Federal Wetlands Guidance Picks Up ELI Study Recommendations

January 2003

On December 24, 2002, the Army Corps of Engineers released new guidelines for compensatory mitigation projects authorized under Clean Water Act and joined five other federal agencies in a new National Wetlands Mitigation Action Plan. The new Corps regulatory guidance letter (RGL), revising several provisions contained in a controversial October 2001 version, supports many of the findings and recommendations offered in the Environmental Law Institute’s recently published study, Banks and Fees: The Status of Off-Site Wetland Mitigation in the United States.

The RGL emphasizes three main themes: a watershed approach to evaluating prospective mitigation efforts, an increased use of functional assessment tools, and improved performance standards. The findings in Banks and Fees support this emphasis. ELI’s report supports the use of a watershed-based approach to mitigation decision-making. However, ELI’s findings indicate that less than 1 percent of all current banking instruments and few in-lieu-fee programs are consistent with a watershed management plan or formal watershed plan. Although the Action Plan emphasizes identifying criteria for making compensatory mitigation decisions by 2005, the current RGL provides little practical guidance on how to apply a rigorously administered and science-based watershed approach in the field.

“Without solid guidance on how to effectively protect wetlands and mitigation for their losses on a watershed scale, a misapplied watershed approach could lead to a weakening of current provisions in place to assure replacement of lost wetland functions,” said Jessica Wilkinson, director of ELI’s Wetlands Program and the study’s principal investigator.

ELI applauds the federal agencies for adopting a number of the recommendations advanced by its Banks and Fees research. Positive steps include new requirements for greater detail on mitigation plans in the site selection process, environmental goals and objectives of the proposed mitigation, and for greater specificity in site protection plans, contingency plans, monitoring and long-term management, and financial assurances. However, the RGL falls short of ELI’s recommendations in several other areas.

For example, the RGL relaxes the minimum of a one-to-one replacement of wetland acreage for a one-to-one functional replacement in a watershed. The Institute’s Banks and Fees study found that although wetland experts have professed the advantages of using functional assessment techniques to evaluate lost wetland functions and define adequate compensation methods, these approaches are used infrequently. ELI’s research found that 61 percent of all banks define mitigation credits by acreage, 23 percent, a combined approach relying upon best professional judgment to scale wetland acreage according to some value of functionality. Given the general absence of functional assessment tools in the field, Institute researchers remain skeptical of the adequacy of current science, technology, or resources to evaluate functional wetland trade-offs and to ensure replacement of wetland functions on a watershed scale effectively. The new emphasis on functional assessment techniques is useful, but more Corps guidance is needed on the application of alternative methods that combine acreage and functionality considerations.

The new Corps RGL makes great strides towards requiring written performance standards in mitigation plans. Currently, about a third of both authorizing instruments for in-lieu-fee programs and wetland mitigation banks fail to specify required performance standards. Despite the importance of wetland hydrology, only half of those banks with standards incorporate hydrologic criteria and few address water quality, soils, wildlife habitat, or other criteria. Yet 95 percent of all banks with performance standards include vegetative standards.

ELI’s study provides publicly available information on the location and character of wetland mitigation sites across the country. The Institute hopes this data will help communities be able to be more effectively involved in incorporating their local concerns into mitigation siting and design. This comprehensive database can be found on the