Mixed Signals

Public policy isn't always neat and clean. Just ask manufacturers. On one hand, they're being wooed through incentives from state and local governments (as well as being leaned on by the Clinton Administration) to locate plants and jobs in blighted inner cities. On the other hand, they're being told by the EPA that maybe they cannot locate in such areas. And if they already have facilities there, they may have to shutter them or fight off high-profile lawsuits. The mixed signals are the result of controversial interim "environmental justice" guidelines, issued by the EPA in February, that are the subject of a regulatory debate that rapidly is becoming one of Washington's most contentious. Growing out of the 1964 Civil Rights Act, the guidelines encourage citizens' groups to challenge environmental operating permits of industrial facilities in economically disadvantaged areas that have heavy minority populations. More than 50 such complaints, alleging that such areas are being discriminated against because they bear a disproportionate share of pollution, have been filed with the EPA. An industry-backed rider in the omnibus fiscal 1999 appropriations bill passed by Congress in October prevents the agency from processing further complaints during the period. But the EPA can continue work on the 15 complaints it already is investigating, as well as move forward on developing "final" guidelines. "We regard the rider as only a 'stay,'" says William Kovacs, vice president of environment and regulatory affairs of the U.S. Chamber of Commerce, Washington. "The bottom line is that EPA can act like a zoning board -- or a judge -- by overruling local authorities. For companies, it means that they have no certainty for getting permits. A company may not know it has located in a 'wrong' area until it's sued." Companies, says Kovacs, "are panic stricken over what the permit process will be." The guidelines apply not only to new permits but also to renewals and modifications of existing permits, points out Charae Bishop, director of energy and natural resources at the National Assn. of Manufacturers, Washington, D.C., and a member of the EPA's advisory committee on implementing the Civil Rights Act provisions. Ultimately, she warns, the guidelines "could potentially shut down a lot of manufacturers." Even a complaint being filed with the EPA, she says, "can create a public relations nightmare" for a firm. Adds Mark Whitenton, NAM's vice president for resources, environment, and regulatory policy: "The definitions in the interim guidance document are very imprecise. So it appears that anyone with a typewriter can stop a permit." Industry, whose lobbying on the issue is being coordinated by the Business Network for Environmental Justice, a coalition of 50 companies and trade associations, isn't alone in its opposition to the guidelines. Such state- and local-government groups as the National Assn. of Counties, the U.S. Conference of Mayors, and the Western Governors Assn. have joined the fight. "We all think the guidelines are too vague," says Carol Leftwich, an executive with the Environmental Council of the States, a Washington, D.C.-based association of state environmental regulators that also opposes the guidelines. In addition, she says, the groups feel that the guidelines run counter to federal policy of shifting authority to state and local governments and encouraging development on former industrial sites called "brownfields." Industry and its allies already have won three key victories: enactment of the appropriations bill rider; the Supreme Court's dismissal of a suit brought by residents of Chester, Pa., against the state of Pennsylvania for locating a waste-treatment facility in the mostly African-American city; and the EPA's dropping early last month of one of its existing cases -- a high-priority investigation into a proposed Select Steel Co. mill near Flint, Mich. But major battles loom. Closely watched is Shintech Inc.'s effort to build a scaled-down, new plastics plant in Iberville Parish, La., after environmental-justice opposition from environmental activists caused the firm to withdraw plans for a larger nearby facility. The battle surely won't be the last. As James Pasierb, spokesperson for the Chemical Manufacturers Assn., which represents an industry in the thick of the issue, puts it: "The situation is very dynamic. Environmental justice is going to be an evergreen issue."