Here's how: to avoid environmental liability.

• Author: McKeever, Timothy

"EPA Fine Closes Business"

"State Investigates Dumper"

"Clean Up Cost $3.2 Million, Battery Shop Closes Doors"

"EPA Searches Pulp Mill"

These newspaper headlines show what dozens of Alaskan businesses are discovering: Violating environmental laws can result in extensive liability. Penalties and fines are often only a small part of the overall expense. Paying consultants, clean-up contractors and/or the government's clean-up costs can take a chunk out of your bank account.

Environmental problems can mean liability to workers, neighboring property owners and others. This potential liability is often not covered by insurance and can be enormous. Criminal liability, including jail sentences, is becoming increasingly common.

For example, over the years, many Fairbanks firms disposed of used automobile and truck batteries with a particular battery shop. The land where that battery shop was located is now a Superfund site, and the federal Environmental Protection Agency is supervising cleanup. The cost so far is estimated to be $3.2 million, and 11 Fairbanks businesses have been asked to pay a total of $3 million and 15 other businesses have been asked to pay $69.25 for each battery they left at the site. The owner of the battery shop has closed the business and plans to build batteries in Siberia.

Businesses can take steps to limit these kinds of environmental liabilities. Avoiding environmental liability requires learning about the environmental laws that affect your business, complying with those laws, obtaining required permits and complying strictly with the terms of those permits. Property that is being purchased, leased or sold should be examined for environmental problems. And you should ensure that your employees and those you do business with strictly comply with environmental laws. There are costs involved, but the costs are worth the reduced risks of environmental liability.

Government Regulations and Restrictions. Environmental laws have blossomed since the early 1970s. In an effort to clean up the environment, the federal government has passed dozens of laws that regulate the discharges of pollution onto land and into air and water. There are restrictions on the use of dangerous insecticides such as DDT; more innocuous substances like paints are also regulated. Federal laws restrict the development of certain private land, require detailed record-keeping about the transport of hazardous materials, and provide for the disposition of...