Improving the Quality of Phase I ESA ReportsJun 7th, 2014 | By Stuart J. Spiegel | Category: Due Diligence, Environmental Management, Take A Break
Phase I Environmental Site Assessments (ESAs) have been conducted since the 1980s, but it was only in 1993 that ASTM (formerly the American Society for Testing and Materials) issued the first version of what would become today’s reference standard, the “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” (E 1527-13).
The following are tips that can improve the quality of a Phase I ESA report.
1. Understand the Risk Posture of Your Audience
The audience of the Phase I ESA is referred to as the “User” in the terminology of E1527. Simply stated, different Users have different risk thresholds and abilities to implement corrective actions. Issues that may be of great concern to one User may be of less concern to another User. The factors underlying each real estate transaction are different, as are the abilities of clients to understand, accept, or be in a position to deal with risk. Both the Phase I report and the Phase I investigation need to reflect the risk posture of the User.
2. Describe the Site Early in the Report
It is extremely difficult to understand, assimilate and evaluate a Phase I ESA report when it does not indicate what the primary use of the property or facility is until page 6 or 8 – or even later. A simple upfront statement sets the stage for the information that follows. Facility descriptions too often are buried in the later pages of the report, making the significance of any information provided before that point of little value.
3. Establish the Anticipated Future Use
A property needs to be evaluated in light of the stated current and future use(s). Where there are different remedial thresholds for different types of property or building uses, this may be an important evaluation factor to the User of a Phase I ESA.
4. Use Clarity in Relating the Work of Others
In the preparation of a Phase I ESA report, it is common to relate the findings of previous work that was prepared by others: a previous Phase I, the results of a Phase II or other environmental quality investigation, or any other reports that may be relevant to the subject property. The Phase I report must clearly differentiate this previous work from that of the current assignment to prevent the reader from mistakenly inferring that the current preparer performed that work or reached those conclusions.
5. Cite, Cite, Cite
Never forget that a Phase I ESA report is a legal and highly technical document. It is critical that facts be appropriately sourced and documented, similar to the documentation used for a paper in a peer-reviewed technical journal. Sources that should be cited include books, reports, maps, photos, blogs, newspapers, permits and permit applications, memos, and regulatory records, among others. Citations should also be provided for people who provided verbal information. The names, job titles, and roles of interviewees should be captured and reported.
6. Reference Limitations in Information
It is also important to reference accessed sources that did not contain usable information; this documents the extent of the due diligence that was conducted. By referencing sources that were not productive, the completeness and documentation of the process is enhanced and the credibility of the findings and conclusions are improved.
7. Analyze Detection Limits
It’s not unusual to see a conclusion stating that the data from laboratory analyses were below detection limits. The tendency is then to eliminate the issue from further review. This can be a significant oversight. Detection limits may be elevated, sometimes significantly, over expected laboratory reporting limits, or they may exceed the regulatory thresholds that are the benchmark for evaluation. Refer to the underlying data or, if it is unavailable, make a statement that the appropriateness of the detection limits could not be verified.
8. Search the Internet
As most people know, the reach of the Internet is extensive. As a result, it can be of value to enter the address of the property, the name of the site, or the name of recent owners into a search engine. Reviewing about five pages of results with 50 items per page can turn up history or other information not readily available from other sources.
9. Analyze the Information
A Phase I ESA is an analysis, not just an information dump. Many Phase I ESAs seem to be an assemblage of information, summarized and described. Note that Section 12 of the Standard Practice requires that the Environmental Professional render an opinion of the impact of findings on the property.
Following these simple tips can help make any Phase I ESA report clearer to understand and more valuable to the end-users.
About the Author
Stuart J. Spiegel is a Senior Managing Scientist at O’Brien & Gere Engineers, Inc. in Syracuse, NY, USA. He specializes in Phase I ESAs for environmental due diligence and other environmental management, planning, sustainability, and compliance issues. His experience includes several transactions with values over $1 billion involving facilities around the globe. He holds a B.S. in Biology and M.S. in Sanitary Science, both from Syracuse University.