CORPORACION AMBIENTAL DE MEXICO

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Environmental Site Assessment Phase I

What is an Environmental Liability (EL)?
From the accounting point of view, a LIABILITY is the section of the balance of the period, where all the debts and charges that decrease the assets of a company are registered.

It is then an ENVIRONMENTAL LIABILITY, the set of environmental damage that a company does not compensate for, and the compensatory cost this company should be transferred to eliminate such damages.

The site in Phase I Environmental Assessment (ESA I, for its acronym in English) is a report prepared for owners, users and potential buyers of properties and/or industrial/commercial facilities that identifies RESPONSIBILITIES on existing or potential pollution.

In Mexico, chapter V of the General Act for the prevention and management of waste (LGPGIR), establishes the responsibility of pollution and remediation of sites, and in chapter II, section I, article 132, paragraph 3 of the rules of procedure of the LGPGIR, says: “It is considered as Environmental Liability the sites contaminated by the release of materials or hazardous waste that they were not remediated in a timely manner to prevent the dispersion of pollutants, but that they imply an obligation of remediation. This definition includes pollution generated by an emergency that has effects on the environment..

Preventive application
The ESA Phase I is in essence, a practice review and exhaustive research, which is aimed at the environmental conditions that keeps a site, property or field, with regard to their degree of contamination as a result of the activities or operations carried out therein, throughout its history.

The methodology CAM applies in the development of this practice is the one pointed out in the standard ASTM-E-1527-05 and its main purpose is to technically identify the existence of an "ENVIRONMENTAL LIABILITY", on the basis of the historical background of use and operation of the site, land or property.

Given that in the past there was a recognition of the consequences of possible damages to the soil, subsoil and groundwater by practices considered "Normal", such as the "burial" of waste or the abandonment of hazardous liquids in unsuitable containers or fractured floors, there still are many companies that do not consider the assessment of possible environmental damage.

These companies do not consider those costs related to the aforementioned contamination in their operations. This main reason causes Environmental Liability (environmental damage), which can take a company to drastically reduce their operations, and even, to the closure of its facilities. As the LGPEGIR, includes in its chapter V, articles 68 to 79, the Environmental - Legal responsibility about pollution and remediation of sites, is well worth considering as a preventive action making the ESA-1.

Some Benefits of Preventive Conduct:
1.- Environmental
a. To identify environmental liabilities.
b. Identify and manage environmental responsibilities.
c. Decrease environmental and human health risk .
d. Compliance with Local and international regulations.
e. National and international certifications.
f. Contribute to the sustainable development of the country..

2.- Economic:
a Projection of economic growth on the basis of real assets.
b. Increase in the competitiveness of the company or business.
c. National and international certifications.
d. Action Plan programmed and without pressure.
e. Strategic planning to address priorities.
f. Prevents closure of operations by unreachable goals or projects.

Results of ESA I
1. Identification of potential environmental liabilities.
2. Action Plan and/or contingency Plan's characterization of the ESA Phase II site.
3. Estimated cost of ESA Phase II, with Legal and technical justification.
4. Priorities, program activities.
5. Legal advices.
6. Investigation of tax incentives that apply to the investment project (if exists).