NJ Lawyers Raise Concerns About Transparency of LSRP Program

July 20th, 2012

On May 7, 2012, the New Jersey Site Remediation Reform Act, N.J.S.A. 58:10C-1 et seq. (SRRA) became fully effective. With limited exceptions, all site remediation projects in the state of New Jersey regardless of when work began must proceed under the supervision of a Licensed Site Remediation Professional (LSRP) and without New Jersey Department of Environmental Protection (NJDEP) approval. Previously, parties remediating sites under NJDEP supervision could opt-into the LSRP program while new remediation projects were required to proceed with LSRPs. The voluntary cleanup program or Memoranda of Agreement (MOA) program has been terminated.

Amendments to several other Site Remediation Programs became effective on May 7, 2012 to reflect the LSRP program including the Underground Storage Tank rules, the Industrial Site Recovery Act Rules, and the Remediation Standards. In addition, repeal of the NJDEP Technical Requirements for Site Remediation (Tech Regs) for cleanups became effective on this date. A copy of the complete adoption document is available here.

The LSRP program does not apply to certain types of site remediation, including the unregulated heating oil tank cleanups that are specifically exempted by SRRA, certain Federal-lead cases (RCRA, CERCLA, Department of Defense, Department of Energy), publicly funded remediation projects, and landfill cases that remain under the oversight of the NJDEP’s Solid Waste program.

Some of the key provisions of SRRA included:

  • Established the Site Remediation Professional Licensing Board(Board) and the LSRP program. The Board issues licenses to qualified individuals (LSRPs), who conduct the remediation of sites in New Jersey. Every LSRP is bound by a strict code of ethics. Violation of the code could result in the assessment of penalties and the suspension or revocation of the LSRP’s license.
  •  Imposes an affirmative obligation of responsible parties to remediate discharges for which they would be liable pursuant to the Spill Compensation and Control Act (Spill Act).
  •  Requires NJDEP to establish mandatory remediation timeframes for the completion of key phases of site remediation. These mandatory timeframes are codified in the Administrative Requirements for the Remediation of Contaminated Sites (ARRCS) at N.J.A.C. 7:26C-3.3.
  •  Established the circumstances where NJDEP shall undertake direct oversight (see N.J.S.A. 58:10C-27a), and may undertake direct oversight (see N.J.S.A. 58:10C-27b) of a remediation. Requirements regarding direct NJDEP oversight are codified in the ARRCS at N.J.A.C. 7:26C-14. Additional information about NJDEP direct oversight is available here.
  •  Required NJDEP to establish presumptive remedies for residential development, schools and childcare facilities to ensure that the remedy implemented at the site is protective of human health and safety and of the environment. Additional information regarding presumptive remedies is available here.

The full implementation of SRRA prompted me to think about how due diligence may have changed in other states with licensed professional programs. In particular, I was wondering what impact there might be on information that might be available to the public about site investigations or remediation being performed by LSRPs since documentation that would have ordinarily been in the agency files under a traditional oversight scenario are now only in the files of the licensed professional.

Normally, a consultant or lawyer performing due diligence will file a request to review files under a state freedom of information law. In New Jersey, this is the Open Public Records Act (OPRA). However, the NJ State Attorney General has provided an informal opinion to the Board that an LSRP’s records are not subject to an OPRA request. Therefore, an LSRP would not be considered to be in violation of the LSRP rules if it declines to respond to an OPRA request. Since property owners are usually reluctant to share information about environmental conditions at their properties with potential purchasers much less parties representing current or potential owners of nearby properties, this could informal opinion could have a dramatic impact on due diligence in New Jersey.

I have discussed this issue with a couple of seasoned environmental lawyers in New Jersey whom I have known for several decades and who I greatly respect. They have indicated that there is a growing concern among NJ lawyers that the LSRP program is making it more difficult to obtain copies of sampling and other documentation now that these documents are being held by LSRPs, and not DEP.:

For example, a colleague shared with me that his client noticed cleanup activities at an adjacent site in NJ and wanted to learn what it was about and if his property was contaminated. However, when he filed an OPRA request, he was told there were no relevant records since they were not in possession of LSRP. Obviously, when LSRP submits its remedial action outcome (RAO), the adjacent landowner will be able to review records but seems might be difficult to obtain records prior to that time. However, that will not be much consolation for a prospective purchaser whose due diligence period expires before the RAO is issued.

It appears that the LSRP professional rules do not REQUIRE LSRP to respond to requests of adjoining property owners. Now, I can understand why LRSPs do not want to be in the OPRA business and have to respond to due diligence requests every time a property within the applicable search radius of their site is involved in a transaction. This does raise the question though how one obtains information about adjacent sites if the info is being held by LSRPs.

In most cases, I suspect the LSRP will have to obtain permission from its client to release information that has yet to be provided to the NJDEP. If the client denies permission, how can the prospective purchaser of the adjacent site obtain this information?

Will this impact the ability of the purchaser to satisfy the CERCLA All Appropriate Inquiries (AAI) rule that is required to assert one of the CERCLA landowner liability protections? Will this failure to obtain information about the site have to be identified as a “data gap” under the ASTM E1527? It is true that an owner is required as part of its CERCLA “Continuing Obligations” to cooperate with persons responsible for remediation and this requirement might serve to incentivize an owner to comply with the request. However, a close reading of the BFPP Continuing Obligations suggests that failing to provide information to a prospective purchaser for an adjacent site who might be able to assert the BFPP defense will probably not be a violation that could cause the owner refusing to disclose the information to lose its liability protection.

NJ has its own innocent landowner defense under the Spill Act. Perhaps the AG might consider issuing an opinion that suggests that failing to comply with a request might jeopardize eligibility for the defense.

Another question that comes to mind is how the LSRP program will impact the accuracy of state database record. How current will state databases be updated when documents are retained by LSRP?

There has been at least one instance of LSRP being denied access to collect off-site sampling. In past, DEP might issue a cooperation order to the adjacent property owner. Now, it looks like DEP is no longer in the business of doing so and LSRPs do not have ability to compel access.

I have asked some environmental attorneys who practice in Massachusetts if they have encountered transparency problems with the state LSP program. No one I have spoken to has come across this issue. We discussed why this might be an issue with the NJ LSRP since it was modeled after the Mass LSP program. One suggestion was that perhaps the Mass LSP program requires more deliverables at earlier times than the NJ LSRP program so there may be more records in MADEP files. However, this is just speculation.

Time will tell if this perceived lack of transparency is just a transition issue or if it will indeed prove to be a significant problem. Since other states are considering moving to LSP programs because of budgetary issues, it would seem that this issue requires close monitoring. If you have any experience with this issue in CT or MA, I’d love to hear from you.

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