Environmental Audits Don’t Have to be Scary Business

PPM Consultants routinely receives calls from small to medium size industries inquiring the need for an environmental compliance audit.  Environmental audits can come in many shapes and forms but the topic of discussion here is an industrial facility with internal suspicion from management or from the environmental department that “something is missing and we need to make sure we get this right”.  On occasion, PPM gets these calls from environmental lawyers because their industrial client is so concerned with their compliance status that they want the work conducted under privilege.  This isn’t a bad idea because the audit may reveal some downright terrifying news regarding what has been missed.  However, as one prominent Birmingham environmental lawyer recently told me, “if they are out of compliance – they need to make it right regardless of privilege status”.

More often than not compliance with environmental regulations is not missed because they are trying to “skate by” the requirements, but more likely due to lack of knowledge.  The “environmental supervisor” for a small to medium industry may wear multiple operational hats, so the focus on regulatory requirements is less intense.  In contrast, larger industries have more sophisticated environmental departments, consultants, peers, and involvement in trade associations where information flows more readily to them.  You’ve heard the old saying by many “ignorance is bliss”?   Unfortunately, ignorance is not above the law.

An audit may reveal something as minimal (take that with a grain of salt!) as a missed water permit noncompliance notification, but what happens when you find out you have multiple toxic release inventory reportable constituents that you‘ve never reported because you never conducted a threshold calculation?  What if your facility should have had an emission inventory long ago and you are in danger of gross violations of the Clean Air Act?  You get the idea.  These are the kind of situations that get company owners and executives involved in “situational meetings”.  No fun.

A few weeks back (May 15, 2018), EPA announced a renewed emphasis on self-disclosed violation policies as part of its implementation of Goal 3 of EPA’s FY 2018-20122 Strategic Plan.  The strategic plan gives a much broader view of the new administrations renewed emphasis on “compliance assistance” instead of “enforcement”.  Industries are enjoying this much needed relief!  EPA plans to enhance and promote: a) its already successful online “eDisclosure” program; b) the additional flexibility to new owners who self-disclose violations; and c) opportunities to increase compliance through use of existing self-disclosure policies or tailored programs.

Regarding eDisclosure – it is already very successful and self-disclosure is soaring as indicated by the ~75% increase from 2015 to 2018 (projected) in annual self-disclosures  which is shown in the graph below:

Additionally, EPA is reminding the regulated community that EPA’s self-disclosure policies:

  • eliminate 100% of the gravity-based civil penalty that otherwise might apply if all policy conditions are met;
  • allow EPA to waive the economic benefit penalty component where EPA deems it insignificant (they have pursued recovery of this in less than 1% of the 10,500 disclosures)
  • do not require advance notice to EPA of an audit
  • do not impose time limits on audit completion
  • do not require an affirmative admission that a violation has occurred (stating that violations “may have” occurred is sufficient)
  • provide entities with clarity by defining an objective time period for disclosing violations; and
  • provide entities with clarity by defining allowable violation correction time periods.

The clarifications are intended to dispel some common misconceptions that may unnecessarily discourage even greater use of EPA’s self-disclosure policies.

While these new policies, clarifications and shift in EPA emphasis’ are encouraging, there are many things to consider (pros and cons) with this program.  PPM Consultants, Inc. can assist in determining a facility’s compliance status and identify an appropriate course of action through an environmental compliance audit.  Don’t hesitate to call us today and develop a strategy for your environmental audit.

Contributed by Zane Hood, P.E., Principal and Senior Engineer