USA – NEW JERSEY Law and Practice Contributed by: Nicole Dory, Christina Sartorio Ku, Meredith Rubin and Camryn Goldstein, Connell Foley LLP
6.3 Incentives, Exemptions and Penalties Incentives for good environmental citizenship in New Jersey include those available through NJDEP’s pro- grammes and the Environmental Stewardship Initiative that promote voluntary or “beyond compliance” envi- ronmental stewardship. Under certain programmes, operators who proactively implement best practices may benefit from recognition or reduced enforcement risk. While NJDEP’s Environmental Stewardship Initiative does not provide exemptions from regulation, general permits are available under certain regulations, which streamline compliance for regulated activities by pro- viding pre-approved permits that cover a specific class of sources or activities and are less complex and time consuming than individual permits. In the case of bad environmental stewardship, as noted, NJDEP levies penalties on entities that vio- late environmental laws or permit conditions and can include fines, cleanup orders, permit suspension/ revocation, and criminal charges in serious cases. 6.4 Shareholder or Parent Company Liability Under New Jersey law, the “corporate veil” generally protects shareholders and parent companies from lia- bility for the subsidiaries’ environmental wrongdoing. However, if a parent company exercises operational control, directs waste‐handling decisions, or is the alter-ego of the subsidiary, liability may attach. Indi- vidual directors/officers may also face personal liabil- ity under the RCO doctrine in certain circumstances. 6.5 ESG Requirements There is no comprehensive ESG law in New Jersey, although such requirements are evolving. Recent legislative and regulatory developments increas- ingly mandate disclosure of corporate behaviour and reporting related to environmental justice and green- house gas emissions. Implemented in 2023, the New Jersey Environmental Justice Law requires certain major facility permit appli- cants in or near certain overburdened communities to prepare an Environmental Justice Impact Statement, engage with affected communities, and disclose infor- mation concerning potential environmental and public
health impacts. Enforcement mechanisms under the law include denial of permits for new facilities that cannot avoid disproportionate impacts to overbur- dened communities, issuance of special conditions on permits, and joint enforcement actions by the DEP and the OAG. Under the Global Warming Response Act, New Jer- sey requires regulated entities to track and disclose greenhouse gas emissions, including carbon dioxide, methane, and other covered pollutants, through peri- odic NJDEP reporting. Companies that hold environ- mental permits or approvals must, of course, monitor and report emissions, discharges, and annual compli- ance data as required by state and federally delegated programmes and applicable permitting programmes, which have their own enforcement mechanisms. 6.6 Environmental Audits Companies in New Jersey are not subject to a com- prehensive, mandatory environmental audit scheme, unless such reporting is required under a permit or as part of a remediation order. Audit requirements may be included as a permit condition, particularly for higher risk facilities or those in environmental justice commu- nities, or they may be imposed as part of a settlement order or a remediation enforcement order. Directors and officers may be personally liable for environmental damage or breaches of environmental law committed by the company if there is a showing that a corporate officer was in control of the events that led to the environmental harm or was person- ally involved in the operation and decision-making process. Penalties include civil administrative penal- ties, civil penalties, and potentially criminal charges. Corporations are allowed to purchase and maintain insurance on behalf of directors and officers which may cover environmental liability, as long as the terms of the policy do not preclude such coverage. 7. Personal Liability 7.1 Directors and Other Officers
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