The Epa Audit Policy: Incentives For Self-policing

The U.S. Environmental Protection Agency (EPA) Audit Policy provides incentives for regulated entities that voluntarily discover, disclose, and correct violations. The policy is designed to safeguard human health and the environment by providing incentives for regulated entities to come into compliance with the federal environmental laws and regulations rendering formal EPA investigation and enforcement action unnecessary.

Under the policy, gravity-based penalties for violations of EPA-administered statutes are reduced or completely eliminated if the violations are voluntarily discovered, promptly disclosed to EPA, and meet a number of other specified conditions. There are nine specific requirements of the policy.

1. Systematic Discovery: the discovery must be done through an environmental audit or a compliance management system reflecting the company's due diligence in preventing, detecting, and correcting violations.

2. Voluntary Discovery: the discovery must not have been done through a legally mandated monitoring or sampling requirement prescribed by statute, regulation, permit, judicial or administrative order, or consent agreement.

3. Prompt Disclosure: the company must fully disclose the specific violation in writing to EPA within 21 days after the entity discovered that the violation has, or may have, occurred.

4. Discovery and Disclosure Independent of Government or Third Party Plaintiff: the company must discover and disclose the potential violation to EPA prior to: (a) the commencement of a federal, state or local agency inspection or investigation, or the issuance by such agency of an information request to the company; (b) notice of a citizen suit; (c) the filing of a complaint by a third party; (d) the reporting of the violation to EPA or other government agency by a "whistleblower" employee; or (e) imminent discovery of the violation by a regulatory agency.

5. Correction and Remediation: the company must correct the violation within 60 days from the date of discovery, certify as such in writing, and take appropriate measures as determined by EPA to remedy any environmental or human harm due to the violation.

6. Prevent Recurrence: the company must agree in writing to take steps to prevent a recurrence of the violation.

7. No Repeat Violations: the specific violation or a closely related violation cannot have occurred previously within the past three years at the same facility, or within the past five years as part of a pattern at multiple facilities owned or operated by the same entity.

8. Other Violations Excluded: the violation cannot be one that (a) resulted in serious actual harm, or may have presented an imminent and substantial endangerment, to human health or the environment, or (b) violates the specific terms of any judicial or administrative order, or consent agreement.

9. Cooperation: the company must cooperate with EPA and provide such information as is necessary and requested by EPA to determine applicability of the Policy

Even if a company fails to meet the first condition, it can still be eligible for 75% penalty mitigation and for no recommendation for criminal violations if it meets the remainder of the conditions.

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