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Mitigation Overview

Mitigating the environmental impacts of necessary development actions on the Nation's wetlands and other aquatic resources is a central premise of Federal wetlands program.

Compensatory mitigation is the third step in the sequence of actions that must be followed in the review process, the first being to avoid, then to minimize and finally to mitigate for any unavoidable impacts. The Clean Water Act (CWA) Section 404 permit program relies on the use of compensatory mitigation to offset any unavoidable adverse impacts which remain after all appropriate and practicable avoidance and minimization has been achieved.

The objective of the Clean Water Act (CWA) is “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” Toward achievement of this goal, the CWA prohibits the discharge of dredged or fill material into wetlands, streams, and other waters of the United States unless a permit issued by the U.S. Army Corps of Engineers (Corps) or approved State under CWA Section 404 authorizes such a discharge. When there is a proposed discharge, all appropriate and practicable steps must first be taken to avoid and minimize impacts to aquatic resources. For unavoidable impacts, compensatory mitigation is required to replace the loss of wetland, stream, and/or other aquatic resource functions.

Mitigation for the unavoidable adverse impacts to aquatic resources may occur through the following methods restoration, establishment, enhancement and, in certain circumstances, preservation. The preferred hierarchy, as stated in the EPA/ Corps Mitigation Rule, for the forms and location of compensatory mitigation is as follows:

1. mitigation bank credits from an approved mitigation bank,
2. in-lieu fee (ILF) program credits from an approved ILF program,
3. permittee-responsible mitigation under a watershed approach,
4. permittee responsible mitigation through on-site and in-kind mitigation, or,
5. permittee-responsible mitigation through off-site and/or out-of-kind mitigation.

Click here to view the Regulatory Sourcebook.

What is compensatory mitigation? 
The fundamental objective of compensatory mitigation is to offset environmental losses resulting from unavoidable impacts to waters of the United States authorized by DA permits and to replace the loss of wetland, stream, and/or other aquatic resource functions. Compensatory mitigation involves the actions taken to offset unavoidable adverse impacts to the aquatic ecosystem after all appropriate and practicable steps have been taken to avoid and then minimize adverse impacts to wetlands, streams, and other aquatic resources authorized by Clean Water Act section 404 permits and other Department of the Army (DA) permits. Compensatory mitigation can be carried out through the restoration of a previously-existing wetland or other aquatic site, the enhancement of an existing aquatic site’s functions, the establishment (i.e., creation) of a new aquatic site, or, in some cases, the preservation of an existing aquatic site.

When is Mitigation Required?
The mitigation sequence established by the Clean Water Act Section 404(b)(1) Guidelines has been retained in the Mitigation Rule. Proposed impacts must first be avoided to the maximum extent practicable. Remaining unavoidable impacts must then be minimized. Finally, unavoidable impacts must be compensated for to the extent appropriate and practicable.

EPA/Corps Mitigation Rule

The EPA/ Corps Mitigation Rule establishes the standard to improve the planning, implementation, and management of compensatory mitigation projects by emphasizing a watershed approach in selecting compensatory mitigation project locations, requiring measureable, enforceable ecological performance standards and regular monitoring for all types of compensation, and specifying the components of a complete compensatory mitigation plan, including assurances of long-term protection of compensation sites, financial assurances, and identification of the parties responsible for specific project tasks. This rule also significantly revises the requirements for in-lieu fee programs to address concerns regarding their past performance and equivalency with the standards for mitigation banks and permittee-responsible compensatory mitigation.

The Corps and the Environmental Protection Agency have issued regulations governing compensatory mitigation for activities authorized by permits issued by the Department of the Army. The regulations establish performance standards and criteria for the use of permittee-responsible compensatory mitigation, mitigation banks, and in-lieu programs to improve the quality and success of compensatory mitigation projects for activities authorized by Department of the Army permits.

Approved Mitigation Banks

A mitigation bank is a site, or suite of sites, where resources (e.g., wetlands, streams, riparian areas) are restored, established, enhanced, and/or preserved for the purpose of providing compensatory mitigation for impacts authorized by DA permits.

A mitigation bank is a wetland, stream, or other aquatic resource area that has been restored, established, enhanced, or (in certain circumstances) preserved for the purpose of providing compensation for unavoidable impacts to aquatic resources permitted under Section 404 or a similar state or local wetland regulation. In general, a mitigation bank sells compensatory mitigation credits to permittees whose obligation to provide compensatory mitigation is then transferred to the mitigation bank sponsor. The operation and use of a mitigation bank are governed by a mitigation banking instrument.

View the Baltimore District approved commercial mitigation banks here.