most wetlands. This interpretation recognizes that some wetlands improve water quality through nutrient cycling and sediment trapping and retention; it is based on the judgment that some goals of the Clean Water Act cannot be achieved if wetlands are not protected. Indeed, in 1989, President Bush stated that “no net loss” of wetlands was a goal of his administration, and that was reflected in interagency agreements soon afterward.

The Clean Water Act prohibits the discharge of materials, such as soil or sand, into waters of the United States, unless authorized by a permit issued under Section 404 of that act. The Corps of Engineers, or a state program approved by the Environmental Protection Agency, has authority to issue such permits and to decide whether to attach conditions to them. To achieve no net loss of wetlands within the Section 404 program, a permittee is first expected to avoid deliberate discharge of materials into wetlands and then to minimize discharge that cannot be avoided. When damages are unavoidable, the Corps of Engineers can require the permittee to provide “compensatory mitigation ” as a condition of issuing a permit.

Compensatory mitigation specifically refers to restoration, creation, enhancement, and in exceptional cases, preservation of other wetlands as compensation for impacts to natural wetlands. The permit recipient, either on a permit-by-permit basis or within a single-user mitigation bank, carries out “permittee-responsible” mitigation. In third-party mitigation (i.e., commercial mitigation bank, in-lieu fee program, cash donation, or revolving fund program), another party accepts a payment from the permittee and assumes the permittee's mitigation obligation. Most compensatory mitigation has been done by permit recipients, rather than by third parties.

The Committee on Mitigating Wetland Losses, which prepared this report, was established by the National Research Council to evaluate how well and under what conditions compensatory mitigation required under Section 404 is contributing toward satisfying the overall objective of restoring and maintaining the quality of the nation's waters. The committee reviewed examples of wetland restoration and creation projects in Florida, Illinois, and southern California that were required as a condition of Section 404 permits; received briefings from outside experts; and conducted an extensive review of the scientific literature on wetlands, government data and reports, and information provided by a wide variety of experts and organizations.


Conclusion 1: The goal of no net loss of wetlands is not being met for wetland functions by the mitigation program, despite progress in the last 20 years.

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