[CPEO-BIF] Guardian Trust discussion

[Lenny Siegel <lsiegel@cpeo.org>]

Bruce-Sean Reshen <reshen@mindspring.com> of The Guardian Trust asked us
to post his reply to Peter Strauss on both CPEO listservers, because it
covers issues important at Brownfields as well as military facilities.
Peter's original message may be found at
http://www.cpeo.org/lists/military/2002/msg03062.html

LS               

***

Thanks Peter for your thoughtful and insightful comments.  You raise
some of the key questions that must be answered for The Guardian Trust
to be effective.  Please understand that the work we have done to date
was related to the feasibility of The Guardian Trust to assume certain
responsibilities and undertake certain activities.  Certain activities
related to the maintenance of engineering controls (in addition to
institutional controls) are clearly feasible.  With that said, I agree
that there are complexities with engineering controls that are not
present with institutional controls.  Yet, since institutional controls
are often utilized in conjunction with engineering controls, it is
important that we address both aspects in order to ensure effective long
term stewardship of these sites.  Once finalized, we will forward a
final report of The Guardian Trust pilot study for review.

Let me share some further ideas in response to your comments.  
The Guardian Trust would assume the responsibility for the monitoring,
inspecting and reporting on the status of ICs and ECs.  Reports would be
generated on a regular basis to regulators, responsible parties,
community officials and public interest stakeholders.  Note that many of
these stakeholders are not currently receiving the timely information
they need to effectively represent their constituencies.

The responsibilities assumed by The Guardian Trust would not affect
the relationship between the regulators and the responsible parties. The
responsible parties would still have their full obligations towards the regulators.

The Guardian Trust organized as a 501(c)(3) not-for-profit trust would
have to meet much more stringent fiduciary standards than an ordinary
corporation.  In addition to financial statement audits, there would be
operational audits and fiduciary reviews to ensure that The Guardian
Trust would meet its obligations.  Management operations would be
supervised by A Board of Trustees, accountable to both the regulators
and the public, would provide oversight for management operations. 
While no solution is truly perfect, it seems to me that if an entity
with more severe restrictions on its operations is available, it is to
be preferred to ordinary corporate or other entities.

You correctly point out that the two major risks are mis-estimation of
actual costs over time and mis-estimation of interest rates.
Appropriately designed insurance can be used to mitigate both of these
risks. Errors in cost estimation can be mitigated through a type of
post-closure cost cap policy and interest rate differentials can also be
managed through the use of insurance products.  Clearly, nobody can
predict the future, but that fact should not be used as a reason to not
undertake important programs.

By pooling these risks with a large number of sites, programmatically,
The Guardian Trust can provide cost effective solutions and take
advantage of the benefits of the Law of Large Numbers.  A large number
of sites will allow The Guardian Trust to provide engineering and land
use services with reduced costs for all parties.

Future potential litigation where it is claimed that The Guardian Trust
did not appropriately meet its responsibilities would be mitigated by a
strong system of quality controls supported by professional liability
insurance which any responsible organization should be required to maintain.

In order to provide more detailed empirical evidence, MGP Environmental
Partners is going to conduct further research and activities to fine
tune the parameters we are discussing.  

What is already clear is that the worst solution would be to do nothing
because that is what produces "Love Canal" type incidents that can
result from risk-based remedies.  What we must do is to test the most
effective solutions and develop a program that will give all of us the
assurance that the issues associated with long term post closure
stewardship of contaminated sites are being addressed.  Thoughtful
questions such as the ones you have mentioned are the start of that
process.  We welcome your continued comments and participation.  

Please feel free to contact me to discuss these issues further.

Bruce-Sean Reshen





-- 


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org

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