Summary: Pursuant to a congressional request, GAO determined the extent to which: (1) owners and operators of hazardous waste facilities have declared bankruptcy and thereby avoided paying closure and post-closure costs for their facilities; (2) financial assistance requirements ensure that sufficient funds will be available to close and provide post-closure care at such facilities; (3) facilities that cease operations are inspected for compliance with closure requirements; and (4) the Environmental Protection Agency (EPA) and states are taking enforcement action for violations of those requirements.
GAO found that: (1) according to state and territorial officials, 74 hazardous waste facilities have filed for bankruptcy; (2) while bankruptcy law provides for the enforcement of environmental regulations over creditor claims, various courts have given EPA and state environmental interests equal status with other unsecured creditors, thereby hindering efforts to force responsible parties to properly close their facilities; (3) in cases reviewed, courts restricted EPA or state efforts to obtain proper closures in three cases; (4) the adequacy of new EPA and state financial assurance requirements that are designed to ensure that hazardous waste firms are strong enough to pay closure and post-closure costs could not be assessed; and (5) it is difficult for states to assess the financial condition of interstate hazardous waste facility operators. GAO also found that: (1) about 37 percent of the facilities that EPA inspected either during or after closure violated EPA regulations; (2) only 46 percent of the operators in states it reviewed had submitted financial assurance documents; (3) 34 percent of the financial assurance statements submitted were deficient; and (4) in many cases, EPA did not take adequate enforcement actions against operators committing financial assurance or closure violations.
