&EPA
United States
Environmental Protection Agency
Office of Enforcement and
Compliance Assurance
EPA300-N-99-001
AUDIT POLICY UPDATE
Volume 4, Number 1
Office of Regulatory Enforcement
Spring 1999
10 Telecommunications Companies Disclose,
Correct Violations Under Audit Policy
Ten telecommunications companies
recently disclosed and promptly
corrected 1,300 environmental violations at
more than 400 of their facilities.
Under proposed and final settlements, the
companies have corrected violations of the
Emergency Planning and Community Right-
to-Know Act (EPCRA) and/or the Clean
Water Act's (CWA) Spill Prevention Control
and Countermeasure (SPCC) requirements.
Correction requires properly notifying local
emergency planning committees of the
presence of hazardous chemicals and
preparing spill prevention plans to reduce the
risk of environmental accidents, and protect
the safety of those who respond if an accident
occurs.
EPA has reached final settlements under
EPCRA with Cincinnati Bell Telephone
Company; Cincinnati Bell Long Distance;
Convergys Customer Management Group;
Dallas MTA, L.P.; Houston MTA, L.P.;
PrimeCo Personal Communications; and San
Antonio MTA, L.P
Proposed settlements pending approval by
the Environmental Appeals Board are with
Cellco Partnership and its affiliates doing
business as Bell Atlantic Mobile or Cellular
One (EPCRA and SPCC), Southwestern Bell
Telephone Company (SPCC); and United
States Cellular Corporation (EPCRA and
SPCC).
The disclosures were made under EPA's
"Audit Policy," which sharply reduces or
eliminates penalties for companies that
voluntarily audit, promptly disclose and
correct violations. Since the Audit Policy was
implemented in 1996, environmental violations
Continued Page 10
Audit Policy Evaluation and Proposed
Revisions Near Completion
Preliminary Findings and User Survey Responses Highlighted
Since its issuance in December 1995,
EPA's Audit Policy has been widely
used, generating disclosures of violations
from approximately 470 entities at more than
1,880 facilities.
Discovery and correction of violations
under the policy have resulted in removal of
pollutants from the air and water, reductions
of health and environmental risks and
improved public information on potential
environmental hazards and reduced
environmental pollutants. The policy has
encouraged companies to expand their use
of environmental auditing and compliance
management systems. There also is a very
high satisfaction rate among users of the
Audit Policy.
Those are some findings of an EPA Audit
Continued Page 4
NEWS&
INFORMATION:
Y2K Incentives
Policy: Page 3
Region 9 University
Compliance Incentive
Program: Page 3
EPA Announces
Voluntary Audit
Program for Nation's
Pork Producers: Page 5
EPA Issues Audit
Protocols for Three
Statutes: Page 7
National Conference of
State Legislatures'
Report: Page 8
Md. Company First to
Get Penalty Relief for
'Disclosure Rule'
Violations: Page 9
Industrial Vegetable
Oils Industry Must
Comply with TSCA
Sect. 8: Page 9
DEPARTMENTS:
From the Assistant
Administrator: Page 2
Resources on the 'Net:
Page 10
Information Corner:
Page 11
This publication is on the Internet at http://www.epa.gov/oecet/apolguid.html
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AUDIT POLICY UPDATE
FROM THE ASSISTANT ADMINISTRATOR
Office of Enforcement and Compliance Assurance
Steven A. Herman
Since its inception in January 1996,
EPA's Audit Policy has opened
the door for responsible companies to
reap the benefits of self-disclosure and
compliance with federal environmental
laws and regulations. To date, 470
companies have disclosed environmental
violations under the Audit Policy at more
than 1,880 facilities nationally, and EPA
has reduced or waived penalties under
the policy for 166 companies at 936
facilities so far. Only 80 companies have
made disclosures that were determined
not to involve
violations or were
ineligible for Audit
Policy relief; the
balance is still under
understanding of how the Audit Policy is
to be applied. For example, in some cases
we have agreed that multi-facility
disclosures can be made at the end of a
reasonable period to complete the
corporate-wide audit, rather than 10 days
after discovery of each violation at each
facility. Companies interested in
negotiating corporate-wide disclosures
are encouraged to contact Leslie Jones,
Office of Regulatory Enforcement, (202)
564-5123.
EPA is also increasingly focused on
targeting use of the Audit Policy to
particular compliance problems within
particular sectors. These efforts may
combine outreach, identification of
compliance assistance tools like audit
protocols, and more defined terms for
audit disclosure and correction. This issue
reports on our initiatives to encourage
review.
The Agency is
encouraged by the
growing trend in corporate-wide
disclosures under our Audit Policy. In
this issue, for example, we announce
settlements with 10 telecommunication
companies that corrected violations of
spill prevention and hazard notification
requirements at 400 facilities. EPA is
negotiating with other companies in this
sector, and we expect more settlements
to follow. We have also granted penalty
relief for multi-facility disclosures from
BP Exploration, Burlington Northern
Santa Fe, Union Carbide Corp., and
others. These agreements are often
preceded by negotiations in which EPA
and the company arrive at a mutual
As of March 1999, 470 companies have disclosed
environmental violations under EPA's Audit Policy at
more than 1,880 facilities nationally, and EPA has reduced or
waived penalties under the policy for 166 companies at 936
facilities so far.
compliance with Clean Water Act
requirements by pork producers,
eliminate "non-notifier" violations at
chemical plants, and correct TSCA
violations by oilseed manufacturers and
RCRA violations at universities and
colleges.
For EPA, such initiatives provide an
efficient and economical means of
ensuring and improving compliance with
environmental laws and regulations. For
regulated industry, these initiatives create
a level-playing field by offering all
companies the opportunity to comply
without the stigma of a hostile
enforcement action and potentially costly
sanctions for violations.
Our results show that EPA's Audit
Policy is serving its intended purpose;
however, we are always trying to
improve upon it. As promised in the
Dec. 22, 1995, Federal Register, we
are conducting a three-tiered
evaluation of the Audit Policy's
effectiveness. In June 1998, we asked
EPA Regions to complete an "Internal
Survey" to evaluate their own
experiences under the Audit Policy
and suggest possible revisions to
enhance implementation efforts.
Besides receiving public input
through focus groups and the Office
of Enforcement and Compliance
Assurance's 5th Anniversary
Conference, we sent out a customer
satisfaction survey in October 1998 to
252 companies 8 that had self-disclosed
under EPA's Audit
Policy to obtain
feedback
concerning their
experiences under
the policy. This
month, we expect
to issue a Federal
Register notice soliciting comments
about the effectiveness of EPA's Audit
Policy and suggestions for changes to
the policy.
Meanwhile, we encourage industry
to continue to make use of EPA's Audit
Policy and compliance incentive
programs. The continued efforts of
responsible companies working to stay
in compliance with environmental laws
will help meet our common goal of
protecting the public health and the
environment.
Page 2
SPRING 1999
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AUDIT POLICY UPDATE
Y2K Policy Provides Incentives to Test
Computer-Related Equipment, Disclose Violations
EPA issued an enforcement policy on
Nov. 30, 1998, designed to
encourage prompt testing of computer-
related equipment to ensure that
environmental compliance is not impaired
by the Y2K computer bug. Under the
policy, EPA stated its intent to waive 100
percent of the civil penalties that might
otherwise apply, and recommend against
criminal prosecution for environmental
violations caused during specific tests
that are designed to identify and eliminate
Y2K-related malfunctions.
The Y2K issue arises because a
number of computerized functions
require recognition of a specific year, day,
and time but many computers and
computerized equipment recognize only
the last two digits of a year's date (i.e.,
1998 is 98; 2000 is 00). Therefore, when
the calendar changes to the year 2000,
computers and equipment with embedded
computer chips may have difficulty
interpreting the correct date. They may
interpret the year to be 1900 or some
other year. As a result, some computers
and equipment containing embedded
computer chips could become
permanently unable to function properly.
The policy is similar to the Agency's
Audit Policy because it requires facilities
to identify, promptly disclose, and
expeditiously correct violations and
remediate any adverse consequences
that result from Y2K-related testing.
Also, it precludes eligibility under the
policy where there is actual serious harm
Y2K Policy is available on
the Internet at
www.epa.gov/year2000
or a potentially imminent and substantial
endangerment. Unlike the Audit Policy,
it is limited to testing-related violations,
and only to such violations disclosed to
EPA by Feb. 1,2000. In addition, eligibility
is subject to other conditions, such as the
need to design and conduct the tests well
in advance of the dates in question, the
need to conduct the tests for the shortest
possible time period necessary, the need
to correct any testing-related violations
immediately, and other conditions to
ensure that protection of human health
and the environment is not compromised.
The policy's primary focus is to
encourage the regulated community to
test their equipment early and resolve any
potential environmental compliance
problems promptly that result from Y2K-
related equipment problems. Where a
facility, however, tests in accordance with
the policy's terms but cannot correct all
its Y2K-related deficiencies promptly,
despite its best efforts, it is still likely to
be in a more favorable position than
facilities that do not take such steps.
In response to comments received on
the policy, EPA has made several minor
language changes to clarify the Agency's
intent, and published the policy in the
Federal Register on March 10, 1999.
The policy and more information are
available on the Internet at
www.epa.gov/year2000.
Contact Gary Jonesi, Office of
Regulatory Enforcement, (202) 564-
4002.
EPA Region 9 Invites Colleges, Universities to Participate in
RCRA Compliance Incentive Program
In a Jan. 19, 1999 letter, EPA
Region 9 invited all colleges and
universities in Arizona to participate
in a compliance incentive program
that the Region developed to help the
schools determine their compliance
with the requirements of the Resource
Conservation and Recovery Act
(RCRA).
EPA is offering the 28 Arizona
universities and colleges the
opportunity to conduct environmental
audits and disclose any violations
discovered to the Agency for
consideration under the Audit Policy.
At the end of the six-month program,
Region 9 will increase inspections at
universities and colleges. Although
EPA will consider disclosures of
violations of other than RCRA
requirements, the compliance incentive
program focuses on RCRA because
violations of hazardous waste
requirements have been documented
at university laboratory and facility
operations.
Contact Brian Riedel, EPA
Region 9, (414) 755-1380.
SPRING 1999
PageS
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AUDIT POLICY UPDATE
Audit Policy Evaluation
From Page 1
Policy evaluation, which consisted of an
internal feedback and a survey of Audit
Policy users. The findings and proposals
for several changes to the policy are
being summarized in a Notice that EPA
will publish in the Federal Register in
April. Readers will be invited to provide
comments.
Preliminary findings
Use of the Policy is widespread and
has increased annually since it took
effect. The number of multi-facility
disclosures is increasing as well, with 16
parent companies disclosing the same
types of violations at more than 900
facilities, resulting in nationwide auditing
and widespread environmental benefit.
Of the 153 cases settled under the Audit
Policy for more than 526 facilities, 126
resulted in no penalty. In eight others,
the disclosing entity paid a penalty
representing only the economic benefit
of non-compliance, with 100 percent
mitigation of the gravity component of
the penalty.
User Survey Responses
Several months ago, the Agency sent
a voluntary and anonymous User's
Survey to 252 entities that had disclosed
environmental violations under the Audit
Policy. Users generally indicated support
for the compliance incentive approach of
the policy. "Everyone wins," stated one
respondent. Another said "It [Audit
Policy] enhances compliance,
environmental performance and
depolarization of regulators and the
regulated community."
Respondents indicated that the policy
enhances trust between EPA and
regulated entities. One respondent noted,
"It was a very good experience. It
4£EPA demonstrated
the benefit of
maintaining
compliance and
auditing programs
through [its]
willingness to reduce
penalty amounts on
self-reported
violations." —
Respondent, Audit
Policy Evaluation
allowed the facility to respond proactively
to address a compliance issue quickly
without delay." Another respondent
noted that the Audit Policy "creates an
incentive for comprehensive self-
auditing."
Among other highlights of the survey,
approximately 50 percent of the
respondents that had formal
environmental managements systems
(EMSs) or auditing programs reported
that the Audit Policy encouraged
specific improvements in their EMSs or
auditing programs. For example, several
respondents remarked that the use of
the Audit Policy broadened the scope
of their awareness of various regulatory
responsibilities and led to more and
better auditing.
Revisions Under
Consideration
Based on the survey results and
other information, EPA is considering
improvements to the Audit Policy,
including broadening the prompt
disclosure period and clarifying that an
enforcement action taken against one
facility does not always bar another
facility owned by the same company
from obtaining relief under the Audit
Policy for disclosing the same violations.
EPA is also proposing changes to the
policy's implementation, including a
commitment to reduce the time for
processing Audit Policy cases.
Contact Bob Fentress, Office
Planning and Policy Analysis, (202)
564-7023.
AUDIT POLICY UPDATE
The Audit Policy Update is published periodically for the Assistant Administrator for Enforcement and
Compliance Assurance by the Office of Regulatory Enforcement. The newsletter is intended to provide
information to the public and regulated communities regarding developments under EPA's Audit Policy.
Director, Office of Regulatory Enforcement Eric. V. Schaeffer. Editor: Virginia Bueno, (202) 564-8684. Email:
bueno.virginia@epamail.epa.gov. Attorney-Advisor: Leslie A. Jones, (202), 564-5123. Change of address or
information on how to subscribe to this newsletter should be sent to the Editor.
Page 4
SPRING 1999
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AUDIT POLICY UPDATE
EPA and Pork Producers Agree to Audit Program
to Protect America's Waters
Program Goes Beyond Existing Law by Requiring Independent Inspectors to
Certify That Clean Water Act Violations are Corrected
The EPA and the National Pork
Producers Council (NPPC)
announced on Nov. 25,1998, a voluntary
compliance program to reduce
environmental and public health threats
to the nation's waterways from runoff
of animal wastes from pork-producing
operations.
Underthis initiative, participating pork
producers will have their operations
voluntarily assessed for Clean Water Act
(CWA) violations by certified
independent inspectors. Producers who
promptly disclose and correct any
discovered violations from these audits
will receive a much smaller civil penalty
than they might otherwise be liable for
under the law.
The program goes beyond existing
law by requiring participating pork
producers to certify that the final report
identifying violations is correct and by
requiring inspectors to certify that CWA
violations have been corrected.
COMPLIANCE
INCENTIVE PROGRAM
violations report submitted by
participating producers, and the producer
is liable for full penalties for any
violations not reported or corrected
through the audit. In addition, the
agreement does not apply to any
violations that are the subject of citizen
suits or that are known to EPA or a state
prior to the audit.
Inspecting and taking enforcement
actions against CWA violations by large
confined animal feeding operations is one
of EPA's highest national priorities. The
Clean Water Action Plan, which is the
Administration's blueprint for completing
cleanups of our nation's rivers, lakes and
streams, has identified polluted runoff
from industrial feeding operations as a
leading source of water pollution. In
Producers who promptly disclose and correct any
smaller civil penalty than they might otherwise be liable for
under the law.
The agreement does not compromise
the ability of EPA or states to enforce
the Clean Water Act (CWA). EPA or
State agencies will continue to inspect
and take enforcement action as needed.
EPA retains all injunctive authority and
can accelerate the timetable for
corrections if needed. In addition, EPA
or state agencies may verify the final
conjunction with the Clean
Water Action Plan, EPA and the U.S.
Department of Agriculture announced
a joint animal feeding operations draft
strategy to control agricultural animal
waste runoff. The amount of animal
manure and wastewater generated from
animal feeding operations can pose risks
to water quality and public health.
The compliance audit program
provides an incentive for pork producers
to take the initiative to find and correct
CWA violations and prevent discharges
to waterways without compromising the
ability of EPA or states to enforce the
law. Pork producers who undergo the
assessment and promptly report and
correct violations will receive seals from
the NPPC. Seals will be withdrawn if a
producer is found later to be in violation
of the CWA.
The compliance audit program does
not extend to slaughterhouses,
pork-processing and packing facilities or
other ancillary operations.
EPA will consult closely with the
states in implementing the compliance
audit program. States may elect to
administer the program directly, in which
case, EPA will refer any disclosures to
the states for consideration and
response.
Additional information about the
compliance audit program can be found
at http://www.epa.gov/oeca/ore/
porkcap. EPA's National Agriculture
Compliance Assistance Center can
provide additional information about
EPA's environmental regulations and
voluntary pollution prevention
opportunities. The Center's
Homepage can be found at http://
www.epa.gov/oeca/ag or call the
Center toll-free at 1-888-663-2155.
Contact Ciannat Howett, Office of
Regulatory Enforcement, Water
Enforcement Division, (202) 564-
4031.
SPRING 1999
PageS
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AUDIT POLICY UPDATE
EPA Provides
Callers
Advice About
Audit Policy
Disclosures
Parties with questions about
EPA's Audit Policy or its
applicability to specific situations
can get general advice from EPA
through several sources without
havingtoidentify themselves.
EPA encourages interested
parties to contact its Audit Policy
Coordinator, Leslie Jones, at
(202) 564-5123 with specific
inquiries. In addition, parties
may use EPA's Quick Response
Team (QRT) as a resource for
cases of first impression. The
QRT is made up of representatives
from EPA Headquarters, EPA
Regions, and the Department of
Justice.
The QRT was developed to
ensure that determinations for
eligibility under the Audit Policy
are expeditious, fair and consistent
nationally.
Agency Launches New Compliance
Incentive Program for Industrial
Organic Chemical Sector
The Audit QRT Chair is
Leslie Jones, (202) 564-5123.
EPA has initiated a program that
encourages the industrial organic
chemical sector (SIC Code 2869) to
perform environmental compliance
audits and to take advantage of EPA's
Audit Policy to self-report any violations
uncovered during such audits.
In August 1998, EPA launched the
compliance incentive program by issuing
letters to approximately 1,000 industrial
organic chemical facilities.
Under the program, EPA has
received approximately 45 self-
disclosures covering all major
environmental programs. Many of the
self-disclosures covermultiple facilities.
To participate in the program,
facilities had until Jan. 31, 1999, to
perform voluntary environmental audits
of their operations, identify potential
areas of noncompliance uncovered by
the audit, and report these findings to
EPA. The letter also directed interested
facilities to resources that may assist
them in understanding their obligations
under environmental statutes and in
performing environmental audits.
The compliance incentive program
focused on the industrial organic
Visit http://
www.epa.gov/oeca/ore/
red for more
information about the
Industrial Organic
Sector (SIC Code 2869)
Compliance Incentive
Program
COMPLIANCE
INCENTIVE PROGRAM
chemical sector because of EPA's
concern that some facilities may be
avoiding reporting and other regulatory
requirements. In addition, more
enforcement actions have been taken
in this sector than in any other priority
sector.
While the Audit Policy usually
requires prompt disclosure of a violation
within 10 days of discovery, under this
program EPA encouraged companies
to disclose their violations all at once,
rather than piecemeal. Thus, civil
violations disclosed no later than Jan.
31, 1999, are considered prompt under
this program, so long as the violations
are discovered through an audit and
meet all other policy conditions. The
exception to the 10-day notice
requirement does not affect the
requirement to meet all other conditions
of the Audit Policy, such as the
requirement to correct all violations
expeditiously.
For more information about the
compliance incentive program, EPA has
posted a fact sheet, a list of questions
and answers about the program, and an
example of the letters sent out to a
portion of this sector on its Website at
http://www.epa.gov/oeca/ore/red.
Contact Mary Andrews, Office of
Regulatory Enforcement, RCRA
Enforcement Division, (202) 564-
4011.
Page 6
SPRING 1999
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AUDIT POLICY UPDATE
EPA Issues Audit Protocols for Three Statutes;
Nine More Under Development
EPA recently issued four
voluntary environmental
compliance audit protocol manuals, the
first part of a multi-media set of 13, to
assist the regulated community in
conducting environmental audits. To
date, EPA has issued audit protocols for
the Comprehensive Environmental
Response, Compensation, and Liability
Act (CERCLA), the Emergency
Planning and Community Right-to-Know
Act (EPCRA), and the Resource
Conservation and Recovery Act
(RCRA). RCRA protocols are
presented in two volumes, addressing
generators and treatment, storage and
disposal facilities.
EPA developed these protocols to
encourage businesses and organizations
to perform environmental audits and
disclose violations in accordance with
EPA's Audit Policy. The audit protocols
are intended to help provide guidance to
regulated entities conducting
environmental audits and to ensure that
audits are conducted in a thorough and
comprehensive manner.
Although the protocols were
developed originally to assist the
industrial chemical sector in particular,
many of the protocols apply to all
regulated entities. Each protocol offers
guidance on key requirements, defines
regulatory terms, and provides an
overview of the federal laws affecting
a particular environmental management
area. It also includes a checklist
containing detailed procedures for
conducting a review of facility
conditions.
EPA expects to issue nine additional
protocols this year: Nonhazardous
Waste Management; Universal Waste
and Used Oil; Pesticides Management;
PCB Management; Safe Drinking
Water Act; Spill Prevention Control and
Countermeasure Requirements and
Storage Tank Management; Clean Air
Act; Clean Water Act; and TSCA.
Electronic versions of the protocol,
which can be tailored to a specific facility,
can be found at the following websites:
• RCRA generators [Document No.
EPA-305-B-98-005] at http://
www.epa.gov/oeca/ccsmd/
gen_ptll.html.
• EPCRA [Document No. EPA-305-
98-007] at http://www.epa.gov/oeca/
ccsmd/epcra.pdf.
• RCRATSDF [DocumentNo.EPA-
305-B-98-006] at http://www.epa.gov/
oeca/ccsmd/tsdf.pdf.
• CERCLA [Document No. EPA-
305-B-98-009] at http://www.epa.gov/
oeca/ccsmd/cercla.pdf.
Hard copies of the protocols are
available from EPA's National Center for
Environmental Publications and
Information at 1-800-490-9198.
Contact Richard Satterfleld, Office
of Compliance, (202) 564-2456.
East Ohio Gas Self-Discloses and Corrects PCB Violations
On July 13, 1998, EPA reached a
settlement with East Ohio Gas that
resolves a series of polychorinated
biphenyl (PCB) violations disclosed by
the company.
In settling the disclosed violations,
EPA proposed a civil penalty of
$1,247,460. By qualifying for
settlement under EPA's Audit Policy,
the company will pay a $193,260 fine.
The fine offsets the economic benefit
that East Ohio received by not fully
complying with PCB regulations. The
settlement requires the company to
correct its violations and prevent future
recurrence.
PCBs are a group of toxic
chemicals once widely used in
industry as coolants and insulators.
EPA banned the manufacture of
PCBs in 1979 due to evidence that
they accumulate in the environment
and present health hazards. Under
TSCA, EPA regulates the proposed
cleanup, disposal, marking, record
keeping, storage, and limited use of
PCBs to protect the public from these
potentially dangerous chemicals.
In June 1995, East Ohio Gas self-
disclosed to EPA violations of several
federal PCB rules at its Cleveland-
area facilities, including the failure to
properly manufacture, use, label, store,
record or dispose of PCBs and PCB-
containing items. Also, East Ohio
disclosed that it failed to prepare,
carry-out, and have available for
inspection a spill prevention control and
countermeasures plan as required by
the Clean Water Act. In April 1998,
the company completed a company-
wide audit to determine its compliance
with the federal rules.
Contact John Steketee, EPA
Region 5, (312) 886-0558.
SPRING 1999
Page?
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AUDIT POLICY UPDATE
NCSL Report Shows No Increase in Environmental
Audits Due to State Privilege, Immunity Laws
Anew National Conference of State Legislatures
(NCSL) study concludes that there is no evidence to
support the claim that state audit privilege and immunity laws
encourage facilities to begin auditing, increase the number of
audits they perform or disclose more violations.
Based on the study's results, EPA believes that its well-
established position of opposing enactment of federal or State
audit privilege and immunity laws remains appropriate.
While more than 75 percent of the 988 facilities surveyed
are performing audits, the existence of an audit law or policy
does not appear to influence the level of audit activity. NCSL
found no statistically significant difference in auditing rates
based on whether the state in which the facility operates has
an environmental audit law, audit policy, or no law or policy.
The study also examined whether there has been any
increase in auditing among the surveyed facilities during the
past four years (when environmental audit laws began to be
enacted). The number of facilities beginning to conduct audits
increased slightly during that time, as did the number of audits
conducted by all facilities surveyed. Again, however, NCSL
found no statistically significant difference in the increase in
auditing rates over the four-year period for facilities based on
whether they were located in a state with an audit law, audit
policy, or neither.
Additionally, the study found that the majority of facilities
surveyed had not disclosed violations that had been discovered
For Your Information....
during an audit. Also, the fact that the facility was located in
a state with an audit privilege and immunity law does not
appear to make a difference.
The NCSL report may support EPA's view that a strong
environmental enforcement program is the key to achieving
better environmental compliance and protection. Significantly,
the study found that inspector presence is a strong motivator
for auditing. An overwhelming number of facilities (90
percent) identified measuring compliance with environmental
laws, and finding and correcting violations before inspectors
do as very important reasons why they conduct audits. This
overshadowed any other motivators.
In 1997, NCSL applied for and received a grant from
U.S. EPA to perform this independent study with the
assistance of Abt Associates Inc., of Cambridge, Mass.
The author of the NCSL report is Larry Morandi, Director,
Environment, Energy & Transportation Program, (303) 830-
2200. Summary information on the NCSL report is available
on the Internet at http://www.ncsl.org/programs/esnr/
audits.htm.
Contact Nancy K. Stoner, Director, Office of Planning
and Policy Analysis, (202) 564-2530.
FA
500-
400-
300-
200-
100-
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OLITIES GRANTED PENALTY RELIEF BY EPA
fzL= r=\
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How to Get Audit Policy-Related
Documents
Documents concerning the development of the Audit
Policy, settlements under the policy and additional copies
of this Audit Policy Update can be obtained by
contacting the Audit Policy Docket located in Room
4033 of the Ariel Rios Building (1200 Pennsylvania
Avenue, N.W., Washington, D.C. or by visiting the
Environmental Auditing Policy Compliance docket at
http://www.epa.gov/oeca/polguid/enfdock/
docketC9401.html.
Copies are also available by calling (202) 564-2119
or(202) 564-2614 or by faxing requests to (202) 501-
1011.
Page 8
SPRING 1999
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AUDIT POLICY UPDATE
Maryland Realty Company First to Get Penalty Relief
under Audit Policy for Lead Paint Disclosure Rule Violations
In May 1998, a Maryland property management firm became
the first company to be approved for penalty relief for
violations of the Real Estate Notification and Disclosure Rule
under EPA's Audit Policy.
The Disclosure Rule, a public right-to-know initiative under
the Residential Lead Based-Paint Hazard Reduction Act of
1992, requires sellers, landlords and agents to provide
purchasers and tenants with an EPA-approved lead hazard
information pamphlet. The rule also allows purchasers a 10-
day period to inspect housing units for the presence of lead-
based paint and associated hazards. Furthermore, sales and
leasing contracts must include certain notification and
acknowledgment languages.
Grady Management Inc. disclosed four violations of the
Disclosure Rule after a voluntary self-audit of its 28 apartment
complexes in Maryland. The violations concerned two
apartment complexes in which Grady failed to properly disclose
the presence of known lead-based paint to its tenants, as
required by the Disclosure Rule. After notifying EPA of the
violations, Grady promptly abated the lead-based paint in one
apartment complex and provided the tenants with the correct
disclosure statement in the other complex.
Recognizing Grady's voluntary efforts to find, promptly
disclose and expeditiously correct violations of the Disclosure
Rule, EPA waived thousands of dollars in potential penalties
against Grady after determining that Grady met all of the
conditions of the Audit Policy.
Since the Agency began enforcing the Disclosure Rule
last year, EPA has issued four civil complaints, with penalties
totaling $439,725 and 22 "Notices of Violations" forviolations
of the rule.
Contact Claude Walker, Office of Regulatory
Enforcement, Toxics and Pesticides Enforcement Division,
(202) 564-4042.
Six Industrial Vegetable
Oil Companies Self-
Disclose Violations Under
Audit Policy
EPA recently settled with six
members of the National Oilseed
Processors Association (NOPA) who
notified the Agency they may have
violated TSCA Section 8 and 40 C.F.R
Part710. The companies requested that
their self-disclosures be considered
under the Audit Policy.
Industrial vegetable oils, animal fats,
and petroleum oils share common
chemical and physical properties and
produce similar environmental effects.
These oils can contain toxic components
and produce similar acute toxic effects,
chronic toxicity, and carcinogenicity. In
addition, the oils can interfere with water
treatment, and can have detrimental
physical effects on animals and spawning
grounds, such as oxygen depletion and
suffocation, egg contamination, and
destruction of food supply and habitat.
Section 8, commonly known as the
Inventory Update Rule, requires
manufacturers, processors and importers
of certain chemical substances to report
the chemical identity, quantity and site
of manufacture, processing or
importation of these substances every
four years. EPA uses this information
to update the TSCA Chemical
Substances Inventory database. The
data in the Inventory is considered the
only reliable source of national production
volume information for organic
chemicals. EPA uses the data to justify
testing and regulatory action. It is also
used by other federal and state agencies
to assist in establishing an integrated
toxics program.
After conducting environmental
audits, the six companies, Ag Processing
Inc, Bunge Corporation, Central Soya
Company, Inc., Harvest States, Inc.,
Riceland Foods, Inc., and Townsends,
Inc., confirmed TSCA Section 8
violations for substances such as soybean
oil, soya lecithins, acidulated soapstock
and other similar chemicals.
All six companies met Audit Policy
requirements and were not assessed a
penalty. Under federal law, the
companies could have been liable for
$493,000 in total penalties for failure to
report to the TSCA Inventory.
Food processors who produce
products that do not qualify as "foods"
or "food additives" for purposes of the
Federal Food, Drug and Cosmetic Act
are subject to regulation as a chemical
substance manufacturer under TSCA
and must comply with the Inventory
Update Rule. Companies are using
vegetable oils and other derivatives from
vegetable processing as an ingredient in
lubricants, paints, inks, fuels, plastics,
solvents and a variety of other industrial
products.
Contact Kathy Clark, Office of
Regulatory Enforcement, Toxics and
Pesticide Enforcement Division, (202)
564-2164.
SPRING 1999
Page 9
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AUDIT POLICY UPDATE
Telecommunications Companies Take Advantage of Audit Policy
From Page 1
have been disclosed atmore than 1,800
facilities nationally.
The disclosures by the 10 companies
resulted from an Agency outreach effort
to the nation's telecommunications
companies following on the heels of a
major settlement by EPA and the GTE
Corporation in January 1998. The GTE
settlement resolved 600 EPCRA and
SPCC violations at 314 GTE facilities
in 21 states and was the largest Agency
settlement reached through EPA's self-
disclosure policy.
In addition to correcting violations,
the 10 telecommunications' companies
will pay a total of $128,772 for their
violations, which is equal to the amount
the companies saved for delayed
compliance. Pursuant to the Audit
Policy, the Agency has waived or
proposed to waive more than $4.2
million in potential gravity-based
penalties that otherwise could have been
assessed.
"These settlements and proposed
settlements continue to show how EPA's
self-disclosure policy benefits the public,
The 10 telecommunications
companies disclosed and
promptly corrected 1,300
violations at more than 400
facilities
the environment, and industry," said
Steve Herman, EPA's Assistant
Administrator for Enforcement and
Compliance Assurance. "We were able
to settle these cases quickly and
efficiently, and local and state
governments will have the information
they need to protect their citizens and
their environment in the event of a
hazardous chemical spill or accident."
The Emergency Planning and
Community-Right-to-Know Act
(EPCRA) was enacted to help local
communities protect public heath, safety,
and the environment from chemical
hazards. Nine of the companies failed
to notify state agencies and local fire
departments of the presence of sulfuric
acid, lead, and/or diesel fuel at some of
their sites. Facilities that have hazardous
chemicals and meet reporting thresholds
must submit reports to the appropriate
agencies by March 1 annually. Under
SPCC requirements, facilities are
required to prepare plans that help
prevent or mitigate spills and keep
hazardous chemicals from polluting
streams and other water bodies. All of
the companies involved have made the
appropriate notifications and/or
developed plans, as required by federal
regulation.
Notice of the SPCC claims against
United States Cellular Corporation and
Southwestern Bell Telephone Company
was published in the Federal Register
on Feb. 1, and Cellco Partnership on
Feb. 10, for a 30-day public comment
period. The United States Cellular
Corporation and Cellco Partnership
matters also include EPCRA claims,
which are not subject to public comment
under the law. The Environmental
Appeals Board must approve these
consent agreements.
Contact Phil Milton, Office of
Regulatory Enforcement, Multimedia
Enforcement Division, (202) 564-
5029.
RESOURCES ON THE 'NET
@ ENFORCEMENT&COMPLIANCE HOMEPAGE
http://www.epa.gov/oeca
@ ENFORCEMENT& COMPLIANCE POLICY &
GUIDANCE
http://www.epa.gov/oeca/polguid.html
@ AUDIT POLICY
http://www.epa.gov/oeca/auditpol.html
@ AUDIT POLICY INTERPRETIVE GUIDANCE
http://www. epa. gov/oeca/apolguid.html
@ CONFIDENTIALITY OF INFORMATION RECEIVED UNDER
AGENCY'SSELF-DISCLOSURE POLICY
http://www.epa.gov/oeca/sahmemo.html
@ MEMORANDUM: IMPLEMENTATION OF EPA'SSELF-
POLICING POLICY FOR DISCLOSURES INVOLVING POTENTIAL
CRIMINAL VIOLATION
http://www. epa. gov/oceft
@ SMALL BUSINESS POLICY
http://www. epa. gov/oeca/smbusi.html
@ Y2K ENFORCEMENT POLICY
http://www.epa.gov/year2000
@ 'ENFORCEMENT ALERT'
http://www.epa.gov/oeca/ore/enfalert
Page 10
SPRING 1999
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AUDIT POLICY UPDATE
INFORMATION CORNER
Audit Policy Contacts
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 10 days of the violation's discovery.
EPA Office States
Contact
Phone
FAX#
Region 1 (CT,ME,MA,NH,RI,VT)
Region 2 (NJ,NY,PR,VI)
Regions (DE,DC,MD,PA,
VA,WV)
Region 4 (AL,FL,GA,KY,
MS,NC,SC,TN)
Regions (IL,IN,MI,MN,OH,WI)
Region 6 (AR,LA,NM,OK,TX)
Region? (IA,KS,MO,NE)
Region 8 (CO,MT,ND,SD,
UT,WY)
Region 9 (AZ,CA,ffl,NV)
Region 10 (AK,ID,OR,WA)
Joel Blumstein
JohnWilk
Samantha Fairchild
Bill Anderson
Wm. MacDowell
Charles Sheehan
Becky Dolph
David Rochlin
Leslie Guinan
Jackson Fox
(617) 918-1771
(212) 637-3918
(215) 814-2999
(617) 918-1809
(212) 637-4035
(215) 814-2905
(404) 562-9680 (404) 562-9663
(312) 886-6798
(214) 665-2228
(913) 551-7281
(303) 312-6892
(415) 744-1339
(206) 553-1073
(312) 353-4135
(214) 665-2146
(913) 551-7925
(303) 312-6339
(415) 744-1041
(206) 553-0163
HQ Criminal Enforcement Roy Kime
(All potential criminal violations)
(202) 564-2539 (202) 501-0599
HQ Multimedia Enforcement Melissa Marshall (202) 564-6002 (202) 564-9001
(Civil violations of more than one federal statute at more than one EPA Region)
HQ Quick Response Team Leslie Jones (202) 564-5123 (202) 564-0011
(Civil violations of one EPA statute at more than one EPA Region)
SPRING 1999
Page 11
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xvEPA
United States
Environmental Protection Agency
Office of Regulatory Enforcement
2201A
Washington, D.C. 20460
Official Business
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Bulk Rate
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EPA
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