Environmental Compliance and Reporting
Assuring Compliance for Ongoing Conduct and Board and Officer Oversight
Members of our Environmental, Energy and Public Resources Group have performed hundreds of audits and other investigations. These audits assist and support internal investigations or on-going environmental compliance assessments. Many resulting in very specific consideration of not only how to come into compliance, but also how to mitigate or eliminate civil and criminal penalties by self-reporting to relevant environmental agencies.
Environmental lawyers frequently advise corporate officers, directors, and environmental staff on implementing and managing procedures and controls for possible disclosure under the Sarbanes-Oxley Act and SEC requirements. These efforts include developing programs for environmental transparency and corporate accountability. We regularly assist in designing environmental management systems to assure environmental compliance and “up-stream” reporting to corporate officers. Often we are called on to counsel companies on the creation of environmental compliance plans, including those that consider shareholder initiatives, so-called “green principles,” and “beyond compliance” strategies. One of our partners is a member of the TAG 207, the International Standards Organization Work Group for ISO 10014, and the Environmental Management System series of protocols.
Our lawyers authored the environmental handbook in the Corporate Compliance Series published by Clark Boardman Callaghan (now part of Thompson Publishing). Titled "Designing an Effective Environmental Compliance Program," the volume was first published in 1993 and we update it annually. This handbook covers not only specific compliance issues and techniques for environmental auditing, but also basic corporate law issues relating to environmental matters.
Given our experience working with clients who have achieved a positive reputation on environmental issues, we are mindful of the "front page test" for environmental compliance matters, as well as the manner in which compliance and audit findings are described and communicated. We have found that the development of fully secure Extranets linking client to-counsel-to-consultant mitigates many of the dangers and risks involved in conducting environmental audits with substantial paper documentation. This approach reduces the amount of paper generated, hard-drive space consumed by e-mail traffic, the direct costs of audits, and materially improves document and information control. We offer a Sonnenschein proprietary Extranet for complex, large-scale matters as well as in transactional settings.
In conducting large-scale audits, we work with consultants and other technical experts to create targeted survey instruments that acquire the necessary audit information in a user friendly way to minimize the burden on the respondents. The survey can address the most common factual situations with "flag" identifiers to recognize uncommon situations that require further detail and discussion. This approach streamlines the preliminary audit exercise, enabling survey respondents to check off a series of "yes," "no" or "need further information" boxes, thereby minimizing costs.
The vast majority of our representation on environmental audits remains confidential and privileged. We have been involved in investigations or audits for chemical manufacturing facilities, refineries, nationwide automotive service centers associated with retail stores, international food companies for their processing operations, transportation companies at their fueling and servicing centers, bank acquisitions with respect to portfolio and trusts and media companies in connection with franchise acquisitions and other large-scale multi-site investigations.
At a time in which many constituents demand "transparency," we work with clients to balance appropriate disclosure with the need not to divulge internal, legal and management deliberations. Many times, compliance can be achieved by a combination of education and changes in work practices, without a substantial negative impact on the company's reputation or profitability. Our Environmental counsel are at the forefront of crafting cost-effective and environmentally responsible audit and management systems. For a solution to be effective, it must fit into the ongoing business and culture of the client. Our focus is to deliver recommendations that fit the client's business model and needs.
Finally, the result of the audit may indicate some form of disclosure to relevant environmental agencies. In addition to our substantial experience with EPA's audit policy, we have contacts with senior state administrators, and U.S. EPA officials. One of our partners was the founder of the Environmental Council of States ("ECOS"), and continues as an alumni member. Other partners have senior contacts in particular states, as well as with EPA. These contacts are available when required to achieve the client's needed results.
back to top
Due Diligence and Transactions
We also are extensively involved in analyzing, evaluating, and helping to allocate environmental risks for facing potential liability in corporate and real estate transactions, including purchases, sales, financings, leveraged buyouts, and mergers and acquisitions. Our clients include lenders, investors, real estate owners and developers, and management companies. On their behalf, we have supervised due diligence investigations in numerous transactions, including multi-site transactions and some of the largest real estate transactions ever conducted. We have assisted institutional lenders in developing policies and procedures for handling environmental issues in real estate financings, and have counseled institutional lenders in connection with the environmental aspects of loan workouts and restructurings.
We have been involved in handling environmental issues arising during construction or modification of shopping centers, office buildings, industrial facilities, and other real estate projects. These issues have included problems involving contamination, landfills, and underground storage tanks; wetlands matters; air pollution related to project siting; and compliance issues related to PCBs, CFCs, and storm water management. In addition, we have drafted various engineering services, design, and construction contracts and also handled disputes in connection with construction or remediation projects that involve cost-overrun claims relating to environmental issues.
Often we are asked to advise on the structure of a transaction, or of a business going forward. Many transactions present the threat of legacy liabilities, even of activities not directly associated with the current business or the existing corporate entity. Other times, the nature of the business presents risks that must be appropriately structured. Working with our colleagues in the corporate and bankruptcy groups, we help shape the appropriate structure of a business and its environmental programs, to minimize personal liability and the liability of shareholder and related entities.
Our Environmental lawyers frequently represent clients in bankruptcy proceedings. As environmental counsel to a debtor international waste services company, we advised the client and negotiated favorable accommodations, allowing the client to responsibly reduce environmental burdens and to emerge from Chapter 11 with significantly diminished environmental liabilities. On behalf of creditors, we have led efforts to better evaluate, manage, and resolve environmental concerns, resulting in a preservation of assets in the bankruptcy estate. Sonnenschein lawyers appear in adversary proceedings and have widespread experience in negotiations with regulators in bankruptcy matters.
back to top
Freedom of Information Procedures and Security/Confidentiality Issues
We regularly work with clients to protect their information filed with regulatory agencies from discovery by third parties. We also help our clients access agency files to identify information that is relevant to a client's business. In addition, we work with our clients to protect their public files with respect to homeland security and related issues. We also know how to use FOIA and other disclosure-related laws to ensure that inappropriate agency actions harmful to our clients are brought to light. And on several occasions, we have assisted clients to restrict inappropriate information collection activities by federal agencies.
back to top
For E-Library resources, please click here.
