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In the wake of Governor Gretchen Whitmer’s Executive Order 2020-21 (Order) mandating stay-at-home restrictions for all Michigan residents in response to the COVID-19 pandemic, companies across the state are trying to determine whether their business is exempted from the Order and, if so, to what extent the exemption applies to their business operations. For some, the answers are relatively clear-cut, but for others, the answers are much less clear. While companies grapple with these threshold questions, more nuanced and universal questions remain largely unanswered by currently available orders and guidance. Among them: Does the Order temporarily exempt or relieve your company from state-level environmental compliance or other state-level environmental regulatory requirements?
The short answer is this: In the state of Michigan, environmental compliance and other environmental regulatory requirements remain in effect during the effective dates of the Order, subject to a few conditions created by the pandemic (these regulatory conditions, we note, are often changing). The harder question, though, is how Michigan businesses deal with the balancing act of complying with the Order while also meeting environmental compliance requirements. This article provides a brief, high-level view of the Order in the context of environmental compliance to assist businesses with the daunting task of understanding and navigating these uncharted waters.
What does Executive Order 2020-21 require of businesses?
The Order took effect on March 24, 2020 at 12:01 a.m., and will continue through April 13, 2020 at 11:59 p.m., pending a potential time extension by the governor. The Order states that, subject to specified exceptions, “all individuals currently living within the State of Michigan are ordered to stay at home or at their place of residence. Subject to the same exceptions, all public and private gatherings of any number of people occurring among persons not part of a single household are prohibited.” Exceptions to this restriction include several different categories of activities and types of workers. For businesses, the primary exceptions of note are those for “critical infrastructure workers” and workers that are “necessary to sustain or protect life or to conduct minimum basic operations.” These designated workers must be those who cannot conduct their work remotely.
“Critical infrastructure workers” include some of those workers employed by businesses engaged in the industries listed below. Please see the memorandum from the Director of the U.S. Cybersecurity and Infrastructure Security Agency for greater detail on each of the categories, as well as guidance on the categories issued by the State of Michigan:
The exception allowing for in-person workers in these “critical infrastructure” industries and activities is limited to “no more [workers] than [are] strictly necessary to perform the business's or operation's critical infrastructure functions.” In other words, just because a business may fall under the “critical infrastructure” industry umbrella, does not automatically mean that all of its personnel may return to in-person work.
However, even if a business does not independently qualify for the “critical infrastructure” exception, it may be designated by a qualifying critical infrastructure business as a supplier, distribution center or service provider “whose continued operation is necessary to enable, support, or facilitate the work of [the designating business’s] critical infrastructure workers.”
If a business is so designated, the Order provides that the business may then “designate workers as critical infrastructure workers only to the extent those workers are necessary to enable, support, or facilitate the work of the original operation's or business's critical infrastructure workers.” Additionally, upon your business’s designation, you may also “designate additional suppliers, distribution centers, and service providers whose continued operation is necessary to enable, support, or facilitate the work of [your business’s] critical infrastructure workers.” In turn, the businesses you so designate “may designate workers as critical infrastructure workers only to the extent that those workers are necessary to enable, support, or facilitate the work of the critical infrastructure workers at the supplier, distribution center, or service provider that has designated them.” Businesses utilizing these exception categories must be sure to “make all designations in writing to the entities they are designating, whether by electronic message, public website, or other appropriate means. Oral designations were permissible until March 31, 2020 at 11:59 pm.”
The other main exception apart from the “critical infrastructure” exception is the one for those workers who are “workers . . . necessary to sustain or protect life or to conduct minimum basic operations.” This includes “those [workers] whose in-person presence is strictly necessary to allow the business or operation to maintain the value of inventory and equipment, care for animals, ensure security, process transactions (including payroll and employee benefits), or facilitate the ability of other workers to work remotely.” Again, like critical infrastructure workers, this group of in-person-work-eligible workers is limited to those who are “strictly necessary.” However, unlike the critical infrastructure exception, this exception may apply to a business regardless of its industry. Please see Michigan’s “Guidance for Business” website for more information.
Regardless of the exception your business may qualify for, you should be aware that all businesses conducting in-person activities must adhere to the following additional requirements under the Order:
promoting remote work to the fullest extent possible
keeping workers and patrons who are on premises at least six feet from one another to the maximum extent possible, including for customers who are standing in line
increasing standards of facility cleaning and disinfection to limit worker and patron exposure to COVID-19, as well as adopting protocols to clean and disinfect in the event of a positive COVID-19 case in the workplace
adopting policies to prevent workers from entering the premises if they display respiratory symptoms or have had contact with a person who is known or suspected to have COVID-19
any other social distancing practices and mitigation measures recommended by the Centers for Disease Control and Prevention.
Further, you should note that “critical infrastructure workers” and “minimum basic operations” workers must be designated as such by their employers in writing; the deadline for oral designation was March 31, 2020 at 11:59 p.m. An email to your designated workers or a website listing their jobs will suffice to designate your workers. All other workers cannot provide in-person work for your business, but they can work remotely from their homes if possible. Although not required, many business are electing to have their designated workers carry a copy of their designation with them in case questions arise.
You should also note that a willful violation of the Order constitutes a misdemeanor. Per section 9(b)(6) of the Order, “businesses, operations, suppliers, distribution centers, and service providers that abuse their designation authority shall be subject to sanctions to the fullest extent of the law.”
What does the Order mean for environmental regulatory compliance in Michigan?
The Order itself does not appear to directly relieve/restrict state-level environmental compliance obligations, aside from potentially limiting the number of employees available to carry out the obligations in person under the “critical infrastructure workers” or “minimum basic operations” exception definitions. The Michigan Department of Environment, Great Lakes, and Energy (EGLE), however, recently released further guidance and news bulletins designed to give the regulated community some clarity with respect to compliance requirements in light of the Order.
EGLE’s Enforcement Discretion Policy
Most notably, EGLE recently released an important notice regarding its enforcement discretion policy during the COVID-19 response. While the notice explicitly states that all “regulated entities are expected to maintain compliance with environmental regulations and permit requirements,” it also provides a method of potential regulatory relief for those “entities who face unavoidable noncompliance directly due to the COVID-19 emergency.”
In short, the notice states that, if a business or other regulated entity faces unavoidable noncompliance due to the requirements of the Order, it may submit a detailed request for enforcement discretion to EGLE at the following email address: EGLE-EnforcementDiscretion@mi.gov. Per the notice, each request should include:
the specific regulatory requirement in question, including identification of any permit, order or agreement that applies to the entity’s obligations
a concise statement describing the circumstances preventing compliance and how the compliance issue is impacted by the COVID-19 response
the steps taken to avoid the compliance issue, including whether you contacted EGLE for assistance and why the compliance issue was not reasonably avoidable
the anticipated duration of the compliance issue and whether it may create an acute risk or imminent threat to human health or the environment (Note emergency situations should continue to be reported to the PEAS hotline at 800.292.4706)
mitigative measures planned to protect Michigan’s environment and public health during the period in which the requirement cannot be met
a central point of contact for the regulated entity, including an email address and phone number.
After a request is received, EGLE states that it “may consider extending reporting deadlines, waiving late fees, and otherwise exercising enforcement discretion.” If EGLE approves a business’s request and offers an alternative compliance option, the business must maintain records that thoroughly “document activities related to the noncompliance and details of the regulated entity’s best efforts to comply.” Importantly, EGLE also states that requests that include a clear reference to an order, permit or other compliance document “will meet the notice or reporting requirements for noncompliance in those governing documents provided the request meets any timing and substantive requirements of the relevant governing document.” As such, businesses should ensure that their requests are timely filed pursuant to any notice or reporting requirements in any permits, orders or decrees to which they are subject.
This enforcement discretion policy is a promising and much-needed development for those businesses that find themselves unable to fully maintain their environmental compliance obligations due to the Order. However, given that this is a novel policy for a novel time, the practicalities of its implementation have yet to be determined. Please see the section of this article titled “What should businesses do to comply with Michigan environmental requirements while also complying with the Order?” below for recommendations on (1) when to submit a request and (2) potential pitfalls to avoid when drafting the request.
Other EGLE Guidance
While the enforcement discretion policy generally applies to all state-level environmental compliance obligations, EGLE is also posting notices and guidance specific to certain regulatory programs and requirements. For example, EGLE released a news bulletin stating that it “will address the inability to conduct a baseline environmental assessment (BEA) within the 45 days from date of purchase, occupancy, or foreclosure via a request that the delay is inconsequential” pursuant to applicable state law. If your business purchased, occupied or foreclosed on property on or after February 1, 2020, you now have the option to complete a BEA outside of the standard 45-day time limit as long as you submit the request “with a cover letter indicating the submitter is seeking an inconsequential determination for failure to meet the 45-day statutory requirement to have conducted the BEA. The letter should clearly indicate the failure was due to limitations associated with the executive orders issued by Governor Whitmer related to the Coronavirus pandemic.” This flexibility for BEA submission deadlines is good news for those businesses that purchased, occupied or foreclosed on property on or after February 1, 2020.
Another example involves an EGLE notice written for businesses that transport, collect, store, handle, process, recycle, compost or dispose of solid waste, e-waste, organic materials or scrap tires from municipalities, residences, businesses or facilities in Michigan. The notice specifies that “[w]aste and materials management activities are deemed essential and necessary activities,” and encourages those businesses “to proactively plan for the possibility that normal waste and materials management practices may be interrupted.” EGLE also indicates its awareness that “sites may be experiencing an impact due to a reduced workforce, which may make it difficult to maintain normal operations.” The notice then states the following:
However, in the instance that noncompliance is unavoidable directly due to impact from the COVID-19 [crisis], please contact the staff listed [in the notice] to talk with MMD staff about requests for potential regulatory relief. You will be asked to provide an email with specific information related to request(s) including:
Facility name, address, and contact information.
A concise statement supporting any request for regulatory relief.
Anticipated duration of need for regulatory relief.
A description of the regulatory relief that is being requested (i.e., collection/storage practices, treatment modifications, increased storage time, etc.).
The business must maintain records adequate to document activities related to the regulatory relief, including details of the business’ best efforts to comply with the existing requirements.
Additional information, such as photo documentation may also be requested.
The notice also reiterates the need for workers to use personal protective equipment (PPE), follow social distancing guidelines, and regularly wash hands and disinfect surfaces.
EGLE bulletins and notices like these are likely to become far more numerous in the coming days. We will release updates with additional environmental compliance and regulatory requirements as they become available.
What is EGLE doing during this Order?
Aside from writing and publishing news bulletins and other forms of guidance, EGLE staff are working from home to the greatest extent possible, consistent with the Order. Its operations are expected to continue in this manner for the duration of the Order. Please see the following EGLE bulletin for more information on EGLE district office closures.
How about the federal side of things? What is the U.S. Environmental Protection Agency (USEPA) doing concurrently with Michigan’s Order?
What should businesses do to comply with Michigan environmental requirements while also complying with the Order?
Subject to currently existing guidance — like EGLE’s bulletins and notices, the governor’s “Guidance for Business” website, or additional state guidance as seen here — businesses should understand that all state-level environmental regulatory obligations remain in full force and effect for the duration of the Order. To the extent that these obligations can be satisfied with remote work, they should be so satisfied to the fullest practicable extent. For those businesses that have environmental compliance obligations for which an employee’s physical presence is required, such as operation, monitoring or maintenance (OM&M) of a remedial action site, the precise nature of the compliance activity at the site should be examined against the critical infrastructure or minimum basic operation requirements incorporated by the Order to determine if meeting those compliance obligations would put the business at odds with the Order.
If your environmental compliance obligation can be read as an activity that is a “minimum basic operation” of your business, or if the obligation is an activity that falls under one of the critical infrastructure categories, you may designate in-person workers to address the compliance requirements, but only to the extent that doing so is strictly necessary and only for those portions of the compliance requirements that cannot be done remotely. While it is unlikely that most environmental compliance obligations would be “minimum basic operations” of your business, you may find that it is a “critical infrastructure” activity. If the activity qualifies as the latter, you should move to designate any suppliers, distribution centers or service providers that are necessary for that activity as discussed above.
Using the remedial OM&M example above, the critical infrastructure category of “hazardous materials” can be read to allow necessary in-person compliance activities to be completed at the site for the duration of the Order, as such work “support[s] hazardous materials response and cleanup.” If you have any suppliers, distribution centers or service providers that are necessary for your OM&M work, you should move to designate them as soon as possible.
Additionally, if the nature or industry of your business is properly characterized as one of the “critical infrastructure” business categories, environmental compliance obligations related to your business appear to be excepted by the Order for in-person work, subject to the strict necessity requirements outlined above.
Recommendations for Businesses Facing Unavoidable Noncompliance
On the other hand, (1) if your business is not categorized as critical infrastructure, (2) the environmental compliance requirement itself does not fit into any of the Order’s exceptions, and (3) compliance with the requirement requires in-person work, your business may be unable to avoid noncompliance with the requirement in question. If faced with this situation, businesses should consider submitting a request for enforcement discretion to EGLE, subject to the following recommendations:
Before submitting a request, the business should consult with its environmental legal counsel regarding the best approach to dealing with anticipated or ongoing noncompliance issues.
Concurrently, the business should immediately take any feasible and prudent internal actions toward avoiding or mitigating noncompliance, as long as those actions are consistent with the Order and any applicable environmental compliance requirements. Every action taken in this regard should be internally documented.
The business should also consider reaching out to the EGLE point of contact identified in its compliance document (permit, consent decree, etc.) or related correspondence (if one is not provided, a current EGLE directory can be found here) as soon as possible to seek assistance with avoiding noncompliance.
Taking these first two steps may bolster the business’s eventual request for enforcement discretion by helping to establish a record of attempts to avoid noncompliance.
When drafting the request, clearly identify the document establishing your compliance obligations, as well as the specific compliance requirement at issue:
If the document is a permit, consider listing the permit number, the name of the permitted entity, the location of the permitted activity, the type of permit, the date of issuance, the date of expiration, and the specific requirement(s) of the permit, identified by section and paragraph number, that your business cannot comply with under the Order.
For a consent order, consent decree or other similar document, consider identifying its document number, effective date, date of expiration (if applicable), the name of the entity bound by the document, the location of the activity authorized by the document, and the specific requirement(s) of the document, identified by section and paragraph number, that your business cannot comply with under the Order.
When describing the circumstances preventing compliance with any requirement, explicitly state the specific requirements of the Order that are causing the conflict with your specified compliance requirements. Do not assume that EGLE will “connect the dots” for you.
When describing the steps your business took to avoid noncompliance, consider referencing any internal actions taken to avoid noncompliance, as well as any communications to and from EGLE that document your attempts to seek assistance.
When describing the anticipated duration of the compliance issue, take a realistic approach. You might consider mentioning that the effectiveness of the Order is subject to extension, which causes uncertainty with respect to the duration of noncompliance.
As for describing whether the compliance issue may create an acute risk or imminent threat to human health or the environment, consider having a discussion with your environmental legal counsel and EHS staff or consultant to determine whether your compliance issue creates such a threat.
For your description of planned mitigative measures, set mitigation objectives that are effective yet reasonable under the circumstances of the pandemic and the Order. Avoid making untenable promises in this time of uncertainty, such as offering measures with deadlines that your business may not be able to meet.
To ensure that your request satisfies any notice or reporting requirements applicable to your business via existing permits or other compliance documents, timely submit your request to EGLE pursuant to all applicable notice and reporting deadlines in those documents.
Finally, realize that any alternative compliance requirements you receive in response to your request may ultimately be the product of negotiations with EGLE. Consult with your environmental legal counsel to ensure that your alternative compliance requirements are not overly burdensome on your business and that your rights are protected.
And remember — this is a novel policy for a novel time. Since we have yet to see how EGLE actually implements this policy, it behooves the businesses relying on it to tread carefully, build in flexible approaches, and preserve all legal defenses at their disposal.
General Recommendations for All Businesses
Above all, businesses should do everything in their power to meet and maintain their environmental compliance requirements. Regardless of your situation, consider taking the following steps:
Fix outstanding noncompliance issues now, or as soon as possible.
Record events of noncompliance.
Track all permit-imposed deadlines and all other deadlines established in settlement agreements or consent decrees.
Discuss and set clear expectations for, and operational plans and contingencies involving, all key and back-up environmental personnel, including any consultants and contractors, to make sure they are going to continue to provide services.
Maintain open communications with regulators.
Evaluate all possible legal defenses that may be available for noncompliance issues.
A business may want to assess all available force majeure clauses, especially if EGLE denies a request for enforcement discretion or insists on alternative compliance requirements that are unreasonable or infeasible. In this context, it is key to ensure compliance with all notice provisions.
For more information
Please see the following related article written by our colleagues at Troutman Sanders: https://www.environmentallawandpolicy.com/2020/03/environmental-compliance-in-the-wake-of-the-coronavirus/.
See the COVID-19 Resource Center for additional resources to guide companies through this unprecedented global health challenge.
The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.