52-1 Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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11• Administrative Law

• The Federal Trade Commission Act and Consumer Protection Laws

• Antitrust: The Sherman Act• The Clayton Act,

The Robinson-Patman Act, and Antitrust Exemptions and Immunities

• Employment Law• Environmental Regulation

Regulation of Business

PART

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Environmental Regulation

PA ET RHC 52

Every human has a fundamental right to an environment of quality that permits a life of dignity and well-being.

United Nations Conference on the Human Environment

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Learning Objectives

• Explain when an environmental impact statement must be prepared and the information it must include

• Discuss major provisions of the: Clean Air Act, Clean Water Act, and hazardous waste laws

• Describe the impact global climate change may have on business

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Agency Enforcement

• Environmental Protection Agency, Dept. of Justice (DOJ), and Occupational Safety & Health Admin. (OSHA) work together to implement & enforce law– Agencies issue regulations pursuant to

Administrative Procedure Act to support and implement federal laws

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Definition of Pollution

• The EPA defines pollution as any substance in the environment that endangers human welfare

• Toxic substances in pollutants linked to:

• Carcinogenesis• Mutagenesis• Teratogenesis• Behavior

disordersBald eagle faced extinction due

to mutagenic effect of DDT

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State & Tribal Regulation

• States and Tribes may enact laws to regulate the environment within their jurisdiction– State laws implemented by state agencies– State law may not conflict with federal law

Muscogee Nation Tribal Police Officer

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National Environmental Policy Act

• NEPA does not deal with pollution control– Applies only to government agencies

when actions are planned and subject to federal approval of permits, loan guarantees, federal loans or insurance, or other federal involvement

• Requires federal agencies to prepare an environmental impact statement (EIS) for major Federal actions significantly affecting quality of human environment

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The EIS

• An Environmental Impact Statement must analyze the:– Impact of proposed action on the

environment– Any expected adverse effects of the action– Practical and feasible alternative methods– Any irreversible effects the action might

generate

• See: EISs With Open Comment/Wait Period

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• Goal of the Clean Air Act is to improve National Ambient Air Quality through standards (NAAQS)

• Focus of the law is controlling pollution from mobile sources and stationary sources by issuing permits to polluters

• Act enforced by agency action and citizen suits against polluters who fail to obtain a permit or violate permit limitations

Clean Air Act

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• State environmental agencies issue permits to companies that emit pollutants– Permits specify type of

pollutants allowed and amount for each type

– New sources treated more stringently than older facilities

Clean Air Act Implementation

Pulp and paper mill; point source

pollution

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Global Climate Change

• Clean Air Act specifically supports U.S. obligations under the Montreal Protocol, an international agreement to reduce air pollution and ozone-depleting substances

• U.S. signed the Kyoto Protocol (next step after the Montreal Protocol of the Convention on Global Warming ), but has not yet ratified

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Clean Water Act

• Goals:– Ensure that navigable

water is safe for drinking, fish & wildlife protection, and recreational use

– Eliminate or limit discharge of pollutants into coastal and inland waterways

Point source pollution

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NPDES Permit Program

• Every industrial or municipal facility must apply for a National Pollutant Discharge Elimination System (NPDES) permit to discharge pollutants into inland waterways or oceans– Total Maximum Daily Loads (TMDLs)

• A state environmental agency issues NPDES permits based on state determinations about the quality of specific water bodies

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Violating Water-Related Laws

• Federal and state environmental agencies may enforce the Clean Water Act and related programs with civil fines and/or criminal penalties, including prison for those who knowingly violate law

• Citizens also may file suits to remediate or compensate for environmental harm

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Wetlands

• Section 404 of the Clean Water Act (CWA) protects wetlands by requiring a permit from the Army Corps of Engineers before dredged or fill material may be discharged into waters of the United States

Endangered green pitcher plant found in

some southern wetlands

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Liability for Oil Spills

• 1989 Exxon Valdez disaster prompted the Oil Pollution Prevention, Response, Liability and Compensation Act of 1990

• Spill-related lawsuits consolidated into Exxon Shipping Co. v. Baker, reaching U.S. Supreme Court in 2008– Issues: were compensatory damages

preempted by the Clean Water Act and was punitive damages award excessive as a matter of law

– Ruling: no preemption, but case remanded to remit the punitive damages award

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Liability for Oil Spills

• The 2010 BP Deepwater Horizon oil rig explosion prompted a new look at current oil pollution and offshore drilling regulations– The 1989 Exxon Valdez disaster still impacts the

Alaskan coast

Oil-soaked brown

pelicans and Kemp’s

Ridley Sea Turtle await cleanup and rehabilitation

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Resource Conservation and Recovery Act

• RCRA authorizes EPA to regulate transport, storage, monitoring, treatment, and disposal of solid and hazardous wastes – Tracking from creation of waste through

disposal or treatment (cradle to grave)

• Any person who fails to follow regulations strictly violates RCRA

Toxic waste, bankrupt company

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CERCLA

• Comprehensive Environmental Response, Compensation, and Liability Act authorizes EPA to ensure the clean-up and remediation of hazardous waste sites

• Also authorizes EPA to assign liability for clean-up costs to any (or all) potentially responsible party (PRP)– Generators of hazardous substances, current

or former owners or operators of facility, arrangers or transporters for treatment or disposal of hazardous substances

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Pesticide Regulation

• The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) regulates use of pest control chemicals in process of food growth through food packaging, to minimize presence in consumable foods

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Toxic Substances Control Act

• The Toxic Substances Control Act (TSCA) requires anyone planning to sell or market chemicals to first determine effect on human health and the environment

• Gives EPA authority to track, investigate, or ban industrial chemicals currently produced or imported into U.S.

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Conservation Efforts

• Several laws, such as the Endangered Species Act, attempt to identify, list, and protect threatened or endangered species– See U.S. Fish & Wildlife Service webpage– 588 species of U.S. animals are listed and

794 species of U.S. plants are listed as of Jan. 2012

• The ESA provides for habitat recovery plans and species recovery plans

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International Wildlife Law

• The Convention on International Trade in Endangered Species (CITES) prohibits trade in threatened and endangered species, whether animal or plants, or parts of animals or plants

Illegal wildlife parts and products

confiscated by U.S. agents

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Environmental Management

• Partly because of the regulatory web and partly as corporate social responsibility, many companies implement an EMS or environmental management system

• Types of EMS systems include ISO 14001, Responsible Care, and Smart Wood

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Thought Question

• Given technological improvements in alternative energy (wind or solar power, biofuels), does a company have a responsibility to use the best available technology?

Anaerobic bioreactors for sludge digestion and methane production in

Kiel, Germany