In the U.S., permitted polluters must self-monitor pollution control performance and report self-monitoring results as required by their permits. [For more information on this, see the case study on “Self-Monitoring Required by U.S. Environmental Laws” following Guideline 41(a)
(iii).] In contrast, “environmental self-auditing” is voluntary in the United States: there is no legal requirement for companies to conduct comprehensive self-audits or to develop environmental management systems.
The U.S. Environmental Protection Agency (USEPA) welcomes the activities of the International Organization for Standardization (ISO), which encourage voluntary environmental self-audits or environmental management systems (EMS). However, because the ISO 14000 program (see case study) does not address compliance per se, it does not fulfill EPA legal requirements. Instead, EPA by law and policy has incorporated environmental auditing into the enforcement process, in two ways. First, self-monitoring, record keeping, and reporting requirements are commonly found in EPA laws and permits, and it is a violation to fail or falsify in fulfilling these legal requirements.
Second, a violator’s voluntary agreement to do an environmental audit may be the basis for a substantial reduction in the punitive portion of its USEPA administrative or civil monetary penalty assessment (see the case study on “Setting Appropriate Administrative and Civil Monetary Penalties in the United States” following Guideline 40(c)). USEPA invites violators to “voluntarily” conduct an audit, rather like a voluntary Supplemental Environmental Project that the government will reward in the same way. The penalty reductions (incentives) are greatest for small business and for local governments. Because of USEPA’s reputation for tough enforcement, voluntary self-auditing has increased significantly. (While the cost of the audit is credited to reduce the penalty, the cost of correcting or achieving compliance based upon the audit’s findings – which by law must be done anyway – is not so credited.)
Third, where USEPA has not identified a violation, USEPA’s audit policy encourages companies themselves to discover their violations and disclose them to USEPA. This must be done using an audit programme that is resourced, systematic, prompt, and independent. When a company agrees to correct and remediate harm, prevent recurrence, make information publicly available, and cooperate with regulators, USEPA usually does not impose a penalty. USEPA reserves to the Government the right to protect the public health and the environment in cases of serious violations, and USEPA does not excuse violations that are repeated, imminent, cause substantial endangerment or serious actual harm, criminal conduct, or yield substantial wrongful economic benefit from noncompliance. There is no total amnesty. Many enterprises have qualified for these incentives, to the benefit of themselves and the environment.
Criminal penalties, like administrative and civil monetary penalties, may also be reduced to encourage and reward environmental auditing. An offender may receive a reduced sentence where it had in effect a good-faith environmental auditing or compliance program. Similarly, an offender can expect some leniency when, reasonably promptly after becoming aware of the crime, the offender reports it to government authorities, cooperates, and accepts responsibility. At sentencing, leniency may be shown to the offender who agrees to reform and begins an effective environmental auditing program to prevent and detect future violations.
According to its audit policy, USEPA will not initiate criminal cases against companies that voluntarily and promptly disclose and correct violations and meet the specific conditions of the audit policy. But where an enterprise or its employees ignores an audit report of violations, is willfully blind to violations, or conceals or condones continuing non-compliance, any audit report may become strong evidence of guilt (the so-called “smoking gun”). Under these circumstances, the audit report may be seized and used by the government as evidence of knowledge of violations, intent to continue to violate, and thus actual criminal behavior of the most serious kind.For more information, see http://www.epa.gov/compliance/
resources/policies/incentives/index.html, http://www.epa.gov/
ebtpages/compcompliaudit.html, and http://cfpub1.epa.gov/compliance/
resources/publications/incentives/ems/