Lucent Technologies

Letter from Polakowski to Morris

Lucent Technologies
Bell Labs Innovations

Debra Sabatinni Hennelly Lucent Technologies, Inc.
Corporate Council Room B2180
131 Morristown Road
Basking Ridge, NJ 07920
Telephone 908 630 2810
Facsimile 908 204-8365
Internet Address hennelly@lucent.com

March 14, 1997

By Telecopier and Overnight Mail
Dr. Alvin R. Morris
Water Protection Division Region III U.S. Environmental Protection Agency
842 Chestnut Street
Philadelphia, PA 19107-4431

Re: Lucent Technologies/Project XL

Dear Dr. Morris:

Following up on our recent correspondence regarding our XL Project, we believe that it is imperative that we resolve, once and for all, the "information sharing" issue before we proceed any further.

In your February 26th letter, you indicated USEPA's interest in addressing the information-sharing issue using language based on the approach taken in USEPA's Environmental Leadership Program ("ELP). As promised, we have reviewed its publicly available language. We are proposing revised language for inclusion in the Final Project Agreement ("FPA") that is based on language that has been accepted in ELP. As you know, the participation by our stakeholders, including USEPA, in the design and ongoing implementation of Microelectronics' environmental management system ("EMS"), which is the heart of our Project, poses both unique opportunities and challenges regarding the relationship between Microelectronics and our government stakeholders. In particular, the enforcement consequences of inviting our government stakeholders -- USEPA and our State regulators -- to participate directly in the identification and management of our environmental aspects and having unprecedented access to information about our environmental aspects, must be clear and predictable.

The first effort to address this issue, the Interim Participation Agreement ("IPA"), was signed a year ago by USEPA as well as the States that are participating in this Project. The IPA is an important element in facilitating the involvement of the various stakeholders in the development and ongoing implementation of Microelectronics EMS. As you know, the EMS is the basis for identifying and actuating our superior environmental performance and potential regulatory flexibility. Unfortunately, after the initial signing, USEPA indicated that there were provisions of the IPA with which it was not comfortable.

Accordingly, we propose the following language, which is based on USEPA's self-disclosure policy and on language which has been accepted by USEPA in specific ELP projects, for inclusion in the FPA for our XL Project: (1) A violation of federal or state environmental law which is discovered during the development or ongoing implementation of this Project and disclosed to each affected government stakeholder shall be considered a disclosure made pursuant to and consistent with USEPA's Self-Disclosure Policy (60 Fed. Reg. 66706 (December 22, 1995). (2) Except as provided in subparagraph (3) below, such violations will not be subject to any enforcement action by USEPA (including notices of violation, civil penalties and criminal referrals), where those violations can be corrected within 90 days. The correction period may be extended up to an additional 90 days in a written agreement with USEPA that establishes a compliance schedule. (3) This correction period will not be available for violations that may present an imminent and substantial endangerment to the public health or environment, actions to address recurrences of violations for which a prior enforcement response has been taken, or violations where USEPA determines that significant economic benefit has accrued or been realized as a result of the violation(s). (4) Where, during the development and implementation of this Project, violations discovered that are accompanied by evidence of what USEPA consider to be significant environmental harm that does not necessarily pose an imminent and substantial endangerment to public health or the environment, Microelectronics -- in addition to correcting the violation -- will be required to initiate immediate efforts to remediate such harm, and to complete such efforts as soon as is practicable. This language would replace the section III(E)(1)(b) of the most recent collective draft (April 17, 1996) of the FPA.

Of course, some adaptations may have to be made in this FPA language to also reflect the States' ongoing role in our EMS. Additionally, more specific language may have to be developed in the facility-specific addenda to address unique information-sharing issues that may arise as the demonstration projects are further defined.

We would next like to reach closure on this issue as quickly as possible so that we can get our Project back on track. We would appreciate USEPA's written response to this letter in the next two weeks. If you concur with our proposed language, then we will proceed with our scheduled April 1st FPA drafting meeting at Sidley & Austin's offices in Washington, D.C. If you continue to have reservations on this information-sharing language, we would like to use that April 1st meeting to resolve this problem. If such a meeting is necessary, we would request that USEPA bring to the meeting those having a direct interest and decision-making role in this issue.

We trust that we will be able to come to resolution in short order, based upon this new proposal. We look forward to hearing from you soon and returning to making progress on our Project. As you understand, given the operational schedule for our EMS, time is of the essence.

Thank you for your continued efforts in this regard.

Sincerely,

Ted Polakowski
Debra Sabatini Hennelly

Lucent Technologies

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