On Tuesday, November 3, the White House released a Presidential Memorandum: “Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment” (“Memorandum”).  The Memorandum was sent to the Secretaries of Defense, Interior and Agriculture and the administrators of the Environmental Protection Agency and the National Oceanic and Atmospheric Administration, and purports to establish a general “no net loss” goal for natural resources impacted by federal actions.  The Memorandum recognizes “a moral obligation to the next generation to leave America’s natural resources in better condition than when we inherited them” and establishes the following policies applicable to identified federal departments and agencies (and all bureaus and agencies within them):

  • To avoid and to minimize harmful effects to land, water, wildlife and other ecological resources (natural resources), and to require compensatory mitigation for the projects they approve.
    Agency mitigation policies should establish a net benefit goal or, at a minimum, a no net loss goal for natural resources each agency manages that are important, scarce, sensitive, or “consistent with [an] agency[’s] mission.”
  • For compensatory mitigation, agencies are directed to give preference to advance compensation mechanisms, such as mitigation bank approaches. “Advance compensation” is defined to mean a form of compensatory mitigation for which measurable environmental benefits (defined by performance standards) are achieved before a given project’s harmful impacts to natural resources occur.
  • Agencies are encouraged to use large-scale plans to identify areas where development is most appropriate, where natural resource values are irreplaceable and development policies should require avoidance, and where high natural resources values result in the best locations for protection and restoration.

What Does This Mean?

It is difficult to predict exactly how this is going to play out.  Some federal laws (e.g., Clean Water Act Section 404 permitting for filling wetlands) already have well-developed compensatory mitigation programs, and others provide for mitigation measures, but not compensatory mitigation (e.g., incidental take authorization under Section 7 of the ESA or Section 101 of the Marine Mammal Protection Act).  However, most federal permitting schemes have not been interpreted to authorize compensatory mitigation or implemented to require compensatory mitigation, let alone at no net loss or net benefit levels.  Accordingly, to the extent that the Memorandum is intended to require net benefit or no net loss compensatory mitigation to virtually all federal permitting programs, such a directive would be (1) a significant departure from existing practice and (2) in some cases, arguably contrary to existing law.

Although the Memorandum states that the actions it requires must be “consistent with existing mission and legal authorities,” it is unclear how some of the policies stated in the Memorandum will or can be reconciled with existing law.

Reactions and Next Steps

The Memorandum establishes certain deadlines for action, principally by the Department of Interior (“DOI”) or its agencies.  Certain agencies within the DOI must issue policy guidance on mitigation within the next year, and the U.S. Fish and Wildlife Service is also developing a separate policy to grant credits for private actions that advance conservation for species before a potential future listing under the ESA.

While some are hailing the Memorandum as “impressive,” House Committee on Natural Resources Chairman Rob Bishop (R-UT) is not so supportive.  In response to the Memorandum, he issued the following statement: “President Obama is throwing the principle of multiple-use of our nation’s federal land out the window and blatantly disregarding our nation’s laws to do so. Economic development can coexist with environmental protection and it has for decades.”

Stay tuned for future reactions and updates.

Post authored with the assistance of Shannon Morrissey.  Ms. Morrissey is not currently licensed to practice law and is awaiting admittance to practice law in California.