Corporate Good Character Law – Indiana

  • Jan 9, 2009
  • ILSR
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  • State Policy
  • Climate and Environmental Justice
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    The State of Indiana has a good example of a corporate "Good Character Law" when it comes to environmental protection.

    Accordingto Indiana’s law, a company seeking a solid waste or hazardous waste permits from the IN Dept. of Environmental Management can be denied on a number of grounds. A company seeking a permit must submit a disclosure statement indicating any past wrongdoing. Denial of the permit can result if the IDEW Commissioner finds that:

    (1) the applicant or a responsible party has intention ally misrepresented or concealed any material fact in the disclosure statement or;

    (2) a civil or administrative complaint has been filed against the applicant within five years before the date of submission of the application or;

    (3) a criminal complaint has been filed against the applicant within five years before the date of submission of the application or;

    (4) a judgment of criminal conviction has been entered against the applicant within five years before the date of submission of the application or;

    (5) the applicant has knowingly and repeatedly violated any state or federal environmental protection laws.

    In1997, The Indiana Department of Environmental Management denied a subsidiary of Waste Management (Chemical Waste Management, Inc)expansion of a hazardous waste landfill in Fort Wayne using the "Good Character Law". In denying the expansion, the IDEM Commission said"Indiana’s Good Character Law allows IDEM to effectively deny a permit application if the applicant has not demonstrated good environmental stewardship..with Chem Waste’s poor environmental track, I could not approve their expansion request." The Commissioner went on to cite both Civil and Criminal Action taken against Waste Management in Pennsylvania, Alabama, California, Texas, Illinois, and Louisiana as the basis of his conclusion that Waste Management did not meet the standard of the Good Character Law. The Indiana "Good Character Law" was enacted in 1990. In 1994, it withstood a constitutional challenge by Chem Waste (subsidiary of Waste Mgmt) before the Indiana Supreme Court.

    In its December 1, 1994, decision, the Supreme Court of Indiana found that the good character law is constitutional and reversed each of the trial court holdings but one. The supreme court agreed with the trial court that the good character law exceeded the state’s police power by allowing IDEM to deny an application for a solid or hazardous waste management permit even if it were never proven that a violation had actually occurred. The court held that before IDEM can deny a permit application, the commissioner must "make a finding that the alleged environmental violation actually occurred and that none of the mitigating factors are present, or are present but inadequate to justify the issuance of a permit." Otherwise, the court held the law was not constitutionally defective.

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