Common Phase I Issues: A Brief Reflection
Environmental attorney Dianne Phillips authored an article for the Environmental Bankers Association (EBA) Journal exploring trends in environmental due diligence, specifically Phase I Environmental Site Assessment (ESA) reports. Ms. Phillips shares her observations since adoption of the American Society for Testing and Materials (ASTM International) Standard Practice for Phase I Environmental Site Assessments updates in 2021, also known as E1527-21, and how these trends affect ESA reviews. Beginning with the designation of PFOS and PFOA as "hazardous substances" under CERCLA, she highlights the variance in treatment of these substances in Phase I reports, from not mentioning them at all to identifying a Significant Data Gap (SDG) or Recognized Environmental Condition (REC) in relation to the compound. She also notes an increase in the use of SDGs in reports and explains why this is problematic, since under E1527-21 an Environmental Professional (EP) cannot render an opinion on whether an REC exists without additional information. Finally, the article points out that EPs are more carefully reviewing risk-based closures before labeling site conditions as Controlled RECs (CRECs). Ms. Phillips' reflections offer a useful summary of problems encountered in practice and thus can help guide lawyers, project developers and financial advisors in future due diligence processes.