Lender Liability for Environmental Harm This pap

This paper will examine how the issues of lender liability for environmental harms are handled in the United States. Canada, and Australia. The main focus of the paper will be on the whether a lender can be held liable for environmental harms as an owner or person in control of a contaminated site. The principle way in which a lender can be held liable is by forcing it to pay for the cost of cleaning up a contaminated site. The main controversy in this area is whether the security interest held by a lender is a sufficient enough property interest to classify the lender as an owner or gives the lender enough control of the contaminated site. The section of this paper concerning the United States will focus solely upon federal law, namely CERCLA, since federal environmental law constitutes a fairly comprehensive system which governs most parties throughout the United States. The sections concerning Canadian and Australian law will focus solely upon the laws of particular provinces and states, because there is no overall federal environmental law in either of these countries.

Although almost of the states in the United States have enacted environmental legislation which can potentially affect lenders, the most important legislation in this area has been enacted by the federal government. The states have the power to enact such legislation because it falls within the purview of traditional health and safety concerns

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t said that Congress did not intend to confer on the EPA any authority to issue regulations concerning liability under Section 107(a). The Court held that the EPA was attempting to use the authority it had to issue regulations under Section 105 to issue regulations which were actually related to Section 107. The Court then rejected the EPA's reliance upon provisions which granted it enforcement powers, saying that these powers made the EPA an environmental prosecutor. Thus, the EPA exceeded its powers, since only the judge can decide liability. Third, the Court said that the EPA could not rely upon Section 106(b)(2), which seems to allow the EPA to resolve liability issues in reimbursement actions. The Court said that in such case, the EPA is merely acting in the capacity of a party defendant. Should the defendant in a CERCLA action appeal the decision of the EPA denying reimbursement, the District Court would not be required to give deference or even consider the EPA's view of liability. In addition, when making such a decision, the EPA was not empowered by the Section to select the criteria in making its decision; these criteria are more appropriately developed by Congress or the judiciary. In response to the EPA's a
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Approximate Word count = 10268
Approximate Pages = 41 (250 words per page)