Natural Resource Damages

A Look at the Basics

Natural resource damages (NRD) may occur as a result of releases of hazardous substances or oil. By statute, any natural resources held in the public trust, which have been “injured”, must be restored and the public compensated for their loss.

Statutory Authority

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) is designed to address any release, or threatened release, of hazardous substances, pollutants, or contaminants that could endanger human health and/or the environment. The statute also provides authority for assessment and restoration of natural resources that have been injured by a hazardous substance release or response.

The Oil Pollution Act (OPA) was enacted in reaction to the Exxon Valdez oil spill and provides authority for oil pollution liability and compensation, as well as for the Federal government to direct and manage oil spill cleanups. Similar to CERCLA, OPA contains authorities to allow the assessment and restoration of natural resources that have been contaminated by the discharge, or threatened discharge, of oil.

Natural Resources Defined

Both CERCLA and OPA define “natural resources” broadly to include “land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources…” And “natural resources” are limited to those resources held in trust for the public, termed Trust Resources. While there are slight variations in their definitions, both CERCLA and OPA state that a “natural resource” is a resource “belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by” the United States, any State, an Indian Tribe, a local government, or a foreign government.

NRD are for injury to, destruction of, or loss of, natural resources, including the reasonable costs of a damage assessment. The measure of damages is the cost of restoring injured resources to their baseline condition, compensation for the interim loss of injured resources pending recovery, and the reasonable cost of a damage assessment.

Natural Resource Trustees

The Environmental Protection Agency (EPA) is not a Natural Resource Trustee, nor is it authorized to act on behalf of Natural Resource Trustees. Rather, under CERCLA and OPA, EPA shares with the U.S. Coast Guard the general responsibility for investigating and responding to contamination by hazardous substances or oil. CERCLA provides EPA with comprehensive authority to respond to hazardous substance releases by initiating either response activities financed by the Hazardous Substance Superfund or enforcement actions to force responsible parties to pay for cleanups. However, for NRD, the Agency’s role is more limited – primarily involving the notification of, and coordination with, Trustees.

Under both CERLA and OPA, responsibility for protecting natural resources falls with Federal, State, and Tribal Trustees.  This is because no one individual “owns” a natural resource; rather, they are held in trust for the public. Both CERCLA and OPA provide authority for designated Trustees to act as Natural Resource Trustees on behalf of the public, and state that certain Federal, State, and Indian Tribe officials can be designated as Trustees. However, under OPA, foreign governments can also choose officials to act as Trustees.

NRD Assessments and Restorations

One of the primary responsibilities of Trustees under both CERCLA and OPA is to assess the extent of injury to a natural resource and determine appropriate ways of restoring and compensating for that injury. A natural resource damage assessment (NRDA) is the process of collecting, compiling, and analyzing information to make these determinations. The overall intent of the assessment regulations is to determine appropriate restoration and compensation for injuries to natural resources. If a Federal or State Trustee goes into Federal court and sues a potentially responsible party (PRP) for NRD under CERCLA, it is given the force and effect of a “rebuttable presumption”. If a Federal, State, or Tribal Trustee sues a PRP for NRD under OPA, an assessment is given a rebuttable presumption. This means that the burden of persuasion in court shifts to the PRP, and it is the PRP’s task to disprove the Trustee’s assessment.

Under CERCLA, monies recovered from an NRD claim are to be used only for restoration or replacement of the injured natural resource, or for acquisition of an equivalent resource. Under OPA, recovered sums are to be used only to reimburse or pay costs incurred by the Trustee with respect to the natural resources.

Restoration actions are principally designed to return injured resources to baseline conditions, but may also compensate the public for the interim loss of injured resources from the onset of injury until baseline conditions are re-established. Restoration activities have been successfully completed at several sites.

HETI…Your Resource for NRD Services

Hydro-Environmental Technologies, Inc. (HETI) offers a technical staff with extensive expertise in Natural  Resource Damages…including NRD assessments.  Our staff of experienced environmental professionals are available to provide expert and efficient technical services, as well as regulatory and compliance consultation.