. The first two are about
holding people liable for their messes

9. What is the “Superfund”

The superfund is the CERCLA act and it is a law that enables the EPA (or its state equivalents) to
hold partially responsible parties (PRP) financially accountable for the remediation of their
messes. If no PRP cannot be reasonably be held liable, the superfund raises funds from the
taxpayers. This is how it is theoretically supposed to work but the reality of the corporate world
(and backlogs) make it difficult for the superfund to be fully enforced within its original
intention.

10. In your opinion, should environmental laws be more punishment or encouragement?

This question should be addressed with some care as the line between criminal and civil is not
clearly delineated. For example, if a plastics corporation knowingly allows a river to be
contaminated and people (in a poor country perhaps) use that river without knowing it is being
contaminated and consequently suffer skin lesions, cancer, and other ailments, there should
exist punishments fit for a criminal. The rub is, though, that this is difficult to prove. The
business owner may feign ignorance or find a convenient scapegoat and all persecutory action
may result in a waste of time and resources.
In other words, this answer is relative and contextualized to the situation at hand.
Nonetheless, generally, environmental laws should focus more on encouragement. If one
generation is set in their ways in regards to how they conduct business in their harmful staid
way, then they are a lost cause. The youth should be raised with an awareness that a higher
duty of care should be rewarded and not expected as human nature never sticks for an honor
system for long, no matter what NPR says. That is not cynicism or fatalism but simply the nature
of the beast. Punishment should always have its role but environmental laws often do not
directly harm people in a malicious way so it weakens the case that environmental law should
center more around punishment. Let he who is without sin cast the first stone. I recommend
people look up Chinese legalism to get an idea of how excessive punishments can cause
problems in the society in the long-run.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect
the official policy or position of any agency of the U.S. government. Examples of analysis performed within this
article are only examples. They should not be utilized in real-world analytic products as they are based only on very
limited and dated open source information. Assumptions made within the analysis are not reflective of the position
of any U.S. government entity.