1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f WASHINGTON, D.C. 20460
OFFICE OF
ENFORCEMENT AND
COMPLIANCE MONITORING
Advantages and Disadvantages of Environmental Auditing
Attached is a list of the advantages and disadvantages of
environmental auditing. The first two sections are essentially
the "traditional" advantages and disadvantages. The third section
covers the advantages and disadvantages derived from auditing
that was agreed to in settling enforcement actions. These
reasons were taken from a draft report that was done by PP&E,
Jas Singh's firm. I thought you might find this third section
useful as it contains some profound advantages that many have
not considered. It certainly may help convince corporate manage-
ment to engage in auditing. Please feel free to contact me
if you have any questions about this list.
Jonathan D. Libber, Acting Chief
Legal Enforcement Policy Branch
(202) 475-8777
-------
Advantages and Disadvantages of Environmental Auditing
Traditional Advantages of Environmental Auditing
A. Better Compliance
B. Fewer Surprises (better to know compliance status
now than when it's too late).
1. Chemical Waste Management - $900 million loss in
stock price following closure of landfill.
2. Union Carbide - $700 million loss in stock
price following Bhopal.
3. Rollins $70 million loss in stock price
following closure of incinerator.
C. Fewer penalties and suits.
1. federal or state enforcement
2. private citizen enforcement
3. private damage suits
D. Better public image with the local community and
regulators.
1. better chance of getting what you want in zoning
or building permits.
2. more likely to obtain financial breaks from your
state or local government
3. fare better with community notification require-
ments under SARA.
4. bounty of $10,000 for criminal prosecutions under
SARA.
E. f^otential Cost Savings.
F. ,, Increased Information Transfer.
. *,*> -
G. Manage Regulatory Overload (259 sets of EPA Regs just
under review, development or revision).
H. Bolster role of corporate Headquarters environmental
management. Director of compliance certifies, reviews
data, issues reports etc.).
-------
-2-
II.
Traditional Disadvantages
A.
Commitment of Resources to Run the Program.
B.
Temporary Disruptions of Plant operations.
C.
Increased Anmunition for Regulators and Nongovern-
mental Litigants
D.
Increased Liability When You Fail to Respond to the
Audit Recommendations.
III. Advantages of Environmental Auditing in Settlements
A.
Benefits to Companies
1 .
2.
Improvements in Environmental Management Systems
in Corporations.
a.
I
env. policies - allows corporation to make
changes in policy manuals, & training.
b.
organization & staffing - changes allow a
corporation to better track wastes, prepare
permit applications, communicate environ-
mental policies programs and objectives to
the facilities.
c.
staff management and training - not only
achieved better compliance but greater
awareness of regulatory requirements. Also
helps bolster role of corporate headquarters
env. management.
d.
env. planning - improved ability to antici-
pate and implement future env. requirements
and respond quickly to env. hazards.
Business Benefits of Settlements
a.
raising capital in financial markets - demon-
strate to potential investors that you are
minimizing your environmental liabilities.
b.
improved public image - calm nervous public
and demonstrates that you are a responsible
corporate citizen.
c.
increased ability to divest properties -
ability to assure prosective buyers of the
absence of environmental liabilities.
------- |