Ch. 21-1 © 2006 Prentice Hall THE LEGAL ENVIRONMENT OF BUSINESS A Critical Thinking Approach Fourth...
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Transcript of Ch. 21-1 © 2006 Prentice Hall THE LEGAL ENVIRONMENT OF BUSINESS A Critical Thinking Approach Fourth...
Ch. 21-Ch. 21-11 © 2006 Prentice Hall© 2006 Prentice Hall
THETHE LEGALLEGAL ENVIRONMENTENVIRONMENT OFOF BUSINESSBUSINESS
A Critical Thinking ApproachA Critical Thinking ApproachA Critical Thinking ApproachA Critical Thinking ApproachFourth EditionFourth Edition
Nancy K. KubasekNancy K. Kubasek
Bartley A. BrennanBartley A. Brennan
M. Neil BrowneM. Neil Browne
Nancy K. KubasekNancy K. Kubasek
Bartley A. BrennanBartley A. Brennan
M. Neil BrowneM. Neil Browne
© 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-22
THE LEGAL ENVIRONMENT OF BUSINESS
CHAPTER 21CHAPTER 21
Environmental LawEnvironmental Law
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-33
THE LEGAL ENVIRONMENT OF BUSINESS
Environmental ProtectionEnvironmental Protection
Pollution as “negative Pollution as “negative externality”externality”
A detrimental by-product of A detrimental by-product of an industrial economy an industrial economy
A national problem, A national problem, requiring national requiring national solutionssolutions
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-44
THE LEGAL ENVIRONMENT OF BUSINESS
Alternatives to RegulationAlternatives to Regulation
Tort Law ActionsTort Law Actions
Nuisance: public and privateNuisance: public and private
TrespassTrespass
NegligenceNegligence
Tort Law ProblemsTort Law Problems
StandingStanding
CausationCausation
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-55
THE LEGAL ENVIRONMENT OF BUSINESS
Other Alternatives to RegulationOther Alternatives to Regulation
Pay subsidies to pollutersPay subsidies to polluters
Charge pollution feeCharge pollution fee
Sell permits to pollute: Sell permits to pollute: “marketable discharge “marketable discharge permit”permit”
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-66
THE LEGAL ENVIRONMENT OF BUSINESS
Direct Regulation to Protect the EnvironmentDirect Regulation to Protect the Environment
General approach: Set and enforce General approach: Set and enforce standardsstandards
Technology-forcingTechnology-forcing
Technology-drivenTechnology-driven
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-77
THE LEGAL ENVIRONMENT OF BUSINESS
The EPAThe EPAThe largest federal agencyThe largest federal agency
Created 1972 by executive orderCreated 1972 by executive order
Mission: Protect environment from all Mission: Protect environment from all forms of pollutionforms of pollution
Methods: Sets standards, monitors Methods: Sets standards, monitors compliance, enforces regulations—compliance, enforces regulations—including criminal sanctions including criminal sanctions
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-88
THE LEGAL ENVIRONMENT OF BUSINESS
National Environmental Policy Act of 1970National Environmental Policy Act of 1970
Created the Created the processprocess of requiring of requiring Environmental Impact Statements (EIS)Environmental Impact Statements (EIS)
For For major federalmajor federal legislation or agency legislation or agency action havingaction having
Significant impactSignificant impact on the quality of on the quality of the human environmentthe human environment
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-99
THE LEGAL ENVIRONMENT OF BUSINESS
EIS ProcessEIS ProcessPreliminary decision: determination of non-Preliminary decision: determination of non-significancesignificance
When EIS is required, it includesWhen EIS is required, it includes
Impact of proposed actionImpact of proposed action
Unavoidable adverse effectsUnavoidable adverse effects
AlternativesAlternatives
Short-term v. long-term analysisShort-term v. long-term analysis
Irreversible commitments of resourcesIrreversible commitments of resources
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1010
THE LEGAL ENVIRONMENT OF BUSINESS
Federal Water Pollution Control ActFederal Water Pollution Control Act
Direct regulation of water qualityDirect regulation of water quality
GOALSGOALS
““Fishable”Fishable” and and ““swswimmable”immable” waters waters
Total elimination of Total elimination of pollutant dischargespollutant discharges
METHODSMETHODS
Point source Point source effluent limitationseffluent limitations
NPDES discharge NPDES discharge permitspermits
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1111
THE LEGAL ENVIRONMENT OF BUSINESS
Safe Drinking Water ActSafe Drinking Water Act
Regulates public water Regulates public water supply systemssupply systems
Application: 15 service Application: 15 service connections/25 personsconnections/25 persons
Primary and secondary Primary and secondary standardsstandards
Sets unenforceable goals Sets unenforceable goals for contaminantsfor contaminants
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1212
THE LEGAL ENVIRONMENT OF BUSINESS
Air QualityAir QualityClean Air Act of 1970Clean Air Act of 1970
National Ambient Air Quality National Ambient Air Quality Standards (NAAQS)Standards (NAAQS)
State Implementation Plan State Implementation Plan (SIP)(SIP)
1990 amendments: focus on 1990 amendments: focus on cars; hazardous air pollutantscars; hazardous air pollutants
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1313
THE LEGAL ENVIRONMENT OF BUSINESS
Air QualityAir QualityNew Source Review (NSR) 1977New Source Review (NSR) 1977
Hazardous Air Pollutants (HAP) 1999Hazardous Air Pollutants (HAP) 1999
Standard: Maximum Achievable Standard: Maximum Achievable Control Technology (MACT)Control Technology (MACT)
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1414
THE LEGAL ENVIRONMENT OF BUSINESS
Indoor Air PollutionIndoor Air Pollution““Sick building syndrome”Sick building syndrome”
Emissions from building Emissions from building materials, furnishingsmaterials, furnishings
Clean Air Act does not applyClean Air Act does not apply
OSHA regulations may apply OSHA regulations may apply in workplace but not in homesin workplace but not in homes
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1515
THE LEGAL ENVIRONMENT OF BUSINESS
Acid RainAcid Rain
1990 Clean Air Act Amendments1990 Clean Air Act Amendments
Emissions trading programEmissions trading program
Sulfur dioxide allowances auctionedSulfur dioxide allowances auctioned
One ton per allowanceOne ton per allowance
Effectiveness of process under Effectiveness of process under continuing study continuing study
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1616
THE LEGAL ENVIRONMENT OF BUSINESS
Hazardous Waste and Toxic SubstancesHazardous Waste and Toxic SubstancesResource Conservation and Recovery Act of 1976 (RCRA)Resource Conservation and Recovery Act of 1976 (RCRA)
METHODMETHOD
Manifest program — creates certification Manifest program — creates certification and recordkeeping for entire life cycle of and recordkeeping for entire life cycle of designated hazardous wastes designated hazardous wastes
Goal: Goal: Control hazardous wasteControl hazardous waste
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1717
THE LEGAL ENVIRONMENT OF BUSINESS
Hazardous Waste and Toxic SubstancesHazardous Waste and Toxic Substances
Comprehensive Environmental Response, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) Compensation, and Liability Act of 1980 (CERCLA)
Example: "SUPERFUND"Example: "SUPERFUND"
GOAL:GOAL: To remediate land polluted prior to RCRA regulation To remediate land polluted prior to RCRA regulation
METHOD:METHOD: Use government Superfund money to clean up Use government Superfund money to clean up toxic sites, then recover costs from those responsibletoxic sites, then recover costs from those responsible
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1818
THE LEGAL ENVIRONMENT OF BUSINESS
““Superfund” Issues: LiabilitySuperfund” Issues: Liability
““Potentially responsible parties” Potentially responsible parties” – controversial extension of – controversial extension of liability toliability to
Present owners or operatorsPresent owners or operators
Previous owners or operatorsPrevious owners or operators
Hazardous waste generatorsHazardous waste generators
Hazardous waste transporterHazardous waste transporter
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-1919
THE LEGAL ENVIRONMENT OF BUSINESS
““Superfund” Issues: FundingSuperfund” Issues: FundingGoal: Self-supporting programGoal: Self-supporting program
1986 Amendments increased funding to $8.5 billion1986 Amendments increased funding to $8.5 billion
Funding comes from taxes on major Funding comes from taxes on major polluters: petroleum, chemical polluters: petroleum, chemical feedstock, environmental taxes on feedstock, environmental taxes on corporationscorporations
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-2020
THE LEGAL ENVIRONMENT OF BUSINESS
Toxic Substances Control Act of 1979 (TSCA)Toxic Substances Control Act of 1979 (TSCA)
Goal: Fills gap between Goal: Fills gap between RCRA and CERCLARCRA and CERCLA
Toxics broadly definedToxics broadly defined
Method: Requires PMN Method: Requires PMN to EPAto EPA
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-2121
THE LEGAL ENVIRONMENT OF BUSINESS
Federal Insecticide, Fungicide, and Federal Insecticide, Fungicide, and Rodenticide Act of 1972 (FIFRA)Rodenticide Act of 1972 (FIFRA)
Goal: Regulation of all Goal: Regulation of all pesticidespesticides
Method: Registration systemMethod: Registration system
Certifies: composition of Certifies: composition of compound; labeling; compound; labeling; performanceperformance
Registration determines scope Registration determines scope of use: of use: generalgeneral or or restrictedrestricted
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-2222
THE LEGAL ENVIRONMENT OF BUSINESS
Federal Food, Drug, and Cosmetic Act Federal Food, Drug, and Cosmetic Act (FFDCA)(FFDCA)
Goal: Establishes standards for pesticide Goal: Establishes standards for pesticide residue in foodresidue in food
Method: Issues ‘tolerances’ for pesticide Method: Issues ‘tolerances’ for pesticide used as determined by EPAused as determined by EPA
Applicant must demonstrate complianceApplicant must demonstrate compliance
1996 Food Quality Protection Act declares 1996 Food Quality Protection Act declares ‘safe residue level’ as ‘reasonable certainty ‘safe residue level’ as ‘reasonable certainty of no harm’of no harm’
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-2323
THE LEGAL ENVIRONMENT OF BUSINESS
Pollution Prevention Act 1990Pollution Prevention Act 1990Numerous regulatory efforts have been effectiveNumerous regulatory efforts have been effective
Pollution has been significantly reducedPollution has been significantly reduced
However, elimination of remaining pollution However, elimination of remaining pollution increasingly costly to achieveincreasingly costly to achieve
Pollution Prevention Act goal is to Pollution Prevention Act goal is to encourageencourage further progressfurther progress
Method: Provide information and incentive grants Method: Provide information and incentive grants to spur innovationto spur innovation
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-2424
THE LEGAL ENVIRONMENT OF BUSINESS
Global DimensionsGlobal DimensionsPollution is Pollution is transnationaltransnational
The ‘Global Commons’ The ‘Global Commons’ conceptconcept
Goal:Goal: International cooperation and harmonization of laws International cooperation and harmonization of laws
Methods:Methods: Share research; promote conferences; create Share research; promote conferences; create treaties; provide economic aid to accomplish goalstreaties; provide economic aid to accomplish goals
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-2525
THE LEGAL ENVIRONMENT OF BUSINESS
Selected Treaties and ProtocolsSelected Treaties and Protocols
Stockholm 1972 Stockholm 1972 sustainable developmentsustainable development
Montreal Protocol 1987 and 1996 Montreal Protocol 1987 and 1996 ozone ozone depletiondepletion
Rio de Janeiro 1992 Rio de Janeiro 1992 biodiversity biodiversity
NAFTA NAFTA side agreement on the environmentside agreement on the environment
Kyoto 1998 Kyoto 1998 greenhouse gasesgreenhouse gases
l © 2006 Prentice Hall© 2006 Prentice Hall Ch. 21-Ch. 21-2626
THE LEGAL ENVIRONMENT OF BUSINESS
U.S. Government PoliciesU.S. Government Policies
U.S. did not sign Kyoto ProtocolU.S. did not sign Kyoto Protocol
U.S. does provide foreign aid to assist U.S. does provide foreign aid to assist selected countriesselected countries
Certain trade agreements contain Certain trade agreements contain environmental protection: NAFTAenvironmental protection: NAFTA