CAUTION ! SUPERFUND IS NOT DEAD

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CAUTION !SUPERFUND IS NOT DEAD

• ISRI's
• SREA Reasonable Care Compliance Program

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1990

• Recyclers were sued as Potentially Responsible
  Parties (PRPs).
• Superfund is the U.S. environmental law
  officially known as the Comprehensive
  Environmental Response, Compensation, and
  Liability Act ("CERCLA"). Superfund was enacted
  in 1980 as a result of the Love Canal disaster.
  It was created to protect people from hazardous
  waste sites.

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1990

• Lawsuits were filed pursuant to CERCLA Section
  107(a)(3) which read in part
• any person who by contract, agreement, or
  otherwise arranged for disposal or treatment of
  hazardous substances . . .
• these terms were not defined in CERCLA, but were
  defined in the Resource Conservation and Recovery
  Act ("RCRA").

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RCRA

• RCRA defined disposal and treatment in the
  context of waste.
• RCRA had two central purposes
• to reduce the amount of waste going to landfills
• Congress felt that recycling was the best means
  to achieve that goal.
• to thoroughly regulate the remaining waste

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Lead-acid Battery Lawsuits

• Scrap shippers argued that recyclables were
  products, not waste.
• The Courts held that lead-acid batteries were
  'waste-like'.
• Scrap shippers found themselves in extremely
  costly lawsuits and very expensive cleanups under
  CERCLA's joint and several liability provision.

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It Just Didn't Make Any Sense

• It seemed incomprehensible that Congress would
  acknowledge in RCRA the importance of recycling,
  but then cut off our hands in CERCLA for doing
  just that - recycling.
• Scrap shippers were going out of business and the
  industry was in jeopardy. It could not withstand
  the onslaught much longer.

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ISRI Fights Back

• RCRA reauthorization was not about to happen.
• ISRI had to get a clear mandate from Congress
  that would grant us an exemption from
  CERCLA/Superfund liability.
• Our industry was in jeopardy and had never faced
  such a crisis!

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Our Argument

• Liability against scrap shippers was an
  unintended consequence of CERCLA.
• Congress did not intend to harm legitimate
  recyclers.
• Scrap (secondary feedstocks) were now at a
  disadvantage compared to virgin ores (primary
  feedstocks).
• Our argument was valid and supported by the
  environmental community.

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Our Plan

• A grass roots implementation team ("GRIP") would
  eventually be formed.
• A grass roots effort of this magnitude had never
  been undertaken before by ISIS or ISRI. All 50
  states would be canvassed.
• Fly-ins would be arranged for Capitol Hill visits
  to our Senators and Representatives.
• We were finding bi-partisan champions for our
  cause.

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ISRIs Congressional Efforts

• 1994 ISRIs added language to Superfund Act of
  1994 bill, but bill unsuccessful
• 1995 Congress began to understand our Superfund
  issue, but S-607 and H-820 blocked by other
  industries.
• 1998 Added public relation effort (newspaper
  editorials) for S-2180 and H-2733, but effort
  insufficient

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ISRIs Congressional Efforts (contd)

• 1999 ISRI Senate Champions, Lott (R) and
  Daschle (D), introduce S-1528, saying
• "Both the environmental and the business
  communities agree that America's public policy
  should expand the use and reuse of recycled scrap
  materials. It is unfortunate that Superfund
  actually discourages legitimate recycling and
  this unintended consequence must be addressed."
  BUT,
• In order for recyclers to be relieved of
  Superfund liability, they must act in an
  environmentally sound manner and must sell their
  product to manufacturers with environmentally
  responsible business practices."

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ISRIs Congressional Efforts Finally Work . . .

• 1999 We win!
• S-1528 was incorporated into a larger omnibus
  spending bill.
• At the very last moment, the Superfund Recycling
  Equity Act ("SREA") is passed.
• President Clinton signs SREA into law on November
  29, 1999.
• Our almost decade-long struggle had finally
  proved successful!

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. . . But, With A Price . . .

• Our victory did not result in a carte-blanche
  exemption from liability.
• The exemption is couched in language that
  required further compliance on our part.
• The lead article in the January 21,2000 issue of
  the ISRI Digest read and warned
• "Superfund Relief Is Not Automatic - Compliance
  Requirements Are In Effect.

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The Reason For This Presentation

• We must not forget how terrible Superfund
  liability was.
• We must not forget the almost decade long
  struggle to finally persevere.
• We must not think that the industrys work is
  done.

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Reasonable Care Obligation

• In order to be afforded relief from Superfund
  liability, scrap shippers must meet certain
  conditions, such as
• The material shipped met the definition of a
  "recycled material".
• The transaction met the conditions for "arranging
  for recycling".
• Did the shipper take reasonable care to determine
  the environmental compliance status, as it
  applies to the recyclable material, of the
  facility to which the recyclable material was
  sent.

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Reasonable Care (cont.)

• This presentation is concerned about 3.
• SREA does not ask, but rather requires that
• "The recycler must exercise reasonable care to
  determine that the consuming facility was in
  compliance with substantive provisions of any
  federal, state, or local environmental law or
  regulation, compliance order, or decree
  applicable to the direct handling, processing,
  reclamation, storage, or other management
  activities associated with the recyclable
  material.

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What is meant by Reasonable Care?

• The statute itself does not specifically outline
  what it means.
• The legislative history inserted into the
  Congressional Record provides some authoritative
  guidance.
• Based on that guidance, reasonable care
  principles have been developed for the recycling
  industry for protection under SREA.

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What is meant by Reasonable Care?(contd)

• However, even the legislative history does not
  specifically identify the environmental
  compliance records which should be reviewed the
  frequency of such review, or the consuming
  processes that are germane to the scope of
  inquiry.
• The concern over the reasonable care standard
  post-enactment of SREA was raised to EPA by
  various stakeholders in July/2000.

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EPA Guidance

• As of this date, EPA has not released its
  official guidance on reasonable care.

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Due Diligence

• Researching environmental databases is a very
  difficult and time consuming task.
• In 2002 many ISRI members requested assistance in
  compiling such searches.
• In February/2003 an ISRI task force was convened
  to consider whether RFPs should be sent to third
  parties to conduct such searches.

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The Reports onConsuming Facilities

• In 2004, ISRI established the initial SREA
  Reasonable Care Compliance Program to provide
  facility reports for ISRI members.
• For todays SREA Program, ISRI has retained the
  services of URS Corp. to conduct the database
  searches in order to satisfy the requirement of
  making inquiry to the appropriate environmental
  agencies.

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The SREA Program

• SREA Reports are ISRI member benefit.
• Highly discounted qualifying reports on limited
  number of facilities (1,400)
• 15 per qualifying report (500 retail!)
• 300 per non-qualifying report (wholesale)
• Report ordering mid-March through April each year
• New reports automatically e-mailed following Fall
• Previous years reports available on-line for 12
  each.
• Current years reports available on-line for 15
  each.

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The SREA Program (cont.)

• Ordering reports is easy!
• Go to www.isri.org/srea to reserve your reports.

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The SREA Program (cont.)

• Simply check off facilities for which you need
  reports from existing facility list.
• Add names of desired facilities not on the list.
• Review your order.
• Submit your order.

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The SREA Program (cont.)
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A Final Reminder

• Superfund was a nightmare.
• Defending Superfund is hugely expensive.
• Superfund imposes joint several liability which
  means you could be responsible for the entire
  cost to cleanup a Superfund site which could
  force you out of business.
• Please Protect Yourself - Order Your Reports Now!

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SREA Program Contacts

• Danielle Waterfield, Director, Gov't Relations
• daniellewaterfield_at_isri.org, 202-662-8516
• Edie Burkhead, Admin. Assistant, GR
• edieburkhead_at_isri.org, 202-662-8508