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Berry Corporation

National Association of Environmental Professionals Paper

South Florida Water Management District
3301 Gun Club Road,
West Palm Beach, Florida 33406 --
(561) 686-8800 --
FL WATS 1-800-432-2045

CON 24-06

March 31, 1997

Mr. Ernest W. Caldwell
Jack M. Berry, Inc.
P.O. Box 5609
Winter Haven, FL 33880

Ms. Jacqueline McGorty
Florida Department of Environmental Protection - MS18
3900 Commonwealth Blvd.
Tallahassee, FL 32399-3000

Dear Mr. Caldwell & Ms. McGorty:

Subject: ACHIEVING BETTER ENVIRONMENTAL RESULTS USING ALTERNATIVE REGULATORY STRATEGIES: A CASE STUDY OF EPA'S PROJECT XL AT THE JACK M. BERRY, INC. CITRUS JUICE PROCESSING PLANT, LABELLE, FLORIDA

Enclosed is a copy of the final version of our paper which was submitted to the National Association of Environmental Professionals 22nd Annual Conference. I appreciate your help in getting this finalized and will look for your input as I put together the oral presentation. The conference is scheduled for May 19 - 23, 1997 in Orlando; although I don't know yet what day and time our paper will agended.

I have also sent a copy of our paper to the Berry XL Project Contacts listed below.
Thanks again for your help.

Sincerely,

Terrie Bates, Director
Regulation Department


cc: EPA - M. Glenn, L. Hunter, K. Gates, F. Wellborn, Z. Pryor, W. Lambert
DEP - P. Highsmith, P. Comer

Mailing Address: P.O. Box 24680, West Palm Brach, FL 33416-4680
ACHIEVING BETTER ENVIRONMENTAL RESULTS USING ALTERNATIVE REGULATORY STRATEGIES: A CASE STUDY OF EPA'S PROJECT XL AT THE JACK M. BERRY, INC. CITRUS JUICE PROCESSING PLANT, LABELLE, FLORIDA
Terrie Bates, South Florida Water Management District, West Palm Beach, Florida
Jacqueline McCorty, Florida Department of Environmental Protection, Tallahassee, FL
Ernest W. Caldwell, Jack M. Berry, Inc., Winter Haven, Florida
ABSTRACT

Administrators of local, state and federal environmental regulatory programs have been increasingly faced with complaints from the regulated community about bureaucratic rules, duplicative programs and overwhelming paperwork requirements. Industry leaders also point out that the typical "one size fits all" approach to regulation has led to a system of "minimum" environmental standards, with no incentives for industry to perform at a higher level than necessary to achieve compliance with those minimum standards. In Florida, the call for a return to common-sense strategies has led to new ecosystem management initiatives which complement federal initiatives for "Reinventing Environmental Regulation." Both the state and federal initiatives encourage development of pilot programs to test innovative alternatives to the current regulatory system.

In May, 1995, the U.S. Environmental Protection Agency began soliciting proposals for its newly established eXcellence and Leadership (XL) program and set a goal of implementing fifty pilot projects. Projects selected to participate in the XL program are provided the opportunity to pursue alternative regulatory strategies that will replace or modify specific regulatory requirements on the condition that they will produce better environmental benefits; e.g. environmental results that otherwise would not have been achieved under current regulations.

In July, 1996, Jack M. Berry, Inc., owner of a large citrus juice processing plant, became the first XL project in the nation approved for implementation under the terms of a "Final Project Agreement" signed by federal, state and local regulatory authorities. The Berry XL project involves a one-stop approach to the permitting of Berry's existing citrus juice processing plant in LaBelle, Florida.

The Berry plant is currently required to obtain multiple operating permits from multiple regulatory agencies. Air quality, water quality and consumptive use regulations govern the plant's boilers, feed mill dryers, drinking water, industrial wastewater and water use operations. The Berry XL project entails development of a Comprehensive Operating Permit which will consolidate all existing operating permits, including all operating procedures, into a single document. This streamlined permitting approach is expected to result in cost savings, which Berry will reinvest in new environmentally-beneficial operating procedures that will exceed current minimum standards, as well as increased permit compliance.
INTRODUCTION

Environmental protection laws and programs in the state of Florida have evolved significantly over the last 30 years. Today, tools such as acquisition and management of environmentally sensitive lands, comprehensive land use and water supply planning, and regulation are among the cornerstones of -the state's environmental protection efforts. State regulatory programs have been implemented to govern such things as air emissions, domestic and industrial wastewater, drinking water, stormwater, wetlands, water use and flood protection. While each program undeniably serves an important public purpose, each is also typified by a complex set of permitting rules, thresholds, criteria and policies. Further complicating the regulatory arena is the fact that in addition to complying with state standards, regulated interests must also meet the often differing requirements of federal and local permitting agencies.

In recent years, the cumulative effect of such regulation has led to an overwhelming call for change from the regulated community, both nationally and in the state of Florida. Rigid, bureaucratic rules; duplicative programs with differing criteria and standards; and overwhelming paper work requirements are commonly heard complaints from business, industry and agricultural leaders. Interestingly, at the same time, state environmental agencies have come to the paradoxical realization that despite progressive regulations, and the added safeguards and additional requirements imposed at the federal or local level, the quality of Florida's environment continues to decline.


FLORIDA'S ECOSYSTEM MANAGEMENT INITIATIVE

In 1994, the state's lead environmental agency, the Florida Department of Environmental Protection (DEP), responded to the dual challenge of addressing the complaints of regulated interests and finding better ways to protect the environment through an "ecosystem management initiative". The DEP defines Ecosystem Management as an integrated, flexible approach to management of Florida's biological and physical environments-conducted through the use of tools such as planning, land acquisition, environmental education, regulation, economic incentives, and pollution prevention-designed to maintain, protect and improve the state's natural, managed and human ecosystems.

Hundreds of citizens throughout the state, including representatives of business, industry, agriculture and environmental interests, participated in more than a year of the discussions and deliberations of twelve Ecosystem Management Committees established by DEP. The outcome of these stakeholder meetings was the development of the Ecosystem Management Implementation Strategy & Action Plan which details how DEP intends to implement ecosystem management. The strategy for meeting ecosystem management goals includes four basic approaches: Place-based Management; Cultural Change; Common Sense Regulation; and, Improved Foundations for Ecosystem Management. The case study presented in this paper describes ongoing state and federal efforts to use a common sense approach to regulation in order to achieve better environmental results.


From Theory to Action

Jack M. Berry, Inc. (Berry) was an active participant in DEP's ecosystem management initiative. Berry is a major citrus producer in Florida with over 20,000 acres of grove in nine counties and a large juice processing plant near the Town of LaBelle, Hendry County, Florida. In the Incentive-Based Regulatory Alternatives Committee of DEP's ecosystem management initiative, Berry explained the difficulties that it has encountered in the regulatory process:


In response to this type of input, DEP's Common Sense Regulation strategies include new, voluntary parallel permitting and approval processes designed to provide meaningful economic and regulatory incentives to applicants in return for better protection of ecosystems. At the heart of Common Sense Regulation is the recognition that each circumstance, each application and each site are different. As such, consideration must be given to which actions can be taken and which are most important and appropriate for the site in question. Common Sense Regulation looks for solutions that are: 1) based on consensus within the framework of the law, rather than adversarial and entrenched; 2) based on pollution prevention, rather than end-of-the pipe control; 3) flexible rather than rigid; and 4) able to provide economic incentives to applicants.

Encouraged by the strategies which were emerging from the state's ecosystem management initiative, Berry put the concepts to the test by proposing a one-stop approach to the permitting of its existing juice processing plant. In July, 1995, Berry organized an interagency meeting to discuss its innovative proposal. In attendance were representatives form the Governor's Office, U.S. Environmental Protection Agency (EPA), U.S. Department of the Interior, Florida Game and Fresh Water Fish Commission, Florida Department of Environmental Protection, Southwest, Suwannee River and South Florida Water Management Districts and Hendry County.

The one-stop, team-permitting concept generated a lot of positive response and interest. All of the participants, recognizing that the present approach to regulation needed improvement, expressed a willingness to try something different-a though no one was quite sure what type of permitting mechanism could be used to achieve the one-stop objective. The EPA representatives described a new federal initiative, Project XL, which seemed to be very compatible with the state's evolving ecosystem management initiative and common sense regulation strategies. Given the similarities between the state and federal initiatives, it appeared XL could potentially be an ideal vehicle for implementing the one-stop, team permit concept.

EPA'S PROJECT XL PROGRAM

Developed by the U.S. Environmental Protection Agency under the federal "Reinventing Environmental Regulation" initiative, the excellence and Leadership program gives regulated entities the flexibility to develop alternative strategies that will replace or modify specific regulatory requirements on the condition that the strategies produce better environmental benefits. The projects are real world tests of innovative strategies that achieve cleaner and more cost-effective results than conventional regulatory approaches. Projects involve creating a nexus between regulatory flexibility and an enforceable commitment by a regulated entity to achieve better environmental results than would have been attained through full compliance with current or anticipated regulations.

The EPA began soliciting proposals for the XL program in May, 1995 with a goal of establishing fifty pilot projects in four categories: facilities, industrial sectors, government agencies and communities. Evaluation criteria used by EPA in selecting the XL projects include:

1. Environmental Results: Ability to achieve environmental performance that is superior to what would be achieved through compliance with current regulations.

2. Cost Savings & Paperwork Reduction: Ability to produce cost savings or economic opportunity, and/or result in a decrease in paperwork burden.

3. Stakeholder Support: Extent to which the project has gained the support of parties that have a stake in the environmental impacts of the project.

4. Innovation/Multi-Media Pollution Prevention: Projects should - embody a systematic approach to environmental protection that test alternatives to several regulatory requirements and/or affects more than one environmental medium. Projects should also focus on preventing pollution rather than controlling pollution once it has been generated.

5. Transferability: Extent to which the project could be incorporated in other facilities or industries.

6. Feasibility: Projects should be technically and administratively feasible.

7. Monitoring, Reporting & Evaluation: Projects should have clear objectives and requirements that will be measurable in order to allow EPA and the public to evaluate the success of the project and enforce its terms.

8. Shifting of Risk Burden: Projects must protect worker safety and not result in environmental injustice.


DEP & JACK M. BERRY, INC. XL PROJECT PROPOSAL

In August, 1995, the Florida Department of Environmental Protection, in partnership with Jack M. Berry, Inc., submitted an XL project proposal to EPA. The project proposal involved a one-stop approach to the permitting of Berry's existing citrus juice processing plant in LaBelle.

In operation since 1976, the juice processing plant produces not-from-concentrate, concentrate, and related citrus products. The plant, one of the major employers in Hendry County, provides jobs for approximately 300 people and operates 24 hours a day from November through May. The plant has the capacity to process 10 million boxes of fruit annually (90 pounds of fruit per box) and typically handles 100 to 125 semi-trailer loads of fruit per day.

The Berry plant is currently required to obtain operating permits from multiple regulatory agencies. Air quality, water quality, consumptive water use and stormwater regulations govern the plant's boilers, feed mill dryers, drinking water, industrial wastewater, water use and physical site operations. Permits incorporating these requirements are issued by DEP and the South Florida Water Management
District (SFWMD).

As proposed, Berry will develop a Comprehensive Operating Permit (COP) which will consolidate all existing operating permits, including all operating procedures, into a single document. Berry's employees will be extensively involved in development of the COP and will detail every step of the plant's activities and processes. The COP will incorporate all of the conditions currently required by existing rules, regulations, statutes and permits. Although the format will be different, reflecting instructions needed to operate the facility by process area, the regulatory requirements will remain intact. The COP will be submitted to all of the permitting agencies who will review, issue any necessary changes, and then approve the COP as the operating permit for the plant.

It should be noted that the regulatory flexibility sought by Berry through its application to participate in the XL program does not entail relaxation of any environmental standards. Rather, Berry seeks relief from administrative and procedural rules which require preparation and certification of multiple permit renewal applications every few years.

In March, 1996, EPA Region 4 Administrator John Hankinson, Florida Lt. Governor Buddy MacKay, and DEP Secretary Virginia Wetherell announced that the Jack M. Berry, Inc, project had been chosen fort he XL program. The Berry project became the ninth in the nation, and second in Florida, selected to participate in EPA's excellence and Leadership program.


BERRY XL FINAL PROJECT AGREEMENT

As required by the XL program, Berry and the regulatory agencies (EPA, DEP & SFWMD) executed a Final Project Agreement (FPA) governing the project in July, 1996. Berry is the first XL project in the nation to have completed this major step towards project implementation.

The FPA states the intention of Berry, DEP, SFWMD and EPA to carry out a pilot project as part of EPA's Project XL program. It is important to note that the FPA is not a regulatory action; it contains the intent and principles agreed to by the signing parties. Provisions of the FPA will be implemented through a separate permit, the COP, the terms and conditions of which will be legally enforceable.

The DEP will have the lead role in administering the FPA and coordinating the input and review of all agencies having a permitting interest in the Berry facility. The Final Project Agreement sets forth the "Governing Procedures," "Permit Consolidation Plan," and "Project XL Criteria."

Section I, Governing Procedures, sets forth the agreed upon "ground rules" regarding such matters as the roles of the signing parties; duration, modification, termination and transfer of the agreement; and dispute resolution.

Section II, Permit Consolidation Plan, describes the Comprehensive Operating Permit which will incorporate, and therefore supersede, existing permits and permit conditions. This section also sets forth the public notice provisions, scope of authorization and enforcement policy.

Section III, Project XL Criteria, addresses each of the eight criteria elements (described above) which EPA has established for the XL program. Included in this section are Berry's specific commitments to superior environmental performance in the areas of water consumption and conservation, air emissions, industrial wastewater treatment and wetland conservation, solid and hazardous waste, and potable water. Each of Berry's environmental commitments includes a description of the expected superior environmental benefit, the baseline environmental condition, and the environmental performance measures.


Permit Consolidation Plan: A Single Comprehensive Operating Permit

The Berry juice processing plant is covered by seven different regulatory permits with varying durations, staggered expiration dates, and separate and distinct monitoring and operational requirements. The Berry XL project will replace the existing regulatory permits with a single Comprehensive Operating Permit. This permit for the operation and regulation of the entire facility will maintain all environmental standards and serve to consolidate federal, state and local facility permits. The single permit will be subject to re-evaluation every five years.

The objectives of the COP include: compliance beyond current regulations; net improvement to the environment (as described below); reduced costs of permit review and inspection; better working relationships between the regulated facility and the regulators; simplified paperwork and reporting; opportunity to train staff in compliance and cross-media permitting; long-term assurance of business operation; and creating a process that is transferable to other facilities.

The COP will contain the Operating Procedures and detailed Work Instructions needed to operate the juice facility in accordance with both company policies and regulatory requirements. While the procedures and instructions will be written in a manner easily understood by the plant employees responsible for carrying them out on a day-to-day basis, they will incorporate those specific operating procedures, conditions, standards or criteria required by current rules.

Berry employees in 13 different process Areas are currently documenting each step in the plant's daily operational activities and processes. As these steps are being incorporated in the draft Operating Procedures and Work Instructions, regulatory agency staff meet regularly with Berry to provide input and ensure that the facility wide operating plan includes all applicable regulatory requirements.

Each regulatory agency will take independent final agency action on the completed COP in accordance with applicable public notice requirements. Upon approval, the agencies will each issue. a. simplified permit referencing the COP as constituting agency action and a finding that the intent of all governing regulations will be met provided that the facility is operated in accordance with the COP.


Employee Training

All processing plant personnel, from hourly employees through plant managers, will receive training within their respective areas of responsibility in the COP. Employees will be specifically trained regarding the relationship between the Operating Procedures and Work Instructions contained in the COP, permit conditions, and general regulatory requirements. Strict adherence to the COP will be a condition of employment for all Berry employees.

In addition, Berry has established a Quality Council (comprised of senior-level staff) and Regulatory Steering Committees (comprised of staff from various plant process areas) to provide oversight of the COP implementation, facilitate on-going training, promote continuous improvement, and initiate corrective actions when necessary.


Berry's Commitment to Superior Environmental Performance

Through the requirements of the COP, Berry's environmental performance is expected to exceed that which could have been achieved through compliance with current and reasonably anticipated future regulation in the areas of: water consumption and conservation; air emissions; industrial wastewater treatment and wetland conservation; solid waste; and potable water and surface water management. Berry is also in the process of instituting the ISO 9000 management program and the ISO 14000 environmental management program established by the International Standards Organization.

Implementation of the Berry XL project is expected to benefit the environment by:

Duration and Evaluation of the FPA and COP

Both the FPA and COP will be subject to five year re-evaluation. To facilitate evaluation of the FPA and COP, Berry will prepare five year reports which describe the environmental benefits achieved and summarize all environmental performance monitoring data. The reports will be reviewed by the regulatory agencies for the purpose of determining whether: (1) superior environmental benefits have been achieved as anticipated in the FPA; (2) Berry has complied with the terms and conditions of the COP; and (3) the FPA and COP should be continued for another five year time period.

If the regulatory agency evaluations support continuation of the FPA and COP, public notice will be provided prior to final agency action to continue the FPA and COP (and/or amend, as necessary to incorporate new statutory or regulatory requirements). In the event Berry or the regulatory agencies elect not to continue the FPA and COP, Berry will return to operation under conventional permits.


Stakeholder Participation

The Berry juice processing plant is located five miles from the nearest community, LaBelle, and is surrounded by ten thousand acres of citrus grove. As a major employer in the area and active participant in Florida's ecosystem management initiative, Berry's operations are of interest to both the local citizenry and environmental organizations.

The XL program is not intended to diminish in any way the ability of the public to participate in the COP review, modification or re-evaluation process. Since the Berry XL entails a new approach to permitting, additional time and effort will be devoted to notifying the public about the process as well as the content of the COP.

Berry will establish a Stakeholder Committee which includes representatives from the local Chamber of Commerce, a regional economic development group, local and national environmental groups, the U.S. Department of the Interior, and local government. The Committee will facilitate public meetings to inform and seek comment and input from all interested citizens about the development and implementation of Berry's COP.


CONCLUSION

As a real world test of an alternative regulatory strategy, the Berry XL project will provide regulatory agencies with an opportunity to evaluate the effectiveness of providing flexibility in the permitting process in anticipation of achieving greater environmental benefits than would otherwise be obtained.

The project will provide insights to the potential for cost savings and paperwork reduction to be realized by both the industry and regulatory agencies. By eliminating the requirements, paperwork, and associated costs of preparing multiple permit renewal applications, Berry anticipates meaningful cost reductions. In addition, the greater permit certainty afforded by the consolidated permit may reduce financial lender concerns about the future operational status of the plant, which may in turn translate into lower costs when pursuing long-term loans. From an agency standpoint, the workload associated with reviewing multiple permit renewal applications will be reduced, thereby allowing the agencies to concentrate on compliance.

The project is also expected to demonstrate whether compliance can be significantly improved as a result of having the operating employees involved in the development of the facility-wide Operating Procedures and Work Instructions and by using simple language to describe more clearly what is required by law.



Authors' Note: Acknowledgment must be given to Dee Stewart, EPA Region 4, for her leadership role and considerable contribution in finalizing the Berry XL Final Project

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