Good Intentions

by Fern Abrams, Manager Environmental Affairs, American Trucking Association

Issue: Fleets can reduce penalties dramatically if they notify EPA about violations right away.

Good intentions do count for something - even in the high-stakes climate of environmental law enforcement. In 1995 the EPA adopted an "audit" policy to reduce or completely eliminate fines for violations that companies discover, voluntarily disclose, and correct. In May 1997 the agency proposed revisions that would provide additional incentives for fleets to conduct environmental audits.

Under EPA's current policy, companies must disclose self-discovered violations within 10 days in order to be eligible for a penalty reduction. Fleets must put the disclosure in writing and mail or fax it to their EPA regional office. Based on the severity of the violation, penalties will be reduced by up to 75% if companies repair environmental damage and take steps to prevent its recurrence. However, fleets may still have to pay fines if EPA believes they benefited economically by not following the law. And repeat violations or those that cause substantial harm are ineligible for penalty reductions. To take advantage of the audit policy, violators must come to an agreement with EPA during settlement proceedings. If settlement terms can't be reached and EPA begins litigation, fleets may have to pay the fines in full. Small businesses (100 or fewer employees) can be at a disadvantage when it comes to understanding a variety of confusing environmental regulations since they often don't have environmental specialists on staff. To address this, the Small Business and Regulatory Fairness and Relief Act of 1996 mandated an environmental audit policy for small companies. While similar to EPA's policy, it does have a few important differences.

Under the legislation, small businesses can receive penalty reductions if they disclose violations discovered through government-sponsored compliance assistance or voluntary audits. Depending on the severity of the violation, they can receive penalty reductions of up to 100%. But they may still have to pay fines equal to any economic benefit of noncompliance. Audit policies reflect more than generosity on EPA's part; they also serve as recognition that the agency doesn't have the funding or people necessary to inspect every regulated facility. Consequently, the agency has recently proposed some changes to improve its audit policies.

Perhaps most surprising is a proposal that EPA will not recommend prosecution if a criminal violation meets the following conditions:

• It presents no "imminent and substantial" danger to human health or the environment;
• Steps are taken to prevent its recurrence; and
• The violator has either an audit program or an environmental management program.

In addition, the agency has proposed extending the period of self-disclosure from 10 to 21 days. However, there is also a proposal to report violations that "may have occurred." This means that if you're not sure whether an action qualifies as a violation, you should report it to EPA and let the agency decide. Under the new proposal, EPA would allow a company undergoing an investigation at one facility to voluntarily disclose violations at its other sites. Under current policy, if a violation is discovered at one facility, a business can't take advantage of the penalty-relief program at any of its other facilities. To assist fleets that want to begin conducting environmental audits or improve their current program, EPA is developing 12 compliance audit protocols. Three protocols are already available on the agency's Web site; you can also order them by calling 1-800-490-9198.

For more information about EPA's audit policies, visit the EPA Web page, or call the audit policy coordinator at (202) 564-5123.