1 CAUTION ! SUPERFUND IS NOT DEAD ISRI's SREA Reasonable Care Compliance Program

Recyclers were sued as Potentially Responsible Parties (“PRPs”). Superfund is the U.S. environmental law officially known as the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). Superfund was enacted in 1980 as a result of the Love Canal disaster. It was created to protect people from hazardous waste sites.

Lawsuits were filed pursuant to CERCLA Section 107(a)(3) which read in part:  any person who by contract, agreement, or otherwise arranged for disposal or treatment of hazardous substances...  these terms were not defined in CERCLA, but were defined in the Resource Conservation and Recovery Act ("RCRA").

4 RCRA RCRA defined disposal and treatment in the context of waste. RCRA had two central purposes: 1. to reduce the amount of waste going to landfills a) Congress felt that recycling was the best means to achieve that goal. 2. to thoroughly regulate the remaining waste

5 Lead-acid Battery Lawsuits Scrap shippers argued that recyclables were products, not waste. The Courts held that lead-acid batteries were 'waste-like'. Scrap shippers found themselves in extremely costly lawsuits and very expensive cleanups under CERCLA's joint and several liability provision.

6 It Just Didn't Make Any Sense It seemed incomprehensible that Congress would acknowledge in RCRA the importance of recycling, but then cut off our hands in CERCLA for doing just that - recycling. Scrap shippers were going out of business and the industry was in jeopardy. It could not withstand the onslaught much longer.

7 ISRI Fights Back RCRA reauthorization was not about to happen. ISRI had to get a clear mandate from Congress that would grant us an exemption from CERCLA/Superfund liability. Our industry was in jeopardy and had never faced such a crisis!

8 Our Argument Liability against scrap shippers was an unintended consequence of CERCLA. Congress did not intend to harm legitimate recyclers. Scrap (secondary feedstocks) were now at a disadvantage compared to virgin ores (primary feedstocks). Our argument was valid and supported by the environmental community.

9 Our Plan A grass roots implementation team ("GRIP") would eventually be formed. A grass roots effort of this magnitude had never been undertaken before by ISIS or ISRI. All 50 states would be canvassed. Fly-ins would be arranged for Capitol Hill visits to our Senators and Representatives. We were finding bi-partisan champions for our cause.

10 ISRI’s Congressional Efforts 1994 — ISRI’s added language to Superfund Act of 1994 bill, but bill unsuccessful 1995 — Congress began to understand our Superfund issue, but S-607 and H-820 blocked by other industries — Added public relation effort (newspaper editorials) for S-2180 and H-2733, but effort insufficient

11 ISRI’s Congressional Efforts (cont’d) 1999 — ISRI Senate Champions, Lott (R) and Daschle (D), introduce S-1528, saying – "Both the environmental and the business communities agree that America's public policy should expand the use and reuse of recycled scrap materials. It is unfortunate that Superfund actually discourages legitimate recycling and this unintended consequence must be addressed." BUT, – “In order for recyclers to be relieved of Superfund liability, they must act in an environmentally sound manner and must sell their product to manufacturers with environmentally responsible business practices."

12 ISRI’s Congressional Efforts Finally Work — We win! – S-1528 was incorporated into a larger omnibus spending bill. – At the very last moment, the Superfund Recycling Equity Act ("SREA") is passed. – President Clinton signs SREA into law on November 29, – Our almost decade-long struggle had finally proved successful!

13... But, With A Price... Our victory did not result in a carte-blanche exemption from liability. The exemption is couched in language that required further compliance on our part. The lead article in the January 21,2000 issue of the ISRI Digest read and warned:  "Superfund Relief Is Not Automatic - Compliance Requirements Are In Effect.

14 The Reason For This Presentation We must not forget how terrible Superfund liability was. We must not forget the almost decade long struggle to finally persevere. We must not think that the industry’s work is done.

15 Reasonable Care Obligation In order to be afforded relief from Superfund liability, scrap shippers must meet certain conditions, such as: 1) The material shipped met the definition of a "recycled material". 2) The transaction met the conditions for "arranging for recycling". 3) Did the shipper take reasonable care to determine the environmental compliance status, as it applies to the recyclable material, of the facility to which the recyclable material was sent.

16 Reasonable Care (cont.) This presentation is concerned about #3. SREA does not ask, but rather requires that:  "The recycler must exercise reasonable care to determine that the consuming facility was in compliance with substantive provisions of any federal, state, or local environmental law or regulation, compliance order, or decree applicable to the direct handling, processing, reclamation, storage, or other management activities associated with the recyclable material.

17 What is meant by Reasonable Care? The statute itself does not specifically outline what it means. The legislative history inserted into the Congressional Record provides some authoritative guidance. Based on that guidance, reasonable care principles have been developed for the recycling industry for protection under SREA.

18 What is meant by Reasonable Care? (cont’d) However, even the legislative history does not specifically identify the environmental compliance records which should be reviewed; the frequency of such review, or the consuming processes that are germane to the scope of inquiry. The concern over the reasonable care standard post-enactment of SREA was raised to EPA by various stakeholders in July/2000.

19 EPA Guidance As of this date, EPA has not released its official guidance on reasonable care.

20 Due Diligence Researching environmental databases is a very difficult and time consuming task. In 2002 many ISRI members requested assistance in compiling such searches. In February/2003 an ISRI task force was convened to consider whether RFPs should be sent to third parties to conduct such searches.

21 The Reports on Consuming Facilities In 2004, ISRI established the initial SREA Reasonable Care Compliance Program to provide facility reports for ISRI members. For today’s SREA Program, ISRI has retained the services of URS Corp. to conduct the database searches in order to satisfy the requirement of making inquiry to the appropriate environmental agencies.

22 The SREA Program SREA Reports are ISRI member benefit. Highly discounted “qualifying” reports on limited number of facilities (1,400) $15 per qualifying report ($500 retail!) $300 per non-qualifying report (wholesale) Report ordering mid-March through April each year New reports automatically ed following Fall Previous year’s reports available on-line for $12 each. Current year’s reports available on-line for $15 each.

23 The SREA Program (cont.) Ordering reports is easy! Go to to reserve your reports.

24 The SREA Program (cont.) Simply check off facilities for which you need reports from existing facility list. Add names of desired facilities not on the list. Review your order. Submit your order.

25 The SREA Program (cont.)

26 A Final Reminder Superfund was a nightmare. Defending Superfund is hugely expensive. Superfund imposes joint & several liability which means you could be responsible for the entire cost to cleanup a Superfund site which could force you out of business. Please Protect Yourself - Order Your Reports Now!

27 SREA Program Contacts Danielle Waterfield, Director, Gov't Relations – Edie Burkhead, Admin. Assistant, GR –