[CPEO-MEF] The Guardian Trust Pilot Study

[Lenny Siegel <lsiegel@cpeo.org>]

[Because The Guardian Trust is being designed to function at a variety
of cleanup sites, including Brownfields and closing military bases, we
are posting this summary on both our listservers. Please excuse the
cross posting. - LS]


Connecticut-based MGP Environmental Partners has released "The Guardian
Trust Pilot Study Report." Though "Pilot" often connotes a trial run,
this Pilot Study is more of a feasibility study. The report describes
the proposed role of The Guardian Trust:

"The Guardian Trust is intended to assure that certain institutional and
engineering controls are maintained over the long-term after a cleanup
has been completed and approved by the environmental agencies, and that
information about these controls is maintained and available to the
public and interested stakeholders."

It also explains:

"The Guardian Trust could assume the remediator's responsibilities to
assure the long-term stewardship of ICs [institutional controls] and ECs
[engineering controls], not as a substitute with respect to the
environmental agencies' enforcement authority, but as an entity legally
positioned and obligated to perform. The Guardian Trust would receive a
property interest from the remediator, consistent with property law of
the state in which the site is located, and thereafter carry out the
remediator's responsibilities. This is a role that most government
agencies are reluctant or unable to play even though it is critically
important in the remediation scheme. The ability of a remediator to
transfer these responsibilities to The Guardian Trust, a single-purpose
entity formed to serve as a steward for ICs and ECs, would enable
remediators to satisfy long-term obligations on a cost advantaged basis
based upon the economies of scale offered by The Guardian Trust.
Thereafter, properties can be redeveloped and transferred with the
confidence and assurance that environmental conditions remaining on
remediated sites will be properly monitored and managed...."

The pilot study found that The Guardian Trust could exercise these
functions under Pennsylvania's hazardous waste laws and at Department of
Defense facilities, including closing bases. 

It also explored the complex tax rules that could apply to various forms
of corporate organization, leaving some uncertainty whether it would be
possible for a remediator to get a tax break in transferring its
responsibilities to The Guardian Trust. In fact, The Guardian Trust
might end up as an entity other than a legal trust: "... upon further
analysis as part of the implementation of The Guardian Trust, it may
turn out that a not-for-profit charitable trust is not necessary or is
too burdensome that it becomes counter to the mission of The Guardian
Trust. It is interesting to note that despite the perceived advantages
of a not-for-profit charitable trust, the Advisory Committee Findings do
not require either feature as a fundamental component of The Guardian
Trust moving forward."

The report describe the potential services that The Guardian Trust
expects to provide. Those would include remedy-specific monitoring
programs, such as physical inspections and a periodic review of land
records. It plans to develop an expansive database and information
system. The Trust may also assume financial responsibility for the
maintenance of ICs and ECs, including possibly the funding and/or
conducting of "additional remedial actions related to a breach of ICs
and ECs."

In my view, the Guardian Trust is a creative approach to long-term
stewardship at both private and federal cleanup sites. There is no way
to determine, at this point, how well it will work because so much of
its structure and activities remain vague or undefined. In fact, the
most significant lesson of the "Pilot Study" is that the creation of
single-purpose stewardship entity is complex and difficult.

For more information, including the full 50-page report, contact
Bruce-Sean Reshen at <reshen@mindspring.com>. 

Lenny

-- 


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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