1. John W. Watson Baker & McKenzie 130 E. Randolph Drive – Suite 3500 Chicago, Illinois 60601 (312) 861-2646 – phone / (312) 698-2969 – fax John.W.Watson@Bakernet.com John.W.Watson@Bakernet.com Revolution and Evolution of Environmental Risk Management for Mega-Projects The Legal Perspective Brownfields 2006 Boston, Massachusetts November 14, 2006

2. Revolution and Evolution of Environmental Risk Management for Mega-Projects Legal Liability Issues Remediation Cost Exposure Remediation/Development Risk Third Party BI/PD Claims Tools for Managing Liabilities

3. Revolution and Evolution of Environmental Risk Management for Mega-Projects Mega-Projects Remediation Cost Exposure Owner’s primary objective – cost minimization ELURs v. excavation Long term liability for ELURs

4. Revolution and Evolution of Environmental Risk Management for Mega-Projects Remediation / Development Risk Remediation cost overruns Remedy construction risk Remedy completion –Timing of reuse –Limitations on reuse

5. Revolution and Evolution of Environmental Risk Management for Mega-Projects Third Party BI/PD Claims Off-site liability concerns ELURs/Toxic Tort Claims Long term remedy failure

6. Revolution and Evolution of Environmental Risk Management for Mega-Projects Managing Environmental Risk Statutory Protections –Bona Fide Prospective Purchasers Pre-acquisition AAI Post-acquisition – continuing obligations –U.S. EPA comfort letters –Enforceable Institutional Controls

7. Revolution and Evolution of Environmental Risk Management for Mega-Projects Managing Environmental Risks Contractual risk allocation –ELURs/Continuing obligations –Multiple purchasers –Subsequent purchasers –LLC purchasers

8. Revolution and Evolution of Environmental Risk Management for Mega-Projects Managing Environmental Risks Environmental Insurance Issues/Solutions –Remediation Solutions Cost cap Finite risk Liability buy-outs

9. Revolution and Evolution of Environmental Risk Management for Mega-Projects Managing Environmental Risks Environmental Insurance Issues/Solutions –Long Term Liability PLL Indemnity failure O&M funding ELURs / PLL limits