Thank you to my colleague Bob Melvin for his contributions to the post below. Bob is a partner in the Environmental & Utilities Practice Group whose practice focuses on representing manufacturers with enforcement, compliance, and permitting issues.
Under EPA’s Audit Policy and Small Business Compliance Policy, companies that discover, promptly disclose, and expeditiously correct environmental violations may be entitled to penalty mitigation and other incentives. EPA recently developed a proposed plan for efficient and consistent disclosure of violation discoveries. In the Fall of 2015, the Agency plans to launch its “eDisclosure” portal for the reporting of both Emergency Planning and Community Right-to-Know Act (EPCRA) and non-EPCRA violations under EPA’s Audit Policy. The web-based program would not change any of the Audit Policy criteria, but it would dramatically change the manner in which the Policy is implemented.
To use the eDisclosure portal, a company must register with the system, disclose violations online within 21 days of discovery, and submit an online Compliance Report certifying that it corrected any noncompliance.
The portal will provide for two tiers of disclosures – Tier 1 and Tier 2. Tier 1 disclosures generally include most EPCRA disclosures (not to be confused with tier I and II EPCRA reporting). The online Compliance report must be submitted within 60 days from the date of discovery under the Audit Policy and 90 days from the date of discovery under the Small Business Compliance Policy, with no opportunity for an extension. The system will then automatically generate an electronic Notice of Determination, or “eNOD”, conditionally confirming that the violations are resolved without civil penalties.
Tier 2 disclosures generally include all EPCRA violations not covered by Tier I and all non-EPCRA violations. While the same timelines for submittal of the Compliance Report for Tier 1 disclosures apply to Tier 2 disclosures, there is an opportunity for an extension to those deadlines under Tier 2. The system will automatically issue an Acknowledgement Letter noting EPA’s receipt of a Tier 2 violation. The Acknowledgement Letter will also confirm the Agency’s commitment to determining eligibility for penalty mitigation if and when the Agency considers the matter and decides to take an enforcement action.
EPA’s proposed program seems to be designed to streamline the disclosure process, but companies looking for written resolutions documenting no penalty or enforcement action may be disappointed. In addition, not only is EPA planning to make this web portal the exclusive method for making most Audit Policy disclosures, it also plans to maintain the centralized database out of EPA Headquarters. Information disclosed on the portal is expected to be public and accessible under the Freedom of Information Act.
EPA’s website provides more information on its proposed eDisclosure portal, the process for implementation, and the Audit Policy in general.