Changes Expected to the USEPA Audit Policy in 2015


Changes Expected to the USEPA Audit Policy in 2015

epa-logo-2x2inWhat does 2015 have in store for self-reporters of environmental violations?  Bloomberg BNA announced on December 11, 2014, the United States Environmental Protection Agency’s (USEPA) enforcement office will provide a proposal in 2015 to update its environmental audit and self-disclosure policy.  This policy, issued in 1995 and revised in 2000, offers regulated entities the opportunity to self report, correct, and prevent environmental violations, with incentives such as waived gravity-based civil penalties.  The agency is considering ways to make the policy “more efficient and more recognizing of today’s electronic tools,” Cynthia Giles, the assistant administrator for the USEPA’s Office of Enforcement and Compliance Assurance, said.

The USEPA’s audit policy, “Incentives for Self-Policing: Discovery, Disclosure, and Prevention of Violations,” was developed to address the scope of “privilege” allowed for voluntary environmental audits and findings and offered incentives to perform audits where the findings were disclosed and promptly corrected.  Benefits include reductions in civil penalties, possible elimination of gravity-based penalties, and possible avoidance of criminal prosecution.

The USEPA announced in 2012 its decision to reduce its investment in the audit policy for fiscal year 2013 because the violations reported were not in “the highest priority enforcement areas for protecting human health and the environment,” according to its national program manager guidance.  More than half of the self-disclosures between FY 1999 and FY 2011 were violations of the Emergency Planning and Community Right-to-Know Act (44 ER 1163, 4/19/13).  In general, industry objected to abandonment of the audit policy, which remains in place while USEPA deliberates on how to update it.  USEPA continues to allow regulated entities the use of USEPA’s audit policy by reporting to named regional USEPA audit policy staff.

According to Giles, the USEPA has received specific feedback that the policy is important for companies during acquisition of a new business because it is a convenient time to evaluate the purchased business’s compliance.  Additionally, businesses emphasized the value of having “some mechanism for there to be accountability at that time.”  “We’ve heard that loud and clear and whatever we come out with is going to reflect that understanding of how important that is and that it’s a top priority for businesses,” Giles said.

Granta Nakayama, a former assistant administrator for the Office of Enforcement and Compliance Assurance and current partner with Kirkland & Ellis LLP, told Bloomberg BNA that the audit policy is a significant tool for businesses that want to “maintain compliance” and acts as a “strong inducement for ‘doing the right thing.’” “The tool also is important for protecting the environment”, Nakayama said.  “I think the regulated community would be delighted for some sort of clarification on the audit policy”.


Do you have clear sense of how the USEPA audit policy can benefit your organization in 2015?  With the continuing development of this policy, this is a challenging endeavor.  Clearly understanding your options is crucial to making the right decisions. The beginning of the New Year is a perfect time to determine how you should proceed, but where do you start?  EHS Support can help.

EHS Support will track the progress of the upcoming proposed audit policy.  In the interim, we can help you interpret the current USEPA audit policy process and identify potential benefits and drawbacks of participation.  Our technical experts can help distinguish and evaluate outside resources to help your organization determine if participation in the USEPA audit policy is a good fit and how to best move forward with self-disclosure. If you are interested in taking advantage of the existing USEPA audit policy or if you would like stay on top of any changes to the policy in 2015, contact Amy Bauer.

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