The Import/Export of Hazardous Waste and Toxic Substances:  The United States Enforcement Experience

Paul R. Thomson, Jr.*

 

Hazardous chemical wastes – solvents, PCBs and waste oil – have been mixed clandestinely into fuels in the past four years and sold to unsuspecting customers in Southern Ontario, Quebec and Western New York State, The Globe and Mail has learned.

A sophisticated criminal conspiracy operating in Buffalo and Toronto has illegally blended several million gallons of toxic wastes into gasoline, diesel and industrial heating fuel, participants in the scheme and law enforcement sources said.

The Globe and Mail, May 8, 1989

A Toronto newspaper

 

Clearly, experience shows that criminal enforcement of national environmental laws involving international incidents are, more often than not, a case of an immovable object meeting an unstoppable force.  A country’s authority, on the whole to enforce its laws or investigate environmental non-compliance stops at its borders.  The environmental harm caused to that nation, however, may have originated or been facilitated by events and actions that occurred beyond that country’s jurisdiction.

 

With the rise of storage, treatment and disposal costs, there is a perceived incentive to clandestinely dispose of waste by dumping it on the ground, in the air, or in the water.  While each country tries to deal with such illegal activity in its own way, increasingly such activity is having an international effect.  This increased international effect results from, among other things, the illegal transportation of wastes between countries, and the conveying of such wastes via air and water currents.  Greater coordination and cooperation among countries in environmental enforcement could, in a very short time, have a significant impact on deterring the illegal disposal of wastes.

 

The consequences of illegal environmental activities know no boundaries.  The perception that developing nations can be used as a dumping ground hurts not only that country but also the world.  All countries share a responsibility in limiting industrialization impacts on the environment in general.

 

A similar coordinated enforcement response would also be useful in ensuring that safety standards are met in regard with the transportation of oil on the world’s waterways.  By ________________

*The author is the Deputy Assistant Administrator for Criminal Enforcement within the Office of Enforcement.  He wishes to thank Howard Berman, Senior Attorney within the Office of Criminal Enforcement Counsel, for his significant contribution to this article.  In addition, the author wishes to acknowledge Jim Vincent of EPA’s National Environment Investigations Center for his contributions from which parts of this paper were drawn.  The views expressed in this Article are solely those of the author; they do not necessarily reflect the views or policies of the U.S. Environmental Protection Agency.

establishing standards for safety and ensuring their enforceability – by information sharing and coordinated enforcement actions – countries can force the use of oil tankers in the world market to be a safer, well run means of transportation.

 

Criminal and civil enforcement can assist in stemming this trend of environmental mismanagement on the international level.  In the international arena of environmental laws, the most certain way to ensure compliance is through criminal enforcement.  Because all enforcement efforts are limited by jurisdiction, criminal enforcement has an advantage of using international tools such as INTERPOL, extradition treaties, specific agreements involving the cooperation of law enforcement agencies among the various nations, and the trust and kinship experienced by criminal investigators in expending United States jurisdiction.  Furthermore, in the international enforcement arena, foreign nations are very concerned with stopping criminal (either here or in the foreign jurisdiction) transboundary movement of toxic substances.1

 

Domestically, the United States’ primary law concerning the treatment, storage, and disposal of hazardous waste was enacted in 1976.  It was intended to be a tough regulatory scheme with very severe penalty provisions.  The Resource Conservation and Recovery Act (RCRA) established a cradle-to-grave regulatory system focused on generators, transporters, and disposers of hazardous waste.  The system is an expensive one for the affected industries.  Recognizing that penalties would have to be significant and that economic penalties can and often are passed through to the consumer, stiff criminal penalties were enacted.  Incarceration is the maximum deterrent.

 

Under the 1984 Hazardous and Solid Waste Amendments to RCRA, Congress recognized exports of hazardous waste as a significant issue that EPA must address.  Two provisions of this Act, 42 U.S.C. §§6928(d)(6) and (e)2, set forth the criminal sanctions of violating the statutory framework for exports of hazardous waste.3

 

Regulations governing the exports of hazardous waste were promulgated, pursuant to 42 U.S.C. §6938, on August 8, 1986 and effective November 8, 1986, and are found in 40 CFR Part 262 Subpart E.  Related regulations are found in 40 CFR Pars 260, 261, 263, and 271.

 

42 U.S.C. §6938:  This section establishes the framework for the exports of hazardous waste.  In order to export a hazardous waste, certain conditions precedent must be satisfied.  The threshold step in the hazardous waste export process is the notice of intent to export.  This notification, filed 60 days prior to the initiation of the export and valid for a 12 month period, for which EPA provides the following information:

 

EPA’s Office of International Activities via the State Department and Embassies, cables this information to the proposed receiving country.  The national government of the proposed recipient country is asked to consent.  If consent is given, a cable sent to EPA by the United States Embassy in the receiving country acknowledging the consent and setting forth any conditions serves as the EPA Acknowledgement of Consent to the exporter, who must attach a copy of it to each export shipment.  If the foreign jurisdiction objects to receiving hazardous waste or withdraws prior consent, EPA notifies the exporter in writing.

 

In order to be consistent with RCRA’s “cradle to grave” mandate, exporters are to comply with special manifest requirements, such as the name of the exporter and the point of departure from the United States.  Like the domestic requirements, a manifest must accompany all hazardous waste shipments, with the slight variation in the information contained there in so as to make it more useful for exports.

 

Although not statutorily mandated, regulations require exporters to deposit a copy of the manifest with United States Customs at the point of departure from the United States.  The primary purpose of this is to provide a “paper trail” in the event of an international incident.  The manifest is then forwarded to EPA to be used for tracking and exporter profiles and other purposes.

 

The transporter, upon completing his role in the export, is required to send a copy of the signed manifest (containing the date and place of the departure from the United States) to the exporter within 45 days from the date the hazardous waste was accepted for transport.  Likewise, within 90 days from the date the hazardous waste was accepted for initial transport, the consignee must confirm, in writing, to the exporter that the hazardous waste was received.  It should be noted that there is no authority to compel the foreign TSD facility to comply with this provision.

 

Finally, by March 1 of each calendar year, all exporters are required to file with EPA an Annual Report.  This report must contain exporter identification information, the calendar year covered by the report, consignee identification information, certain details of the hazardous waste exported to each consignee, and a description of the efforts taken to reduce the volume and toxicity of the waste generated, and a description of the changes in volume and toxicity of waste actually achieved during the past year.  This report must be signed and contain a certification as to its truth and accuracy.

 

42 U.S.C. §6938:  This section also allows for the United States and foreign government exports of hazardous waste as long as that agreement contains requirements similar to that above and, in addition, enforcement procedures.

 

42 U.S.C. §6928(d)(6):  This section prohibits the export of hazardous waste without the consent of the receiving country or in a manner not in conformation with an international agreement.  The penalty for violating this prohibition is 2 years in jail and/or $50,000 in fine.  Footnote [Under 18 U.S.C. §3571, the fine may be enhanced to $250,000 for an individual and $500,000 for an organization, or turn the pecuniary gain to the defendant].  It should be noted that exporting without the consent of the receiving country can be interpreted broadly – exporting a substance different from that stated in the notice or sending the hazardous waste knowing that it is going to be disposed of differently from what is stated on the notice changes the premise under which consent is given.

 

In addition to the regulations governing exports of hazardous waste, the United States has signed two international agreements – one with Mexico and the other with Canada – that directly deal with this matter.  The one with Mexico was signed November 12, 1986.  This agreement slightly modifies the notification procedures and also covers the import of hazardous waste into the United States from Mexico and transit shipments through the United States and Mexico.  Special provisions apply to hazardous waste generated by United State companies with manufacturing facilities in Mexico.

 

The agreement between the United States and Canada was signed October 28, 1986, and became effective November 8, 1986.  This agreement also sets forth slightly different requirements for several aspects of export shipments and, in addition, covers imports of hazardous waste into the United States from Canada and transit shipments of waste routed through Canada between two United States points.

 

There have been two developments that are in the process of changing the way the United States deals in transboundary shipments of hazardous waste.  On March 10, 1989, President Bush announced that he would seek legislative authority to ban exports of hazardous waste from the United States, except where there is a bilateral agreement with the receiving country that provides for the environmentally sound management of the waste.  As of this time, that legislation is under review by the Administration.

 

The other event is the 1989 Basel Convention on the Control of Transboundary Movement of Hazardous Wastes and Their Disposal.  In March, 1989, negotiations on a global convention on the transboundary movement of waste were concluded in Basel, Switzerland under the auspices of the United Nations Environmental Program.  Almost 40 countries have signed the convention.  To date, the United States has not yet signed.  The Convention applies to transboundary movement of wastes defined as “hazardous” by its terms, as well as to certain “non-hazardous” waste, including household waste and municipal incinerator ash.  The Convention allows a country to enter into separate bilateral agreements or arrangements provided “that such agreements or arrangements do not derogate from the environmentally sound management of the subject wastes as required by the Convention.”  What the Convention provides, from an enforcement view, is uniformity of baseline requirements for exports.  With that uniformity would come the potential for revelations of non-compliance.

 

Enforcement of these laws and regulations involves the close cooperation of various federal Departments and Agencies including EPA, Customs Service, the FBI, State Department and the Justice Department, and the foreign country involved in a particular export.  This cooperation is mandatory for the United States to have any chance of monitoring compliance across its vast borders with Mexico, Canada, and its shipping ports.  The purpose of the paperwork requirements is to limit the need for actual inspections of exports.  The best way that this cooperation can be shown is to discuss the incident involving improperly blended fuels.

 

On May 9, 1989, EPA’s Office of Criminal Enforcement Counsel (OCEC) and the National Enforcement Investigations Center (NEIC), both within the Office of Enforcement and Compliance Monitoring (OECM), learned of articles appearing in Canadian newspapers alleging criminal exports of PCBs and hazardous waste from upstate New York to Canada and that organized crime was involved.  Specifically, these articles alleged that over the past four years, PCBs, solvents, and waste oil have been mixed into fuels (gasoline, diesel and industrial heating fuel) and sold to customers in Southern Ontario, Quebec and Western New York State.  One purpose of this alleged scheme is to cheaply dispose of toxic materials originating here in the United States, inasmuch as the distributors and blenders could make more money by selling a diluted product of fuel blended with these PCBs and solvents to create a chemical “cocktail.”  Concurrently, the participants would perpetrate a tax fraud against both Canadian and United States governments.  By paying tax on the smaller amount (the undiluted fuel), but selling the larger volume (the diluted fuel), the perpetrators were avoiding paying the appropriate tax on the difference between these two amounts.  Given the quantities involved, the tax revenue involved would be significant.

 

Canada responded promptly to these allegations by decreasing the number of ports of entry/exit for such shipments from 170 to 31 and closely monitoring shipments through the 31 permitted points of entry.  The shipments that did cross the border were closely tracked.  Canadian Provincial and Federal Environmental officials did extensive sampling of current shipments and of locations to which shipments had been delivered in the 90 days preceding May 8.

 

The true picture about these allegations comes to light through almost a daily exchange of information between those who deal in environmental enforcement on a high level, and, more importantly, between those who deal in environmental enforcement on the staff level.  The lesson to be learned is that the best tool in these situations is fast communications.  Enforcement must be able to talk to enforcement directly.  If the purpose is to act against the environmental harm, diplomacy and protocol, while having their place, have to be subservient, in the short term, to the needs of enforcement cooperation, information exchanges, and assisting in finding the “smoking gun.”

 

While most abuses in this area stem from cost avoidance, there exists the probability that, due to the large amounts of cash involved, that waste can be used in laundering drug or other illegally derived money.  For example, if the normal cost of disposing of a certain hazardous waste is $500 per ton, but two people contract to have the waste disposed of at a rate of $3000 per ton, and there is no different disposal method involved, then $2400 in cash has been “laundered.”  That is, what may have been $2500 in illegally obtained money is now carried on the ledgers of a firm as legitimate.  It would not be difficult to set up such a scheme involving large sums of money masked as legitimate cash transactions.  Given the large volumes of waste production, significant amounts of money can be “laundered.”  In such situations, different agencies must come into play to ensure enforcement – in the United States it would mean that the Drug Enforcement Agency and the Internal Revenue Service would join the enforcement team.  Furthermore, while the United States has certain tracking procedures for bank transactions involving large sums of money, there are many nations that do not.  If these transactions were to occur in one of those countries, the difficulty of discovery is notably increased.

 

Time after time, those who use or affect the storage, movement or disposal of wastes try to minimize their costs and efforts by violating established rules.  This activity has marked effect on many countries, not just the nation where the illegal activity occurs, either because the wrongdoer traveled across national boundaries to accomplish this deed, or because currents below or above the surface carry these poisons across continents.  The ability to gather information in a timely manner is significant in enforcing each country’s environmental laws and regulations.  In addition, the ability to have an international coordinated enforcement response to a specific or perceived crime is a well-established tool that can easily be applied to the environmental arena.  Each country here has the ability, by establishing environmental enforcement protocols, to greatly increase environmental compliance in each nation and on a worldwide level.  Establishing lines of communications between our enforcement offices would greatly assist in establishing these goals.

Endnotes

 

1.  See Canadian Environmental Enforcement Act, §§111-133, for its use of a penal approach in ensuring compliance.  For example, §113(b) states that

Every Person who conducts any false or misleading test in purported compliance with a notice…is guilty of an offense and is liable

(o) on summary conviction, to a fine not exceeding three hundred thousand dollars or to imprisonment for a term not exceeding six months, or to both,

(p) or on indictment, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding three years, or to both.

 

2.  42 U.S.C. §6928(d)(6) states

Any person who knowingly exports a hazardous waste identified or listed under this subchapter (A) without the consent of the receiving country or, (B) where there exists an international agreement between the United States and the government of the receiving country establishing notice, export, and enforcement procedures for the transportation, treatment, storage, disposal of hazardous wastes, in a manner which is not in conformance with such agreements shall, upon conviction, be subject to a fine of not more than $50,000 for each day of violation, or imprisonment not to exceed two years….

    42 U.S.C. §6928(e) states

Any person who knowingly…exports any hazardous waste…who knows at that time that he thereby places another person in imminent danger of death or serious bodily injury, shall, upon conviction, be subject to a fine of not more than $250,000 or imprisonment for not more than fifteen years, or both….

 

3.  Presently, there are no RCRA restrictions on the export of solid waste.  In addition, PCB exports are regulated under the Toxic Substances Control Act, which by regulation the Agency has prohibited, as having imports.  Violation of this prohibition is punishable by up to one year in jail and/or a fine of up to $25,000 for each day of violation.  15 U.S.C. §2615(b).