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Conducting a Better Phase I ESA

Bill Leedham, P. Geo., CESA, QPESA

Over the last 30 plus years of consulting I have reviewed a lot of Phase I Environmental Site Assessment (ESA) reports for a variety of purposes, including: due diligence, peer review, and for members of the Associated Environmental Site Assessors of Canada (AESAC) seeking accreditation as a Certified Environmental Site Assessor (CESA). The majority of these reports have been satisfactory; a few have been superb, and a small number were of extremely poor quality. The worst offenders usually related to an improperly scoped project and/or poorly conducted research. As such, I thought a few suggestions for practitioners to conduct better Phase I ESAs would be helpful.

Understanding stakeholder objectives:
First the assessor must confirm the purpose of the ESA report and define the scope of work. If the stakeholder’s objective is transactional due diligence then a Canadian Standards Association (CSA) compliant report should suffice for property transactions in Canada. For (provincial) regulatory approval you may need to follow specific provincial standards, such as the Brownfields legislation in Ontario (Ontario Regulation 153/04, as amended); or guidelines for upstream oil and gas facilities in Alberta or Saskatchewan. American or international clients and projects could specify the use of ASTM Standards. Once the appropriate tasks and regulatory criterion have been established, the scope of work should be clearly stated in the report, along with any alterations, limitations or enhancements. It may be acceptable or even necessary to deviate from a specified Standard, but such changes should be defensible, and the rationale provided so that the reader or reviewer can understand and accept these modifications. If your scope of work states that you fully adhered to a particular Standard, you must ensure that the Standard is followed diligently; or a meticulous peer reviewer or lawyer will pick up on the slightest discrepancy.

Do your research:
A common deficiency I see in Phase I ESA reports is insufficient historical research. This could be the result of not searching far enough in the past to identify all historical environmental concerns, or not completing the necessary document review. The CSA Standard includes both mandatory and optional research items; my suggestion is to complete both (where available) to be thorough and diligent. If the research indicates no data is available for a particular record review item (e.g. absence of fire insurance plans or city directories for a rural site), then state that as your search result – nil findings are still considered reportable findings. The historical review should provide a complete picture of Site development and activities from first developed property use until present day, so that all potential concerns can be evaluated. This is an excellent reason to invest in an ERIS database report for all Phase I ESA assignments, not just for urban or industrial sites.

Another deficient item I encounter relates to conducting and reporting of the Site inspection and interviews. The assessor must ensure the property and Site buildings are thoroughly inspected and documented; and that people with knowledge of the Site are interviewed. The data collected from the inspection and interviews must also be interpreted, summarized and clearly reported. Unfortunately I find that many observations regarding building construction and site activities are lacking in detail. Similarly, little consideration is given to the selection of interviewees and the reporting of the findings from those interviews. Both of these tasks are critical in assessing environmental liabilities.

Evaluation and reporting:
Conducting proper research is vital; however the findings still must be properly evaluated and relayed to the stakeholders. Some of the inherent difficulties in interpreting and reporting the ESA findings are discussed below. Although my comments are directed mainly to ESA practitioners, I hope they will also be useful for the end users of these reports. The assessor must ensure the scope of their assessment is suitable to meet not only the client’s objectives, but also other stakeholders such as financial institutions and regulators. The level of the assessment required and the standard(s) followed can be quite different for private transactional due diligence; than for regulatory approval or acknowledgement of Site reclamation/restoration. The degree of assurance or comfort level, required by the existing owner of a commercial office building for a low-value mortgage refinance may be much less than that required by the purchaser of an industrial Brownfield site who plans to redevelop the property for residential use. These requirements should be confirmed prior to initiating the assessment, and should be incorporated throughout the investigation and reporting process.

Don’t make assumptions:
Assumptions will get you in trouble; whether it involves relying on incomplete or inaccurate data, or providing conclusions that are not fully supported by the observations and findings. I recall reviewing a vendor-supplied report for a client who wanted to buy a large, multi-building apartment complex. The report stated ‘…since the site has operated without incident as an apartment building since 1978; there are no environmental concerns, and no further investigation is required’. In my opinion, this was a very broad statement, intended to ease the minds of prospective purchasers and banks. I also found this conclusion to be very misleading and wholly inaccurate, as my own research had identified historical Site activities (i.e. prior to the apartment construction in 1978) that included two gas stations, a small paint production plant, a dry cleaner, and a bulk fuel storage facility with a tank farm. Needless to say, my client withdrew his offer to purchase this Site.

Putting it all together:
Once the records review, interviews and site inspection are complete, the assessor must interpret the collected data. Data gaps can lead to uncertainty, and the assessor must ensure potential data gaps are reflected in their conclusions, and any related uncertainty is acceptable to the stakeholders; if not, additional measures may be necessary to fill in the gaps and reduce this uncertainty. Significant expertise and professional judgement are required to determine what concerns may be present and whether further investigations are required. Does the off-site, up-gradient gas station with reported leaking fuel tanks represent a potential concern when it is 150 m away from your property in a geologic setting of low-permeability clay soils? What about the former dry cleaning plant located 300 m away, topographically cross-gradient, with shallow bedrock comprised of highly weathered shale? It is vital that the assessor has not only the skills to make these judgements, but has obtained sufficient data to provide rational and defensible conclusions and recommendations.

Some hints for report writing:
For some the report writing process can be difficult and stressful. As someone who has peer reviewed hundreds of ESA reports, reading a poorly written report can be equally difficult. The assessor should write so that their target audience can easily understand the report. Avoid technical jargon, repetition and overly wordy text – the ESA is a technical report, not a doctoral thesis or epic novel. I find the use of tables, bullet points, charts and figures is an effective way to present data in an easy to digest manner. The writer should assume (the only case where assumption is permissible) that a more knowledgeable expert will be paid more money than they were to pick apart their report. Make it easy for the reader to follow the assessment process, to concur with the reported findings, and to come to the same conclusions as the writer. Diligently check (and re-check) your documents – ensure your report is completely error free, formatted properly, and is grammatically and technically correct. Having another person carefully proof read the report, and having a two-signature review policy are both great ideas. Lastly, if an individual really struggles with report writing, I suggest they take some courses in technical writing and continue to improve their writing – it takes hard work and practice, but their writing skills will improve with time and effort.

Bill is the founder and President of Down 2 Earth Environmental Services Inc. and the Head Instructor and Course Developer for the Associated Environmental Site Assessors of Canada (www.aesac.ca). You can contact Bill at info@down2earthenvironmental.ca. This article was originally published for AESAC as ‘The Instructors’ Blog.”