Corps Shifts Toward a Functional Approach to Wetlands Mitigation

Joseph P. Williams

On Dec. 27, 2002, the U.S. Army Corps of Engineers released Regulatory Guidance Letter (RGL) No. 02-2, entitled “Guidance on Compensatory Mitigation Projects for Aquatic Resource Impacts Under the Corps Regulatory Program Pursuant to Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899.” The RGL applies to all compensatory mitigation proposals in connection with permit applications filed after Dec. 27, 2002 and supersedes RGL 01-1 issued Oct. 31, 2001. The stated purpose of the RGL is to support the national policy of “no overall net loss” of wetlands and to reinforce the Corps commitment to protecting wetlands while allowing permitees to provide appropriate and practicable mitigation for authorized impacts to aquatic resources.

The most important change effected by the RGL is its policy shift in the Corps’ mitigation approach from strict acreage replacement to an increased reliance on assessing and replacing wetlands functions within a particular ecosystem. As a result, the “no overall net loss of wetlands” goal may not be achieved for each and every permit decision, but the Corps intends to achieve this goal on a cumulative basis.

It should be noted that the Corps did not completely abandon its traditional policy of using acres as the standard measure for determining impacts and required mitigation for wetlands. Rather, the RGL provides that where there is an absence of definitive information on the functions of a specific wetland, “a minimum one-to-one acreage replacement may be used as a reasonable surrogate for no net loss of functions.” This may be the case in the event of an enforcement action after impacts have already occurred or where there is no appropriate method to evaluate functions. Districts will determine on a case-by-case basis whether to use a functional assessment or acreage surrogate for determining the necessary mitigation.

However, the Corps is now instructing its Districts wherever possible to use a “functional assessment method.” Given the unique ecological characteristics of each aquatic site, the RGL states that focusing on the replacement of the functions provided by a wetland, rather than simply the acreage lost or replaced, will more effectively enhance environmental performance. Under this approach, Districts will assign scores to particular functions using assessment techniques generally accepted by experts in the field, the best professional judgment of federal, tribal and state agency representatives, and the ecological functions listed in the Section 404(b)(1) Guidelines. Fortunately, the RGL requires that the District make its chosen assessment method available to applicants.

The Corps’ mitigation objective under the RGL is now to provide, at a minimum, one-to-one functional replacement, meaning “no net loss of functions.” In some cases, replacing the functions provided by a wetland can be achieved with another, smaller wetland, where the replacement wetland is of higher function.

As mitigation alternatives, permit applicants may propose the use of mitigation banks, in-lieu fee arrangements, or separate activity specific projects. The four types of wetland projects available under the RGL are familiar: establishment (creation) of a new wetland, resulting in a gain in wetland acres; restoration, either by re-establishment of a former wetland or rehabilitation of a degraded wetland; enhancement of specific functions; or protection/maintenance by the removal of a threat to, or preventing the decline of, wetland conditions. The fourth project type, also know as preservation, will be used only in exceptional circumstances as it does not result in a gain of wetland acres. As part of specific wetland projects, Districts may require any of the following:

• On-site and off-site mitigation
• In-kind and out-of-kind mitigation
• Buffers, either in upland or riparian areas

Mitigation plans associated with individual permits will be made available for public review and comment and forwarded to relevant agencies. As always, pre-application consultation is recommended to discuss compensatory mitigation proposals with the Corps prior to filing. In accordance with the sequencing requirements of the Section 404(b)(1) Guidelines, in which compensation is the final step, Districts will not approve mitigation plans until they have established the unavoidable wetland impact.

The level of information that must be provided in a mitigation plan should be commensurate with the potential impact to aquatic resources. The plan must contain the following components: baseline information concerning the impacted resources, goals and objectives for the mitigation plan, the factors considered in site selection, written specifications and work descriptions, performance standards, the parties responsible for compliance, description of the legal means for protecting mitigation areas, contingency plans for unanticipated site conditions or changes, monitoring and long-term reporting plans, and financial assurances and contingency funds set aside for remedial measures.

While it may never be possible to determine whether the Corps has achieved its goal of no cumulative net loss in wetlands functions, most interested parties should be encouraged that their government will now be evaluating wetland function and mitigation proposals based upon scientific factors rather than a mere bean-counting of acres. Of course, from the applicant perspective, whether this new approach will add further expense and delay to an already cumbersome process remains to be seen.