• Arizona Contractor & Community

Business Perils of Environmental Negligence

By Michael Bernstein


This is the story of an Environmental Health & Safety manager who was so preoccupied with current operations at his plant that he neglected the site’s environmental history. His inattention nearly cost his employer the approval of a bank loan, and he paid for his error with his job.


The company was a manufacturer of wire products. An important industrial employer in an otherwise rural county, the company was seeking a loan for expansion. I was assigned to lead a team of trainee scientists to perform a Phase I Environmental Site Assessment for the lender.


In order to satisfy insurance company requirements and government regulations, the EHS manager was always busy maintaining records of air emissions, chemical usage, employee health and safety, and related matters. Focused entirely on the plant’s active operations, he had never thought to consider the possibility of historic concerns. He had a one-dimensional perspective of time – the present. But the plant had been operating since the 1970s. I was primarily concerned with the potential for environmental contamination resulting from historic operations. Potential problems with current recordkeeping were strictly secondary.


The plant had its own water supply well. Rarely had the water been sampled for laboratory analysis. Trichloroethylene – a notorious environmental contaminant – had been detected years earlier. One of the other managers gave me an old environmental report that noted the former use of a TCE degreaser. The report contained a photograph of the degreaser. Features on the wall behind the degreaser on the photograph, plus the help of an honest employee, enabled us to find the exact location.


That’s where we collected soil gas samples, and found TCE – about 80 feet from the water well. Was the employee cafeteria using tainted water? If so, did the TCE concentration exceed the applicable standard for drinking water? No one knew.

Two outbuildings, which were still in use, pre-dated construction of the plant. Each had a heating oil underground storage tank. Had the USTs leaked? No one knew. Their integrity had never been evaluated.


The plant was listed on a state regulatory agency database as an open-case leaking UST site. Contaminated soil had been encountered and excavated when a regulated gasoline UST was removed about 10 years earlier. Why had closure approval not been granted? The EHS guy knew nothing about it.


The bank had two viewpoints regarding these issues. The TCE question and the heating oil USTs were concerns known only to the private parties; the confidential holding of this information gave the lender a cautioned degree of relief. But the leaking UST case was a matter of public record. The loan officers regarded it as a stigma for all to see, with the possibility of eventual enforcement action and additional expense. They warned the owner that the loan would not be approved if the case remained open.


#MichaelBernstein #EnvironmentalNegligence

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This article originally appeared in the bimonthly Arizona Contractor & Community magazine, Jan/Feb 2021 issue, Vol. 10, No. 1.


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