NRD Liability in the US

In the US, liability for natural resource damages was first introduced in 1980 under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or “Superfund”). Under CERCLA and other federal laws (the Clean Water Act and the Oil Pollution Act) and environmental laws in more than 40 states, federal, state, local and tribal officials (natural resource “trustees”) may file claims on behalf of the public to recover damages from responsible parties to restore injured, destroyed or lost natural resources (land, fish, wildlife, biota, air, water, groundwater, drinking water supplies and resources). Further, liability for NRDs, authorized by statute to be in addition to site remediation or “clean up” requirements, may include the costs to restore and/or replace the resource, compensation for lost uses (“services”) of the resource and trustee assessment costs. Two sets of federal regulations provide the overall construct for performing natural resource damage assessments (NRDAs), both involving sequential phases of assessment and restoration. Both sets of regulations are optional unless a trustee wants the assessment to have the force and effect of a rebuttable presumption in a federal NRD claim. The overall goal of the NRDA process is to restore the services provided by injured natural resources to its baseline through restoration or replacement of the resource, or acquisition of an equivalent resource. The Ad-Hoc Industry Natural Resource Damage Group has an extensive database related to diverse aspects of NRD practice to date.

Environmental Liability in Europe

In Europe, the “European Union Directive on environmental liability with regard to the prevention and remedying of environmental damage” (ELD) was adopted by the European Parliament on 21 April 2004 and focuses primarily on the prevention of environmental damage. The ELD, which embodies concepts similar to the NRD regime under US law, makes Member States responsible for ensuring that “damage to water, land and biodiversity is either prevented, by taking appropriate measures in cases of imminent threats, or effectively remedied by restoring the previous condition if the damage has already been done”. Industrial companies, including transporters or disposers of waste or hazardous waste, whose operations have resulted in the discharge of dangerous substances resulting in potential environmental damage to land, water and protected habitats and species may be subject to liability under the ELD. There are both similarities and differences between the US and EU liability regimes; however, synergies in assessment and restoration methodologies certainly exist. The Ad-Hoc Industry Natural Resource Damage Group is actively engaged with industry and government authorities in Europe relative to the recent implementation of the ELD by Member States and emerging cases under Member State legislation.

A Global Regime

The United Nations Environment Programme (UNEP), in 2010, adopted a set of guidelines for development of domestic legislation on liability, response action and compensation for damage caused by activities dangerous to the environment and affirmed that the guidelines were voluntary and “do not set a precedent for the development of international law". The Ad-Hoc Industry Natural Resource Damage Group provided input to the deliberations which lead to this adoption.

Today’s NRD Practice and What has Changed

Today, government and private sector parties, as well as research and conservation organizations, have a unique opportunity to build upon the collective "lessons learned" over the past 20 years. Since CERCLA was enacted in 1980, there have been many policy and practice advances, including the growing use of cooperative (industry/government) NRDAs and encouragement of innovative settlement and restoration solutions.

There is No One Way to Settle an NRD Claim

Over 700 NRD claims have been settled under US federal and state laws involving a wide array of site type (ranging from instantaneous oil spills to large, complex Superfund Sites) and parties (ranging from a single Potentially Responsible Party (PRP) and trustee to multiple PRPs and federal, state and tribal trustees). While early NRD claims were settled primarily in monetary terms, NRD settlements today often involve land transfers, purchase of open space and performance of on-site and off-site natural resource restoration projects. Depending on a wide set of details and facts related to the specific case/site, some NRD claims settle quickly via cooperation between government and industrial parties, while others are litigated over many decades. More recently, NRD claims have also being seen in bankruptcy proceedings and settlements.

Further Information

For further information on the general subject of natural resource damages and related issues, visit the Group's NRDAR Practice Exchange website. The website was developed in 2005 by the Group in cooperation with US Department of Commerce/NOAA, the US Department of the Interior and representatives of the State trustee community. It is intended to facilitate communication among diverse practitioners engaged in the conduct of NRDA and related matters.

For further information on the Ad-Hoc Industry Natural Resource Damage Group, see www.NRDonline.com.