ASTM Phase I

History and Update

ASTM first issued guidance for performing due diligence environmental site assessments (ESAs), or Phase I’s, in 1993. The stated intent was (and remains) to assist the user with qualifying for certain “limited liability protections” (LLPs)  available under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The ASTM practice has undergone periodic revisions, and serves a common reference and protocol for the purpose of identifying, before acquisition or occupation of a property, if a release of oil and hazardous material (OHM) to the environment is present. ASTM “standard practice” E1527 defines information sources and records to be reviewed, outlines certain information to be obtained from governmental authorities and persons associated with the property, and performance of limited visual and physical inspection of the property. However, it is important to note that the use of the ASTM practice has always been voluntary and is not required to qualify for CERCLA LLPs.

The ESA process also plays a critical role in business decision-making and risk management – having been incorporated by banking, insurance and other financial services institutions into their internal due diligence processes. Thus, the Phase I has become an accepted industry practice for environmental risk evaluation.

Federal Brownfields Amendment and the All Appropriate Inquiries Standard

In January 2002, the Small Business Liability Relief and Brownfields Revitalization Act (“Brownfields Amendments” to CERCLA) was signed into law. The Brownfields Amendments included changes to, and clarification of, available LLPs under CERCLA. Notably, it added the “contiguous property owner” and “bona fide prospective purchaser” categories to the original “innocent landowner” LLP. It also included a directive to the U.S. Environmental Protection Agency (EPA) to develop a permanent due diligence standard.

On November 1, 2005, the EPA released its “Standards and Practices for All Appropriate Inquiries” (AAI) to establish a regulatory framework for what constitutes acceptable due diligence for the purposes of qualifying for the CERCLA LLPs. ASTM developed and issued revision E1527-05 to be compatible with the AAI standard, which, in turn, referenced the ASTM revision as an option to demonstrate compliance with the AAI provisions. EPA is currently evaluating the incorporation of the 2013 E1527 update and the continued viability of E1527-05 relative to the AAI standard.

The 2013 ASTM Phase I Update

Numerous articles concerning the update (E1527-13) have been prepared by various entities, including law firms, consultants, industry trade groups, and environmental data providers. Most of the attention has focused on the inclusion of vapor-phase OHM as a medium of interest, the new emphasis on review of site-specific regulatory files, and revised definitions and wording. For example:

  • The update references “vapor” seven times and adds an explicit definition of “migrate/migration” that includes  movement of OHM “in any form.” “Vapor” was not used in E1527-05, and “migrate” only in the context of soil and groundwater. [HETI notes that CERCLA and AAI do not differentiate by medium.]
  • If the property or any adjoining property is identified in the government records search, the update requires that regulatory file content or equivalent be reviewed and documented in the Phase I, or that justification be provided as to why review is not necessary. E1527-05 did not address review of regulatory files. [HETI notes that AAI requires that governmental records be reviewed to meet the AAI performance objectives.]
  • Definitions of several key terms have been revised or streamlined (e.g., “recognized environmental condition” or “REC,” “historical REC”), added (e.g., “environment,” “release,” and “controlled REC” or “CREC”); or made explicit, (e.g., “de minimis”). The 2013 revision tends to be more prescriptive than the 2005 version concerning the conduct and content of a Phase I (i.e., “should” is replaced by “shall” or “must” in several places.) Language pertaining to OHM in “soil or ground water” is largely replaced with “soil, soil vapor, groundwater, and/or surface water.”

Other changes include extensive rewriting of the regulatory background appendix and addition of a new appendix that reviews common items of environmental relevance – such as lead-based paint, asbestos-containing material, radon, etc. that are beyond the standard scope of CERCLA/AAI and E1527, but nonetheless may be relevant to the User’s risk  management strategies.

What has received less attention is that the primary purpose of the update is to more faithfully represent the content and purpose of the AAI standard. It better describes the responsibilities of the “User” (property owner, tenant, prospective purchaser, and/or lender) and of the “Environmental   Professional” (EP); reinforces the defined and sometimes separate responsibilities of the User and the EP; and emphasizes that the ESA process (and qualification for available LLPs under CERCLA) is a cooperative effort of the User with the EP.

What It All Means

The bottom line is the understanding that AAI is a performance-based standard, and that ASTM E1527 serves as a guideline for complying with the requirements of AAI. Rather than a “checklist” of elements to complete, the 2013 update clarifies and makes “mandatory” certain aspects of the ESA process that have always been components of a conscientious inquiry into the history and status of a given property with respect to the potential presence of OHM in the environment. It is important to understand that the terminology of E1527 is highly nuanced and should be carefully read by any person seeking to apply or use it as guidance. The key aspects remain the technical knowledge and sound professional judgment of the environmental professional to assist an involved User with the successful completion of the environmental due diligence process.

Hydro-Environmental Technologies, Inc. (HETI) is available to provide our clients with environmental due diligence services for property transfers, changes in property usage, etc. We have performed countless environmental site assessments – using ASTM or client-specific standards – for lending institutions, developers, attorneys, insurance  companies and private clients.

Whether it’s a question about the latest ASTM Phase I revisions…or other environmental due diligence or compliance needs…HETI is here to help.