Reforming Superfund Could Revitalize Inner Cities

Commentary by H. Sterling Burnett

Despite spending more than $30 billion over 15 years, the federal Superfund program has failed. Among the most tragic aspects of Superfund's failure has been its creation of "brownfields" -- once-productive commercial sites now sitting abandoned due to the suspicion that they contain toxic waste and thus carry the burden of Superfund liability.

There are as many as 450,000 brownfield sites across the country. Ironically, Superfund, a law created to protect human health and promote environmental cleanup, has resulted in a use-and-throw-away pattern of property ownership in inner cities and increasing urban sprawl as greenfields (pastures, forests and farmlands) are cleared to make way for industrial growth.

Brownfield redevelopment presents a win/win opportunity for virtually everyone. Community leaders are interested in returning brownfield properties to the tax rolls and increasing employment in economically depressed areas. Environmentalists want to preserve currently undeveloped greenfields, and to see existing contaminated sites made safe. The owners of brownfield sites want to see potential liabilities turned into assets.

Three reforms are necessary to effectively address the "brownfield crisis." First, Superfund's liability scheme must be changed. Second, Superfund decisions must be made on the basis of rational risk analysis. Third, the states must make future Superfund decisions.

Superfund liability is supposedly based on the "Polluter Pays" principle: When culpable parties can be linked to a site, they must pay for cleanup. But under Superfund's present liability provisions -- in legal jargon "retroactive, joint-and-several and strict liability" -- almost anybody can be dragged into the Superfund liability morass. In one instance, a Michigan Girl Scout troop whose summer camp garbage ended up in a landfill was sued for cleanup costs. Whoever has the deepest pockets can wind up paying the most, even if only peripherally involved.

While the current liability system provides lenders and developers with little incentive to restore brownfields, it has been a boon for lawyers as 30 to 60 percent of Superfund's costs are lawyers fees and other transaction costs. Superfund liability should be based upon proportionate cost-sharing among responsible parties. Further, retrocative liability -- changing the law to hold someone legally liable for doing something that was legal at the time it was done -- is unjust. The United States Constitution bars retroactive criminal liability. Civil law should recognize the same standard.

Under the current Superfund law, one unrealistic risk assumption is stacked atop another, resulting in wildly exaggerated risk scenarios. For example, the EPA requires soil at sites to be so clean that it would not cause cancer in a child eating half a teaspoon of dirt a day 350 days a year for 70 years. This standard would not be met by soil in most wilderness areas. Instead of using such outlandish risk scenarios, site cleanup standards should be based on estimates of reasonably anticipated land use. With such standards, inexpensive deed restrictions could provide greater levels of protection at lower costs.

In purely intrastate Superfund matters, states should be responsible for selecting Superfund sites and setting cleanup standards. The past 15 years of federal failure under Superfund, along with the proven commitment and often superior ability of the states to handle environmental problems, has removed the argument in favor of a continued federal role.

The EPA must also cease second-guessing state judgments concerning site listing, cleanup standards and acceptable completion of the cleanup. Currently, upon the completion of a state cleanup plan the state issues some form of written assurance to the owner that the state will not return with further demands for cleanup, but the EPA may not respect the state'swaiver of liability.

These three reforms would contribute to quicker, less costly brownfield redevelopment. Restoring the "polluter pays" principle would decrease the costs of cleanups and quicken their pace. Money now spent fighting Superfund liability could be used to clean sites. Banks and developers, no longer fearful of incurring future Superfund liabilities, would have greater incentives to redevelop brownfield sites.

Requiring improved risk analyses of Superfund sites would also reduce the hurdles to brownfield redevelopment. Under more reasonable measures of risks, many brownfield sites would likely be shown to present no or minimal risks to humans. Superfund liability would no longer be a sword of Damocles hanging over such sites. Restoring state control over Superfund matters would allow the states the flexibility to set site-specific cleanup standards based upon actual risks to humans.

Ensuring that neither the federal government nor environmental organizations could second-guess state cleanup decisions would give potential lenders and investors the confidence they need to undertake brownfield redevelopment.

These three Superfund reforms would benefit almost everyone -- they would get brownfield sites back on the tax rolls faster, increase inner-city employment opportunities, reduce urban sprawl and safeguard citizens' health.

This appeared as an op-ed in The Washington Times, March 27, 1996.