Abolition of Supplemental Environmental Projects: A Damaging Retreat for Environmental Enforcement

Late last month, the U.S. Department of Justice (DOJ) quietly took a major step to undercut the enforcement of our federal pollution control laws. In a publicly released but little publicized memorandum, DOJ’s Associate Attorney General for Environment and Natural Resources, Jeffrey Bossert Clark, announced that the agency will no longer approve enforcement case settlements with local governments that include Supplemental Environmental Projects (SEPs) – a long-standing feature of negotiated resolutions of environmental enforcement cases.

SEPs allow a non-complying company, state, or local government to develop an environmentally beneficial project, not otherwise required by law, in lieu of paying part of its fine. To implement its SEP program, EPA carefully crafted a Policy on Supplemental Environmental Projects with the intention of ensuring that SEPs are limited to projects that improve public health or the environment while not directly benefitting a violator or third parties. Under EPA’s policy, acceptable SEPs – such as local public health monitoring for the impacts of a defendant’s pollution or helping to restore an ecosystem affected by that pollution – must relate directly to the underlying violation at issue in the enforcement action. The same policy specifically bars certain projects – such as those that will become profitable to defendants within five years – from being approved.

In fact, SEPs have immense practical benefits for regulators and regulated parties alike. SEPs created consistent with EPA’s policy have proven especially attractive to local governments and industries hoping to preserve a positive public image. They are also of interest to government regulators and local community members since they tangibly improve human health or the environment.

The Trump DOJ’s opposition to using SEPs to promote the settlement of environmental enforcement cases has evolved in stages. In November 2018, the department established a broad policy prohibiting the use of consent decrees to further “general policy goals, or to extract greater or different relief from the defendant than could be obtained through agency enforcement or by litigating the matter to judgment.” Clark’s recent anti-SEPs memorandum aggressively expands that policy. It also seems to be a harbinger of a more expansive prohibition on the use of SEPs in enforcement actions against industrial polluters.

DOJ’s current SEPs policies are ill-considered and irrational in several ways. For one, municipalities can be particularly good candidates for SEPs. Local officials are frequently concerned with appearing “green” to their constituents, and, for various reasons, municipal enforcement cases are often difficult for federal officials to resolve satisfactorily. SEPs often represent a mutually beneficial “middle ground” that promotes amicable municipal enforcement case settlements. Moreover, some SEPs, e.g. conducting health studies or enhancing local ecosystems, may be a comfortable, logical extension of the typical activities of local departments of health or recreation.

The alternative that DOJ favors – requiring violators to pay fines to the U.S. Treasury – accomplishes little or nothing for health or the environment while, at most, contributing only a tiny fraction of the federal government’s overall revenues. Realistically, after SEPs are barred, it seems unlikely that EPA and DOJ will actually seek civil penalties in significant amounts against known polluters. Together with other indicators of less-than-diligent enforcement activity, EPA’s overall penalty assessments have dropped off dramatically since January 2017. Unless current trends are reversed, civil penalties against polluters will continue to decline.

Notably, DOJ's recent SEPs policy somehow manages to be inconsistent with the department's previously announced policy that consent decrees may not be used to achieve “greater or different relief than could be obtained…by litigating the matter to judgment.” Federal judges have long had broad discretion to conclude environmental enforcement cases by issuing injunctions, and court orders that resolve cases “litigated to judgment” may always include requirements similar or identical to the beneficial projects that have been pursued in settlements containing SEPs. DOJ’s policies also overreach when they assert that EPA may not include SEPs in settlements of administrative cases. DOJ has never had any role in EPA enforcement matters, and the legality of SEPs in administrative case settlements is properly a matter to be determined by EPA’s own attorneys, not the Department of Justice.

Furthermore, DOJ’s SEPs policy mistakes Congress’s relative silence on whether SEPs may be incorporated in environmental case settlements as congressional disapproval of the enforcement tool. Congress has never passed legislation that prohibits the use of SEPs. In fact, in a 2018 statute, America’s Water Quality Infrastructure Project, EPA was specifically directed to promote the use of “green infrastructure” in enforcement matters, as well as other settings. Green infrastructure projects have been included in past SEPs, a fact that Congress was most likely aware of. Contrary to DOJ’s assertions, these circumstances seem a telling indication that Congress has accepted SEPs as a legitimate means of settling environmental enforcement cases.

In the end, DOJ’s ongoing efforts to restrict and abolish SEPs are yet another manifestation of the Trump administration’s thoughtless and damaging political campaign to thwart EPA enforcement and deregulate environmental pollution. Those efforts are deeply harmful to public health and environmental protection.

Top image by Wikipedia user Coolcaesar, used under Creative Commons license CC BY-SA 3.0.