Reducing Environmental Risk

Term Definition: Environmental Requirements

Environmental Requirements: Traditionally the term used is “Environmental Law,” but “Requirements” is more accurate as the definition goes beyond statutes and regulations.

a. These definitions typically list all of the major federal and state environmental statutes with appropriate citations, all as amended, and any regulation pursuant thereto, followed by the clause, “or any other present or future law, ordinance, rule, regulation, order or directive addressing environmental, health or safety issues of or by any “Governmental Authority.” The term “Governmental Authority” may be defined to mean “the Federal government, and any state or other political subdivision thereof, and any agency, court or body of the Federal government, any state or other political subdivision thereof, exercising executive, legislative, judicial, regulatory or administrative functions.” Since the catch-all phrase includes all relevant authorities, the traditional long list of statutes and citations could easily be eliminated.

Environmental Requirements: Traditionally the term used is “Environmental Law,” but “Requirements” is more accurate as the definition goes beyond statutes and regulations.

a. These definitions typically list all of the major federal and state environmental statutes with appropriate citations, all as amended, and any regulation pursuant thereto, followed by the clause, “or any other present or future law, ordinance, rule, regulation, order or directive addressing environmental, health or safety issues of or by any “Governmental Authority.” The term “Governmental Authority” may be defined to mean “the Federal government, and any state or other political subdivision thereof, and any agency, court or body of the Federal government, any state or other political subdivision thereof, exercising executive, legislative, judicial, regulatory or administrative functions.” Since the catch-all phrase includes all relevant authorities, the traditional long list of statutes and citations could easily be eliminated.

b. To avoid the possibility of a reference list of statutes with inaccuracies or gaps, a descriptive definition is preferable. The definition should include “all present and future requirements of common law, and all present and future requirements of any Governmental Authority regulating the discharge, disposal, remediation, etc. of any Hazardous Material” or any other pollutant, contaminant, etc., or regulating the protection of the health and safety of employees or the public.

c. Including in the definition a reference to “future” requirements is necessary to address the backward reach of environmental statutes such as CERCLA. To the extent a lender is requiring a covenant of compliance with laws, the reference to future laws is also needed.

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