1. Ch. 21-1 © 2006 Prentice Hall THE LEGAL ENVIRONMENT OF BUSINESS A Critical Thinking Approach Fourth Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne Nancy K. Kubasek Bartley A. Brennan M. Neil Browne

2. © 2006 Prentice Hall Ch. 21-2 THE LEGAL ENVIRONMENT OF BUSINESS CHAPTER 21 Environmental Law

3. © 2006 Prentice Hall Ch. 21-3 THE LEGAL ENVIRONMENT OF BUSINESS l Environmental Protection Pollution as “negative externality” A detrimental by-product of an industrial economy A national problem, requiring national solutions

4. © 2006 Prentice Hall Ch. 21-4 THE LEGAL ENVIRONMENT OF BUSINESS l Alternatives to Regulation Tort Law Actions Nuisance: public and private TrespassNegligence Tort Law Problems StandingCausation

5. © 2006 Prentice Hall Ch. 21-5 THE LEGAL ENVIRONMENT OF BUSINESS l Other Alternatives to Regulation Pay subsidies to polluters Charge pollution fee Sell permits to pollute: “marketable discharge permit”

6. © 2006 Prentice Hall Ch. 21-6 THE LEGAL ENVIRONMENT OF BUSINESS l Direct Regulation to Protect the Environment General approach: Set and enforce standards Technology-forcingTechnology-driven

7. © 2006 Prentice Hall Ch. 21-7 THE LEGAL ENVIRONMENT OF BUSINESS l The EPA The largest federal agency Created 1972 by executive order Mission: Protect environment from all forms of pollution Methods: Sets standards, monitors compliance, enforces regulations— including criminal sanctions

8. © 2006 Prentice Hall Ch. 21-8 THE LEGAL ENVIRONMENT OF BUSINESS l National Environmental Policy Act of 1970 Created the process of requiring Environmental Impact Statements (EIS) For major federal legislation or agency action having Significant impact on the quality of the human environment

9. © 2006 Prentice Hall Ch. 21-9 THE LEGAL ENVIRONMENT OF BUSINESS l 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

10. © 2006 Prentice Hall Ch. 21-10 THE LEGAL ENVIRONMENT OF BUSINESS l 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

11. © 2006 Prentice Hall Ch. 21-11 THE LEGAL ENVIRONMENT OF BUSINESS l Safe Drinking Water Act Regulates public water supply systems Application: 15 service connections/25 persons Primary and secondary standards Sets unenforceable goals for contaminants

12. © 2006 Prentice Hall Ch. 21-12 THE LEGAL ENVIRONMENT OF BUSINESS l 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

13. © 2006 Prentice Hall Ch. 21-13 THE LEGAL ENVIRONMENT OF BUSINESS l Air Quality New Source Review (NSR) 1977 Hazardous Air Pollutants (HAP) 1999 Standard: Maximum Achievable Control Technology (MACT)

14. © 2006 Prentice Hall Ch. 21-14 THE LEGAL ENVIRONMENT OF BUSINESS l Indoor Air Pollution “Sick building syndrome” Emissions from building materials, furnishings Clean Air Act does not apply OSHA regulations may apply in workplace but not in homes

15. © 2006 Prentice Hall Ch. 21-15 THE LEGAL ENVIRONMENT OF BUSINESS l Acid Rain 1990 Clean Air Act Amendments Emissions trading program Sulfur dioxide allowances auctioned One ton per allowance Effectiveness of process under continuing study

16. © 2006 Prentice Hall Ch. 21-16 THE LEGAL ENVIRONMENT OF BUSINESS l Hazardous Waste and Toxic Substances Resource Conservation and Recovery Act of 1976 (RCRA) METHOD Manifest program — creates certification and recordkeeping for entire life cycle of designated hazardous wastes Goal: Control hazardous waste

17. © 2006 Prentice Hall Ch. 21-17 THE LEGAL ENVIRONMENT OF BUSINESS l Hazardous Waste and Toxic Substances 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

18. © 2006 Prentice Hall Ch. 21-18 THE LEGAL ENVIRONMENT OF BUSINESS l “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

19. © 2006 Prentice Hall Ch. 21-19 THE LEGAL ENVIRONMENT OF BUSINESS l “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

20. © 2006 Prentice Hall Ch. 21-20 THE LEGAL ENVIRONMENT OF BUSINESS l Toxic Substances Control Act of 1979 (TSCA) Goal: Fills gap between RCRA and CERCLA Toxics broadly defined Method: Requires PMN to EPA

21. © 2006 Prentice Hall Ch. 21-21 THE LEGAL ENVIRONMENT OF BUSINESS l 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

22. © 2006 Prentice Hall Ch. 21-22 THE LEGAL ENVIRONMENT OF BUSINESS l 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’

23. © 2006 Prentice Hall Ch. 21-23 THE LEGAL ENVIRONMENT OF BUSINESS l Pollution Prevention Act 1990 Numerous regulatory efforts have been effective Pollution has been significantly reduced However, elimination of remaining pollution increasingly costly to achieve Pollution Prevention Act goal is to encourage further progress Method: Provide information and incentive grants to spur innovation

24. © 2006 Prentice Hall Ch. 21-24 THE LEGAL ENVIRONMENT OF BUSINESS l 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

25. © 2006 Prentice Hall Ch. 21-25 THE LEGAL ENVIRONMENT OF BUSINESS l Selected Treaties and Protocols Stockholm 1972 sustainable development Montreal Protocol 1987 and 1996 ozone depletion Rio de Janeiro 1992 biodiversity NAFTA side agreement on the environment Kyoto 1998 greenhouse gases

26. © 2006 Prentice Hall Ch. 21-26 THE LEGAL ENVIRONMENT OF BUSINESS l 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