Navajo Nation Enacts Tribal Superfund Law

August 05, 2008

• Author(s):
• Marte Lightstone

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Summary
On February 26, 2008, the Navajo Nation Council enacted the Navajo Nation Comprehensive Environmental Response, Compensation, and Liability Act, N.N.C. §§ 2104-2805, also known as the Navajo Superfund Law (“NSL”).

On February 26, 2008, the Navajo Nation Council enacted the Navajo Nation Comprehensive Environmental Response, Compensation, and Liability Act,  N.N.C. §§ 2104-2805, also known as the Navajo Superfund Law ("NSL").  On March 10, 2008, the President of the Navajo Nation, Dr. Joe Shirley, Jr., signed the NSL.  The NSL is patterned on the Federal "Superfund" law, the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),[1] but contains significant differences.  The NSL provides for modular or phased implementation at the discretion of the Director of the Navajo Nation EPA, so programs authorized by the statute may not be implemented immediately. However, the NSL steps beyond other, similar regulatory programs in many ways that present specific problems for industry, most significantly in its characterizing oil and gas as "hazardous substances."   

Unique Provisions of The NSL

Unlike the federal Superfund law, the NSL defines the term "hazardous substance" to include petroleum, natural gas, and natural gas liquids, in addition to generally regulating pollutants and contaminants. The NSL provides for response actions and cost recovery for the "release" of petroleum, natural gas, and natural gas liquids.  A reportable quantity for release of petroleum is 25 gallons.

Cultural Resource Damages

• The NSL allows for damages to a "cultural resource" in addition to damages for injuries to natural resources.  Cultural resources are defined to include "any product of human activity or any object or place given significance by human activity or belief." The federal Superfund law, by contrast, allows natural resource damage actions only.
• A separate fund is created by the NSL called the "Natural and Cultural Resources Fund" which is to be used to restore, replace or acquire natural or cultural resources which have been damaged, destroyed or otherwise lost.  The funding will be from natural and cultural resource damage claims brought pursuant to the NSL.

Transportation Tariff and Registration

• The NSL provides for the establishment of a special fund called the "Hazardous Substances Fund" to fund the activities of the NSL.  The funding is to provide for response actions when other sources of funds are not available at the time the action is taken.  Part of the funding mechanism for the Hazardous Substances Fund is a tariff on "transporters" of hazardous substances.  "Transporters" includes all transporters of petroleum and petroleum products, including natural gas, which cross the lands described in the NSL.  In turn, the definition of a pipeline is not limited, but can be read to apply to all pipelines or pipe line in the ground. The tariff also can apply to petroleum treatment, storage, and disposal activities.
• The NSL provides for a rulemaking process to determine the amount of the tariff to be assessed.  The assessment will be based on the quantity of hazardous substances that a transporter transport across the lands described in the NSL. 
• All transporters of hazardous waste as defined by the NSL are required to register annually with the NSL program on forms to be developed and to submit registration fees.   

Document Retention and Access

• The NSL requires retention of pertinent documents for years and gives the Navajo Nation EPA broad authority for information gathering including access to sites subject to the provisions of the NSL.  For certain documents, the required record retention period is the 50 year period prescribed under the federal Superfund law.

Penalties

• The NSL provides for criminal and civil penalties for violations of the NSL which are broader than those applicable under federal CERCLA, including fines of up to $25,000 a day.

Regulatory Jurisdiction Extends Beyond Recognized Reservation Boundaries

• The NSL applies to a broad territorial area outside of formal reservation boundaries, including all lands within the BIA's Eastern Navajo Agency, Navajo "dependent Indian communities" and territory associated with Navajo Chapter governments. 
  

NEXT STEPS

• The New Mexico Oil & Gas Association, along with the Colorado Oil and Gas Association and Arizona Chamber of Commerce and Industry have entered into a Tolling Agreement with the Navajo Nation, extending a deadline for the filing of actions challenging the authority of the Navajo Nation to enact the NSL.   
• The agreement tolls claims of the signatories related to the NSL until August 10, 2009 to allow the parties to enter into good faith negotiations with regard to the terms of the NSL, provided negotiations are commenced prior to early August 9, 2008.

If you have questions, please contact Marte Lightstone at Modrall Sperling at (505) 848-1847 or  Mlightstone@modrall.com

[1] 42 U.S.C. §§ 9601, el seq.

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