Coal barge on a river

Liability for Pollutants and Toxic Materials

Things just got slightly more complicated for companies that produce toxic or potentially harmful waste. A debate over toxic selenium released by coal mines in Appalachia has been heard and ruled on by the Fourth Circuit Court of Appeals in Virginia, and the court has ruled that claiming ignorance about a toxin is not enough to shield a company from being forced to take responsibility for it once it’s released into the environment.

The toxin in question is selenium, a by-product of coal mining, and a pollutant found in rivers throughout the Appalachian coal mining region.

The case was brought against A&G Coal which was accused of releasing selenium into area rivers in violation of the Clean Water Act. A&G’s defense – that it was unaware of the fact that it was discharging (or may be in the future) selenium at the time of filing its National Pollutant Discharge Elimination System (NPDES) application with the EPA – failed.

The case against A&G was open-and-shut to a certain degree, reports Mondaq – A&G hadn’t answered the question about selenium on the application at all – but the court’s ruling reveals that claiming ignorance about the presence of toxins or other things harmful to the environment may no longer be a defense tactic any company should risk.

Responsible manufacturing

So, how can a company keep up with compliance? In the case against A&G, there are tables and lists of hundreds of compounds that take up three pages of a two-column document (you can see them here.) Lab testing and other professional services are required just to identify the potential violations, and making contingency plans for all of them can be prohibitive to business.

On the other hand, groups like the Southern Appalachian Mountain Stewards, which brought the suit against A&G, will continue to partner with other regional and national groups to battle against pollution, particularly as issues like fracking gain additional publicity.

How small and mid-sized businesses can meet compliance standards

A&G is a giant in the coal industry, with the resources to fight court battles like this one, but what do smaller businesses do to ensure compliance and mitigate issues when they arise? One key strategy is to work closely with the EPA (and/or other regulation agencies)  to begin with. If your company might in any way impact the environment, it’s best to hire the right contractors or staff to help you maintain compliance and work with the EPA – and any other regional, state, or federal entities that have regulatory oversight – to understand what you need to do to maintain compliance. The EPA offers compliance assistance as well as incentives for companies who need help paying for upgrades and improvements.

You are much better off working with environmental agencies on compliance than battling them in court.

It’s always a good idea to check with your insurance provider to make sure you have coverage in case you’re caught on a violation, particularly when violations can be for something you’ve never considered before, or the result of a natural disaster – for example, if a fire, tornado, or earthquake causes a spill or seepage.

If you feel your insurance is inadequate, that your deductibles are prohibitively high, or if you find you can’t purchase the kind of insurance you need on the open market, then consider a captive insurance solution. Contact us if you’d like to find out more about how a captive can help in this situation.