United States       Office ot tne Insoector Gtsnerai  Marcn 3t 1988
Environmental Protection    -101 M St., SW
Agency          Wasnington. DC 20460
Report of Audit
E1D37-05-0456-80855

EPA's Program To Control
Exports of Hazardous Waste

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 V
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      attention to the Export of 'Hazardous Waste review.   Regardless,  the
      Export of Hazardous Waste report was issued on March 31,  1988,  which met
      our commitment. to issue the report by March 31.

Attachment

cc:  AIGA
     Director, Technical Services Division

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United State*        Office of tf» IrMpactor General
Environmental Protection    401 M St. SW
Agency          Wartingmn, DC 20460
Report of Audit
El D37-05-0456-80855

EPA's Program To Control
Exports of Hazardous Waste

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 EPA'S FKX3WM TO OONIRDL
EXPORTS OF HAZARDOUS WASTE
    MARCH 31,  1988
   AUDIT REPORT NUMBER
   E1D37-05-0456-80855

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                         TABT.vf OF CONTENTS


SCOPE AND OBJECTIVES	1

SUMMARY OF FINDINGS   	   2

ACTION REQUIRED   	 .   7

BACKGROUND   	   8

FINDINGS AND RECOMMENDATIONS

  1.  EPA OFFICES SHOULD COORDINATE THEIR EFFORTS TO
      CONTROL HAZARDOUS WASTff EXPORTS  	  12

  2.  NEED TO ENSURE AN EFFECTIVE NATIONWIDE MONITORING
      PROGRAM EXISTS WITH THE U.S. CUSTOMS SERVICE  	  29

  3.  EXPORTERS SHOULD PROVIDE A COMPLETE DESCRIPTION
      OF THE MANNER IN WHICH EXPORTED HAZARDOUS WASTE
      WILL BE HANDLED	43

  4.  EPA SHOULD STRENGTHEN PROCEDURES TO NOTIFY EXPORTERS
      WHEN A RECEIVING COUNTRY OBJECTS TO THE EXPORT	.49

  5.  HAZARDOUS WASTE EXPORT PROGRAM NEEDS BETTER
      ACCOUNTABILITY  	  54


APPENDICES

  1.  ASSISTANT ADMINISTRATOR FOR ENFORCEMENT AND  COMPLIANCE
      MONITORING'S REPLY TO OIG DRAFT REPORT  	  59

  2.  ASSISTANT ADMINISTRATOR FOR SOLID WASTE AND  EMERGENCY
      RESPONSE'S REPLY TO OIG DRAFT REPORT  	  63

  3.  ACTING ASSOCIATE ADMINISTRATOR FOR  INTERNATIONAL
      ACTIVITIES' REPLY TO OIG DRAFT REPORT   	 	  66

  4.  DISTRIBUTION	70

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            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
A.     ..-                    WASHINGTON. D.C. Z0460
 '*' -•«/»•'
                                  'AR 3 1
 SUBJECT:  Audit Report No.  E1D37-05-0456-80855
           EPA's Program to  Control
           Exports of Hazardous Haste
                                                                  OPPtCE Of
                                                             THE INSPECTOR
 FRCM:     Ernest E.  Bradley   ^
           Assistant  Inspector General for Audit

 TO:       Sheldon Meyers
           Acting Associate  Administrator for
             International Activities

           J.  Winston Porter
           Assistant  Administrator for
             Solid Haste and Emergency Response

           Thomas L.  Adams,  Jr.
           Assistant  Administrator for
             Enforcement and Compliance Monitoring
•We- nave completed an audit of the Environmental Protection Agency's
 (EPA)  yrc"-jr*iffl. to control exports of haCTrtcw waste
 the Resource conservation and Recovery Act  (ECRA) .  Ttm objectives
 of our audit were to determine the adequacy of EPA's:

   1.   Enforoanent efforts in  identifying specific industries and
       companies that are not  outlying with ha^rrif»ta waste export
       regulations.

   2.   Efforts in  implementing a Msnorandum  of Understanding
       (MDU) with  the U.S. QMfcem* Service to establish a program
       to monitor  and spot check international shipments of
       hazardous waste.

   3.   Policies and procedures for ensuring  that exporters are
       complying with hazardous waste export regulations.
we performed the audit in accordance with the 'SftBtfy***  *rtf
of Gou*frprc*^pfci»^ Qrgap^y-at;ion3. Programs. Acfrwlti^*- and FVmctions
issued by the CcnptroUer General of the United States.   In the
course of our review, we identified and reviewed internal controls
that would affect the ptojidm to control hazardous waste exports.
The weaknesses we found are included in this report.  No other
iqreies cave to our attention which we believed were significant
enough to warrant expanding the scope of this  audit.  We conduct!*!
our fieldwork from March 30, 1987 to Danpntier  8, 1987.

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 Our audit generally covered  EPA's activities from October 1,  1986,
 through September 30,  1987.   in order to accomplish our objectives,
 we interviewed EPA officials who have responsibilities for
 administering the hazardous  waste export program.  The following
 EPA offices were included  in our review:

   1.   Office of International Activities (OIA).
                                                                /
   2.   Office of Enforcement  and Compliance Monitoring -(OECM) .

   3.   Office of Solid  Waste  and Emergency Response (OSWER).

 In addition,  we reviewed and evaluated Agency policies, procedures,
 and practices pertinent to hazardous waste exports.  We also
 interviewed and visited generators  and transporters of hazardous
 waste.   We reviewed their  records to determine compliance with EPA
 regulations.   Further, we  interviewed U.S. Customs Service officials
 in Washington,  DC,  and we  visited the Customs Ports of Los Angeles,
 CA, and Laredo,  TX,  to review export documents.  We also visited
 the Bureau of Census in Washington, DC, and reviewed data that the
 Bureau  of Census has on hazardous waste exports.

                        SUMMARY OF  FINDINGS

 The Administrator has  stated that the Agency must continue to look
 beyond  our national boundaries and  give attention to our work with
 other nations to promote sound environmental practices worldwide.
 As part of this endeavor,  the Agency revised existing 'regulations
 in August 1986  which provided Agency employees additional means to
 more effectively regulate  hazardous waste exports.  In the Federal
 Register containing the final regulations, EPA explained  it
 intended to prosecute  violators to  the fullest extent because of
 the adverse environmental  and health consequences that can result
 when any, exported hazardous  waste is mishandled.  Also, this
 nation's reputation as a responsible trading partner can  be
 adversely affected when another country receives unwanted hazardous
 waste.

 Despite these goals we found hundreds of tons  of exported hazardous
 waste that were not handled  in accordance with the Agency's  regula-
 tions.   Accordingly, the Agency needs a coordinated effort to ensure
 compliance with its hazardous waste export regulations.   This effort
 should  include  (1)  an  enforcement strategy to identify those exporte
 in noncompliance with  the  Agency regulations,  (2)  a joint nationwide
 prograa with  the U.S.  Customs Service to monitor and  spot check
 hazardous waste exports,  (3)  procedures to ensure  that exporters
 provide complete descriptions of how hazardous wastes will be handle
 in receiving  countries, and  (4) stronger procedures to notify export
when a  receiving country objects to the export.   This effort also
needs to deal with the differing responsibilities of  OIA, OECMr and
OSWER under the hazardous  waste export prograa in terns of assuring
the program is  properly carried out.  This  should include reporting
their activities in the Agency tracking system to ensure program
accountability.

                                -2-

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 We discussed our findings and recommendations with OIA,  OECM,  and
 OSWER officials.   Their comments and actions taken in response to
 our findings are discussed in the body of this report.  Also,
 their formal comments  to our draft report are attached as
 appendices to this report.  Their actions, if properly implemented,
 will substantially correct the deficiencies found during our
 review.

   l.  SPA Offices Shoj?ldu.4&ordjjiai;e-jrhe.ir Efforts To control
       qaz ardous  Waste  Exports

 Hazardous waste  exports were not adequately controlled because
 officials from different Agency offices did not establish a
 compliance system to ensure exporters followed applicable Agency
 regulations.   Consequently, the Agency did not resolve apparent
 acts of  noncompliance  and had inadequate assurance that exported
 hazardous waste  were properly handled.  In our review we found
 hundreds of tons of exported hazardous waste which were not
 handled  in accordance  with the Agency's regulations.  Thus, in
 addition to the  adverse environmental and health consequences that
 can result when  any exported hazardous waste is mishandled, this
 nation's reputation as a responsible trading partner  could also be
 adversely affected.

 The Agency's program to control the export of hazardous waste was
 not adequate because:

   *   The Agency  did not Know che extent of noncompliance with
      EPA's requirement that hazardous waste exporters must  submit
      notifications of  intent to export hazardous waste  (notifica
      tion)  and file an annual report stating the actual amount o
      hazardous waste exported.  These reports are  required  by
      statute.  As a result, the Agency did not know the  amount of
      hazardous waste actually exported to other countries.

   *   The Agency  did not have an enforcement strategy and did  not
      resolve apparent  acts of noncoapliance.  Agency offices  needed
      to  coordinate and commit their staff to develop an effective
      strategy.

The Assistant Administrators for OECM and OSWER  substantially
agreed with our  draft  report finding and  recommendations.   As a
result of our view, OECM completed an enforcement strategy
on March 28,  1988.  The strategy refines  existing procedures for
evaluating (l) notifications of  intent to export,  (2) manifests
accompanying export shipments, and (3) annual reports to ensure
compliance with  regulations and  international agreements.
Additionally,  procedures will be implemented for appropriate
enforcement responses  to instances of noncompliance.

The actions by the Assistant Administrators,  if properly
implemented,  will substantially  correct  the deficiencies cited in
our draft report.   We  recommend  the Assistant Administrators take
appropriate steps to ensure their  respective offices and EPA
regional  offices implement the enforcement strategy.

                                 -3-

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   2'.   Need To Ensure An Ef factive Nationwide Monitoring Prnn
       Exists With The O.sT Customs Service              riagj^g

 EPA did not have a nationwide monitoring program to spot check
 international shipments of hazardous waste because EPA had not
 completed efforts to coordinate with the U.S. Customs Service
 (Customs).  Consequently, hazardous waste exporters could disregard
 EPA regulations with little chance of detection.

 Congress intended that EPA work with Customs to establish an
 effective monitoring program to spot check hazardous waste exports.
 Accordingly, in February 1987 EPA and Customs signed a Memorandum
 of Understanding (MOU) which calls for certain actions on the part
 of EPA and Customs so that an effective monitoring and spot check
 program can be established.

 All Customs ports have been notified of their responsibility to
 forward a copy of the hazardous waste manifest to EPA.  However,
 EPA could not determine all ports where hazardous waste is
 exported from because many manifests do not  identify the port of
 export.  EPA's National Enforcement Investigation Center  (NEIC)
 officials advised us that through December 10, 1987, they had
 received 274 manifests.  Three ports account for 129 manifests
 covering shipments to Canada.  There were 143 manifests that did
 not show the port of exit.

 The coordination with customs needed improvement because hazardous
 waste manifests often did not identify the port of exportation.
 Also, EPA had neither completed development  of exporter profiles
 nor targeted ports of exit through which  illegal exports  of
 hazardous waste were likely to occur.  This  would help Customs
 identify illegal hazardous waste shipments.  In addition,  the
 receiving country's consent, which EPA forwards to the exporter
 for attachment to the manifest, did not always contain the data
 that customs needs to ensure the hazardous waste shipment is proper.

 The Assistant Administrators for'&ECM- and^QSWER substantially
 agreed with our draft report finding and  recommendations.   NEIC
 is  developing a joint enforcement strategy  to address enforcement
 activities specific to customs.  This strategy  includes rein-
 forcing  procedures for collecting manifests  at  ports of exit,
 developing a waste exporter profile, training customs' inspectors,
 and expanding the existing program of spot  checks of export ship-
 ments.

 The draft enforcement strategy addresses  the issues discussed in
 our draft report.  We recommend the Assistant Administrators ensure
 the joint enforcement strategy is completed and appropriate steps
 taken to implement the strategy.  We  ask  that  the Assistant
Administrator for OECM provide us a date  by which the joint enforce-
ment strategy will be completed and a copy  of  the final strategy.
                                 .4-

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   3.   Exporters Should Provide AComplete Description Of The
       Manner  In Which Exported Hazardous Waste Will Be Handled

 EPA has  not provided guidance to exporters which would help ensure
 that  exported hazardous waste will be properly handled by the
 receiving country. " Consequently, exporters do not always provide
 EPA an adequate description on their export notifications of the
 manner of treatment, storage or disposal in the receiving country.
 For example,  the description for treatment of (1) 40 metric, tons of
 lead  dross in Pakistan was given simply as "Recycling"; (2) 120
 drums of spent chemical catalyst containing mercury sludge in South
 Africa was given as "P.acycling; and (3) 250 tons of lead flue dust,
 250 tons of lead furnace, slag, and 11,000 tons of lead press coke
 in West  Germany were gi/--  ^s "Reclamation."

 Exporters did not provide -   ruate descriptions because EPA's
 hazardous waste export regulation is unclear on how much informa-
 tion  the exporter needs to include in a notification.  Therefore,
 OIA does not  consistently review these notifications to ensure that
 exporters provide a complete description of the manner in which the
 hazardous wastes are to be handled.  Consequently, exporters can
 engage in sham recycling or other illegal treatment methods that
 can result in environmental harm to the receiving country  and the
 health of its population.  EPA is aware of evidence that certain
 materials exported ostensibly for recycling were actually  sham
 recycling and resulted in potential risk to the health  and the
 environment of the receiving country.

 The Assistant Administrators for OECM and OSWER  substantially
 agreed with our draft report finding and recommendations.  The
 Assistant Administrator for OECM stated the enforcement strategy
 provides for  NEXC technical review of notifications  of  intent  to
 export.  This should minimize the incidence of  inadequate  informa-
 tion  on  the manner of handling of the wastes  in  the  foreign  country
 He added that if this approach does not prove adequate,  appropriate
 revisions of  the regulations will be addressed.

The Acting Associate Administrator for-OIA™believed  a careful
check  is needed of EPA's legal authority to require  a complete
description of the manner of treatment, storage,  or disposal of
hazardous waste exports.  He stated that  if such authority exists,
and a  requirement is established, EPA must develop guidelines to
advise exporters on the kind of  information that exporters should
provide  to EPA.

Our draft report recommended several steps the Agency should take
to resolve this issue.  We -ecommend  iie  Agency implement these
recommendations.  In addition,  if the  proper  authority exists, we
reconnend the Agency implement "XA's proposal to develop guidelines
to advise exporters of what kind of  information is needed.
                                 -5-

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   4.   EPA Should  Strengthen Procedures To Notify Exporters When
       A Receiving Country Objects To The Export.

 O±A records  do  not show that it informed exporters of objections
 made by receiving countries to intended exports of hazardous waste.
 For example,  Mexico objected to a shipment of 40,000 gallons of
 flammable, corrosive dross and 900 metric tons of crushed battery
 plates.   Several  exporters advised us they were not aware of
 objections to their planned exports.  However, they stated that
 they did not export the hazardous waste to the objecting country.

 Unless the Agency's records clearly show the exporter is notified
 of objections to  its exports, the Agency could be held accountable
 if the shipment occurs and the receiving country complains that the
 shipment occurred against its wishes.  Further, the exporter may
 complain if  his shipment is stopped at the receiving country's
 border and OIA  is unable to show that the exporter was notified of
 the objection.  OIA needs to have a formal procedure that
 adequately documents it has notified an exporter when the receiving
 country has  objected to the exporter's planned hazardous waste
 shipment.  The  procedure should consist of a telephone call  followe-
 by a  certified  letter to the exporter.

 The Acting Associate Administrator for OIA agreed with our draft
 report finding  and recommendations.  He explained that OIA has
 adopted  the  practices recommended in the our draft  report.   When
 there is an  objection, OIA will notify the exporter by telephone,
 and follow-up by  sending a copy of the objection to the exporter  by
 certified mail.   At the same time, the EPA regional office where
 the exporter is located will be notified of the objection.

 The actions  taken by OIA, if properly implemented,  will correct  the
 deficiencies  cited in our draft report.  -We- recommend that the
 Acting Associate  Administrator provide usljijsopy  of the procedures
 for the  new practices established as a resultI of  our report.

   5.  Hazardous  Waste Export Program Needs Better  Accountability

 OIA-is not part of the Agency's Strategic Planning and Management
 System (SPHS).  Thus, senior Agency officials cannot adequately
 monitor  the hazardous waste export program.   Also,  OIA's  internal
 control  reviews are not sufficiently documented to show the extent
 that  employees  included the hazardous waste export program in their
 reviews.  Consequently, the Agency  is less  likely to identify and
 quickly  resolve significant program weaknesses that need manage-
 ment  attention.

A strong  and  well managed national  compliance program needs
 reliable  information so that senior Agency  officials can judge a
 program's success and identify areas needing management attention.
One of the Agency's principal means for determining the success of
Agency programs is through the SPMS.  SPHS  provides the Agency a
                                .6-

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 way to track progress  and guide the Agency in implementing its
 legislative mandates through goal setting, planning and evaluation
 functions.

 The Acting  Associate Administrator for OIA agreed with our draft
 report finding and recommendations.  He explained that OIA would
 welcome the opportunity  to meet with Agency officials to discuss
 bringing the hazardous waste export program under the Agency's
 SPMS.   He further stated that OIA has started an examination of
 internal controls in order to better identify ways of improving
 those  for the hazardous  waste export program.

 The actions planned and  initiated by the Acting Associate
 Administrator,  if properly implemented, will i«oi-ove OIA'S control
 over the hazardous waste export program.  w* recommend mat tne
 Acting Associate  Administrator take appropriate action to meet with
 Agency officials  to determine what aspects of the hazardous waste
 export program can be  brought under SPMS.  He should also implement
 procedures  to correct  any additional weaknesses identified by the
 internal control  review.
The comments by OIA, OECM, and OSWER provided additional information
regarding the  findings  in our draft report.   After reviewing this
data, we made  appropriate changes  to our findings before we finalizec
this report.

                          ACTION REQUIRED

In accordance  with EPA  Order 2750, each action official is required
to provide this office  a written response to the audit report
within 90 days of the audit report date.

We have no objection to the further release of this report at your
discretion.
                                 -7-

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                             BACKGROUND

 EPA has identified the improper management of hazardous waste as
 a serious  environmental problem in the United States.   The
 mismanagement of such waste has had tragic consequences. The
 Agency has on file hundreds of cases of damage to human health and
 the environment that resulted from the indiscriminate dumping or
 other  improper management of hazardous waste.

 There  are  a whole series of numbers available to describe and
 characterize the current hazardous waste management problem.  One
 estimate is that more than 260 million metric tons of hazardous
 waste  are  generated annually or a quantity equal to more than  170
 billion gallons.-  Large portions of this total are believed to  be
 mixtures of hazardous and non-hazardous wastes, such as wastes
 mixed  with industrial process liquids.

 To ensure  that hazardous waste is managed properly, Congress
 enacted the Resource Conservation and Recovery Act  (RCRA) in 1976.
 Through RCRA, Congress authorized EPA to regulate current and
 future waste management and disposal practices*  The basic thrusts
 of the hazardous waste management provisions of RCRA were to
 establish  (1) standards for the safe treatment, storage and
 disposal of hazardous waste at approved facilities; and (2) a
 •cradle to grave" tracking system to assure hazardous wastes reach
 approved facilities.

 RCRA defines the term "hazardous waste" as a solid  waste, or
 combination of solid wastes, which because of  its quantity,
 concentration, or physical, chemical, or infectious characteristics
 may:

   1.   Cause or significantly contribute to an  increase in mortality
       or an increase in serious irreversible,  or  incapacitating
       reversible illness; or

   2.   Pose a substantial present or potential  hazard  to human
       health or the environment when  improperly treated, stored,
       transported, disposed of, or managed.

Under  EPA  regulations, a waste is considered hazardous if  it
exhibits a hazardous waste characteristic, has been listed as  a
hazardous  waste by EPA because of its hazardous constituents,  or is
a mixture  that contains a listed hazardous waste*  The hazardous
waste  characteristics EPA identified  are  ignitability, corrosivity,
reactivity, and toxicity.

The Agency has a specific mandate to  determine which wastes are
hazardous  and, therefore, subject to  these  regulations.
Accordingly, EPA developed a list, of  hazardous wastes using
criteria established by statute,  currently, EPA lists 450 generally
agreed upon materials or substances as  hazardous waste.  Other
wastes may also be regulated if they  fail tests that EPA developed
to measure their toxicity, corrosivity,  reactivity, or ignitability.

                                -8-

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 Recognizing that improper management of hazardous waste  can expend
 beyond the nation's boundaries, EPA promulgated regulations H
.February  1980 under RCRA which placed certain requirements on
 exporters of hazardous waste in light of the special circumstances
 involved  in international shipments.  These regulations  required
 exporters of hazardous waste to:

   1.  Initiate a manifest.

   2.  Use proper labels and containers.

   3.  Comply with the record Keeping and reporting requirements of
      RCRA.

   4.  Notify EPA four weeks prior to the initial shipment of
      hazardous waste to each foreign country in a reporting year.

 The notification requirement assisted EPA in tracking exports of
 hazardous waste.  However, the  foreign country was not required to
 give prior written consent to EPA before shipment of the waste.
 Thus, EPA had no authority to prohibit the export of hazardous
 waste if  the foreign country objected to its receipt.

 Subsequently, Congress became concerned that EPA's regulations
 were inadequate to address the  present and potential environmental
 health, and foreign policy problems which occur when wastes are
 exported  to nations which do not wish to receive them or lack
 sufficient information to manage then properly.  Congress also
 expressed concern that the failure to effectively regulate exr~ts
could create a major loophole for circumvention of Federal      '
hazardous waste lava.  For example, in April 1986 a Federal grand
jury returned an indictment against four officers and two corpora-
tions that were claiming to be  recycling waste when in  fact they  .
knew the  waste waa illegally disposed of in Mexico.  Congress  actec
to strengthen the nation's hazardous waste laws  and in  November
 1984 the  President signed into  law the Hazardous  and Solid Waste
Amendments of 1984 (HSWA).  The HSWA waa a major new statute that
significantly changed the way that this country  managed hazardous
waste including the export of such waste.  These amendments
provided  that, beginning 24 months  after their enactment, the
export of hazardous waste is prohibited unless:

  1.  A primary exporter of hazardous waste  notifies EPA of an
      intended export before such wastes is  scheduled to leave the
      United states.

  2.  The government of the receiving  country gives its consent to
      accept the waste.

  3.  A copy of the receiving  country's written consent is attachet
      to  the manifest which accompanies the waste shipment.

  4.  The shipment conforms to the  terms of such consent.


                                 -9-

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 In August 1986  EPA promulgated final regulations to implement the
 HSWA.   The final  regulations were consistent with the HSWA require-
 ments .

 Penalties for noncompliance with the regulations are severe.  The
 HSWA authorize  criminal prosecution of persons who knowingly export
 hazardous waste and  fail to file any record, application,  manifest,
 report  or other documents required to be maintained or filed for
 purposes  of compliance with regulations promulgated by the Agency.
 Violators may be  fined $50,000 per day of violation and/or
 imprisoned up to  two years.  Repeat offenders are subject to a
 $100,000  fine and four years in prison.

 Congress  also intended that EPA should work with the U.S. Customs
 Service to establish an effective program to monitor and spot check
 international shipments of hazardous waste to assure compliance
 with the  statute's requirements.  EPA is to consult with the
 Customs Service in order to develop this monitoring and spot-check
 program.

 The  Office of International Activities  (OIA) is charged with the
 responsibility  of developing policies and procedures for the
 direction of the  Agency's international programs and activities
 subject to United states foreign policy.  Therefore, OIA has a
 major responsibility in EPA and within the Federal government for
 all  aspects of  Federal hazardous waste export policy,  including
 the  development of new regulations and the  implementation  of export
 notification and  consent procedures, as required under RCRA.

 With -respect to this program, the specific  responsibilities of OIA
 include:

   1.  Coordinating Federal government involvement with complex
      hazardous waste export proposals.

   2.  Assessing the  foreign policy  implications of  hazardous waste
      exports and recommending methods  and  alternatives  for
      monitoring  and evaluating such activities.

   3.  Working closely with Agency program offices  and the U.S.
      Department  of  State to  (a) refine and revise hazardous waste
      export policies,  (b) enhance  government objectives, and  (c)
      maintain  the United States as a responsible  member of the
      international  community.

  4.  Developing  international agreements with other countries,
      such  as Canada and Mexico on  the  transboundary movement of
      hazardous waste.

The Office  of Enforcement and Compliance  Monitoring (OECM) also ha:
responsibility  for the hazardous waste  export program.  OECM staff
assisted  in drafting the hazardous  waste  export regulations.  They
also negotiated agreements with other government agencies  (e.g.,
the U.S.  Customs  Service and the Bureau of Census) which will better

                                -10-

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 ensure compliance with the regulations.  Similarly, the Office of
 Solid Waste and  Emergency Response has responsibilities for drafting
 regulations and  developing programs and strategies for RCRA.

 The Agency's hazardous waste export program could increase in
 importance  because HSWA  is clear in its assessment that land
 disposal  is the  least desirable method of managing hazardous waste.
 HSWA required the Agency to restrict dioxin and solvent-containing
 waste from  land  disposal by November 1986.  By July 1987 the Agency
 was required to  restrict land disposal of wastes on the "California
 list.* This list represents wastes that the State of California
 indicated should be banned from land disposal.

 Further requirements have been imposed on the Agency.  By 1990 EPA
 must decide whether it is safe to continue land disposal of 450
 hazardous wastes containing over 300 separate toxic constituents.
 Should EPA  fail  to meet  this deadline, so called "hammer clauses"
 go  into effect banning such disposal.  The HSWA requires that the
 bans take effect immediately unless EPA can demonstrate that there
 is  not sufficient treatment capacity for handling  the restricted
 waste.  In  that  case, an extension of two years is allowed.

 In  addition,  the export:  of hazardous waste may increase because
 HSWA gave facilities that handle hazardous waste until November 8,
 1985,  to  either  certify  that they were in compliance with certain
 interim requirements and apply for a final permit, or to begin
 closure proceedings.  By April 1986 EPA's Office of Waste Programs
 Enforcement reported that two-thirds of land disposal  facilities
 had  lost  their interim status, either because they could not  certif
 compliance  with  requirements or because they chose to close
 rather than comply with  nev more stringent requirements to  be
 imposed over the next two years.  While most of these  facilities
will  remain in operation as a non hazardous waste  facility, the
number of facilities handling hazardous vaste could  likely  decline.

In August 1987 the OECM  Assistant Administrator agreed that the
hazardous waste  export program will become more  important because
of these  conditions..  The factors described above  will likely
create  additional pressure for companies, who do  not eliminate or.
recycle hazardous vaste  resulting from their  operations,  to export
their  hazardous  vaste to other countries.
                                 -11-

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                     FINDINGS  AND RECOMMENDATIONS

 FINDING NO. 1 - EPA OFFICES SHOULD COORDINATE THEIR EFFORTS TO
                 CONTROL HAZARDOUS WASTE EXPORTS

 Hazardous waste exports were  not adequately controlled because
 officials from different Agency offices did not establish a
 compliance system to ensure exporters  followed applicable Agency
 regulations.  Consequently, the Agency did not resolve apparent
 acts of noncompliance and had inadequate assurance that exported
 hazardous waste were properly handled.  In our review we found
 hundreds of tons of exported  hazardous waste which were not
 handled in accordance with the Agency's regulations.  Thus, in
 addition to the adverse environmental  and health consequences that
 can result when any exported  hazardous waste is mishandled, this
 nation's reputation as a responsible trading partner can also be
 adversely affected.

 The Administrator has stated  that the  Agency must continue to look
 beyond our national boundaries and give attention to our work with
 other nations to promote sound environmental practices worldwide.
 Unless the Agency acts to ensure that  exporters have complied with
 the Agency's regulations, neither Congress nor EPA can determine
 whether the export right is being abused.  Also, the Agency cannot
 assess the impact of previous legislation and determine whether
 additional controls are necessary or desirable.  Congress  has
 expressed concern that failure to effectively regulate exports may
 be  creating a major loophole  for circumvention of Federal  hazardous
 waste laws.   The Agency needs to establish procedures to ensure
 exporters have complied with  the regulations.

 The Agency's program to control the export of hazardous waste is
 not adequate because:

  »   The Agency did not know  the extent of noncompliance with EPA's
      requirement that hazardous waste  exporters must submit notifi-
      cations of intent to export hazardous waste  (notification)  and
      file an annual report stating the actual amount of hazardous
      waste exported.   These reports are required by statute.   As  a
      result,  the Agency did not know the amount of hazardous  waste
      actually exported to other countries.

  *   The Agency did not have  an enforcement  strategy and  did not
      resolve apparent acts of noncompliance.  Agency offices needed
      to  coordinate and commit their staff to develop an effective
      strategy.

In August and September 1987,  the Assistant  Administrators of
the Office of Enforcement and Compliance Monitoring (OEQf) and the
Office of Solid Waste and Emergency Response (OSWER)  exchanged
memoranda explaining that an  enforcement strategy for the hazardous
waste export  program is important.  OECM's National Enforcement
Investigations Center (KEIC)  is finalizing a strategy which will
include defining appropriate  responses to cases of noncompliance.
                                 -12-

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 On November 23,  1987,  our office presented information to NEIC that
 will be useful in developing exporter profiles and defining areas
 of noncompliance.

 Compliance with  the  hazardous waste export regulations is important
 because certain  studies  indicate the amount of hazardous waste
 exported may be  increasing.  For example, reports prepared for the
 Organization of  Economic Cooperation and Development indicated that
 between 1982 and 1983, wastes transported in Western Europe for
 disposal in another  country virtually doubled.

 The International Solid  Waste Association has also issued figures
 showing that 2.2 million tons of hazardous waste cross national
 boundaries each  year with no way of knowing how much of it is being
 exported to developing countries.  More recent statistics are not
 available,  however,  OECM and Office of International Activities
 (OIA)  officials  believe  current land disposal restrictions will
 increasingly make international shipments of hazardous waste more
 economical.

 The severe consequences  of improper handling of hazardous waste
 led Congress to  pass the Hazardous and Solid Waste Amendments
 (HSWA)  of 1984.   The HSWA prohibits the export of hazardous waste
 unless the exporter  complies with the notification requirements anc
 receives prior written consent from the receiving country.  These
 requirements help ensure hazardous waste exports are properly
 handled and that instances of sham recycling and other  improper
 handling of hazardous  waste exports will be detected.

 The Agency is aware  of situations where hazardous waste exports
 have been mishandled.  For example:

   *  In January  1986,  Mexican environmental authorities discovered
     an illegal  dumping  site in a rural community near  Tecate,
     Mexico.   Authorities determined that a Mexican  recycling
     company bought  10,000 gallons of heavy hydrocarbons and  other
     hazardous materials from U.S. companies.  The waste was
     shipped to  Mexico and then dumped.  The Mexican company  was
     not a  licensed  recycler or importer and was  not authorized to
     dump the material at the illegal dumping  site.   In April 1986
     a  Federal grand jury sitting in the Southern District of
     California  returned a 41 count  indictment against four
     officers and owners of two corporations  that were allegedly
     involved in this  illegal activity.                    :

Although the wastes  in this example, according to an OECM
official, may not have been covered  by  EPA's  hazardous waste
regulations,  the example shows the  importance of complying with tr
regulations.   The regulations require the  receiving country to gi\
its consent  to receive the waste and the opportunity to track the
waste,   whenever an  exporter does not comply,  a situation is
created  where another  country may receive  unwanted hazardous waste
which cannot be  managed  properly.


                                -13-

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 NoncoTnpliance  With EPA's Notification Of Intent
 To ExportHazardous Waste Requirement

 HSWA addressed Congress' concern that EPA's existing regulations
 were inadequate to control the export of hazardous waste.
 Accordingly, HSWA required EPA to promulgate rules to improve
 regulations pertaining to hazardous waste exports.  In August 1986,1
 the Agency issued revised regulations.  With respect to the notifi-J
 cation  requirement, the Agency required exporters to include in
 their notifications:

   1.  The  period of time and the estimated frequency or rate at
      which such waste is to be exported.

   2.  Estimated total quantity of waste exported.

   3.  All  points of entry to and departure from each country
      through  which the hazardous waste will pass.

 The regulations also require that notifications be sent to OIA
 in  Washington,  DC, who will obtain the receiving  country's
 consent.   In promulgating these regulations, the  Agency explained
 that  the primary purpose is to provide sufficient information to
 a receiving country in order for it to make an informed decision
 on  whether to  accept the waste and to manage it in an environ-
 mentally sound manner.

 By  comparing notifications with 80 annual reports submitted  to  OIA
 from  companies exporting hazardous wastes in FYs  1985 -  1986, we
 found instances of non-compliance with the notification  requirement
Our comparison disclosed the following instances  (that occurred
since the  export regulations were promulgated) where OIA did not
have on file a notification from the exporter.  All of these
companies, except Company E, shipped their wastes to Canada  in
1986.  Company E shipped its waste to England.

Company         Quantity                   Description

   A       16  tons              Scrap Circuit  Boards containing
                                Copper, Epoxy, and  Fiberglass
                                with small amounts  of  Tin and  Lead

   B       130  tons             Baghouse  Oust  containing Zinc
                                or Copper

   C       500  tons             Metal Hydroxide  Sludge

   O       95  tons              Metal Hydroxide  sludge

   E       19  tons (metric)     Metal Hydroxide  sludge

   F       4,605 gallons        Waste Zinc  Cyanide
                                 -14-

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    H


    I


    J
24 tons
4  tons
2  tons

55 gallons

2,340 gallons

19 tons
Electroplating Sludge
Spent Chromic Acid
Nickel Plating Bath Filter Sludge

Waste Hydrochloric Acid

Waste Flammable Liquids

Contaminated Sand and Gravel
with Chrome
 Instances where an exporter knowingly exports hazardous waste but
 purposefully avoids submitting a notification could constitute a
 significant.criminal violation.  Without filing a notification and
 obtaining the receiving country's consent, there is no assurance
 that  the receiving country would agree to accept the waste and
 ensure  that the waste will be handled properly.  We contacted
 company officials in these instances of noncompliance and they
 claimed they were unaware of the notification requirement.  An
 official for Company F, that has regularly exported hazardous
 waste,  explained that he was unaware of the Agency's requirement tc
 file  a  notification even though the requirement has been in effect
 since I960.

 Noncoipplianee With EPA's Annual Report Requirement

 EPA did not know the extent of noncompliance with its requirement
 that  exporters of hazardous waste must file an annual report
 stating the actual amount of hazardous waste exported.  Present ou
 data  indicate noncompliance could be significant.  Agency official:
 have  been reluctant to make the commitment necessary to determine
 noncompliance and enforce the regulations requiring exporters to
 submit  an annual report because they believe significant enforce-
 ment  action will not result.

 Unless  exporters comply with the annual report requirement,  the
 Agency  cannot provide Congress with accurate information on  the
 actual  amount of hazardous waste exported.  Therefore,  Congress
 will  not have accurate or reliable information on which to make
 additional policy or regulatory decisions or to assess  the impact
 of previous legislation.  In addition, the Agency  loses an
 important source of information for developing exporter profiles
 and a basis for developing an enforcement strategy.

 HSWA  requires that any person who exports hazardous waste must f il
 with  the Administrator no later than March  1 of  each year a  report
 summarizing the types, quantities, frequency,  and ultimate
 destination of all such hazardous waste exported during the
previous calendar year.  This requirement became effective immedi-
 ately upon enactment of HSWA.  Therefore, annual reports were due
on March 1, 1985, 1986 and 1987.

Congress' rationale for requiring annual  reports from hazardous
waste exporters is that the annual report will assist EPA as an
 enforcement tool and aid Congress and  EPA in determining whether
                                 -15-

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 thr export right is  being abused and whether additional controls
 ar. necessary or desirable.  The annual report would also provide
 actual amounts of hazardous waste exported whereas the notifica-
 tions are estimates  and  not actual shipments.

 Although exporters have  sent OIA hundreds of notifications each
 year, relatively few exporters have submitted annual reports.
 Agency officials became  aware that exporters were not complying
 with the annual report requirement after the first annual reports
 were due in March 1985.  A February 1986 memorandum from the former
 OECM Assistant Administrator to the OSWER Assistant Administrator
 outlined several concerns about the proposed export rule.  One
 concern was that exporters of hazardous waste were not complying
 with the annual report requirement.  The Assistant Administrator
 stated:

      We have gooc reason to believe that the regulated community
      is not in compliance with current export requirements.  To
      date,  only ten  persons have submitt:d annual reports.  Yet,
      we have received hundreds of notifications.

 In  April 1986,  an OECM attorney also advised OECM's Assistant
 Enforcement Counsel  for  Waste that the Agency received very  few
 annual  reports on hazardous waste exports.  The attorney explained
 that OIA, OSWER,  and the General Counsel were concerned about the
 apparent widespread  noncompliance with the annual reporting
 requirement.

 The OECM attorney drafted a letter that the Agency could send to
 persons  who notified the Agency that they intended to export
 hazardous waste but  never filed an annual report.  The purpose of
 notifying exporters  was  to provide the Agency with the opportunity
 to  initiate enforcement  actions against exporters not in compliance
 with the annual reporting requirement.

 However,  officials recognized that there may have been some
 confusion on the part of the regulated community and  EPA regional
 offices  as  to where  annual reports should be sent.  This
 confusion vas caused by  RCRA §3017(g), which only  required sub-
 mission  of  the, annual reports to the "Administrator", but gave no
 address.  Thus,  a submission to the Regional Administrator complied
 with  the RCRA requirement.  Therefore, officials  recognized that
 the Agency  should not bring actions against  these individuals.

 In May 1986,  the Acting  Assistant Administrator for OECM,  in a
 presentation before  the  Government Institutes,  explained that the
 Agency vas  considering an export enforcement strategy to deal with
 the apparent widespread  noncompliance with  the annual export
 reporting requirement.   He also cited statistics  shoving that the
Agency received hundreds of notifications each year but less than
 20 annual reports had been submitted since  the reporting requiremen
became effective in  March 1985.
                                 -16-

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 We  asked OECM officials whether the Agency launched an enforcement.
 initiative.  Officials stated that", no actions were taken to notify
 exporters about their noncompliance with the Agency's annual report
 requirement.  OECM officials also had not contacted regional
 officials to determine whether exporters may have submitted their
 initial annual reports to the Regional Administrators.  The regula-
 tions  issued in August 1986 now require that exporters send their
 annual reports to OIA.

 The Agency does not know the extent of noncompliance with the
 annual report requirements.  For 1986, the Agency received 344
 notifications. Through December 22, 1987, OIA advised us that 84
 exporters filed an annual report for 1986.  We contacted 29
 companies that submitted notifications to OIA but did not file an
 annual report.  Officials for 11 companies stated they exported
 hazardous waste but were unaware of the annual report requirement
 and therefore had not filed an annual report.  Of the other 18
 companies, IS stated they did not export hazardous waste or that
 the waste was not hazardous, and 3 stated that they  filed the annual
 report with a state agency.

 The following are examples of exporters who intended to ship
 significant amounts of hazardous waste but did not file annual
 reports.

 Exporter    Country    	Quan^ty       	Description

    A        Canada     269,451 gallons    Used Solvents containing
                                          Nitric  and Sulfuric Acid

                       49,854 gallons     Electroplating Sludge

    B        Canada     1,518 tons         Metal Hydroxide  Sludge

    C        Canada     300 tons           contaminated Earth

    0        Canada   •  134 tons           Metal  Bearing Oust

    E        Mexico     3,539 tons         Electric Arc Furnace Dust

    F        Mexico     295 tons           Electric Arc Furnace Oust

OIA, OECM, and OSWER officials did not determine if these companie:
actually exported hazardous waste  and violated the annual reportin<
requirement.  We contacted the above six companies.   Three compani<
confirmed that they exported the hazardous  waste but were not awan
of the annual report requirement.   Officials from the other three
companies explained that they filed annual  reports with their stat
environmental agencies and believed these reports would fulfill th
Federal annual reporting requirement.   We presented the above  info
mation and other data to NEIC which will assist them in detenainin
compliance.
                                 -17-

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 EPA's Intent To Determine  Compliance
 Using Census Data

 Our review showed the  Agency cannot use the Bureau of Census
 (Census)  data because  the  Census  information is incomplete.
 Therefore, the Agency  lost a means to help determine compliance
 with the  Agency's requirements.   For example, if the Census data
 was complete the Agency  could use the data to determine compliance
 with the  notification  requirement.

 Each year OIA received hundreds of notifications.  However, our
 analysis  of 344 notifications received by OIA between January 1,
 1986 and  November 30,  1986, shows the large majority are to two
 Canadian  facilities:

                                Notifications of Intent
           Receiving Country    .   :  Received bv OIA

              Canada                     300*
              Mexico'  ,                    14
              England                      3
              West Germany                 8
              Philippines                 2
              South Africa                 2
              Taiwan                       2
              Australia                   1
              Belgium.                      1
              Brazil                       1
              Holland                      1
              India                       1
              Japan                       1-
              Korea                       1
              Spain
               Total                     344

 *283  (82 percent) notices  are to  two  facilities in Canada.

Since the majority of notifications  are for  only two Canadian
facilities, we asked officials if  they reviewed Census data to help
determine whether exporters are  complying with the notification
requirement.  Officials advised  us that,  when the Agency issued its
final hazardous waste export regulations in  August 1986, the Federa
Register explained that exporters  may  be required to comply with
pertinent export control  laws and  regulations issued by other
Federal agencies.  EPA hoped to  use  information filed with Census
to determine exporter compliance with  EPA regulations.

     Census Shippers Export Declarations Are Incomplete

In issuing the revised export regulations, Agency officials
explained that Census requires exporters to  file Shippers Export
Declarations (SEDs) for shipments  that are valued over $1,000.
Exporters submit the SEDs to the U.S.  Customs Service  (Customs)

                                 -18-

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 at the port of  exportation.  Customs in turn forwards the SEDs to
 Census,  which prepares a statistical report of domestic export
 valued over $1,000.  EPA officials recognized that a hazardous
 waste shipment  could have a value over $1,000, especially those
 containing gold,  silver or other valuable material.  Therefore,
 when the value  of a hazardous waste shipment exceeds $1,000, the
 exporter must prepare an SED.  EPA officials intended to use this
 data to help determine compliance with EPA's regulation.

 Our review of SEOs showed that exporters are not classifying
 hazardous waste shipments properly.  We examined SEDs at Census  and
 discussed with  Census officials their procedures for processing
 this data.   Our review showed that exporters could inadvertently ot
 purposefully classify hazardous waste exports under another classi-
 fication number.  For example, an exporter that ships hazardous
 waste containing  gold or silver could classify the shipment under
 the Census category for gold or silver scrappings.  We  found 5
 exporters incorrectly classified electric flue furnace  dust, an EPA
 listed hazardous'waste, as zinc waste and sweepings  in  16 shipments
 totalling 2,065 tons.  As explained on page 35 of this  report,
 these exporters also did not provide a required manifest to Customs
 for each of these shipments.

 In addition,  census officials explained that  exporters  of hazardous
 waste could avoid preparing SEDs for hazardous waste shipments by
 purposefully stating the value of a hazardous waste  as  less than
 $1,000.   Customs  officials advised us that they do not  have the
 expertise to determine whether a specific shipment has  a value
 greater  than $1,000 or to determine whether exporters have  proper!}
 classified hazardous waste on the SED even when the  value is greater
 than $1,000.

 We discussed this issue with NEIC officials,  who  have experienced
 similar  problems  with Census data.  In response to our draft report
 they stated that  data collected by Census is  of little value becaus

   *   NEIC's experience in reviewing limited SEDs  collected  by
      Customs, along with hazardous waste manifests,  shows serious
      problems with proper completion of these documents and
      classification of wastes.

   >   Census'  SED  requirement imposes an additional set of waste
      classification codes much different than EPA.   This contributi
      to  misclassification problems.

   *   Most exports of hazardous waste have no  economic value and
      thus,  these  exporters are not required to prepare an SED.

In addition,  NEIC officials explained  if Census were to require al
exporters of hazardous waste to  file an SED regardless of value,
this would  be a new requirement  on the regulated community.  It
would directly  duplicate the revised EPA  regulation which require
exporters to prepare a hazardous waste manifest and annual report.
NEIC  officials  added that  if an  exporter  decides to avoid complian

                                 -19-

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 with the EPA export requirements, he could just as easily avoid
 compliance with the SED requirement.  Therefore, NEIC officials
 believe efforts to improve  the collection of export data through
 the SED process could be better spent in improving compliance with
 EPA export requirements.

 We agree with NEIC comments and have included them in the body of
 the report.   Accordingly, based upon this additional information,
 we have deleted two recommendations that were in our draft report.

      census  Statistical Category  for
      Hazardous Waste Inaccurate

 The Federal  Register explaining the final rule also showed that
 the Agency requested Census officials to create a separate
 statistical  category for hazardous waste exports.  OECH and OSWER
 officials met twice with Census officials during the development
 of the regulation.   They convinced Census to create a separate
 category because it could also help EPA determine exporters
 compliance with the Agency's hazardous waste export regulations.
 Agency employees were to request  Census data for the hazardous
 waste category and the supporting SEDs which Census microfilms.
 Employees could then compare this information to notifications
 received and identify violators of the Agency's notification
 requirement.

 Census agreed to the Agency's request for a new hazardous waste
 category and on January 1,  1986,  Census created a new statistical
 reporting number (818.8000)  that  exporters must use on  their  SEDs
 when  exporting hazardous waste.   Census defined 818.8000 as  follows:

      For the purpose of this subpart, item 818.8000 covers
      hazardous waste material as  described in Title 40  Code  of
      Federal Regulations, Parts 260 and 261.

 This  new statistical classification was contained  in a  Census
 publication  "Schedule B-Statistical Classification of  Domestic
 and Foreign  Commodities Exported  from the United States.11   Census
 officials  said that this document is sent to  30,000 brokers,
 exporters, and other businesses and persons that export merchandise.

 Census officials provided us a summary of the  818.8000  category
 for January  1,  1986 through November 30,  1986 which  listed 145
countries, including several third world countries,  and the
cumulative value of shipments to  each country.  The  following are
examples of  countries that  are shown under this statistical
category and  the exported shipments cumulative  value:
                                 -20-

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                                       Cumulative Value of
                Country                Exported Shipments

           Hong Kong    .                    $252,999
           Korea                             247,415
           Dominican Republic                145,218
           Columbia                          132,922
           Venezuela                         120,705
           Thailand                           42,521

Although these countries received shipments valued  over $1,000,
our review showed OIA did not receive any notifications to these
and several other countries.

Our review of Census data arid discussions with Census officials
also showed a need to make this Census data more  accurate  in order
to be useful to EPA.  Our review of Census data for the period
January through November 1986, showed most shipments could not be
clearly identified as hazardous waste.  The SED,  for example,  did
not contain descriptions of the chemical makeup of the shipments.
Instead, the shipments were described in very general terms.

We discussed our review of Census data with Census officials. They
advised us that the data accumulated under number 818.8000 probably
contained exports that were not hazardous waste.   Census officials
explained that this number had been previously designated for
miscellaneous exports valued at less than $10,000.

Although 30,000 exporters and brokers received a revised Census
publication designating statistical number 818.8000 for hazardous
waste exports, exporters may have continued reporting miscellaneous
exports under this category.  Therefore, data listed under the
category for hazardous waste may not be hazardous waste.

For the 1987 Census publication, Census officials assigned hazard-
ous waste exports another statistical category (818.7777).  However
Census' original classification error may have confused exporters c
hazardous waste because no hazardous waste exports were listed unde
this category through April 1987.  Furthermore, Census officials
said they intend to discontinue collecting hazardous waste  exports
under 818.7777 in FY 1988 because other countries have no provisior
for collecting information on hazardous waste exports.  An  OECM
official explained that Census is making  their collection of infor-
mation consistent with that of other  countries.  Since other
countries do not collect this information,  Census  also decided to
discontinue collecting data on hazardous  waste exports.

Compliance with the Agency's  notification retirement is  critical
to the success of the Agency's program to control  hazardous waste
exports.  Agency officials  acted appropriately in reaching an
agreement with Census to collect data on hazardous waste exports.
However, Census' information  has not  been useful to the Agency  in
determining compliance.  Accordingly,  the Agency developed a strati
to improve the Agency's program to  ensure hazardous waste exporter;
comply with the Agency's regulations.

                                 -21-

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 An EnforcementStrategy Would Strengthen The Agency'sProgram

 At the  time of our review the Agency had not developed an enforce-
 ment  strategy for the hazardous waste export program.  Consequently,
 the actions necessary to deter violations of the hazardous waste
 export  regulations and to remove any economic benefit resulting
 from  noncompliance were more difficult to achieve.  The Agency did
 not have  an enforcement strategy because officials from several
 Agency  offices, involved in the enforcement of the hazardous waste
 export  regulations, had not coordinated with each other to develop
 a  strategy.

 When  EPA  issued its original regulations pertaining to hazardous
 waste exports in February 1980, Agency officials recognized several
 issues  that needed to be addressed.  A December 1980 memorandum
 from  the  Deputy Assistant Administrator for Solid waste to the
 Deputy  Director for Policy outlined these issues.  One of the issues
 consisted of a need for officials  from several Agency offices to
 develop an enforcement strategy for the export of hazardous waste
 program.            '

 An  enforcement strategy is a cornerstone for any environmental
 program because it helps to ensure that appropriate  enforcement
 action  can be taken quickly for serious violations.  The
 Administrator's Overview in the Agency's 1987 Operating Guidance
 stated  that a primary goal for the Agency is to ensure a  strong
 enforcement presence in all of the Agency's programs.  A  strategy
 that  defines deterrent activities  the Agency can take  is  important
 because it provides the best protection for the environment and
 reduces the resources necessary to administer the  regulations by
 addressing noncompliance before it occurs.  To enforce the hazardous
 waste export program, Agency officials needed to develop  an
 enforcement strategy with procedures for determining what type  of
 enforcement actions and penalties  should be assessed against
 violators for specific violations.

 Our review of Agency documents and discussion with officials  from
 OIA,  OECM, and OSWER showed little communication  between these
 offices to develop and implement an enforcement strategy for the
 hazardous waste export program.  The Agency initially promulgated
 regulations for the program in 1980.  Each  of these offices has
 responsibilities for enforcing the Agency's environmental programs.
OSWER has specific responsibilities for RCRA enforcement and OIA
has specific responsibilities over the hazardous  waste export
program.  OECM has responsibility  for providing overall guidance to
Agency  offices so they can develop strong enforcement strategies in
all of  the Agency's programs.  To  develop an effective enforcement
strategy  for the hazardous waste export program,  officials from
these three offices needed to coordinate and commit their staff to
develop an enforceable international regulatory strategy.
                                 -22-

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 A joint  effort between Agency offices requires recognition that
 the program  to control export of hazardous waste is important
 The program  was not listed among the Agency's highest priorities
 and has  few  employees devoted to the program.  For FY 1988, OLA
 allocated  2.5 staff years to processing export notifications.
 OSWER's  FY 1988 RCRA  {Resource Conservation and Recovery Act)
 Implementation Plan (RIP), which each year provides the national
 direction  and priorities for the RCRA program, also did not mentier
 the Agency's hazardous waste export program.  An October 1986
 memorandum from the Director of the RCRA Enforcement Division  to
 several  Agency officials regarding an agreement with Customs to
 monitor  hazardous waste exports stated:

     We  are  not able to provide any substantial support for
     the export effort and noted that support.must be provided
     by  OECM.  This is not a priority for the severely resource-
     constrained RCRA program in the Agency's FY 87 RCRA
     Implementation Plan or FY 88 Budget.

 We  also  discussed OECM's budget with an OECM senior budget analyst
 who explained that OECM's budget did not provide a specific resourc
 allocation for the hazardous waste export program.  However, we are
 aware from discussions with NEIC officials that, in mid FY 1987,
 NEIC began to develop a data base for the storage and retrieval of
 export information including data from notifications, annual report
 and hazardous waste manifests.  This data base  should allow NEIC tc
 detect areas of noncompliance.

 In  addition, the EPA Administrator and the Commissioner of the U.S.
 Customs  Service entered into a Memorandum of Understanding (MOU)  ir
 February 1987.  Elements of an enforcement strategy  are  in the MOU.
 At  the time  of our review, Customs, EPA and  state officials had
 conducted  spot checks of hazardous waste shipments at two ports.
 These actions are appropriate and the Agency can use the  MOU  to
 timely complete an enforcement strategy.

 An  effective enforcement strategy can be completed and  implemented
 timely if  officials know that a program, although  not listed  as  the
 highest  Agency priority, is still important.   The  Administrator  in
 his  overview to the 1987 Agency Operating  Guidance stated:

     The Agency Priority List is not  intended to include
     everything EPA and its state and  local partners must do
     to  fulfill various statutory and  judicial requirements.
     In  fact, a number of these nondiscretionary activities
     are not included on the list.

Although the hazardous waste export program is not listed as an
Agency priority, Congress has expressed concern over this nation's
 exportation  of hazardous waste to other countries.  An enforcement
strategy will allow the Agency to determine what actions EPA offici
need to  take to effectively control  hazardous waste exports.   For
example, the Agency did not emphasize comparing annual reports of


                                 -23-

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 hazardous waste exported with notifications to determine if
 exporters failed to comply with either requirement.  Providing
 these documents to EPA is important for managing the program.

 The annual report is a statutory requirement which provides  more
 specific and accurate information than the notifications.  Congress
 believed that the reporting requirement would assist the Agency as
 an enforcement.tool and would aid Congress and the Agency in
 determining whether the export right is being abused and whether
 additional controls are necessary.

 when notifications and annual reports are received, inconsistent
 reviews were made by OIA.  In some instances OIA requested addi-
 tional information from the exporter to complete the notification.
 However,  our review of notifications and the annual reports
 disclosed other instances where OIA did not request the exporter to
 submit the data needed to complete the notification.  For example:
                  '" -t
   *   our review of all 39 non-Canadian notifications filed in
      1987 as of the date of our review showed that 9 did not
      state the estimated frequency of shipments or the time
      period over which the shipments were to occur.  This
      information could be useful in developing profiles  of
      exporters as part of an enforcement strategy.

   *   Our review cf exports to Canada showed several exporters
      did not notify OIA 30 days in advance of hazardous  waste
      exports in accordance with EPA regulations.   There  were
      17  notifications that OIA did not receive timely.   In
      only one instance did OIA notify the exporter that  he was
      not  in compliance with the regulation.  In 6  of these  17
      instances,  the date of the notification was after the
      intended date of the first shipment.  In these cases,  the
      Canadian government had no opportunity to give its  consent
      to accepting the shipment before the shipment took  place.
      Timely notification is necessary to provide the receiving
      country adequate, time to decide if it will accept  the
      shipment.

We discussed the issues in this finding with officials  from the
Agency's  OIA,  OSWER,  and OECM.  An August 5,  1987  memorandum from
the Assistant Adainistrator for OECM advised the Assistant
Administrator for OSWER of the need to develop  an  enforcement
strategy  for the hazardous waste export program because exports of
hazardous waste are likely to increase.  In this memorandum, the
Assistant Administrator for OECM further stated that he believed
the export control program to be important.   He explained that the
issue of  export of hazardous waste has received increased attentioi
in both the United States and the international community.   For
example,  the United states is involved in  the Organization for
Economic  Cooperation and Development's negotiations on an inter-
national  agreement on hazardous waste exports.   He further explain
that as the Agency continues its enforcement  of permitting facili-
ties and  land ban requirements, American exports of hazardous wast
are likely to increase.

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 On September  8,  1987, the Assistant Administrator for OSWER advised
 the Assistant Administrator for OECM that he agreed the hazardous
 waste export  program is important and that enforcement of the '
 program needs continued attention by the Agency.   He expla'ined that
 the Director  of  the office of Waste Programs Enforcement (OWPE-)
 would work with  OECM to develop an enforcement strategy.  We believe
 his action is appropriate and he needs to ensure OWPE carries out
 its commitment.

 An August  14, 1987 memorandum by the Assistant Administrator for
 OECM also  advised the Acting Associate Administrator for OIA of his
 interest in participating in the development of this nation's
 position regarding international agreements on exports of hazardous
 waste.   He proposed steps whereby his office could make contribution;
 by providing  legal enforcement analyses of various international
 proposals.  He requested the Acting Associate Administrator's
 assistance in determining how OECM could best participate and help
 with this  important topic.

 In December 1987, NEIC's Director issued a memorandum to all
 Regional Waste Management Division Directors.  The memorandum
 discussed  NEIC's steps for developing an export enforcement program.

 These  actions were appropriate and addressed several of the issues
 discussed  in  our draft report.  Timely completion and implementation
 of the  enforcement strategy will result in better Agency control
 over the hazardous waste export program.

 Conclusions

 OIA, OECM  and OSWER have a role in the Agency's hazardous  waste
 export  program because of their respective responsibilities  in
 enforcing  the Agency's regulations.  We found that  all  three
 offices needed to coordinate their efforts to determine the  extent
 of  noncompliance with the hazardous waste export  regulations.
 Consequently, at the tine of our audit, the Agency  did not have an
 enforcement strategy which would help ensure compliance and deter
violations.   Also, the Agency did not resolve apparent acts of
noncompliance, did not have accurate data on the  amount of
hazardous  waste  actually exported, and did not: have adequate
assurance  that exported hazardous waste was handled properly.

Compliance with  the hazardous waste export  regulations is
 important.  The  HSWA (1) is clear that  land disposal is the least
desirable  method of managing hazardous waste  and (2) requires the
Agency  to  restrict land disposal of waste.  This restriction,
combined with fewer facilities permitted  to treat the waste, will
likely  create additional pressures on companies,  who do not
eliminate  or  recycle hazardous waste  from their operations, to
export  their  waste to other countries.
                                 -25-

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 Instances of improper handling of  exported hazardous waste can
 create adverse environmental  and health consequences in other
 countries and adversely affect this  nation's reputation as a
 responsible trading partner.   In our opinion, the Agency can take
 steps to improve its control  over  the program to control hazardous
 waste exports.

 OECM officials need to determine the extent that exporters are
 complying with the requirement to  file an annual report on actual
 waste exported.   NEIC is accumulating data which will permit this
 analysis.  Without accurate information of the  amount of waste
 actually exported, neither Congress  nor the Agency has reliable
 information to make additional policy or regulatory decisions or to
 assess the impact of previous legislation.

 In addition, HSWA provides for substantial penalties  for exporters
 who knowingly do not comply with the regulations.  The Agency needed
 to develop an enforcement strategy for the hazardous  waste export
 program.   An enforcement strategy  will help the Agency determine
 what level of enforcement action to  take for various  violations.
 Officials from OIA,  OSWER,  and OECM  needed to coordinate with each
 other to develop an effective enforcement strategy.

.Draft Report Recommendations

 We recommended in our draft report that the Assistant Administrators
 for OECM and OSWER.

       coordinate the Agency '"si efforts to contact  exporters that
       have not filed a notification  or an annual  report.   The
       exporters  should be instructed to submit  these documents  to
       OIA if they exported hazardous waste.

       Insure an  enforcement strategy for the  hazardous  waste
       expj3rt__pragram is completed.  This effort should  be coordi-
       nated with d$A.  The enforcement  strategy should  provide that
       employees  review notifications and  annual reports in a
       consistent manner and that they resolve acts of apparent
       noncompliance.   Accordingly, the  strategy should include (a)
       steps for  identifying exporters which are not following the
       notification or annual  report  procedures, (b)  appropriate
       enforcement responses to identify cases of noncompliance, and
       (c)  requirements of the MQ&  with Customs.  Further, the
       Assistant  Administrators should coordinate the contact of
       Regional Administrators to  determine whether annual reports
       or  notifications have been  inadvertently sent to the regions
       instead of to OIA.

       Reply-To— OTG-- Draft Report -
The Assistant Administrator for OECM substantially agreed with  oar
draft report finding and recommendations.  He stated that NEK  has
developed a draft  EPA enforcement strategy in cooperation with  OIA
and OWPE which  addresses the issues raised in our draft  report,   on
March 28, 1988  OCEM issued the (final) EPA enforcement strategy..

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 The enforcement strategy  refines existing procedures for (1)  evalua
 ting notifications  of  intent to export,  (2) manifests accompanying
 export shipments, and  (3) annual reports to ensure compliance with
 regulations and international agreements.  Procedures are defined
 for appropriate enforcement responses to instances of non-complianc
 This includes requests to exporters for additional information and
 inspections of facilities where appropriate.

 This process will be supported by the NEIC database of export
 information.   Facilities  that notified but did not file an annual
 report will be contacted  to determine if wastes were exported and
 appropriate enforcement actions taken.  The inspection strategy
 also provides for targeted inspections of waste generators most
 likely to export wastes to determine compliance with regulations.

 Notices of violation,  warning letters, administrative orders with
 penalties,  civil suits and criminal investigations are possible
 enforcement responses  depending upon the nature and severity of the
 non-compliance.

 The Assistant Administrator for OSWER also  agreed with our draff"
 report finding and  recommendations.  He  stated that the  recently
 revised RCRA Enforcement  Response Policy dated December  21,  1987,
 states that violations of export requirements are Class  1 violation
 The "systematic failure"  or "substantial deviation"  in complying
 with the export requirements will cause  violators to  receive a
 formal enforcement  response.  Violators  will  be penalized by assess
 ment of an economic sanction within 90 days of violation discovery.

 In  addition,  the Assistant Administrator res^Adad  that  OWPE is
 involved in other activities related to  the export  rule  which will
 be  carried out during  this fiscal year.

   *   RCRA inspector training workshops which  will be conducted
      in all ten regions during  1988, beginning in March, will
      include discussion of hazardous waste export reouirements .

   *   OWPE is coordinating with  NEIC on the development of the
      Enforcement Strategy on Hazardous Waste Exports.  OWPE is
      reviewing the  draft  strategy  and  will provide comments.

   *   The draft F¥ 1989 RIP notes the  importance of reviewing
      hazardous waste export documentation during generator and
      transporter inspections.   The draft FY 1989 RIP-also provides
      for flexibility from national program commitments- to allow
      for regional initiatives.

         Comments
-the actions  by the Assistant Administrators for OECM and  OSWER,
if properly  implemented, will substantially correct the
deficiencies cited in our draft report.
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We recommend that the Assistant Administrators for OECM and OSWER
take appropriate action to ensure their respective offices and EPA
regional offices implement the enforcement strategy.  We request
each Administrator provide us the documentation to support the
completion of each action.
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 FINDING NO.  2  -  NEED TO ENSILE AN EFFECTIVE NATIONWIDE MONITORING
                 PROGRAM EXISTS WITH THE U.S. CUSTOMS SERVICE

 EPA did not  have a nationwide monitoring program to spot check
 international  shipments of hazardous waste because EPA has not
 completed efforts to coordinate with the U.S. Customs Service
 (Customs) .   Consequently, hazardous waste exporters could disregard
 EPA regulations  with little chance of detection.

 Congress intended that EPA work with Customs to establish an effec-
 tive monitoring  program to spot check hazardous waste exports.
 Accordingly, in  February 1987, EPA and Customs signed a Memorandum
 of Understanding (MOU) which calls for certain actions on the part
 of EPA and Customs so that an effective monitoring and spot check
 program can  be established.

 The coordination with Customs needed improvement because hazardous
 waste manifests  often did not identify the port of exportation.
 Also,  EPA had  neither completed development of exporter profiles
 nor targeted ports of exit through which illegal exports of
 hazardous waste  were likely to occur.  This would help customs
 identify illegal hazardous waste shipments.  In addition, the
 receiving country's consent, which EPA forwards to the exporter for
 attachment to  the manifest, did not always contain all the data
 that Customs needs to ensure the hazardous waste shipment is proper.

 Congress Intended Vigorous Enforcement
      Hazardous Waste Exports
To have an effective enforcement program, Congress  recognized that
EPA and Customs needed to cooperate in order  to  enforce  the  regu-
lations pertaining to the export: of hazardous waste.   The  relevant
legislative history of Section 245 of the Hazardous and  Solid Waste
Amendments of  1984, which added Section  3017  of  the Resource
Conservation and Recovery Act  (RCRA) , states:

     The requirements of this section should  be  vigorously
     enforced  using all the tools of section  3008.  To accom-
     plish this, the Agency should work  with  the U.S.  customs
     Service to establish an effective program to monitor and
     spot check international shipments  of  hazardous  waste to
     assure compliance with the requirements  of  the section...
     [S. Rep.  No. 98-284, 98th Cong. 1st Sess.  48  (1983).]

Section 3008 of RCRA provides EPA with enforcement  tools including
informal, administrative, civil, and criminal actions.  Criminal
penalties can  be incurred by any person  who knowingly exports a
hazardous waste without the consent of the  receiving country or in
nonconformance with an international agreement  between the U.S. and
a receiving country.  The penalty and prison  terms may be doubled
for second offenses.  The Agency explained  in the Federal Register
containing the final regulations that  it intends to prosecute
violators to the fullest extent.


                                 -29-

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 customs can provide valuable assistance in a program to control
 hazardous waste exports.   The Export Administration Act grants
 Customs independent authority to  stop, inspect, search, seize, and
 detain suspected illegal  hazardous waste exports.  Exporters who
 violate the Export Administration Act or Customs regulations are
 also subject to enforcement actions under those authorities,  in
 March 1987, customs responded to  EPA's final regulations by issuing
 a circular to all Customs ports explaining that effective November
 8,  1986,  exporters of hazardous waste are required to submit to
 Customs,  at the point such waste  leaves the country, a copy of the
 uniform Hazardous Waste Manifest.  Customs officials are instructed
 to annotate the manifest  with the date of receipt and port of export
 and mail the manifest to  NEIC.

 To accomplish the intent  of Congress, EPA and Custom* recognized
 that they needed an agreement delineating their respective, areas
 of responsibility.   In February 1987, EPA and Customs signed  a KOU
 that provides guidance to coordinate their responsibilities for
 enforcement of hazardous  waste export requirements.

 Many Manifests Do Not Identify The Qustoms fiprjj;

 All customs ports have been notified of their responsibility  to
 forward a copy of the hazardous waste manifest to EPA*  However,
 EPA is unable to determine all ports where hazardous waste is
 exported  from because many manifests do not  identify the port of
 export.   National Enforcement Investigations Center (NEIC)
 officials advised us that through December 10, 1987, they  have
 received  274 manifests.   There were 143 manifests that  did not
 show the  port of exit.

 In  addition,  not all manifests may be sent by Customs to EPA as
 agreed to in the MOU,   Customs officials at   -.e  port advised an
 OECM attorney that Customs personnel are not  Always removing '
 manifests which are stapled to a  Shippers Export Declaration.
 Consequently,  the manifests are not sent to  NEXC.   Instead,  the
 manifests are handled by  Customs  as part of  the  Shippers  Export
 Declaration which are sent to census.  Custom  inspectors  suggested
 that Customs could require exporters to hand deliver  the manifests
 to  Customs to ensure better compliance.

 EPA's revised hazardous waste export regulations explain the proce-
 dures and the importance  of the manifest to  EPA.  The regulations,
 issued in August 1986, requires transporters of hazardous waste to
 deliver a copy of the manifest to a customs  official  at the point
 the  waste leaves the country, customs  is  to periodically forward
 the  manifest copies to NEIC.  EPA officials  explained in the Federal
 Register  containing the revised regulations  that this procedure
will  assist the Agency and Customs  in establishing an effective
program to monitor and spot check exports  of hazardous waste.  The
manifest  allows EPA to:
                                 -30-

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   1.   Monitor  closely generators' compliance with the conditions in
       the  exporters' notification and the conditions placed on the
       shipment by the receiving country.

   2.   Coordinate enforcement actions with foreign countries.

   3.   Establish trends and patterns for enforcement and program
       development.

   4.   Provide  clear evidence of an important element of proof in
       enforcement actions (i.e., that an export did or did not
       occur) and serves as a deterrent to illegal activities.

   5.   Respond  promptly to hazardous waste incidents in foreign
       countries.

The Assistant  Attorney General for the Department of Justice's Lane
and Natural Resources Division agreed that Customs' submission of e
manifest to EPA would be beneficial.  In a February 1986 memoranda
to EPA's Associate Enforcement Counsel for Criminal Enforcement am
Special litigation, he stated:  .

     First, it could help generators operating in good faith
     to defend themselves against allegations which might
     arise from events occurring beyond United States juris-
     diction,  froa middleman malfeasance, and from allegations
     of improper disposal within the United States.  Second,
     in cases  of statutory violations it would help provide
     investigators with a hot trail, rather than stale clues
     which might only come through annual reports.  Thus,
     investigatory resources could be applied in a more  econo-
     mical manner.  Fresh information would not help only
     investigators preparing for enforcement actions;  it would
     also  allow remedial action to be required before  potential
     harm  becomes actual harm to human health or the environ-
     ment.  Third, any action which will help us stop  viola-
     tions at  our own borders especially when little energy
     need  be expended to implement a requirement will  benefit
     us diplomatically as a nation to avoid adverse incidents
     with  our  closest neighbors.

Because many manifests did not  identify the port of exit,  we
examined EPA documents for indications  of other  ports where
hazardous  vaste may be exported.  Our limited  review of FV 1986
notifications  received by OIA shoved that exporters intended to
ship hazardous wastes from several U.S.  ports.   The following are
examples of other U.S.. Customs  ports  intended  for use by hazardous
waste exporters in FY 1986:
                                 -31-

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Company

   A
     Port of Export
 Alexandria Bay,  Massena
 or Champlaign, NY
                                    Importing      Quantity and
                                     Country     Description of
  B
Wilmington, NC
         Philadelphia, PA
         Baltimore, MD
         Newark, NJ
         Elizabeth, NJ

         San Ysidro, CA
                                     Canada      23 tons of Nickel
                                                Niplex Strip
                                                (A waste poison)

                                                28 tons of Waste
                                                Cadmium Cyanide
                                                Sludge

                                                25 tons of Nickel
                                                Cyanide Enstrip

                                                220  tons of Metal
                                                Hydroxide Sludge

                                     Holland    7 tons of Nickel
                                                Hydroxide Battery
                                                Plates

                                                € tons of Cadmium
                                                Hydroxide Battery
                                                Plates

                                                2.8  tons of Cadmium
                                                Hydroxide

                                                357  Ibs. of Nickel
                                                Hydroxide

                                     England    Lead Flue Dust
                                                (Quantity unstated)
  S
Port Huron, MI
                                     Mexico     Combustible Liquid
                                                Waste Ink (Quantity
                                                unstated)

                                     Canada     1,000 gallons of
                                                Waste Nitric Acid

                                                1,600 gallons of
                                                Waste Corrosive
                                                Liquid

                                                12,000 gallons
                                                of Waste Sodium
                                                Hydroxide.

Our discussion with the  Customs official primarily responsible for
coordinating with EPA on hazardous waste exports explained that
Customs needs feedback from EPA on which ports submit manifests
                                 -32-

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 to EPA.   This  information will help Customs officials determine
 how well Customs  ports are adhering to the MOU requirements.
 Therefore,  EPA needs to periodically provide Customs a list of
 ports from  which  manifests have been received to help Customs
 evaluate their ports' adherence with this requirement.

 EPA needs to provide Customs with export information.  Therefore,
 receipt  of  hazardous waste manifests are important in establishing
 an effective program to monitor and spot check international ship-
 ments of hazardous waste.  Receipt of the manifest by Customs also
 allows EPA  to  more quickly confirm what actually happened to the
 waste in case  it  is disposed of illegally and creates an inter-
 national incident.  Also, this procedure can help generators
 operating in good faith to defend themselves against untrue alle-
 gations  or  middleman malfeasance.

 The export  of  hazardous waste is unlike the domestic situation,
 where EPA can  check the treatment, storage or disposal facility.
 with hazardous waste exports, EPA has no jurisdiction over the  -
 ultimate destination in a foreign country.  Therefore, EPA needs
 to. rely  on  exporters submitting manifests to Customs.  By having
 a  manifest, EPA could identify the waste, the amount transported,
 origination, destination, the route by which the waste left this
 country,  the transporter and other information essential to any
 enforcement action.  If an international incident  involving the
 exporting of hazardous waste were to occur, the manifest would
 enable a quick and appropriate response by EPA.

 If hazardous waste exporters or transporters do not  provide
 Customs  a manifest, or a complete manifest, EPA is presented  with
 a  difficult situation.  An Office of Enforcement and Compliance
 Monitoring  (OECM) attorney involved in the hazardous waste export
 program  explained that  (1) EPA in an attempt to find alleged  wrong
 doers  would be forced to rely on annual reports, which nay be file
 up to  twelve months (or more) after the date of export,  (2)  the
 annual reports are of limited usefulness because they, unlike the
 manifests,  are not timely and do not provide the actual  dates of
 shipments;  and (3) attempting to show  intentional  actions  by the
 broker and  transporter possibly more than a year after the actions
 have occurred,  gives violators the opportunity to  "cover their
 tracks."

A  situation where illegal disposal of  this nation's waste occurs i
 another  country could be the cause of  considerable embarrassment.
 Should a  member of Congress or the Executive  Branch inquire as to
the improper disposal, EPA would have  to wait  for the annual repor
to be  filed if a  manifest had not been received.

 For FY 1987, notifications show hazardous  waste exporters expected
to continue to use several different Customs ports to export hazaz
dous wastes.   These ports are therefore more likely to submit
manifests.  For example:
                                 -33-

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 Company  Port of Export:    Importing Country   Description of Waste

    A     Charleston, NC    England            38  tons of Waste
                                               Mercury Components

                                               13  tons of Mercury
                                               Oxide

    B     New York, NY      Sweden             38  tons of Waste
                                               Water  Sludge
                                               containing Nickel
                                               Cadmium

    C     Jersey City, NJ   South Africa       16  tons of Spent
                                               Chemical  Catalyst
                                                (Mercury  Sludge)

    0     Seattle, WA       Philippines         250 tons  of  Spent
                                                Batteries
              j .*
    E     Laredo, TX        Mexico              22,900 tons of
                                                Electric Furnace
                                                Emission Control
                                                Dust

Although port of export is useful data to EPA, the hazardous waste
export regulations do not require the exporter's notification to
show the intended port of export.  Such information would assist
EPA and customs in establishing an adequate monitoring and spot
checking program and an effective enforcement strategy.  While most
notifications indicated the intended port of export,  several FY
1987 notifications with significant amounts of hazardous waste did
not show a port of export.  For example:

    Company    Importing Country       Description of Waste	

       A       Japan                 10 tons of Solid  Arsenic
                                    Compound

       B       Netherlands           240,000 gallons of Organic
                                     Effluent Haste Flammable
                                     Liquid
       C
Pakistan             40 metric tons  of  Lead Dross
       D       England               8,000 metric tons of
                                     Flammable Waste,  Spent
                                     Halogenated Solvents

       E       Australia             300 tons of Waste Magnesium
                                     scrap
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 In  these  instances, EPA should contact the exporter regarding the
 intended  port of export.  Providing this, information to  customs
 port  officials could alert them that hazardous waste exporters are
 intending to export hazardous waste through their ports  and the
 approximate dates of shipment.  They could then better ensure that
 a proper  manifest is submitted to Customs and that the shipment  is
 proper.

 Exporters Mav NotBe Aware Of The
 Requirement To Submit A Manifest

 Customs records in Laredo, TX disclosed that some exporters may  not
 be  aware  of the requirement to submit a manifest to Customs. We
 identified through a review of the Census Bureau's Shippers Export
 Declarations five exporters who made 16 shipments in total from
 December  1986 through June 1987 of electric furnace flue dust but
 did not submit a manifest to Customs and misclassified the waste as
 zinc  waste and sweepings  (see page 19 of this report).  Electric
 furnace flue dust is listed by EPA as a hazardous waste.

 We  discussed these shipments with the forwarding agent who handled
 all of the exporters' shipments.  The forwarding agent confirmed
 that  all  the exporters prepared a manifest but that the agent's
 representative neglected to submit a copy of the manifest to the
 railroad.  The railroad in turn did not submit a manifest to Custom:
 when  the  shipment crossed the border into Mexico.  He also  advised
 us  that he is unaware of EPA's regulation requiring the transporter
 to  submit a manifest to customs' officials.

 We  also interviewed an official of the rail carrier  involved in all
 of  these  shipments.  The official explained that his  office is also
 unaware of the requirement that the transporter submit  a hazardous
 waste manifest to Customs officials at the port of  export.  In
 addition,  he stated that Customs does not ask for the manifest.

 Similarly, we contacted a Customs' inspector  in charge  of  in-bound
 and outbound rail shipments at Laredo, TX.  The  inspector  stated
 that he and his inspectors have not received  any  hazardous waste
 manifests.

 we  provided to NEIC officials the names  of  the exporters that did
 not submit a manifest to Customs.  Officials  need to contact these
 exporters and ensure they submit a manifest to customs  for each
 export of hazardous waste.  Appropriate  enforcement action should
 be  considered when exporters do not submit  required manifests.

 Procedures Needed To Identify Illegal
 Hazardous Waste Shipments

 EPA had not completely  fulfilled its  responsibilities under the
MOU.  Thus, efforts to establish an effective monitoring program ot
hazardous waste; exports were hindered.   EPA needs to coordinate its
 efforts in order that Customs can  initiate an effective monitoring
and spot  check program..

                                 -35-

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 In the MOU,  EPA agreed to:

   »   Develop procedures for Customs to identify hazardous  wastes
      and notify EPA when shipments of hazardous wastes do  not
      comply  with Section 3017.

   x   Notify  appropriate Customs officials when they should take
      "for cause" inspections of suspect shipments.

   *   Promptly respond to Customs' request for assistance in
      inspecting,  seizing, detaining, or otherwise handling known
      or suspected noncomplying shipments.

   *   Take the lead on investigatir." noncompliance with Section 3017
      and bring enforcement actions .here appropriate.
                                       (j '
 Custom officials said that these actions will help in their efforts
 to monitor and spot check hazardous waste exports.  In September
 1987,  EPA, Customs and state of Texas personnel performed joint
 inspections  of hazardous waste shipments in Texas.  In December,
 EPA,  Customs and state of Michigan personnel performed inspections
 in Michigan.   At the time of our audit, an NEIC official explained
 that  these initial spot checks provided insights into the function!]
 of Customs border stations and inspection programs which will be
 used  in the  development of additional spot checking and training
 activities.

 After reviewing the results of these inspections EPA  officials
 should contact Customs about a   -: nwide spot check  program.  At
 the time of  our audit, EPA h?'        ^pleted and did  not  have an
 agenda for coapleting the above ac.^^ns.  One Customs official
 explained that Customs needed EPA to specifically develop:

   *   Profiles of exporters that are most likely to viola  >. or have
      previously violated EPA's hazardous waste export regulations.

   *   A list  of ports through which most hazardous waste is leaving
      or through which illegal exports are most likely to  occur.

Agency officials stated that they had not acted to provide this
data  because of other priorities.

Because the  Agency did not provide this  data,  EPA's  Region 6
initiated action to develop a course designed to  train Customs
officials on regulations and enforcement for the  import and export
of hazardous waste.  Region 6 officials  advised us that they
requested Headquarters officials to develop  a training course for
Customs.   Headquarters declined to  fund this effort because of
a lack of funds.  Subsequently, Region  6 officials independently
contracted with a consulting firm to develop a course designed to
train  Customs officials on regulations  and  enforcement on the
import  and export of hazardous waste.   Region 6 believed this
course  is important because of their  concern that international
shipments of hazardous waste are  likely to  increase in the future.

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 The  specific objectives of this course were to familiarize Customs
 employees with:

   '   General hazardous waste regulations.

   *   Related import/export hazardous waste regulations (including
      international agreements).

   *   Inspections of transporters and profiles of potential
      violators.

 An associate with Region 6's consulting firm advised us that he
 contacted Federal, state and local government officials to  obtain
 relevant information for developing a waste exporter profile.  None
 of the agencies the firm contacted, however, had useful informatior
 to help in the development of an exporter profile.  Because the
 contract with Region 6 required a completed project by August 1987,
 the  course included little valuable information about waste exports
 profiles.  In August 1987, the consultant provided Region 6's
 project officer a draft of the training course curriculum.   The
 consultant stated that the specifics on the hazardous waste import/
 export regulations were covered in detail.  However, the contractoi
 also stated that the implementation section of the course,  which is
 the  most practical section, is the one for which the least amount
 of information was available to the consultant.  The consultant
 explained that there was little information available on profiles
 of violators. •

 In November 1987, Region 6, OECM, and NEIC officials presented the
 course to customs inspectors in El Paso, TX.  Customs officials
 explained to us that the exporter profile information is most
 important to them because the profile will enable Customs inspectoi
 to identify and target specific exporters, transporters, and export
 brokers who are exporting hazardous waste. . Region  6  initiated
 steps to develop a course that will assist Customs  to  implement an
 effective program to inspect and target  exporters of  hazardous
 waste.  At least one other EPA region expressed  interest in
 developing a course that would help Customs  implement an effective
 monitoring and spot check program.  Because the  Office  of
 International Activities  (OIA) has significant  responsibility  in
 EPA  for controlling the hazardous waste  export  program, it needs
 to review the course developed by Region 6  and  make any necessary
 changes so that the course can be given  to  Customs  inspectors
 nationwide.  Because OECM and the Office of Solid Waste and
 Emergency Response (OSWER) have responsibilities in this area, the
 course should also be reviewed by these  two offices.

State Department Cables Are Not Always Complete

EPA has not ensured that the  receiving country's consent,  which
 is forwarded to the exporter, contains all  relevant data that
Customs needs to ensure the hazardous waste shipment is proper.
Consequently, hazardous waste  shipments  that do not conform (with


                                 -37-

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 either the description and terms  in  the exporters notification or
 the conditions established by  the receiving country for accepting
 the waste) can more easily occur  without Customs detection.

 Subsection (a) of Section 3017 provides that a copy of the receiving
 country's written consent be attached to the manifest which accom-
 panies each waste shipment.  The  shipment described on the manifest
 must conform to the terms of the  consent.  EPA defined the acknow-
 ledgment of consent as the cable  prepared by the U.S. Embassy in
 the receiving country.   The cable should contain relevant informa-
 tion from the exporter's notification and a description of the
 terms and conditions of the receiving country for accepting the
 hazardous waste.   Cables are to be transmitted to EPA via the
 Department of State in Washington, DC and then to the exporter for
 attachment to the manifest accompanying each waste shipment.

 EPA decided to use the cable,  as  opposed to a reproduction of the
 actual communication from the  receiving country, for purposes of
 uniformity,  and to provide an  English translation to the exporter
 of the terms and  conditions of consent.  Agency officials stated in
 the Federal Register containing the  final regulations that:

      Where.the terms of the receiving country's consent are
      understandable only by reference to the export notifi-
      cation (e.g.,  the receiving  country simply references a
      notification and gives consent  without reiterating the
      terms described in the notification) the cable will also
      include  relevant portions of such notification.

 Agency officials  further explained that they would work closely
 with the  State Department to establish procedures to ensure cables
 prepared  by the U.S.  Embassy in the  receiving country  include  all
 of the relevant information contained in the exporters original
 notification,  as  well as an exact reiteration or translation of  the
 receiving country's written consent  to that notification.  This
 would  provide  Customs officials with the information necessary to
 check  the shipment against the receiving country's  consent to  the
 notification.   Without an English translation,  the  exporter and
 customs would  have difficulty  ensuring the shipment conforms with
 the  consent.

 Our  review showed cables did not  contain all  relevant information.
 Of 23  cables received from U.S. Embassies  in  FY 1987  for countries
 other  than Canada,  20 cables only made reference to the export
 notification and  did not include  relevant  information needed by
Customs.   The  following are examples of significant shipments when
the cable  lacked  relevant information  (e.g.,  a  description and
quantity  of the waste):
                                 -38-

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            Date of         Receiving      Quantity and
          Notification       country    Description of

            08/26/86        Mexico     960 tons of Emission
                  "  .                   Control Dust

            09/17/86        Australia  300 tons of Magnesium
                                       Scrap

            09/25/86        England    10 tons of Sludges from
                                       Electroplating Tin on
                                       Copper Wire

            11/26/86        Mexico     4,500 tons of Flue Dust
                                       from Electric Arc
                                       Furnaces containing
                                       Lead Cadmium and Zinc

            12/01/86        England    4 tons of Toxic Waste
                                       containing Mercury

 We  discussed  this  issue with OIA officials.  We determined the
 Agency  does not have  written procedures for working with the State
 Department  to ensure  that cables prepared by U.S.. Embassies in
 receiving countries include all relevant information.

 Customs needs complete data from the exporters notification and the
 receiving country's terms of acceptance to ensure the hazardous
 waste shipment is  proper.  Without this data exporters may purpose-
 fully or  accidentally ship another type of hazardous waste or
 greater quantities of the waste than agreed to by the receiving
 country.  Acknowledgment of consents,  in the form of cables, do not
 always  contain the data needed by Customs to effectively monitor
 hazardous waste exports.  EPA needs to review all cables carefully
 and establish procedures with the State Department to ensure cables
 contain all relevant  information provided in the exporters notifica
 tions and the receiving countries' terms for accepting the wastes.

 Conclusions

 Congress  intended  that Customs and EPA work together to  establish
 an effective  program  to monitor and spot check  international
 shipments of  hazardous waste to assure compliance with hazardous
waste export  requirements.  SPA and Customs have acted appropriatel
 in developing an MOU  that explains their respective areas  of
 responsibility.

Customs ports have submitted manifests to NEIC.  However the  mani-
 fests often do not identify the port name.  Agency data  strongly
 indicate  that hazardous waste exports  are shipped  from several
ports across  the nation.  EPA needs to advise Customs personnel
that all  ports may not be  (1) separating manifests from Shippers
Export  Declarations,  (2) annotating the port name  on  the manifest,


                                -39-

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 or (3)  submitting the manifest to NEIC.  EPA also needs to  periodi-
 cally  analyze data  from notifications, annual reports and manifests.
 EPA could .then provide useful information to Customs which  will
 better ensure that  all manifests for hazardous waste exports will
 be submitted a't Customs ports across the country.

 Receipt of these manifests is important so that EPA can better
 provide a quick and thorough response to any international  incident
 involving the export of hazardous waste from this country.

 In addition, EPA needs to establish procedures for Customs  to
 identify hazardous  wastes and notify EPA when shipments of  hazardou
 wastes  do not comply with Section 3017.  EPA's Region 6 has indepen
 dently  contracted with a consultant to develop a training course
 which will assist Customs in implementing an effective monitoring
 and spot check program.  Officials from 01A, OECM, and OSWER should
 give the course to  Customs inspectors nationwide.

 EPA also needs to ens .re that the receiving country's consent,
 which is forwarded  to the exporter, contains all relevant data that
 Customs needs to determine that the ('hazardous waste shipment is
 proper.  OIA officials should work more closely with the State
 Department to make  sure that cables prepared by U.S. Embassies in
 receiving countries include all relevant information regarding the
 export.

 Draft Report Reconunendati ons

 we  recommended in oxir' draft report that the Acting Associate
Administrator for OXA take aoorooriate action to:
                                    -  • f    •.
  1.  Inform all exporters of hazardous waste of the requirement
      to submit a manifest to Customs  for each export  of hazardous
      waste.

  2.  Request exporters to show the  intended port of export on  noti-
      fications.  OIA should follow-up with the  exporter when this
      information is not included in the notification.

  3.  Evaluate Region 6's course to  train Customs  inspectors.   In
      this evaluation, OIA should obtain comments  from OECM and
      OSWER officials.  OIA should then initiate action with Custom
      to provide the course to Customs inspectors  nationwide.

  4.  Review cables prepared by U.S. Embassies  in  receiving
      countries for all relevant information that  will help Customs
      determine that the hazardous waste shipment  is proper.  When
      relevant information is lacking, OIA  should attach the neces-
      sary data and cor-act the responsible embassy,  through the
      State Department  if necessary,  to complete the information
      needed by Customs.  OIA should also remind the embassy of the
      information requirements for subsequent  cables that  the
      embassy may prepare.


                                -40-

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 We also recommended that the Assistant Administrator for OECM take
 appropriate action to ensure that SEIC:

   1.  Obtains copies of manifests for hazardous waste exports from
       all Customs ports where hazardous waste  is exported.

   2.  Periodically reviews and analyzes notifications, annual reports
       and manifests received.  This information should then be
     t provided to Customs for distribution  to  its ports.

 Agency Reply To QIC Draft Report

 The Acting Associate Administrator for OIA  agreed with ou-r draft
 report finding and recommendations. Accordingly, he has  acted to
 ensure Customs has all relevant information needed  to determine the
 shipment is proper.  In cooperation with  #£IC, OIA  has begun
 development of an improved Acknowledgement  of  Consent letter which
 is sent to the exporter when a receiving  country agrees to accept
 the shipments.  This new letter will include a reference  to leaving
 a copy of the manifest for customs at the border.   The letter will
 also name the specific wastes being consented  to, and note the
 requirement to submit an annual report.   The Acting Associate
 Administrator believed this should facilitate  increased compliance
 with the export regulations and assist in determining cases for
 enforcement action.

 The  Assistant Administrator for OECM also agreed with our draft
 report finding and recommendations. He stated that NEIC  is
 developing a joint enforcement strategy with Customs  to address
 enforcement activities specific to customs. The activities specific
 to Customs include reinforcing procedures for  collecting  manifests
 at ports of exit,  developing a vaste exporter  profile, training  for
 Customs  inspectors and explaining the existing program  for  spot
 checking export shipments.   This will involve  training of Customs
 inspectors and joint border inspections involving Customs,  EPA and
 authorized State RCRA programs.  A waste  exporter profile is  under
 development with a mid-1988 completion target  and will be provided
 to Customs as part of inspector training.

 The Region 6 training course also is under  review by NSIC as the
 basis  for training of Customs inspectors  at the  targeted ports-
 This review will be coordinated with OIA  and OSWER.

 The Assistant Administrator for oswER substantially agreed with cut-
 draft  report finding and recommendations.  He  will  incorporate    : '
 export program consideration into appropriate  guidance,  particularly
 inspection manuals and inspector training programs.

Auditor
We- agree with the  actions planned and started by the Agency to
implement a nationwide monitoring program with Customs.  The
actions to strengthen Customs'  manifest procedures will better
                                 -41-

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ensure that complete manifests will be submitted to Customs and
forwarded to EPA.  In addition, the actions taken and planned to
train Customs inspectors to. perform joint inspections will help
Customs identify illegal shipments and notify EPA when violations
occur. 1 Further v- OIA's development of an improved Acknowledgement
of Consent letter will also better ensure Customs has all relevant
information needed to determine that the hazardous .waste shipment
is proper.
We recommend'- the Acting Associate Administrator  for OIA  and the
Assistant Administrators for QECM and OSWER complete  their actions.
  £
We requests the Agency provide us documentation to  support the
completion of each action to implement  our recommendations.
                                 -42-

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 FINDING NO. 3 - EXPORTERS SHOULD PROVIDE A COMPLETE DESCRIPTION
                 OF THE MANNER IN WHICH  EXPORTED HAZARDOUS WASTE
                 WILL BE HANDLED

 EPA has not provided guidance to exporters that would help ensure
 that exported hazardous waste will  be properly handled by the
 receiving country.  Consequently, exporters do not always provide
 EPA an adequate description on their export notifications of the
 manner of treatment, storage or disposal in the receiving country.
 For example, the description for treatment of  
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   United Nations Environment Program  (UNEP) and the Senior Advisors
   on Environmental  Problems of the Economic Commission for Europe,  is
   an environmental  organization that performs unique functions which
   cannot be carried out  by governments acting alone or bilaterally.

   These organizations  have pursued guidelines for international
   shipments of hazardous waste.  For example, in June 1986 OECD
   adopted a resolution requiring certain actions on the part of its
   member countries  pertaining to hazardous waste exports,  with
   respect to the manner  in which the exported hazardous waste would
   be handled,  OECD  required member countries to require exporters to
   provide certain information, including:  "The information used by
   the exporter to assure himself that the proposed disposal operation
   can be performed  in  an environmentally sound manner."  This informa-
   tion requirement  and other information requirements were important
   because OECD was  "Convinced that the exports of hazardous waste  .
   may,  if not  properly maintained and controlled, result in serious
   risks to health and  the environment."  In addition, an OECD survey
   concluded that "... while in many (OECD) countries hazardous
   waste management  is  now regulated,  in others there is still a legal
   vacuum."

   The requirement to provide a description of the manner in which
   hazardous waste will be treated, stored or disposed of in the
   receiving country is important because it provides the Agency some
   assurance that the exporter intends to handle the exported waste in
   an  environmentally sound manner.  However, the regulation does not
   provide criteria  about how much information the exporter should
   include in the notification.  Consequently, notifications received
   by  the  Office  of  International Activities  (OIA) identify the
   manner,  but  often do not provide a  description of how  the exported
   hazardous waste will be treated, stored or disposed.   A review of
   39  non-Canadian FY 1987 notifications showed that 19 did not
   provide any  description of the manner for handling the waste.  The
   following examples illustrate the lack of a description of  the
   manner  of handling the waste by exporters  in their notifications:

                                                   Notification's
Notification  Receiving      Quantity and      Description  of Treatmer
    Data       Country   Description of Waste    Storage or  Disposal

               West
  04/10/87     Germany     250 tons of Lead    Reclamation
                          Flue Dust

                          250 tons of Lead
                          Furnace Slag

                          11,000 tons of  Lead
                          Press Coke

  03/24/87   Japan        10 tons of  Waste     Recycling
                          Arsenic Compounds


                                  -44-

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 03/18/87   Philippines
 03/17/87   England
 03/03/87
South
Africa
 02/24/87    Netherlands
 11/10/86    Pakistan
 10/27/86   Mexico
             6 tons of Selenium
             Metal Powder

             Up to 250 tons of
             used batteries that
             contain (1)  alkaline
             electrolyte gel.
             That is corrosive
             and (2) levels of
             mercury that exceed
             the toxicity
             threshold under
             40 CFR 261.24
             500 tons of Furnace
             Brick, contaminated
             with Lead Alloys
120 drums of Spent
Chemical Catalyst
containing Mercury
Sludge

150,000 gallons of
Organic Effluent
Waste Flammable
Liquid

40 metric tons of
Lead Dross

25 tons of Emission
Control Dust from
steel production
The company has indi-
cated that it will
reclaim the hazardous
waste to recover
metal, plastic and
other merchantable
materials in
conformance with the
Philippines Pollution
Board laws regulations
"... recycle the
materials for values
rather than dispose of
it as a hazardous
waste."

Recycling by Thor
Chemicals, Inc.
                                  In the Netherlands,
                                  recycling/land
                                  incineration
                                  Recycling
                                  Test, Recycling
In the above 8 examples  and  the  other 11 notifications,  the
exporters provided  no description of the recycling,  incineration
or other process  for handling the vasts in the receiving country.
Exporters do not  provide adequate descriptions because the regu-
lation suggests that a cursory "description of the manner . .  ."
(e.g., land or ocean incineration,  other land disposal,  ocean
dumping, recycling)  is sufficient.   Although, OIA employees do not
receive full descriptions from exporters, they still process the
notifications.  However,  without a complete description of the
manner in which the hazardous waste will be treated, stored or
disposed, the Agency has less assurance that the intended process
will be adequate  and not a sham  recycling or other illegal treatmei
method.

The receiving country may also object to the intended export unles:
the notification  contains an adequate description of the treatment,
storage, or disposal method.   For example, in April 1987 Canada
objected to a shipment of 60 tons of metal hydroxide sludge becaus-
                                 -45-

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 the exporter's  notification did not contain an adequate description
 of the manner in which this waste would be treated.  Consequently,
 the exporter had to provide Canada the necessary data to resolve
 the objection while ensuring proper storage of the waste until  it
 could be shipped.  In cases like this, the exporter cannot ship the
 waste until  the objection is resolved.

 Many of the  incomplete notifications pertain to hazardous waste
 that exporters  wanted recycled because the waste contained precious
 metals.   In  response to the draft regulations issued in March 1986
 several commentors focused on recycled waste and suggested that all
 hazardous waste exported for use, reuse, reclamation or other
 recycling be exempt from the export requirements.  The commentors
 explained that  recyclers have an economic incentive to be certain
 that their wastes are in fact recycled; therefore, more secure
 handling of  wastes intended for recycling is assured.  EPA did not
 agree with this rationale.  EPA explained that its authority to
 regulate materials for recycling under Subtitle C has been fully
 discussed in other rule-makings.  .In addition, hazardous waste
 recycling and ancillary activities are within the  statutory meanin^-
 of the terns "treatment, storage and disposal.". EPA did not belie
 Congress intended to exempt hazardous wastes exported for recycling
 which EPA fully regulates domestically.

 The Agency comments to the final regulations covering the exporta-
 tion of  hazardous wastes for recycling are clear evidence that
 this is  the  type of waste about which foreign countries would  also
 wish to  receive notice and either reject the  import or monitor its
 disposition.  The potential for illegal recycling  activity is
 increased since the foreign facility  is outside EPA's enforcement
 jurisdiction.   The requirements that  EPA imposes domestically  upon
 each person  owning or operating a facility for the treatment,
 storage  or disposal of hazardous waste are contained  in  Subtitle
 C  of the Resource Conservation and Recovery Act  (RCRA).   Each
 facility must provide a description of the manner  in  which wastes
 will  be  handled in order to receive an EPA permit  to  operate.  The
 permit application explains the type  of  information  EPA requires  in
 order to determine that the facility  can operate properly.   As
 provided in  RCRA, the permit application requires  a  description of
 the  processes used for treatment, storage, and disposal of hazardou
waste; the design capacity of such processes,  and the specific
hazardous wastes to be handled at the facility.

Conclusions

The Agency needs to determine the information needed from the
exporter to  satisfy the notification  requirement that the exporter
provide  a description of the manner  in which exported hazardous
waste will be treated, stored or disposed.   The primary purpose
of a notification, which includes a description of the manner of
treatment, storage or disposal,  is to provide sufficient infor-
mation so that  receiving countries can make an informed decision
on whether to accept the waste and,  if so,  to manage it in an
environmentally sound manner.


                                 -46-

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This  information combined with the other information  requirements
will  better  (1) ensure that the environment,  public health, and
U.S.  foreign policy interests are safeguarded and (2)  assist EPA
and Congress in determining whether the right to export is being
abused.  Page 13 of this report explains that EPA is  aware of
evidence that certain materials that have been exported ostensibly
for recycling were actually examples of sham recycling.  Requiring
information from the exporter as to ^iow it is assured that exported
hazardous waste will be treated, stored or disposed  of will help
the Agency ensure the exporter has taken precautionary measures.
Any notification based on false representations is invalid and
exposes the exporter to civil and criminal enforcement actions

.pga-ft-Report Recommendations

We recommended in our?-'-raft report ~.iat the Acting Associate
Administrator for OSAr- in coordination with the Assistant
Administrators for the Office of Enforcement and Compliance
Monitoring (OECM) and the Office of solid Waste and Emergency
Response (OSWER) determine whether the hazardous waste export
regulations provide EPA sufficient authority to require that
exporters provide a complete description of the manner of treat-
ment, storage, or disposal of hazardous waste exports.  If
sufficient authority does not exist, the Assistant Administrator
should determine whether the Agency should promulgate  a new rule
requiring exporters to provide a complete description  of the manner
of treatment, storage, or disposal of hazardous waste  exports.

If EPA determines it has sufficient authority under the existing
regulation to require a complete description of the manner of
treatment, storage, or disposal, we-recommended the Acting
Associate Administrator- for OIA in coordination with the
Assistant Administrators for OECM and OSWER:

  1.  Determine the amount of information needed  from the exporter
      to satisfy the export regulation  requirement that the notifi-
      cation provide a description of the manner in  which the
      hazardous waste will be treated,  stored,  or disposed in the
      receiving country.  This would include the sane information
      used by the exporter to assure that the proposed disposal
      operation can be performed  in an  environmentally sound  manner.

  2.  Review notifications to ensure the exporter provides a  complet
      description of the manner in which the hazardous waste  is to
      be handled.  For incomplete notifications,  the exporters
      should be notified that the notification is incomplete  and a
      complete description must be provided in order to process the
      notification.  The exporter should be made aware that shipment
      is prohibited until such  information is provided.

  3.  Refer to National Enforcement  Investigations (KEIC)  officials
      for their consideration all instances where the exporter
      fails to provide the required  information.


                                 -47-

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 froenev Reply To QIC Draft Report

 The  Acting Associate Administrator for OIA believes a careful
 check  is needed of EPA's legal authority to require complete
 description of the manner of treatment, storage,  or disposal of
 hazardous waste exports.  If such authority exists and a
 requirement is established, EPA must develop guidelines to advise
 exporters of what kind of information to look for.  For an exporter
 to assure himself that the waste will be treated in an environ-
 mentally sound manner, an on-sight inspection of the facility  may
 be needed.  The Assistant Administrator for OECM substantially
 agreed with our draft report finding and recommendations.  He
 stated that the enforcement strategy provides for NEIC technical
 review of notifications of intent to export.  This should minimize
 the  incidence of inadequate information on the manner of handling
 the  waste in the foreign country.  If  -his approach does not work
 appropriate revisions of the regulations will be addressed.

 The  Assistant Administrator for OSWER  also agreed that exporters
 should provide a complete description  of the manner in which
 exported hazardous waste will be handled.  He added that EPA's role
 should be to ensure the adequacy of the notification  information
 for  the receiving country to make judgments on the manner  in which
 the  waste will be handled.
We agrees with the Agency's comments.  A determination should be
made regarding EPA's legal authority to require  from exporters
a complete description of the manner of treatment,  storage, or
disposal of hazardous waste exports.  If such  authority  is
determined to exist, then the Agency should develop guidelines
to advise exporters of the information needed.   NEIC's technical
review of notifications should be useful in developing these
guidelines.
We/ ^recommend the Acting Associate Administrator for 0£A in
coordination with the Assistant Administrators for oSQi and OSWER
implement our draft report recommendations.   In addition, if the
proper authority exists, we  recommend the Agency implement OIA's
recommendation to develop guidelines to advise exporters of what
kind of information is needed.
         t the Agency provide  us documentation to support the
completion of each action to implement our recommendations.
                                 -48-

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 FINDING NO.  4  -  EPA SHOULD STRENGTHEN PROCEDURES TO KOTTPY EXPORTERS
                 WHEN A RECEIVING COUNTRY OBJECTS TO THE EXPORT

 The  Office of  International Activities (OIA) records did not show
 that it informed exporter* of objections made by receiving
 countries to intended exports of hazardous waste.  Consequently,
 several exporters advised us they were not aware of objections to
 their planned  exports.  However, they stated that they did not
 export the hazardous waste to the objecting country.

 Unless the Agency's records clearly show the exporter is notified
 of objections  to its exports, the Agency could be held accountable
 if the shipment  occurs and the receiving country complains that the
 shipment occurred against its wishes.  Further, the exporter may
 complain if  his  shipment is stopped at the receiving country's
 border and OIA is unable to show that the exporter was notified of
 the  objection.   OIA needs to have a formal procedure that adequately
 documents it has notified an exporter when the receiving country
 has  objected to  the exporter's planned hazardous waste shipment.
 The  procedure  should consist of a telephone call followed by a
 certified letter to the exporter.

 Countries importing hazardous waste can object to  intended shipment:
 for  a variety  of reasons.  The waste may be a substance that  is too
 dangerous and  cannot be processed or disposed safely within the
 country.  Also,  the country may object if the exporter has not
 complied with  the country's requirements for importing hazardous
 wastes.  In  these instances the objecting country  formally notifies
 OIA  and  not  the  exporter.  OIA's responsibility  is to quickly
 notify the exporter of the receiving country's objection.  The
 exporter. can either resolve the objection and send the waste  to
 that  country °*  find an alternate location,- foreign or domestic.
Most objections OIA received were  from Canada.   From December 1986
through May 1987 Canada raised objections  to  61  intended shipments
from 54 companies.  In most cases  Canada objected to the shipments
because the exporter pr his representative did not have a Canadian
identification number, used an improper waste code,  or submitted an
incomplete notification.  For example:
Company
  Data of
Notification
 Date of
Letter Of
Objection
           10/16/86     12/18/86
   B
  10/27/86    12/10/86
  Quantity and
  Description
    of Waste

130,000 gallons
of Xylene,
Acetone,
Methanol,
Toluene

10 Tons of
spent Gold
Cyanide 400
Ibs. of spent
Silver Cyanide
  Basis for
  Objection

Exporter not
registered wit*
Province of
Ontario
                              Exporter not
                              registered wit!
                              Province of
                              Ontario
                                 -49-

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                   Incomplete waste
                   description
                   Awaiting
                   Consignee's
                   agreement to
                   accept the
                   waste
                   Facility is not
                   authorized by
                   the Province of
                   British Columbia

                   Discrepancies
                   between export
                   and importer
                   information
   C        01/20/87     02/25/87   250,000 gallons
                                  of Xylene,
                                  Toluene, Phenol,
                                  Sodium Chloride

   D      02/26/87       04/21/87   400 tons of
                                  Hydroxide
                                  sludge

                                  1,100 gallons
                                  of Nickel
                                  Sulfate

   E      03/14/87       03/19/87   5 tons of spent
                                  solvent from
                                  cleaning and
                                  painting parts

   F      03/26/87       05/07/87   17,160 gallons
                                  of waste water
                      '            sludge

                                  3,300 gallons of
                                  caustic Alkali

                                  3,300 gallons of
                                  spent sulfuric
                                  acid

                                  3,300 gallons of
                                  Cyanide

                                  3,300 gallons of
                                  Ammonia

In  the above examples',  OIA could not provide us documentation to
show that it contacted  the exporter.  In  these instances we  called
the exporter or his representative.  They advised us  that  OIA had
not informed them of  Canada's objection to their hazardous waste
shipments.  The exporters claimed they did not ship the hazardous
waste to Canada.  We  visited exporters B  and E and  we confirmed
through a reviev of their records that they did  not export the
hazardous waste but properly disposed of  the waste  domestically.

Unless OIA sufficiently documents that the exporter has been
informed of the objection, the Agency could be placed in  an  embar-
rassing situation.  This could most  likely occur with exports  to
countries, like Canada, with whom the United States has a bilateral
agreement.  In the agreement, the exporter can ship the hazardous
waste if Canada does  not respond to  OIA within 30 days regarding
the shipment.  The bilateral agreement with  Canada  states:
-50-

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      If no response is received by the designated authority of
      the country of export within the 30 day period referred
      to in paragraph (c)  of this article, the country of  import
      shall be considered as having no objection to the export
      of hazardous waste described in the notice and the export
      may take place conditional upon the persons importing the
      hazardous waste complying with all the applicable laws of
      the country of import.

 Therefore, in the above six examples, the exporter could  have
 exported the shipment when, after 30 days, the company received  no
 notice of an objection from Canada through OIA.  in these examples,
 if the export takes place, it is contrary to the wishes of the
 Canadian government.  If the shipment is stopped at the border by
 Canadian authorities,  the exporter will likely inquire of OIA as to
 why the company was not notified of the Canadian objection.  The
 exporter must either resolve the objection or find another  foreign
 or domestic location to ship the hazardous wastes.  In addition,
 the exporter must properly store the hazardous waste until  the
 objection is resolved or an alternate location is found to  send  the
" waste.

.Although the majority of objected to shipments occur with Canada,
 there were three intended exports in which other countries objected
 to shipments of hazardous waste.
 company
  Date of
Notification
 of Intent

12/29/86
 Date of
Letter of
Objection

01/1S/87
    B
 11/10/86
01/22/87
    B      11/10/86
     (2nd export)
              02/16/87
Quantity And
 Description
  of Waste

40,000 gallons
per week of
flammable,
corrosive and
poison liquids
and gas

700 metric tons
of Lead Dross
and 900 metric
tons of crushed
Batter Plates
           770 metric tons
           of crushed
           Battery Plates
Receiving Countr
  and Basis for
    Ob-lection

Mexico-Cons ignee
had been denied
authority to
import waste
Taiwan-Consignee
does not have
sufficient pollv
tion protection
equipment and
procedures

Korea-government
opposed lead
imports
OIA officials advised us in cases where a country opposes or  rejed
the import of specific type of waste, an OIA employee  is to call
the exporter about the rejection and then send a registered letter
to the  exporter confirming the rejection.  This procedure, for
example, would be followed for Company B when Korea  informed  OIA
that  it opposed lead imports.
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 However,  as with the  Canadian objections, OIA could not provide
 us documentation to show they contacted cither exporter A or B
 regarding their intended exports of waste.  Notifying the exporter
 is important because  Taiwan and Korea do not have a bilateral agree-
 ment with the United  States and the export is not allowed until the
 exporter  receives,  through OIA, an Acknowledgment of Consent from
 the receiving country.  The president of Exporter B advised us that
 OIA did notify him  of the objections by Taiwan and Korea.

 A company may try to  proceed with the export if it is unfamiliar
 with the  regulations  and believes that EPA would notify  it of any
 objection*   In addition, an exporter may be under other  pressures
 which would cause it  to export the waste, unless it is clearly
 informed  of an objection.  For example, EPA informed the State
 Department regarding  exporter B's intended exports that  "The U.S.
 site where the material is located is the subject of an  EPA closure
 order and the exporter  .  . . will be rapidly near ing a deadline for
 moving the material to another site for treatment."

 We also asked the president of exporter B about the objections
 raised against his  exports.  He stated that the wastes were never
 exported.   Instead, his company disposed of 1,206 tons of crushed
 battery plates and  221 tons of lead dross at a California smelter.
 The exporter has 1,000 tons of lead dross remaining at its  facil-
 ities until an alternative location can be found.

 In instances such as  the one above, OIA may need to ensure  the
 objected  to shipments are ultimately handled by the exporter  in  a
 proper manner.   To  help OIA accomplish this task, it should rely  on
 liaison officers that have been established in several regions to
 assist OIA  when needed.  We contacted these liaison officers  who
 stated they have not:  been called upon by OIA .to resolve  problems
 regarding hazardous waste exports.  In instances such  as that
 described in the preceding paragraph, the regional liaison  could
 help  confirm the final disposition of the waste.

 We discussed this issue with OIA officials.  They explained that in
 certain cases OIA will call the. exporter  regarding the objection
 and follow  up with  a  certified letter.  This procedure is important
 and OIA should use  it for all objected to shipments.   OIA should
 also  ensure that its  records are documented to  show  that exporters
 are contacted when  the receiving country  objects  to  a hazardous
waste shipment.

 Draft Report Recommendation a
v*0 recommendeo: in our draft report that the, &r*ina Associate
Administrator for OTA:

  1.  Revise OIA's procedures for notifying exporters when the
      receiving country objects to an intended export.  OIA should
      promptly telephone the exporter and ensure that the name of
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      the person contacted is documented.  In addition, OIA should
      promptly send a certified letter to the exporter confirming
      the objection.

   2.  Contact regional offices to help the Agency ensure that, in
      cases where the receiving country objects to significant
      shipments of hazardous waste, the exporter either resolves
      the objections or properly disposes of the waste.

 •Agenc  KeDl  To OIG Draft
 'he Acting Associate Administrator  for OIA agreed with our draft
report finding and recommendations.  He explained that OIA has
adopted our draft report recommendation.  When there  is an objection
OIA will notify the exporter by telephone, and follow-up  by  sending
a copy of the objection to the exporter by certified  mail.   At  the
same time, the EPA regional office  where the exporter is  located
will be notified of the objection.

Auditor Comments

The actions by OlA's Acting Associate Administrator,  if properly
implemented, will correct the deficiencies cited in our draft
reoort.

'econunendationa

We recommend that the Acting Associate Administrator  provide us a
copy of the procedures for the nev  practices established  as  a result
of our. draft recommendations.
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 FINDING NO.  5 - HAZARDOUS WASTE EXPORT PROGRAM NEEDS BETTER
                 ACCOUNTABILITY

 The Office of International Activities (OIA) is not part of the
 Agency's Strategic  Planning and Management System (SPMS).   Thus,
 senior Agency officials cannot adequately monitor the hazardous
 waste export program.  Also, OIA's internal control reviews are
 not sufficiently documented to show the extent that employees
 included the hazardous waste export program in their reviews.
 Consequently,  the Agency is less likely to identify and quickly
 resolve significant program weaknesses that need management
 attention.

 A strong and well managed national compliance program needs
 reliable information so that senior Agency officials can judge a
 program's success and identify areas needing management attention.
 One of the Agency's principal means for determining the success of
 Agency programs is  through the SPMS.  SPMS provides the Agency a
 way to track progress and guide the Agency  in implementing its
 legislative  mandates through goal setting, planning and evaluation
 functions.

 SPMS provides a step-by-step process or framework for the Agency
 to set goals and priorities, plan actions, manage and track
 performance,  and identify areas for in-depth evaluation.  The
 principal clients of SPMS are the Administrator and Deputy
 Administrator.   To  monitor progress on program commitments,  the
 Deputy Administrator meets with Assistant Administrators during
 quarterly reviews and with the regions during semi-annual  reviews.
 Thus,  all Agency managers should be involved in the development of
 SPMS priorities,  guidance, measures, and commitments  for their
 important programs.

 QIA Activities  Mot  Measured Bv SPMS

 Despite the  importance of its activities, OIA  is  not  part  of SPMS.
 The Acting Associate Administrator for OIA  advised  us that he was
 aware  that OIA's activities were not included  in  SPMS.   However,  he
 was not aware  of why OIA is not in SPMS because the previous
 Associate Administrator made the decision.  OIA had no documenta-
 tion to show whether any of its activities  had ever been considered
 for inclusion  in SPMS.

 OIA is  charged with the responsibility of developing policies and
 procedures for the  direction of the Agency's  international programs
 and activities,  subject to U.S. foreign policy.   In addition, OIA
 negotiates arrangements or understandings relating to international
 cooperation with foreign organizations, and supervises all programs
with respect to such activities which are completely within the
purview of EPA.

These  international activities are  important because the
Administrator  has stated that the Agency  must look beyond our
national  boundaries.  Therefore, the Agency must give attention  to

                                -54-

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 its work with  other nations to promote sound environmental
 practices worldwide.  The Agency recognizes that many environ
 mental  problems  require international cooperation.

 We also discussed why OIA activities are not part of SPMS with
 officials in the Agency's Office of Management Systems and
 Evaluation  (OMSE).  OMSE is responsible for maintaining SPMS and
 for conducting program evaluations upon the request of the  Deputy
 Administrator  or senior Agency program managers.  OMSE officials
 explained that they were unaware of OIA's program to monitor
 hazardous waste  exports,  one OMSE official believed that OIA
 managers may have reviewed their programs and decided that their
 activities  could not be measured by SPMS.  Thus, OIA did not
 request OMSE's assistance in establishing commitments for OIA
 activities.

 The Agency's work with other nations to promote sound environmental
 practices such as in the international movement of hazardous waste
 should  be tracked by SPMS.  By including OIA's programs in SPMS,
 the Agency  can determine the success of the program to control
 hazardous waste  exports.  The Administrator has stated that many
 environmental  problems require international cooperation and that
 this is an  important area for the Agency.  The activities of OIA,
 such as controlling the export of hazardous waste, should therefore
 be  included in SPMS.

 In  determining what activities should be monitored by SPMS, the
 Administrator  has stated that officials must define success
 carefully and  not rely on administrative "beans" to measure per-
 formance.   Accordingly, the management process of identifying goals
 and objectives is as critical to the success of the program as  the
 actual  measures  and commitments that result.

 OIA officials  need to discuss with officials of the Agency's
 Offices of  (1) Management Systems and Evaluation,  (2) Solid Waste
 and Emergency  Response, and  (3) Enforcement and Compliance
 Monitoring  the development of SPMS priorities, measures and commit-
 ments for the  program to control hazardous waste exports.

 Internal  Control Reviews Mot Thoroughly  Documented

 The  Federal Manager's Financial Integrity  Act  (FHFIA)  of 1982
 (31  U.S.C.  3512(b) and  (c)) requires department and Agency manager:
 to  identify internal controls and accounting  systems weaknesses
that can lead  to fraud, vaste, and abuse in government operations.
 FMFIA requires Federal managers to correct the weaknesses and to
 report  annually  to the President and the Congress on their progresi
 The  legislation  provides an important  impetus to the restoration
of the  public's  confidence in the management  of its Government.

 In  February 1984 the Agency  issued EPA Order 1000.24 on
 ••Establishing, Evaluating, and Reporting on Internal Control
Systems.11   The heads of the Agency's primary offices were given


                                -55-

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 responsibility to evaluate  internal controls relative to their
 organizations, report any material weaknesses disclosed during the
 evaluation process,  and take  actions to correct weaknesses in
 internal controls.

 As part of the process to evaluate internal controls, the Associate
 Administrator for OIA, like other senior officials, submits annual
 reports which explain that  they have evaluated their internal
 controls.   OIA's annual statement, dated September 30, 1986, stated
 that there were no weaknesses in 1985 that needed corrective action
 However,  OIA identified four  weaknesses in OIA's control systems in
 1986 and officials took action to improve:

   1.   Expenditure monitoring.

   2.   Procedures for obtaining official passports and visas for
       EPA travellers.

   3.   OIA's system for tracking international travel data.

   4.   Guidance to EPA staff on international travel.

 OIA's internal control documentation does not show which specific
 activities were reviewed by OIA employees,  without adequate
 documentation we could not  determine whether OIA em£*oyees  reviewed
 OIA's hazardous waste exports program.  Employees  involved  in this
 program,  however,  advised us  that they did hot  include  the
 hazardous  waste export program in any internal  control  review.
 Instead,  the internal control reviews focused upon OIA's
 financial,  budget, staff and  administr .tive controls.   However,  the
 Associate  Administrator's assurance letter explained  that their
 review of  internal controls included important  activities such as
 program management and operations.

 Internal control reviews of OIA's activities should  be  thoroughly
 documented and should include OIA's program activities  such as
 those pertaining to  the hazardous waste program.   In this way OIA
 management will have better assurance that  internal  control weak-
 nesses and weaknesses in program operations, such as those
 described  in this report, are quickly identified and addressed.

 We discussed this issue with  OIA officials who agreed with our
 conclusions and explained that our report would be used to help
 strengthen internal  controls  over the hazardous waste export
 prograa.
We recommended  in  our draft report that the Acting Associate
Administrator for  OIA take appropriate action tos
                                 -56-

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      include significant OIA activities in SPMS.

   2.  Ensure thorough documentation of internal control
      These reviews should include all significant program
      activities such as the hazardous waste export program.

Aoencv xecly To PIG Draft Report

The Acting Associate Administrator agreed with ottr draft report
finding and recommendations.  He explained that OIA would welcome
 .he opportunity to meet with Agency officials to discuss bringing
the hazardous waste export program under the Agency's Strategic
Planning and Management System (SPMS).  OIA would like to explore
the use of SPMS as a step-by-step process for setting goals and
priorities, in plarthii.g actions and in managing performance.  He
added that as the number of shipments of hazardous waste to other
countries increases and grows in importance, OIA is ready to
examine the options for better managing all aspects of the program.

The Acting Associate Administrator further stated that OIA has
also begun an examination of internal controls  in order to better
identify ways of improving those for the hazardous waste export
program.  Work has already begun in consultation with  the organiza-
tion and management offices of the Agency.  This will  assist OIA ir
developing a comprehensive set of internal controls to improve the
accountability of the hazardous waste export program.

Auditor Comments

W*- agree with the Acting Associate Administrator's  comments.   _
OIA should be considered for inclusion  in  SPMS because it is
responsible for policies and procedures pertaining  to  the Agency's
international program and activities  subject to U.S.  foreign  polic:
In addition, OIA negotiates understandings relating to internationi
cooperation with foreign organizations.  Further,  as the Acting
Associate Administrator stated in his response, hazardous waste
exports continue to increase.

OIA actions to examine its  internal  controls will also benefit the
hazardous vasts export program.  The Acting Associate Administrate
should ensure that employees implement  all corrective procedures
identified by the reviev.
                                 -57-

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Recommendation

We racommena the Acting Associate Administrator for the OIA
take appropriate actions tor

  1.  Meet with officials from the Office of Policy, Planning, and
      Evaluation to discuss bringing the hazardous waste export
      program under SPMS.

  2.  Implement procedures to correct any additional weaknesses
      identified by internal control reviews.

We request the Acting Associate Administrator provide us documenta
tion to support the completion of the actions planned and begun by
OIA.
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*
 I       UNITED STATES ^V«ONMENTAL PROTECTION AGENCY       APPENDIX 1
/                    WASHINGTON, D.C. J04M

                           MAR   8
                                                   O»l U I III I * », I »•«
                                                    »MM ,«Mr| i«\, i

                                                      Ml>M1iit>M.
 MEMORANDUM

 SUBJECT:  OECM Response to Draft Report of Audit on  EPA's  "rogram
           to Control Exports of Hazardous Waste

 PROM:     Thoaas L. Adaas, Jr.   ^Vi       .   \c-      \
           Assistant Administrator**1^***'*-' ^' -***•"	•   \

 TO:       Ernest E. Bradley III
           Assistant Inspector General  for Audit
                          i
      Thank you for the opportunity to  comment on the subject draft
 report.  Your staff is to be complimented on a thorough and
 comprehensive review of the export program.   Data  provided by your
 staff have already been very useful in supplementing information
 developed by the enforcement prograa on compliance with export
 regulations.

      As a general comment, the national Enforcement  Investigations
 Center  (NEIC) has developed a draft EPA enforcement  strategy in
 cooperation with the Office of International Activities and the
 Office of Haste Programs Enforcement that addresses  the enforcement
 issues you raise.  This strategy is currently under  review at the
 Headquarters level and will be completed by March  28, 1988.  NEIC
 is also developing a joint enforcement strategy  with the U.S.
 Customs Service to address enforcement activities  specific to
 Customs.  Implementation of these two  strategies will strengthen
 the ongoing enforcement of export regulations in 1988 and beyond.

      The EPA enforcement strategy refines  existing procedures  for
 evaluating notifications of intent to export and manifests
 accompanying expert shipments and annual  reports to ensure
 compliance with regulations and international agreeaents.
 Procedures arc defined for appropriate enforcement responses  tc
 instances of non-compliance.  This includes requests to exporters
 for additional information and inspection* of facilities  where
 appropriate.  This process will be supported by the NEIC  database
 of export information.  An inspection strategy provides for
 targeted inspections of waste generators most likely to export
 wastes to determine compliance with regulations.  Notices of
 Violation, Warning Letters, Administrative Orders with penalties,
 civil suits and criminal investigations ars possible enforcement
 responses depending upon the nature and severity of the
 non-coapliancs.


                            -59-

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      The joint strategy  with Customs includes reinforcement of
 procedures for collection  of manifests at ports of exit,
 development of a waste exporter profile, training for Customs
 inspectors and expansion of the existing program of spot checks of
 export shipments.

      We have comments on several findings and recommendations.
 These are presented below  in order of presentation in the report.

      Finding No. 1, Page 3.  This finding is specifically addressed
 by the enforcement strategy drafted by the NCIC and currently under
 review in Headquarters.  The strategy is scheduled for completion
 and implementation by March 28, 1988.

      Finding No. 2, Pages  3 and 4.  The draft joint enforcement
 strategy under development with Customs addresses improvement of
 the collection of manifests.   In addition, we have provided Customs
 with a list of the 10 ports of exit for which notifications of
 intent to export indicate  receive over 95 percent of export
 shipments.   A waste exporter profile is under development with a
 mid-1988 completion target and will be provided to Customs as part
 of inspector training.   The draft enforcement strategy provides  for
 NEIC technical review of export documents and procedures to ensure
 that all required information  is included on all export related
 documents.

      Finding No. 3, Pages  4 and 5.  The enforcement strategy
 provides for NEIC technical review of notifications of  intent to
 export.   Me believe this will  minimize the incidence of inadequate
 information on the Banner  of handling of the wastes in  the  foreign
 country.   If this approach does not prove adequate, appropriate
 revisions of the regulations will be addressed.

      Finding No. 1, Page 11.   Our previous comments on  the  status
 and  content of the enforcement strategy are applicable  to  the two
 bullets  and following paragraph on this page.

      Page 14.   Th« enforcement strategy specifically addresses the
 annual report compliance requirement.  The NEIC  database  contains
 notices  of  intent to export for 198? and  1988.   As  1987 annual
 reports  are received,  they arc entered  in the  database.  Facilities
 that  notified but did not  file an annual report  vill be contacted
 to determine if wastes ware exported and  appropriate  enforcement
 actions  taken.   Also,  a  report of vasts exports  for 1987  will be
 compiled  when all annual reports have been processed.   Exporters
who are detected to be in  non-coapliance with  annual  report
 requirements for earlier years will also  be  subject to enforcement
actions.

      Page 20.   We believe  the  enforceaent strategy under review is
 fully responsive to the  concerns expressed on  pages 20-22.
                                -60-

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      Page  24  - Recommendations 2 and 3,  and discussion on page
 16-19.  We do not agree with your recommendations concerning
 Census  information.  Your report points out some of the problems
 inherent in use of Shipper Export Declarations (SED)  as a source c:
 information on exporters.  Our experience in reviewing limited  SEDs
 collected  by  Customs, along with hazardous waste manifests,
 indicates  that there are serious problems with proper completion o
 these documents and classification of wastes.  It is probable that
 current procedures produce little data of value in evaluating
 exports.   Host exports of hazardous wastes have no economic value
 and thus these shippers are not required to prepare an SED.
 Exports with  a value of more than $1,500 are usually recyclable
 materials  being exported for legitimate recycling. We believe thes
 types of shipments are adequately regulated.

      We believe that any efforts to improve the collection of
 export  data through the SED process could be better spent in
 improving  compliance with EPA export requirements.  If the Census
 Bureau  were to require all export shippers of hazardous waste to
 file  an SED regardless of value, this would in effect be a new
 requirement on the regulated community which directly duplicates
 the export requirement for preparation of a hazardous waste
 manifest and  annual report.  If an exporter decides to avoid
 compliance with EPA export requirements, he could  just as easily
 avoid compliance with the SED requirement.  The SED requirement
 imposes an additional set of waste classification  codes much
 different  than the EPA and Department of Transportation codes with
 inherent misclassification problems.

      Finding  No. 2, Page 25.  We have addressed the issues
 concerning this finding through both the EPA enforcement strategy
 and the joint enforcement strategy with Customs.   The EPA strategy
 includes the  technical review of manifests  received by Customs.
 This  review will identify any incomplete manifests, and exporters
 will  be contacted to obtain the proper  information.   Upon
 completion of the NEIC database and modification of administrative
 procedures used by Office of International  Activities (OIA)  in
 mid-1988,  all Acknowledgements of Consent will  be waste-specific.
A waste exporter prof11* is under development  for completion in
 mid-1988.  Custom* has been provided information on port*  of exit
most  likely to handl* export shipment*.

      Page  26  - First Paragraph.  The date  of issue of the  Customs
 circular given in the first sentence as October 1986 is incorrect
other Agency  Compliance Circular No. 188 was issued by Customs in
March 1987.   This was preceded by a telegram to Customs ports on
March 4, 1987.

      Pages 31 and 32.  The joint enforcement strategy under
development with Customs specifically  addresses the issues raised
 on these pages.  The program of  spot checking of export shipments
begun in Texas and Michigan in  1987 will be expanded in 1988 to


                                -61-

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include approximately 10 ports of exit most likely to receive
export shipments.  This will involve training of Customs inspectors
and joint border inspections involving Customs, EPA and authorized
State RCRA programs.  The Region VI training course is under review
by NEIC as the basis, for training of Customs inspectors at the
targeted ports.  This review will be coordinated with OIA and the
Office of Solid Waste and Emergency Response (OSWER).

     Recommendations - Page 35.  The EPA enforcement strategy and
the joint Customs enforcement strategy specifically provide  actions
consistent with all of these recommendations.
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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY    APPENDIX
                          WASHINGTON, O.C. 204*0
                             MAR I 6 T-7'

                                                          OFFICE OF
                                                 SOLID WASTE AND EMEMGCNCV MESi
 MEMORANDUM

 SUBJECT:  pDraft  Report  of  Audit  on EPA's Program
           to Contra-*  Exports  of  Hazardous Waste
 FROM
          /Assistant  Administrator

 TO:        Ernest  E.  Bradley,  III
           Ass 1 stant•1nspector  General  for Audit
      We  have  reviewed  the  draft  audit  report  of  EPA's  program
 to  control  exports  of  hazardous  waste.  The  report  resulted
 in  two  recommendations pertaining  to OSWER.

      The  first  recommendation  stated that  OSWER  and  OECM  should
 coordinate  their  efforts  to  control  hazardous waste  exports.
 Specifically,  OSWER and OECM should  coordinate efforts  to contact
 exporters  that  have not filed  a  notification  or  an  annual report
 Both  offices  should also  request that  the  Bureau of  Census  retain
 its statistical data for  hazardous waste  exports.   The  enforcement
 strategy  for  the  hazardous waste program  should  be  completed.

      Responsibilities  related  to the enforcement of  hazardous
 waste export  requirements  are  shared,  as  stated  in  the  draft
 report,  between the Office of  International  Activities  (OlA),
 the National  Enforcement  Investigations Center (NE1C),  the  Office
 of Enforcement  acd  Compliance  Monitoring  (OECM), Regional Offices,
 and the Office  of Haste Programs Enforcement  (OWPE).   We  believe
 OWPE  is  carrying  out this  office's responsibilities  as  described
 in the draft  Hazardous Waste Export  Enforcement  Strategy, currently
 undergoing  Headquarters review.  OWPE  is  responsible for  incor-
 porating export program consideration  into appropriate  guidance,
 particularly  inspection manuals  and  inspector training  programs.
 NE1C will provide overall  coordination of  the exports  enforcement
 program, including  development of  enforcement activities  vich
 Customs.  OIA will  continue  their  program responsibilities,  with
 assistance  from NEIC  through  the  Information management  and
 technical review  activities.   OWPE will assist through  guidance
 to the Regions  concerning  inspection procedures  and training.
OECM will assist  in enforcement  responses as  appropriate, and
 the role of Customs will  be  more fully defined by the  joint
enforcement strategy.
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                                -2-


      With regard to the other  recoamendatloo addressed to OSUER,
 we are in agreement with  the OIG  chat EPA should  povide a complete
 description of the manner in which  exported hazardous waste will
 be handled.   The draft  enforcement  strategy, which  is an NEIC-lead
 effort,  addresses the  issue  of  increasing che  awareness of the
 regulated community and achieving a  high  level  of compliance.
 The draft strategy describes  the  procedures which hazardous
 waste exporters  must follow  In  order  to comply  with hazardous
 waste export requirements.   The importance  of  these requirements
 has been recognized in  several  documents  recently prepared by
 this office.

      The revised RCRA  Enforcement Response  Policy,  dated
 December 21, 1987,  provides  an  example  of violations  in the
 appendix.  Violations  of  export .requireaents are  noted as being
 Class I  violations.. •; The  "systematic  failure to comply" with  export
 rule requirements o'r "substantial deviation" from the  requirement
 are noted as indicating that the  handler  should be  designated  a
 high priority violator.   High  priority  violators  are  the  category
 of violator  given the  highest  priority  for  enforcement response
 within the RCRA  enforcement  program.  These violators  will  receive
 a  formal  enforcement response  and be  penalized  by assessment  of  an
 economic  sanction within  90  days  of  violation  discovery.

      The  following  are  examples of  OUPE activities  related  to  the
 export  rule  which will  be carried out during this fiscal  year:

      9   RCRA Inspector  Training Workshops which will  be conducted
 in  all  ten Regions  during 1988, beginning  in March, will  include a
 discussion of  hazardous waste  export  requirements.

      *   the  draft FY 89 RCRA  Implementation Plan  (RIP) notes the
 importance of  reviewing hazardous waste export  documentation
 during generator and  transporter  Inspections

      One  final comment  concerns the  statement  made  In  the report
 that  EPA  should  help ensure  exported  hazardous waste  will be
 properly  handled  by  che receiving country.  The goal  of  EPA
overseeing U.S.  export  handling in  the  country of Import  is a
 laudable  one,  but  It also presents  some quite  complicated issues
regarding  the  autonomy  of other nations.  This issue  is  currently
under debate  in  UNEP and  OECD.   All  parties agree that there
should be  a  good  description of the  intended  mode of  hazardous
waste management.   However,  it  should be  recognized that  the
U.S.  legal authority to prohibit  hazardous  waste  shipments is
problematic  at best, if the  Importing country  approves of such
shipment.


                                 -64-

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                               -3-


     Moit  shipments  cited  In the report were ahlpnents to developed,
not undeveloped  countries.  In soae cases, these countries define
the wastes  in  question  as  hazardous and In other cases they do
not define  then  as hazardous.  Moreover, what la acceptable disposal
or recycling In  one  country would  not  be acceptable  in another.

     Judging the  integrity of  a  recycling operation  is often  a
highly complex,  technical  judgaent.  The U.S. should  not  be  in  a
role of making such  case-by-case judgments of the  integrity of
operations  that  are  licensed or  approved of  in  another country.
Rather our  role  should  be  to ensure the adequacy of  the  notification
information  for  the  receiving  country  to make such  judgments,
especially  where  other  developed countries are  involved.
cc:   Office of International Activities
                                -65-

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t ^ffiZ ?    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY         APPENDIX
                        WASHINGTON DC 20460
                             MAR 2 3 1968
  MEMORANDUM

  TO:       Ernest E. Bradley,  III
           Assistant Inspector General for  Audit
  PROM:     TTheldon Meyers
           Acting Associate Administrator

  SUBJECT:  OIA's Response to the Inspector General's (IG)
           Draft Report of Audit on SPA ' s  Program to Control
           Exports of Hazardous Haste

      The  EPA Office of International Activities (OIA)  appreciates
  the opportunity to comment on the draft  report from the Inspector
  General on the implementation of the hazardous waste export
  rule.  He welcome an examination of the  hazardous waste export
 program as a sign of the Agency's commitment to an efficient
 and enforceable export program.  The report should help strengthen"
  the Agency's procedures for implementing  the program and ensuring
 that the U.S. is a responsible member of  the international
 community.

      In general, OIA agrees with the basic thrust of the report.
 while we do not take direct issue with the Report's assertion
 that hazardous waste exports could be better controlled,  we
 believe it must be put in the proper context.  Although there
 is much room for improvement, we believe  that the Agency is now
 controlling exports of wastes better than ever before.  Under
 the hazardous waste export regulations mandated by the 1984
 amendments to RCRA, EPA requires that exporters notify the
 Agency  in advance of the proposed shipments and the United
 States  aust secure tbt prior written consent of the receiving
 country in order for tbt shipments to commence,  in our view
 this new requirement Is a very significant achievement.  There
 has only been a little over a year of implementation of the
 regulation**  with «ore experience and adequate resources
 dedicated to its implementation the system should prove to  be a
 very effective mechanism for managing the transf rentier shipment
 of  hazardous  wast*.

      In response to the Report, OIA has  initiated close
 consultations with various sectors, both within and outside of
 EPA.  For  example,  we are working with the National Enforcement
 Investigations Center (NEIC) in the development oC  a  long-tern


                             -66-

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                                 -2-


 enforcement strategy that will include careful tracking through
 the manifest system, examination of annual reports to see if
 they match the individual notifications, and development of  a
 data base to include all the notices and information contained
 in them.  The enforcement strategy also calls for increased
 cooperation with the U.S. Customs Service under the EPA-Customs
 MOO.  Part of this cooperation will include seminars put on  by
 the Agency to train Customs Inspectors about the various aspects
 of hazardous waste exports.  In order to implement the enforcement
 strategy, OIA will work closely with NEIC, especially to determine
 non-compliance with the regulations and to develop an appropriate
 enforcement response to the export of hazardous wastes.

      OIA has also undertaken an internal review of its procedures
 for implementing the hazardous waste export regulations, especiall
 in processing the notifications and responses and in managing
 the information contained in the notices.  OIA is working closely
 with the Management'and Organization Division of EPA's Office
 of Administration and Resources Management and Program Evaluation
 Division to develop short and long-term program objectives and
 to streamline the processing of the notices and responses from
 receiving countries.   During the spring, we will be working
 together on management and operational elements as well  as on
 programmatic and policy matters.

      I  would also mention another initiative  undertaken  by the
 United  States to bring about better international  control of
 the transfrentier shipment of hazardous waste.   In  1986
 contracting parties to the London Ocean Dumping Convention
 adopted guidance on the Export of Wastes for  Disposal  at Sea.
 The basic purpose of this action is to  ensure that  any wastes
 exported to another country for the purpose  of  sea  disposal  are
 disposed of in full conformance with  all appropriate Internationa
 environmental rules,  primarly those set by  the  London  Dumping
 Convention.   The guidance also urges  parties  to ensure that
 wastes  exported for a purpose other than  sea  disposal  are not
 ultimately  disposed of at sea unless  done  in compliance with
 the  requirements of the Convention.   A  member of  the EPA OIA
 chaired the international work group  that  developed this guidance
 EPA  has lead responsibility within  the  U.S.  for seeing that it
 is  implemented effectively.

     In addition,  with strong EPA  participation,  the U.S. has
 been actively engaged in negotiating  conventions in the OECD
 and  in  ONEP concerning the transboundary  movement of hazardous
 waste.   These conventions call for  prior  notice of proposed
 exports  and the written consent of  the  receiving country before
 the  shipments can commence.  These  conventions should improve
 the  international systems for  the  export  and import of  hazardous
waste and give particular protection  to developing countries
 through  the ONEP global convention.   They will serve  as an
 effective complement to the domestic  hazardous waste  export
 regulations under RCRA and facilitate development of  a  uniform


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 system worldwide for international shipments of hazardous
 waste.  Both conventions  are expected to be completed within
 the next two years.

      As to the specific recommendations in the Report, OIA is
 working to determine what is feasible and what additional
 resources might be needed for  their implementation.  In cooperation
 with NSIC, OIA has begun  development of an improved Acknowledge-
 ment of Consent letter  which is  sent to the exporter when a
 receiving country agrees  to accept the shipments.  This new
 letter will include  a reference  to leaving a copy of the manifest
 for the Customs Service at the border.  It will also name the
 specific wastes being consented  to, and note the requirement to
 submit an annual report.   This should faciliate increased compliance
 with the export regulations and  assist in determining cases  for
 enforcement action.

      OIA does not disagree with  the recommendation that  more
 information is needed in  the notice on how  the waste will be
 managed,  but we believe a careful check of  our legal  authority
 to require this information is necessary.   If  such authority
 exists,  and a requirement is established, EPA  must develop
 guidelines to advise exporters of what kind of information  it is
 looking for.   It would  also seem that in  order for an  exporter
 to assure himself that  the waste will be  treated in  an  environ-
 mentally  sound manner,  an on-sight inspection  of the  facility
 itself would be needed.

      In transmitting any  objections from  a  receiving  country
 back  to the exporter, OIA has  adopted the practices  recommended
 in the Report.   When there is  an objection, this office first
 notifies  the  exporter by  telephone, and  follows-up by sending  a
 copy  of  the objection to  the exporter by  certified nail.  At
 the  same  time,  the EPA  Regional  Office where  the exporter  is
 located  is  notified  of  the objection.

      OIA  believes that  there is  another  very  important element
 that  should be  highlighted in  the  Inspector General's Report,
 for  improving implementation of  the  regulations.   That is the
 amount  of  resources  needed to  implement  the recommdenations.
 Many  of the shortcomings  identified  in  the  Report  involve the
 screening  of  information  in the  notices  and the  review of cables
 from  the  State  Department. This is  a  time-consuming process,
 especially  during the peak time  of year  when  the renotification
process begin*.   In  the past,  OIA has  found it difficult to
 keep up with  this work  while undertaking other tasks such as
 answering questions  from the regulated  community and tracking
proposed  exports of  hazardous  waste  that may  cause problems in
foreign policy  as well  as in the environmental and health  area.
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                                 -4-


     Concerning the IG's Finding number  5 on better  accountability,
OIA would welcome the opportunity to meet with Agency officials
to discuss bringing the hazardous waste  export program under
the Agency's Strategic Planning and Management System (SPMS).
OIA would like to explore the use of SPMS as a step-by-step
process for setting goals and priorities, in planning actions
and in managing performance.  As the number of shipments of
hazardous waste to other countries increases and grows in
importance, OIA is ready to examine the  options for better
managing all aspects of the program.

     OIA has also begun an examination of internal controls in
order to better identify ways of improving those for the
hazardous waste export program.  Work Has already begun  in
consultation with the organization and management offices of
the Agency.  This will assist OIA in developing a comprehensive
set of internal controls to improve the accountability  of the
hazardous waste export program.
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                                                        APPENDIX  4
                             DISTRIBUTION

 Administrator (A-ioi)  .....................  1
 Deputy Administrator  (A-101)   .............. -. .   .  1
 Associate Administrator  for  International
   Activities  (A-106)  .....................  3
 Assistant Administrator  for  Solid Waste and
   Emergency Response  (WH-562A)   ...  .....  .  .......  X
 Assistant Administrator  for  Enforcement and
   Compliance  Monitoring  (LE-133)   ...............  l
 Comptroller  (PM-225)   .....................  1
 Agency Follow-up Office, Attention  Resource
   Management  Staff  (PM-208)  ............  .  .....   i
Associate Administrator  for  Regional  Operations (A-101)  ....   i
Director, Financial Management  Division (PM-226)   .......   i
Office of Public Affairs (A-107)   .........  ......   1
Office of Congressional  Liaison   ...............   1
Regional Administrators  ....................  1C
National Enforcement  Investigations Center (Denver,  CO)  ....   ]
                                 -70-

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