Administration Announces Refuse Act Permit Program

The President has taken administrative action by Executive Order, 1 ELR 45007, to set up a federal permit system under which industrial facilities will be issued permits for waste discharges under the combined authority of the Federal Water Pollution Control Act, as amended, 1 ELR 41101 (especially § 21(b) of the 1970 Water Quality Improvement Act) and the Refuse Act, 33 U.S.C. §§ 407, 411, 413, 1 ELR 41141, which is part of the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. § 401 et seq.

The Refuse Act makes unlawful the discharge of materials into the navigable waters of the United States, unless a permit to do so has been obtained from the Army Corps of Engineers. Subsequent Supreme Court decisions require that water quality considerations be taken into account in granting such permits. United States v. Republic Steel Corp., 362 U.S. 482, 1 ERC 1022 (1960); United States v. Standard Oil Co., 384 U.S. 224, 1 ERC 1033 (1966). The Water Quality Improvement Act of 1970, § 21(b), states that no federal permit or license can be given without a certification from the relevant state water pollution control agency that the facility proposed for licensing will meet applicable water quality standards.

The Army Corps of Engineers currently issues permits under the Refuse Act, and the Federal Water Quality Administration, now a part of the new Environmental Protection Agency (see Reorganization Plan No. 3 of 1970, 1 ELR 48001), administers the Federal Water Pollution Control Act. State agencies administer water quality standards which the Federal Water Pollution Control Act requires the states to promulgate for interstate waters.¹ Water quality standards for intrastate waters are administered by the states without federal oversight, although federal permits, such as Refuse Act permits, may be required for various activities in intrastate, but navigable, waters.

[1 ELR 10010]

In the new plan responsibility will be shared between the Environmental Protection Agency (EPA), the Corps of Engineers and the state water quality agencies. EPA will prepare "guidelines on effluent quality," or base levels of treatment, for 22 types of industry. These guidelines, expressed as allowable limits of so many parts per million for various pollutants, will define acceptable levels of secondary treatment or its equivalent for each industrial category. The Federal Water Quality Administration has already made initial attempts to define these effluent "base levels" for the oil, pulp and paper, and steel industries. In some instances higher-than-base levels of effluence will be required in order to meet standards for a particular stretch of water. Base levels of effluence will be, in effect, national water pollution standards, developed industry-by-industry. Rather than defining desirable overall water quality, as is done under the Water Pollution Control Act's water quality standards, the new plan will approach water quality control from the other side, defining acceptable water pollution in 22 different categories, distinguished by source.

The administrative machinery of the Army Corps of Engineers will be used to enforce the standards which EPA develops. (New Corps proposed regulations will be published in a special mailing of ELR.) When a polluter applies for a permit under the Refuse Act, the Corps will ask EPA if the polluter's proposed effluent levels are consonant with state water quality standards and with the newly developed "guidelines on effluent quality," scheduled for completion by June, 1971. The Corps will be required to accept EPA's decision as to whether the issuance of a permit would allow water quality standards to be violated. Under the new plan Corps permits will either be "provisional" or "final," depending upon the contents of the state certification, as described below. In other words, the Corps will no longer decide whether water quality standards will be infringed if a Corps permit under the Refuse Act is granted.Ultimately the Administration would consolidate authority for this program in EPA.

State water quality agencies will be asked to examine permit applications and advise EPA whether or not existing or proposed water treatment processes meet established water quality standards. For interstate waters, which are covered by the Federal Water Pollution Control Act, EPA will review the state's response and instruct the Corps to issue the permit if proposed levels of effluence are within the new guidelines. For waters not covered by the Federal Water Pollution Control Act, the state's determination would be binding, except for certain toxic materials.

For facilities which will be built after the plan goes into effect, the standard is high: permits will not be granted until the facility has been certified by the state as meeting its water quality standards and until EPA has passed on the permit application. Applications are expected for about 1,000 new permits a year.

For existing but presently unlicensed facilities, the states will be asked to make one of three determinations. (1) If the state determines that the applicant is not treating effluence, or that treatment is inadequate, and that the applicant is not meeting the implementation schedule set up under the state water quality standards implementation plan, EPA will instruct the Corps not to issue the permit. (2) If the state determines that the applicant is not treating effluence, or that treatment is inadequate, but that the applicant nevertheless is meeting the implementation schedule set up under the state water quality standards implementation plan, EPA will instruct the Corps to issue an interim permit requiring annual review of the extent of the applicant's compliance with the schedule. (3) If the state determines that the applicant is currently meeting water quality standards, EPA, if it is satisfied with the applicant's ability to conform to the new guidelines, may instruct the Corps to issue the permit.

Existing unlicensed sources of pollution will be asked to submit applications for permits by July 1, 1971. New facilities will have to begin applying for permits as soon as the new Corps regulations are commented upon and finally promulgated. The plan does not indicate how existing facilities which already have permits will be handled. There are approximately 40,000 existing facilities, only a few of which currently have permits.

Consolidation of the entire plan in EPA would probably occur within a year. A reorganization plan would probably not be sufficient to accomplish the transfer from the Corps, since permit authority is presently lodged with the Army Corps by statute.

Reaction to the Permit Proposal

The Council on Environmental Quality, which is apparently the plan's chief architect, has sought comment on the plan from a variety of sources. The U.S. Chamber of Commerce apparently was opposed; the National Industrial Pollution Control Council, created by Executive Order 11523, April 9, 1970, ER Federal Laws 71:0125, has circulated the proposal to industrial groups for comment.Among citizens' groups, the Citizens Advisory Committee on Environmental Quality was contacted, as were various representatives from national conservation organizations. Senator Muskie was informed of the proposal on December 15; Senator Hart and Congressman Reuss were also asked to comment. The Corps apparently has resisted the proposed redefinition of its authority, so that the Administration has delayed several times the announcement of its new program.

Even before the Administration's proposal, environmentalists were attracted by the simplicity of the Refuse Act, especially its enforcement provisions allowing civil injunctive relief, fines without a scienter requirement (up to $2,500 for each earlier discharge), imprisonment in some circumstances, and the possibility — not explicitly provided for in the [1 ELR 10011] statute — that citizens might supply the U.S. Attorney with the necessary evidence and, by means of a qui tam action,² collect half the total fine levied. The Corps had already made some progress in stepping up its formerly lax enforcement of the act's permit requirement, and the Corps had apparently formulated a Refuse Act plan of its own.

Recent Activity in the Courts under the Refuse Act: Standard Brands, Transit-Mix and Durning

The Justice Department recently has brought several well publicized suits involving mercury, and some U.S. Attorneys have been active in prosecuting violations of the act, especially in the Southern District of New York. see e.g. United States v. Standard Brands, Inc., 1 ELR 20040 (S.D.N.Y. October 23, 1970); United States v. Transit Mix Concrete Corp., 1 ELR 20041 (S.D.N.Y. December 11, 1970). (Justice Department enforcement guidelines will be revised soon.³) Also, many qui tam suits have now been filed, although only one (unfavorable) district court decision has been rendered. The case is now on appeal. Durning v. ITT Rayonier, 1 ELR 20040 (W.D. Wash. 1970).

In Standard Brands Judge Mansfield permanently enjoined defendant from (1) discharging into the Hudson River "sewage" (primarily carbohydrates and protein) which contains less than one part per million of chlorine and which has not received primary treatment; (2) discharging materials creating a biological oxygen demand (BOD) greater than an average of 200,000 pounds per week until 15 April 1972; (3) creating a BOD in a four-week period in excess of 22,500 pounds after April 15, 1972; (4) discharging any materials into the river except through waste treatment facilities after April 15, 1972. Furthermore, the court ordered the defendant to submit monthly statements to plaintiff of daily BOD and ordered defendant to allow access to his premises to duly authorized representatives of the United States for purposes of insuring compliance with the court's order. The order in Standard Brands illustrates the far-reaching civil relief available under the Refuse Act. Also, the court granted detailed injunctive relief, with ample time afforded defendant for internalizing into his normal business costs his free use of the river. This result could not be achieved if the Refuse Act's enforcement provisions included fines only.

In Transit-Mix Mrs. Gwen B. Zeichner and her son Steven, acting without counsel, asked the district court to award them half of the $25,000 fine imposed in this case on November 24, 1970. Judge Wyatt awarded them $12,500, reasoning that $411 of the Refuse Act requires that if in the discretion of the court any award is to be made to an informer, the award must be one-half the total fine imposed. Mrs. Zeichner and her son gave the Army Corps of Engineers information, relevant to the prosecution of this case, over a period of two years. The court points out that although the United States did not rely upon the information gathered by the Zeichners, nevertheless their efforts did "lead to conviction" of the defendant. It is unclear from the opinion whether the Zeichner's persistence was motivated by the fine-sharing provisions of the Refuse Act.

In Durning the court granted defendant's motion for dismissal of a qui tam action in which plaintiff was attempting to recover half of any fine levied for 1,800 separate alleged violations of the Refuse Act by defendant's pulp mill, located in Port Angeles, Washington. Plaintiffs alleged that they had "… provided full information of defendant's violations to the U.S. Attorney for the Western District of Washington and to the U.S. Corps of Engineers and waited a reasonable period for action he the U.S. Government prior to beginning this suit." Plaintiff's Memorandum in Support of Complaint and in Opposition to Motion to Dismiss, p. 15. In dismissing the plaintiff's suit, the court held that "if the plaintiff's contention is correct the Court would be in the awkward position of determining priority between a criminal prosecution by the United States … and a civil suit … by an informant. It would be unreasonable to conclude that Court would entertain both actions simultaneously or consecutively." 1 ELR 20040. The plaintiff has appealed to the Ninth Circuit.

Army Corps of Engineers' Authority under Proposed Refuse Act Permit System

The Administration's proposal is relevant to the Corps's authority as it was construed in Zabel v. Tabb, 1 ELR 20023, 430 F.2d 199 (5th Cir. 1970). In that case plaintiffs, two riparian landowners in Florida, sought to compel the defendants, the Secretary of the Army and the District Engineer of the U.S. Army Corps of Engineers, to issue a dredge-and-fill permit so that plaintiffs could fill their land in order to build a trailer park. On July 16, 1970 the Fifth Circuit reversed the district court and held that the Secretary may deny a dredge-and-fill permit on environmental grounds, under both the Fish and Wildlife Coordinating Act of 1958, 16 U.S.C. § 661 et seq., and the National Environmental Policy Act of 1969. In his July 16, 1970 opinion Chief Judge Brown of the Fifth Circuit entered judgment for the Army and held that these statutes obligate the Secretary to consider the environmental aspects of any proposed project before he grants a dredge-and-fill permit. Presumably, under Zabel v. Tabb the Corps's Refuse Act permit authority would be construed to include a range of environmental factors including — but going beyond — water pollution.

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The new plan is unclear about the circumstances under which the Corps can override permit applications approved by EPA or the states and deny permits because environmental degradation other than water pollution will occur. Executive Order 11574 § (a)(2)(B) requires the Corps to consider factors other than water quality which the Refuse Act or other acts prescribe. Section (a)(4) requires the Corps to perform environmental consultations under NEPA in administering the Refuse Act plan. Finally, § 2(a)(3) allows the Corps to consider fish and wildlife only where discharges under the permit sought will significantly modify the stream course or body of water. Thus the Executive Order apparently reaffirms the Corps's authority and obligation under Zabel and NEPA to deny permits for environmental reasons other than water quality, except when fish and wildlife are endangered but factors relevant to navigation are not affected. Yet proposed Corps regulations, which were mailed to ELR subscribers on January 7, 1971 (35 Fed. Reg. 200005, Dec. 31, 1970), appear to limit the Corps permit-granting authority to ministerial acts only, except in the one case where effects on fish and wildlife may be considered (but only if factors relevant to navigation are also affected). See Proposed Regs. §§ (d)(5) and (j). Section 1(2) does require the Corps to prepare NEPA environmental impact statements, but only for non-water quality related impacts. The proposed regulations, however, apparently do not give the Corps authority to act upon its findings.

Other Comments on the Refuse Act Plan Article in this Issue

Neither the Council nor one of the other federal agencies involved prepared a 102(2)(C) statement under NEPA, detailing the environmental impact of the proposed permit system. Section 102(2)(C) does not specifically exempt or include Presidential action under its requirement, but the new plan involves federal agency action affecting the environment in the most significant way. Although under the Council's Interim Guidelines § 5(d) and 102(2)(C) statement is not required from EPA, nevertheless a full 102(2)(C) statement might have afforded the best technique for coordinating plans for an interagency program.Also, by preparing such a statement the Council would have re-enforced its intention to apply NEPA to the entire range of federal action affecting the environment. Finally, the Corps is not exempted from preparing 102(2)(C) statements, and its statutory authority under the Refuse Act is the basis for the new plan.

The Council indicated before the new program was announced that the effluent guidelines would be made available for comment by industry and other interested groups before the program goes into effect. Industry, as a matter of due process, would expect to review proposed effluent levels. But public hearings or public review of the base effluent levels apparently is not planned. This omission, if it is such, is anomalous, since the federal air and water pollution control acts, especially the Federal Air Pollution Control Act, has rather lengthy, even vitiating provisions for review — including public review — before air and water standards are set. Of course technical questions regarding biological oxygen demand and other measures of stream turbidity, temperature, absorptive capacity, and toxicity (to man, animal and plant life) are best developed by EPA. But the final and simple question of water quality, i.e. just how clean does the nation want its streams, is primarily a non-technical question which has nevertheless been delegated in part by Congress to the administrative process. Public scrutiny, as is provided in water and air pollution legislation, would help insure that the standards as finally promulgated will achieve nationally expected levels of water quality.

The plan is unclear on how EPA and the Corps will learn the exact amount and character of pollutants discharged once the program is in operation, in order to determine whether a facility is in compliance with its permit. It appears that mandatory disclosure will be required, except the new plan is unclear about how pollutants involving trade secrets will be treated. A loophole for trade secrets would be difficult to justify; the public interest in full disclosure of pollutants would normally override profit interests in formulas and processes revealed only roughly, if at all, through a competitor's analysis of effluence, especially since the polluter can make in-process or recycling changes (also in the public interest) which will protect the information character of his effluence.

Refuse Act permits which have already been granted by the Corps are not mentioned in the new plan. They are important, because earlier Corps standards in issuing permits did not set clear, or high, standards. Perhaps these "grandfather" permits will be treated in the same manner as the "provisional" permits, discussed above. Yet provisional permits as a group may become a problem, unless they are frequently reviewed to monitor the extent of a polluter's progress toward a "final" permit, which in turn will probably have a review period, although longer than that for provisional permits.

Finally, the plan does not yet describe in detail just how early in the planning for a facility a permit application must be filed. Denying a permit to a plant costing millions to build is harder after the plant is built than before.

The Administration maintains that the proposed permit system can interrelate existing uncoordinated Corps, EPA and state programs in such a way as to spur compliance with overall water quality standards. This imposes a responsibility under the new plan to make the whole more effective than the sum of its parts, a task which the Administration feels can be accomplished.

1. For a recent discussion of the scope of the Federal Water Pollution Control Act and the definition of interstate waters, see F. Barry, The Evaluation of the Enforcement Provisions of the Federal Water Pollution Control Act: A Study of the Difficulty in Developing Effective Legislation, 68 Mich. L. Rev. 1103, 1114-6 (May, 1970).

2. Staff of the Conservation and Natural Resources Subcommittee of the Committee on Government Operations, 91st Cong., 2d Sess., Qui Tam Actions and the 1899 Refuse Act: Citizen Lawsuits Against Polluters of the Nation's Waterways (Comm. Print 1970).

3. See ER Current Developments 288 for Assistant U.S. Attorney General Shino Kashiwa's guidelines to all U.S. Attorneys.