Getting Your Money’s Worth With Phase I Environmental Site Assessments

As the old saying goes, “You get what you pay for.”

When it comes to a Phase I Environmental Site Assessment (ESA) conducted as part of due diligence prior to the purchase or sale of a facility (see previous article), it couldn’t be more true.

Although all Phase I ESAs should be conducted by an experienced environmental professional to industry standards (following ASTM Standard E1527-13), the level of quality you actually get can vary widely.

The purpose of the ESA is to help you identify and manage present and future risks from the environmental impact of a facility’s operations. Cutting corners on an ESA is like leaping over stacks of $100 bills to pick up three pennies. What’s the point?

A Phase I ESA is the starting point for most due diligence. If you kick things off on the wrong foot, it can negatively affect the whole due diligence process, leading to serious environmental issues and liabilities being addressed incorrectly or overlooked altogether.

This can impact the real estate transaction – a buyer may not move forward with the purchase or may even ask for a price reduction. In some cases, when problems missed in due diligence are discovered post-sale… it often leads to a dispute (with potential legal action) between buyer and seller to see who pays to address the overlooked issue.

How Just Being “In Compliance” Can Get Your Facility Into Trouble

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You no doubt have any number of environmental permits related to the work done at your facility. As a good facility or plant manager, you want to stay in compliance, after all.

But simply acquiring permits and doing the associated monitoring or other tasks is only the first step in truly staying in the good graces of regulators. Over the five years that a permit is typically valid, there can be a lot of changes in:

  • Your manufacturing process
  • The type and amount of raw materials used
  • How and where you store materials
  • The chemicals (like solvents) used in your process
  • The number of production lines
  • The layout of your building
  • New buildings and new construction

Any time you make changes at your facility – even if they are seemingly insignificant, it’s your obligation to review your permits to see if the changes are covered by the existing permit conditions… or if you need to modify the permit or even secure a whole new permit. In some cases, you could even “drop” a permit because it’s not required anymore.

This determination is the responsibility of the facility, not regulators.

Why Due Diligence Is So Important - and How to Do It the Right Way

If you’ve ever bought a house, you know a critical part of the process is the home inspection conducted by a certified professional. It’s not a 100% guarantee the inspector will find every issue. But, more than likely, any big-ticket items are going to be identified and, as a result, you can certainly rest easier when you sign on the dotted line. That’s why it is important to retain an established firm that will provide you with a thorough inspection conducted by an experienced professional. Your investment in due diligence protects you from future surprises.

If it’s important to conduct due diligence when purchasing a home, it should be quite evident that it is vital to conduct thorough due diligence whenever you buy or sell a commercial/industrial property. However, it surprises me that so many businesses are reluctant to invest in a thorough environmental due diligence assessment when buying or selling a site for their manufacturing operations, storage, or whatever else… even when millions of dollars are at stake.

Case Study: Misused Roof Leaders Cause Serious Contamination

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Case Study: Where Do Those Floor Drains Discharge?

New Download: Get this Environmental Gorillas Checklist to find the invisible ways your facility can be impacted.  Download Now

Knowledge is often divided into “need to know” and “nice to know” categories. “Need to know” knowledge can be looked upon as the critical must have information, while “nice to know” knowledge is often the information that is quite useful, but not necessarily vital or critical.

When it comes to environmental, health and safety issues, make sure you obtain and understand what you “need to know” first and foremost, and then complement that knowledge with the “nice to know” information.

You should take this approach to all of your environmental, health and safety issues at your facility – regardless of complexity. For one client we worked with in the Mid-West, the location and discharge point of several floor drains throughout their facility definitely became “need to know”.

Case Study: The Vapor Intrusion That Wasn’t There

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Vapor intrusion is a “hot topic” across the country these days when it comes to environmental, health and safety. There are definitely times when indoor air quality is severely affected by this issue.

But, we’ve also found instances where it’s all too easy to just declare there is vapor intrusion causing an indoor air issue and then initiate costly mitigation… when there may be another cause if you dig deeper.

A while back, I highlighted just such a case involving a warehouse that contained plastic hotel supplies. Now, I’d like to share another similar situation where a company was being pressured into taking drastic action over a vapor intrusion issue that turned out to be non-existent.

It’s a great example of where you can’t take test results at face value, and it’s important to do a little more investigation before embarking on an expensive remediation effort.

The Dangers of “Lazy Contamination”

I was recently undergoing some continuing education training at Rutgers University, when a comment the instructor made in passing caught my attention.

He’s an old pro, a veteran of a public utility. He said that contamination and releases are “lazy.” The rest of the group kind of looked at him strangely. But I caught on right away.

You might think this is good news… that lazy releases mean you don’t have anything to worry about. However, it’s the opposite.

Here’s what he meant:

When a contaminant is released by accident, it looks for the path of least resistance. It does the least amount of “work” possible to do the greatest amount of damage to your facility. Say there’s a chemical spill – that liquid is headed straight to the nearest floor drain… and you better know where that drain discharges.

This is an issue that should keep you up night, because you probably have some lazy contamination just waiting to happen; especially if there are hazardous materials stored, handled, offloaded and/or loaded in your facility that have the potential to be spilled.

Of course, no facility is really immune; almost all have the potential for lazy contamination, as you’ll see in a moment.

The good news is these issues are generally easy to solve. To reduce, or eliminate, the potential for lazy contamination, all you have to do is identify and eliminate the paths of least resistance. And, if you take action now and put preventive measures in place, you’ll be able to avoid a potentially expensive cleanup situation.

Creating a Culture that Values Environmental, Health and Safety Programs

When you have a strong environmental, health and safety program at your facility, wonderful things happen.

  • You add value to your organization by increasing efficiency and productivity.
  • Your customers appreciate the improvement in product quality.
  • You reduce costs on healthcare and downtime thanks to reduced workplace accidents.
  • You boost your company’s image and employee morale.

Of course, this all reflects well on you as the facility or plant manager.

So why do so many facilities lack strong EH&S programs, even at facilities that have the required regulatory knowledge and resources, and understand the importance of having such a program in place?

Two contributing factors are lack of buy-in from management and lack of participation from employees. These two groups just don’t get it—and for very different reasons, as we cover in this article in detail.

Getting Buy-In for Your Environmental, Health and Safety Program from Management and Employees

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When you’re trying to implement an effective environmental, health and safety program at your facility, there are two major audiences you must reach:

1. Management

2. Employees

As the facility or plant manager, you’re caught right in the middle—and as you try to put your EH&S plan into action, you have to consider that you need to communicate in very different ways to these two populations for them to understand and act on your program.

How to Follow the Most Important Regulations Dealing with Hazardous Waste at Your Facility

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Among all the regulations that facility managers must follow, those dealing with hazardous waste are some of the most important… and the easiest to fall afoul of.

The main hazardous waste regulation that is often overlooked is the Resource Conservation and Recovery Act (RCRA), a.k.a. the “cradle-to-grave” law. In simple terms, hazardous waste must be accounted for throughout its entire life cycle (generation, accumulation, transportation, treatment, disposal and post-disposal).