THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch The Legal Environment of Business A Critical Thinking Approach 5 th Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch THE LEGAL ENVIRONMENT OF BUSINESS CHAPTER 21 Environmental Law

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Environmental Protection  Pollution as “negative externality”  A detrimental by- product of an industrial economy  A national problem, requiring national solutions

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Alternatives to Regulation Tort Law Actions  Nuisance  Negligence Tort Law Problems  Causation

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Other Alternatives to Regulation  Pay subsidies to polluters  Charge pollution fee  Sell permits to pollute: “marketable discharge permit”

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Direct Regulation to Protect the Environment  General approach: Set and enforce standards  Technology-forcing  Technology-driven

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch The EPA  The largest federal agency  Created in 1972 by executive order  Mission: Protect environment from all forms of pollution  Methods:  sets standards,  monitors compliance,  enforces regulations—including criminal sanctions

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch National Environmental Policy Act of 1970 Created the process of requiring Environmental Impact Statements (EIS)  for major federal legislation or agency  Significant impact on the quality of the human environment

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch EIS Process  Preliminary decision: determination of non-significance  When EIS is required, it includes  Impact of proposed action  Unavoidable adverse effects  Alternatives  Short-term v. long-term analysis  Irreversible commitments of resources

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Federal Water Pollution Control Act Direct regulation of water quality GOALS  “Fishable” and “swimmable” waters  Total elimination of pollutant discharges METHODS  Point source effluent limitations  NPDES discharge permits

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Safe Drinking Water Act  Regulates public water supply systems  Application: 15 service connections/25 persons  Primary and secondary standards  Sets unenforceable goals for contaminants

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Air Quality  Clean Air Act of 1970  National Ambient Air Quality Standards (NAAQS)  State Implementation Plan (SIP)  1990 amendments: focus on cars; hazardous air pollutants

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Air Quality New Source Review (NSR) 1977:  regulates criteria pollutants  Installation of new pollution control technology  Removes millions of tons of pollutants each year.

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Acid Rain  Emissions trading program  Sulfur dioxide allowances auctioned  One ton per allowance  Effectiveness of process under continuing study  1990 Clean Air Act Amendments Amendments

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Climate Change Definition: Earth’s climate is changing in response to greenhouse gases and other pollutants. As the Earth’s temperature rises,  Polar ice caps & glaciers melt  Arctic sea ice decreases  Raise ocean levels  Flooding of coastal areas  More storms  Animals in danger of extinction Note: Some scientists are skeptical.

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Regulating Hazardous Waste and Toxic substances  Resource Conservation and Recovery Act of 1976 (RCRA)  Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA)  Toxic Substance Control Act of 1979 (TSCA)  Federal Insecticide, Fungicide, and Rodenticide Act of 1972 (FIFRA)

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Resource Conservation and Recovery Act of 1976 (RCRA): Goal: Control hazardous waste Method: Manifest program creates certification and recordkeeping for entire life cycle of designated hazardous wastes

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA): Example: "Superfund" Goal: To remediate land polluted prior to RCRA regulation Method: Use government Superfund money to clean up toxic sites, then recover costs from those responsible.

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch CERCLA “Superfund” Issues: Liability “Potentially responsible parties” – controversial extension of liability to  Present owners or operators  Previous owners or operators  Hazardous waste generators  Hazardous waste transporter

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch CERCLA “Superfund” Issues: Funding  Goal: Self-supporting program  1986 Amendments increased funding to $8.5 billion. Funding comes from taxes on major polluters:  petroleum  chemical feedstock  environmental taxes on corporations Note: The future of the Superfund is unclear

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Toxic Substances Control Act of 1979 (TSCA) Goal: Fills gap between RCRA and CERCLA Method: Requires PMN to EPA Note: Toxics broadly defined

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Federal Insecticide, Fungicide, and Rodenticide Act of 1972 (FIFRA) Goal: Regulation of all pesticides Method: Registration system  Certifies: composition of compound; labeling; performance Registration determines scope of use: general or restricted

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Federal Food, Drug, and Cosmetic Act (FFDCA) Goal: Establishes standards for pesticide residue in food Method: Issues ‘tolerances’ for pesticide used as determined by EPA  Applicant must demonstrate compliance  1996 Food Quality Protection Act declares ‘safe residue level’ as ‘reasonable certainty of no harm’

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Pollution Prevention Act 1990  Numerous regulatory efforts have been effective  Pollution has been significantly reduced  However, elimination of remaining pollution is increasingly costly to achieve Goal: Pollution Prevention Act is to encourage further progress Method: Provide information and incentive grants to spur innovation

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Global Dimensions  Pollution is transnational  The ‘Global Commons’ concept Goal: International cooperation and harmonization of laws Methods: Share research; promote conferences; create treaties; provide economic aid to accomplish goals

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch Selected Treaties and Protocols  Stockholm 1972 sustainable development  Montreal Protocol 1987 and 1996 ozone depletion  RIO Earth Summit - Rio de Janeiro 1992 biodiversity  NAFTA side agreement on the environment

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch U.S. Government Policies  U.S. did not sign Kyoto Protocol  U.S. does provide foreign aid to assist selected countries  Certain trade agreements contain environmental protection: NAFTA

THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall