Electronic System for Voluntary Disclosure of Violations of Federal Environmental Requirements
By: Rory Carlisle
EPA's eDisclosure on-line system for voluntarily reporting civil violations of environmental laws and regulations is up and running. EPA announced its new system in a Federal Register notice late in 2015 (80 Fed. Reg. 76476). eDisclosure streamlines implementation of EPA's policies that reward voluntary reporting of civil environmental violations by forgiving or reducing civil penalties. The policies under which voluntary disclosures are made through eDisclosure are "Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations," (the Audit Policy) and the Small Business Compliance Policy. New owners of businesses may take advantage of certain protections under the "Interim Approach to Applying the Audit Policy to New Owners,"(New Owners Policy) when they disclose violations caused by predecessors in the business, but the EPA notice requires that they make paper filings of their disclosures rather than using eDisclosure. Those making disclosures that involve trade secrets and confidential business information must also make paper filings to assert that the information is entitled to confidential treatment under EPA's regulations. Potential criminal violations continue to be handled by the Voluntary Disclosure Board.
The notice states that under the Freedom of Information Act (FOIA) EPA will release files for resolved violations that are voluntarily disclosed through the new system, and "will determine on a case-by-case basis whether it reasonably foresees that release [of unresolved disclosures] would harm an interest protected by a FOIA exemption." EPA also stated in the notice its presumption in favor of releasing information on unresolved voluntary disclosures.
Certain conditions must be met under the Audit Policy and the Small Business Compliance Policy if the benefits of those policies are to be obtained. Under both policies, discovery of the violation must be voluntary, disclosure must be made within a specified time from discovery (usually 21 days), the violation must be corrected within a specified time, and recurrence must be guarded against. Each policy imposes additional specific conditions. If all conditions of the applicable policy are met, reductions in civil penalties of as much as 100% are available.
eDisclosure requires registration with EPA's Central Data Exchange (CDX), completion of the online form, and certification of compliance within 60 days of the disclosure, or, in the case of Small Business Compliance Policy disclosure, within 90 days. Failure to certify compliance within the applicable time frame disqualifies the discloser from penalty forgiveness and may result in enforcement action by EPA.
EPA's treatment of disclosures differs based on the classification of the violation. Category 1 Disclosures are those involving violations of the Emergency Planning and Community Right-to-Know Act (EPCRA) that meet all Audit Policy or Small Business Compliance Policy conditions and do not relate to chemical release reporting. Category 2 Disclosures consist of all non-EPCRA violations, EPCRA violations for which all conditions of the Audit Policy or Small Business Compliance Policy cannot be certified, and chemical release reporting violations. For Category 1 Disclosures, EPA will automatically issue a conditional confirmation of resolution of the violation without penalty, subject to the disclosure's accuracy and completeness if it is evaluated by EPA as it spot-checks disclosures. EPA individually evaluates each Category 2 Disclosure and screens each for criminal conduct and potential imminent hazards. With both types of disclosures, if EPA determines that conditions under the applicable policy are not met, EPA may bring an enforcement action.
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Wendy Wilkie Parker
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