Michigan’s Environmental Due Diligence

Following is some information that has helped others gain a better understanding of Michigan’s Environmental Due Diligence process so perhaps it will be useful to you as well.

Protecting purchasers of potentially contaminated property is precisely (too many Ps here:) why the State of Michigan amended the law that governs environmental cleanup 26 years ago and introduced Baseline Environmental Assessments (BEAs), Due Care Plans and engineering controls that have minimized the need for costly No Further Action Letters (NFAs), Covenants Not to Sue, Deed Restrictions and costly Remediation that stalled projects historically. And it’s still unique to the rest of the country.

Step I

An ASTM E1527-13 Phase I ESA includes a review of prior reports (if available), FOIA requests to the Michigan Department of Environment, Great Lakes and Energy (EGLE) and the host Municipality, purchase of an environmental database to identify potential contamination that could be migrating onto the subject property, questionnaires to the buyer and seller, Aerial and Sanborne Maps, and a site walk-thru. The Phase I begins the innocent landowner’s defense to CERCLA liability and will daylight any potential environmental contamination/recognized environmental conditions (RECs) as well as to determine if a Phase II ESA (testing soil, groundwater, soil-gas, and/or indoor air) is needed. If RECs are not identified, then we will publish the Phase I report and the process is complete.

An ASTM Phase I has to be completed prior to closing in order to obtain liability protection and it has a shelf life of one year. EGLE does not receive a copy of the report.

Step 2 (if needed)

If RECs are identified during the Phase I, then a Phase II ESA will be completed to address said RECs and classify soils for compatibility with proposed future uses and/or for off-site disposal. A Phase II begins with review of analytical data in prior Phase II or BEA reports and sampling of soil, groundwater, soil-gas, and/or indoor air contamination.

The lab results from the sampling are then compared to EGLEs cleanup criteria (residential or non-residential) to determine if there are exceedances.

• If there are no compounds that exceed the cleanup criteria associated with the future use, then no further investigation will be recommended, and we will publish the final Phase II report to complete the process.

• If there are impacts above the cleanup criteria associated with the future use, the site would be deemed a Facility, and a Baseline Environmental Assessment (BEA) would be completed.

Step 3 (if needed)

The BEA is completed for a non-liable party to purchase contaminated property and obtain liability protection for any preexisting environmental impacts. In laymen’s terms, the BEA is basically an Insurance Certificate that “memorializes” the Phase I/II work and must be completed prior to purchase, or within 45 days of purchase, and submitted to EGLE within six months. While the BEA provides liability protection, an owner or operator of a contaminated piece of property has Due Care Obligations (DCP) to protect human health and the environment.

Step 4 (if needed)

After a buyer purchases the property, DCPs require the owner to prevent unacceptable risk, notify third parties that may come in contact with the soil, groundwater, soil-gas, and/or indoor air contamination, and to not exacerbate the contamination.

The DCP provides a roadmap for future use and outlines engineering controls that can be implemented, including, but not limited to; limited soil removal that is replaced with clean imported soil, using the building envelope to encapsulate contamination, berming contaminated soils, design/install/operate/maintain sub-slab depressurization systems for vapor intrusion.

Note: Contaminated soils under buildings and parking lots are acceptable if there are no volatile organic compounds (VOCs).

Feel free to call Doug Brown at ASTI ENVIRONMENTAL with any questions at 810/599-8131.