How the Environmental Justice Movement Could Affect Foreign Investments in Georgia

Note: This article originally appeared in Global Atlanta as part of AGG’s annual sponsorship.

Attention foreign investors and companies looking to locate or expand in Georgia: Don’t let new Environmental Justice considerations catch you by surprise.

“Environmental Justice” is an effort intended to address the disproportionate adverse impacts of pollution on disadvantaged communities primarily comprised of minorities and lower-income people. The movement is gaining media attention lately, but international companies may not fully understand its impact on their ability to operate existing or develop new businesses in the United States. Familiarity with Environmental Justice concerns and requirements will help businesses control costs, reduce liability and avoid future litigation.

U.S. environmental laws already seem particularly onerous to foreign companies, as they are very different from regulations in the rest of the world. I have previously written an article to educate foreign companies on ways to manage the risk posed under American environmental laws in order to avoid extra expense, time and liability. Governments, environmental advocacy groups and individual citizens now have additional grounds to challenge businesses based on Environmental Justice claims.

President Biden’s emphasis on Environmental Justice since taking office in January adds further considerations to companies’ decision-making regarding site selection and business operations. The companies most affected will be those located in urban rather than rural areas where there tend to be greater concentrations of Environmental Justice communities located near industrial facilities. However, Environmental Justice will be an important factor wherever communities predominately made up of people of color, indigenous people, or lower-income families reside nearby.

Environmental Justice has been a part of the United States’ official policy since the 1990s when the Clinton Administration began to address concerns over unfair effects of pollution on certain communities. Whereas the Trump Administration tended to be more “hands-off” in terms of enforcing environmental requirements, the Biden Administration has now made Environmental Justice a priority in decision-making for all federal agencies, such as the Environmental Protection Agency (EPA), the Department of Housing and Urban Development (HUD), the Department of Energy (DOE) and the Department of Justice (DOJ).

We expect the EPA to have the most significant impact on businesses in Georgia. Although many state governments, such as the Georgia Department of Natural Resources Environmental Protection Division (EPD), have the authority to issue or deny certain environmental permits and make enforcement decisions, the federal government is going to increasingly engage in “over filing,” or taking authority back from the states, to pursue actions against private industry instead.

Whether requesting new permits or renewing existing permits for operations or construction, companies should plan for potentially longer approval times, higher consultant costs and possible rejections of permit applications. Businesses locating, or already located, near Environmental Justice communities will face increased scrutiny on potential air emissions, discharges to water, generation of waste, increased water usage, increased noise and construction issues. Additional testing and analysis will be necessary to evaluate future impacts.

The government may issue public notice and hold public meetings before rendering any decision. As a condition to approval, the government may require such businesses to more rigorously address any adverse effects their operations may have on those communities, including potential health impacts and impacts to their surrounding environment. For example, facilities may be required to install additional pollution controls, implement health monitoring programs in the community, or share more environmental information with the local community, all significantly increasing the cost to operate.

One reason for the additional time and expense is that the government will now be considering not just the potential pollution caused by the applicant, but how its impact in combination with other potential sources in the vicinity could create an unacceptable cumulative risk to an Environmental Justice community.

Ongoing operations in urban settings will likely see an increase in environmental compliance inspections, monitoring and stricter enforcement actions by regulating agencies. Penalty amounts may increase, and companies may be required to complete Supplemental Environmental Projects (SEPs) or community service projects that benefit nearby communities. Some companies may even be required to pay restitution or mitigation costs to communities that have been harmed by past emissions or other violations. A big change from the previous administration will be an increase in criminal prosecutions that could result in jail time for individual offenders in Environmental Justice areas.

All of these considerations could influence international companies’ choices on where and how to operate. Some states, like Washington, have passed their own Environmental Justice laws but others are deferring to federal authority. In Georgia, a state Environmental Justice bill failed in the last legislative session. It is unlikely that Georgia will enact any Environmental Justice laws.

On the other hand, we expect to see a significant increase in citizen suits filed by nonprofit groups. For example, the Renewable Biomass Group’s proposed wood pellet plant in Adel, Ga., has been challenged by citizens and environmental groups. The Georgia EPD approved a construction permit for the plant’s air emissions, but numerous public interest organizations petitioned the federal EPA to intervene and review the permit, as the site is upwind from a “particularly vulnerable environmental justice community.” The area is 94 percent minority and 86 percent low-income, according to EJSCREEN, an EPA Environmental Justice screening tool.

Other Southern states are seeing similar cases. In Alabama, state-approved environmental permits for a chemical plant and an electric utility generating plant are now being questioned over Environmental Justice issues and the EPA is deciding whether to intervene. In Louisiana, the U.S. Army Corps of Engineers recently denied a wetlands permit needed to construct a new plastics facility near a vulnerable community. Similarly, the EPA stepped in to deny an operating permit for air emissions for a refinery based on a petition over Environmental Justice concerns.

Other examples are coming. So, what can international companies do to protect their investments and operations in Georgia?

1. When choosing a site for a new facility, identify whether an Environmental Justice community is located in the vicinity. Talk to a local real estate or business broker, review the EPA’s EJSCREEN tool, and consult with the Georgia EPD.
2. Build in extra time and dollars to address Environmental Justice issues to cover negotiations with the government, additional testing, pollution controls, emissions monitoring or discussions with community stakeholders.
3. Consider entering into dialog with the surrounding community. Even if an investment presents potential adverse impacts, growing a new business does benefit communities in terms of increased investment and employment opportunities. Let community members have a voice and listen to their concerns; they may conclude that the benefits of a proposed investment outweigh the potential costs and become an ally.
4. If already operating near an Environmental Justice community, be prepared in advance for an inspection and a notice of potential violations. Make sure to know the requirements, conduct internal audits and document all compliance.
5. Get good advice from a lawyer and/or environmental consultant on the rights and obligations under environmental laws. If seeking a permit to build a new facility or expand an operation, or if hit with a notice of violation, find out the legal parameters and the actual environmental facts. The EPA’s authority only goes so far.

See how your site measures up to environmental justice issues here: https://ejscreen.epa.gov/mapper/.

For more information on how to prepare for and manage environmental justice concerns, please contact Brooke Dickerson at (404) 873-8632 or at brooke.dickerson@agg.com.