The American Bankers Association yesterday wrote to the Environmental Protection Agency requesting changes to a proposed rule that would implement financial responsibility requirements for hardrock mining companies under the Comprehensive Environmental Response, Compensation and Liability Act. The rule would require those companies to prove that they are financially capable of paying out claims made under CERCLA, including health assessment costs, natural resources damages at company facilities or others. One option hardrock mining companies have for demonstrating financial capability is to establish a trust with a bank serving as a corporate trustee.
ABA noted that in order for these arrangements to be feasible and limit liability for banks, the corporate trustee must have no discretion or responsibility for determining whether CERCLA claims are legitimate; must receive direction from a grantor on the investment and distribution of assets; and must not be deemed a CERCLA guarantor. ABA also called on EPA to limit the trust investment options hardrock mining owners can choose to those that are lower risk. Such changes would make it more likely that banks would banks engage in this type of business, ABA added. For more information, contact ABA’s Phoebe Papageorgiou or Chris Naser.Email This Post