The Nickel Report

The Biden-Harris administration is taking new steps to put some teeth into its emphasis on addressing environmental justice (EJ). Two recent developments are worth noting given the potential impact on projects and communities. 

One, EPA announced on September 24, 2022 that it is launching its new Office of Environmental Justice and External Civil Rights (OEJECR or EJ Office). Establishing the EJ Office on par with other key EPA offices, such as the Office of Air and Radiation, the Office of Enforcement and Compliance Assurance, and the Office of Land and Environmental Management, signals the emphasis that the Biden-Harris administration is placing on EJ.

Two, in August 2022, EPA’s Office of General Counsel (OGC) issued a guidance document entitled Interim Environmental Justice and Civil Rights in Permitting Frequently Asked Questions (EJ FAQs) that outlines EPA’s current views as to how federal, state, and local permitting agencies can meet the requirements of civil rights laws when they are administering environmental permitting requirements. The FAQs document signals greater focus on environmental justice in permitting, even noting that denial of permits based on environmental justice or civil rights concerns may be appropriate in some cases.

NEW EJ OFFICE

EPA is dedicating significant resources to its new EJ Office, which will be nationwide, staffed with over 200 personnel spread across all 10 EPA regional offices, and headquartered in Washington, DC. The EJ Office will have its own Assistant Administrator, who will be a politically appointed leader confirmed by the Senate. EPA announced that the office will focus on:

• Community engagement;
• Managing and disbursing historic levels of grants and technical assistance;
• Interacting externally with state and local governments and federally recognized tribes; and
• Performing internal inter-office work to facilitate the incorporation of EJ into the agency’s programs.

According to agency statements, the EJ Office will also administer technical and financial assistance related to EJ. In particular, the EJ Office will be the new home to the Office of External Civil Rights Compliance (OECRC aka the External Civil Rights Compliance Office (ECRCO)) that was formerly within OGC. OECRC/ECRCO is charged with EPA’s enforcement of federal civil rights laws, including the review of petitions submitted to the agency claiming discrimination under Title VI of the Civil Rights Act of 1964. Four other important offices will also reside within OEJECR: (1) the Office of Policy, Partnerships, and Program Development; (2) the Office of Resource Management and Communications; (3) the Conflict Prevention and Resolution Center; and (4) the Office of Community Support. The EJ Office will have expanded resources. For instance, in addition to other appropriations provided by Congress throughout the fiscal year, in the Inflation Reduction Act passed in August, Congress reportedly has provided over $60 billion for environmental justice priorities.

EJ FAQS GUIDANCE

In August 2022, OGC issued an interim EJ FAQs guidance document that outlines EPA’s current views as to how federal, state, and local permitting agencies should meet the requirements of civil rights laws when they are administering environmental permitting requirements. The EJ FAQs document provides insight into EPA’s analysis under the Civil Rights Act and the agency’s anti-discrimination regulations under which the agency determines whether discrimination has occurred—in other words, it illustrates how EPA will review a permitting authority’s decisions if challenged under Title VI of the Civil Rights Act. In summary, the document is comprised of eighteen FAQs covered over twenty-five pages that address how to consider EJ in permitting decisions and provides insights as to how a federal funding recipient can avoid a finding of discrimination, for instance, where EPA reviews a permitting authority’s action for potential discrimination. Key takeaways are provided below:

• Emphasizes that complying with environmental laws does not guarantee compliance with civil rights laws

At the outset of the EJ FAQs, the agency differentiates between compliance with environmental laws and compliance with civil rights laws. According to EPA, a funding “recipient’s compliance with the requirements of federal environmental laws with respect to permitting activities and decisions does not necessarily mean that the recipient is complying with federal civil rights laws. Federal civil rights laws prohibit recipients of federal financial assistance from taking actions that discriminate based on race, color, national origin, disability, age, and sex.” Although this statement would not necessarily create any substantive difference in terms of the recipient governmental entity’s obligations, it does make clear that entities who accept federal funding are “on notice” that they may need to independently establish civil rights compliance.

• Recommends state-level screening for EJ/civil rights concerns

The EJ FAQs document encourages states to conduct routine EJ screening early on in the environmental permitting process. The agency provides a list of best practices for screening for EJ and civil rights concerns that includes the use of EJScreen and review of a permit applicant’s environmental compliance record, and data on health analytics, such as asthma and incidence of low birth weight as evidence of disparate impacts, among other indicators of EJ/civil rights concerns.

• Endorses consideration of cumulative impacts

The EJ FAQs document implies that funding recipients should consider cumulative impacts of chemical and non-chemical stressors that would result from a permitting decision in the same way that EPA would when the agency evaluates whether an adverse impact is caused by a permitting decision. Examples of non-chemical stressors would be extreme weather events, noise, or psychosocial factors, such as poor diet, smoking, and illicit drug use. This is consistent with direct communications from top EPA officials to state regulators regarding air permitting that have “recommend[ed] a cumulative analysis of the projected emissions from all emission units at the proposed facility, fugitive emissions from the proposed facility, and emissions from nearby industrial facilities, to provide a more complete assessment of the ambient air impacts of the proposed facility on this community.”

Despite the fact that EPA’s OGC has promised a much-anticipated guidance that will “provide clarity internally and externally about the investigative and legal standards that are applied to external civil rights claims, including those concerning . . . how cumulative impacts will be evaluated” related to Title VI, the EJ FAQs document makes no mention of an upcoming guidance. Instead, EPA directs funding recipients to aspects of the National Environmental Policy Act (NEPA) cumulative impacts guidance that is specific to major federal actions. In addition, rather than the “cumulative effects” definition found in NEPA regulations, EPA points to a “cumulative impacts” definition put out by its Office of Research and Development in a draft white paper in January 2022. That definition considers “total burden – positive, neutral, or negative – from chemical and non-chemical stressors and their interactions” both temporary and over time to help determine community vulnerability or resilience. OGC’s Title VI cumulative impacts guidance, if released, would address the “consideration of cumulative impacts in the disparate impact and, where relevant, the disparate treatment analyses” and be issued in coordination with OECRC/ECRCO, according to prior agency statements.

• Notes potential for permit denial: FAQ #13 and FAQ #14

Two references in the EJ FAQs document to “permit denial” have made headlines. First is FAQ #13 addressing disparate impact and second is FAQ #14, which provides examples of mitigation measures.

FAQ #13 addresses a permit decision that will have “disparate impacts” on the basis of race, color, or national origin and reads:

If there are no mitigation measures the permitting authority can take, whether within or outside the permitting program, that can address the disparate impacts, and there is no legally sufficient justification for the disparate impacts, denial of the permit may be the only way to avoid a Title VI violation. Whether denial of a permit is required to avoid a Title VI violation is a fact-specific determination that would take into account an array of circumstances, including whether the facility will have an unjustified racially disproportionate impact, as well as the less discriminatory alternatives available.

As a preface to the mitigation measures that it goes on to discuss, FAQ #14 reads:

[A]s discussed in FAQ #13, if there are no mitigation measures that can address the unjustified disparate impacts, denial of the permit may be the only means of avoiding a Title VI violation. This will be a fact-specific determination.

FAQs #13 and #14 reflect EPA’s discriminatory effect (i.e., disparate impact) analysis under section 602 of Title VI of the Civil Rights laid out in EPA’s 2017 Toolkit that was issued by ECRCO during the final hours of the Obama Administration and is referenced in the EJ FAQs document. According to the Toolkit, under both the Civil Rights Act and EPA’s non-discrimination regulations, a recipient potentially could overcome an unavoidable disparate impact through the demonstration of a substantial legitimate interest; however, even if a recipient demonstrates a “substantial legitimate justification,” the challenged policy or decision will nevertheless violate federal civil rights laws if the evidence shows that “less discriminatory alternatives” exist. The Toolkit included not renewing an existing permit or modifying permit operating conditions as potential “less discriminatory alternatives” that could avoid a Title VI violation for discrimination based on disparate impact. This is reflected in EPA’s FAQ #14, which reiterates that denial of a permit may be the only way to avoid a Title VI violation where no mitigation measures can address disparate impact.

We note that state and local agencies are bound by the limitations of their own laws, regulations, and permitting requirements, as well as existing federal permitting requirements that may impact the ability to deny a permit based on civil rights or EJ grounds or to require more of a cumulative effects analysis.

• Provides examples of measures to mitigate adverse and disproportionate impacts

Continuous compliance monitoring is the first on the list of examples of measures to mitigate adverse and disproportionate impacts. Others include public-facing websites with compliance information and emissions data and community-driven monitoring. Companies can expect that, in many cases, permitting authorities would impose these measures through additional permit terms in areas where a disparate impact would result without regard to discriminatory intent. Notably, FAQ #13 indicates that such mitigation measures can be “within or outside of the permitting program.” This highlights the variation between constraints of some environmental laws in comparison to civil rights laws. While certain offsets or other mitigation efforts outside of the permitting program could help overcome the actual permit denial due to disparate impacts under civil rights laws, environmental statutes may prevent a permitting authority from considering the very same offsets to meet air or water quality standards.

• Information on community engagement and available resources

The EJ FAQs document outlines over a dozen steps that funding recipients could implement to enhance community engagement and public participation and includes a long list of additional resource documents on EJ, civil rights, and tribal consultation. The EPA FAQs document is one of a growing number of EJ-related releases over the last 18 months. Some releases have been notably more substantive than others, and the EJ FAQs document is one of them, as was EPA’s Legal Tools to Advance Environmental Justice (EJ Legal Tools) that was issued back in May 2022. Also released by EPA’s OGC, EJ Legal Tools is a public-facing comprehensive legal review, cataloguing EPA’s authority to integrate EJ and equity into decision making or otherwise consider EJ under the various environmental laws and programs that it administers.

* * *

EPA has titled the EJ FAQs document as an “interim” document because the agency anticipates future updates to incorporate best practices over time. The EJ FAQs document comes nearly a year after state requests for EPA to provide written and specific guidance on how states should be addressing EJ considerations in permitting and enforcement proceedings. It also follows shortly after New Jersey proposed its implementing regulations for the state’s Environmental Justice Law. New Jersey’s proposed new rules would require denial of a permit application if “control measures proposed by the applicant cannot avoid a disproportionate impact . . . unless the applicant demonstrates that the proposed facility will serve a compelling public interest in the overburdened community.” Under the New Jersey proposed rule, while employment or tax benefits would not constitute a “compelling public interest,” a facility that would serve an essential environmental, health, or safety need of an overburdened community could be considered a “compelling public interest.”

While some may argue that the EJ FAQs document does not represent a shift in agency policy in that they harken back to a 2017 Toolkit, this administration’s EJ emphasis and associated activity mean that the statements may have more practical effect, even if they are not “new,” and state and local governments that are implementing EPA permitting programs will need to take note of them to ensure continued funding and avoid  challenges to the permits they issue.