OAR 340-043-0025: Permit Conditions on Assumption of Liability

(1) This rule is necessary for the following reasons: (a) ORS 468B.015 expresses an extremely strong state policy against pollution of the waters of the state; and (b) ORS 468B.010 declares that the “water pollution laws of this state shall be liberally construed for the accomplishment of the purposes set forth in ORS 468B.015”; and (c) ORS 468B.020 directs the Department to require the use of all available and reasonable methods necessary to achieve the purposes of ORS 468B.015; and (d) Under ORS 468.065, the Department, in any permit it issues, is required to specify conditions for compliance with the rules and standards adopted by the Environmental Quality Commission pursuant to state law; (e) Certain chemical process mines pose an unusual risk of substantial environmental harm; (f) There is no significant operating history of chemical process mines in Oregon, and experience in other states demonstrates that, at least in some instances, chemical process mines have produced extraordinary environmental harm, and the permittees have escaped responsibility for such harm; (g) It is inherent in the nature of chemical process mining that income from the mining activity will likely cease before the obligations and costs of the permittee, thereby creating a serious risk that pollution will not be abated unless adequate financial safeguards are required; (h) The Reclamation Bond or alternative security required by ORS 517.987 and OAR 632-037-0135 for a chemical mining facility is intended to provide adequate resources to cover the costs of reclamation and a credible accident. The amount of security required is to be determined at the time permits are issued and adjusted as necessary during site operations. Lack of long-term experience with chemical mining activities makes it difficult to confidently estimate the full range of problems that could develop after chemical mining activities have ceased. This bond may not be adequate to address the full range of costs for protection and restoration of the environment if the permittee defaults; (i) It is appropriate to take reasonable steps to assure continuing accountability from those who profit from chemical mining activities. (2) Unless an exception is granted by the EQC pursuant to section (3) of this rule, and consistent with the provisions of section (4) of this rule, the Department shall require, prior to issuing or renewing a permit for a chemical mining facility, and as a condition of the permit, that those persons or entities who control the permittee assume liability for environmental injuries, remediation expenses, and penalties. (3) The EQC may grant an exception to the requirements of section (2) of this rule upon entering a finding that a particular chemical process mine for which a permit is required does not pose a risk of substantial environmental harm. A finding under this section may be based upon one or more of the following factors which are deemed to relate to the risk of substantial environmental harm: (a) Nature of the chemical mining process; (b) Size and scope of the operations; (c) Types of discharges; (d) Sensitivity of the potentially affected environment; (e) Difficulty and costs of implementing remediation measures; (f) Potential for unintentional or unanticipated environmental injury and the potential magnitude of such injury; or (g) Long-term operating history for the particular type of chemical process mine. (4) If any of the securities of the permittee or of an entity assuming liability under section (2) of this rule are Publicly Traded, the investors of such Publicly Traded entity shall not be required to assume liability for environmental injuries, remediation expenses, and penalties. As used in this section, “Publicly Traded” means listed on the New York Stock Exchange or the American Stock Exchange or designated under the National Association of Securities Dealers Automated Quotations System, Inc., National Market System. (5) As used in section (2) of this rule, “control” means the power to direct or exercise significant control over the management or policies of the permittee: (a) The power to direct or exercise significant control arises principally from ownership, directly, indirectly or through intermediary entities, of the permittee; (b) An important indicator of significant control arises from the ownership of or the power to vote ten percent (10%) or more of the securities of the permittee. Such ownership or voting rights may be either direct or indirect through intermediary entities; (c) An important indicator that significant control exists arises if the entities share a significant number of common directors or officers; (d) Individuals who hold status as officers, directors, employees, or agents of the permittee or intermediary entities shall not be deemed to fall under the definition of “control” for purposes of this rule solely as a result of such status; (e) Commercial lending institutions operating within the scope of their normal business activities shall not be deemed to fall under the definition of “control” for purposes of this rule. (6) The assumption of liability provided for in section (2) of this rule may, at the option of the persons or entities who control the permittee, be accomplished by joining with the permittee as a co-permittee or such other means as the Environmental Quality Commission, with advice of the Attorney General, may approve as being legally sufficient to protect the interests of the State of Oregon and its citizens. (7) No permit for a chemical process mining activity shall be transferred without the prior written approval from the Department and full compliance with any applicable rules regarding permit transfer. Such approval may be granted by the Department when the transferee acquires a property interest in the permitted activity or agrees in writing to comply fully with all the terms and conditions of the permit and the applicable statutes and rules and demonstrates to DEQ’s satisfaction the ability to fully comply. (8) This rule shall apply to all permit applications either pending on or submitted after the effective date of this rule. This rule shall also apply to all transfers pending on or requested after the effective date of this rule and to all persons who control the associated transferee.