November 30, 2018

Phase 1 Regulations: CERCLA, ASTM, and AAI



Any Environmental Firm should be experts in the rules and regulations pertaining to Phase 1 Environmental Site Assessments. In this post, we will discuss three of the most important Phase 1 regulations, CERCLA, ASTM, and AAI.

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) was enacted by the United States Environmental Protection Agency (EPA) in 1980. Mainly known as “the Superfund,” CERCLA created a tax on the chemical and petroleum industries. CERCLA also provided broad federal authority to respond directly to releases or threatened releases of hazardous substances that may endanger public health or the environment. In accordance with CERCLA, a property manager, owner, lender or lessor could be liable, from virtue of ownership or control of a property, for the remediation of hazardous substances in the groundwater and/or soil that may exist on a site.  

In addition to CERCLA, the Phase 1 Environmental Site Assessment entails a scope of work that must meet the technical requirements stated in the ASTM (American Society for Testing and Materials) guidelines, which were published as the Standard Practice for Environmental Site Assessments: Phase 1 Environmental Site Assessment Process (Standard E 1527). This practice of ASTM is meant to allow a user to fulfill one of any requirements essential to qualifying for an innocent landowner, relevant property owner, or true prospective purchaser.

ASTM released a new standard called the Standard Practice for Environmental Site Assessments: Phase 1 Environmental Site Assessment Process (ASTM Standard E1527-05) in 2005. This new ASTM standard defines good commercial and customary practice in the United States, with regards to conducting an ESA of a commercial real estate parcel. This of course entails respect to the range of contaminants that lies within the scope of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (42 U.S.C. 9601) and for petroleum products.

The EPA also published the final All Appropriate Inquiry (AAI) Rule (40 CFR Part 312), Standards and Practices for All Appropriate Inquiries; Final Rule in 2005. This AAI standard establishes the specific regulatory requirements for conducting all appropriate inquiries. This includes inquiries into previous ownership, environmental conditions and uses of a property for purposes of qualifying for selective landowner liability protections under CERCLA.

Phase 1 Environmental Site Assessment companies (since November 1, 2006) must comply with requirements of the All Appropriate Inquiries Final Rule, or follow the standards that are set forth in the ASTM E 1527 “ 05 Phase I ESA process. Thus, all appropriate inquiries must be conducted in compliance with either of these standards under CERCLA to acquire protection from potential liability as an innocent landowner, a relevant property owner, or a true prospective purchaser. ASTM amended the old 2005 standard in 2013 to a new standard called the Standard Practice for Environmental Site Assessments: Phase 1 Environmental Site Assessment Process (ASTM Standard E1527-13). As it is, the changes were mainly editorial, and the standard remains substantially unchanged.
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