Supplemental Environmental Project (“SEP”) Policy

Who is affected by this Advisory?

Any person, business, or other entity, that is, or may be, subject to penalty liability for violations of NJDEP requirements.

Why is DEP issuing this Advisory?

In 2011, NJDEP implemented an Interim SEP Policy. SEPs are voluntary environmentally beneficial projects responsible entities may complete, if approved at the Department’s sole discretion, to reduce their penalty liability. Through the resolution of enforcement actions, the Department has approved dozens of SEPs, which bring direct, concrete, and measurable environmental benefits to communities.

The Department has now implemented a final policy entitled “Standard Operating Procedures for Incorporating Supplemental Environmental Projects into Settlement Agreements and Administrative Consent Orders,” which became effective on February 15, 2024.

In part, this new policy:

1. Bolsters the requirement that SEPs have a nexus to the underlying violation at issue in the enforcement action and maintains the strong commitment that SEPs must be for the benefit of the public through concrete and measurable environmental benefits;

2. Furthers the Department’s pursuit of climate resilience in requiring the Department to consider the extent to which climate change would impact a SEP’s performance and encourages SEPs that would improve the resilience of vulnerable communities;

3. Continues the Department’s commitment to Environmental Justice by strongly encouraging responsible parties to consider community input in the development of a SEP, including the potential for a full penalty reduction (within statutory restrictions and within the enforcement program’s discretion) if a responsible party completes a detailed Community Needs Assessment as part of their SEP proposal; and

4. Encourages completion of approved SEPs by providing for additional stipulated penalties if an approved SEP is abandoned by a responsible party. Responsible parties who may wish to reduce their penalty liability should review the full SEP policy in detail. The possibility of reducing the penalty liability through a SEP does not, in any way, compromise a responsible party’s obligation to achieve full compliance in relation to the underlying violations.

Click to read the full advisory notice

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