Liability Management Brochure

We develop and safely execute contracts under diverse scenarios. Our flexibility to combine approaches and pricing mechanisms yields the greatest benefit to contract stakeholders.Liability transfer of existing regulatory obligations with firm cost-to-closure pricingCost-to-closure to achieve no further action approvalPay-for-performance for a specific scope of workCost-to-objective based on contaminant concentration reductionClosure-by-portfolio with cost/labor allocation based on evolving needsliability managementwww.gesonline.commanaging risk with the right solutionGES has been helping our clients define, understand, and manage their environmental liabilities for more than a quarter-century. We know from experience that when program goals are well defined, they ultimately can be achieved. The communication, alignment, and development of shared risk opportunities that combine the client’s goals and the consultant’s expertise offer tremendous potential for successful liability-risk reduction programs. ¦ DEVELOPING THE RIGHT SOLUTIONWhat is the right—the most practical—solution to achieving each client’s portfolio goals, tailored to real-world requirements and offering the flexibility to support changing needs? To answer this question, we apply lessons learned from our extensive environmental remediation experience. We understand that although the development of a remediation solution can be standardized, site-specific data must be evaluated to achieve the desired remediation goals. This perspective also applies to development of a contracting approach. We combine a sharp focus at the site level with an understanding of our client’s business drivers, environmental program, and the equitable balance of risk and reward. The most practical solution often centers on life cycle management and the development of a project progression plan that evaluates the costs, benefits, and risks of alternative paths to closure. Day-to-day tools include regulatory consulting, project management, engineering design, and technical field services such as system optimization, O&M, and sampling and monitoring. Remedial strategies include risk-based closure as well as innovative, traditional, and green technologies, as well as natural attenuation and other sustainable techniques. ¦ IMPLEMENTING THE STRaTEGyWe actively pursue the optimal strategy through our respectful relationships with local regulating authorities. Based on the contracting scenario and business strategy, insurance products may be a component of the customized liability management solution.www.gesonline.com ¦ ExPERIENcEWe have been helping our clients develop, implement, and refine their Liability Risk Transfer (LRT) programs for close to 15 years. Our experience ranges from complete LRT “cost to close” (cTc) agreements to “pay-for-performance” (PFP) contacts that focus on completion of specific objectives. We have also entered into contracts with various performance-based or combinations of performance-based objectives such as contaminant concentration reduction, regulatory closure, and/or contaminant concentration goals independent of contaminant reduction schedules or regulatory closure. The most successful incentive programs are those with criteria that are direct, unambiguous and readily measurable. additional incentives may be established based on primary project drivers, typically revolving around schedule, task completion, and task cost containment. ¦ MaNaGEMENT aPPROacH FOR qUaLITy aSSURaNCEWe recognize that these projects bring added risk and liability potential and management oversight requirements. GES’ liability-risk transfer policy specifies a unique management structure and specific procedures and guidance for contract development and execution. Our LRT Team includes company management at the highest operational levels. The Team develops a contract-specific management plan for each initiative; each plan includes a verification and validation process to ensure that contract and site specific objectives are being met. Each local team is led by a dedicated portfolio/project manager who is an expert in the local regulatory environment and in the unique requirements and objectives of an LT project. ¦ WHaT aRE THE FacTORS FOR SUccESS? There are two tiers of critical shared risk/reward decisions. The first focuses on portfolio and program-level guidelines and acceptable or unacceptable risk and reward; the second, on site-specific goals and objectives, milestones, time frames, and levels of effort. Some of the factors for a successful project are:· partnership between client and consultant with bilateral negotiation for an equitable balance of risk and reward· defined program and project-level terms and conditions to ensure the fulfillment of primary goals · selection of appropriate sites (thoroughly characterized and risks identified) · regulatory environment with clear compliance guidelines and consistent and fair regulatory decisions· a clear and reasonable path to closure · timely response periods for review and approvals· reasonable access to properties· contractually agreed-upon milestones with lump sum billing to streamline invoicing and client approval process15 years of diverse LRT experience retail service stationsindustrial-RCRAformer refineriesliquid product terminalsSites at, post-, or no divestitureInsurance or self-insuredState reimbursement fundscurrently managing $80M+ in LRT contracts25 statesmore than 650 sitesliability managementmanaging risk with the right solutionDefine liabilities/Risks to transferLiability – certain loss ? cleanup of known (legacy) contaminationRisk – uncertain loss ? Unknown contamination accuracy of clean-up costs Future bodily injury/property damage claims changes in regulations Future releases Fund solvency Third party interaction (property use, access, etc.) Force majeureDetermine transfereeRetain or transfer risk ? Determine transferee ? consultant Insurance Other third party (e.g. future property owner)cost Benefit analysis ? Known liabilities can be priced for direct cost benefit Risks difficult to price Risks may not ripen into liabilities Potential retention of low probability/high cost risks Other business considerations ? ¦ LIaBILITy-RISK TRaNSFER cONSIDERaTIONS GES’ years of experience, working closely with our clients as they have refined their environmental program goals, have exposed us to a diverse array of transfer circumstances and structures. This experience has provided an insight into defining the risks, liabilities, costs, benefits, and optimal management approach for each initiative. www.gesonline.comliability managementmanaging risk with the right solutionQuantify liabilityassess contaminant type, extent, and magnitude ? Source Sensitive receptors Identify compliance progression requirements ? Timelines/effortIdentify contractual requirements? Determine end points (regulatory, contractual) ? compliance requirements cleanup standards Potential engineering and institutional controls Third party agreements/business considerationsIdentify mitigating factors ? Funding mechanisms IndemnitiesWe know from experience that when program goals are well defined, they ultimately can be achieved. Shared risk opportunities that combine the client’s goals and the consultant’s expertise offer tremendous potential for successful liability-risk reduction programs. Liability Management The Right Solution Experience The Factors for Success Quality Assurance Liability-Risk Transfer Considerations