For the past 30 years, in civil settlements, polluting companies in the United States could be compelled to fund environmentally beneficial projects in order to offset the damage they caused. As part of a 2018 settlement, for example, an Arkansas paper mill agreed to put $1.8 million into projects that curb air pollution, in addition to cleaning up its own pollution and paying $600,000 to the U.S. government.
But the U.S. Department of Justice’s Environment and Natural Resources Division announced an end to these supplemental environmental projects, or SEPs, in a memo last Thursday, claiming that the program violates a federal act requiring money acquired by the government in court to go straight into the U.S. Treasury.
The change built on an August memo from the DOJ that began to erode the program by prohibiting further use of these agreements settlements with state and local governments.
“SEPs have been really good tools to create local and immediate impacts that the courts might not otherwise have been able to grant under the statutes that they’re suing under,” Scott Edwards, Food and Water Justice Director at the environmental organization Food and Water Watch, told Earther. “This the DOJ trying to stop prosecutors from pursuing those kinds of programs. This was a good option for prosecutors, and now the DOJ is basically tying their hands.”
These agreements work to counteract some of the harm polluters cause when they violate federal environmental protections. In 2013, for instance, Edwards’ organization intervened in a state lawsuit against an energy company in Maryland, which found that the company’s coal-fired power plants were violating its permit and the Clean Water Act by dumping harmful nutrients into the Chesapeake Bay.
“During the negotiations we want this facility to install new technology to stop its violations and put in safeguards to make sure they weren’t polluting anymore, ” Edwards said. “And that’s all well and good, that would result in compliance with their permit, but that alone doesn’t address the fact that they’ve already dumped all this nitrogen and phosphorus into the Chesapeake Bay.”
So Food and Water Watch and environmental organizations negotiated a plan to counteract that pollution.
“The result was, they had to commit to do oyster bed restorations to withdraw the excess nitrogen that was in the bay along a stretch of the Potomac River,” said Edwards. “That’s a remedy that the court could not have granted under the strict guidelines of the statute that we were suing under, but we got the company to agree to this SEP to try to give more of a benefit to the Potomac River and to the people who rely on the Potomac River for fishing and the communities that need healthy waterways.”
Under the DOJ’s new rules, that kind of agreement couldn’t have transpired.
These agreements have also appealed to polluters, because they could often negotiate smaller fines if they volunteer to foot the bill for green projects.
“These in-kind payments in exchange for a reduction of a penalty are as problematic as direct cash payments to third parties,” assistant attorney general Jeffrey Bossert Clark, who heads the Justice Department’s Environment and Natural Resources Division, wrote in the DOJ’s new memo.
In theory, without that possibility, polluters will now be forced to pay higher fines. But Edwards said he doubts that will be the case.
“I certainly don’t think this administration is looking to change the way that [these agreements] are used because they thought, oh, these are being used in a way that is too beneficial to polluters,” he said. “That’s certainly not what I think this administration would do. They’re looking simply to limit the things that prosecutors can do in fashioning creative remedies.”