United States
            Environmental Protection
            Agency
Office of the Administrator
(1801)
EPA100-R-99-006
July 1999
www.epa.gov/reinvent
v>EPA      Aiming for Excellence
                    Actions
         to  Encouraae
 Environmental  Progress
                          Accelerate

                     Report of the EPA Innovations Task Force
  ) Printed on paper that contains at least 30 percent postconsumer fiber.

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Contents
                2
Reinvention at EPA
                28
                                                         Introduction
                               7
              Our Commitments
                                    24
                       Ensuring Success
   Appendices
   28 Reinvention Accomplishments
   38 Comments Received by the Innovations Task Force
   44 Key Actions

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 Aiming for  Excellence
  Actions to Encourage Stewardship
and Accelerate Environmental Progress
     Report of the EPA Innovations Task Force

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                           Reinvention  at  EPA
              after                          , Vice President Gore took charge of anew
National Partnership for Reinventing Government to radically change the way our government per-
forms. The challenge given to all agencies was to be more efficient, less bureaucratic, and to provide
better service to the American people. At the U.S. Environmental Protection Agency (EPA), that chal-
lenge led us to rethink how we go about achieving environmental and public health protection goals.
In March 1995, we launched a small set of high-priority projects that quickly evolved into a broader
reinvention  agenda for the Agency.  Today, we have numerous reinvention efforts under way. Many
focus on improving well-established programs, such as permitting and compliance assurance. The
emphasis is on streamlining regulatory processes and introducing innovations that can make these
programs more efficient and effective. Others focus on finding fundamentally new approaches for
the future. Our reinvention initiatives are designed to address environmental problems that have yet
to be solved through the current system.
We'd like to tell you about all of our reinvention efforts, but for this brief overview, we'll focus on a
few programs we think are especially significant. For starters, we've slashed obsolete or unnecessary
requirements-representing nearly 27 million hours of paperwork a year-without sacrificing protec-

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                                  "Our reinvention initiatives are designed to
tion capabilities. We've dra-
                .    ...            address environmental  problems that have
matically increased  public
access to environmental infer-        yet to  be solved through the current system."
mation,  enabling citizens to go
online and find out  about environmental conditions and issues that affect their community. We're
providing flexibility to meet new pollution reduction targets in cost-effective ways, using emissions
averaging, trading,  and  other alternative compliance options. We're collaborating with others to
make environmental progress; a recent agreement we helped negotiate between the automobile
industry, state governments, and other stakeholders, which should reduce emissions from new cars by
70 percent, is just one example. We've launched special programs, such as the Common Sense
Initiative and Project XL (which stands for excellence and leadership), to test innovative environmental
management strategies that work more effectively for businesses, their customers, and the people
who  live and work around them. We're involving stakeholders earlier in the rulemaking  process and
we're developing new compliance assistance tools to help people understand environmental require-
ments and comply more easily.
Recent actions within the Agency prepare us to do more. We're in the midst of setting up a new
office to significantly improve the way we collect, manage, and report environmental data. We're
applying what we've learned from  working with industry to improve the effectiveness of EPA pro-
grams and policies. And through agreements that clarify how we will work together to foster  innova-
tion and increase environmental results, we're building stronger relationships with state governments.
If you'd like to learn more about any of these efforts, we invite you to look at EPA's 1 998 annual
report on reinvention.  Or take a look at the annual report highlights, presented in Appendix 1.  These
materials provide helpful background for the report that follows on the additional reinvention actions
we will carry out in the next 1 2 to 18 months as our ongoing reinvention efforts proceed.

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Introduction

                                          While we're proud of the
                                          progress we've made through reinvention efforts,
                                          we're also interested in additional ideas about
                                          ways to accomplish even more. So we decided
                                          to talk with the people who know environmental
                                          issues the best-business and community repre-
                                          sentatives, state government and EPA staff-
                                          people who have important suggestions for
                                          actions and solutions. We received a great
                                          response to this outreach. (See Appendix 2 for
                                          more details about stakeholder comments).
                                          Comments, reactions, and suggestions came in
                                          by the hundreds. Some were  specific, others
                                          more general. But two themes emerged:

                                          •  EPA needs to do more to help organizations
                                            comply with the law.
                                          •  EPA needs to encourage those who are will-
                                            ing and able to do more.

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These themes underscore how far we've come
and how far we still have to go in learning to pro-
tect the environment. Here in the United States,
we still have tremendous variability in how well
businesses and other organizations manage their
environmental responsibilities. It's helpful to think
of this variability as a bell curve along a perform-
ance spectrum. At one end, we have companies
acting as environmental leaders, adding business
value and gaining competitive advantages along
the way; they are setting standards of excellence
that will define future business practices for them-
selves and their peers. In the middle, we have the
"main streamers"-businesses, industries, and
other regulated parties that typically meet require-
ments, but do little else. And then there are those
that have been left behind, who  do not meet the
most basic environmental standards.

As we consider this, we see evi-
dence of environmental achieve-
ments. Yes, we have made a
great deal of progress over the
past 3 decades, and yes, we have
companies setting high standards
for others to follow. But overall,
we still can do better. And we
must if we are to successfully
address unsolved problems such
as global warming and the envi-
ronmental consequences of popu-
           "We believe a system that
           promotes stewardship, in
           addition to compliance with
           environmental requirements,
           has the greatest potential  for
           advancing  environmental
           management capabilities  and
           solving  environmental
           problems."
                                                          E
                                                         <
Environmental Performance Among Regulated Facilities

        Laggards
     (compliance problems^
Mainstreamers
  Top-Performers
(exceeds requirements)

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lation growth and economic expansion.
Stakeholders reminded us of what might be
accomplished if we could improve capabilities
across the board, shifting the curve toward better
performance. Clearly,  such action could help us
achieve significant, long-lasting environmental
results on a  much wider scale.

With this in mind, we believe a system that pro-
motes stewardship, in  addition to compliance
with environmental requirements, has the great-
est potential for advancing environmental  man-
agement capabilities and solving environmental
problems. For us, the goal is not just compli-
ance, but getting more of our society to achieve
environmental excellence.
This vision calls for an ethic of environmental stew-
ardship, where everyone takes more responsibility
to reduce adverse impacts upon the world in
which they live. It applies to the environmental
engineer in charge at the local manufacturing
plant. It also applies to the local officials faced
with community development and transportation
issues, and the millions of private citizens who
make lifestyle choices each and every day.

We realize that no one has to do more than just
comply with environmental requirements. But
with a growing number of environmental leaders
in the public and private sectors practicing envi-
ronmental stewardship, we hope more organiza-
tions and the people who run them will begin to
see its advantages. We also realize we can't
expect more without doing more ourselves.
That's why we're committed to using our
resources  to provide businesses and communi-
ties with the additional help they need to comply
and to create new incentives and tools to
encourage them to achieve even more.

We know we cannot just talk about such  a vision
-we must take steps to make it happen. As the
next section describes, that's exactly what we
intend to do.

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                                            Our  Commitments
              a  SyStem where everyone
takes more responsibility for protecting the envi-
ronment is going to require some changes. In
thinking about the future, we believe what we
need most is a system with more incentives,
rewards, and assistance. We should recognize
and provide meaningful rewards to those who
are already environmental leaders, using their
bench-marking practices to guide others; we
should give assistance and  incentives to the
"main streamers" to  help them not only comply,
but take extra steps  to do more; and we must
use all available means to bring those with poor
environmental track records up to speed.

These changes won't be  made overnight, but we
can take action to make them a reality in the fore-
seeable future. We believe we can help accelerate
environmental progress most effectively if we:

v\ V


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•  Use incentives and promote environmental
   management systems (EMSs).

•  Provide timely and accessible compliance
   assistance.

•  Create flexible and streamlined permitting.

•  Help communities make sound environmental
   decisions.

The following sections highlight where we are in
each of these areas, why more needs to be done,
and what we'll  do in the next 1 2 to 18 months to
make further headway. Appendix 3 provides more
specific details  about these commitments. The
steps EPA will take to achieve success-including
working with our state and tribal partners and
promoting innovations within the Agency's cul-
ture-are outlined in the last section of this report.
Our
      Commitment:

Use  Incentives  and Promote
Environmental  Management
Systems

Getting more of our society to continuously
improve environmental performance will require
new ways of thinking and new ways of doing busi-
ness. Clearly, one way is  by providing special
assistance to help organizations comply with the
law. The compliance assistance program we talk
about in the next section  will do that. But what can
we do to encourage organizations to pursue more
ambitious improvements? As a first step, we will:

•  Use incentives to encourage actions beyond
   what is required.
•  Promote use of EMSs  that can help organiza-
   tions incorporate environmental issues into
   their business operations.
•  Develop a "performance track" that rewards
   environmental leaders.
The first step-using incentives-will provide dis-
tinct advantages to motivate organizations to go
the extra mile. The second-promoting EMS use
-will help organizations make better business
decisions by taking environmental issues  more

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fully into account. The third-developing a per-
formance track-will enable us to recognize and
reward those who excel environmentally.

We believe that by using these new approaches,
we can help organizations see the value and
strategic advantages in improving environmental
performance and lead them to increase their
environmental  commitments. We can also help
these relatively new environmental management
concepts evolve. By giving them more promi-
nence in our programs and policies, we have an
opportunity to  help develop their full potential
for increasing environmental results.

Using Incentives More Widely

We believe meaningful incentives can be a pow-
erful force for achieving environmental results.
Providing incentives to "main streamers" encour-
ages them to become  leaders. Providing incen-
tives to top performers encourages them to
continue improving  and create cutting-edge,
efficient practices that  can be adopted  by others.
Over time,  the cumulative effect should be a
safer, cleaner environment.

Incentives are already at work. EPA has them in
several voluntary partnership  programs  and in
regulatory programs. (See Box 1:  Incentives Used
by EPA). We've also used incentives in our com-
pliance assurance program. EPA has waived or
reduced penalties for companies that voluntarily
audit, disclose, and correct environmental viola-
tions and that take action to prevent future ones.
Many states also are experimenting with incen-
tives for stewardship; some have established
"ladders" that recognize and reward different lev-
els of performance. These experiments will give
us useful information about what works and help
us use incentives more widely to achieve environ-
mental goals.

We've already learned that different kinds of
incentives and assistance are necessary. We
know that what works for one business sector
might not work for another.  Likewise, companies
within the same industry might have different
environmental management capabilities and lev-
els of performance. The challenge is finding the
right kinds of incentives to motivate different
types of organizations to improve their  perform-
ance and get better results.
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Incentives Used by EPA
Box 1
Some examples that we use in our voluntary partnership programs

  What is the program?         It gives. . .

                              Public recognition.


                              Software and technical assistance.
                              Information about alternative
                              products and processes.
Some examples that we use in our regulatory programs

 What is the program?           It gives...                       If organizations,

                              Reduced reporting.
                              Flexible permits, such as pre-
                              approvals for certain operational
                              changes.

                              Option to sell SC>2 credits.

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There are different opinions about what can be
used to motivate performance:

•  A recent industry-sponsored report identified
   many incentives that could improve environ-
   mental results, including streamlined permit
   procedures, consolidated and streamlined
   reporting, and tax breaks for investing in
   advanced technologies.
•  Based on results from the Toxic Release
   Inventory, many see benefit from making
   more information about the environmental
   performance of individual companies  publicly
   available.
•  As Box 1  showed, our own experiments have
   offered public recognition, technical assis-
   tance, regulatory flexibility, and market-based
   trading options.
It will take time to find out which  incentives are
most effective. To find our way, we'll work with
all interested parties-Congress, state and tribal
governments, industry, environmental groups,
communities-to identify and develop incentives
that work. We'll make incentives a more routine
part of our regulatory and voluntary programs.

Promoting the Use of Environmental
Management Systems

We believe incentives will motivate organizations
to comply and even improve their environmental
performance. But we also think companies
Use incentives and voluntary partnerships more widely to
                                  encourage better environmental performance.

       We will work with all interested parties to identify, test, and evaluate incentives that can be
       used to encourage better environmental performance by a wide range of businesses and
       other organizations. We'll also use voluntary partnership approaches to help address
       unsolved environmental problems and/or unique challenges facing communities or specific
       business sectors.

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should take action on their own. One way to do
this is by making environmental responsibilities
part of "business as usual." Today, more and
more businesses and other organizations are
doing just that by using EMSs. Like other evolv-
ing tools, such as lifecycle management and full
cost accounting, EMSs help integrate environ-
mental issues into business decisions and prac-
tices. Basically, they provide a framework for
managing environmental responsibilities in a
more systematic way. We want to encourage the
use of EMSs that improve compliance and other
measures of environmental performance.

So far, the business community has led the way
in developing EMSs-at both the corporate and
plant level.  Some EMSs have been developed
for specific  business sectors, such as  metal fin-
ishing and printing. EMSs have great potential
for helping  small businesses, in particular,
improve environmental performance because
they offer a type of operational template that
can be easily modified and adopted. Based on
their potential for helping organizations gain a
better awareness of how environmental responsi-
bilities fit into their overall operations, EPA has
been requiring companies with compliance
problems to develop EMSs when we settle
enforcement cases.

Stakeholders told us the Agency needs to contin-
ue to  champion EMSs by working with industry,
the environmental  community, and others to sup-
port their use. We've already started working
with states to evaluate how well EMSs actually
improve environmental performance. This evalu-
ation will provide "lessons learned" and will help
us move from experimenting with EMSs to
understanding how they can complement envi-
ronmental programs and  policies.
Promote the use of environmental management systems.
       We will encourage organizations to use EMSs that improve compliance, pollution prevention,
       and other measures of environmental performance. We'll continue evaluation efforts to learn
       more about which EMS elements and applications are most effective, and we'll determine
       how these systems might be used to strengthen environmental programs and policies.

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Developing a "Performance Track" for
Environmental Leaders
We've already talked about using incentives to
promote environmental improvements. But what
about companies that already excel? We believe
we should find a way to encourage leaders to
continue striving for improvement. Environmental
leaders help advance state-of-the-art practices
that ultimately bring progress.

How can  we do this? Several national policy
reports have recommended that EPA develop an
"alternative track" or "performance track" to
encourage companies to use innovative environ-
mental performance strategies.4 Definitions of a
"performance track" vary; they generally refer to
allowing top-performers more flexibility in how
they meet regulatory requirements if they do
more to protect the environment and assure
accountability. Doing more could  mean using an
EMS that  improves compliance, pollution pre-
vention, and other measures of environmental
performance; involving the community in deci-
sion-making; and reporting to the public about
their environmental performance.

EMSs have the potential to form the foundation
of a performance track. A company's environ-
mental performance could  be  demonstrated
through an EMS that measures progress toward
specific environmental goals. Currently, EMSs
used in the private sector, including ISO 14001
"The challenges we face as a
growing,  dynamic society
demand that we go beyond mere
compliance in the future."
         - Jack Barkenbus, Executive Director,

                     University of Tennessee
                                                E
                                                <

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(an internationally recognized EMS standard)       formance, which could potentially include self-
measure how well an organization meets its own    auditing and third party certification.
self-defined environmental goals.  These goals
alone will not be sufficient.  To create a perform-    The concept of a performance track is still rela-
ance track that is fair and publicly supported, we    lively new. Up to this point,  most experimenta-
need goals that are broadly understood and       tion has been limited to certain industry sectors
applied. And we need mechanisms to verify per-    or companies. Recently EPA and the states
EPA  and the  States Test  Leadership Approaches                 BOX2

At EPA, we've created several innovative programs that experiment with ways to provide incentives
and reward leadership in environmental protection:

•  Project XL is testing innovative approaches that offer companies flexibility in how they meet envi-
   ronmental requirements if they can  produce results that are better than what would otherwise be
   expected.
•  Under the Environmental Leadership Program, facilities that demonstrated strong environmental
   performance were given rewards, such as public recognition through certificates and logo usage
   and a reduction in discretionary inspections.
Several states also have created programs that provide incentives and reward leadership:

•  Colorado has created a voluntary environmental leadership program that offers financial incen-
   tives to companies that prevent pollution, reduce toxic use, improve energy efficiency, and per-
   form other environmentally beneficial activities.
•  Wisconsin is starting a program that will allow select businesses to experiment with regulatory
   innovations that remove administrative burdens, clear the way for better environmental perform-
   ance, preserve environmental and public health protections, and provide for public accountability.
•  Oregon has launched the EMS Incentives Program, which includes four tiers with increasing
   rewards for facilities meeting increasingly higher standards of environmental performance.

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Develop a  "performance track" to motivate
                                 and reward top environmental performance.

       We will work with states, tribes, industry, and environmental and other interest groups to
       define  what it means to be a top environmental performer and to identify appropriate
       building blocks for a new "performance track" that enhances the current regulatory system.
began experimenting with different programs to
give incentives to environmental leaders [See
Box 2. EPA and the States Test Leadership
Approaches]. We want to continue to learn
more about this type of approach,  and will work
with states, tribes and other stakeholders to cre-
ate a system that makes it worth an organiza-
tion's time and effort to go the extra mile.

Our
      Commitment:

Provide Timely  and  Accessible
Compliance  Assistance

While we will focus on rewarding those who do
more than what is required,  making sure that
businesses and other organizations comply with
the law will continue to be one of our most
important responsibilities. In the past, EPA and
state governments have relied on a strong
enforcement program to do this. We'll continue
using this effective tool, but we must look for new
and creative ways to help regulated parties
achieve compliance and improve performance
capabilities.

For some, the failure to comply comes down to
a simple lack of understanding  about what's
required. We need to do a better job of provid-
ing information in timely, helpful ways so people
can fulfill  their environmental responsibilities.

In  recent years, we've developed new ways to
improve our compliance assistance efforts by
setting up compliance assistance centers on the
Internet that provide certain sectors with quick,
easy access to the latest regulatory requirements
and pollution prevention information; developing
compliance assistance tools, such as plain

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language compliance guides, training modules,
and compliance checklists; and launching
national and regional compliance campaigns for
priority industry sectors. Now we intend to do
more by:

•  Becoming a more  effective "wholesaler" of
   compliance assistance information.
•  Providing compliance assistance tools in a
   more timely manner.
•  Using compliance  assistance in strategic
   combination with  enforcement, monitoring,
   and incentives to achieve environmental
   results.
Becoming a More Effective "Wholesaler"
of Compliance Assistance Information

The stakeholders who work directly with busi-
nesses and other regulated parties to improve
environmental performance told us how they
think we could most effectively assist with com-
pliance:  by supplying compliance assistance
tools and information. In other words, they
thought we should develop materials,  but rely on
an extensive network of environmental assistance
providers in the public and private sector to
actually deliver them. We agree, and believe this
is a sound way for us to leverage our compli-
ance resources.
                 Support a network of public and private organizations that
provide assistance on  environmental compliance.

       We will focus on becoming a "wholesaler" of compliance assistance tools and information.
       We'll meet with compliance assistance providers to share our approach for developing mate-
       rials that help businesses and communities comply with the law and prevent pollution, and
       we'll ask them to help  us set priorities to determine which materials are needed most. We'll
       provide these materials, and help them  develop training and peer mentoring programs.

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Providing Compliance Assistance Tools in
a More Timely Manner

The stakeholders we talked to consistently sug-
gested that we begin thinking about compliance
assistance at the start of the rulemaking process.
We need to do more than issue sound regula-
tions to address today's problems; we need to
give people the tools, assistance,  and resources
they need to comply with those requirements
before those rules take effect.
"EPA needs to support and
provide resources to the state
and local networks that are in
place to deliver these services
rather than creating new
networks."
        - Lynda Wiese, Director, Bureau of
      Cooperative Environmental Assistance,
  Wisconsin Department of Natural Resources
Deliver compliance assistance  information  for new,
               "economically significant" rules when and where it's needed 5

       We will provide compliance assistance information typically within 90 days of issuing these
       rules so it is available before new requirements take effect. We will continue to make general
       assistance widely available through the Internet, toll-free telephone lines, and other distribu-
       tion channels. We'll also evaluate the need for additional compliance assistance centers as
       we maintain support for existing ones.

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"Compliance assistance often
plays a critical role in
improving the overall environ-
mental  performance of
regulated entities, especially
smaller businesses."
      - Keith Holman, Chief Regulatory
         Counsel on Environmental and
                  Regulatory Affairs,
          U.S. Chamber of Commerce
Using Compliance Assistance in Strategic
Combination With Enforcement,
Monitoring, and Incentives to Achieve
Environmental Results

Compliance assistance is one of several
avenues that can  lead to compliance and better
environmental performance. Incentives, public
reporting on performance, and enforcement are
a few others. Before we decide on a course of
action to address a particular problem, our
stakeholders recommended that we  consider the
options for getting the desired result and then
determine how they might be combined or
sequenced for greatest strategic advantage.

This approach would allow EPA and states and
tribal governments to target limited  resources
more effectively. When a new rule takes effect
for a certain small business sector, for example,
the most effective course of action might very
well be an intensive campaign of compliance
assistance and a later date when monitoring
would begin to assure performance. In the case
of a larger, more  mature industry, there might be
less need for compliance assistance, and  more
opportunity for incentives that produce environ-
mental, economic, and social benefits. Clearly,
different problems require different solutions. We
should become more flexible and responsive at
using the tools we have to improve  compliance
problems.

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Combine compliance assistance, incentives, monitoring,
               and enforcement in  order to implement environmental laws
                        in a more strategic manner.

      To make better use of limited resources, we will design new strategies that incorporate a
      range of options to address major compliance problems.
Our
     Commitment:

Create  Flexible and
Streamlined  Permitting

When our stakeholders told us we need to help
businesses and communities comply, we thought
about ways to change the permitting system.
After all, by specifying levels of environmental
performance that must be met, permits are one
of the primary ways we assure compliance with
environmental laws. And they are where most
people first encounter the regulatory process.

Through the combined efforts of environmental
regulatory agencies, businesses, environmental-
ists, and the general public, we've created a
permit system that has dramatically improved
environmental conditions in the United States.
"In an industry where being quick
to market with a new product is a
requirement for financial success,
delays from frequent permit
revisions are a huge concern..."

    -Tim Mohin, Vice President, Environmental,
                      Health, and Safety,
                       Intel Corporation

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                                       Box 3

Examples  of Pilot  Programs
to Test Innovative
Approaches  to  Permitting

Through a variety of pilot projects, we have tested
new permitting approaches that give companies
and communities  greater flexibility if they agree to
take additional steps for preventing pollution and
protecting public health and the environment.
•  In the Common Sense Initiative, which
   focused on creating a better environmental
   protection system for specific industry sectors,
   we looked for  ways to avoid unnecessary bur-
   den. Because of CSI recommendations, each
   of the major permitting programs has been
   working to eliminate excessive backlogs of
   permit reviews and approvals and to imple-
   ment regulatory changes to streamline permit-
   ting procedures.
•  Through Project XL and the Pollution
   Prevention Permitting  Program, we've tested
   facilitywide permits that use an overall "cap"
   on air emissions as an alternative to permit-
   ting each individual new emissions source.
Now we're working with states-who issue the
majority of permits today-to make this system
more effective at meeting environmental goals
without creating unnecessary social and eco-
nomic burdens. Box 3: Examples of Pilot
Programs To Test Innovative Approaches to
Permitting shows some of the pilot projects
we've used to test new permitting approaches.
Earlier this year, EPA announced "The Next
Generation  in Permitting," an effort to move
permitting toward measuring performance while
providing regulated parties more flexibility in
how standards are met. This and other permit-
ting reform efforts show we're committed to
strengthening the role of the public in important
decisions, focusing on results instead of proce-
dures, and reducing unnecessary burden.
To accelerate progress, we'll proceed with some
additional improvements within the two permit
programs that affect the largest number of facili-
ties: the NPDES (waste-water discharge) pro-
gram under the Clean Water Act, and the New
Source Review and Title V Operating Permit
programs under the Clean Air Act.
We want to  continue to find ways to make  per-
mitting easier on businesses and communities,
while also making permits more effective for
protecting public health and the environment.
With these efforts, we hope  to reduce the unnec-
essary delays and administrative burdens permits
have often created in the past.

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                                Develop  more flexible air permitting policies
                       for protecting the environment.

      Based on our experiences in pilot projects, we will identify those approaches that increase
      permitting flexibility while providing equal or better levels of environmental and public health
      protection, provide incentives for pollution prevention, and ensure public participation in per-
      mitting decisions.
Speed  up the review and issuance of NPDES
                                (water discharge) permits.

      We will streamline NPDES permitting by providing training to improve understanding of the
      NPDES permitting process, and by encouraging applicants to submit draft permit limits or
      conditions that can expedite regulatory review and approval. We will also encourage more
      public involvement in permitting actions.
Our
     Commitment:
Help Communities Make
Sound Environmental
Decisions
Along with encouraging better performance
among regulated parties, we must do more to
support environmental management and
problem-solving at the community level. EPA,
States, and Tribes need to help communities find
solutions that take local social, economic, and
environmental conditions into account, and that
maintain the same level of protection provided
under national standards.

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                                   Box 4
Some of  EPA's
Community-Based
Projects
  The Brownfields Initiative helps communi-
   ties clean up and restore abandoned
   industrial properties, bringing them back
   into productive use.
  The National  Estuary Program provides
   financial and technical support to help
   coastal communities protect their water-
   sheds and estuaries.
  Sustainable development challenge
   grants offer seed money to help commu-
   nities leverage additional resources for
   sustainable development activities with
   environmental, economic, and social
   benefits.
  New monitoring and reporting projects
   give citizens in 68 urban areas more timely
   information about the quality of local
   beaches, outdoor air, and other environ-
   mental conditions.
At EPA, we've already started to help communi-
ties help themselves. We've created tools to sup-
port environmental decision-making and
established programs that enable communities
to address problems such as abandoned waste
sites, loss of wetlands,  and poor air quality.
Some of our successful partnering efforts with
communities are shown in Box 4: Some of EPA's
Community-Based Projects.

These partnering activities show the many roles
EPA plays in working with communities. In the
majority of communities, our role is to provide
the tools and information resources that build
local capacity for tackling environmental prob-
lems. In many cases, we are just one of many
partners involved in a local effort. Sometimes,
we play a stronger role, getting directly involved
with the local stakeholders.

We want to continue to offer communities the help
they need to find practical, workable solutions to
their unique challenges and assure environmental
justice for their citizens.  This will include offering

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tools that help them have open, constructive dia-
logues among citizen groups, industry representa-
tives, and other stakeholders. And it will include
tools that enable them to see the environmental
consequences of planning and development deci-
sions before those decisions are made.
Build leadership capacity in communities to  participate in
                                           local environmental  problem-solving.

       We will help communities make decisions about issues that improve public health and their
       local environment by developing new environmental  management tools, offering technical
       assistance, and providing facilitation support for dialogue on environmental  issues. We'll
       also include community representatives in Agency decisions about programs or policies that
       directly affect them.
                          Provide "smart growth" support to state, tribes, and
communities to help them find local solutions to livability issues.

       Because community development patterns have a great impact on environmental conditions
       and overall quality of life, we will support and encourage smart growth decisions by individu-
       als; communities; businesses; and state, tribal, and local governments.

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Ensuring  Success
                                               HGH that we've outlined in this report
                                        will take work but we are committed to doing
                                        everything we can to ensure its success. The actions
                                        we've committed to take will be launched through
                                        our national and regional planning processes, so
                                        we need to work closely with our state and  tribal
                                        partners and with staff throughout EPA who man-
                                        age environmental programs.


                                        Working With Our State and Tribal Partners

                                        Today, more than 70 percent of environmental pro-
                                        grams that can be delegated are being run at the
                                        state level. Like EPA, states and tribes have  shown
                                        commitment to finding  innovative strategies to cut
                                        Busts and improve environmental results. As
                                        described earlier in this report, innovations  are
                                        under way to improve permitting, to provide recog-
                                        nition for those who deserve it, and to streamline

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unnecessary requirements. We know any
progress we make toward our vision of environ-
mental excellence will depend on good  commu-
nication and a close working partnership with
our fellow innovators. We will:
•  Consult and coordinate with states and tribes
   through associations, especially the
   Environmental Council of the States (ECOS),
   EPA's Tribal Operations Council, and through
   contact with states and tribes individually.
•  Rely on well-established planning processes,
   such as those conducted under the National
   Environmental Performance Partnerships
   System (NEPPS) and annual or biennial plan-
   ning cycles for environmental programs.
•  Create additional communication forums so
   that states and tribes are fully informed and
   involved with our reinvention efforts.
•  Seek out states and tribes that have pio-
   neered innovative projects to learn from
   and build on their experiences.

Making Changes Within EPA

Within EPA, we need to make changes to ensure
all the actions in this report happen. We will:

•  Continue to encourage an organizational cul-
   ture that promotes innovation and learning.
Continue to Encourage an Innovative
Organizational Culture

Like many organizations, EPA has focused on
improving its effectiveness through steps that
influence organizational culture. Given our mis-
sion, we're striving  for an organizational culture
that promotes creativity, fosters learning, encour-
ages testing and adoption  of innovative
approaches, works in partnership with others,
expands public  involvement in environmental
decision-making, and supports efforts of busi-
nesses and others to protect the environment.

EPA's organizational culture has already evolved
significantly over the last few years. As evidenced
by the  numerous initiatives and achievements
discussed in  EPA's 1998 annual reinvention
report, our staff has shown a commitment to
creating an environmental  protection system that
works better  for everyone. As many of our col-
leagues in the public and private sector already
know, however,  changing organizational culture
is a continuous  and challenging task.

To realize our own  ideals about what our Agency
can and should be, and to support implementa-
tion of the actions in this report, we will:

•  Create new budgetary mechanisms for mak-
   ing  resources available to innovators within
   the  Agency.
  Be accountable for producing results.

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•  Identify and act upon our own  internal rules
   or practices that promote or inhibit innova-
   tion and learning.
•  Reward employees who make significant
   achievements that demonstrate innovation
   and creativity.
•  Provide career development opportunities,
   including training and exchange programs with
   outside organizations, that allow people to gain
   new skills and bring new insights to their jobs.
•  Develop guidelines for evaluating how well
   innovative approaches work so we have  an
   objective way to identify lessons learned  and
   determine the most appropriate next steps.
•  Bring together EPA front line staff to share
   experiences and information about innovative
   approaches and to develop new approaches
   to improve environmental  programs.

Be Accountable for Producing Results

In Appendix 3, you'll find our plans for imple-
menting each of the report's key actions. For
each action, we've identified a  lead office and
specific steps to measure progress. In order for
these commitments to have an  impact and pro-
duce results, we need to be accountable for per-
formance.  We will take several  steps to do this.

•  The Office of Policy and Reinvention will track
   how well we follow through  on specific tasks,
   and report quarterly on progress to the
   Deputy  Administrator and to the Reinvention
   Action Council (comprised of the Agency's
   most senior career staff from Headquarter's
   programs and EPA regional  offices).
•  The Reinvention Action  Council will  identify
   and resolve any implementation problems.
•  We will assign personnel critical to complete
   each task and support  them with resources
   and training. They will  be held accountable
   for  making progress in  their  projects.
•  We will post our progress on EPA's reinven-
   tion Web site at  and in
   the Agency's annual reinvention report.
1U.S. EPA. 1999. Reinventing Environmental Protection. U.S. Environmental Protection Agency. EPA100-R-99-002. March. Available at
.
2At the request of Administrator Browner, EPA created a task force in January 1 999 to work with stakeholders on identifying next steps for
reinvention activities.
3Global Environmental Management Initiative. 1999. Environmental Improvement through Business Incentives.
4See, for example: The Aspen Institute. 1996.  The Alternative Path: A Cleaner, Cheaper Way to Protect and Enhance the Environment.
Series on the Environment in the 21st Century.
5Under the Congressional Review Act, "economically significant" rules are generally those expected to have an impact of $100 mil lion or more.

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"We believe a system that promotes
stewardship,  in addition to compliance
with environmental requirements, has
the greatest potential for advancing
environmental management capabilities
and solving environmental problems."

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          Appendix 1
Reinvention  Accomplishments
3
 s                            taken from the Agency's report,  Reinventing
 1                            Environmental Protection: 1998 Annual Report,
 UJ
 "-                            1998 marked another year of steady progress in the U.S. Environmental Protection
 •|                            Agency's (EPA's) efforts to reinvent environmental programs. EPA began its
 <                            reinvention efforts in 1995 when President Clinton, Vice President Gore, and EPA
                              Administrator Carol Browner announced a reinvention agenda to make
                              environmental and public health protection programs more efficient and effective. Since
                              that time, EPA has pursued common sense reforms and new ideas that can help us
                              achieve national goals, such as clean  air, clean water, and better waste management.

                              Last year, Administrator Browner made several strategic decisions that should
                              advance our reinvention capabilities  even further. She laid out a vision for improving
                              the way EPA manages and disseminates environmental information, and called for a
                              new information office to be set up-the first in the Agency's history. Harnessing the
                              many lessons learned about working effectively with industry sectors and other stake-
                              holders through the Common Sense  Initiative, the Administrator approved plans to
                              apply this learning broadly within EPA programs. After working on the details for
                              more than a year, she signed an agreement with the states that provides the

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additional flexibility and assurance they need to proceed with their own reinvention
initiatives. These decisions were milestones in a year when we followed through and
delivered on some of our earliest reinvention commitments.  But the year also
brought new challenges and  initiatives with the potential to significantly shape how
environmental  management is conducted in the 21st century.
Better Environmental Information

With more than 40 million hits on EPA's Web site every month, public demand for
high-quality environmental information has never been greater. To meet this and
other related demands, EPA began setting up its first information office.  In addition to
improving data quality and streamlining reporting, this move will advance community
right-to-know opportunities for citizens and improve our ability to analyze environ-
mental conditions.

Established a National Center for Environmental Information and Statistics
A new online center launched in August is putting EPA's vast reserves of environmen-
tal data to work for citizens. The center makes it faster and easier than ever before
to  retrieve, compile, and present data stored in numerous environmental databases.
Users can request easy-to-understand reports about drinking water, surface water,
air quality, hazardous waste,  and toxic releases in their communitiesjust by typing
in their zip code.

Developed  Real-Time Reporting Capabilities
To enable citizens to make decisions about their daily lives by taking actual environ-
mental conditions into account, we worked with select communities on an environ-
mental reporting breakthrough-offering real-time, rather than historical, data. This
advance  offers answers to basic  questions, such as "is the air quality safe for me to
go jogging today" or "is the water safe for a swim ?"

Pushed for  More  Environmental Disclosures
Recognizing  the effect that public disclosure can have on environmental perform-
ance, the Agency took actions to make more  environmental information publicly
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available. We proposed to expand reporting under the Toxic Release Inventory for
persistent, bioaccumulative chemicals, such as dioxin and mercury, by almost 25
percent. Other actions will give Americans access to information about the hazards
from lead-based paint when renovating or remodeling their homes, whether their
drinking water meets federal public health standards, and the potential risks from
facilities in their neighborhoods that produce, use, or store chemical products.

Challenged the Chemical Industry to Make Product Toxicity Data Publicly
Available
A new program, announced by Vice President Gore, challenges the chemical indus-
try to provide missing information on about 2,800 of the nation's most widely used
toxic chemicals  to the public. By agreeing to conduct any necessary toxicity testing
and to publicly  report the results, companies can help resolve remaining questions
about risk levels and avoid the need for further regulation.

Offered Citizens Tools for Evaluating Environmental Performance
New databases  were made publicly available that  allow citizens to  evaluate and
compare the environmental performance  of individual facilities or industry sectors as
a whole. A database created under the Agency's Sector Facility Indexing project
offers compliance and other environmental performance information on facilities in
six industrial sectors. Another database, known as  E-GRID, provides extensive data
on the environmental performance and efficiency of  electric utilities-information
that might become more valuable as deregulation gives consumers more choice in
determining their energy provider.
                                  Stronger Partnerships

                                  Industries, businesses, community groups and many other organizations are increas-
                                  ingly working with EPA as partners to improve environmental performance, cut costs,
                                  and avoid new regulations. These  partnerships are leveraging limited resources and
                                  spawning new ideas that can produce better results more quickly and more cost-
                                  effectively than what might be expected through regulatory actions alone.

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Collaborated on Joint Ventures With the States
With two-thirds of the states now working with EPA under the National  Environmental
Performance Partnership System, special attention was given to creating more meaning-
ful environmental performance measures that demonstrate the results from federal and
state programs. The year also brought agreement on a process that gives states the
flexibility and assurance they need to engage in their own regulatory reinvention initia-
tives and still meet federal standards.

Offered Assistance for Smart Growth
To help more communities avoid poorly planned development, urban decay, and loss of
valuable green space, we supported "smart growth" through Agency programs. We led a
national network to help expand smart growth tools and information. And by expanding
a $500,000 pilot project into a $5 million national grant  program, EPA offered 45 com-
munities seed  money to launch sustainable development initiatives in agricultural, rural,
and urban settings.

Doubled  Support for Brownfields Redevelopment
By offering $21 million to 107 communities,  the Agency doubled its investment for revi-
talizing brownfields-abandoned, idle, or unused properties tainted by environmental
contamination. Since 1995, EPA has awarded more than  $42 million to 227 communi-
ties with a  goal of supporting 300 brownfield projects by the end of 1999. In March,
Administrator Brownerjoined Vice President Gore to announce that 16  projects would
collectively receive an additional $28 million  and other assistance to create "Brownfield
Showcase" communities for the nation.

Promoted Environmental  Stewardship Through Partnership Programs
To spark interest among potential  new members, the Agency compiled and  publicized
the latest annual  results on the environmental and economic benefits  from participat-
ing in its voluntary partnership programs. The results showed that about 6,000 part-
ners-ranging from Fortune 500 companies to small  family-owned businesses-saved
$1.6 billion through voluntary improvements that eliminated  7.6 million tons of solid
waste, prevented  the release of 79 million metric tons of the  pollution linked to global
warming, saved nearly 6 million gallons of clean water, and conserved enough energy
to light 56 million households for a year.
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                                   Shared  Business Risks
                                   In April,  EPA offered to become a financial partner with responsible parties under
                                   Superfund that are willing to invest in innovative cleanup technologies. We agreed to
                                   share up to  one half of the additional cost that would be incurred in cases where an
                                   innovative technology might fail and necessitate further investment.  In so doing, the
                                   Agency reduced the responsible parties' financial risks and bolstered support for new
                                   technology use and development.
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More Tailored, Flexible Approaches

Increasingly, EPA is relying on a mix of regulatory and  nonregulatory approaches to
solve environmental problems in common sense ways. In some cases, this means
offering incentives that prompt voluntary environmental improvements.  In others,
regulations are needed, but can be tailored to offer more flexibility in choosing
among compliance options.

Offered Flexible, Cost-Effective Program for Reducing Smog
In September, EPA issued a flexible, cost-effective plan that would allow most areas of
the county to meet the 1997 antismog standards without having to implement costly
new controls. The plan offers compliance options for states, which include an emission
trading program for power plants and other sources of nitrogen oxide-a primary
ingredient in smog formation. This approach has the potential to drop the per-ton cost
of controlling these emissions from as much as $10,000 to about $1,500.

Launched Clean Water Action  Plan
In February, President Clinton unveiled a comprehensive Clean Water Action Plan to
finish the job of protecting the nation's waters. Developed with unprecedented coop-
eration at the federal level, this plan offers the first-ever, multiagency budget for
clean water programs and specifies more than 100 actions  to address  high-priority
problems, such as polluted runoff from livestock operations.

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Rewarded Pollution Prevention Achievements
The Agency supported technical innovations that minimize waste and the use of toxic
chemicals and that help avoid the need for new requirements. This included offering
Presidential awards for outstanding green chemistry achievement. In 1998, awards
were given to four companies and two university research teams whose discoveries
offer more environmentally sound alternatives to current products and processes.

Focused on the Needs of Industrial Sectors and Other Stakeholders
After 4 years of unprecedented collaboration involving many diverse parties,
Administration Browner concluded the Common Sense  Initiative as an experimental
program  for testing a fundamentally different approach to environmental protection.
Lessons learned  from working with six industrial sectors  and other stakeholders
formed the basis of new plans to adopt sector-based  approaches more broadly
across Agency programs and to improve EPAs ability for involving stakeholders in
decision-making  processes.

Used Project XL to Pursue Innovative Approaches
The Agency approved three new projects in 1998, and  developed a simplified
process for approving additional projects  in the future. One participating company
is exploring how  environmental management systems might be used to simplify per-
mitting, recordkeeping and reporting requirements, n Massachusetts, the state envi-
ronmental agency is testing self-certification procedures as an alternative to
traditional environmental permits.

Promoted Innovative Technologies
Recognizing the  financial risks and regulatory barriers faced by companies trying  to
develop and market innovative environmental technologies, EPA offered information
and sponsored trade shows and award programs to showcase new technologies,  n
a new role, we also helped broker discussions between technology developers  and
representatives from the financial community in order to secure more capital for new
technology development.

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Getting to Compliance—and Beyond

Throughout the year, we looked for ways to help businesses and communities
improve their environmental performance.  Often, this meant providing more infor-
mation or technical assistance, particularly for the smaller entities that do not always
have the resources they need to understand what is required. Increasingly, it meant
creating incentives that encourage companies to reach for performance goals that
go beyond compliance.

Responded  to Growing Interest in Environmental Management Systems
Recognizing  the interest and questions still surrounding use of Environmental
Management Systems, EPA  launched pilot projects to test their effectiveness and
gather information that will  be used  in future  policy decisions. In a move that sent
an important signal to the regulated community, we  issued a policy statement clarify-
ing  EPA's support for environmental  management systems that "help an organization
achieve its environmental obligations and broader environmental performance
goals."

Opened Five More  Compliance Assistance  Centers
In partnership with other organizations, EPA opened new compliance assistance
centers on the Internet to serve five more sectors: the printed wiring board  manufac-
turers, the paints and  coatings industry, the transportation sector, chemical  manufac-
turers, and local governments. With the four centers opened previously, nine centers
are  now up and running. These centers are tailored to serve small and medium-sized
organizations, providing users with round-the-clock access to  information about envi-
ronmental regulations, pollution prevention techniques, and related issues.

Encouraged Environmental Improvements Through Self-Auditing
More companies had environmental penalties reduced or eliminated under an
incentive-based policy EPA announced in 1996 that  encourages self-auditing, along
with quick correction and public disclosure of any environmental violations. As  of
December 1998, 318 companies had corrected and publicly disclosed environmen-
tal violations at 1,668 facilities,  a twofold increase over the number of facilities
doing so the year before.

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Supported Corporate Environmental Mentoring
Recognizing that businesses can often help each other improve environmental per-
formance, EPA offered funding to support what could become a new trend in corpo-
rate America-environmental mentoring. These funds are being used to create an
institute that will provide the information and tools needed to support mentoring
relationships between companies that have environmental  expertise to offer and
those in need of special assistance.

Provided Funding to Improve Drinking Water Compliance
More than 300 small communities facing  new requirements under the 1996 Safe
Drinking Water Act got special help  in 1998 when the Agency began administering
the federal government's first-ever loan program for drinking water improvements.
Rather than one-time grants to select communities, financial assistance was offered
through state  revolving loan programs. All but the most needy recipients repay their
low interest loan, enabling the states to maintain a reliable source of capital for
other communities needing assistance.
Less Regulatory Burden

Many reinvention efforts had the effect of reducing the regulatory burden imposed
by environmental requirements in 1998, but the requirements imposed for record-
keeping and reporting continued to be a major focal point. By the end of the year,
EPA had cut 26.9 million hours of paperwork burden by streamlining processes,
eliminating outdated provisions, or consolidating duplicative requirements-without
sacrificing the Agency's ability to ensure environmental and public health protec-
tion.  These reductions, which surpassed  the Agency's 1995 goal  of reducing burden
by 25 million hours, offset additional requirements that have taken effect in recent
years to increase environmental  protection and accountability. They should also save
businesses and communities an  estimated $807 million a year.
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Proposed a Consolidated Air Rule for Chemical Manufacturers
A proposed rule that consolidates 16 federal air regulations into a single guideline
could save the average U.S. chemical plant about 1,700 hours or $80,000 a year
in the future. The proposal, which represents the first consolidated rule ever under
the Clean Air Act, would be voluntary. Plant managers could opt to comply with the
consolidated rule or continue operating under the existing 16 rules.

Streamlined  Certification Process for Auto  Makers
A streamlined process for certifying that new passenger cars and trucks meet federal
standards for air pollution emissions is expected to save automobile manufacturers
an estimated $55 million a year. Under the proposed process, testing would  be per-
formed on vehicles actually in use on the nation's highways rather than on brand
new vehicles. In addition to cutting burden, the new process creates an incentive for
manufacturers to  produce more durable emissions control equipment and gives EPA
better data for managing air quality programs.

Simplified Hazardous Waste Management Requirements
The Agency addressed several barriers that have prevented common sense practices
in managing hazardous wastes. Reforms to the 20-year-old  program for managing
polychlorinated biphenyls, or PCBs, are  expected to produce cost savings estimated
at between $1 78 million and $736 million each year.  New treatment standards for
land  disposal of hazardous waste will facilitate cleanups of contaminated sites.
Another regulation simplifies the cleanup and closure of hazardous waste disposal
facilities.

Offered  Compliance Alternatives to  Small Drinking Water Systems
Based on the 1996 amendments to the  Safe Drinking Water Act, the Agency issued
new regulations that will give small community water systems less expensive treat-
ment alternatives  to comply with federal drinking water standards in the future.
Smaller systems can also request more time to achieve  compliance and variances
from federal  requirements, as long as such actions do not threaten public health.

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Eliminated Barriers That Discourage Removal of Lead-Based Paint
We proposed a new rule to expedite the removal of lead-based paint because doing
so will help protect children from exposure to lead. Based on studies showing that
lead-based paint debris could be safely placed in ordinary landfills (under the Toxic
Substances Control Act), we proposed that this disposal option be provided as an
alternative to the traditional, but more expensive disposal currently required under
hazardous waste regulations.

Published Plain Language Regulations
 n 1998, the Agency issued several regulations using plainer language and simpler
formats than ever before. Among them were important requirements explaining what
gas station owners, industrial facilities, and others operating underground injection
wells must do to protect local drinking water supplies, and what industries must do
to respond in a chemical emergency situation. These improvements were possible
because of a pilot program began  in 1997 to improve the understanding of EPA
regulations.
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          Appendix2                                           nments  Received

                               By The  Innovations  Task  Force


                               March through May 1999

"ofl                            Encouraging Improved Performance

 §                             Encourage stewardship: Many stakeholders agreed that compliance alone should
 1                             not be the end goal for environmental management. We can and should do more.
 U
 ^                             Specifically, we should encourage environmental stewardship, where everyone-
 "-                             individuals, communities, and companies-takes more responsibility for their
 •|                             actions. Fostering stewardship needs to be interdisciplinary, taking social, economic,
 <                             and other issues into account. It will require a different approach than enforcement.

                               Recognize top performers or improved performance:  Many stakeholders urged EPA
                               to establish programs for regulated facilities that go beyond compliance with envi-
                               ronmental requirements. Suggestions ranged from a voluntary program recognizing
                               sound performance, based on a set of specific criteria, to "case-by-case" actions for
                               the truly outstanding performers. Some stakeholders felt that the former, a program
                               with broader applicability, would be well-received and a step in the right direction.
                               Others felt this would be neither bold nor effective enough. They felt that focusing
                               on the top performers would allow EPA to offer more meaningful incentives and
                               make participation more attractive. It would also help to create new leaders that
                               others could follow. They suggested bench marking performance levels in facilities
                               that are already widely recognized as top performers as a way to get started quickly.

                               They also felt that criteria for defining exceptional performance should be multime-
                               dia, emphasize sustainability and include measures such as:

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•   Public disclosure

•   Public involvement

    How well a company addresses particular environmental problems

    Product stewardship

    Mentoring other companies

A number of stakeholders suggested using a "ladder" that recognizes several differ-
ent performance levels. Those who still have compliance problems would be at the
lower level; those with better performance would be higher up; the best would be at
the very top. Incentives and  assistance could be provided to help organizations
move upward.

Incentives: Recognition can be an incentive, especially when it is in the local com-
munity and with clients and customers. However, incentives for superior performance
are important and these can and should go much further. They could  involve such
things as fewer compliance inspections, more flexibility in regulatory programs,
reduced reporting and monitoring, and tax credits.


Tools for Improving Environmental Performance

Environmental Management Systems (EMSs): Stakeholders identified EMSs as key
tools for  improving environmental performance. However, they felt that EMSs are
just a tool, and to work best, they need to be tailored to industry sectors. They also
felt that special attention was needed to help small businesses develop and imple-
ment EMSs. This would help overcome a  common perception  that EMSs are for big
companies, not small ones.  There are successful examples of tailoring  EMSs to
smaller business  (e.g., printers) and this is an area where EPA  can help.
Stakeholders also explained that EMS use would likely increase if insurers,  bond
raters and others were encouraged to use a company's EMSs  when evaluating their
performance.
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                                   Some stakeholders were sensitive about the role that EPA should take in promoting
                                   EMSs.  Many states and business already are using EMSs, and they felt the Agency
                                   should not try to step into the leadership roles established by others. EPAs role
                                   should be to promote their use, support their development,  evaluate their effective-
                                   ness, and make recommendations on how to improve them. Conversely, others felt
                                   EPA should  play a more active role in EMS development and testing.

                                   Integrating environmental and business decisions: Stakeholders noted many other
                                   tools that could also help businesses account for environmental impacts and make
                                   more cost effective decisions. These tools include:  life-cycle analysis, full  cost
                                   accounting, product stewardship and  product "take-back" programs, industrial ecol-
                                   ogy, etc. They thought EPA should help develop these tools, and support business
                                   assistance networks that help companies use them.

° |                                 Voluntary programs: Stakeholders emphasized that voluntary programs can help
g                                  companies and individuals address unsolved environmental problems. These pro-
J                                  grams can encourage stewardship in several ways, such as  by offering technical or
0)
^                                  financial assistance, or by providing public recognition  for environmental actions.
£                                  There were suggestions for new voluntary programs to address certain issues, such
.E"                                 as reducing use of persistent bioaccumulative  and toxic chemicals, reducing nutrient
<                                  loadings into watersheds, implementing innovative air quality improvement projects,
                                   and improving  labeling and  creating awards for environmentally friendly  products.

                                   Apply lessons from  successful pilots: Our stakeholders emphasized that when an
                                   innovation proves successful in a pilot project, we need to move quickly to  institute
                                   the innovation more broadly.  EPA has tried new approaches through its reinvention
                                   programs, such as developing flexible permits and working  with specific industry on
                                   sector-based environmental management approaches. Where successful, they felt
                                   the Agency should expand use of new approaches or integrate them into existing
                                   programs so that benefits can be realized on  a wider scale.

                                   Market-based or economic incentives: Some stakeholders emphasized the potential
                                   of market-based approaches for addressing problems. For example, effluent trading
                                   in watersheds is one way to help address  nonpoint source pollution.

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Promoting Compliance
Improved regulations: Some suggestions for improving our regulations were:

   Continue to use plain language. Plain language is important because it helps
   people understand what they need to do and increases their ability to comply.
   Stakeholders felt that if  EPA can do a better job in this area, there would be less
   need for additional compliance assistance materials,  because the requirements
   would be clear. They also suggested  that we provide flowcharts and checklists
   along with rules so applicability and  requirements can be determined more easily.

   Develop more performance-based regulations. There were a number of specific
   suggestions for more regulatory changes that would  increase flexibility in meeting
   permit limits, especially in  meeting air requirements.

•   Promote sector-based rulemaking. Through the Common Sense Initiative and
   other reinvention efforts, EPA has seen benefits from tailoring environmental
   management strategies for specific industry sectors. EPA should use this
   approach more in rulemaking so that regulations are more effective at address-
   ing problems associated with specific industries.

•   Provide more openness during rulemaking and pilot-test rules prior to issuance.
   This will allow the regulation writers  to receive input from front line agency staff
   and from people in companies and  communities. In  this way,  EPA can help
   assure that new requirements are understandable and doable.
Permitting,  monitoring, and reporting reforms: A number of stakeholders urged EPA
to build on its successful initiatives to reduce regulatory burden. Specifically, they
called for more efforts to consolidate monitoring and reporting. To further reduce
burden, they also  encouraged more use of electronic reporting. On permitting, they
suggested a number of specific projects from testing permit reforms developed
through the Common Sense Initiative (PrintSTEP), to one-stop  permitting,  to sector-
based permits. They also had  media-specific suggestions, such as expanding the
Pollution Prevention in Permitting Program (for air emissions).

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                                   Compliance assistance: Stakeholders explained that we need to do a better job of
                                   providing compliance assistance. They had many ideas about how we could do so.
                                   Some of these were:

                                      Develop compliance assistance materials and tools that are targeted to the
                                      needs of the regulated parties. EPA should prepare these materials along with
                                      regulation development so that more consideration is given to how the new
                                      requirements will actually be met. This approach would allow the Agency to
                                      develop assistance materials that are more timely and  helpful.

                                   •   Coordinate with industries and their trade associations to develop materials that
                                      work well for the people who will use them.

  .                                 •   Ensure that EPA inspectors and the regulated facilities use the same inspection
r\j
^-1                                    checklists.
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I                                  •   Continue to build on traditional approaches for providing assistance, including
0)
^                                     the existing compliance assistance centers. But also provide more help for small
£                                     businesses who often have fewer resources to deal with environmental issues
O)
.£                                     than larger companies.
<
                                      Use electronic tools (such as the Internet and computer software programs), but
                                      don't rely too heavily on them. Gear these tools to the front line, shop floor peo-
                                      ple who are most likely to use them.

                                   •   Turn to other assistance providers to deliver compliance assistance. There are
                                      existing networks of organizations (such as local governments, state agencies,
                                      universities, non-profits, trade associations, small  business and technology assis-
                                      tance centers)  that all have frequent interactions with businesses. Businesses pre-
                                      fer to go to them for help with compliance issues rather than  dealing with  EPA.
                                      EPA should be a "broker" rather than a "retailer" for compliance assistance
                                      materials. In other words, the Agency should  develop materials and make them
                                      available, but  let others actually deliver them to the regulated community.

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   Use existing assistance networks and compliance assistance materials to deliver
   pollution prevention assistance as well. Also, keep  in mind that many of these
   providers are ideal for delivering  additional tools for integrating environmental
   and business decision-making.

   Deliver compliance assistance separately from enforcement, so that companies
   build some trust in working with those who offer assistance.

   Revise EPA's Audit Policy, Small Business Policy and penalty mitigation protocol to
   give people more incentives to self-disclose and correct environmental violations.

   Continue to measure the effectiveness of EPA's compliance assistance activities to
   see what is working well.

    ntegrate compliance assistance with incentives, monitoring and enforcement to
   address specific environmental priorities.
Cross-Cutting Issues                                                                                        £
                                                                                                               O)
Information management: A number of comments dealt with information-related                                      .1
issues. Some suggested that making data about the environmental performance of
specific facilities  more user-friendly and accessible would be a strong incentive for
corporations to improve or maintain high standards. Others suggested that EPA
needs to  do more to  integrate data about ecological conditions, individual facilities,
and other issues  so people can gain a more complete understanding of factors
influencing conditions at the watershed, ecosystem  or community level.

Still others felt  that Agency databases  should be designed so that state and EPA staff
can input and  update data more easily.

Support for community-based activities: Stakeholders spoke about how communities
and citizens want and need EPA to deliver information  and technical assistance that
will help them  use environmental data and participate  in environmental decision-
making. In particular, some stakeholders urged EPA to provide additional support
and tools to help local governments address urban sprawl.

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           Appendix 3
Key  Actions
~5~|                              Action 1: Use incentives and voluntary partnerships more widely
 m                               to encourage better environmental performance.
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 I                               Objective:
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 £                               We will work with interested parties to identify, test, and evaluate incentives that can
 ™                               be used to encourage better environmental performance by a wide range of busi-
 ;f                               nesses and other organizations. We'll also use voluntary partnership approaches to
                                 address unsolved problems and/or unique challenges facing communities or specific
                                 industry sectors.

                                 Background:

                                 Our program and regional offices are already developing ways to promote steward-
                                 ship.  Experimental programs, such as Project XL, and partnership programs, such as
                                 Energy Star, have used incentives to encourage organizations to make environmen-
                                 tal improvements. Additionally, we have started  to use incentives to enhance our
                                 regulatory programs.

                                 Our rapidly-growing partnership programs continue  to show strong promise for
                                 effecting stewardship. These programs typically  improve  efficiency, cut waste, and
                                 conserve resources, lowering costs and yielding environmental benefits. As such,
                                 we've used partnership programs to address a variety of issues, including climate

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change, solid waste, pesticide risks, and to advance new environmental technolo-
gies and  practices. These experiences have shown that voluntary approaches can be
a strong complement to our regulatory system, and a tangible means for getting
better environmental results.
Approach:
We will work with states,  tribes industry, public interest groups, and other
stakeholders to:

   Evaluate ongoing pilots and programs that use incentives.

   Look for new opportunities to use incentives.

   Make changes in policies and regulations to remove barriers and promote
   stewardship.                                                                                                £
                                                                                                              CD
For voluntary programs, we will study the experience gained over the past few years,                                  c
to find out what kinds of voluntary programs work best and why. We will use this                                      "g
                                                                                                              X
information to  help identify new areas where a voluntary partnership approach                                       ^
                                                                                                              o
could achieve significant environmental results, and how we might accomplish more                                  ^
                                                                                                              c
through existing programs.                                                                                      E
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Tasks:

1. We will  partner with several states to further test incentives (such as expedited
   permitting,  consolidated or streamlined reporting,  increased permit flexibility).
   Lead: Office of Policy and Reinvention

2. We will  co-sponsor a national conference in 1999 on  how economic  and infor-
   mation incentives can  be used to promote environmental stewardship.
   Lead: Office of Policy and Reinvention

3. We will  award competitive  research grants to  identify and evaluate incentive-
   based approaches and investigate the relationship between  environmental
   stewardship and financial return and growth.
   Lead: Office of Research and Development

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4. We will work to improve the accessibility and increase the potential of voluntary
   partnership programs:

    -   First, we'll  establish a central point of contact for basic information on EPA
       partnership programs to make it easier for current and potential new part-
       ners to discover the full range of programs available.  (This will augment out-
       reach efforts by individual programs).

       Second, we will work with interested sectors to determine which programs
       have greatest value for their specific operations, how these programs might
       best be packaged to simplify use, and whether  new features are needed to
       meet their needs.

       Third, we'll explore additional areas where partnership programs might be
       created to achieve environmental improvements.

    -   Fourth, we will publish annual results achieved  by partnership programs to
       demonstrate environmental and economic benefits.  We will also work with
       our partners to develop better performance measures, where needed. These
       measures will enable us to more thoroughly evaluate the effectiveness of
       these programs, and  prepare  a report on their collective contribution to
       achieving national environmental and public health protection goals.
       Lead: Partnership  Programs Coordinating Committee

5. Working with industry  and other stakeholders, we will explore incentives to
   encourage further toxicity testing (under the Agency's chemical right-to-know
   program), and to promote improved product stewardship based on the toxicity
   testing results.
   Lead: Office of Prevention, Pesticides and Toxic Substances

6. We will work with industry and other stakeholders to explore an environmental
   stewardship  initiative that challenges U.S. companies to voluntarily meet U.S.
   environmental  and public health standards at their facilities in other countries
   whose standards are less protective.
   Lead: Office of Prevention, Pesticides and Toxic Substances

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Action 2: Promote the use of environmental management systems.

Objective:

We will encourage organizations to use EMSs that improve compliance, pollution
prevention, and other measures of environmental performance. We'll continue eval-
uation efforts to learn more about which EMS elements and applications are most
effective, and we'll determine how these systems might be used to strengthen envi-
ronmental  programs and policies.

Background:

An environmental management system applies standard business principles to the
management of an organization's environmental responsibilities. This kind of system
looks at environmental concerns in  a more systematic way, and as a part of all busi-
ness decisions and practices. An EMS does not determine the organization's legal
obligations; rather, it is a sophisticated tool used by the organization to manage
compliance and other environmental issues. A strong  EMS does not just set rules for
employees: it tracks performance, identifies and corrects problems, and tries to pre-
vent the problems from recurring.                                                                              £
                                                                                                           O)
Many organizations are adopting EMSs as a management tool. We encourage the                                   .i
use of EMSs because they have the potential to improve compliance rates and envi-
ronmental performance. In 1998,  EPA issued a policy statement endorsing the use
of EMSs that focus on improved environmental performance, including compliance
and source reduction.

It is now time for EPA to take a more prominent role in encouraging organizations to
use EMSs. Already, a number of our programs and regions have helped selected sec-
tors, or organizations in particular geographic areas, to develop strong EMSs. We've
also incorporated EMSs into a number of settlement agreements in enforcement
cases. We need to look strategically at what else we can do to help promote EMSs.

At the same time, we still  have much to learn about how effective different types of
EMSs actually are in improving environmental performance, and about how they
may affect our programs  and policies. We are currently working in partnership with

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a number of states (through the Multi-State Working Group) to develop a national
database to help us build an understanding of EMSs and their effects. This work will
be continued and expanded.
Approach:
Working with states, tribes, and other stakeholders,  we will assess the real-world use
of EMSs and look at their implications for environmental programs and policies. We
will help selected sectors (especially smaller businesses) develop and test EMSs, and
we'll promote EMSs in selected geographic areas. To do this, we will:

   Develop a stronger, more far-reaching assistance program.

   Develop additional tools that can help organizations integrate environmental
   planning with other business decisions.

•   Continue and expand research on what kinds of EMSs are most effective, and
   how the growing use  of EMSs  may affect our programs and policies.
Tasks:

1. We will designate a single office to provide leadership on Agency EMS policy
   and planning.
   Lead: Deputy Administrator, with advice from Reinvention Action Council

2. We will promote the use of EMSs to address known compliance and perform-
   ance problems. Within six months, we will  prepare a strategy to increase EMS
   use in targeted sectors or geographic areas, and begin developing tools such as
   training, best practice manuals, mentoring programs, short-term and long-term
   measures of environmental performance, and incentives that encourage
   improved environmental performance.
   Lead: Office of Policy and Reinvention

3. We will evaluate the environmental and economic results of EMSs, building  on
   and expanding  current research efforts. (These results will  form the basis of an
   evaluation report to be issued  within  3 years).
   Lead: Office of Policy and Reinvention

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4. We will look at other business decision-making tools and evaluate how well they
   improve environmental performance. We will also assess how these other tools
   may work with or enhance a firm's EMS.
   Lead: Office of Prevention, Pesticides and Toxic Substances
Action 3: Develop a "performance track" to motivate and reward
top environmental performance.

Objective:

We will work with States,  Tribes, industry, environmental, and other interest groups to
define what it means to be a top environmental performer, and to identify appropri-
ate building blocks for a  new "performance track" that enhances the current regula-                                 f^T
tory system.
                                                                                                            u
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Background:                                                                                              =
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                                                                                                            I
States and EPA have already started using incentives to promote top environmental                                     ^
performance (see Box 1, page 10). Project XL, the Environmental Leadership Program,                                  g>
and leadership programs  in Oregon, Colorado, and other states are preliminary                                      .1
efforts to motivate top performers. In addition to these programs, a number of policy
studies have called for creation  of an "alternative track" or "performance track."

There is broad support for a "performance track" that rewards top performers, but
there are diverse ideas about how this approach should be designed and operated.
Unresolved issues include:

   Finding the right incentives  to motivate top performance, and identifying the
   changes that are needed in policy, regulations, or statutes to use incentives.

   Defining and measuring top environmental performance.

   Ensuring that companies  and communities are accountable for performance, in
   part by publicly reporting on their performance to the public.

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                                       Determining the appropriate role for government agencies and the appropriate
                                       allocation of government resources.

                                    We are already learning from the past several years of experimentation,  and we now
                                    need to agree on a next phase of activities to create a performance track. This track
                                    should include both meaningful incentives, and a way to account for results. Because
                                    this performance track concept is not fully defined, it is not without controversy. But
                                    we believe it holds strong promise for motivating and rewarding stewardship in com-
                                    panies that are willing to be leaders and achieve better environmental results.

                                    Approach:

                                    A process will be established so that diverse interests can work with the Agency in
                                    developing a performance  track that promotes top performance and assures
~o~|                                 accountability for results. This collaborative process will  assess what has been effec-
                                    tive in previous pilot tests and programs, develop a framework for a performance
 [=                                  track, and propose practical implementation steps.
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 uj                                  Tasks:
 £
 ™                                  1.  We will convene a group of leaders from state and tribal environmental agen-
 <                                     cies,  industry,  environmental and other interest groups to evaluate options for a
                                       performance track and  propose practical steps for demonstration and implemen-
                                       tation. This will include:

                                          Defining and measuring environmental excellence, for example  by "bench
                                          marking" the performance of 25 to 30 top performers identified by the
                                          group participants.
                                          Lead: Office of Prevention,  Pesticides and Toxic Substances

                                          Defining the characteristics of EMSs and accountability measures that will
                                          demonstrate top environmental performance.
                                          Lead: Office of Policy and Reinvention

                                       -  Identifying the best  incentives for motivating organizations to improve envi-
                                          ronmental performance.
                                          Lead: Office of Policy and Reinvention

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CD
2. We will work with two industry sectors to develop sector-specific performance
   standards that demonstrate a more comprehensive, system-based approach to
   environmental management. This will involve assessing industry trends and condi-
   tions, developing environmental performance goals, and designing EMSs to help
   individual facilities improve environmental performance.
   Lead:  Office of Policy and Reinvention
Action 4: Support a network of public and private organizations
that provide assistance on environmental compliance.

Objective:

We will focus on becoming a "wholesaler" of compliance assistance tools and infor-
mation. We'll meet with compliance assistance providers to share our approach for
developing materials that help businesses and communities comply with the law and
prevent pollution, and we'll ask them to help us set priorities to determine which                                      g
                                                                                                             X
materials are needed most. We'll provide these materials, and help them develop                                    ^
                                                                                                             o_
training and peer mentoring programs.                                                                         ^,
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Background:                                                                                              <

Many regulated groups, especially small and mid-sized businesses, are wary of
seeking help from  EPA and other federal agencies. Because of this, we are not in
the best position to offer direct compliance assistance. But, there are many organi-
zations that are in  a good position to help because they already have contact with a
large number of regulated entities. Some examples are state and  local governments;
small business assistance programs and development centers;  manufacturing exten-
sion partnerships; pollution prevention programs;  universities;  licensing agencies
and issuers of building  permits; and trade and professional associations. These
organizations already have an infrastructure in place to deliver information and
assistance, and businesses often turn to them.

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                                    Approach:

                                    We will bring together other organizations in the public and private sector that pro-
                                    vide compliance assistance, and seek their ideas about what tools are still needed.
                                    We will seek their input on the best ways to get new compliance assistance tools
                                    delivered to them in a timely manner. In this way, we can help build an effective
                                    environmental assistance network with the ability to reach a much larger audience
                                    than  EPA could  ever reach on its own. Our role will  be primarily to enable other
                                    providers to work more effectively,  and to provide compliance assistance directly
                                    only in special circumstances (e.g.  in cases where assistance networks may not suffi-
                                    ciently reach all affected parties). We will also work to encourage more collabora-
                                    tion and coordination among organizations that routinely provide assistance on
                                    business, environmental or other issues. This would be more efficient  for small busi-
"77"!                                 nesses and others seeking information, as well as for EPA and other organizations
 LO
—                                 that provide it.
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 I                                  Tasks
 0)
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 £                                  1.  We will convene a national compliance assistance forum to share information
 g>                                     with participants on recently developed  compliance assistance materials, get
 ~                                     stakeholder  input in setting priorities for new compliance assistance materials,
                                       and exchange compliance assistance tools. We will  also use the forum to help
                                       identify industry sectors that have special compliance assistance needs.
                                       Lead: Office of Enforcement and Compliance Assurance

                                    2.  We will also sponsor a national meeting of organizations that provide assistance
                                       to the regulated community. We hope to encourage simpler and more efficient
                                       "one-stop" shopping for assistance on a variety of inter-related issues, such as
                                       business management,  technical  process improvements, pollution  prevention,
                                       and regulatory compliance.
                                       Lead: Office of Prevention, Pesticides and Toxic Substances

                                    3.  We will assess EPAs current suite of environmental  assistance  services for small
                                       businesses.  We'll assess the value and  accessibility of the many hotlines,  clear-

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   inghouses, and other EPA support functions. Working with other public and pri-
   vate sector assistance providers, we'll use these findings to improve our assis-
   tance to small businesses.
   Lead: Office of Policy and Reinvention

4. We will create a clearinghouse of compliance assistance materials and tools.
   This clearinghouse will include information from federal, state, tribal, and local
   governments and from private providers, such as trade associations.
   Lead: Office of Enforcement and Compliance Assurance

5. We will distribute and market compliance assistance tools to organizations that
   are likely to have contact with regulated groups.
   Lead: All offices that prepare materials or tools to support regulatory action

6. We will support mentoring programs that help businesses and other organizations
   share environmental management information and expertise with one another.
   Lead: Office of Policy and Reinvention,  Office of Water,  and Region 4
Action 5: Deliver compliance assistance information for new
"economically significant" rules when and where it's needed.
Objective:
We will provide compliance assistance information, typically within 90 days of issu-
ing an "economically significant" rule,  so it is available before new requirements
take effect1. We will continue to make general assistance widely available through
the Internet, toll-free telephone lines, and other distribution channels. We'll also
evaluate the need for additional compliance assistance centers as we maintain sup-
port for existing ones.
Background:
Clear, understandable regulations and compliance assistance tools improve a facility
manager's ability to comply, and they strengthen  the public's ability to effectively

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                                    participate in environmental and public health protection issues. Over the last sever-
                                    al years, EPA has begun to write plain language regulations. We have also devel-
                                    oped a variety of compliance assistance tools and mechanisms for delivering them.
                                    These include plain language guides, compliance assistance centers, hotlines, self-
                                    audit checklists,  and special software. We have begun and will continue to evaluate
                                    these tools, with a special focus on how well they meet the needs of small business.
                                    Still, as we talked to our stakeholders about compliance, we heard that we need to
                                    do more. In particular, we need to integrate compliance assistance planning into the
                                    rulemaking process.

                                    A more integrated approach should have several positive effects.  Earlier considera-
                                    tion of compliance assistance issues during regulation development will allow us to
                                    develop more effective, understandable regulations designed for application in real-
-^n                                 world  situations. Providing more timely compliance assistance information will give
—^                                 the regulated community the time they need to understand regulatory obligations
 CD
 H                                  and to focus planning on  how to comply through pollution prevention or other
 _0>
 ~v                                  appropriate controls.  Finally, the interaction between facilities and regulatory agen-
 ^                                  cies, and public involvement in environmental decision-making will become more
 ^                                  positive as all parties gain a clearer understanding  about what is  required.
 c
 <                                  Approach:

                                    Under the Small Business  Regulatory Enforcement Fairness  Act (SBREFA),  EPA is
                                    required to prepare a compliance guide for new regulations that have a "significant
                                    impact on a substantial number of small entities2."  n the future, we'll extend this
                                    type of service more broadly. Specifically, we will provide compliance assistance
                                    guides or self-audit checklists for economically significant rules that apply to compa-
                                    nies or government facilities and that are not already covered by the SBREFA
                                    requirement. These materials will help regulated entities-in  other words, companies
                                    or government facilities-comply with EPA rules that apply to them. (Rules that aren't
                                    directly applicable to companies or government facilities may warrant different forms
                                    of guidance, such as state program guidance.)

                                    Because guides  and checklists must be tailored to each rule and to diverse audi-
                                    ences (e.g., small  businesses versus large manufacturers),  they will vary substantially
                                    in format and length. Where appropriate, they will include  information about how to

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 comply through pollution prevention options. We will prepare these materials as
 soon as possible after issuing the rule, typically within 90 days so that requirements
 can be understood well before the actual compliance date. Longer time frames may
 be needed in some cases for stakeholder input on draft assistance  materials, for
 highly complex rules or for special circumstances, but these extensions will be sub-
ject to the Deputy Administrator's approval.

 There may be cases  in which EPA decides to produce a compliance guide for a rule
 that does not meet the economically significant threshold rather than  for a rule that
 does because it would be more beneficial overall, considering factors such as the
 needs of the regulated community and the potential benefit to public  health and the
 environment. These "substitutions" will be made as part of an annual  compliance
 assistance planning process,  n addition, EPA will produce compliance materials for
 other rules that do not meet the economically significant threshold, within budget                                    r^-
 limitations.                                                                                                    L-^-
                                                                                                               0)
                                                                                                               u
 EPAs media offices will integrate compliance assistance planning into rule develop-                                   J
                                                                                                               CD
 ment, with active assistance and participation from our enforcement and compliance                                  ^
 assurance staff at Headquarters and in the regions. We'll also seek input from State                                   £
 program staff, the regulated community and other stakeholders,  as appropriate.  As                                   ?
 part of this process, we may identify and develop other materials to supplement                                       <
 guides and checklists.

 Tasks:

 1.  We will develop compliance assistance guides and/or self-audit checklists for
    economically significant rules that apply to companies and/or government facili-
    ties (or rules that were "substituted" because of greater benefit),  typically within
    90 days of issuance. Extensions beyond  this time frame will be subject to
    approval by the Deputy Administrator. EPA also will produce compliance materi-
    als for additional rules that do not meet the economically significant threshold,
    within budget limitations.
    Lead: EPA National program office that prepares regulation, with assistance from
    enforcement and compliance assurance  program.

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E
<
2. We will develop an annual compliance assistance plan, in consultation with
   State, Tribal, and other compliance assistance providers, to ensure that compli-
   ance assistance resources are focused on areas where they are most needed.
   Based on their input, we will consider developing compliance assistance tools for
   other new rules that do not meet the economically significant threshold or for
   existing rules known to have compliance problems.
   Lead: Office of Enforcement and Compliance Assurance

3. We will field test certain compliance assistance tools before issuing them. For
   one or two rules, the Agency will also develop special software to guide facility
   operators through regulations and provide answers on applicability, deadlines,
   and what must be done to comply.
   Lead: EPA National program office that prepares regulation, with assistance from
   enforcement and compliance assurance staff

4. We will field test certain draft regulations prior to promulgation. This will be done
   through simulated trial application of a draft rule with one or more regulated
   entities, with opportunity for public involvement.
   Lead: EPA National program office that prepares regulation


Action 6:  Combine compliance assistance, incentives, monitoring,
and enforcement in  order to implement environmental laws in a
more strategic manner.
Objective:
To make better use of limited  resources, we will design new strategies that incorpo-
rate a range of options to address major compliance problems.
Background:
During the last several years  EPA and States have experimented with integrated  com-
pliance and enforcement strategies. These strategies usually include some or all  of
the following tools: compliance assistance, compliance  incentives (such as penalty

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relief for firms that conduct self-audits, disclose violations, and quickly correct prob-
lems), monitoring, and targeted enforcement actions. Several  examples of how these
tools were strategically applied are described below:

   Steel mills:  EPA Region 5  provided steel mini-mills with a 6-month period to self-
   audit, disclose, and  correct violations in accordance with the Audit Policy or
   Small Business Policy;  offered outreach and technical assistance; and followed
   up with inspections,  and enforcement as appropriate, at facilities that did not
   audit and disclose.

   Chemical companies:  This national strategy gave organic  chemical manufactur-
   ers compliance assistance, including auditing protocols,  and an opportunity to
   audit, disclose, and  correct violations. It also  included compliance monitoring
   and appropriate  enforcement for non-participating companies.                                                  T~

   Universities laboratories: By combining targeted enforcement actions regarding                                    8
                                                                                                               CD
   hazardous waste violations with customized assistance opportunities, EPAs New                                    ^
   England region was able  to address RCRA  compliance and other performance                                     m
                                                                                                               o
   problems at laboratories.                                                                                      ^,
                                                                                                               c
These and other experiences  have shown that strategic  combination of enforcement                                   <
with other environmental management tools can be effective for addressing environ-
mental and compliance problems. During focus groups, our stakeholders voiced
support  for this approach.

Approach:

As part of future planning processes, we will consult with states, tribes and other
stakeholders to  identify  new opportunities for strategically combining compliance
assistance, incentives, monitoring, and enforcement. Through  this approach, we will
tailor actions to the particular compliance issue and/or sector involved. While the
combinations and sequences in these strategies may vary, we  would likely start with
compliance assistance first. We would then give incentives, such as extended com-
pliance periods or penalty relief for auditing and correcting  problems. Monitoring
would come next, followed by enforcement,  where necessary.

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                                   Task:

                                   1.  We will talk to states, tribes and other stakeholders to identify the priorities where
                                      combined enforcement strategies are appropriate. We will then develop the
                                      appropriate strategy for each priority area and begin implementation.
                                      Lead: Office of Enforcement and Compliance Assistance and EPA Regions


                                   Action 7: Develop more flexible air permitting policies for
                                   protecting the environment.

                                   Objective:

                                   Based on our experiences in pilot projects, we will identify those approaches that
" |                                 increase permitting flexibility while  providing equal or better levels of environmental
g                                  and public health protection, provide incentives for pollution prevention, and ensure
d
J                                  public participation in permitting decisions.
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^                                  Background:
O)
-p                                  For the past 6 years, we have looked for ways to provide greater flexibility under the
<                                  air permit program without sacrificing environmental  protection. We  have done this in
                                   connection with ongoing rule development,  and through a number of experimental
                                   pilot permits  in Project XL and the "Pollution  Prevention in Permitting Project" (P4).

                                   Approach:

                                   Because of our pilot programs, we have enough experience to  identify approaches
                                   that can be taken beyond the pilot stage and used more broadly.  Currently, permits
                                   are issued through a decentralized system of state and regional permit writers. We
                                   will build an  extensive support system to disseminate information on new approach-
                                   es  among this network.  We will do this  through EPA staff, a variety of publicly avail-
                                   able information  sources, and training  programs for federal and state permit writers.

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Tasks:

1. We will identify approaches that provide greater flexibility in the New Source
   Review and Title V permitting  programs, without sacrificing environmental results
   or weakening the role of the public in permit decisions.

2. We will publicize those new approaches so that permit writers at EPA and other
   regulatory agencies understand and know how to use them, and so that permit
   applicants and holders become aware of the approaches and their benefits.
3. We will identify and work with selected sectors for which the new approaches
   offer the greatest benefits.
   Lead: Office of Air and Radiation
Action 8: Speed  up review and issuance of NPDES (water                                             §
discharge)  permits.                                                                                        1
                                                                                                             X
                                                                                                             UJ
Objective:                                                                                                  £
                                                                                                             O)
                                                                                                             c
We will streamline NPDES permitting by providing training to improve understanding                                  'E
of the NPDES permitting process, and  by encouraging applicants to submit draft
permit limits or conditions that can  expedite regulatory review and approval. We will
also encourage more public involvement in permitting actions.

Background:

The National  Pollutant Discharge Elimination System (NPDES) permitting program
controls the discharge of pollutants from industrial  and municipal sources into U.S.
waters. Approximately 71,000 facilities have been  issued individual NPDES permits,
primarily by their State environmental agency. Under the Clean Water Act, permits
are issued for a 5 year period. Permit holders must reapply at least 180 days before
the day their permit expires.  However,  if the permitting authority does not  send a
new permit before the expiration date, the operations can be continued under the
existing permit conditions.

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                                   The number of facilities requiring permits has grown substantially since the pro-
                                   gram's inception in 1972. In addition, the complexity of developing permits has
                                   increased due to new technology-based requirements  (e.g., new effluent limitations
                                   guidelines), the  adoption of comprehensive water quality standards by States, and
                                   the development and incorporation of total maximum  daily loads (TMDL). For these
                                   reasons, the process for permit issuance has become increasingly costly and time-
                                   consuming  for EPA and the  States who issue permits and for the facilities that need
                                   them to operate. The result  is a "backlog" of expired (administratively extended)
                                   NPDES permits. The Agency estimates that as many as 35 percent of individual per-
                                   mits are currently expired.

                                   Approach:

                                   We will work with an outside organization and several select states to improve
§ \                                 NPDES permitting for the regulated community and the public. As a first step, we
g                                  will work with them to  modify NPDES training materials (originally developed for
J                                  permit writers at regulatory agencies) for permit holders (or applicants),  their envi-
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^                                  ronmental consultants, and  interested citizens. Using these materials, we will then
£                                  develop a certification course for NPDES permit preparation. The certified individu-
.E"                                 als will be trained to prepare complete permit applications and  to prepare draft  per-
<                                  mit limits or conditions that  could be submitted to expedite regulatory review and
                                   approval. Members of environmental groups, and  other citizens interested in the
                                   NPDES permit development process will also be encouraged to attend the training.
                                   Based on the results, EPA will decide whether training  and/or the option to submit
                                   preliminary permit information should be offered nationally.

                                   Task:

                                   1. Working with a  national  organization and two or three states, we will develop a
                                      training  program to improve understanding and execution of NPDES permitting.
                                      Together, we will:

                                          Modify NPDES training materials (originally developed for permit writers at
                                          regulatory agencies) for permit holders, their environmental consultants, and
                                          interested citizens.

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       Design, publicize and offer training courses that improve understanding of
       NPDES permitting and provide professional certification  for assisting with
       NPDES permit applications.

2. In the pilot states, we will  encourage permit applicants to use certified profes-
   sionals to submit draft permit limits or conditions that can be used to expedite
   permitting decisions.

3. After a 3 year demonstration period, we will evaluate the experience and make
   recommendations on whether this permitting approach should be implemented
   nationally.
   Lead: Office of Water


Action 9: Build leadership capacity in communities to participate in                                | 5
local environmental problem-solving.                                                                   g
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Objective:                                                                                                  g
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We will help communities make decisions about issues that improve public health                                    £
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and their local environment by developing environmental management tools, offer-                                  -p
ing technical assistance,  and  providing facilitation for dialogue on environmental                                    <
issues. We'll also include community representatives in Agency decisions about pro-
grams or policies that directly affect them.

Background:

Often, environmental problems are best addressed at the state,  tribal, or local level,
where unique social, economic, and cultural priorities can be better recognized and
considered in the decision-making  process. Many individuals also want the opportu-
nity to participate in  environmental decisions that affect them. The Agency has made
significant progress in developing tools and providing assistance to support commu-
nity involvement.  Our overall strategy has been to work in partnership with commu-
nities, states, and tribes on  collaborative, flexible  approaches to environmental
protection.

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                                    Approach:

                                    Because there are already a wide variety of Agency activities related to communities,
                                    including many recent initiatives, we've chosen to focus on tasks that will increase
                                    technical assistance to communities and provide additional support for community
                                    involvement in environmental  decisions. We hope that these activities will

                                    •   Create more public participation in EPA activities that will affect them;

                                       Foster constructive dialogues among public and private stakeholders and local,
                                       state, and tribal governments to address environmental and public health con-
                                       cerns; and

                                       Encourage all stakeholders to work cooperatively together to set community pri-
171                                    orities for environmental action.
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 y                                  1. Increase technical assistance to communities
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 ^                                  As part of a national program on hazardous material research, we support five
 'I                                  regional university consortiums in carrying out basic and applied research, technolo-
 <                                  gy transfer and training. These centers provide technical outreach services for com-
                                    munities in  their area, with a special emphasis on providing technical assistance for
                                    brownfields cleanup and redevelopment.

                                    As part of the next solicitation to establish new centers, we will place greater empha-
                                    sis on providing technical support activities, including outreach to communities.
                                    These centers will:

                                        -   Provide high-quality technical assistance materials for communities and other
                                           stakeholders on challenging redevelopment issues.

                                        -   Conduct forums for researchers, vendors, regulatory agencies, developers,
                                           and community leaders to discuss potential applications and benefits of
                                           cleaning up and redeveloping brownfield sites.
                                           Lead: Office of Research and  Development

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2. Establish "Good Neighbor Groups" in each EPA region

Good Neighbor Groups are voluntary groups facilitated by  EPA that bring together
industry; state, tribal and local government; and community representatives in eco-
nomically disadvantaged areas with major industrial sources. These groups meet
regularly for discussions and have often led to  agreements about new efforts to
address pollution issues. EPA's Region 5 office  has sponsored several "Good
Neighbor Groups" with key  industries  in a South Chicago community; the Agency is
now ready to expand this program more broadly.

       Our Region 5 staff with work with other regions to develop a Good Neighbor
       Group guidance document to  be used in other parts  of the country.
       Lead: EPA Region 5

    -   Each EPA Region will establish two "Good Neighbor Groups" over the next
       2 years to facilitate communication among community groups, industry, and
       state, tribal, and  local  governments.
       Lead: EPA Regions

3. Improve access to conflict resolution support

Early and meaningful stakeholder participation in Agency decision-making can
increase satisfaction with results and help reduce or avoid conflicts. While we've
already adopted a number of regulatory changes and new policies to increase
meaningful participation, we need to  do more  to routinely involve stakeholders  in all
Agency programs. When conflicts do  arise, we need to turn  to non-adversarial, col-
laborative  approaches for dealing with them. To do this, we will improve the ways
we involve stakeholders in discussions, and we will  improve  the ways we prevent and
resolve disputes.

    -   We will develop a user-friendly toolkit that explains dispute resolution
       processes and  identifies supporting resources that are available for commu-
       nity members and other stakeholders.

    -   We will develop an Agency policy on alternative dispute resolution. We will
       establish a permanent office of dispute resolution to oversee and coordinate

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                                         alternative dispute resolution activities. The office will assist communities, as
                                         well as EPA programs and regions, in preventing and resolving dispute issues.
                                         Lead:  Office  of the Administrator

                                  4. Assist communities through Supplemental  Environmental Projects

                                  When settling environmental enforcement cases, we require alleged violators to
                                  comply with Federal  environmental laws and regulations and to pay a civil penalty.
                                  Sometimes, we may  include Supplemental Environmental  Projects (SEPs) as part of
                                  the settlement. These projects provide environmental  improvements or other forms of
                                  compensation to the community  in which the violation occurred. We  encourage
                                  community involvement in the development of these projects, and we've developed
                                  a brochure to explain the policy to communities. To foster more use of these proj-
                                  ects, we will:
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                                         Develop a guidance document for companies that explains how to involve
[=                                        communities  in selecting  and developing SEP proposals.
$                                        Lead:  Office  of Enforcement and Compliance Assurance
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<2                                 5. Evaluate and update EPA's public participation requirements
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;|                                 We will assess how well our regulations and policies ensure public participation in
                                  decision-making. We will report on what we find and develop an action plan to
                                  upgrade requirements and fill gaps.
                                  Lead: Office of Policy and Reinvention
                                  Action 10: Provide "smart growth" support to states, tribes, and
                                  communities to help them find local solutions to livability issues.
                                  Objective:
                                  Because community development patterns have a great impact on environmental con-
                                  ditions and overall quality of life, we will support and encourage smart growth deci-
                                  sions by individuals, communities, businesses, and state, tribal and local governments.

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Background:

The development patterns in the United States over the last half of this century have
resulted in voracious land consumption and the loss of farmland, open space, and
wildlife habitat. Some unintended  consequences of these development patterns
include growing traffic congestion and air pollution, diminished access to nature
and open space, and more contaminated stormwater  runoff. These changes have
driven communities across the country to take a new look at development patterns
and use innovative growth strategies, n search of smarter growth, communities  are
considering policies that will deliver more compact, community-oriented develop-
ment centered around mass transit hubs, with walkable neighborhoods,  convenient
access to shopping and services, open space and access to nature.

Approach:

Our role in smart growth is not to provide regulatory directives or mandates, but to
support others' smart growth efforts. The positive impacts of smart growth directly
support EPA's goals of protecting human health and the environment. To encourage
this type of development, we will:

   Ensure that EPA regulations do not present barriers to smart growth efforts.

   Provide  guidance or policy on  how smart growth strategies can be used to meet
   regulatory requirements.

   Support and promote voluntary activities that encourage smart growth.

   Offer tools to help states, tribes, and communities  analyze the environmental
   benefits associated with smart growth decisions.

Our approach involves advancing smart growth through EPA National programs,
providing information and tools that link environmental, economic, and  social
issues, and promoting financial reforms that encourage more livable communities.
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Tasks:

1. Assist in establishing commuter choice programs across the country

"Commuter Choice" is a voluntary program to improve air quality and reduce traffic
congestion by educating employers and employees about tax incentives for public
transit, van pooling and  parking benefits. We are partnering with members of the
business community, environmental interests, and state and local governments to
extend this program throughout the country.

       We will provide commuter choice training workshops for business and other
       interested parties; support new and existing commuter choice pilot pro-
       grams; develop a model commuter choice program for federal agencies;
       and develop Internet-accessible commuter choice training and implementa-
       tion materials for individual  employees, employers, and metropolitan  areas.
       Lead: Office of Air and Radiation

2. Safely  return Superfund sites to productive use
   	*	'	'	
The Superfund Site Recycling Initiative is a nationally coordinated effort to return
Superfund sites to productive use. More than 100 Superfund sites, many thought to
be unusable, have already been recycled without an organized effort on the
Agency's part. By focusing more on recycling Superfund sites, we can increase the
number of sites in productive use. We will do this by involving states, tribes, and
local governments, potentially responsible parties (PRPs) and community organiza-
tions in determining  the reasonably anticipated future  uses of sites and in designing
cleanups that are consistent with those uses.

    -   We will select 50 pilot sites for Superfund recycling. For each site, we will
       provide up to $100,000 for a reuse assessment and for public outreach
       activities to determine future uses of the site.

       We will evaluate  policies and guidelines to determine where  refinements can
       be made to facilitate site reuse.

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       We will work with all regions and with real estate developers and associa-
       tions to share information about reuse successes, how to replicate those suc-
       cesses, and how to assess the reuse potential of sites.
       Lead: Office of Solid Waste and Emergency Response

3. Incorporate smart growth principles into the water pollution program

The Clean Water Act requires EPA to identify sources of pollution within a watershed
and to allocate pollutant loadings among those sources in a way that assures water
quality standards are met. Collectively, these allocations represent the watershed's
total maximum daily load, or TMDL. By specifying how much pollutant loadings
need to be reduced for the waterbody to attain  water quality standards, TMDLs can
play an important role in preventing water pollution problems and creating more
sustainable communities.
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       We will propose  changes to the TMDL regulations and guidance. To encour-
       age smart growth principles, we will include  incentives for redeveloping                                       |
       urban lands and encouraging the protection of critical habitat, agricultural                                    g
       lands, and open space. (For example, in allocating the pollutant load reduc-                                  ^
       tions needed to meet water quality standards, smaller loadings would be                                      ^
       allowed in limited growth zones compared to designated growth zones).                                      .1
                                                                                                               
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                                     5. Promote financial reforms that encourage more  livable communities

                                     A key barrier to creating more  livable communities  is financing. Current financing
                                     trends favor low density, single use, automobile-dependent development on the
                                     edges of communities.  EPA will work with financial institutions that are beginning to
                                     develop reforms in financing that encourage more livable communities.

                                         -   We will work with Fannie Mae, BankAmerica, the development community,
                                            federal agencies, states and other stakeholders to implement innovative
                                            financing  options that will prevent or reduce pollution.
                                            Lead: Office of Policy and Reinvention
                                     1Under Executive Order 1 2866, "economically significant" rules are generally those that have an eco-
                                     nomic impact of $100 million or more.

                                     2Under SBREFA, the definition of small entity varies by industry. Some definitions are based on annual rev-
                                     enues, others on the number of employees. Where not specified for a particular industry, the definition is
                                     generally a business with 500 or fewer employees.

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