Massachusetts Moves Toward Environmental Compliance Privatization

Alexander Volokh
Privatization Watch, August 1996

Massachusetts is moving toward a "self-certification" program for certain permitted businesses. Current Massachusetts environmental permits spell out in detail how companies should achieve state environmental standards -- dictating what technology the companies should use, how they should install it, and even where they should store their own records of the work.

Under the "Environmental Results Program" (ERP), companies need to commit to a certain standard of environmental performance, and report or "certify" annually their compliance with these standards. The Massachusetts Department of Environmental Protection (DEP), in return, will increase compliance information, do more inspections and audits, and step up enforcement against violators. The DEP estimates that 10,000 low-risk permits will be eliminated through self- certification. The objective of the ERP is to give companies flexibility to choose how to meet environmental standards.

The ERP is expected to apply to about 10,000 companies, which currently hold a total of 16,000 state permits (these companies account for only a small fraction of emissions in Massachusetts). The self-certification program is expected to allow the Massachusetts DEP to spend more of its resources on inspections and audits (to locate violations of performance standards) and enforcement (to punish violators).

The ERP was unveiled by Gov. William Weld in late April. Twenty-two companies are participating in a voluntary pilot project to test the approach and determine how much recordkeeping and reporting is necessary under the ERP. Ultimately, the state may produce "compliance workbooks" to help companies understand and comply with the program. By the end of 1996, the state hopes to open the program to two (as yet undetermined) categories of permits; more will be added as standards are written. Facilities subject to federally mandated permitting programs are excluded from participating in the ERP.

The state of Massachusetts will have to seek federal approval to certify companies that are subject to both state and federal standards. By the end of 1996, the DEP expects 70 percent of all companies that now require state permits to shift to performance-based, facility-wide self-certification, eliminating many low-risk permits. The number of facilities involved could be greater if the U.S. EPA allows the DEP to treat federal permits in the same way.

Industry has generally supported the ERP. Still, according to State Environmental Monitor, some DEP sources suggest that "industry has been reluctant to leave its permits" -- both because permits lend some certainty to the regulatory process, and because some companies may use their permits to conceal their noncompliance. Environmentalists have been cautious; some groups have accused Weld of "rushing" the program to placate business interests and are "withholding complete support" until more results become available.

Environmental compliance privatization isn't new in Massachusetts; since October 1993, in what amounts to a privatization of the state Superfund program, an independent state board has been authorizing hazardous waste cleanup professionals to oversee the cleanup of state Superfund sites. Since its inception, the licensed site professional (LSP) program has certified about 450 professionals, who have done environmental assessments and supervised cleanup at about 3,200 sites.