The Notice of Violation and Assessment ("NOVA") filed against AT&T of the Virgin Islands Inc. ("AT&T") by the Planning and Natural Resources Department on Dec. 31, 1998, proposes a penalty of $23,373,150 for what DPNR alleges are 2,494 violations of the Coastal Zone Management Act.
Because the individual violations that make up this total are not specified, AT&T cannot respond precisely to these charges. The vast majority of the alleged violations, however, appear to relate to the cable conduit drilling that occurred during the construction of the St. Croix cable landing station in 1996.
In effect, the NOVA assesses 28 penalties per day for each day that drilling occurred. The drilling began on April 12, 1996, and ended Sept. 25, 1996, a total of 166 days. Because of equipment failures and other problems, actual drilling occurred on only about 90 days.
If AT&T and its contractors were assessed the maximum penalty for each day of drilling, the total penalty would be $900,000. DPNR's proposed penalty is more than 20 times that amount.
The proposed penalty of more than $23 million is almost unheard of in environmental enforcement history. Nothing approaching this amount has ever been assessed under Virgin Islands law. A review of recent judgments and settlements under the federal Clean Water Act provides perspective.
— The largest civil penalty trial judgment in Clean Water Act history is only $12.6 million. That was imposed in 1997 against Smithfield Foods Inc. for nearly 7,000 Clean Water Act violations over a five-year period, including discharges that resulted in the Pagan River being closed for shellfish harvesting. The violations also included submitting false and inaccurate discharge monitoring reports, and destroying or otherwise failing to maintain required records.
— An EPA report of its enforcement accomplishments in fiscal year 1997 discloses that, of the approximately 50 Clean Water Act civil enforcement actions reported, only eight involved penalties and Supplemental Environmental Projects totaling more than $1 million. Those cases follow:
— Pacific Gas & Electric agreed to pay a $7.1 million penalty to settle claims that they had filed incomplete and misleading monitoring reports relating to discharges from its Diablo Canyon Nuclear Power Plant. The plant discharges 2.5 billion gallons of cooling water per day. The reports were filed beginning in 1985. Senior executives of PG&E allegedly knew that the reports were misleading and inaccurate as early as 1992 but did not turn over missing data until 1994.
— Barry Petroleum agreed to pay $800,000 in civil penalties to EPA, $200,000 to the State of California and $25,000 to the Fish & Wildlife Service. It also agreed to reimburse federal and state agencies $830,000 for response costs and damages. The claims arose from a spill of about 2,000 barrels of crude oil from an oil production facility into a wetland area adjacent to a state beach. The crude oil reached the Pacific Ocean, coating nearby beaches, killing sea birds and damaging sensitive wetland habitat.
— The Telluride Co. agreed to a civil penalty of $1.1 million for filling without authorization approximately 46 acres of wetlands.
— ASARCO agreed to a penalty of $1,036,000 to settle alleged violations of discharge limits in its NPDES permits.
— Sherwin-Williams agreed to a $4.7 million penalty to settle claims arising under four federal environmental statutes including the Clean Water Act. The company also agreed to perform several SEPs valued at $1.1 million, including a $150,000 wetlands restoration project.
— Wierton Steel Corp agreed to a $1.5 million penalty and $6.4 million in SEPs to settle claims arising under the Clean Air Act, the Clean Water Act and RCRA. The Clean Water Act violations involved wastewater discharges in excess of permit limits.
— The Puerto Rico Electric Power Authority agreed to pay $1.5 million and undertake land conservation acquisition valued at $3.4 million to settle claims arising at five of its facilities under six federal statutes.
— The Puerto Rico Administration of Corrections agreed to pay $625,000 in penalties for violations of a 1992 consent decree and agreed to perform a SEP valued at $600,000 in a case based on wastewater discharges from several correctional facilities.
— EPA Region 5, which encompasses the states of Ohio, Indiana, Illinois, Michigan, Wisconsin and Minnesota, maintains a database of all of its Clean Water Act enforcement cases in fiscal year 1998 and to date in FY 1999. The database shows that the region was involved in 19 enforcement matters during that period that specified final or proposed civil penalties. Of those, only one exceeded $1 million ($3.2 million penalty imposed against Koch Refining), and only four others exceeded $100,000.
The facts of this case do not justify a precedent-setting penalty. Even the NOVA does not charge that AT&T is responsible for significant harm to the environment. The fact is that during and after the mud release:
— Human health was not endangered.
— Recreational use of the site was unimpaired.
— Coral, fish, turtles and sea birds were unharmed.
— The shore and reef were free of mud deposits.
— Serious environmental harm was never a threatened.
The NOVA states that "[u]p to three million gallons" of drill mud were released into the marine environment. Because this statement encompasses everything between zero and three million, strictly speaking, it is not inaccurate -– just imprecise.
DPNR's own, more precise estimate is not nearly so dramatic. Shortly after the mud release was discovered, DPNR divers surveyed the area and estimated that approximately 100,000 gallons of mud was on the bottom. Other dive teams estimated similar or lower volumes. No on-scene observers ever reported any greater amount, let alone the 3 million gallons alleged in the NOVA.
The drill mud spread in a thin layer over a sandy-bottom area of about one-half acre, and was deep enough in some places to trap and smother about 100 conch. No conch have been harmed since the original release. Moreover, because the drilling was deliberately done in a sandy bottom area with little plant or animal life, the drill mud release appears to have had no lasting harmful effect of any kind.
The drill mud was a non-toxic slurry of inert bentonite clay and sea water. Although a small quantity of lubricant or hydraulic oil from the drill rig apparently got into the mud, there was no deliberate disposal of oil or any other hazardous material. The concentration of petroleum product in the mud was well below the level that would pose a threat to marine life.
AT&T has spent millions to clean up the mud. It has paid the Virgin Islands government $1.5 million already to reimburse it for its cleanup costs and to settle some of its claims. An unprecedented penalty on top of that is unwarranted.
AT&T stands ready to settle the government's remaining claims on a basis that is comparable to settlements of similar claims and proportionate to what actually happened. Fair and consistent enforcement of the law is fair to the people of the Virgin Islands and all who do business here.
