Green Building Projects and Environmental Risk
January 2010
As most construction firms will attest, green
building is not a waning fad. Sustainable design is now embedded in our culture
as a proven method for conserving water and materials, creating healthier and
safer environments, reducing carbon footprints, and saving energy.
by Jeff
Slivka
New Day
Underwriting Managers
However, the best of intentions as well as the staunchest precautions will
not always protect contractors and site owners against the many liabilities
that can surface during green building projects. For example, over the past
few years, several instances have arisen where contractors were sued during
excavation projects that led to the third-party exposure of dust containing
hazards, such as asbestos fibers and silica dust. In addition, similar problems
have also been created through the release of carbon monoxide, carbon dioxide,
methane, and nitrous oxide produced from generators and other equipment operating
in improperly ventilated areas.
Unforeseen Risks
Similarly, many devastating environmental lawsuits are also produced through
unforeseen risks. The best new example related to the use of newly developed
recycled products and materials concerns Chinese drywall, which made numerous
headlines in Florida, Louisiana, and Texas throughout the past year. Because
of its alleged high-sulfur content, Chinese drywall produces a low-grade sulfuric
acid that impairs the integrity of internal structures when exposed to moisture.
Whether the drywall will eventually be found to negatively impact indoor
air quality or adversely impact human health, there is little doubt about the
damage it has already been found to cause. Although it may not be the next asbestos,
which was considered a breakthrough fire retardant 40 years ago, it is causing
environmental issues for both owners and contractors.
Furthermore, while the vast majority of contractors may have a great deal
of experience working in contaminated conditions, numerous firms possess either
little knowledge of the possible risks or are not aware of all the complexities.
Even knowledgeable companies can be tempted to accept remedial work as a way
of appeasing their clients or expanding their business.
Consequently, environmental risks can be catastrophic when properties are
not properly investigated or characterized. Even with today's technology, it
is extremely difficult to perform a cursory and cost-effective environmental
assessment that yields accurate information.
Environmental Assessments
Unfortunately, too many parties rely on the "phase I" and use it as a determining
rather than a contributing factor in managing environmental site risks. This
is because environmental assessments performed with little to no intrusive sampling
will generate reports offering only information already recorded for that property.
What would happen if the property had been used, historically and possibly
illegally, for the disposal of waste oil, waste products and other hazardous
products? Or, if it is found to contain unregistered underground tanks and abandoned
materials causing residual contamination? These details may not be revealed
during the assessment process and, in most cases, are discovered only after
actual development and construction had already begun.
Conclusion
There is no doubt that "green" projects are better for the environmental,
but just because a property or structure is "green" doesn't mean it's free of
environmental liability or related issues. It's likely claims related to green
exposures will climb in the coming years as increasingly more contractors and
site owners engage in or become pushed into green building practices. However,
there is no substitute for knowledge. Armed with the proper education and experience,
construction professionals will then be prepared to withstand the challenges
of environmental exposure and the resulting financial implications, which can
prove extremely costly and disruptive to business practices.
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