A little over a month ago, on July 24, 2018, the Deputy Director for Policy and Programs of the United States Bureau of Land Management issued Instruction Memorandum No. 2018-093 (“IM 2018-093”) to all Assistant Director and All Field Office Officials. The IM’s subject is “Compensatory Mitigation,” and provides:
Except where the law specifically requires, the BLM must not require compensatory mitigation from public land users. While the BLM, under limited circumstances, will consider voluntary proposals for compensatory mitigation, the BLM will not accept any monetary payment to mitigate the impacts of a proposed action. In all instances, the BLM must refrain from authorizing any activity that causes unnecessary or undue degradation (UUD), pursuant to FLPMA Section 302(b).
There are conflicting views about the effect of IM 2018-093, largely falling along political party lines. The purpose of this briefing paper is to provide an apolitical summary and analysis of IM 2018-093.
I. What is a BLM Instruction Memorandum? Instruction Memorandum (“IM” or “IMs”) “are directives that supplement the BLM manual sections and handbooks” and “contain new policy or procedures that must reach BLM employees quickly, interpret existing policies or provide one-time instructions.” There are two types, Permanent IMs, which “provide lasting guidance that is short in scope [, and] . . . remain in effect until superseded or deleted,” and Temporary IMs, which “offer operational, incident-specific, project-related or one-time policy or guidance for evolving activities[, and] . . . expire at the end of the third fiscal year following issuance.” IM 2018-093 is, by its terms, a Permanent IM, as it provides lasting guidance without a term or expiration date.
It is important to understand that IMs are non-binding, as they are neither promulgated through an agency rulemaking process nor created through an adjudication as a binding precedent. Consequently, IMs do not have the effect of law, and Courts are not required to follow them in legal challenges. Consequently, a party cannot bring a claim for relief against the BLM solely on the basis that the BLM fails to follow an IM, as there are “non-binding internal policy memorandum.” This is a critical distinction, as IM 2018-093 makes clear that “[t]his IM does not affect compensatory mitigation that may be required by Federal laws other than FLPMA.” Consequently, compensatory mitigation required by other Federal laws or state laws are not impacted by IM 2018-093; likewise un-impacted are the general requirements of FLPMA and NEPA regarding the mitigation of impacts.
II. Summary of IM 2018-093 IM 2018-093 prohibits the BLM from imposing “compensatory mitigation” into its “official actions, authorizations to use the public lands, and any associated environmental review documents, including, but not limited to, permits, rights-of-ways, environmental impact statements, environmental assessments, and resource management plans.” It likewise prohibits BLM from explicitly or implicitly conditioning approval on “voluntary” compensatory mitigation.
IM 2018-093 defines “compensatory mitigation” as “[a] project proponent’s activities, monetary payments, or in-kind contributions to conduct offsite actions that are intended to offset adverse impacts of a proposed action onsite” (emphasis added). This is an important definition, as it makes clear that IM 2018-093 does not relate to, or in any way impact, project proponent’s activities, monetary payments, or in-kind contributions to conduct onsite actions that are intended to offset adverse impacts of a proposed action onsite.
Recall, NEPA requires a “hard look” at the impacts of a proposed action, which includes the “a reasonably complete discussion of possible mitigation measures to minimize environmental consequences.” NEPA does not require that mitigation be legally enforceable, funded, or even in final form. The CEQ Regulations define mitigation as including:
(a) Avoiding the impact altogether by not taking a certain action or parts of an action. (b) Minimizing impacts by limiting the degree or magnitude of the action and its implementation. (c) Rectifying the impact by repairing, rehabilitating, or restoring the affected environment. (d) Reducing or eliminating the impact over time by preservation and maintenance operations during the life of the action. (e) Compensating for the impact by replacing or providing substitute resources or environments.
The CEQ regulations provide that the analysis of alternatives and environmental consequences shall “[i]nclude appropriate mitigation measures not already included in the proposed action or alternatives.” The CEQ regulations are consistent with the BLM regulations, which provide:
An applicant's proposal presented to the bureau for analysis must include any ameliorative design elements (including stipulations, conditions, or best management practices), required to make the proposal conform to applicable legal requirements, as well as any voluntary ameliorative design element(s). The effects of any mitigation measures other than the ameliorative design elements included in the applicant's proposal must also be analyzed. The analysis of these mitigation measures can be structured as a matter of consideration of alternatives to approving the applicant's proposal or as separate mitigation measures to be imposed on any alternative selected for implementation.
IM 2018-093 does not change these requirements of NEPA with respect to onsite compensatory mitigation; however, it does provide that unless a compensatory mitigation measure, as defined by the IM, is voluntary, “BLM should not carry them forward for detailed analysis in a NEPA document.” Voluntary compensatory mitigation is defined in the IM as “when a project proponent’s activities, payments, or in-kind contributions to conduct offsite actions to minimize the impacts of a proposed action are free of coercion or duress, including the agency’s withholding of authorization for otherwise lawful activity, or the suggestion that a favorable outcome is contingent upon adopting a compensatory mitigation program.”
Finally, the IM requires the BLM do engage in the following self-reporting requirements:
State, District, and Field Offices must identify any existing mandatory compensatory mitigation programs, including programmatic agreements, resource management plans, and land use plans, and report them to the Deputy Secretary for appropriate action.
The appropriate State Director must review all applications for which the applicants are proposing to conduct offsite compensatory mitigation to make certain that the proposed offsite compensatory mitigation is voluntary.
The BLM Director must prepare and submit to the Deputy Secretary an annual report summarizing all projects incorporating offsite compensatory mitigation. This report must include the location of each project, the estimated cost to the proponent of the proposed compensatory mitigation, and a listing of any Federal and non-federal partners.
The IM provides that “[i]n no circumstance may BLM agree to accept a monetary contribution for the implementation of compensatory mitigation.” This means that even if there is a voluntary compensatory mitigation, the BLM cannot accept or administer the funds. Private parties already utilize compensatory mitigation, like funding off-site improvements, to mitigate impacts below a level of significance (thereby obviating the need for an EIS) or to garner public support. Under the IM, utilization of compensatory mitigation for such purposes will necessitate that the private party identify a state or third-party entity to receive and administer funds for the implementation of compensatory mitigation. All of the forgoing would need to be disclosed and analyzed in the appropriate NEPA documentation. While not overly burdensome, it does create a new administrative hurdle to private parties that want to voluntarily include compensatory mitigation, for whatever purpose.
III. Reconciling the Use of Mitigated FONSIs with the IM One issue with the IM is how it will be implemented with respect to a Mitigated FONSI. In 2011, CEQ issued guidance reversing its past position that an Environmental Impact Statement (“EIS”) remains necessary even if mitigation measures are developed during the NEPA process that will reduce the reasonably foreseeable environmental impacts of a major federal action to a level that is not significant. CEQ’s guidance is that “use of mitigation may allow the agency to comply with NEPA’s procedural requirements by issuing an EA and a Finding of No Significant Impact (FONSI), or ‘mitigated FONSI,’ based on the agency’s commitment to ensure the mitigation that supports the FONSI is performed, thereby avoiding the need to prepare an EIS.” Essentially, a proponent of a private project can forgo a costly and time consuming EIS, and instead prepare an EA, if there is enforceable mitigation in place such that the residual effects are not “significant.” The Mitigated FONSI is the final agency decision, and effectively means that with the required and enforceable mitigation in place, there is no significant impact resulting from the action as approved. Therefore, critical to a Mitigated FONSI is the enforcement aspect of the mitigation:
The mitigation measures must be enforceable, i.e. subject to sufficient legal authority to ensure they will be performed;
Likewise, an agency should not issue a mitigated FONSI if it is not reasonable to believe that the necessary funding will be available to ensure adequate monitoring and enforcement;
An agency should place appropriate restrictions on authorizations (e.g. grants or permits) given by the agency that will enable the agency to suspend or cancel the authorizations in the event of noncompliance with the mitigation plan;
The mitigation requirements should be clearly described in the mitigated FONSI, including measurable performance standards or expected results;
Secondary mitigation measures can be identified for implementation in the event that the initial measures are unsuccessful.
The mitigation used to effectuate a Mitigated FONSI, as contemplated by the 2011 guidance, could include compensatory mitigation. Consequently, under existing CEQ guidance and case law, an EA can be prepared in lieu of an EIS, and a FONSI issued, if the lead agency analyzes, requires, and conditions such approval on mitigation measures, potentially including compensatory mitigation, which reduce the impacts such that they are no longer “significant.” The IM effectively prohibits BLM from utilizing a Mitigated FONSI if compensatory mitigation is involved, unless the proponent “volunteers” to have the compensatory mitigation included. However, even where a proponent “volunteers” to have compensatory mitigation imposed, a Mitigated FONSI is still difficult to reconcile with the IM, as BLM would have to condition the Mitigated FONSI on the incorporation and enforceability of said compensatory mitigation.
One effective means to resolve the friction of Mitigated FONSIs with the IM is through careful development of the “proposed action” to include compensatory mitigation as a “design feature.” A “design feature” is a means to mitigate an impact included in a proposed action. The design features of a project, to some extent, obviate the need to analyze mitigation because such design features reduce the impacts. However, if there are still adverse impacts even with design features utilized to reduce the same, then the BLM must analyze additional potential mitigation measures. Such an approach would be consistent with the IM, which states:
Where a project proponent has voluntarily proffered compensatory mitigation in an application, including in conjunction with a State requirement or as the result of other Federal law, BLM may incorporate it into and consider it as part of the project analysis. When BLM is considering compensatory mitigation as a component of the project proponent’s submission, BLM’s NEPA analysis should evaluate the need for compensatory mitigation by 1) considering the effectiveness of compensatory mitigation in reducing, resolving, or eliminating impacts of the proposed project(s), and 2) comparatively analyzing the proposal with and without the offsite compensatory mitigation.
IV. When Can Compensatory Mitigation Still Be Imposed? The IM is clear that compensatory mitigation can still be imposed if a substantive requirement of state or federal law. The IM is clarifying that FLPMA does not provide a requirement for offsite compensatory mitigation, and consequently anything other than voluntary offsite compensatory mitigation cannot be analyzed in the NEPA process. The Clean Water Act (“CWA”) provides an example of a federal law where compensatory mitigation is a substantive requirement. Under the CWA, for unavoidable impacts to “Waters of the United States,” compensatory mitigation is required to replace the loss of wetland or aquatic resource functions. There are other examples, like the Endangered Species Act, but environmental regulations are presently in some degree of flux with respect to the current administration. The state of other federal regulations is beyond the scope of this briefing paper. Consequently, the IM relates only to the interpretation of FLPMA, and has no bearing on state or other federal laws.
V. Clarification of UUD in the IM As framed by the IM:
The BLM has an obligation to ensure that actions do not result in UUD. 43 U.S.C. §1732(b).
This obligation provides authority to require project proponents to avoid, minimize, rectify, and/or reduce anticipated harms, as necessary and appropriate.
Compensatory mitigation cannot prevent what would otherwise constitute UUD. If a proposed use of the public lands would result in UUD, then the BLM cannot authorize that use, even if compensatory mitigation is proposed.
Preventing unnecessary or undue degradation does not mean preventing all adverse impacts upon the land. The negative inference of the words “unnecessary” and “undue” is that a certain level of impairment may be necessary and due under a multiple use mandate.
The IM is clear that “the BLM must refrain from authorizing any activity that causes unnecessary or undue degradation (UUD), pursuant to FLPMA Section 302(b).” It further clarifies that if there would be UUD, compensatory mitigation cannot obviate the same and the proposed action must be denied. Consequently, it is important to understand what constitutes UUD.
BLM has broad discretion in determining how to address environmental degradation and in determining whether a particular use will cause “undue” degradation. “Undue degradation” can be found where a proposed action is inconsistent with the land-use management objectives identified in a Resource Management Plan (“RMP”); in other words, if a proposed action conflicts with a preservation objective the BLM has identified in an RMP, then the BLM may determine that there would be “undue degradation.” The BLM’s regulations in effect until 2010, in the context of rights-of-way, defined UUD as:
surface disturbance greater than that which would normally result when the same or a similar activity is being accomplished by a prudent person in a usual, customary, and proficient manner that takes into consideration the effects of the activity on other resources and land uses, including those resources and uses outside the area of activity.
While this regulation is no longer effective, it does provide reference for what constitutes UUD. Effectively, undue degradation occurs where there will be impacts to public lands from a proposed action that are in excess to the normal type of impacts that would occur for such an action or activity, or where a proposed action is inconsistent with the preservation objectives identified in an applicable RMP.
BLM likewise has broad discretion in determining whether a particular action is “unnecessary.” With respect to whether something is “unnecessary,” the BLM will consider if there are alternatives to a proposed action, and if there are viable alternatives that are comparable to the proposed action then the BLM is justified in denying the proposed action itself as “unnecessary.”
UUD is a substantive obligation on BLM, whereas NEPA is a procedural requirement. The IM clarifies that during the procedural compliance part of NEPA an agency cannot analyze “compensatory mitigation” unless it is “voluntary,” as those terms are defined in the IM; for substantive compliance with UUD, the BLM cannot rely on “compensatory mitigation,” in any circumstance, to protect against UUD. This clarification is inconsistent with at least one existing federal case: Biodiversity Conservation All. v. BLM, No. 09-CV-08-J, 2010 U.S. Dist. LEXIS 62431, at *1 (D. Wyo. June 10, 2010).
In Biodiversity Conservation All. v. BLM, No. 09-CV-08-J, 2010 U.S. Dist. LEXIS 62431, at *1 (D. Wyo. June 10, 2010), the Biodiversity Conservation Alliance ("BCA") challenged the FEIS and ROD for the Jonah Infill Drilling Project ("JIDP"), in part on the grounds that the JIDP would cause UUD sagebrush obligate songbirds. The District Court upheld the decision of the IBLA, stating:
The JIDP will not result in UUD to the habitat of sagebrush obligate songbirds. BLM specifically analyzed mitigation measures as well as potential impacts to songbirds in the EIS. To ameliorate the acknowledged loss of songbird habitat, the ROD requires operators to conduct immediate reclamation measures once drilling ceases, and to perform onsite and offsite mitigation measures which are to be closely monitored and enforced by the JIO.
The offsite mitigation measures were obligations in the ROD, and analyzed in the FIES, that “obligated operators to carry through with their commitment for funding for compensatory offsite mitigation to ameliorate project related impacts that may not be adequately mitigated onsite.” In this case, the JIDP FEIS and ROD could have been overturned on UUD grounds if the “compensatory mitigation” measures were not requirements. Per the IM, it appears the position of the current administration that this project should not have been approved insofar as it relied upon compensatory mitigation to avoid UUD. In essence, the IM has increased the burden on private parties with respect to UUD, because a private party can no longer utilize compensatory mitigation to avoid UUD. Consequently, one can expect that during legal challenges there will be a renewed emphasis on UUD by environmental organizations.
VI. Concluding Thoughts The IM removes offsite compensatory mitigation from the BLM’s tool box as a means for reducing impacts to the environment; a private party may still voluntarily include offsite compensatory mitigation to address impacts, but cannot be required to do so by the BLM under FLPMA or NEPA. The IM does not alter the substantive compensatory mitigation requirements of state law or other federal laws. The IM does not alter the requirement for the BLM to analyze impacts to the environment and related mitigation, which can include onsite compensatory mitigation, during the NEPA process. Ultimately, whether the change in BLM policy will lead to impacts to public lands will be driven more by changes to substantive federal laws requiring compensatory mitigation, like the ESA or CWA’s definition of “Waters of the United States.”