Editor's note: This is the second in a series of monthly columns about emerging trends in regulatory compliance and managing hazardous or special waste.
A growing U.S. economy over the past decade has created many new jobs that also come with new responsibilities in terms of training around proper waste disposal. During that same 10-year period, California has taken enforcement actions against a host of retail, automotive service providers, digital media, and shipping companies for not following those regulations.
This creates a prime opportunity for waste companies across the country to educate their customers about compliance and potentially provide new types of service around these regulated materials that will help prevent any future issues.
Beginning in 2007, California started to prosecute violators of the state’s hazardous waste (HW) laws and regulations. These cases have generated hundreds of millions of dollars in penalties. Companies doing business in California subject to these enforcement actions include retail giants such as Home Depot, Lowe's, and Walmart; automotive retailers including O’Reilly Auto Parts and AutoZone; media companies such as Comcast and Cox Communications; and shippers such as FedEx.
One of the largest penalties, settled in March 2018, was brought against Home Depot, which agreed to pay $27.8 million to resolve claims for unlawful HW disposal. The violations of the California Hazardous Waste Control Act identified the illegal disposal of waste batteries, aerosol cans, paints, and electronic devices. Over 300 Home Depot stores and distribution centers routinely sent HW to landfills that weren't permitted to receive this waste.
In September 2016, more than 50 California district attorneys ordered O’Reilly Auto Parts to pay a $9.8 million penalty for mishandling HW. O’Reilly stores improperly transported and disposed of used oil, used oil filters and other wastes, such as batteries and aerosol cans over a five-year period. As part of the settlement, O’Reilly agreed to fund projects valued at $1.85 million to improve waste minimization and enhance compliance.
In December 2015, then California Attorney General Kamala Harris announced a $25.9 million settlement with Comcast for unlawful HW disposal. Comcast warehouse and dispatch facilities mishandled and disposed of various wastes, routinely sending these materials to local landfills that weren't permitted to receive them. As part of the settlement, Comcast committed to fund measures to enhance its environmental compliance.
These recent settlements join a long list of actions taken by California's attorney general's office and local district attorneys in recent years.
- Walmart – $27.7M (2010)
- Target – $22.5M (2011)
- AT&T – $21.8M (2014)
- Walgreens – $16.6M (2012)
- Rite Aid – $12.3M (2013)
Retail and commercial operations must comply with EPA and applicable state regulations under the Resource Conservation and Recovery Act (RCRA) for the management of hazardous and universal wastes. RCRA defines HW by 1) the characteristics they exhibit (i.e., ignitability, corrosivity, reactivity, and/or toxicity) or by 2) listed processes that generate wastes.
Federal universal wastes (UW) are best described in four basic categories of materials: batteries, mercury-containing equipment, fluorescent lamps and certain pesticides. California also regulates aerosol cans and electronic devices, including CRTs as universal wastes.
An in-store spill, product recall or merchandise returned to a commercial business containing a hazardous substance or universal waste must be handled under the full scope of the regulations. Training for personnel who manage and supervise these activities must be conducted and training records maintained.
Once hazardous and universal wastes are identified, they must be managed according to specific guidelines until disposed or properly recycled. This is precisely where waste service providers can help educate their customers by providing guidance and options for proper management. It should be noted that waste haulers are assuming liability by unknowingly transporting hazardous substances and disposing them in solid waste landfills not permitted for these wastes.
At a minimum, waste accumulation areas must be designated and include segregated storage for flammable and corrosive wastes, batteries and fluorescent bulbs. These wastes cannot be mixed with nonhazardous solid waste and recyclables in compactor and roll-off boxes or in trash containers. This is where the disposal violations typically occur.
Upon identification, hazardous and universal wastes must be packaged in secure containers in the designated accumulation area. Proper labeling in accordance with RCRA and state regulations must be followed. Spill kits should be available and any releases must be promptly collected. Finally, all shipping records (manifests) must be retained for at least three years.
Investigations and Litigation
California prosecutors have become skilled at investigating and administering legal actions using undercover “dumpster dives” and inspection reports. The settlements reached with these companies generally include a significant penalty, payment for investigation expenses, and costs for improved compliance programs. Beginning Jan. 1, 2018, civil penalties of California’s HW laws can reach $70,000 per violation.
Companies that generate or handle HW face violations if they fail to properly dispose of the regulated waste, don't keep records of storage, transportation and disposal, don't follow emergency plan requirements, and fail to provide the necessary training to employees. Improvements to these programs may include subcontracting a registered HW hauler with a rigorous process to track the waste from “cradle to grave” and ensure proper disposal.
California is not the only state where these issues have produced large enforcement settlements. The Massachusetts Department of Environmental Protection's enforcement of waste bans has produced numerous consent orders with a goal of regulating waste compliance and correcting violations. The EPA, working with the states of Texas and Oklahoma, also took aggressive enforcement action against Macy’s for HW violations in Oct. 2017.
Defending Yourself and Your Customers Against Enforcement
Davina Pujari is an experienced attorney with the San Francisco-based law firm Hanson Bridgett. Her firm has represented a number of companies under investigation for their practices and negotiated civil settlement agreements. In a recent edition of Chain Store Age, Ms. Pujari and colleague Samir Abdelnour outlined a number of steps companies may take to “minimize the risk of an investigation and enforcement action" that include:
Carefully assessing internal compliance programs against evolving California regulations and initiatives (i.e., a “gap analysis”), preferably though an outside environmental consultant.
Preparing and implementing detailed plans to continually improve compliance programs based on the gap analysis conducted and critical feedback from affected employees.
Using the best available technology to manage training and compliance assessments.
Providing meaningful incentives for compliance to employees whose primary job duty is not environmental compliance.
Companies need to continually assess and improve compliance efforts. Environmental management processes which follow the “plan, do, check, act” approach can be tailored to a company’s specific requirements. In most cases, requirements imposed on defendants are publicly available for review by environmental compliance professionals. These settlement documents provide an excellent opportunity to learn from other companies’ missteps.
What's Next for Compliance
Companies have been required to demonstrate ongoing compliance by conducting waste characterization audits. Amy Martinez is a Client Program Manager for APTIM, an engineering consulting firm, who coordinates teams conducting these audits. The audit process includes tracking a scheduled waste load, sorting the materials, and preparing an inventory of the contents including any hazardous or universal wastes.
When asked about future compliance trends, Ms. Martinez pointed to regulations intended to maximize diversion of food and organic waste from landfills. In her opinion, in jurisdictions where food and organic waste disposal is banned, enforcement will follow with investigations for these materials and penalties for noncompliance. While not part of the HW spectrum, this will be another opportunity for haulers to provide additional services to their customers.
The message for companies generating or handling any regulated waste is well-defined. Compliance programs must be implemented today otherwise enforcement and heavy fines could be around the corner.
Rich Thompson is the managing partner of TEC, LLC and provides expert consulting advice on complex environmental compliance issues. He was formerly the director of environmental compliance at both Republic Services and Waste Management.
Correction: In a previous version of this article, law firm Hanson Bridgett was improperly identified.