On February 5, 2025, DOJ rescinded memos issued under the Biden administration guiding the use of supplemental environmental projects (SEPs) and community service payments in civil and criminal settlements respectively. The Attorney General signaled that the agency will seek to “eliminate the illegal or improper use [of] memoranda to direct payments to non-governmental, third-party organizations that were neither victims nor parties to the lawsuits.”
Background
For decades, the Department of Justice (DOJ) and the Environmental Protection Agency (EPA) have relied on the discretionary use of supplemental environmental projects (SEPs) in settlement agreements to redress the impacts of environmental violations on communities. Unlike civil penalties, which go to the US Treasury, SEPs allow companies to voluntarily support projects that can provide important health benefits to impacted communities, including investments in enhanced monitoring or remediating the effects of illegal emissions or discharges.
Under President Biden, DOJ published an interim final rule that restored the use of SEPs in federal environmental enforcement and allowed ENRD to require polluters to invest directly in communities affected by environmental violations, in addition to paying fines to the Treasury. The rule reversed a Trump-era policy banning the use of SEPs and other third party payments in federal environmental enforcement. For more, see DOJ Phases Out Supplemental Environmental Projects in Environmental Enforcement.
Starting in December, 2023, EPA also invited impacted communities to submit their ideas for potential projects to include in future settlement agreements via email at [email protected].