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
^^^^^f^-Ss^^y^^Kv:^;^ jji^'.^.i.ijijv'-;^^^;^^^*™,f..
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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ompltance audits and help ensure
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working documents used, by the
^uditor^ i tp_ evaluate ' "Te,deral
'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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allows the user to custom-tailor the
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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