EPA Encourages Self-Disclosure of Environmental Violations
Richard DiMambro • June 18, 2018
EPA recently announced a renewed effort to educate the regulated community to the benefits of self-audits and voluntary disclosure of environmental violations.
As more and more companies take their corporate social, environmental, and economic responsibilities seriously they find themselves looking inward at their operations and practices, and carefully evaluating their environmental, health and safety (EHS) audit compliance programs, to the extent they may exist. Such self-auditing is widely regarded as beneficial to the owners as well as employees and neighbors.
Before undertaking a compliance audit, however, a company must consider the consequences of identifying a non-compliance issue. What would the company do if a non-compliance issue is identified? Is management prepared to correct non-compliance? To enforcement authorities, having no knowledge of your non-compliance prior to an agency inspection is…well…bad. But having awareness of a non-compliance issue and taking no action to correct is worse. The EPA has long encouraged firms to undertake voluntary audits, disclose violations, and work with the agency, or a corresponding state agency, to resolve the violation. EPA created a web-based reporting portal, “eDisclosure,” in 2015, to simplify and expedite the process. Independent consultants, such as the partners at Integrity Environmental Strategies, can provide su=ignificant support by designing effective programs, performing audits, carefully crafting findings for potential disclosure, and preparing corrective action programs.
On May 15, 2018 the EPA announced its renewed emphasis on self-disclosed violations [i] , taking specific steps to enhance and promote: “(a) its already highly successful online ‘eDisclosure’ program; (b) the additional flexibility available to new owners who self-disclose violations; and (c) opportunities to increase compliance through use of existing self-disclosure policies or tailored audit programs.”
The emphasis takes the shape of several actions:
- Renewed efforts to communicate positive features of self-disclosure, including the elimination of penalties and leniency in collecting economic fees
- Expend outreach and education efforts on a policy that allows new company owners to disclose violations identified during or after the transaction
- Development of a business-sector specific program allowing oil and gas companies the opportunity to conduct audits as new owners of facilities that may have air emissions associated with tank battery vapor control systems
Many state environmental agencies have picked up on this and have implemented similar policies.
Nevertheless, this renewed emphasis does not change the care that must be exercised by companies implementing audit programs. The audit program must ensure that nine conditions set by the EPA are met to be eligible for audit policy benefits:
- Systematic discovery
, the violation must be identified through of the violation through an environmental audit or the implementation of a compliance management system
- Voluntary discovery
, the violation cannot be detected as a result of a legally required monitoring, sampling, or auditing procedure
- Prompt disclosure
, the violation must be reported, in writing, to the EPA within 21 days of discovery or such shorter time as may be required by law. Discovery occurs when any officer, director, employee or agent of the facility has an objectively reasonable basis for believing that a violation has or may have occurred
- Independent discovery and disclosure
, the non-compliance must be disclosed before the EPA or another regulator would likely have identified the violation through its own investigation or based on information provided by a third- party
- Correction and remediation
must be completed within 60 calendar days from the date of discovery
- Prevent recurrence
, the company must take steps to ensure the violation will not happen again
- Repeat violations are ineligible
, violations occurring at the same facility within the past 3 years or those that have occurred as part of a pattern at multiple facilities owned or operated by the same entity within the past 5 years are not eligible
- Certain types of violations are ineligible
, violations resulting in serious actual harm, presenting an imminent and substantial endangerment, or violating the specific terms of an administrative or judicial order or consent agreement are ineligible
- Cooperation
, the disclosing entity is expected to fully cooperate with the agency in resolving the noncompliance and preventing recurrence.
Measurable benefits have been observed at firms that report under the audit privilege. Toffel and Short [ii] , reviewing empirical data, reported that firms that voluntarily disclosed regulatory violations of the Clean Air Act and committed to self-policing, improved their regulatory compliance and environmental performance. The firms had fewer violations and fewer accidental releases of toxic chemicals than a corresponding group of non-disclosers.
An experienced audit team, such as the consultants at Integrity Environmental Strategies, must not only have skills needed to identify non-compliance issues, but, in consultation with management and legal advisors, quickly determine whether to disclose the violation and the information needed for disclosure. Then, if disclosed, a corrective action plan must be expedited so the facility can return to compliance within the prescribed 60-day period.
[i] https://www.epa.gov/sites/production/files/2018-05/documents/refreshannouncementfordisclosures.pdf , EPA Announces Renewed Emphasis on Self-Disclosed Violation Policies
[ii] Toffel and Short. 2011. Coming Clean and Cleaning Up: Does Voluntary Self-Reporting Indicate Effective Self- Policing? Journal of Law & Economics 54(3): 609-64, at 611.
The Environmental Protection Agency released a draft multi-sector general permit for Stormwater Discharges associated with industrial activity (MSGP). The proposed permit, issued under the Clean Water Act of 1972 ( 33 U.S.C. §1251 et seq.) National Pollutant Discharge Elimination System (NPDES) will replace the existing MSGP that expires on June 4, 2020. The renewed permit affects facilities in states and areas where the EPA is the NPDES permitting authority (Idaho, Massachusetts, New Hampshire, New Mexico, tribal lands, Puerto Rico, the District of Columbia, and most U.S. territories and protectorates). For those state agencies that have been delegated the authority to issue NPDES permits, the renewed permit will be used as a template that delineates the stormwater management practices and monitoring standards for thousands of industrial facilities. Brief History The first use of this Multi-Sector General Permit (MSGP) for managing industrial stormwater began in 1995, with renewals required every five years. EPA used the novel approach of issuing a blanket permit in an attempt to balance protection of the environment and provisions of the Clean Water Act without the burden of issuing thousands of individual permits to each industrial site. The provisions of permit are organized by industrial sector, broken down by the facility’s standard Industrial code (SIC). Incorporating the Recommendations of the National Academies of Sciences The draft permit incorporates many of the recommendations made by the National Academies of Sciences, Engineering, and Medicine (NASEM) . (See our previous blog on the report). The NASEM report calls for the EPA to utilize the best available science, relevant recent data, and technological advances to improve management of storm water from industrial sources. In addition to clarifications, simplifications, and streamlining to accommodate more electronic information submittals, the EPA reviewed and accepted many of the recommendations made by NSEM: EPA will establish “universal benchmark monitoring,” industry-wide monitoring parameters that include pH, total suspended solids (TSS), and chemical oxygen demand (COD). The NASEM report suggests these as “basic indicators of the effectiveness of stormwater control measures (SCMs) employed on site” for permit holders. These parameters would indicate potential issues of poor site management or improper implementation of SCM’s. EPA considered the NASEM recommendation to “periodically review and update sector-specific benchmark monitoring requirements” to incorporate new information that could also reflect industry sector-wide practices. The proposed permit requires that additional sectors conduct benchmark monitoring. NASEM recommended benchmark thresholds based on the latest toxicity criteria designed to protect aquatic ecosystems. EPA modified the benchmark threshold for cadmium, removed the thresholds for magnesium and iron, and is considering modification of benchmark thresholds for selenium, arsenic, and copper. (The EPA is seeking comments on modifications to selenium, arsenic, and copper thresholds.) NASEM recommended that the EPA allow and promote the use of composite sampling. The permit clarifies that composite sampling is acceptable for benchmark monitoring. NASEM recommended removing the waiver for a permittee to discontinue monitoring for the remainder of the permit term if four consecutive quarters of sampling data show parameters below the benchmark. The permit now requires quarterly sampling throughout the permit term. Benchmark monitoring will now be required for three additional sectors recommended by NASEM: Oil and Gas Extraction sector for ammonia, nickel, total recoverable lead, nitrate-nitrogen, total recoverable zinc, and hardness in addition to the universal benchmark parameters. Land Transportation and Warehousing sector for lead, mercury, and hardness in addition to the universal benchmark parameters. Ship and Boat Building and Repair Yards for total recoverable chromium, total recoverable copper, total recoverable lead, total recoverable nickel, total recoverable zinc, and hardness in addition to the universal benchmark parameters. EPA is also soliciting comments on whether to allow for a tiered monitoring scheme that includes an “inspection only” option for “low risk” facilities. Benchmark monitoring would not be required but EPA is considering a rigorous inspection protocol. The NASEM report made some substantive recommendations that the EPA decided not to accept: EPA declined to accept the NASEM recommendation to include nonindustrial facilities with activities similar to those currently required under the MSGP after reviewing the sectors already covered by the permit and by the discretion granted to the Director to add any facility discharging industrial stormwater. The EPA declined to implement the recommendation to collect monitoring data and establish new numerical effluent limitations on the performance of stormwater control measures, citing the paucity of rigorous industrial performance data and technical limitations. However, EPA requests comments on viable alternative approaches for characterizing discharges, quantifying pollutant concentrations, and assessing the effectiveness of stormwater control measures. The EPA reviewed its existing guidance on how to conduct visual and analytical monitoring and determined that updating and strengthening monitoring, sampling, and analysis protocols, as recommended by NASEM, was not necessary. Next Steps The draft permit was published in the Federal Register on March 2, 2020 Comments will be accepted until May 1, 2020. The EPA will consider the comments, make changes to the final permit, and are expected to issue the final permit shortly after. We can expect that the states using the federal permit as a template will be making modifications to the state counterparts as the permits come up for renewal.
The National Academies of Sciences, Engineering, and Medicine (NASEM) released a prepublication version of a report that reviews and makes recommendations for the next generation multi-sector general permit for Industrial Stormwater Discharges (NASEM, 2019, Improving the EPA Multi-Sector General Permit for Industrial Stormwater Discharges, Washington, DC, The National Academies Press, https://doi.org/10.17226/25355 ). The multisector permit, issued under the Clean Water Act of 1972 ( 33 U.S.C. §1251 et seq.) National Pollutant Discharge Elimination System (NPDES), forms the basis for stormwater management practices and monitoring at thousands of industrial facilities. A previous National Research Council report, Urban Stormwater Management in the United States (2009) found the industrial stormwater program suffering from “poor accountability and uncertain effectiveness at improving the quality of the nation’s waters” and recommended updating monitoring requirements and using more technologically advanced sampling protocols. A recent settlement agreement with EPA, industries, and environmental groups over the MSGP included a provision for NASEM to revisit the industrial stormwater program. Thus, this report is intended to be used by the EPA to when it proposes revisions in 2020, when the current permit term expires. The first use of this Multi-Sector General Permit (MSGP) for managing industrial stormwater through began in 1995, with renewals every five years. This approach to issuing a blanket permit is the EPA’s attempt to balance protection of the environment and provisions of the Clean Water Act without the burden of issuing thousands of individual permits to each industry site. The general permits are sector-specific and issued to industries at the state and federal level. The current MSGP for industrial stormwater covers, according to the report, more than 2,000 facilities nationwide. For states that manage their own NPDES discharge permit programs, the federal multisector permit sets the minimum requirements and serves as a template for many state agencies to implement their own versions. Some of the significant recommendations to the EPA may be of interest to permit holders: Establish industry-wide monitoring for pH, total suspended solids (TSS), and chemical oxygen demand (COD), “as basic indicators of the effectiveness of stormwater control measures (SCMs) employed on site” for all permit holders. These parameters would indicate potential issues of poor site management or improper implementation of SCM’s. Additional parameters would be added on a sector by sector basis. Implement a process to “periodically review and update sector-specific benchmark monitoring requirements” to incorporate new information that could also reflect industry sector-wide practices. While periodic reviews could result in additional sampling parameters, changes in industry practice, such as eliminating certain chemicals and processes, could reduce the sampling burden over time. Update the MSGP industrial-sector classifications to include nonindustrial facilities with activities similar to those currently required under the MSGP, such as school bus transportation facilities, fuel storage, and fueling facilities. Include the latest toxicity criteria protective of aquatic ecosystems. Collect monitoring data on the performance of SCMs to confirm their actual ability to attain the promised reduction in pollutants, and periodically review and revise them. Update and strengthen monitoring, sampling, and analysis protocols, including the potential addition of a training and certification program to ensure consistent, reliable quality of monitoring data. Allow and promote the use of composite sampling. This could significantly improve the monitoring of discharge events through the use of remote, automated composite sampling devices. Precipitation events can occur at any time and are not always easily predictable. Composite sampling techniques and more sophisticated equipment are available to not only provide more consistent and reliable data but have the advantage of being available during an entire stormwater discharge event. It is not difficult to envision a composite sampler with a controller connected wirelessly to meteorological instruments and flow monitors to select the time to begin interval sampling and notify the owner that the samples can be recovered. Remove the waiver for a permittee to discontinue monitoring for the remainder of the permit term if four consecutive quarters of sampling data show parameters below the benchmark. NASEM, instead, recommends shifting to annual sampling to ensure “appropriate stormwater management throughout the remainder of the permit term,” noting that given the “natural variability and the limitations of grab samples, substantial uncertainty is associated with using the average of only four stormwater samples” to waive monitoring for the remainder of the permit term. The EPA has not provided any indication as to which of these recommendations, if any, may be incorporated into the 2020 renewal. The settlement agreement with EPA, industries, and environmental groups requires the EPA to consider the recommendations within the report; however, the NASEM did not conduct any analysis of costs and benefits, which will likely affect the EPA’s analysis The draft permit is supposed to be available in November 2019. We'll provide updates as more information becomes available.
A periodic visit to the EPA list of states and territories that have adopted the hazardous waste generator improvement ruls.
The Environmental Protection Agency (EPA) continues to track the states aopting the hazardous waste generator improvement rule, which is a collection of new and revised regulations that can have an impact on the waste management activities of thousands of small quantity generators of hazardous waste. Over 60 changes and technical corrections are intended to improve clarity and provide flexibility ( https://www.epa.gov/hwgenerators/fact-sheet-about-hazardous-waste-generator-improvements-final-rule ). The rule is now effective in Alabama, Alaska, American Samoa, Colorado, Florida, Georgia, Hawaii, Idaho, Iowa, Kentucky, Mississippi, New Jersey, North Carolina, Northern Mariana Islands, Oklahoma, Pennsylvania, Puerto Rico, Utah, the Virgin Islands, Virginia, and West Virginia ( http://www.retailcrc.org/Pages/State-Tracking-Matrix.aspx ). The deadline for states to have hazardous waste regulatory programs that incorporate the more stringent aspects of the federal rule was July 1, 2018. If the state regulatory process requires changes to legislation, the deadline is July 1, 2019. Meanwhile, enforcement of hazardous waste management regulations continues, with Whole Foods among the latest retail organizations running afoul of state enforcement authorities. Progressive Grocer ( https://progressivegrocer.com ) reports that Whole Foods paid a fine of $1.6 million for failure to properly dispose of hazardous materials in California. For additional information on the status of the regulations and other information on environmental compliance at retailers, check out the Center for Retail Compliance ( www.retailcrc.org ). Integrity Environmental Strategies offers services to hazardous waste generators in multiple business sectors. Contact us for assistance in developing sound environmental management programs that can address hazardous and solid waste management, as well as other environmental, health, and safety compliance concerns.
In February 2016 the U.S. Environmental Protection Agency (EPA) reached a settlement with several environmental groups (Environmental Justice Health Alliance for Chemical Policy Reform, People Concerned about Chemical Safety; and the Natural Resources Defense Council), agreeing to begin a rulemaking process to propose spill prevention rules that would cover over 350 hazardous substances (HS) under the Clean Water Act (CWA). The existing spill prevention, control and countermeasures (SPCC) requirements would be extended to include thousands of additional facilities or require existing facilities to rewrite SPCC plans to include the additional chemicals. Current SPCC regulations apply only to oil and petroleum storage (40 CFR 112). Regulations for the additional hazardous materials were expected to be finalized on a somewhat expedited schedule, in 2019. An Abrupt Change in Practice In October 2017 EPA Administrator Scott Pruitt issued a directive ordering the EPA to end "Sue & Settle" practices, stating that “The days of regulation through litigation are over.” Many “Sue & Settle” cases establish EPA obligations “without participation by states and/or the regulated community; foreclose meaningful public participation in rulemaking; effectively force the Agency to reach certain regulatory outcomes; and, cost the American taxpayer millions of dollars.” The SPCC settlement, negotiated by the previous administration, arguably can be regarded as an example of “Sue & Settle,” given the limited number of stakeholders involved in the agreement. However, at least one environmental advocacy group, Clean Water Action , points out that the authority and obligation to promulgate regulations can be found in the original language of the 1972 legislation. EPA Invites Comments on the Need for Expanded Spill Regulations On June 25, 2018, the EPA announced that “Based on an analysis of the frequency and impacts of reported CWA HS discharges and the existing framework of EPA regulatory requirements, the Agency is not proposing additional regulatory requirements at this time. This proposed action is intended to comply with the Consent Decree and to provide an opportunity for public notice and comment on EPA’s proposed approach to satisfy the CWA requirements.” (83 Federal Register 122, p 29499) While the EPA recognizes that the CWA included the promulgation of regulations “establishing procedures, methods, and equipment to prevent discharges of oil and hazardous substances from vessels and from onshore facilities and offshore facilities,” the agency determined that existing regulatory programs, such as wastewater and storm water discharge permit programs, hazardous waste management under the Resource Conservation and Recovery Act (RCRA), the Clean Air Act Risk Management Program (RMP), and others, provide an adequate framework to prevent CWA HS discharges. Comments are due to the EPA by August 24, 2018. While no regulatory action is planned by the EPA, the analysis shows a complex tangle of federal and state requirements applicable to facilities that handle and store hazardous substances. Now would be a good time to carefully review your facility’s plans and procedures for addressing releases of hazardous materials. If you have concerns about your company’s hazardous materials storage and handling plans, contact Integrity Environmental Strategies for a brief review and discussion of actions you may need to make.
States continue to adopt “Hazardous Waste Generator Improvement Rule” that became effective at the federal level on May 30, 2017.
A blog post dedicated to practical aspects of environmental, health, and safety compliance topics, selected and edited by Integrity Environmental Strategies partners.