London, Leslie

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Seton Hall University Libraries

Facilitating Cleanup of Hazardous Waste Sites-Hazardous Wastes-Cleanup or Mitigation Services-Indemnification and Defense-Envi-ronment-1986 N.J. Sess. Law Serv. 59 (West).The public is no longer naive to the health and environmen-tal risks posed by the discharge of toxic pollutants. Whether byindustry or individuals, or by storage or transfer activities, thedischarge of hazardous wastes and products has become a con-cern shared by most New Jersey residents. Neither has the issueescaped the attention of the New Jersey Legislature. In the lastten years, the legislature has passed a plethora of laws to safe-guard human, water, and economic resources of the state fromthe threat of toxic discharges.In 1976, the legislature established the Spill Compensationand Control Act.1 The Spill Act was the first legislation in thestate to directly regulate discharges of toxic materials. The SpillAct empowers the state, through the Department of Environmen-tal Protection (DEP), to regulate the transfer and storage of haz-ardous substances. In addition, the Act authorizes the DEP toseek liability for damages, resulting from discharges of hazardoussubstances, and to require the prompt containment and removalof discharged materials.The Spill Act also requires the DEP, in the event a hazardoussubstance is discharged, to either remove or arrange for the re-moval of the discharge, or to direct the discharger to do so. Allremoval efforts must comply with the National ContingencyPlan.2 The Spill Act precludes actions taken to contain or re-move discharges from being construed as admissions of liability.Also, the Act shields persons assisting in the containment of dis-charges from liability for civil damages resulting from their actsor omissions in providing such assistance, as long as their acts oromissions are not the result of gross negligence or willfulmisconduct.In the event a discharge occurs at a hazardous or solid wastedisposal facility, the DEP is authorized to close the facility for theI Spill Compensation and Control Act, N.J. STAT. ANN. §§ 58:10 to -23.11 to -23.1 lz, and -23:12 to -23:24, -23:34 (West Supp. 1986) (hereinafter Spill Act].2 Federal Water Pollution Control Act of 1972, Pub. L. No. 92-500, § 311 (c)(2),86 STAT. 815, 33 U.S.C. § 1321(c) (1977).223SETON HALL LEGISLATIVE JOURNAL [Vol. 11:223duration of the removal operation. Costs incurred by the DEP inits removal efforts are paid from funds provided in the NewJersey Spill Compensation Fund.' The Spill Act creates thisFund and provides for its funding through state appropriationsand taxes on certain hazardous substances. The Fund is alsoused to compensate businesses and persons damaged by any dis-charge, and for research, demonstration programs, and adminis-trative expenses. Finally, the Spill Act limits the amount of fundsthe Administrator may expend for any discharge as well as thetime within which funds may be used for removal efforts.In early 1986, potential contractors were finding it increas-ingly difficult, and in some cases impossible, to obtain the liabilityinsurance coverage necessary to protect them against claims thatmight arise as a result of providing hazardous waste cleanup andmitigation services. Consequently, fewer companies were able toobtain bonding4 and the DEP had difficulty locating qualifiedcontractors to provide cleanup services. The Hazardous Wastes-Cleanup or Mitigation Services-Indemnification and DefenseAct5 was enacted in 1986 to meet the insurance needs of thesecontractors and to alleviate the difficulties the DEP was exper-iencing in locating qualified contractors.The Indemnification and Defense Act amends and supple-ments the Spill Act. It empowers the DEP to provide for the de-fense and indemnification of certain persons under contract withthe state of New Jersey or the federal government to performhazardous substance cleanup, containment, or removal. The in-demnification applies to claims, causes of action, demands, costs,or judgments made against the contractor resulting from thecontractor's activities in providing hazardous substance mitiga-tion or cleanup services. The Indemnification and Defense Actauthorizes the DEP to enter into agreements to defend and in-demnify certain contractors against claims that result after Janu-ary 1, 1988, and arise from the contractor's mitigation or cleanupservices. The claims, however, cannot be predicated on grossnegligence, willful misconduct, fraud, intentional tort, bad faithor criminal misconduct.3 N.J. STAT. ANN. § 58:10-23.11o (West Supp. 1986).4 Bonding is a requirement for contractors performing on state contracts.5 Hazardous Wastes-Cleanup or Mitigation Services-Indemnification and De-fense, 1986 N.J. Sess. Law. Serv. 59 (West).224LEGISLATIVE SUMMARIESIn addition, only those contractors unable to obtain liabilityinsurance at a reasonable cost are eligible to receive legal de-fense and be indemnified by the State, and only the particularcontractor providing services may enforce an agreement for de-fense and indemnification between the contractor and the DEP.The Act does not bar the DEP from enforcing any contractualagreement it might have with a contractor it defends or indemni-fies. Nor does the Act preclude the DEP from recovering fundsexpended in defense of a contractor where the claims are subse-quently found to be the result of gross negligence, willful mis-conduct, fraud, intentional tort, bad faith, or criminalwrongdoing.All costs incurred by the DEP for legal defense and indemni-fication of contractors are paid from the New Jersey Spill Com-pensation Fund.6  However, only those funds specificallyappropriated from the General Fund may be used. The Indemni-fication and Defense Act became effective on July 28, 1986, andapplies to contracts entered into by the DEP as ofJuly 28, 1986,and prior to that date if work is still in progress.The Spill Compensation and Control Act 7 and the Hazard-ous Wastes-Cleanup or Mitigation Services-Indemnification andDefense Act,8 represent significant advances by New Jersey tocontrol and remediate pervasive toxic and hazardous wasteproblems. These initiatives provide solutions to many hazardouswaste concerns. Further, these laws, combined with other initia-tives, provide the foundation for a multi-faceted hazardous wastemanagement program capable of addressing New Jersey's futureneeds.Leslie London6 See supra note 3.7 See supra note 1.8 See supra note 5.1987] 225

Facilitating Cleanup of Hazardous Waste Sites - Hazardous Wastes - Cleanup or Mitigation Services - Indemnification and Defense - Environment - 1986 N.J. Sess. Law Serv. 59 (West).

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Facilitating Cleanup of Hazardous Waste Sites - Hazardous Wastes - Cleanup or Mitigation Services - Indemnification and Defense - Environment - 1986 N.J. Sess. Law Serv. 59 (West).

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