U.S. EPA'S VOLUNTARY AUDIT POLICY
Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations
On April 11, 2000, EPA issued its final policy on incentives for self-evaluation and self-disclosure of violations. The policy took effect on May 11, 2000 (thirty days after publication in the Federal Register) and refined the March, 1995 Voluntary Environmental Self-Policing and Self-Disclosure Interim Policy Statement, which offered regulated entities compelling new incentives to discover, disclose and correct violations of environmental law.
Under the Audit Policy, the Agency protects public health and the environment by encouraging greater compliance with environmental laws and regulations through self-policing, discovery, disclosure, correction and prevention. In accordance with the Policy, EPA may at least partially mitigate the gravity-based portion of a civil penalty for a regulated entity that meets at least eight of nine conditions as laid out in the Policy (specifically, conditions numbered 2 through 9 in the Policy). Gravity-based penalties are completely mitigated for those facilities that meet all nine conditions.
The Audit Policy applies to violations under all of the environmental laws that EPA administers; also referred to as U.S. EPA's "Self-Disclosure Policy": Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations (4/11/00).
Where violations are found through voluntary environmental audits or efforts that reflect a regulated entity's due diligence (i.e., systematic efforts to prevent, detect and correct violations, as defined in the policy), and all of the policy's conditions are met, EPA will not seek gravity-based penalties and will generally not recommend criminal prosecution against the company if the violation results from the unauthorized criminal conduct of an employee.
Where violations are discovered by means other than environmental audits or due diligence efforts, but are promptly disclosed and expeditiously corrected, EPA will reduce gravity-based penalties by 75% provided that all of the other conditions of the policy are met.
EPA retains its discretion to recover economic benefit gained as a result of noncompliance, so that companies won't be able to obtain an economic advantage over their competitors by delaying their investment in compliance.
The final policy also restates EPA's practice of not routinely requesting environmental audit reports.
Safeguards to Protect the Public
In addition to prompt disclosure and correction, the policy requires companies to prevent recurrence of the violation and to remedy any environmental harm.
Repeated violations or those which may have presented an imminent and substantial endangerment or resulted in serious actual harm are excluded from the policy's coverage.
Corporations remain criminally liable for violations resulting from conscious disregard of their legal duties, and individuals remain liable for criminal wrongdoing.
Public Access to Information
The policy contains two provisions ensuring public access to information. First, EPA may require as a condition of penalty mitigation that a description of the regulated entity's due diligence efforts be made publicly available. And second, where EPA requires that a regulated entity enter into a written agreement, administrative consent order or judicial consent decree to satisfy the policy's conditions, those agreements will be made publicly available.