LIMITING ENVIRONMENTAL LIABILITY IN CONSTRUCTION

I. Introduction 1
II. Environmental Issues in Construction 1
   A. Environmental Conditions 1
        1. Potential Contaminants/Structures 1
            a. Asbestos 1
                (1) Demolition and Renovation 2
                    (a) Inspection, Notification, and Emission
Control 2
                    (b) Licensing 3
                    (c) Enforcement 3
                    (2) Workplace Activities -- OSHA Regulations 4
                b. Lead Paint 7
                c. Contaminated Soil and Groundwater 9
                    (1) Remedial Obligations 9
                    (2) Notification Obligations 12
                        (a) CERCLA Notification Rules 12
                        (b) Federal Clean Water Act Spill Reporting 12
                        (c) Texas Spill and Accidental Discharge
Reporting 13
            d. Polychlorinated Biphenyls 14
            e. Indoor Air Pollution 15
            f. Above Ground and Underground Storage Tanks 15
                    (1) Above Ground Storage Tanks 15
                    (2) Underground Storage Tanks 17
        2. Protected Property/Biota 19
            a. Endangered Species 19
            b. Historic Sites 20
            c. Wetlands 21
            d. floodplain Management 21
    B. Activities 22
        1. Air Emissions . . 22
            a. General Prohibitions and Control of Dust Emission 22
            b. Construction Permits 23
            c. Enforcement 23
        2. Water Discharges 24
            a. General Prohibitions 24
            b. Storm Water Discharges 24
            c. Wetlands 26
            d. Enforcement 29
        3. Wastes and Debris Management 29
        4. OSHA Hazard Communication Rules 31
            a. Material Safety Data Sheets 32
            b. Labeling 32
            c. Written Hazard Communication Program and Training 33
            d. Texas Hazard Communication Act 33
            e. Hazardous Waste Operations and Emergency Response 34
III. Limiting Liability and Managing Risks 35
    A. Internal Measures 36
        1. Environmental Policy and Procedures 36
        2. Waste Management 36
        3. Insurance 37
        4. Due Diligence 37
    B. Contractual Provisions 37
        1. Representations and Warranties 38
        2. Environmental Audit 39
        3. Covenants 39
        3. Allocation of Responsibilities 39
        4. Indemnification 40
        5. Insurance 40
        6. Right to Stop Work 41

Conclusion 41


Abstract

Recently, there have been a number of legislative and regulatory developments in the environmental field of particular relevance and importance to those in the construction industry. This paper identifies and discusses significant environmental issues relevant to those in construction and then presents a general discussion of steps for contractors to take to limit environmental liability and manage environmental risks.

Environmental concerns create the potential for significant liability for all parties to a construction contract. The parties, therefore, should identify and address those concerns in the contract. The parties also should take internal measures to assure that they are doing everything they can to minimize their exposure to environmental liabilities.

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