On November 3, 2015, the White House released a Presidential Memorandum intended to encourage federal agencies to consider land use planning more holistically, clearly and consistently, addressing mitigation needs before they undertake or authorize actions impacting the environment.1 The Memorandum, entitled “Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment,” directs five  agencies – the Departments of Agriculture, Defense and Interior, the Environmental Protection Agency and the National Oceanic and Atmospheric Administration -- to produce policy documents and regulations detailing how they plan to meet the President’s goal of “net benefit” (or at a minimum, “no net loss”) for natural resources. While the Memorandum is not binding outside the federal agencies to which it applies, it may herald new agency regulations and procedures that may directly impact developers and other commercial entities.  Businesses expecting to need federal approval for land-use projects, such as construction, mining or agriculture work, would be well advised to keep an eye on further developments in this regard.

The Memorandum cites a problem that agencies face in trying to be good stewards of the nation’s natural resources: their current regulatory structures do not encourage consistent and advanced planning. Too often, according to the Memorandum, agencies are unable to address natural resource depletion until specific projects have regulatory approval. To solve this problem, the Memorandum directs executive agencies to develop new regulations and guidance for natural resource preservation. In particular, agencies are urged to find ways to compensate for environmental destruction before harmful effects occur. For example, if an area of wetland is to be impacted by a project, an authorizing federal agency should identify ways to mitigate that harm ahead of time, such as by restoring another nearby wetland. The Memorandum states that avoidance of harm is preferable, but if not possible, then mitigation and compensation should be provided. Further, such mitigation and compensation should occur, whenever possible, within the same “landscape” or watershed, and should be long-lasting and “additional” to baseline standards. The Memorandum demonstrates an Administration preference for privately developed market-based systems, such as mitigation banking, in which credits are created by conservation programs and then traded in to compensate for projects requiring environmental degradation.  Finally, the Memorandum also directs that federal agencies identify resources with irreplaceable characteristics deserving of special protections, and design policies to avoid impacts to those resources, consistent with applicable laws.

The Memorandum specifically addresses  the U.S. Forest Service, the Bureau of Land Management (BLM), the U.S. Fish and Wildlife Service and the Department of the Interior (Interior) as a whole. The Forest Service is directed to develop and implement a manual and handbook guidance on mitigation within 180 days, BLM is to finalize its own mitigation policy within a year, and the Fish and Wildlife Service is to create additional policies for compensatory mitigation under the Endangered Species Act as well as guidance on measures states and private parties may take to conserve species in advance of any federal protections.  In addition each of the Federal natural resource trustee agencies (the Departments of Agriculture, Commerce, Defense, Energy and Interior) is directed to develop new guidance for its trustee representatives.  The Memorandum does not apply to military testing, training or readiness activities.

An early example of what may be expected to come from these directives was a policy statement promulgated, slightly in advance of the Presidential Memorandum, by Interior,2 entitled “Public Land Policy Landscape-Scale Mitigation Policy.” That policy directs bureaus and offices within Interior to develop compensatory mitigation mechanisms, such as credit banks, and to use “landscape-based” approaches, where a landscape is defined as “an interacting mosaic of ecosystems and human systems characterized by a set of common management concerns.” Interior’s policy is to seek first to avoid or minimize environmental degradation, but to the extent environmental degradation is unavoidable, bureaus and offices within the Department are to offset the harm caused, preferably through advanced compensation, such as mitigation banking, within the same “landscape.”

The Presidential Memorandum expressly does not directly create any legal rights or obligations for private parties. However, if the Interior policy statement is a sign of things to come, there may be a shift in how agencies approach development land-use projects. The federal government will continue, consistent with the National Environmental Policy Act (NEPA),3 to seek to minimize the negative environmental effects of land-use projects. However, agencies may now be more likely to ask project promoters to take actions to mitigate or compensate, even before final project approval, for any unavoidable environmental degradation. Furthermore this Memorandum, like the administration’s recent Waters of the United States (WOTUS) rule,4 aims to increase agency focus on environmental restoration within the same area or ecosystem as that being degraded. This suggests that, apart from impacting businesses seeking new development, the Memorandum intends to encourage private investment in natural resource restoration and may stir up demand for such services and expertise.  Hence, businesses and non-profits that work to restore damaged land or implement market-based programs such as mitigation banking should also follow developments.

1.   Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment (Nov. 3, 2015), available at https://www.whitehouse.gov/the-press-office/2015/11/03/mitigating-impacts-natural-resources-development-and-encouraging-related.
2.   The Dep’t of the Interior, Public Land Policy Landscape-Mitigation Policy, 600 DM 6 (Oct. 23, 2015), available at https://www.doi.gov/sites/doi.gov/files/uploads/TRS%20and%20Chapter%20FINAL.pdf.
3.   42 U.S.C. §§ 4321 -4370h. For more information about NEPA, see Envtl. Prot. Agency, “What is the National Environmental Policy Act?” http://www2.epa.gov/nepa/what-national-environmental-policy-act.
4.   Clean Water Rule: Definition of “Waters of the United States,” 80 Fed. Reg. 37,054 (June 29, 2015) (to be codified at 40 C.F.R. pt. 328). For more information about the WOTUS Rule, see Envtl. Prot. Agency, “What the Clean Water Rule Does,” http://www2.epa.gov/cleanwaterrule/what-clean-water-rule-does.