Is EPA's Get-Out-of-Jail-Free Program Working?
Hundreds of thousands of US businesses, manufacturing plants, and other facilities such as universities, hospitals, airports, and military bases are potential violators of numerous environmental laws. Since federal and state regulators can't regularly inspect every operation in every facility, they rely to a large degree on having these entities police themselves.
One of the self-policing tools used for several decades has been a self-audit, in which owners and operators inspect their own facilities, report any violations they find, and are rewarded to some degree through various forms of legal protection and reduction or elimination of fines if the violations aren't too serious, are corrected, and aren't repeated.
There are many complex machinations in this process, involving issues such as protection of business secrets; unfair advantages for companies that don't self-audit; immunity from prosecution; and the balance between various carrot-and-stick approaches.
In the midst of one flurry of government responses to this issue, EPA adopted an Audit Policy that took effect in 1996. For more information on the controversies of the time — and for a number of sources that remain viable today, see:
- "Audit-Privilege Laws: The Right to Know Nothing?" Environmental Health Perspectives, October 1999, by Richard Dahl.
- "Audit Privilege: Less Info for E-Reporters?" Environment Writer, June 1997, by Joseph A. Davis.
The Audit Policy, which has been revised somewhat over the years, has resulted in a few thousand companies turning themselves in. The annual totals for self-reporting companies have been a roller-coaster ride, rising steadily through 2002, dropping substantially in 2003, only to rise to a peak in 2005, then dropping substantially again in the past two years.
EPA announced in August 2008 two initiatives that it hopes will both reverse this decline and lead to more self-reporting of violations that are causing actual health and environmental problems. Until now, many of the reported violations have been minor paperwork problems, EPA says. However, there have been some cases involving serious transgressions that have resulted in multimillion-dollar fines.
The first initiative, announced on Aug. 1, 2008, encourages companies to self-audit facilities they have recently acquired. There are some new incentives to encourage self-disclosure that may be worth investigating. This program is already in place, even though a public comment period is open until Oct. 30, 2008.
The second initiative, announced Aug. 7, 2008, sets up a pilot effort to test expedited electronic reporting. The agency may get comments on one key aspect highlighted in the announcement: companies won't be able to protect some business secrets when they file this way.
These are two revisions to a system that apparently hasn't been evaluated for its overall effectiveness, at least in a publicly released document, for at least eight years. Among questions that might be asked are:
- Is the Audit Policy more effective than hiring more inspectors and regulators at the federal and state levels?
- If some form of self-reporting is a useful tool, is the current system the best one possible, given that it has drawn the interest of a tiny percentage of companies?
- Do companies who self-report put themselves at a competitive advantage or disadvantage?
- Is it acceptable that the Policy, and concurrent policies of various types at the state level, shield some information from the public, including potentially serious pollution problems?
- Is the Policy evenly applied in different EPA regions? If not, is that a problem?
- Are the significant reductions in potential fines typically granted by EPA appropriate?
Since EPA hasn't publicly released any recent analyses of these and other important questions, you'll need to do some legwork to get a handle on this program. One starting point is a spreadsheet EPA provided upon request on Aug. 14, 2008, that tallies the 3,779 cases that have been resolved from Jan. 1, 1996 to Sept. 30, 2007.
Though the information on the spreadsheet is limited, you can sort and analyze it by EPA region; percentage of cases that resulted in fines; amount of fines; environmental law violated; use of judicial vs. administrative procedures to resolve cases; and, with a little work, patterns by year.
To get more detail, take information on this spreadsheet, such as the case number or company name, and search for it on EPA's Enforcement and Compliance History Online.
- ECHO (covers FY 2001 to the present); click on "Case report".
There, you can find a substantial amount of useful information on individual cases. For instance, Syngenta Seeds of Minneapolis, MN, was fined $1,517,875 for selling and distributing seed corn that contained an unregistered genetically engineered pesticide (Case No. HQ-2006-5016). Cases like this bring up the point that EPA's Audit Policy requires that candidate cases not involve serious harm. Some critics contend that release of an unapproved genetically engineered pesticide may not meet that requirement.
Another case involved Infineum USA LP, based in Linden, NJ, which manufactured and imported unapproved chemicals (Case No. 02-2006-9126). That case raises questions of the potential health and environmental damage that were caused, and the appropriateness of the agreed-upon fine of $950,000, which was less than half the $2,201,500 initially sought by EPA.
The spreadsheet is most useful at the moment for individual cases. It can't be searched for Audit Policy cases by variables such as county or state, year, or other general factors. However, that shortcoming is expected to be eliminated within a couple of months, according to EPA officials.
Information on the hundreds of cases that are under way may also be available, either by contacting Susan O'Keefe or regional staff at EPA (contact information noted below), or through a FOIA request.
For more background on the Audit Policy:
- Main Web site.
- Details on Audit Policy parameters.
- Annual reports for the overall Enforcement and Compliance program (which include limited information on the Audit Policy).
Sources for stories include the companies involved in specific cases, national and regional business and industry groups, and environmental, health, and community groups that deal with the issues involved in the specific cases. In addition, the Environmental Integrity Project's Eric Schaeffer, 202-296-8800 x1, can provide some insights, since he was involved with the Audit Policy from 1996-2002 while working at EPA.
Within EPA, sources include Audit Policy Self-Disclosure & Regional Contacts.
- EPA Headquarters: Office of Enforcement & Compliance Assurance: Susan O'Keefe, 202-564-4021; Philip Milton, 202-564-5029; Media, Dave Ryan, 202-564-7827.
- Region 1: Joel Blumstein, 617-918-1771.
- Region 2: Diane Fiorito, 212-637-4047.
- Region 3: Samantha Beers, 215-814-2627.
- Region 4: Kelly Sisario, 404-562-9054.
- Region 5: Jodi Swanson-Wilson, 312-886-0879.
- Region 6: Marcia Moncrieffe, 214-665-7343.
- Region 7: Becky Dolph, 913-551-7281.
- Region 8: David Rochlin, 303-312-6892.
- Region 9: Daniel Reich, 415-972-3911.
- Region 10: Mike Bussell, 206-553-4198.
- Links to state environmental agencies (which have variable levels of involvement in the laws related to self-reported violations).