Watch Out For Those Nasty On-site Chemicals
Jany K. Jacob
(Reprinted from Seattle Daily Journal of Commerce)

        Contractors know that many construction projects will require that drums of hazardous chemicals or other hazardous materials be stored somewhere on-site for use during the project. What they may not know, however, is that the accumulation of these stored materials can leave them wide open to liability— even when the materials cause no harm to persons or property. The construction work itself may also generate hazardous materials that must be transported to a reputable disposal facility. These activities are also not without their respective liabilities. The federal Resource Conservation and Recovery Act (RCRA), codified at 42 U.S.C.A. §6901 et seq., sets in place a “cradle-to-grave” tracking system for hazardous materials, and it is a “strict liability” environmental law that imposes liability on contractors without regard to notions of fault. Washington law pertaining to hazardous waste management (other than underground storage tanks) is codified at RCW 70.105 and this statute regulates “dangerous wastes” that are present on a project site but are not the result of past contamination. Washington is not authorized to implement RCRA in its entirety so both the federal and state laws pertaining to hazardous materials apply, depending upon the situation. Washington’s Department of Ecology (“Ecology”) and the U.S. Environmental Protection Agency (“EPA”) administer these laws in a dual regulatory capacity.

        Under RCW 70.105, some materials are specifically listed as being dangerous wastes, whereas others exhibit certain characteristics that render them to be dangerous wastes. These characteristics include “ignitability,” “corrosivity,” “toxicity” and “reactivity.” Ecology’s regulations, found at WAC 173-303-090, thrust upon the contractor the responsibility to properly characterize materials on the project site as either hazardous or non-hazardous material. Thus, it is not a defense that the contractor did not know that the material his crew was handling is regulated. Common hazardous materials found on construction sites include solvents, paints, adhesives and petroleum products but many others may qualify, depending upon the scope of the project.

        Pursuant to WAC 173-303-200, whether a permit is required for the accumulation of dangerous wastes depends upon both the quantity of these materials on the project site and the length of time that the materials will be left there. Hazardous materials of sufficient quantity cannot be kept on-site for more than 90 days without a permit. Contractors undertaking public projects should keep this in mind because public owners especially shift the responsibility of obtaining necessary permits onto the prime contractor.

        Under WAC 173-303-330-50, contractors handling dangerous wastes must undertake measures designed to prevent spills, provide personnel training, and have in place an emergency response procedure in case of a spill. Hazardous materials stored on the project site must be properly contained, marked, and labeled. Workers should be adequately warned of the contents of all containers and contractors may want to go as far as using “danger” symbols on the off chance that one of the construction workers is illiterate. Ideally, these materials should be stored at some segregated location on the premises and contractors should check to see that there are not any conditions on the owner’s property that may cause damage to the stored material. This is significant because it may be difficult to insure these materials against the risk of loss from casualty. Commercial general liability (CGL) policies typically include a “pollution exclusion” clause so that they do not cover bodily injury or property damage resulting from spills. Thus, it may prove to be a sound business decision to negotiate for extended coverage or for an endorsement from the owner’s insurer when a project calls for the extensive handling of hazardous materials.

        Obligations pertaining to the generation of dangerous waste, found at WAC 173-303-170, also hinge upon the quantity of the dangerous waste that is generated. A generator is defined as “any person…whose act first causes hazardous waste to become subject to regulation.” 40 C.F.R. §260.10(a). If a generator is unable to meet the requirements of an exemption, then he must comply with the mind-numbing regulatory requirements imposed upon hazardous waste treatment storage disposal (“TSD”) facilities, including meeting proper closure requirements and following the hazardous waste manifest system. Contractors may incur liability as a “TSD operator” who is held to the same level of accountability as the “TSD owner.” Generators must comply with the land disposal restrictions found at WAC 173-303-140. There are also reporting and recordkeeping requirements, and an EPA identification number must be obtained for non-exempt hazardous materials generated.

        The risk-adverse contractor would be well advised to keep abreast of the nature and quantity of hazardous materials on-site that may be deemed to be under his control. As in every project, the best legal defense is to proactively paper the file. This is particularly important when it comes to environmental liability because, not only can the government sue for an injunction and civil penalties (or criminal penalties for knowing violations of the law), but third parties can take advantage of RCRA’s citizen suit provision found at 42 U.S.C.A. §6972. All that is required to trigger RCRA’s liability provisions is a person who is “contributing” to a situation involving hazardous materials that may endanger the environment. 42 U.S.C.A. §6973(a). Regulators will not be shy about meting out monetary penalties to contractors who fit the bill. Since RCRA civil penalties run as high as $25,000 per day for each violation, contractors who implement proper written procedures for the handling of hazardous materials on their projects at the out-set would be making a good investment in the future of their companies.