Natural Resource Damage Assessment - A Sleeping Giant?, 1993 Environmental Conference Proceedings

A Natural Resource Damage Assessment (NRDA) is a quantitative evaluation of injury to natural resources resulting from a discharge of oil or release of a hazardous substance. These damages are compensable under a variety of legislative authorities. Many NRDAs have been pursued for both oil spills and hazardous waste releases. The most famous cases have resulted in damage awards in the millions of dollars. Although NRDA has been around since the mid 1980’s, a variety of legal challenges discouraged Federal and State agencies responsible for natural resources in the public trust (Trustees) from pursuing these cases. Although 1989 Court of Appeals decisions resolved the challenges, new and revised regulations are still pending. The anticipated revisions to NRDA significantly increase the potential magnitude of damages, and thus the liability to industries which may accidentally discharge oil or release a hazardous substance. Until recently, Federal Trustees lacked funding to initiate NRDAs (responsible parties are liable for assessment costs, but not in advance). Except in the most proactive states, state Trustees may still lack funding. On the other hand, confusion regarding the NRDA process will shortly be resolved and many experts believe that more Trustees will aggressively pursue these damages. To date the pulp and paper industry has been spared. Many anticipate that as Trustees become organized, knowledgeable, and funded, this will also be changing. Simple steps can be undertaken now by plant environmental managers to evaluate potential NRDA liability. In some cases liability may actually be limited by actions undertaken in advance of an NRDA. This proactive but cost effective approach can improve community relations as well as prepare for early response on a site-specific basis.