Compliance Incentives Programs
EPA promotes compliance with environmental laws and regulations through its use of compliance incentives with the regulated community. EPA's Audit Policy, Small Business Policy, and Small Local Government Compliance Assistance Policy and the incentive programs developed in association with them are designed to reduce or eliminate penalties under certain conditions for those entities that voluntarily discover, promptly disclose, and correct and prevent the recurrence of environmental violations.
In addition to the penalty waivers and reductions granted under EPA's enforcement response and incentive policies, EPA grants penalty waivers and reductions under the Compliance Incentive Program (CIP) initiatives. These programs invite companies or industrial sectors to disclose and correct violations in exchange for reduced or waived penalties, while increasing the risk of enforcement for those not taking advantage of this opportunity.
There is also a specialized type of (CIP), commonly called a Compliance Audit Program (CAP), which offers a capped penalty or a specified maximum penalty for violations. This is a reduced amount below the normal penalty assessment.
Typically, Compliance Incentive Programs proceed as follows:
- EPA notifies a group within the regulated community that they are, or may be subject to specific environmental requirements;
- The notified companies are given an opportunity to disclose and correct violations, subject to a widely publicized and meaningful deadline;
- Participants that disclose violations within the deadline and commit to return to compliance receive a waived or greatly reduced penalty -- in CAP initiatives, the penalty limits are advertised in advance so participants know what the "capped" penalty, if any, will be; and
- EPA also made widely known that companies that do not take advantage of this limited time offer face a greater risk of future inspections.
Some examples of completed or, ongoing programs where the final dates for auditing disclosures have past, include the following:
- Telecommunications Industry Compliance Incentive Program
- Bakery Partnership Compliance Incentive Program (CAP Program)
- National Iron and Steel "Minimill" Compliance Incentive Program
- National Nitrate Compliance Initiative Program
- Industrial Organic Chemicals Compliance Incentive Program
- Pork Producers Compliance Incentive Program (CAP Program)
EPA will be developing other similar programs as a need arises in the various enforcement areas. The need for such programs will be based on the finding of abnormally high rates of noncompliance in industrial sectors or industrial groups that may present an endangerment to public health or the environment.