What is an environmental compliance audit? Why do one?
An environmental compliance audit is a comprehensive, systematic, documented evaluation that is designed to find and fix environmental violations for companies, local governments and individuals. It includes not only a compliance review, but regular reporting requirements and schedules for correcting problem areas discovered during the audit. Many include a review of pollution prevention opportunities.
Audits are typically done by attorneys, consultants or company staff who review individual facility or company-wide operations. As defined in the policy, the audits must conform to EPA's definition of environmental audit.
Well managed companies and local governments and individuals with environmental responsibilities conduct these environmental "checkups" regularly to keep them in compliance with environmental laws and regulations. They do it because it is the right thing to do, and it saves them compliance costs down the road.
Are other systematic self-evaluations encouraged by the policy?
In addition to environmental compliance audits, the DEP policy encourages the establishment of a Compliance Management System (CMS). Violations which are voluntarily discovered and disclosed following a self-assessment conducted pursuant to a CMS are included within the scope of the policy.
You find it, you fix it, you tell DEP--no penalty.
If a company, local government or individual completes a compliance audit or other self-assessment, discloses the problems uncovered by the self-assessment to DEP and takes action or sets a schedule to correct or eliminate a violation it discovers, DEP, in return, will not assess a civil penalty or suspend or revoke a permit or pursue civil or criminal sanctions for that violation.
The policy does not cover incidents that are committed intentionally or knowingly, where significant environmental or health affect occurred, where repeated violations reveal a pattern of noncompliance and where action is not taken promptly to correct the violation.
If a company, local government or individual does not conduct a compliance audit or other self-assessment and DEP finds the violation, there is no protection from fines or penalties.
The policy does not provide protection from citizen lawsuits or actions by a district attorney.
Why is a special policy needed to encourage compliance audits and other self-assessments?
Many companies, local governments and individuals are now afraid to do environmental audits and other self-assessments conducted under a CMS for fear that information they put down on paper will be used by state and federal agencies to impose fines and penalties on them for not meeting environmental requirements. This fear acts as a real barrier to encouraging self-assessments and voluntary compliance.
DEP wants to encourage actions which give companies, local governments and individuals incentives to find and fix compliance problems on their own. Removing the barrier of uncertainty to conducting compliance audits and other systematic self-assessments will result in more critical self-evaluations on a continuous bases and better environmental compliance.
EPA and 14 states, including: Arkansas, Colorado, Idaho, Illinois, Indiana, Kansas, Kentucky, Minnesota, Mississippi, Oregon, Texas, Utah, Virginia and Wyoming, have adopted legislation or policies to encourage environmental audit programs and limit penalties associated with violations discovered as a result of those audits.
Why does DEP want to encourage compliance audits and other self-assessments?
Environmental protection programs should be structured to provide a variety of incentives for regulated groups to comply. Routine monitoring of environmental performance is one of the best ways to help assure compliance. Water monitoring results are now, for example, self-reported to DEP.
While DEP inspections provide some level of monitoring, in the end a good compliance record comes from voluntary efforts which provide a level of scrutiny which government inspections cannot. Providing incentives for such efforts will enhance compliance and benefit the environment.
A carefully written policy to encourage voluntary environmental "checkups" will take what is now a routine compliance tool for some and turn it into tool used by everyone.
All DEP gives up is money under this program--not compliance or environmental improvement--since that would occur in any event whether the person voluntarily reported a compliance problem under the policy or DEP found it.
Can companies keep violations secret?
No. The DEP policy requires disclosure of the violation uncovered by the audit. It does not provide a special privilege for withholding information in an audit. The information which is disclosed to the Department will be maintained in the Department's files and will be available to the public as a public record upon request of an interested person.
Doesn't this policy make it easy for companies, local governments and individuals to avoid penalties for all types of violations?
No. The policy does not cover violations that were committed intentionally or knowingly, where significant environmental harm or health affect occurred, where repeated violations reveal a pattern of noncompliance and where action is not taken promptly to correct the violation. The audit does not cover incidents where DEP has already found a violation.
Will the policy allow repeat offenders to avoid penalties?
No. The policy does not apply to situations where the same violations are repeated or where there is a pattern of noncompliance. The fact that problems uncovered by the audit will be disclosed to DEP and the public, along with the steps being taken by the company, local government or individual to correct those violations means we can more easily track compliance.
Will the policy allow penalties to be waived for incidents that significantly harm the environment?
No. The policy does not apply to incidents that result in significant environmental harm or health effects.
Won't a policy like this reward companies for doing what they are required to do anyway?
No. There is no law that requires companies to do a compliance audit or establish a CMS. While well managed companies, local governments and individuals with environmental responsibilities have used audits and CMS's to improve their compliance, they are not required to do it.
Is legislation needed to implement this policy?
No. However, DEP believes a statute is needed to authorize a more complete policy.
Senate Bill 1295 introduced by Sen. David J. Brightbill (R-Lebanon) and others offers one approach to encouraging environmental audits.
Is the DEP Policy consistent with the policy adopted by EPA?
On December 18, 1995 EPA announced a revised policy on voluntary environmental self-policing and self-disclosure that puts in final form an interim policy it proposed in March (April 3 FR 16875). The major provisions of the final policy include--
Substantial reduction in civil penalties for voluntary disclosure and prompt correction of violations, except in cases involving serious harm to public health or the environment;
EPA will not recommend criminal cases be brought against entities that voluntarily disclose violations and correct them promptly.
EPA will collect penalties for any economic gain resulting form the violations; and
EPA will not use voluntary audits to trigger investigations.
EPA will retain the authority to recover any economic benefit derived from a violation.
DEP's final policy is similar to EPA's policy, however, EPA's final policy is narrower in scope than the DEP policy because it does not address other enforcement actions such as permit suspensions or revocation or compliance history reviews. DEP's policy does.
How was the public involved in development of the policy?
On January 31, 1996 the Department announced the availability of the proposed policy and solicited public input. A notice was published in the Pennsylvania Bulletin on February 10, 1996 which identified March 11, 1996 as the end of the comment period. The comment period was extended to March 29, 1996 to provide additional time for public comments.
In response to the Department's notices, the Department received over 200 requests for copies of the proposed policy. During the public comment period the Department received comments from 59 individuals and groups. Since the close of the public comment period the Department has received numerous additional public comments which are similar to the comments earlier received.
What provisions are there for small business?
The Department recognizes the need to provide assistance for small businesses, and the policy contains special requirements for small businesses. The term environmental compliance audit includes procedures approved by the Department for small businesses. The Department has recently approved an Environmental Self-Evaluation for Small Business - A Practical Guide to Environmental Compliance as procedures meeting the definition of an environmental compliance audit. This document is available at DEP Regional Offices.
What are the major changes from the proposed policy?
Both environmental groups and businesses requested that the Department revise its policy to retain the authority to recover any economic benefit derived from violations. The final policy does expressly retain the authority to recover any economic benefit derived from any violations of environmental requirements.
Retaining any authority to recover economic benefit allows the Department to eliminate any competitive advantage which a person may have derived from a violation over competitors which complied with applicable environmental requirements. Several companies expressed support for retaining the authority to recover any economic benefit to ensure a level playing field.
The final policy also incorporates a provision from EPA's policy which says violations which were voluntarily discovered are eligible for coverage even if there is a mandatory reporting or disclosure requirement.
For more information on the proposed DEP Voluntary Environmental Compliance Audit Policy:
Write: Voluntary Environmental Audit Policy
Department of Environmental Protection
P.O. Box 8464
Harrisburg, PA 17105-8464
Phone: 717-787-7060
Fax: 717-783-8926
E-Mail: Mather.Richard@dep.state.pa.us
World Wide Web: http://www.dep.state.pa.us
(choose Public Participation Center/Proposals Open for Public
Comment)
Prepared: September 25, 1996