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Are we an essential business?

Mar 17, 2020

Introduction

Over the past week there have been varying interpretations of what constitutes an “essential business” or “critical infrastructure”. BLDI contacted Michigan Department of Environment, Great Lakes, and Energy (EGLE) and received feedback on what the State of Michigan defines an essential business or critical infrastructure. As discussed below, two of the critical issues to consider are: 1) worker safety - not only during the site work but in the travel to and from the site; and 2) violation of the Michigan Governor’s Executive Order 2020-21 (EO-2020-21), which will render the conducted work as an “illegal activity”.

BLDI is therefore taking a position of strict compliance with the Michigan Governor’s Executive Order. BLDI is not conducting site work during the effective dates of EO-2021-20 or the Ohio Department of Health Stay at Home Order (3/22/2020), as applicable. Please consider that public records are generally unavailable at this time, and the availability to obtain various historical information (i.e., city directories) is also limited at this time. Additionally, MISSDIG and OUPS (utility marking services) are currently only conducting emergency marking of utilities for Phase II field events. In support of our health professionals, BLDI has donated all acceptable PPE to a local health facility under the direction of the Kent County Health Department in lieu of using PPE to conduct non-essential site work. The COVID-19 pandemic has resulted in over 2,800 deaths in the United States per the CDC with the number expected to substantially increase. BLDI is committed to doing our part to aid essential businesses during this time and not exacerbate the already over-burdened health care system.

Phase I ESA Alternatives

Although we can get started on the office portion of the Phase I ESA (remotely), in lieu of the ability to conduct a Phase I ESA site visit and review various FOIA documents, BLDI recommends clients consider the following:

Start with an Environmental RiskScan® RSRA (RiskScan)

  • A RiskScan is a desktop review of a property, which would entail a review of an environmental database, limited governmental online records, and limited historical information
  • The cost of a RiskScan rolls into the cost of a Phase I ESA
  • In the meantime, while working under the limitations currently imposed by the COVID-19 pandemic, the RiskScan provides an environmental overview of the property, offering a big-picture point of view.

Once the Executive Orders are lifted and it is safe and reasonable to conduct field activities, a Phase I would be completed at the discretion of the client.

Discussion

We received feedback from EGLE following the “stay-at-home” order in late March 2020 that would like to share regarding the definition of essential business and critical infrastructure. Although EGLE did not specifically say that a Phase I or Phase II ESAS is not an essential business, they indicated that we should appreciate that EGLE shut down all state funded environmental site work. Additionally, EGLE sent out communication on Friday, March 27, 2020 stating that the 45-day deadline for all BEA’s will be waived for properties “purchased, occupied, or foreclosed on or after February 1, 2020”.

Based on this information, we maintain that conducting a Phase I or Phase II during the effective dates of EO-2020-21 is NOT an essential business or critical infrastructure. Once the Executive Order is no longer in effect, BLDI will prioritize work to complete environmental due diligence (EDD) projects as soon as possible (ASAP).

BLDI is applying the Executive Order into our current business practices with the following considerations:

Although select consultants were earlier using an expansive interpretation of what constituted an essential business or critical infrastructure to conduct EDD site work, consideration of the following appears to have corrected this behavior. The following information should be appreciated when considering conducted EDD site work:

  • Violation of the EO-2020-21 may mean a contract is an “illegal” contract which then puts other issues in jeopardy, including reliance on any insurance (i.e. insurance contract)
  • If, in undertaking such an illegal act, anyone gets sick that is in any way related, or even unrelated, to this work both the Client and the consultant can potentially be held liable AND neither of them likely have insurance to cover legal expenses or damages related to: 1) an illegal act and/or 2) COVID illness or death
  • In reviewing EO-2020-21, it appears clear that a Phase I or Phase II is unlikely to meet this criterion for critical infrastructure or essential business, as defined in EO-2020-21 and federal guidance (i.e., ‘necessary to sustain or protect life’), especially considering that the transaction closing are likely well outside the effective date of the Order and often by several months
  • Additionally, analytical laboratories are at partial capacity with none of the labs contacted providing assurance of completion of the analytical work within the required hold times for select compounds (e.g. select metals and VOCs); thus, potentially rendering Phase II ESA sampling and associated analytical results of limited or no value
  • Utility marking services (e.g. MISSDIG) are unavailable except for emergency markings (e.g. broken water-mains) during the effective dates of the Order

Enforcement

BLDI received information from the Michigan Bankers Association regarding Police visiting job sites and citing people conducting work more than just basic business operations. This excerpt was provided by the law firm of Warner Norcross & Judd:
“We have heard reports from clients who have had police officers show up at the place of business. In these instances, the officers questioned whether the small group of employees were actually performing basic minimum operations and indicated they would be turning it over to the Attorney General’s Office for further action.”