The Trident Seafoods Case and the Importance of Environmentally Responsible Corporate Policy

The Trident Seafoods Case and the Importance of Environmentally Responsible Corporate Policy

By Matthew Joseph Genova

In October of 2008, the Environmental Investigation Agency, a leading non-profit in the international environmental movement, stated “the consequences of failing adequately to address environmental crime are potentially disastrous.” The organization followed up by advising that in order to tackle such a problem, “an appropriate and commensurate response is required to reduce [environmental degradation] to acceptable levels, where it no longer threatens the security of communities and the survival of wild species.”[1] Given the recent political debate surrounding the proposed Keystone XL oil pipeline and its merits, as well as the public backlash after the BP oil spill in 2010, it is clear that environmental issues still remain at the fore of the policy agenda, even during a period of economic and social unrest throughout the world. As the EIA makes clear, environmental crime can no longer be tolerated, and legal measures must be taken in order to mitigate the threat that such crimes pose to humans and habitats alike.

In similar fashion to the EIA, the United States Environmental Protection Agency has recently taken a stronger stance against environmental crime on the domestic level. In 2010 the EPA made “enforcing environmental laws” one of its five key strategic goals for the period 2011-2015, which came partially in response to one of the most horrific instances of corporate environmental negligence in history, the Deepwater Horizon BP oil spill.[2] The EPA defines environmental crimes as any “negligent, knowing, or willful violations of federal environmental law,” most commonly resulting in violations of the US Clean Water Act, Resource Conservation and Recovery Act, or the Clean Air Act.[3] The renewed commitment of the EPA to “pursue vigorous civil and criminal enforcement… of federal environmental laws” has had, and will continue to have, serious consequences for American corporations.[4] More specifically, during this period the EPA plans to increase the number of environmental criminal cases in which charges are filed to 45%, an increase of 9% over the period from 2006-2010. In addition, the EPA seeks to maintain an 85% conviction rate in these cases, among a wide range of other specific enforcement goals.[5]

These goals, as outlined by the EPA in its Fiscal Year 2011-2015 Strategic Plan, have played out in meaningful ways since their institution on January 1, 2011, as demonstrated by the court case United States of America v. Trident Seafoods Corporation. Seattle-based Trident Seafoods, one of the largest seafood processing companies in the world, has more than twenty production facilities in Alaska that produce seafood products ranging from salmon and crab to herring and cod.[6] The EPA, in line with its heightened environmental law enforcement goals, pursued a case against Trident Seafoods in which it charged the company with multiple violations of sections 301(a) and 402 of the US Clean Water Act during the period from 2005 to 2009.[7] The case, settled on September 28, 2011, resulted in fines totaling some $2.5 million dollars being levied against the seafood giant for 480 separate violations of the Clean Water Act.[8] The violations ranged in severity from the illegal “discharge of fish waste” without proper permits or in violation of permit limits, to “failure to submit timely, complete or accurate annual reports” to the EPA in line with existing regulations.[9]

In addition to paying the required fines, Trident Seafoods has been ordered to construct several new fishmeal processing plants in order to facilitate a better handling of future waste production. Trident has also been ordered to “remediate the seafood waste pile[s]” that have developed on the sea floor as a result of its poor waste disposal practices, effectively creating anoxic dead zones off the coast of Alaska that are unsuitable for the support of living organisms.[10] When all is said and done, Trident Seafoods Corporation will have paid more than $30 million in fines and injunctive relief measures, making the financial ramifications of the EPA’s tightened regulatory efforts significant for the corporation.[11]

The Trident Seafoods case is meaningful not because the EPA and the US Department of Justice followed through with its charges against the corporation, but because these charges were filed for violations that formerly went unpunished. Here, it becomes clear that the EPA, given their renewed strength in the “vigorous and targeted” pursuit of criminal and civil charges against all breaches of environmental law, will no longer stand idly by while violators go unpunished.[12] The Trident Seafoods case is also meaningful because of the way in which it contrasts with similar Clean Water Act violation cases in years past. On April 4, 2008, the EPA reached a settlement with Leader Creek Fisheries, LLC, a seafood processing company based in Naknek, Alaska, for their repeated violations of the Clean Water Act from 2003 to 2007.[13] Like Trident Seafoods, Leader Creek Fisheries was charged with improper discharge of “solid seafood processing wastes” in excess of permit limits and larger than the required one-half inch maximum diameter specification.[14] Leader Creek was similarly charged with failing to conduct daily inspections of their facilities and failing to properly submit annual reports to the EPA, which are required as a part of its discharge permits.[15] Though Leader Creek Fisheries, LLC was required to pay $54,061 in fines to the EPA for their violations, they were not required to remediate any of the damage done to the surrounding waterways, nor were they required to make any costly improvements to their processing facilities, which stands in stark contrast to the punishment levied in the Trident Seafoods case.[16] This contrasting example serves to highlight the impact of the renewed enforcement measures enacted by the EPA, as the penalties imposed upon Leader Creek were much less severe than those pursued in the Trident Seafoods case.

The Leader Creek case was not an isolated incident: just months after the EPA settled with them, the agency reached an agreement with Salamatof Seafoods, Inc. for its violations of the Clean Water Act in 2005 and 2006.[17] The Salamatof Seafoods case was strikingly similar to both the Leader Creek case and the Trident Seafoods case in its charges, and resulted in fines totaling $38,000 being levied on the seafood processor.[18] As with Leader Creek, however, no orders were put forward by the EPA to provide for the remediation of damage to the local waterways. In addition, the EPA did not force Salamatof Seafoods to improve their processing facilities, standing in stark contrast to the severe punishment levied upon Trident Seafoods for its violations of the Clean Water Act. With the renewed efforts of the EPA to more aggressively pursue violators of environmental laws, a light fine without further action is no longer the expected sanction. As demonstrated by the Trident Seafoods case, the EPA is now, since the beginning of FY2011, making a greater effort to prosecute violators to the fullest extent of environmental law. This assertion is supported not only by the case studies presented, but also by enforcement and compliance trend data released by the EPA in December of 2011. According to this data, enforcement actions by the EPA during 2011 required companies to invest roughly $19 billion in injunctive relief measures such as the facility upgrades required of Trident Seafoods, an EPA record.[19] In addition, strict enforcement practices of environmental law led to over $152 million in civil penalties being levied on corporations and individuals, a figure that is 15% greater than any other year in the last five.[20] Finally, through aggressive pursuance of criminal penalties for environmental law violations, the EPA sentenced lawbreakers to a total of 89.5 years in prison during 2011, the highest in total in the last five years by a nearly 18% margin.[21]

These court cases, as well as the corresponding trend data, are extremely significant for all corporations that deal directly or indirectly with environmental waste or hazardous materials, or that impact the environment in any meaningful way as a direct result of their corporate practices, as these companies must tread carefully to avoid legal recourse for their actions. This point is further demonstrated by the recent proliferation of court verdicts pursued and achieved by the EPA, as the Trident decision is by no means an isolated case. In November of 2011 alone, the EPA reached settlements with nearly a dozen separate corporations, several of which resulted in fines exceeding $100,000, making the financial implications for all corporations apparent.[22] Though these cases did not involve other costly remediation requirements, they still serve to highlight the heightened severity of fines imposed upon corporations, as financial settlements still endure in many cases. In addition, because of the push for pursuit of criminal cases by the EPA, corporate executives must be cautious of their actions, as criminal punishment for corporate violations of environmental law is not without precedent.[23]

With the publication of its Fiscal Year 2011-2015 Strategic Plan, the Environmental Protection Agency has made it abundantly clear that it will no longer stand idly by while corporations across the United States avoid the consequences of their environmentally degrading actions. As a result of these increased efforts, it is obvious now more than ever that environmentally responsible corporate policy is a necessary component of a successful business model, as the penalties for eschewing environmental responsibility are becoming increasingly severe for both corporations and executives. Through the implementation of its new plan, the EPA is making an attempt to “expand the conversation on environmentalism” by giving environmental concerns a place not just in the regulators’ office, but in the courtroom and the boardroom as well.[24] The EPA’s renewed enthusiasm for environmental justice and accountability must be recognized by corporate executives and legal professionals alike, as such a policy may have resounding effects on the way many corporations do business. The Trident Seafoods case serves to highlight some of the potential impacts of this policy change, and indeed is a prime example of why corporations must ensure their practices are in accordance with the standards established by the US Environmental Protection Agency.

[1] Environmental Investigation Agency, Environmental Crime: A Threat to our Future 24 (2008).

[2] US Environmental Protection Agency, Fiscal Year 2011-2015 EPA Strategic Plan: Achieving Our Vision (2010).

[3] What is an Environmental Crime? US ENVIRONMENTAL PROTECTION AGENCY (August 2, 2011), http://epa.gov/Compliance/criminal/investigations/environmentalcrime.html.

[4] US Environmental Protection Agency, Fiscal Year 2011-2015 EPA Strategic Plan: Achieving Our Vision 23.

[5] Id. at 54.

[6] Elizabeth Weise, Seafood Processor Trident Hit with EPA Fines, USA TODAY (September 28, 2011, 8:14 PM), http://www.usatoday.com/money/industries/food/story/2011-09-28/trident-seafoods-penalty/50593856/1.

[7] United States v. Trident Seafoods Corporation, No. 11-1616 at 4 (W.D. Wash. Sept. 28, 2011).

[8] Trident Seafoods Corp. Clean Water Act Settlement, US ENVIRONMENTAL PROTECTION AGENCY (September 28, 2011), http://epa.gov/compliance/resources/cases/civil/cwa/tridentseafoods.html.

[9] United States v. Trident Seafoods Corporation, No. 11-1616 at 4 (W.D. Wash. Sept. 28, 2011).

[10] Id. at 13.; Trident Seafoods Corp. Clean Water Act Settlement, US ENVIRONMENTAL PROTECTION AGENCY (September 28, 2011), http://epa.gov/compliance/resources/cases/civil/cwa/tridentseafoods.html.

[11] Trident Seafoods Corp. Clean Water Act Settlement, US ENVIRONMENTAL PROTECTION AGENCY (September 28, 2011), http://epa.gov/compliance/resources/cases/civil/cwa/tridentseafoods.html.

[12] US Environmental Protection Agency, Fiscal Year 2011-2015 EPA Strategic Plan: Achieving Our Vision 54.

[13] United States v. Leader Creek Fisheries LLC, CWA-10-2008-0043 at 1-7 (W.D. Wash. Apr. 4, 2008).

[14] Id. at 4.

[15] Id. at 6-8.

[16] Id. at 11.

[17] United States v. Salamatof Seafoods, Incorporated, CWA-10-2008-0063 at 1 (W.D. Wash. Jul. 15, 2008).

[18] Id. at 8.

[19] US Environmental Protection Agency, Fiscal Year 2011 EPA Enforcement & Compliance Annual Results 3.

[20] Id. at 8.

[21] Id. at 13.

[22] See United States v. Columbus Steel Castings Company (2011) and United States v. LaFarge North America, Inc (2011), et. al.

[23] See United States v. Gerald Cohen (2009).

[24] US Environmental Protection Agency, Fiscal Year 2011-2015 EPA Strategic Plan: Achieving Our Vision 3.