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Phase I Environmental Site Assessments During the COVID-19 Crisis

Waterstone is continuing to perform Phase I Environmental Site Assessments during the COVID-19 crisis to serve our clients in performing due diligence for property transactions. This includes evaluating properties for recognized environmental conditions (REC), establishing potential liability for existing contamination, and obtaining owner protections under CERCLA consistent with ASTM Standard E1527-13 – Phase I Environmental Site Assessment Process and US EPA’s All Appropriate Inquiry (AAI).

Certain components of Phase I’s may involve social interaction with others, most notably site inspections, interviews, and file reviews. For these tasks, new safety protocols have been implemented to ensure the safety of Waterstone staff, our clients, and the public at large. This includes eliminating or limiting in-person meetings, implementing physical distancing measures, maintaining vigilant personal hygiene measures, and wearing personal protective equipment (PPE). The following are some specifics for key aspects of the Phase I investigation.

Site Inspections. Property inspections are an important part of the overall Phase I investigative process and need to be performed in a competent and complete manner. Project planning will ensure that site inspections can be performed in a safe manner consistent with current COVID-19 directives from federal, State and local agencies. Waterstone will continue to perform site inspections but will be eliminating personal interactions as much as possible; maintaining proper social distancing in the presence of other individuals; using hand sanitizer and disinfectant wipes; wearing masks and gloves; and making special arrangements for facilities at which large numbers of employees continue to work (e.g. performing inspections during off-hours).

Interviews. Interviews with past and present owners, key site managers, occupants, State and/or local government officials, or other personnel familiar with the site history and facility operations are another key component of the Phase I process (see ASTM E1527-13 Sections 10 and 11). Interviews provide vital information regarding the site history, operations, chemical usage and waste management, features of concern (e.g. underground tanks), past releases, and related environmental matters. They comprise one of several relevant lines of evidence as part of the Phase I process to identify RECs. Individuals are also questioned about helpful documents, such as environmental site assessment reports and permits, and asked to provide copies of such documents. Waterstone will avoid in-person interviews to the extent possible, unless that person is also the individual who will guide the environmental professional’s inspection of the facility. In this case, Waterstone will implement the same precautions noted above such as social distancing, PPE, and personal hygiene. Phone interviews or written interviews via electronic media will be the primary methods of communication.

File Reviews. Although most agency offices are currently closed to visitors, many records can be requested and obtained electronically from the agencies without the need for in-person visits. In addition, most of the modern RWQCB and DTSC records are stored on the GeoTracker and Envirostor databases, respectively. Accessing and downloading these records is fast and efficient. The current ASTM standard also allows the environmental professionals, as an alternative, to deem certain file reviews as unnecessary by providing a logical rationale. An example of this kind of rationale is that the files are not reasonably ascertainable (not publicly available, or practically reviewable or not available for reasonable cost within a reasonable time frame). In addition, the new ASTM standard allows environmental professionals to review files/records from alternative sources such as on-site records, user-provided records, records from local government agencies, interviews with regulatory officials, etc. which may be useful under the current circumstances.

Data Gaps. Incorporated into the ASTM standard in 2005, a data gap is a lack of or inability to obtain information required by this practice despite good faith efforts by the environmental professional to gather such information. Data gaps may result from incompleteness in any of the activities required by this practice, including, but not limited to site reconnaissance (for example, an inability to conduct the site visit), and interviews (for example, an inability to interview the key site manager, regulatory officials, etc.). During the COVID-19 crisis there will be a greater likelihood for data gaps. The questions are “what to do with them and are they significant?” If there is a significant data gap, the report must comment on the impact of the data gap on the ability of the environmental professional to identify RECs. Data gaps that do not affect the ability of the environmental professional to identify RECs are largely inconsequential. However, data gaps that impact identifying RECs are unacceptable. The EPA’s AAI rule requires, to qualify for the CERCLA defenses, the report to include an opinion whether the inquiry has identified conditions indicative of a release or threatened release of hazardous substances. If the report does not accomplish this goal, then the purchaser has not qualified for the CERCLA defenses and the entire exercise is futile. So, while data gaps may exist, the environmental professional must identify them and state that they have not impacted his ability to identify RECs.

Reasonably Ascertainable Information. Per ASTM, our Phase Is during this time will be performed at an appropriate environmental professional level consistent with good commercial and customary practice with the goal of reducing uncertainties about unknown conditions that might result from additional information that is unavailable. The current ASTM standard anticipates that not all Phase Is will be done exactly in the same manner. Section 3.2.77 of the ASTM standard defines “reasonably ascertainable” as information that is (1) publicly available, (2) obtainable from its source within reasonable time and cost constraints, and (3) practically reviewable. During the current COVID-19 pandemic, all three of the constraints come into play and must be balanced with the available information. All Waterstone-prepared Phase Is will be reviewed by principals in the company to make sure that they meet the ASTM and AAI standards. In the rare event that the lack of documents and information leads to what would be considered a significant “data failure” or “data gap”, Waterstone will advise the client immediately and recommend how to best resolve the issue and meet the project goals.


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