'Environmental justice' undermines Obama's regulatory reform

President Obama's new interest in curbing federal regulation is, on its face, an encouraging development. But by focusing his "Improving Regulation" executive order narrowly on regulations adopted through formal rule-making, the president's attempt at reform is at best a half-measure.

Federal agencies do a majority of their regulating through informal policy-setting mechanisms that skirt the executive order while also evading due process safeguards. The way in which the Environmental Protection Agency (EPA) is approaching Environmental Justice (EJ) -- one of its major policy initiatives -- offers an alarming case study of such under-the-radar agency action.

This radical theory melds controversial racial discrimination concepts and environmental law. It allows federal bureaucrats and activists to allege discrimination if a business' otherwise lawful air, water, or other emissions have a "disparate impact" on minority or lower-income communities.

Appropriately, it was a 1994 President Clinton executive order, not a regulation, that made EJ a part of government policy-making. He mandated that all federal agencies identify and address EJ concerns within their regulatory work.

Federal regulators embraced this new tool, relying on it to deny or delay emissions permits, which they felt would have a disproportionate impact on minorities. Activist groups followed EPA's lead, demonizing businesses which dared to locate their operations near "overburdened" communities and suing state agencies for issuing "discriminatory" permits.

By the late 1990s, judges began rejecting these lawsuits, and political pressure forced EPA to back off of its EJ zealotry. Soon after, with the White House under new management, the EJ movement fell out of favor and EPA did little more to support it.

But in Washington, bad ideas never seem to go away, and EJ is back under Obama and quietly gaining steam at EPA and other agencies. EPA's EJ minions began by doling out taxpayer-funded grants to EJ activists.

EPA leadership helped devise a new EJ action plan, which included a July 2010 interim guidance aimed at "integrating environmental justice considerations into the fabric of EPA's process."

In other words, every EPA action on matters ranging from global warming to wetlands regulation could be morphed into an environmental justice concern. In December, the White House signaled its support with an EJ forum.

Why should we be concerned about these nascent moves? Consider this scenario: Worldwide Widget announces its intention to build a plant in a low-income community. It receives emissions permits from the state, and dialogues with residents, most of whom are eager for job opportunities.

But federal regulators and activists, seeing an opportunity to advance the EJ movement, flood the media with whispers of discrimination and openly hint at federal action and private lawsuits. Widget decides it's not worth the trouble, and takes its jobs elsewhere.

None of the mechanisms EPA implemented to achieve this result followed formal rule-making procedures, and they certainly violated the transparency and predictability ideals advanced by Obama's executive order.

This hypothetical situation is in fact similar to what happened in 1995 when plastics maker Shintech sought permission to build a plant in impoverished Covenant, La. In the face of support from state officials and local residents, Greenpeace and other radicals "descended on Covenant like locusts," as one resident put it, to oppose the project.

And EPA declared that Shintech's presence could have a discriminatory effect. Shintech ultimately built its plant in another community. During the debate, a Covenant resident asked, "Why do these people want to take away our jobs?"

That's a question far more job-searching Americans will be asking if the EJ movement continues to embed itself at EPA and other agencies, and strays further from the safeguards of administrative law and the Constitution.

Examiner contributor Daniel J. Popeo is chairman and general counsel of the Washington Legal Foundation.