Force Majeure Under Environmental Cleanup Agreements and OrdersMarch 24, 2020 – Alerts
Many businesses that are considered non-essential have been ordered to suspend operations during the coronavirus pandemic. As a result, planned work at remediation sites may not be able to proceed on schedule. Work may include a wide range of required activities, including routine tasks such as quarterly sampling, maintenance of systems and construction of remediation systems.
In most cases, the document governing the implementation of the remedial activities will include deadlines, and an unexcused failure to meet a deadline may result in the imposition of stipulated penalties. While the pandemic and associated governmental orders closing business offices are known to environmental agencies, failure to follow the specific force majeure provisions of the applicable remediation agreement or order can expose a company to penalties.
A force majeure event is an event arising from causes beyond the control of the company implementing the remediation that delays or prevents the performance of an obligation under an agreement or order with the government. If your company has any ongoing remediation projects, determine if any upcoming deadlines may be missed due to the coronavirus, and if so, consider invoking the force majeure provision of the relevant remediation agreement or order.
Many U.S. Environmental Protection Agency (EPA) clean-up agreements and orders impose certain conditions and requirements to establish that a force majeure event has occurred. For example, the agency may require that the company exercise its best efforts to fulfill its obligations under the order or agreement by anticipating a force majeure event and address the effects of a force majeure event to minimize the delay and any adverse effects to the greatest extent possible. In most cases, providing prompt notice of a force majeure event to the environmental agency is required. The notice should be provided to the agency contact identified in the remediation agreement or order under the “notice” provision, should refer to applicable government orders and declarations affecting the ability of the company to comply with its remediation obligations and should describe the measures the company has taken to anticipate the force majeure event and to mitigate any associated delay and adverse effects.
For additional information, here are links to some helpful government resources: