Managing Compliance in an Era of Shifting EPA Priorities
To highlight this fact, one can look to the January 22, 2018 interim guidance from the Assistant Administrator for the Office of Enforcement and Compliance Assurance ("OECA") of the EPA that was sent to each of the Regional Administrators of EPA. The intent of the memorandum was clear: Regions should focus on enhanced involvement by the states in enforcement matters. Perhaps that is why the guidance was developed, in part, out of a set of priorities identified by a working group involving the EPA and the Environmental Council of the States (ECOS). Among other things, the guidance highlighted a number of key issues relevant to audits and enforcement:
Periodic meetings are to be held between EPA and state management, with various issues to be discussed, including enforcement and audit priorities, and areas of focus.
The EPA should defer to authorized states as the primary day-to-day implementer of their delegated programs, except in specific situations.
Given that EPA's involvement in enforcement matter should be limited, it provided a series of examples where EPA involvement would be warranted, such as: where program audits require EPA involvement to fill a gap in a state program deficiency; where emergency situations are present; where EPA specialized equipment or expertise is required; where state or federal facilities may be the subject of inspection; the actions being taken are to address possible widespread compliance issues across an industry or State borders; program oversight inspections; in response to a State request; and, where criminal enforcement is being considered.
In a circumstance in which non-compliance is identified at a facility, the EPA should defer to a request by the state to take the lead, unless certain circumstances are present.
OCEA is requiring each region to complete a progress report to EPA by September 28, 2018, as a means of assessing each region's success in meeting the goals of the interim guidance. As you might assume, regions are keenly focused on this issue at the moment.
So this all begs the question – is my facility less likely to be audited? Broadly speaking, probably not.
In the short term, it is much less likely that a federal environmental regulator will knock on their door than in prior years. However, that does not mean that facilities should necessarily lull themselves into a false sense of comfort. Remember, states still retain day-to-day audit and enforcement oversight of delegated programs, and generally speaking, they are taking that duty seriously in the face of more limited federal involvement. Furthermore, the EPA is not completely out of the audit game. They still retain authority for non-delegable programs (i.e. Spill Prevention Control and Countermeasure Plan compliance), and they are still responding to further requests from involvement from state and local governments, and independent third-parties. In fact, in some industries, outside stakeholder groups may have even more influence than existed in the past ("red" or "blue" state distinction does not matter in the regard). This means facilities must remain vigilant, or risk being held liable for facility shortcomings, including financial penalty, which is increasingly becoming more important to states' bottom lines.
For that reason, it is imperative for facility and corporate management to understand how to appropriately address and mitigate the environmental risks attendant to their business operations. As part of this calculus, it behooves each EHS&S professional to more completely understand how to manage the audit and inspection process with governmental regulators in order to limit exposure, and more broadly understand the personal civil and criminal risk that can be attributed to both businesses and individuals, alike.
There are many actions that can be taken to mitigate risk in this context. One of the most important, and perhaps simplest practices to put into place, is a detailed policy to address governmental audits and inspections. Without a proper plan in place, a facility is more vulnerable, with an increased risk for civil and criminal sanction. In today's corporate environment, robust compliance programs are a key area of focus, especially given the Department of Justice's focus on individual responsibility. In order to ensure that the existing program is addressing everything it should, there needs to be significant thought put into the various areas of risk upfront. In the end, doing so will protect the business, and the individuals' in-charge of managing those functions, to the greatest extent possible.
To learn more tips about understanding the framework of potential civil and criminal risk attributable to each facility and EHS&S professional, tips for mitigating risk, more generally, and establishing a robust facility and corporate policy for addressing governmental interactions, join Michael J. Hecker and Timothy W. Hoover, partners of the law firm Hodgson Russ LLP on August 23, 2018 for the NAEM webinar "Defining and Mitigating Personal Risk as an EHS&S Professional."
About the Author
Hodgson Russ LLP
Timothy Hoover is a partner with Hodgson Russ LLP. He is a white collar defense attorney with extensive trial, appellate, and grand jury experience in federal and state courts. He represents corporate and individual clients in white-collar criminal cases, complex fraud cases, tax cases, environmental cases, and joint defense matters at the federal, state, and local levels. Deeply versed in all aspects of federal criminal practice, he also has extensive experience leading internal investigations.
Hodgson Russ LLP
Michael Hecker is a partner with Hodgson Russ LLP. He has a broad-based environmental and energy-related practice, with a focus on transactional matters, regulatory compliance counseling and permitting, administrative, civil, and criminal environmental defense, and remediation-based project oversight and assistance. A large part of Michael’s practice focuses on assisting regional, national, and international clients with regulatory compliance matters.