Negotiating Superfund Settlements
EPA’s “enforcement first” policy promotes the “polluter pays” principle and allows the Agency to conserve Superfund resources for the cleanup of contaminated sites where there are no potentially responsible parties (PRPs). EPA prefers to reach an agreement with a PRP to clean up a Superfund site instead of issuing an order or doing the work and then recovering its cleanup costs later.
Settlement agreements under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly referred to as Superfund, must be:
- In the public interest, and
- Consistent with the National Contingency Plan<(the federal government’s blueprint for responding to releases of hazardous substance).
Overview of the Negotiation Process
Once a PRP is identified, the Agency typically issues them a general notice letter, which informs the them of their potential liability. The overall purpose of the letter is to provide the PRP with advance notice of possible future negotiations with the Agency and to open the lines of communication between EPA and a PRP.
EPA sends a PRP a special notice letter when it is ready to negotiate. PRP then have 60-days to respond with a good faith offer to do the cleanup work or pay for it. After that, there can be another 60-days or more for EPA and the PRP to negotiate a settlement. If the PRP does not submit a good faith offer at the end of the initial 60 days, EPA may start the cleanup work itself or issue a unilateral administrative order (UAO), requiring the PRP to do the work.
Superfund settlement agreements, once finalized, are enforceable in a court of law. The different types of settlement agreements are explained further below. EPA is committed to strengthening efforts to reach settlements with PRPs and believes that settlements are most likely to occur when EPA interacts frequently with PRPs.
Overview of Enforcement Agreements for Cleanup Work and Payment
A Superfund cleanup enforcement agreement is either an administrative settlement or a judicial consent decree. Which type of agreement the Agency uses to negotiate a settlement agreement depends on whether the PRP is: performing the cleanup work at a site; paying for cleanup work to be done by EPA or another party; repaying the government for their costs to cleanup a site; or EPA is ordering a PRP to cleanup up the site or pay for it.
The Agency maintains a database of model administrative and judicial settlement documents that are available for download in Word format. The database provides information on supporting policy and guidance documents for each model and provides the revision history for any updates to a model after it is issued. These model settlement documents are available from the Cleanup Enforcement Model Language and Sample Documents database.
Agreement for "Work"
The principal settlement agreements used by EPA to get Superfund sites cleaned up are referred to as “Work” agreements.” EPA will negotiate an agreement (in the form of an administrative settlement or judicial consent decree) with a PRP that formalizes the work that will be done at a site and other requirements that PRPs must follow, including those related to community involvement during the cleanup.
The term “work agreement” is used to cover a variety of settlements that involve the PRP doing the work instead of EPA. The most common agreements are for:
- site investigation (remedial investigation and feasibility study),
- short-term clean up (removal action), and
- long-term cleanup (remedial design/remedial action).
A judicial consent decree is the only settlement type that EPA can use for the final cleanup phase (remedial action) at a Superfund site.
Statement of Work
A statement of work (SOW) is the technical attachment to several “Work” administrative settlements, consent decrees, and unilateral administrative orders. The SOW sets forth the procedures and requirements for implementing the cleanup work at the site. In 2021, EPA introduced enhanced community involvement provisions in the model Remedial Design/Remedial Action SOW. EPA developed these community involvement provisions to better address community concerns, especially those communities potentially disproportionately impacted by environmental pollution. Similar provisions are being incorporated into other cleanup enforcement model statements of work.
Statement of work model documents are available on the SOW category in the Cleanup Enforcement Model Language and Sample Documents database.
Agreement for “Payment”
A PRP can settle with EPA under a payment agreement for a variety of reasons: to reimburse the Agency for money it spent for cleanup work at a site or pay to fund cleanup work that will be done by others. Payment agreements include:
Cost recovery: these agreements are for those instances when EPA has spent or is spending Superfund money at a site to: conduct an investigation regarding the nature of the contamination, design a cleanup plan, or do the cleanup work. EPA can recover these costs from PRPs through a cost recovery agreement, which typically takes the form of an administrative settlement agreement.
Cashout: At times, it may be appropriate for a PRPs to not be involved in cleaning up a site. In such cases, EPA may negotiate a “cashout” agreement with the PRP, where the PRP pays an appropriate amount of the estimated site costs in advance of the work being done and generally is used to help pay for the cleanup.
Additional information on Superfund enforcement negotiation process and settlement and orders is available from the Superfund Cleanup Enforcement Policy and Guidance documents database.
CERCLA provides liability protection to bona fide prospective purchasers (BFPPs), contiguous property owners (CPOs), and innocent landowners (ILOs or third parties) to promote the cleanup, reuse, and redevelopment of contaminated, potentially contaminated, and formerly contaminated properties. In addition to these statutory protections, EPA uses site-specific enforcement tools to facilitate the acquisition and reuse of properties when perceived liability continues to be an obstacle. For example, EPA may enter a site-specific settlement agreement with a party who is not liable for contamination at the property but who is willing to perform cleanup work on the property.
More information about these Superfund landowner liability protections and the tools EPA uses to address liability concerns to support cleanup and reuse is available on the Agency’s Addressing Liability Concerns to Support Cleanup and Reuse of Contaminated Lands website.
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