Environmental Audits

As with most industries, mining must now include in its plan of operation mechanisms to address a project environmental impact. New regulations have focused attention on the potential environmental impacts of industry, particularly the handling of wastes.

One of the most effective tools in managing regulatory requirements is an environmental audit. An environmental audit can be a literature review to determine regulatory requirements. The audit can also take on the form of a phase-one site assessment. This is a limited investigation to determine whether there are specific contamination problems at a site.

Phase-two or phase-three assessments are more detailed. They evaluate the feasibility of remedial action alternatives. Phase-three audits are generally performed as the result of regulatory requirements. It is a remedial investigation and feasibility study (RI-FS) if performed in the context of Superfund. Or, a phase-three audit can be a Resource Conservation and Recovery Act (RCRA) facility investigation or assessment (RCI-RCA) if performed under RCRA.

New regulations that address the storage, treatment, transport, and disposal of hazardous materials have made site assessments a major risk-reduction tool for those involved in real-estate transfers or in a business that uses hazardous materials. Most metals and many products used at mine facilities are defined as hazardous.

The concerns of purchasers arise primarily from the scope of liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or Superfund. CERCLA extends liability for clean-up costs and damages to current and former owners and operators, regardless of who caused the contamination.

Environmental risks and associated liabilities can occur due to soil, groundwater, surface water, or air quality contamination resulting from present or past land-use practices. Contamination may also occur due to past or future migration of chemicals onto a prospective site from adjacent properties. Most comprehensive insurance today will not cover any of these potential liabilities.

Lenders can also be exposed to liability even if they never actually take possession of a site. They may be considered operators if they get too involved in day-to-day decision making. They may be indirectly affected by lending money to a client whose collateral property holding is found to be contaminated or are included in a statutory super lien to cover other clean-up costs. Lenders may be indirectly affected if the borrower’s ability to repay is impaired by the cost of clean-up at another site.

Those contemplating the purchase of a site, acting as a lender for a buyer, managing a real-estate based trust, or repossessing a site through foreclosure should ensure that they:

  • • Exercise due diligence under CERCLA-RCRA regulations (They should make all appropriate inquiries regarding potential contamination before acquiring the property.)
  • • Know the facility or site and what regulations apply
  • • Know about any potential for or the presence of contamination that might require future expenditures

A site assessment can provide this information. It gives the present and future property owners and the lender a way to reduce their financial exposure.

Mine operators must understand the requirements of all environmental laws and regulations applicable to their facility. This is necessary to ensure compliance or at least to recognize noncompliance in day-to-day operations. A complete understanding of the regulations will help to protect mine operators’ interests should they be subject to a regulatory agency review' and inspection.

Regulatory requirements continue to grow' with the passage of state and local laws that must be reviewed on a site-by-site basis. Federal laws, however, are applicable to all mining facilities.

CERCLA establishes a mechanism of response for the immediate clean-up of hazardous waste contamination, accidental spills, or chronic contamination (abandoned, hazardous w'aste disposal sites). The Environmental Protection Agency (EPA) has promulgated regulations that establish the quantity of any hazardous substance that, if released, should be reported to the National Response Center.

The Superfund Amendments and Reauthorization Act (SARA)—Title III has two main components. Subtitle A establishes the framework for emergency planning by state and local governments. It creates a state emergency response commission, as well as local emergency planning committees. This section requires these local panels to work with representatives of facilities covered by the law on emergency response plans.

Subtitle В requires certain facilities to provide information to appropriate state, local, and federal officials on the type, amount, location, use, disposal, and release of chemicals. There are several reporting provisions contained in Subtitle B:

  • • Section 311 applies to facilities subject to the Occupational Safety and Health Act. These facilities must submit material safety data sheets or a list of the chemicals for which the facility is required to have material safety data sheets to local emergency planning committees, state emergency response commissions, and local fire departments.
  • • Section 312 establishes an inventory of toxic chemical emissions from facilities meeting certain criteria. Facilities subject to this reporting requirement must complete a toxic chemical release form for specified chemicals.

The RCRA hazardous waste programme regulates all aspects of the management of hazardous waste from generation to disposal. Major components of the programme include regulations for the identification of hazardous waste, notification of any hazardous waste activities, and compliance with standards for generators, transporters, and treatment-storage-disposal (TSD) facilities. Owners and operators of TSD facilities are also required to obtain a permit.

Mining waste regulations under RCRA are currently being developed.

The Clean Air Act provides the basic framework for modern air pollution control. Key elements of the act include the establishment of human health-based ambient air quality standards and technology-limited uniform national emission standards. It also provides for prevention of significant air quality deterioration. Each state has specific air regulations to implement these programmes.

The Clean Water Act addresses point and nonpoint sources of pollution. Point sources include industrial discharges. Nonpoint sources include mining and other construction activities that cause runoff into streams. Point sources are subject to five different effluent limitations administered through the National Pollutant Discharge Elimination System (NPDES). Control of nonpoint sources of pollution is left to the states. They are required to formulate plans that contain land-use regulations to control nonpoint sources. Hazardous waste and oil spills are also addressed in this act. Facility operators are liable, without fault, for the costs of cleaning up spills and for civil and criminal penalties.

The Safe Drinking Water Act (SDWA) was enacted to ensure safe drinking water supplies, protect especially valuable aquifers, and protect drinking water from contamination by underground injection of waste. Under this act, the EPA established a series of drinking water standards to protect public health. These standards apply to public water that regularly supplies water to 15 or more connections or 25 or more individuals at least 60 days a year. This definition applies to most industrial establishments that supply water to employees.

The SDWA’s most direct effect on the industry is through the regulation of underground injection to protect usable aquifers from contamination. The regulations address hazardous waste disposal, the reinjection of brine from oil and gas production, and certain mining processes. The underground injection-control programme is administered through a permit process with substantive requirements depending on the type of injection taking place. The most stringent conditions are for well injection waste classified as hazardous under RCRA.

The Toxic Substances Control Act (TSCA) provides the EPA with authority to require testing of chemical substances, new and old, entering the environment and to regulate them where necessary. This authority supplements sections of existing toxic substance laws, such as Sections 112 and 307 of the Clean Water Act and Section 6 of the Occupational Safety and Health Act. These already provide regulatory control over toxic substances.

Although the heart of the TSCA is the requirement for premanufacture notification, the area of interest in an environmental audit relates to the regulation by TSCA of polychlorinated biphenyls (PCB). Section 6(a) of the TCSA directed the EPA to phase out PCB manufacture and prevent the process, distribution, or use of PCBs except in a totally enclosed manner. The EPA regulations require transformers containing PCBs to be appropriately labelled. The agency sets standards for the transportation of PCBs and recommends certain disposal techniques.

Types of Environmental Audits

There are several types of environmental audits2 that can be tailored to suit specific needs:

Permit performance audits (compliance and monitoring). This is a review of environmental quality assurance plans, environmental permits, and agency-required operating restrictions procedures. It assesses possible or actual non-conformance (especially regarding air and water emissions and hazardous materials management). This type of audit also interprets regulatory agency permit conditions and suggests measures for ongoing permit conformance. It may also involve long-term monitoring of environmental activities.

Regulatory requirement audits. This provides a detailed evaluation of facility operations that are or may be governed by local, state, or federal environmental regulations. It identifies applicable regulations to pinpoint potential noncompliance or conflicts with such regulations. Procedures are also recommended for coming into compliance.

Environmental management practice audits. This type of audit examines existing management structure, procedures, and policies used by the client to implement environmental compliance and to communicate environmental-regulatory awareness (including health and safety) to workforce personnel. Recommendations are also provided for the remediation of deficient practices.

Technical processes-practices audits. Production practices and facility conditions are reviewed to determine whether design or process modifications should be made to accomplish specific environmental goals (minimizing hazardous waste, waste stream treatment, or technology transfer).

Risk management audits. Practices, procedures, and policies are surveyed to identify sources of risk. It suggests how risks of environmental (or health and safety) incidents, accidents, and liability exposure can be reduced or eliminated. A risk management audit may also include a formal risk assessment study or contingency planning component.

Special purpose audit. This is a one-time audit conducted in response to unusual circumstances or requirements, such as an SEC 10k report, an EPA consent decree, insurance-liability impairment determination, or emergency response plan.

Site assessment audits. This consists of a thorough examination of previous and current environmental hazards and physical conditions on or surrounding a facility site. Its purpose is to assess potential on-site problems or sources of external encroachment, contamination, or threat. This audit includes measures to remediate or reduce such problems before they affect operations. A site assessment audit is particularly useful as a planning and predevelopment decision-making tool for suspected problem sites. It is necessary before property transfer or asset sale acquisition.


  • 1. Cook, F., Evaluation of Current Surface Coal Mining Overburden Handling Techniques and Reclamation Practices (Washington, DC: U.S. Department of Commerce, National Technical Information Service, 1976), PB-264-111, pp. 60-123.
  • 2. Philbrook, J.N., Environmental audits: Determining the need at mining facilities. Mining Engineering, 43(2): 207-209 (1991).
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