Published in Economic Development

Biz groups push for more involvement in state’s environmental rule-making

BY Sunday, May 13, 2018 07:00pm

Citing onerous and biased rule-making functions at the Michigan Department of Environmental Quality, the Michigan Chamber of Commerce has long sought to reform the agency’s regulatory process.

A trio of bills backed by major business groups that are moving through the Legislature would do just that by increasing industry input in the rulemaking process and shedding light on the department’s decisions.

However, environmental groups characterize the bills as the “fox guarding the henhouse” that could lead to conflicts of interest where regulated industries write their own compliance measures.

Senate Bills 652-654, which passed in January on a 26-11 vote, have cleared a committee and are now before the full House. They would create an independent, 11-member “Environmental Rules Review Committee” to oversee the rule-making process; a 15-member permit appeal panel; and a nine-member “Environmental Science Board” to advise the state on a variety of environmental science issues. The plan is modeled after Indiana’s rule-making process.

“It’s all about transparency in the process,” said Jason Geer, the Michigan Chamber’s director of energy and environmental policy. “Right now, the rulemaking process is very closed and (DEQ) staff-centric.”

The bill package is championed by state Sen. Tom Casperson, R-Escanaba, who has been blunt in his assessment that DEQ staff is biased against the industries it regulates.

The Environmental Rules Review Committee would include members from industries such as manufacturing, oil and gas, solid waste management and agriculture, as well as environmental and land conservancy groups. Small businesses, electric utilities, local governments and the general public would also be represented. A lobbyist could serve as a member as long as he or she does not represent more than one person on the panel.

Under the plan, a DEQ request for a new rule would be sent to the committee, which would determine whether it meets five criteria, such as not exceeding “rule-making delegation allowed by statute” and achieving “their purposes in proportion to the burdens they place on individuals and businesses.”

A final decision on new rules would need to be made within a year of them being proposed, although the process could be suspended with a majority vote of the committee.

“We’re trying to create a process where critical stakeholders in the rulemaking committee are going to have to answer questions and there can be a genuine dialogue on whether rules are good,” Geer said. “For our members — whether they like a rule or not, are Democrats or Republicans — it’s about how we protect the environment in a way that doesn’t impede business.”

The Michigan Manufacturers Association also supports the bills. “It’s part of the checks and balances for our members with regard to the whole regulatory structure,” said Andy Such, the MMA’s director of environmental and regulatory policy. “We’ll have to see how it works.”

Geer and Such point to the years-long process over developing new rules for Part 201 site cleanups as a “worst-case scenario” of how the current process has failed. The section of the Natural Resources and Environmental Protection Act covers the generic criteria for cleaning various types of groundwater, soil and surface water contamination. It was last updated in 2002.

Despite a “collaborative stakeholder advisory group,” the DEQ proposed a new set of rules that are inconsistent with the group’s recommendations, Geer said. A March independent audit by Public Sector Consultants concluded that despite this years-long process, “many significant elements of the proposed rules package remain under debate.” The audit said the DEQ should “consider investing additional resources into stakeholder engagement processes.”

The DEQ disputes some of the report’s conclusions, saying it does not provide new “technical information” for the new rules and that opinions on the rule-making process had previously been provided through “public meetings and public comment opportunities.”

‘FUNDAMENTALLY RECKLESS’

The DEQ is opposed to the bills, though department spokesperson Tiffany Brown did not provide additional information on the agency’s position.

As well, some business organizations have been critical of the bills. A coalition known as the Great Lakes Business Network, whose members include multiple breweries and other companies dependent on the state’s tourism economy, submitted written testimony opposing the bills.

“These bills are fundamentally reckless because they ask regulated industries to set their own rules when it comes to protecting the health of Michigan families and our natural resources from environmental harm and pollution,” according to a Great Lakes Business Network letter cosigned by 26 businesses. “When balancing environmental and development interests there are sometimes conflicts. However, these interests are not at diametric odds and need to be carefully balanced. A healthy environment is essential for the operation of strong businesses in Michigan. These bills put forth a false premise that there is an imbalance in favor of environmental protections.”

The group also points out that, under the bills, a company like Enbridge could theoretically make decisions on rules related to its pipeline infrastructure.

James Clift, policy director with the Michigan Environmental Council, said in a letter to the House Michigan Competitiveness Committee last month that the bills would “undermine the accountability” of the governor and those appointed to lead departments, as well as “represent a direct conflict of interest in both rule making and permitting decisions.”

Additionally, Clift said the process could result in costly litigation for the state if decisions are challenged.

The Michigan Oil and Gas Association — while it supports the bills — said in November that it is “disappointed” the bills would create “another level of bureaucracy.”

Geer of the Michigan Chamber concedes this may be the case, but said that it would be worth having a debate among various interest groups. While he said there may be “growing pains” if the process is enacted, it will ultimately lead to more thoroughly vetted rules.

“What’s the harm in trying it? What do we have to lose?” Geer said. “If it doesn’t work, we can get rid of it.”

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