State Hopes to Establish Prices for Natural-Resources Damages

Standards could help ensure compensation is adequate and fair, prevent funds being raided for use in general budget

Credit: Joe Loong
ExxonMobil's former Bayway refinery in Linden
If the state established standards for restoring damaged marshes, contaminated drinking supplies, and other natural resources would it be better compensated by polluters who caused the harm?

That is a question lawmakers plan to explore and hope to answer positively as they try to ensure money won from polluters is spent on fixing the problems created by environmental negligence.

The issue is emerging as the Legislature bids to put a constitutional amendment on the ballot next fall to retain most of the money from natural-resources damage claims to restore areas harmed by pollution.

Some lawmakers and environmentalists argue the resolution is needed because of repeated diversions from huge financial settlements won by the state in pollution cases, in which most of the money goes to helping plug holes in the budget rather than restoring resources damaged by spills and other contamination.

Proponents want both houses to approve the resolution (SCR-39) before the end of the year, and again early next year, which would put the constitutional question on the ballot next November. The resolution is awaiting final approval in the Assembly.

Sen. Bob Smith (D-Middlesex), the sponsor of the resolution, said he believes voters will easily approve the ballot question, but added that lawmakers still need to resolve the problem of establishing a standard for setting natural-resources damages.

“When you have these natural-resources damage cases, they’re all by settlement,’’ Smith noted. “We have not yet established a standard by either legislation or regulation. A defendant will say in court how did you come up with this value?’’

He cited one of the more prominent examples involving a case brought against Exxon/Mobil for massive destruction of wetlands and pollution at a pair of refineries in Linden and Bayonne. After extensive litigation, the state agreed to settle for $225 million.

Originally, the state had sought $8.9 billion in damages. “Not too many people thought $225 million was an accurate reflection of the damage,’’ Smith noted. Indeed, the settlement is being challenged in court by environmental groups and Sen. Raymond Lesniak (D-Union).

“We need to come up with an objective standard for natural-resources damages,’’ Smith argued. That could be done by implementing legislation if the issue is put on the ballot and then approved by voters.

The ballot question is backed by most of the state’s environmental organizations, who argued that, without it, these settlements will continue to be raided by future administrations.

“It will prevent many of these grabs that are too common down in Trenton,’’ said Drew Tompkins of the League of Conservation Voters. “We have no choice but to put a lockbox on these settlements.’’

Debbie Mans, NY/NJ Baykeeper, agreed. “Ideally, we would not need to amend the constitution, but we have seen both Republicans and Democrats take this money and divert it. We need to lock it up,’’ she said.