The environmental due diligence industry
is in an unprecedented period of transi-
tion. The market barely had time to read
EPA’s final “All Appropriate Inquiries”
rule (40 CFR Part 312) released on
November 1, 2005, when they were hit
with another significant development two
weeks later: a revised ASTM Phase I
E 1527 standard. The federal rule, which
recognizes the E 1527-05 standard as an
acceptable guidance document for satis-
fying AAI and took effect
on November 1, 2006, gave
Phase I consultants less than
one year to familiarize
themselves with the new
requirements. The following
Executive Summary, based
on EDR’s 2005/2006 Due
Diligence at Dawn work-
shop series, covers the fun-
damentals of meeting the
new federal pre-transaction
requirements,
and
the
details of CERCLA’s post-
transaction continuing obli-
gations.
AAI & ASTM E 1527
The 2002 Small Business Liability Relief
and Brownfield Revitalization Act (the
Brownfields Law) set the wheels in
motion for the first federal environmental
due diligence rule. Under the Brownfields
Law, any property purchasers seeking to
qualify for CERCLA liability protection
must conduct AAI prior to taking title in
order to raise a defense as any of the fol-
lowing:
• Innocent landowner;
• Contiguous property owner; or
• Bona fide prospective purchaser.
After a four-year development period,
including a fall 2004 public comment
period, U.S. Environmental Protection
1
Agency Administrator Stephen L.
Johnson unveiled the long-awaited rule
with much fanfare in his keynote address
at the National Brownfields Conference
in Denver, Colorado on November 2,
2005, tipping his hat to the 25 stakehold-
ers who participated in the regulatory
negotiation process throughout 2003.
The rule’s development period also
included close collaboration between
EPA and ASTM. It was to
the mutual benefit of both
parties
for
the ASTM
E 1527 standard to receive
EPA’s blessing in the federal
rule as sufficient protocol
for meeting AAI. In order to
satisfy EPA that the ASTM
E 1527 standard was “at
l