What Every Business Owner Must Know About PFAS Contamination

Remember when everyone was worried about PFAS contamination? Believe it or not, it was a serious concern that dominated headlines in late 2019 and early 2020 before COVID-19. It remains a serious environmental issue. But what is PFAS, and more importantly, how does it impact your business? PFAS stands for per- and polyfluoroalkyl substances, which are a group of man-made chemicals that have been manufactured and used in a number of industries across the globe since the 1940s. Also known as PFOA and PFOS, these chemicals are found in commercial household products like stains, paints, waxes, chemically coated fabrics, and production facilities for chrome plating, electronics, and general manufacturing. Firefighting foams used on military bases or at airfields are another big contributor to PFAS contamination.

One of the main reasons that PFAS is such big news today is that it has made its way into Michigan’s waterways. PFAS does not break down naturally and tends to accumulate, forming a foamy film on surface water. PFAS has also been linked to certain adverse health effects, making its accumulation in Michigan’s water especially concerning. For example, PFAS accumulation in the Huron River resulted in “do not fish” advisories throughout the watershed in 2019. While swimming was still safe, pictures of accumulated foam on the river banks made for dramatic news stories.  

Business owners need to be aware of whether their business is contributing to PFAS contamination. If your business is releasing PFAS into the environment—whether intentionally or not—it could lead to significant fines and clean-up costs. The State of Michigan recently filed lawsuits against 17 chemical companies that allegedly are responsible for 74 contaminated sites throughout the State. The State is seeking to recoup the approximately $25 million per year that it spends to remediate PFAS contamination—an amount that is likely to increase. Local wastewater authorities—entities that operate wastewater treatment plants—are also filing lawsuits against businesses that are releasing PFAS into the environment to recoup their own expenses and the need for new infrastructure.

Even if you are not the owner of a chemical company or a “toxic” business like a chrome plating facility, you still need to be aware of potential exposure and environmental liability associated with PFAS. An example of a “non-traditional” PFAS contamination source is Chinese-made surgical gowns. Unaware that the gowns are treated with PFAS-containing chemicals, some commercial laundry facilities were inadvertently releasing PFAS into their local wastewater systems. As a business owner, you need to be aware of whether your business is contributing to PFAS contamination. At a minimum, you will want to know the answers to the following:

  • First, does your business have an IPP permit (Industrial Pretreatment Program) from your local wastewater treatment facility? These permits govern the chemical levels that a business is allowed to discharge into the local wastewater treatment system and are issued pursuant to local sewer ordinance. Many—if not all—wastewater treatment authorities are in the process of adopting special regulations related to PFAS. Violations of the local sewer ordinance can result in significant fines and injunctive orders from the Courts.
  • Second, does your insurance protect you from any pollution liability or exposure? Most standard commercial liability insurance policies have pollution liability exclusions. So unless you purchased a special rider (which can be expensive), you are likely not covered against PFAS-related claims.
  • Third, did you do a Phase I, Phase II, and Baseline Environmental Assessment (BEA) when you purchased your business or the property on which your business is located? The Michigan Natural Resources and Environmental Protection Act allows property owners to conduct certain environmental testing as part of purchasing a property. The resulting BEA can limit environmental liability going forward.

If you are concerned with how PFAS is affecting your business, contact attorney Dan Artaev at 248-380-0000 or dartaev@fb-firm.com. Dan can advise you with respect compliance and answer any questions you may have about best business practices going forward.

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