Coming Soon to a Project Near You: Advance Compensation

Earlier this month, the White House released a Presidential Memorandum on “Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment.”  mitigationsignIf that portentous title isn’t enough to make developers quiver in their boots, how about this first line?

We all have a moral obligation to the next generation to leave America’s natural resources in better condition than when we inherited them.

From this beginning, the PM goes on to make clear that federal agencies have an obligation to avoid and mitigate the potential adverse impacts of projects that they either implement or permit.  More specifically,

  • “Agencies’ mitigation policies should establish a net benefit goal or, at a minimum a no net loss goal…”, and
  • “Agencies should give preference to advance compensation mechanisms that are likely to achieve clearly defined environmental performance standards prior to the harmful impacts of a project.”

There has been significant gnashing of teeth in the development community and complaints about executive overreach in connection with the issuance of the PM.  I think that those complaints are off the mark, because the PM is very careful to state that its provisions all apply only “to the extent permitted by each agency’s legal authorities.”

Even with that acknowledgement, this is a potentially far-reaching order.  It may not quite be a full employment act for environmental consultants and land planners, but, depending on how it’s implemented, it could come pretty close.

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