Before a company purchases property, government requirements involve conducting risk assessments for potential environmental problems. Mary Walker, law partner at Brobeck, Phleger & Harrison LLP [http://www.brobeck.com/docs/pocketguide.html] and head of the San Diego Environmental Practice Group asserts the following:
"The major environmental concern in any real property or business transaction is liability for past or present contamination on-site (from on-site uses or off-site migration of contamination) and off-site (from disposal of hazardous waste). This is the subject of federal and state statutes that provide for strict, and joint and several (and some would say, perpetual) liability for all those in the chain of owners and operators. But there are other issues of concern. For manufacturing facilities where the requirements of environmental and safety laws have been ignored, the costs of correcting deficiencies can run high; potential fines for compliance failures can be as much as $25,000 per day of violation; building materials containing hazardous materials can be expensive to replace or manage, and zoning overlays imposed by local governments can limit future facility use. Proper due diligence prior to purchasing the business or property can make you an informed buyer and put you in a better position to negotia te a good deal."
KMPG Canada defines due diligence as the process of systematically obtaining and assessing information in order to identify and contain the risks associated with a transaction (e.g., buying a business) to an acceptable level [http://www.kpmg.ca/dd].
An environmental engineer explains that when financial institutions fund purchases of commercial properties they require an environmental site assessment, in which the past history of the site must include a determination of whether it has been environmentally impacted by prior site usage such as leaking underground storage tanks. Take the example of visiting a site and finding an empty lot. Who knows what was there before and whether the site has been environmentally impacted without conducting further research? Aggi Raeder suggests that "businesses must look for the possibility of contaminated soil at sites they plan to purchase for industrial expansion." ("Internet Express: Environmental Information Sources on the Net," Searcher Magazine, February 1997).
Law firms find it necessary to perform initial due diligence on environmental matters in the context of merger and acquisitions activities and law librarians research company names and locations (site addresses) in various environmental databases available on LEXIS-NEXIS or Westlaw, e.g., to find previous violation citations on local, state, or federal lists. Jennifer Ammirati-Doyle of the EPA Region I Library, Boston (GCI Information Services) explains that when someone moves to a new community they may wish to check for potential hazards and can do so using EPA databases available to the public on the Web [http://www.epa.gov]. Another Web site, the Chemical Scorecard, a chemical information service provided by the Environmental Defense Fund [http://www.scorecard.org] describes how this is done:
"Millions of pounds of chemicals are released into our air and water each year. Some are recognized as harmful to human health, others are suspect, and a great many we don't know much about. The Environmental Defense Fund believes one of the best ways to protect the environment is to give people the information they need to identify chemical hazards, so they can avoid potential health risks and press for better safety information from the companies responsible for releasing these chemicals. The Chemical Scorecard Web site makes it easy to find information fast about where these chemicals come from in a community, what their known or suspected effects are, and what actions you can take."
At one time, …