v>EPA
United States
Environmental Protection Agency
Office of Enforcement and
Compliance Assurance (2248A)
EPA300-N-01-004
           AUDIT  POLICY  UPDATE
 Volume 5, Number 1
            Office of Regulatory Enforcement
     Outreach  Programs Expand Use of
                  EPA's Audit Policy
   2,000 Tons of Volatile Organic Compounds Reduced
      From Petroleum Above-Ground Storage  Tanks
    Disclosures under EPA's Audit Policy
    continued to reach record levels in 2000
as the Agency promoted the disclosure and
correction of violations in specific sectors.

  The Agency continues to promote
compliance through the use of the Audit
Policy, and has extended its applicability
recently to a number of priority areas and
sectors such as:

  O  Above-ground storage tanks
  ©  Wetlands
  ©  Universities
  ®  Nitrate compounds

  ©  'Non-road' engines

  ©  Grain producers

  ©  Telecommunications companies
  Snapshot
                 ©  Airlines

                 ©  Iron and steel 'minimills'

                 In fiscal year 2000 alone, more than 425
              companies disclosed potential violations at
              nearly 2,200 facilities. More than 215
              companies corrected and received penalty
              relief for violations at approximately 435
              facilities in 2000, as well as 72 companies
              and 455 facilities in the first quarter of 2001.
              These  numbers represent a  continuing
              increase in the number of disclosures made
              annually under the Audit Policy.

                 Since 1995, when  the Audit Policy
              became  effective, more than  1,150
              companies  have  disclosed potential
                                                  Continued on page 2
                                                «s
   ** •Volatile Organic Chemicals Reduced: 2,021 tons Annually

  ^^ Wetlands Acreage Restored:  2,000 plus

  jg« *f!TRf Reporting of Nitrate Compounds—Companies Reporting 1st
  *~"~~      Time qr Correcting Form Rs: 135

    '•New Spill Prevention* Control and Countermeasure Plans: 246

       >ulf uric Acid, Diesel Fuel, Lead Reported to Emergency
  fe"<   , *, Responders: 5,5 Million Pounds
  SSW- V* *     r *      ,  *&"% ff*1   "IS-f^"41*3^ fe rf* -V tf^  1   '"1-  ?4  « fe  Pl~_
    ^l/Carfion Monoxide Reduced: 544 Tons Annually
    * ** '  *v   r f    ^> ""   v SS  V Vf^ ^^IV  t=4'v>v"1™       ^^™
       **  *  ^"r^ "^ * ^^"''T *"  %s MW.'t.A.TA  al^ ™ H^Asp C/ \ / ,£>^'*!"  9           *,
            P  rf    «B*->   *• * 1^ * ."Wtt  •*•  ^J1^ -NS-^t ^^S^v^fS   V  ^ ^
                              Spring 2001
                         EPA Revises
                         Audit, Small
                      Business Policies

                        o expand its regulatory
                      J compliance incentives
                      program,  EPA recently
                      revised  its  two  self-
                      disclosure policies, the Audit
                      Policy  and the  Small
                      Business   Compliance
                      Policy.
                        After  a  two-year
                      evaluation, EPA revised the
                      policies based on extensive
                      public outreach and the
                      Agency's experience in
                      handling self-disclosure
                      cases. Businesses that meet
                      policy condition's are eligible
                      for penalty reductions and
                      waivers and other benefits;
                      however,  both policies
                      prohibit   benefits   to
                      companies  for  certain
                      violations, such as those that
                      may result in serious harm
                      or risk, those that reflect
                      repeated noncompliance, or
                      those In which corporate
                      officials condone criminal
                      behavior. In addition, the
                      policies allow i EPA  to
                      recover economic benefits
                      from violating companies to
                      ensure  bu§,ixie§ses that
                      cormp'ly vyifn",ehvforirnental '
                      laws .are, "not  put at a
                      competitive disadvantage by ;
                      those" not complying.;    ; ;-;
                     •? " ."Key' revisions to the Audit
                      PQ|icy:. include lepgtheriing
                      the amount of -time from 10
                      to 21 daysffiat enjitjes have :'
                      to disclose a violation after
                      it is discovered; elajifyjrig
                                                                                  onpage2
         This newsletter can be found on the Internet at http://www.epa.gov/oeca/ore/auditupd.html

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                                               AUDIT POLICY UPDATE
Continued from page 3

and submitted more than 9,000 late or
corrected Form  Rs.Contact Tom
Marvin, EPAHQ, (202) 564-4282.
5Non-road Engines
     In  FY2000,  EPA  received
disclosures affecting more than 2,200
illegal nonroad engines. The CAA
requires that nonroad engines imported
into the United States display labels
certifying that they meet federal
emission standards. EPA investigations
at several U.S. ports, conducted in
cooperation with the U.S. Customs
Service, suggest that a number of
imported engines fail to meet these
labeling requirements, and a subset are
not meeting emission standards. These
"gray market" engines undermine the
nation's air quality goals and put law-
abiding equipment dealers  at  a
competitive disadvantage.
   EPA has taken many steps to bring
industry into compliance such as audit
settlements  with  importers  and
responding to industry requests for
increased enforcement against illegal
imports. For first-time violators, EPA's
goal is to  achieve a settlement that
includes a requirement for the violator
to conduct an audit and correct all prior
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violations of the regulations.
   All uncertified engines must be
exported, but label violations may be
corrected once EPA determines that the
engine is certified. When uncertified
engines are imported in equipment, the
importers are required to correct
violations by exporting the uncertified
engines and providing a new certified
replacement engine to the end user.
Contact Mark Siegler, EPA HQ, (202)
564-8673.
6
    Grain Producers
     In November 2000, EPA Region
7 issued letters to grain processing
facilities inviting them to voluntarily
audit for and correct violations of the
CAA's New Source Review (NSR)/
Prevention of Significant Deterioration
requirements.
   Demand for products from this
sector has steadily increased in the past
decade. Existing facilities may have
increased capacity byjnodifyin_g__
processlinits^r building new^ones to
meet this new demand.  Increased
capacity may trigger the need to obtain
pre-construction permits under the
CAA.
   Participants will have about six
months to complete an air compliance
audit and disclose any potential areas
of noncompliance to EPA.
   Region 7 has identified the grain
processing sector as an enforcement
priority for 2001. EPA plans to increase
overall inspections of grain processing
facilities. Contact Jan Lambert, EPA
Region 7, (913) 551-7003,

7    Telecommunications
     Industry
   In  2000,  EPA  continued  to
encourage    telecommunications
companies to voluntarily disclose and
promptly correct compliance problems.
   In  October,  five  companies
disclosed   3,457  environmental
violations from 1,122 of their facilities
in 45  states  and the District of
Columbia.
   Under the proposed settlements, the
companies will pay a total of $329,426,
the  amount,  saved by delaying
compliance with EPCRA,  SPCC
requirements, CAA, and RCRA. The
companies and their violations included:
AirTouch Communications, Inc.;
EPCRA and CWA SPCC; AT&T Corp.;
CAA and SPCC; AT&T Broadband,
LLC. EPCRA and SPCC; NEXTLINK
Communication, Inc.; EPCRA, SPCC,
CAA,  and   RCRA;   and  Qwest
Communications International, Inc.:
EPCRA, SPCC and CAA.
   Remedial  actions  for  these
companies' violations include notifying
local emergency planning committees
of the presence of hazardous chemicals,
preparing spill prevention plans,
applying for permits to construct or
                                      records for appliances containing more
                                      than 50 pounds of refrigerant, repairing
                                      refrigerant  leaks from  heating,
                                      ventilation and air conditioning units,
                                      and obtaining a letter of financial
                                      assurance demonstrating financial
                                      responsibility for corrective action or
                                      damage caused by sudden accidental
                                      releases from underground storage
                                      tanks.
                                         Since the outset of this initiative,
                                      EPA reached penalty settlements under
                                      its   Audit   Policy   with   24
                                      telecommunications companies that
                                      voluntarily disclosed and corrected more
                                      than 6,200 environmental violations at
                                      more than  2,200 facilities.  The
                                      companies  received  a  100 percent
                                      waiver of the gravity-based penalties,
                                      totaling more than $32  million, that
                                      otherwise could have been assessed.
                                      These companies paid approximately
                                      $607,000 in  penalties in  recent
                                                                                         Continued on page 5
                                                Spring 2001

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                                               AUDIT POLICY UPDATE
Continued from page 4

settlements—the amount of  the
economic benefit they realized through
noncompliance.
   These responsible companies have
ensured 246 facilities now have SPCC
plans in  place and have  reported to
emergency responders and planners
more than 2.3 million pounds of diesel
fuel, 2.1  million pounds of sulfuric
acid, and 1.4 million pounds of lead
present at their facilities. Contact Phil
Milton, HQ, EPA, (202) 564-5029.
8
    Airlines
     Following American Airlines'
voluntary disclosure of Clean Air Act
fuel standards violations in 1999, EPA
sent letters to all major domestic airlines
inviting them to audit and self-disclose
violations. The goal was to heighten the
awareness  of the airline industry's
environmental obligations to comply
with CAA federal fuel standards, CWA
storm'water and spilf prevention
requirements,  and EPCRA emergency
releases reporting. In  addition, EPA
informed facilities of the availability of
compliance  information  on the
Transportation Environmental Resource
Center (TERC) and provided highlights
of applicable  regulations to assist in
                                          |?you have questions about EFWs

                                                  situations, contact EPA's
                                            MLPplipy Coordinator, Leslie
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                                              es,  at (202)  564-5123.
                                              i«£'4K-^T^
                                            o|s|ions may be asked without
                                          Iscjosmg the  name of the client

                                               	

                                       of first impression. Chaired by
                                      (Leslje Jones^the Q RT js, ,mgde up
                                     ^j^epresentatiyes from EPA
                                       Headquarters, Regions, and the
                                      ..Department of Justice.
                                      *-:  -The QRT was developed to
                                     w.ensure.Jhat determinations for
                                     ^^gibjljty under the Audit Policy are
                                     '.;;
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                                         AUDIT POLICY UPDATE
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  'ewirQnmeritaj.qompliance.' EPA has
  produced audit protocols covering
  '.requirements; under'RCRA, CiERCLA,
	EPCRA	airi"d"'portions"6f"T§C'A and
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                                  offers trie protocols in both PDF and
                                        rdf'fpj-mats^ For  greater ^
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                                  protocols   to   more  specific
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                                           AUDIT POLICY UPDATE
                 Who to Contact to  Make  a Disclosure
                                                                Regulated entities that wish
                                                                to take advantage of the policy should
                                                                fax or send a written disclosure to the
                                                                appropriate EPA contacts listed below.
                                                                Written disclosure must be made
                                                                within 21  days  of the violation's
                                                                discovery.
•  Region 1: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
Contact Joel Blumstein at (617) 918-1771; fax (617) 918-1809.
•  Region 2: New Jersey, New York and the territories of Puerto Rico and the U.S. Virgin Islands.
Contact John Wilk at (212) 637-3918; fax (212) 637-4035.
•  Region 3; Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia.
Contact Samantha Fairchild at (215) 814-2999; fax (215) 814-2905.
•  Region 4: Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee.
Contact Bill Anderson at (404) 562-9680; fax (404) 562-9663.
•  Region 5: Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.
Contact Tinka Hyde at (312) 886-9296; fax (312) 353-4135.
•  Region 6: Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.
Contact Charles Sheehan at (214) 665-2228; fax (214) 665-2146.
•  Region 7: Iowa, Kansas, Missouri, and Nebraska.
Contact Becky Dolph at (913) 551-7281; fax (913) 551-7925.
•  Region 8: Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming.
Contact David Rochlin at (303) 312-6892; fax (303) 312-6339.
•  Region 9: Arizona, California, Hawaii, and Nevada, and the territories of Guam and American Samoa.
Contact Dan Reich at (415) 744-1343; fax (415) 744-1041.
•  Region 10: Alaska, Idaho, Oregon, and Washington.
Contact Jackson Fox at (206) 553-1073; fax (206) 553-0163.
•   HO Criminal Enforcement: Contact Jon Jacobs at (202) 564-4037; fax (202) 501-0599 (all potential criminal
violations).
•  National Audit Policy Coordinator:  Contact Leslie Jones at (202) 564-5123; fax (202) 564-0011 (civil violations in
more than one EPA Region and policy questions).
                                            Spring 2001
Page 7

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vvEPA
United States
Environmental Protection Agency
Office of Regulatory Enforcement
(2248A)
1200 Pennsylvania Avenue, NW
Washington, DC 20460

Official Business
Penalty for Private Use $300
Audit Policy Update
Continued from page 5

   This year's minimill program is the
most recent in a multi-year effort to
assist this  sector  in  achieving
compliance. This focused effort began
in  1996,  when EPA Region V
encouraged minimills to self-disclose
violations to the Agency to improve
compliance among the minimills within
its six states. The disclosures submitted
by the companies and the multimedia
inspections performed by Region V and
states revealed environmental concerns
involving uncollected K061 baghouse
dust, slag cooling water puddles, electric
arc  furnace  shop floor dust  and
monitoring, reporting, and maintenance
requirements.  Contact Michael
Calhoun, EPAHQ, (202) 564-6031.

Update: Pork Producers
   In November 1998, EPA and the
National Pork Producers Council
(NPPC) agreed to a comprehensive
Clean Water Act Compliance Audit
Program. The Clean Water Act audit
program provides incentives for pork
producers to undertake voluntary
comprehensive on-farm environment
assessments  by greatly reducing
penalties for any CWA violations that
are promptly disclosed and corrected
under this program.
   Since the start of the program, EPA
has  entered  into a total  of 239
agreements and received 154 reports
with no violations reported.
   The NPPC, which represents pork
producers nationally, plans to  have
independent auditors conduct audits
nationwide to  improve environmental
management practices  and assure
compliance with the CWA.  Contact
Kate Anderson, EPA HQ, (202) 564-
4016.
      Rocyctod/Hocyclable. Printed with Soy/Canola Ink on paper that contains at least 30% recycled fiber

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