THE LEGAL ENVIRONMENT OF BUSINESS The Legal Environment
THE LEGAL ENVIRONMENT OF BUSINESS The Legal Environment of Business A Critical Thinking Approach 5 th Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -1
THE LEGAL ENVIRONMENT OF BUSINESS CHAPTER 21 Environmental Law © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -2
THE LEGAL ENVIRONMENT OF BUSINESS Environmental Protection q Pollution as “negative externality” q A detrimental by- product of an industrial economy q A national problem, requiring national solutions © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -3
THE LEGAL ENVIRONMENT OF BUSINESS Alternatives to Regulation Tort Law Actions q Nuisance q Negligence Tort Law Problems q Causation © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -4
THE LEGAL ENVIRONMENT OF BUSINESS Other Alternatives to Regulation q Pay subsidies to polluters q Charge pollution fee q Sell permits to pollute: “marketable discharge permit” © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -5
THE LEGAL ENVIRONMENT OF BUSINESS Direct Regulation to Protect the Environment q General approach: Set and enforce standards q Technology-forcing q Technology-driven © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -6
THE LEGAL ENVIRONMENT OF BUSINESS The EPA q q The largest federal agency Created in 1972 by executive order Mission: Protect environment from all forms of pollution Methods: sets standards, q monitors compliance, q enforces regulations—including criminal sanctions q © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -7
THE LEGAL ENVIRONMENT OF BUSINESS National Environmental Policy Act of 1970 Created the process of requiring Environmental Impact Statements (EIS) q for major federal legislation or agency q Significant impact on the quality of the human environment © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -8
THE LEGAL ENVIRONMENT OF BUSINESS EIS Process Preliminary decision: determination of non-significance q When EIS is required, it includes q q Impact of proposed action q Unavoidable adverse effects q Alternatives q Short-term v. long-term analysis q Irreversible commitments of resources © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -9
THE LEGAL ENVIRONMENT OF BUSINESS Federal Water Pollution Control Act Direct regulation of water quality GOALS q “Fishable” and “swimmable” waters q Total elimination of pollutant discharges METHODS q Point source effluent limitations q NPDES discharge permits © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -10
THE LEGAL ENVIRONMENT OF BUSINESS Safe Drinking Water Act q Regulates public water supply systems q Application: 15 service connections/25 persons q Primary and secondary standards q Sets unenforceable goals for contaminants © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -11
THE LEGAL ENVIRONMENT OF BUSINESS Air Quality q Clean Air Act of 1970 q National Ambient Air Quality Standards (NAAQS) q State Implementation Plan (SIP) q 1990 amendments: focus on cars; hazardous air pollutants © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -12
THE LEGAL ENVIRONMENT OF BUSINESS Air Quality New Source Review (NSR) 1977: q regulates criteria pollutants Installation of new pollution control technology q Removes millions of tons of pollutants each year. q © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -13
THE LEGAL ENVIRONMENT OF BUSINESS Acid Rain 1990 Clean Air Act Amendments q Emissions trading program q q Sulfur dioxide allowances auctioned q One ton per allowance q Effectiveness of process under continuing study © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -14
THE LEGAL ENVIRONMENT OF BUSINESS Climate Change Definition: Earth’s climate is changing in response to greenhouse gases and other pollutants. As the Earth’s temperature rises, q Polar ice caps & glaciers melt q Arctic sea ice decreases q Raise ocean levels q Flooding of coastal areas q More storms q Animals in danger of extinction Note: Some scientists are skeptical. © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -15
THE LEGAL ENVIRONMENT OF BUSINESS Regulating Hazardous Waste and Toxic substances q q Resource Conservation and Recovery Act of 1976 (RCRA) Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) Toxic Substance Control Act of 1979 (TSCA) Federal Insecticide, Fungicide, and Rodenticide Act of 1972 (FIFRA) © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -16
THE LEGAL ENVIRONMENT OF BUSINESS Resource Conservation and Recovery Act of 1976 (RCRA): Goal: Control hazardous waste Method: Manifest program creates certification and recordkeeping for entire life cycle of designated hazardous wastes © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -17
THE LEGAL ENVIRONMENT OF BUSINESS Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA): Example: "Superfund" Goal: To remediate land polluted prior to RCRA regulation Method: Use government Superfund money to clean up toxic sites, then recover costs from those responsible. © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -18
THE LEGAL ENVIRONMENT OF BUSINESS CERCLA “Superfund” Issues: Liability “Potentially responsible parties” – controversial extension of liability to q Present owners or operators q Previous owners or operators q Hazardous waste generators q Hazardous waste transporter © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -19
THE LEGAL ENVIRONMENT OF BUSINESS CERCLA “Superfund” Issues: Funding Goal: Self-supporting program q 1986 Amendments increased funding to $8. 5 billion. Funding comes from taxes on major polluters: q petroleum q chemical feedstock q environmental taxes on corporations q Note: The future of the Superfund is unclear © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -20
THE LEGAL ENVIRONMENT OF BUSINESS Toxic Substances Control Act of 1979 (TSCA) Goal: Fills gap between RCRA and CERCLA Method: Requires PMN to EPA Note: Toxics broadly defined © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -21
THE LEGAL ENVIRONMENT OF BUSINESS Federal Insecticide, Fungicide, and Rodenticide Act of 1972 (FIFRA) Goal: Regulation of all pesticides Method: Registration system q Certifies: composition of compound; labeling; performance Registration determines scope of use: general or restricted © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -22
THE LEGAL ENVIRONMENT OF BUSINESS Federal Food, Drug, and Cosmetic Act (FFDCA) Goal: Establishes standards for pesticide residue in food Method: Issues ‘tolerances’ for pesticide used as determined by EPA q Applicant must demonstrate compliance q 1996 Food Quality Protection Act declares ‘safe residue level’ as ‘reasonable certainty of no harm’ © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -23
THE LEGAL ENVIRONMENT OF BUSINESS Pollution Prevention Act 1990 q Numerous regulatory efforts have been effective q Pollution has been significantly reduced q However, elimination of remaining pollution is increasingly costly to achieve Goal: Pollution Prevention Act is to encourage further progress Method: Provide information and incentive grants to spur innovation © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -24
THE LEGAL ENVIRONMENT OF BUSINESS Global Dimensions q Pollution is transnational q The ‘Global Commons’ concept Goal: International cooperation and harmonization of laws Methods: Share research; promote conferences; create treaties; provide economic aid to accomplish goals © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -25
THE LEGAL ENVIRONMENT OF BUSINESS Selected Treaties and Protocols q Stockholm 1972 sustainable development q Montreal Protocol 1987 and 1996 ozone depletion q RIO Earth Summit - Rio de Janeiro 1992 biodiversity q NAFTA side agreement on the environment © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -26
THE LEGAL ENVIRONMENT OF BUSINESS U. S. Government Policies q U. S. did not sign Kyoto Protocol q U. S. does provide foreign aid to assist selected countries q Certain trade agreements contain environmental protection: NAFTA © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -27
THE LEGAL ENVIRONMENT OF BUSINESS All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 21 -28
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