Can Clinton Clean Up The Superfund Morass?

The Clinton Administration had the best of intentions when it set out to reform the Superfund toxic-waste cleanup program, up for renewal this year. The goals: Make sure that the worst polluters pay the most, ease the burden on fairly clean businesses, and end the drain of the program's resources into a bottomless pit of litigation. But the sheer complexity of the problem has blocked the consensus solution the Clintonites hoped for. No interest groups are fully satisfied with the Administration's bill, scheduled to be introduced on Feb. 3 by Representative Al Swift (D-Wash.) and Senator Frank R. Lautenberg (D-N.J.).

The one thing everyone can agree on is that Superfund is a catastrophe. In 13 years, the Environmental Protection Agency has put 1,270 toxic-waste sites on its Superfund list. Only 49 have been completely cleaned. Much of the $12 billion spent has paid for lawsuits to force companies to pay for the cleanups.

FAIR SHARE. Under current law, any company that contributes to contamination at a Superfund site can get stuck with the full cleanup cost. In practice, the government tries to nail the "potentially responsible party" with the deepest pockets. The target then tries to recoup costs by suing all parties with any liability. And nearly everyone tries to shift the cost to its insurer.

The Administration had hoped to devise a system that would force each company to pay in proportion to its share of the pollution. But the Justice Dept. objected that the system might violate due-process rights. So the plan now calls for private mediators to allocate shares of the cost. The mediator's recommendations are nonbinding, but Kathleen A. McGinty, director of the White House Office on Environmental Policy, says polluters will get big incentives to accept the deal. For example, the government would keep the right to force a company that rejects mediation to pay all cleanup costs.

Companies that contributed only minimal amounts of waste like the proposal because they would only be liable for minimal costs. But the chemical industry, with the biggest exposure, is worried. Unless lesser polluters are made to accept mandatory allocations, says Dell Perelman, attorney with the Chemical Manufacturers Assn., "then no one has to accept their share."

The role of the insurance industry in the cleanup is even more contentious. Most policies written before 1986 didn't exclude toxic-waste coverage. So companies facing Superfund charges have tried to stick carriers with the bill. A 1992 study of four insurers found that 88% of their Superfund costs went to pay for suits over claims.

"DISASTER." To spend more on cleanup and less on litigation, the Administration wants the insurance industry to put up to $3.1 billion into a fund over the next five years to pay disputed claims. But insurers worry they could still get stuck with the liability of companies that won't pay their share of a mediated settlement. Mike McGavick, lobbyist for the American Insurance Assn., says the fund won't satisfy the industry unless it can "put an end" to old claims.

The proposal still has the support of the National Commission on Superfund, which represents banking, industrial, and environmental interests. But it may be difficult to hold a broad coalition together. With Congress facing a crowded schedule, the defection of any major interest group could consign the bill to an uncertain fate after 1994's elections.

That could be bad news for corporations now being driven to distraction by Superfund. "The current program is a disaster for American business," says Swift. The proposed replacement is less than perfect, but it could make it possible for business and the government to spend less on lawyers and more on cleaning up the toxic sites.

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