NJDEP’s New Natural Resource Damage Settlement Policies 

NJDEP Commissioner Shawn M. LaTourette issued Administrative Order 2023-08 (AO 2023-08), which updates the State’s Natural Resource Restoration (NRD) Policy...

On March 14, 2023, New Jersey Department of Environmental Protection (NJDEP or Department) Commissioner Shawn M. LaTourette issued Administrative Order 2023-08 (AO 2023-08), which updates the State’s Natural Resource Restoration (NRD) Policy. The Order seeks to modernize guidance, improve transparency, and enhance public engagement regarding the development and implementation of NRD assessments and compensation projects.

Of particular relevance to potentially responsible parties, the Order outlines new NJDEP policies and practices for voluntarily resolving potential NRD liabilities. AO 2023-08 specifically directs the NJDEP to “encourage responsible parties to assess and voluntarily resolve their NRD liabilities in the course of performing their contaminated site remediation obligations.” 

Natural Resource Damage Lawsuits

Natural resource damages are intended to compensate the public for the injury to, destruction of, or loss of natural resources. Natural resources are broadly defined to include “land, fish, wildlife, biota, air, water, ground water, drinking water supplies and other such resources.” 

New Jersey is authorized to recover the “cost of restoration and replacement of any natural resource” under the New Jersey Spill Compensation Act (Spill Act). Several other state and federal statutes also provide the NJDEP with additional authority to require the investigation and restoration of injured natural resources. These federal statutes include the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, and the Oil Pollution Act.

In 2017, New Jersey voters approved an amendment to the New Jersey Constitution (Article VIII, Section II, paragraph 9) that mandates funds from environmental settlements must be reinvested into anti-pollution efforts. Specifically, all State moneys received from settlements and awards in cases of environmental contamination relating to natural resource damages must be used for certain environmental purposes, which include to repair, replace, or restore damaged natural resources or to preserve the State’s natural resources. The amendment further provides that moneys must be spent in an area as close as possible to the geographical area in which the damage occurred. 

Policies and Procedures for Resolving NRD Liability

AO 2023-08 confirms the NJDEP’s broad authority to pursue national resource damages. The Order expressly states that it is the policy of the Department, in discharging the Commissioner’s duty as Trustee of the public’s natural resources, to “pursue the assessment and restoration of injured or altered natural resources, including those injured by any past, present, or future discharge of hazardous substances, contaminants, or other pollutants reported to or otherwise discovered by the Department.”

To implement New Jersey’s Natural Resource Restoration Policy (NRRP), the Order states that the NJDEP should, “where in its discretion it deems appropriate,” pursue the assessment and restoration of injured natural resources through a “collaborative process” with responsible parties for the express and limited purpose of amicably resolving their potential NRD liabilities. When the NJDEP reaches amicable resolutions of NRD liabilities with responsible parties, it anticipates that such settlements will reflect a discounted NRD valuation in recognition of a responsible party’s cooperation, as well as the benefit to the public of avoiding the costs, uncertainty, and potential delays associated with litigation.

Pursuant to AO 2023-08, the NJDEP’s Office of Natural Resource Restoration (ONRR) and Contaminated Site Remediation and Redevelopment (CSRR) are directed to establish protocols and procedures that encourage responsible parties to assess and resolve potential NRD liabilities through the collaborative process. Such protocols may include the identification of information necessary to initiate the collaborative process, guidelines for submittal of information to the Department, and the development of relevant forms to facilitate information sharing, such as new or amended site remediation forms. ONRR is further directed to “develop technical assistance to support the collaborative process and facilitate the assessment of natural resource injuries” by responsible parties.

AO 2023-08 additionally provides that notwithstanding the further establishment of protocols and procedures, the NJDEP may determine to enter into a collaborative process with any responsible party that provides the following information to ONRR: (i) a written statement of interest in exploring the voluntary resolution of potential NRD liabilities; (ii) a summary of the operational history of the subject site with relevant information that describes the storage, use, and discharge of any hazardous substances or other pollutants giving rise to potential NRD liability; (iii) a description of the predischarge conditions at the site; (iv) a delineation of the nature, extent, and duration of the subject contamination exceeding predischarge conditions and information pertinent to the assessment of injuries to natural resources; (v) a description of the environmental features and media at and in the immediate vicinity of the site; (vi) a proposal to resolve the potentially responsible party’s primary and compensatory restoration obligations; and (vii) an optional suggestion of candidate restoration projects the DEP may consider funding.

Notably, AO 2023-08 is intended to be prospective in nature and, thus, will not impact any ongoing collaborative processes, settlement discussions, or administrative or legal actions concerning alleged injuries to natural resources. The Order also expressly provides that the NJDEP reserves “all rights to pursue legal action where necessary and appropriate in the Commissioner’s discretion and in consultation with the Attorney General.”

Mechanisms to Improve Transparency Regarding NRD Projects

The Order also directs the NJDEP to create new mechanisms to solicit input from the public in the planning and implementation of natural resource restoration activities. Such mechanisms include the creation of the Natural Resource Restoration Advisory Council (NRRAC), which is tasked with providing insight and feedback concerning the NJDEP’s identification, planning, and implementation of restoration projects, and to assist the NJDEP in communicating restoration project objectives and outcomes to the public.

AO 2023-08 also calls on the ONRR to establish a public dashboard on the NJDEP website that that identifies each restoration project administered by the Department as of the date of the Order, its status, funding source, and any other information relevant to the directives set forth in the Order. Additional steps to improve transparency include the creation of an archive of past NRD recoveries and natural resource restoration projects on the NJDEP website.

Key Takeaway for Responsible Parties

NRD suits have increased significantly over the past several years. Given that such damages can often outweigh the costs of remediation, businesses should fully understand their potential liability as well as the mechanisms that may be available to resolve it.

The attorneys of Scarinci Hollenbeck’s Environmental Law Group have significant experience handling NRD claims in New Jersey. We encourage you to contact us with any questions or concerns about AO 2023-08 and its impact on your potential NRD liability.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.