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April 6, 2005Client Alert

Green Tier: What is it anyway?

There’s been a lot of talk lately about Green Tier.  But, what is it anyway? And why should you be interested?

Green Tier is the name given to a law passed in March 2004 (2003 Wisconsin Act 276) designed to promote and reward “superior environmental performance” by regulated businesses, industries, and municipalities.  The law is implemented by the Wisconsin Department of Natural Resources (DNR).  It is a merger of two ideas – the move away from “command and control” regulation to a more incentive-based, market approach and the concept of a “good housekeeping seal of approval”. Participation is entirely voluntary.  Certification as a Green Tier participant can have positive benefits for your company, municipality or industry.

The Green Tier participant makes an essential two-part commitment – to operate at a level of environmental compliance that exceeds the minimum requirements set out in the laws or administrative rules, and to do in a transparent manner that provides DNR and the public with ongoing access to information.  In return, DNR provides recognition and positive incentives.  The types of incentives can range from reducing the frequency of inspections and reporting and identifying a single point of contact in DNR for your company, municipality or industry, to other incentives the Green Tier participant identifies and negotiates with DNR.  The law requires that any negotiated incentives be “proportional” to the environmental performance being provided.  In addition, DNR will identify your company, municipality or industry as a “Green Tier” participant, giving public recognition that you are a leader, going beyond environmental compliance. 

There are two tiers of participation in the Green Tier program.  Each has its own eligibility criteria and commitment requirements.

Tier I:  For Tier I certification, you must first meet the eligibility requirements for participation.  If you do, your participation consists of the following commitments: a) implement an environmental management system (EMS), b) conduct an annual audit of the EMS and c) report the results to DNR.  If the EMS audit identifies violations and you correct them within a specified time, DNR and the Wisconsin Department of Justice (DOJ) are prohibited from bringing an enforcement action against you to collect a civil forfeiture for the violations.

To be eligible for Tier I, your environmental compliance record must satisfy the following conditions:

  1. no criminal conviction within the prior five yearsfor an environmental law violation that resulted in substantial harm or presented an imminent threat to public health or the environment;
  2. no civil judgment within the prior three years for an environmental law violation that resulted in substantial harm to public health or the environment;
  3. no lawsuit filed by the State or citation issued by DNR within the prior two years for an environmental law violation.

Tier II:  For Tier II certification, you must first meet the Tier II eligibility requirements.  Participation in Tier I is not a prerequisite to participation in Tier II – you can start out in Tier II if you wish to do so.  If you meet the Tier II eligibility requirements, your participation consists of the following commitments: a) negotiate a contract with DNR specifying how you will deliver superior environmental performance and the incentives or rewards DNR will provide in return, b) conduct an environmental compliance audit, and c) report the results of the environmental compliance audit to DNR.  The Tier II audit of environmental compliance is a broader audit than the Tier I audit of the EMS.  If the Tier II audit identifies violations and you correct them within a specified time, DNR and DOJ are similarly prohibited from bringing an enforcement action to collect a civil forfeiture for the violations.

The eligibility requirements for Tier II are more demanding than for Tier I:

  1. no criminal conviction within the prior 10 years for an environmental law violation that resulted in substantial harm or presented an imminent threat to public health or the environment;
  2. no civil judgment within the prior five years for an environmental law violation that resulted in substantial harm to public health or the environment;
  3. no lawsuit filed by the State or citation issued by DNR within the prior two years for an environmental law violation.

Both Tier I and Tier II commitments are subject to public comment, and participation in both tiers is marked by public access to information and the opportunity for public involvement.

Charters:  Green Tier also provides for multi-party agreements called Charters, which can commit like-situated businesses, industries or groups to a common set of superior environmental performance principles.  DNR is currently working on several charters -- with a trade association, with a group of similar industries, with a developer and the municipalities in which the developer works – to establish common understandings, measures of performance, and environmental performance goals.  Interested stakeholders – neighborhood groups, environmental organizations, interested individuals – will also have input.  Beyond the positive working relationships with DNR and interested third parties and enhanced community reputation, these charters may also lead to expedited approval processes and flexibility in approval criteria.

The newness of Green Tier means that DNR, prospective participants and the public are all feeling their way through it.  There are lots of unanswered questions -- from the global issues of how to maximize the environmental benefits Green Tier participation can provide to the details of just how the procedures should work.  Frequent questions include “what can I expect in terms of public involvement?”, “what sorts of incentives can DNR provide?” and “what activities of superior environmental performance are acceptable?”  There are no clear answers – a situation that discourages some from participating, but that others see as an opportunity for creativity and community outreach. While the uncertainty can be unsettling, it also means that early participants have the opportunity to shape this unique program to meet your company’s, municipality’s or industry’s needs as you meet the needs of the State of Wisconsin. 

If you are interested in participation Green Tier, here are some concrete steps to take:

  1. Determine whether your company or municipality currently implements an Environmental Management System (EMS) that either meets the standards for an EMS issued by the International Organization for Standards (ISO) or is functionally equivalent.  If your company or municipality is ISO 14000 certified, you have a qualifying EMS in place.  If you do not have a qualifying EMS in place, but are willing to put one in place, Tier I may be right for you.  If you have one, consider participation in Tier II.
  2. Review your company’s or municipality’s compliance history. If you have had a judgment entered or lawsuit filed within the too recent past, you may not be eligible now, but can be in the future. 
  3. Consider the types of superior environmental performance your company or municipality could provide.  In a world of diminishing resources, and a marketplace that puts increasing emphasis on corporate responsibility and environmental stewardship, these analyses can identify steps that both improvement environmental performance and save money.
  4. Visit the DNR Green Tier website for more information: http://www.dnr.state.wi.us/org/caer/cea/environmental/

For more information, please contact Linda H. Bochert at lhbochert@michaelbest.com or 608.283.2271.

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