RCRA and the Retail Sector: Regulators are Taking a Look at Stores’ Waste Management Practices

Kelley Drye Client Advisory

Let’s say an average hardware store, stocking everyday items such as paints and varnishes, automotive products, fluorescent lights, fertilizer, and pesticides, has decided to upgrade its product lines.  Or a pharmacy, stocking prescription drugs, medical items, and aerosol products, with photo processing and other services, needs to rid itself of returned and unsellable products and other operational waste.  A typical grocery store, carrying bleaches and other cleaning solvents, lighter fluid and other ignitable liquids, and batteries, may be downsizing to a smaller space and clearing its shelves.  While many of these products may seem mundane—things that most of us have in our own homes—the improper disposal of them by a retail operator can mean millions of dollars in penalties.

The Resource Conservation and Recovery Act

The Resource Conservation and Recovery Act (“RCRA”), enacted in 1976, provides a cradle-to-grave” framework for the management and disposal of solid waste and hazardous waste.  It subjects generators of hazardous waste to waste accumulation, manifesting, and recordkeeping requirements.  Facilities that treat, store, or dispose of hazardous waste must hold a permit, develop contingency plans and emergency procedures, meet recordkeeping and reporting requirements, and implement financial assurance mechanisms.  In the case of releases of hazardous wastes or hazardous constituents of solid waste, RCRA regulations contain provisions for conducting corrective actions and cleanup.  The question is, then: How does this all apply to the retail sector?

Although there is an exemption in RCRA for household products discarded as wastes as part of municipal trash by households, all the products mentioned above can be considered a solid or hazardous waste under RCRA when discarded by retail or commercial facilities.  Hazardous wastes include those that have the characteristic of being ignitable (D001), corrosive (D002), reactive (D003), or toxic (D-list).  For example: many aerosol products, cleaning solvents, and other household goods meet the ignitability characteristic.  In addition, bleach, chlorine cleaners and products, and other cleaning agents meet the corrosivity characteristic.  The Environmental Protection Agency (“EPA”) has also developed listed waste substances that are known to be hazardous, many of which encompass pharmaceutical waste and residues (P- and U-lists) and spent cleaning solvents and solvent-contaminated items (F-list).  Finally, the EPA has designated some widely generated, common hazardous wastes as universal wastes,” including batteries, pesticides, mercury-containing equipment, and fluorescent light bulbs.  Because all these wastes are governed by RCRA, retailers must be careful in their management and disposal of such items.

Proper management and disposal under RCRA means putting a number of programs and best practices into place.  Many businesses holding these sorts of wastes contract out the responsibility of waste transportation and disposal to permitted and experienced companies that know how to properly handle, transport, recycle, and dispose of hazardous wastes.  Companies should put into place procedures and protocols that govern the handling of hazardous products when they become waste, including procedures for recordkeeping and use of shipment manifests and appropriate storage and disposal facilities.  Employees should be trained in maintaining these protocols.  Finally, retail operations may want to consider developing a compliance assurance and/or auditing program to make sure that they uncover and correct any discrepancies before the regulators do.

Government Action

A number of retailers have faced enforcement action over the past few years for the mishandling and improper disposal of hazardous wastes.  In 2013, Wal-Mart Stores, Inc. finalized an $82 million settlement with the EPA, which included a civil penalty under RCRA for $6.1 million as well as fines for criminal misdemeanors under the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Water Act.  California, which administers its own federally approved waste management regulations, has collected millions of dollars in penalties each from such big-box retailers as Walgreens, CVS, and Costco.  The EPA has enforced against individual warehouse and retail facilities as well.

The EPA has been looking into how it can better address the problems retail stores face in complying with RCRA.  In February 2014, the EPA issued a notice of data availability inviting comment on information assembled by EPA on the hazardous waste management practices of the retail sector, and the challenges retailors face in complying with RCRA.  Retailers and retail associations have explained that management of unsold or returned products, especially though a reverse distribution system, ought to be exempted from RCRA regulation.  Additionally, shifting stock levels can lead retailers to vacillate between being a small-quantity generator and a large-quantity generator, a circumstance that the EPA should address.

The EPA is considering rulemakings and/or guidance to address the concerns retailers have with RCRA’s manufacturing-focused structure.  In January 2015, EPA promulgated a new definition of solid waste intended to clarify the rules applicable to certain hazardous secondary materials being recycled.  Later this year EPA is planning to release a proposal to address the management of hazardous waste pharmaceuticals.  Until the rules on the retail sector are clarified, RCRA still applies to the management of many everyday products when discarded.

For more information, please contact:

John L. Wittenborn
(202) 342-8514