tanley Meiburg was worried. Plans last year to implement a key portion of President Clinton's reinvention program at the Environmental Protection Agency were near collapse. EPA staffers were bickering among themselves and with various stakeholders over how much flexibility to give a Weyerhauser pulp plant in Georgia under the agency's Project XL.
Meiburg, then the newly appointed deputy regional administrator in EPA's Atlanta office, knew something had to be done to restart the effort. He quickly arranged conference calls among senior officials in EPA's air, water and legal offices to "discuss the issues, reach decisions and move on," as he describes it. He sought to allay the concerns of environmentalists and state officials. And he counseled company executives to be patient.
The result: After more than 15 months of what all sides call very intense negotiations, EPA and Weyerhauser agreed in January 1997 that the company would reduce pollution levels from the water emissions at its Flint River plant. In return, it would gain flexibility in meeting federal and state air standards and reporting requirements.
"I'd like people to look at this experience and say you can negotiate with EPA and get better environmental protection," says Meiburg.
Meiburg's Project XL efforts in Georgia represent just one of the innovative approaches EPA and other agencies are using to resolve environmental issues. Under several new and some old programs, EPA is seeking to replace a command-and-control, one-size-fits-all approach to environmental regulation with standards, programs and rules negotiated and tailored for industrial sectors and individual companies and facilities.
In the process, EPA has put together coalitions of federal, state and local officials, industry leaders and representatives of environmental and community groups. The advisory groups help EPA find new ways to address environmental problems, develop new programs and negotiate new rules.
The idea is to develop "new ways to solicit new ideas that will allow us to change the culture of environmental regulation while achieving better results," says Fred Hansen, EPA's deputy administrator.
To date, EPA's efforts remain mostly experimental and small-scale. Whether they work beyond a few test cases remains to be seen. "These [programs] are dramatic departures," says J. Charles Fox, associate administrator and director of EPA's Office of Reinvention. "They haven't met the promise yet. It is very hard to achieve success in only a couple of years with complex problems where there is a wide disparity of views. We're still working at it."
Nevertheless, enough successes have been recorded to offer hope that the new programs could become a model for managing pollution nationwide.
Challenging the Regulated
President Clinton launched Project XL (for eXcellence and Leadership) with great fanfare in 1995. It offers companies, state environment agencies and community groups a chance to propose better ways to manage pollution, improve environmental performance and reduce costs on a facility-by-facility basis. XL "challenges the regulated community to find cleaner, cheaper ways of protecting the environment," says Jay Benforado, co-deputy director of EPA's reinvention office.
EPA has received 48 proposals for XL projects to date. Only three have been approved: Weyerhauser's pulp plant in Oglethorpe, Ga.; a Jack M. Berry citrus processing facility in La Belle, Fla.; and an Intel semiconductor factory in Chandler, Ariz. At least a half-dozen others are likely to get final approval this year, Fox says.
Many of the early XL proposals were "duds," says one EPA staffer--too focused on regulatory flexibility with insufficient attention given to environmental benefits. Also, some proposals were not suitable for XL, Fox says, but could be accommodated under other programs.
Industry critics, though, charge that EPA's criteria were unclear, the agency inadequately defined what was meant by "superior environmental performance" and "regulatory flexibility," and moved too slowly for companies that must act quickly to stay competitive.
To improve the XL process, EPA Administrator Carol Browner created the reinvention office last year and named Fox to head it. Browner and Hansen also appointed reinvention ombudsmen in each of EPA's program and regional office to ensure that problems were resolved. And EPA issued new guidance in April to clarify what it expected from XL proposals.
One proposal that was not a dud was Weyerhauser's. It worked, Meiburg says, because the company had a good track record managing pollution, offered significantly reduced emissions and invited EPA staffers, state officials, environmentalists and community groups to tour the Flint River plant and examine its records.
In the end, Weyerhauser agreed to install a closed-loop system that reduces water usage by 8 percent, to 11 million gallons a day, compared to the industry average of 25 million gallons.
The company also said it would cut in half its discharges of bleach, used to whiten pulp at the Flint River plant for the fluffy material in baby diapers and other personal hygiene products. Weyerhauser also agreed to improve management of its Georgia timber lands to reduce runoff into waterways and to improve wildlife habitat.
In return, EPA allowed Weyerhauser greater flexibility in meeting standards for hazardous air emissions, consolidated routine environmental monitoring to one report every three years and permitted the company to modify processes without seeking agency approval as long as emissions do not exceed set limits.
"XL lets us change our processes to better prevent pollution rather than just cleaning up afterwards," says Sara Schreiner Kendall, Weyerhauser's director of environmental affairs. "It also lets us be more efficient. That made good business sense." Indeed, Weyerhauser expects to spend $10 million on new water emission equipment, but will save $20 million it otherwise would have had to spend on air pollution equipment, plus $50,000 a year for a study of dioxin levels in fish once done annually but now required every third year.
EPA has incorporated some of the lessons learned in the Weyerhauser case into long-awaited rule for the pulp and paper industry that will give facilities more time to comply with air and water standards if they reduce emissions.
But not all XL proposals have not fared as well as the Weyerhauser initiative. One failure involved a 3M Co. videotape plant in Hutchinson, Minn., 60 miles west of Minneapolis. Proposals developed by the company and the Minnesota Pollution Control Agency promised air emissions below EPA standards. In return, EPA would allow pollutant levels to rise as production increased.
After 13 months of negotiations over whether to credit prior plant reductions in air emissions, 3M withdrew its XL proposal in December 1996. The company said it could not offer improved environmental performance unless its earlier reductions were accepted as a baseline.
"It was a big disappointment," says Andrew Ronchak, the state agency's XL coordinator. "XL is a narrow project that may help some companies if you catch them at a point where they are ready to improve. It will help the dirty facilities and penalize the good ones."
"There were a lot of hurt feelings," EPA's Hansen acknowledges. "Absolutely, [the 3M case] did not go well, but we learned from the experience and changed some of our approaches."
Common-Sense Rule-Making
That sense of experimentation also applies to EPA's Common Sense Initiative (CSI), which seeks to achieve environmental goals through a participatory, consensus-based approach. It aims to improve the ability of companies to manage their emissions by regulating industry sectors rather than trying to make all facilities meet one standard.
Moreover, in the Common Sense Initiative, community representatives "have an equal standing at the table with high-level government, industry and environmental decision-makers," says Elaine Wright, EPA's CSI director.
The Common Sense Initiative operates under a council, co-chaired by Browner and Hansen, that includes the chairmen or other high-ranking executives of leading corporations, presidents of environmental groups, heads of state environmental agencies and representatives of community, labor and Indian groups.
Six council subcommittees tackle regulations and issues relating to different industry sectors: metal finishing, iron and steel, printing, computers and electronics, automobile manufacturing, and petroleum refining. The council oversees the subcommittees' activities, issues recommendations and advises top-level EPA officials.
To date, CSI subcommittees have adopted more than 40 projects to help companies meet environmental standards, says Lisa Lund, the other co-deputy director of EPA's reinvention office.
"We believe the majority of companies want to do the right thing environmentally," says Robert Benson, a senior EPA program manager and the agency's representative on the metal finishing subcommittee, covering a sector that includes everything from watches, belt buckles and door knobs to car bumpers and airplane wings.
The metal finishers "just need some incentives to overcome the barriers," Benson says. "Our job is to identify the barriers and involve people who can help overcome them." One barrier involves getting loans to help small companies buy new equipment that cuts pollution.
EPA has brought together representatives of metal finishers, banks and insurance companies to develop a better under standing of each other's needs. Benson hopes that will lead to a greater willingness by bankers to finance and insurers to underwrite the purchase of new environmental equipment. No such loans have yet been issued.
The metal finishing subcommittee also supervised preparation of a compliance assistance manual, advising company shop-floor managers in plain language how to comply with EPA rules. "It's the bible," Benson says. EPA printed 500 copies but has orders for thousands.
Meanwhile, the iron and steel CSI subcommittee has launched a project aimed at redeveloping a "brownfield" in northwest Indiana. Brownfields are abandoned or underused industrial lands where real or perceived contamination prevents redevelopment as commercial, residential or recreational areas. Most are not polluted enough to make EPA's national priorities list as Superfund sites. EPA has helped fund more than 100 brownfield cleanup projects since 1993.
The iron and steel subcommittee identified more than 30 separate parcels of land in Gary, Hammond and East Chicago as comprising the northwest Indiana brownfield. The tracts range from one to several hundred acres. The subcommittee adopted 10 guiding principles for cleaning up the brownfield, oversaw creation in 1996 of a nonprofit community redevelopment authority and urged EPA to award the authority a $200,000 community development grant. EPA did so.
Robert Tolpa, team manager for industrial sectors in EPA's Chicago office, points out that the agency often sued iron and steel companies for millions of dollars in fines for violating pollution standards. "Now we are working with the companies," Tolpa says, adding: "But it took a long time to trust each other."
Mistrust and government's slow pace almost ended another CSI subcommittee. On behalf of their member companies, the American Petroleum Institute and the National Petroleum Refiners Association told EPA in December 1996 that company executives no longer would take part in the petroleum refining subcommittee.
In nearly two years, the subcommittee had approved only two CSI projects. Its meetings were often occasion for arguments between some company officials and some environmentalists. "Our chances of success were diminished by certain individuals who did not work well in the Common Sense forum," says Craig Weeks, Common Sense coordinator in EPA's Dallas office.
"It takes time to build consensus," Hansen adds. "We have to build levels of trust between people who have not worked with each other before and may have seen one another as adversaries."
After agency officials from the Dallas office worked out a compromise at a June 25 meeting of oil industry environmental managers, industry executives told EPA they would rejoin the subcommittee. Whether the reconstituted subcommittee can function any better is still unclear. Even if it does not, "just because one hasn't worked out doesn't mean the Common Sense Initiative is worthless," Weeks says. "Five out of six is batting pretty good."
In a recent report, however, the General Accounting Office ranked EPA's batting average on the CSI somewhat lower than that estimate. EPA officials say that from now on they will take a stronger lead in developing issues and projects for the subcommittees.
Finding Consensus
In yet another reinvention project, EPA has adopted a one-stop reporting pilot program. Typically, municipal and industrial facilities have to submit reports to a variety of local, state and federal agencies, often several times a year. EPA awarded $500,000 each to New Jersey, Massachusetts, Missouri, Utah and Washington in 1996 to test one-stop reporting. The pilot program calls for regulated facilities to make data from inspections, monitoring and permit applications available via computer networks that can be accessed by EPA, state and local environmental agencies, and the public
EPA is also making use of negotiated rule-making to write regulations. "Reg-neg," as it is called, involves bringing diverse interests together to reach consensus on proposed regulations instead of the usual adversarial comments on staff-written proposed rules, followed by endless lawsuits.
"As soon as we promulgated a final rule, we were sued, often by both sides," says Charles Kirtz, director of EPA's consensus and dispute resolution program. Indeed, in the early 1980s, 85 percent of EPA's final rules were challenged in court.
"Consensus development goes beyond seeking individual advice," Kirtz adds. "We want to get those who would sue us to help design the rules. When the best experts turn their attention from the courts to developing a solution, we can do it."
As with the Common Sense subcommittees, negotiated rule-making involves assembling coalitions of EPA and state environmental officials, industry representatives, environmentalists and community groups. Often a professional facilitator is hired to oversee the proceedings and help the participants reach consensus.
As the project has developed, Kirtz says, "we learned how to select parties and how to negotiate settlements. Interested parties learned it is often better to reach a settlement everybody can live with than to litigate."
Since the first reg-neg in 1983, Kirtz and his colleagues have negotiated 18 rules and considered 60 others. All but a few have resulted in consensus-based rules. That has led to fewer public comments and lawsuits. Even when reg-neg has failed, the parties often have agreed on most issues, which EPA employees then incorporate into a proposed rule. The process has been "wildly successful," Kirtz says. "Consensus is becoming a way of doing business at EPA."
Maybe, but most negotiated rule-making involves relatively narrow rules, such as those for heavy-duty truck engines and underground injection wells. Highly politicized issues, ones with broad national implications or ones that represent new policy directions usually don't work. "Reg-neg is not a panacea," Kirtz says.
Bringing People Together
Can Project XL, the Common Sense Initiative, one-stop reporting, negotiated rule-making and other new programs really cause what Kirtz says is a paradigm shift in EPA's regulatory thinking? "No single program can address all the issues," Hansen says. "But we think they can be applied broadly across all EPA offices."
Others aren't quite so sure. Philip Howard, a New York lawyer and author of the 1995 book The Death of Common Sense, says that EPA is too process-oriented because it must constantly respond to lawsuits challenging whether it follows proper procedures in setting regulations. Accountability for EPA, says Howard, must shift from the courts to Congress. "Let elected representatives make value judgments," he says.
Weyerhauser's Kendall offers a different, more positive perspective. The company's experience with the Flint River project allowed it "to test new ground,"she says. "It lets us experiment with new equipment and new techniques. It lets us try things for the first time."
Perhaps the most important development to come from the new EPA programs, says Dorreen Carey, until recently executive director of the Grand Calumet Task Force, a community group in northwest Indiana, is that they "bring people together to talk and learn about and respect each other's point of view."
"It's a slow process, like getting married," says Carey, who sits on both the Common Sense council and its iron and steel subcommittee.
That, maybe even more than any gains in environmental performance or cost savings, is the real benefit of EPA's new programs. "We are seeing a real sea change across the agency [in EPA's] attempts to reach out to the public," says Neal Kerwin, dean of American University's School of Public Affairs in Washington.
"It goes to the real core of what EPA does," Kerwin adds. "It could help restore public confidence in government. It has never been more important for government agencies to have access to public insights into what their programs should do."
HOT PROJECTS/
KEY PEOPLE
PROJECT XL
Offers companies, state environment agencies and community groups a chance to propose better ways to manage pollution and reduce costs on a facility-by-facility basis.
"I'd like people to look at this experience and say you can negotiate with EPA and get better environmental protection."
--Stanley Meiburg, Deputy regional administrator, Atlanta office
NEGOTIATED RULE-MAKING
Brings diverse interests together to reach consensus on proposed regulations, instead of adversarial comments on staff-written rules, typically followed by lawsuits.
"We want to get those who would sue us to help design the rules. When the best experts turn their attention from the courts to developing a solution, we can do it."
--Charles Kirtz, Director, consensus and dispute resolution program
COMMON-SENSE INITIATIVE
A participatory approach that regulates industry sectors rather than trying to make all facilities meet one standard.
In the initiative, community representatives "have an equal standing at the table with high-level government, industry and environmental decision-makers."
--Elaine Wright, CSI director
Jeffrey P. Cohn is a freelance writer who covers environmental and other issues for Government Executive.
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