Your phase 1 environmental site assessment (ESA) is an important part of your project, and conducting a proper one involves covering a lot of issues.
Recently, there has been a lot of litigation regarding per- and polyfluoroalkyl substances (PFAS), and new regulations covering the levels of PFAS in drinking water were introduced (for two specific chemicals) in February 2020. There will no doubt be regulations including a Maximum Contaminant Level (MCL) and National Primary Drinking Water Regulation (NPDWR) this year for two PFAS chemicals, perfluorooctanic acid (PFOA) and perfluorooctane sulfonate (PFOS). Additionally, a federal bill is in the works which will require PFAS to be designated a hazardous substance under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).
So, how does this affect you and your project? Given the upcoming regulations and the known health risks of PFAS, you should consider including these chemicals in your phase 1 ESA.
Are There PFAS Requirements in an ASTM 1527 Assessment?
Currently, no. This means that if you order a standard ESA, PFAS levels will not be covered or considered. Instead, you should make sure that PFAS are added as non-scope items, which the standard allows for.
This is likely to change as regulations move forward, so check with your surveyor about whether they are now including PFAS as standard. If not, make sure they add them to the list.
In some states, there may already be regulations regarding PFAS that you need to deal with.
When Should You Pay Particular Attention to PFAS?
PFAS are generated by human activity, so are primarily a concern on brownfield sites, including when soil is disturbed for landscaping or similar. You should make sure to check for PFAS if the site was used for:
- The manufacture of firefighting foam (some kinds contain PFAS)
- The manufacture of water or oil resistant products, or the treatment of the same. This includes water-resistant fabrics such as raincoats.
- The disposal of large volume products, i.e. landfill.
- Firefighter training.
You should also check for PFAS if the site is close to a landfill, airport, or military base; if there is known contamination or a history of claims; or if the site experienced a major industrial fire or accident.
Any of these indicate the likelihood of PFAS on a property, but all brownfield sites and infill sites should be checked. Most U.S. companies have voluntarily phased out the use of PFAS, but products manufactured overseas may still have contamination issues.
Is PFAS Contamination Your Responsibility?
If you purchase a site or a building that is contaminated with PFAS, then it is your responsibility, even if you had nothing to do with the contamination. As new regulations are put in place, there is a risk that the EPA will pursue you for cleanup costs even if you had no idea there was PFAS contamination on your land.
Additionally, the health risks are such that not addressing PFAS contamination may expose you to higher workers’ compensation claims (and thus higher premiums) or lawsuits. PFAS exposure can result in low infant birth weights, immune system problems, cancer, and thyroid hormone disruption. Chronic exposure is the larger concern.
This means that you should test the soil for PFAS before engaging in a transaction to purchase land, especially in the categories already listed above. If contamination is found you should consider the costs of cleaning it up and whether you are better off walking away from the transaction. PFAS cleanup costs can be extensive, and in many cases are being shouldered by taxpayers. For example, the state of Michigan is spending $23.2 million for testing, monitoring, and technical assistance at more than a dozen sites…and that was as of February 2019 with costs only rising. The government will no doubt want to push many of these costs off onto companies.
How Do You Protect Yourself From PFAS Issues in Transactions?
The key thing here is to make sure that PFAS are included in the definition of “hazardous substances” in the various deal documents. While legally they are not considered hazardous at the federal level yet, the fact is that the science is pretty solid on the matter. You might also consider deed restrictions to limit future use of the land, at least until proper remediation can be done.
Make sure that you are aware of state regulations covering PFAS remediation and reporting. In most states, the regulations refer primarily to firefighting foam, intending to phase out Aqueous Film Forming Foams (AFFF) which contain PFAS and are used for Class B fires. However, some states have already implemented rules about drinking water contamination and, for example, Vermont has penalties for contaminating water supplies with these chemicals. This can come up in a weather event that causes chemicals to leach from your site or building into a nearby watershed.
Because of this and the changes in the law, you want to work with an environmental lawyer and proper consultants. You might want to purchase environmental insurance to cover you for liability or penalties if PFAS contamination becomes an issue.
What About PFAS Remediation?
PFAS remediation is an option if you discover the contaminant after the transaction, however, it is not easy or cheap. Right now, full-scale treatment is limited to sequestration technologies. Bioremediation and other technologies to destroy PFAS are in testing. You will need expert help to deal with PFAS issues, and in many cases avoiding purchasing land with heavy PFAS contamination is a better option.
This does not always work, however, especially for construction projects. Monitoring until better treatment options are available is often your best choice, but you should also consider the proposed use of the land; residential use, due to the risk to pregnant women, is of particular concern. The due diligence involves paying attention to technological developments, as a site that can’t be remediated now may well prove possible to clean up in the future, and new regulations are likely to drive new technologies.
With new legislation and regulations in the works, it is becoming more and more important to test for, monitor for, and potentially remediate PFAS. Doing your due diligence in transactions and considering what contamination levels you feel are acceptable before purchasing a site can protect you from penalties, clean-up costs, and lawsuits in the future.