International Network for Environmental Compliance and Enforcement
  Principles of Environmental
Compliance and Enforcement
                      Handbook
                 International Network for
    Environmental Compliance and Enforcement
                            April 2009

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Principles of Environmental Compliance
        and Enforcement Handbook
    International Network for Environmental Compliance and Enforcement
                    April 2009

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ABOUT THE INTERNATIONAL  NETWORK FOR  ENVIRONMENTAL COMPLIANCE AND
ENFORCEMENT (INECE)

      The International Network for Environmental Compliance and Enforcement (INECE) is a
partnership of more than 3,000 government and non-government enforcement and compliance
practitioners  from  more  than 150 countries.  INECE's  goals  are  to  raise awareness  of
compliance and enforcement;  develop networks for  enforcement cooperation; and strengthen
capacity to implement and enforce environmental requirements.
      INECE  promotes the  use of regulatory and non-regulatory  approaches  to increase
compliance with and enforcement of environmental laws and regulations that  promote the
sustainable use of natural resources and the protection of ecosystem integrity at the global,
regional, and national levels.
      For more information, visit our website at www.inece.org.

ORDERING INFORMATION

      USEPA's print  publications  are  available through the National  Service Center for
Environmental  Publications (NSCEP), and  USEPA's digital publications are stored in the
National Environmental  Publications Internet Site (NEPIS) database.
      You can search and retrieve, download, print and/or order only USEPA publications,
free of charge, from this site: http://www.epa.gov/nscep/.
      To obtain a copy of this volume, provide its title and document number 300F09002. You
may contact:
      NSCEP Toll Free: 1-800-490-9198
      NSCEP Fax: 1-301-604-3408
      NSCEP Email: nscep@bps-lmit.com
      Web Site: www.epa.gov

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ACKNOWLEDGM ENTS

      Many individuals and organizations contributed time and energy to develop the second
edition of the Principles of Environmental Compliance and Enforcement Handbook. Special
mention goes to  Durwood Zaelke, Tim Whitehouse, Jo Gerardu, and Thomas Higdon of the
INECE Secretariat, Davis Jones of the U.S. Environmental Protection Agency, Ken Markowitz of
the law firm Akin Gump Strauss Hauer & Feld LLP, and Meredith Reeves of the consulting firm
Earthpace.  Other contributors include Angela Bularga, Tom Maslany,  Mike Stahl, and members
of the INECE Executive Planning Committee. This work would also not have been possible
without the  help of Heather Callan, Kirk Herbertson, Veronique Millon,  David Newman, Adam
Pienciak at the INECE Secretariat.
      The  first edition of this handbook was developed in 1992 by the USEPA in consultation
with  the Netherlands' Ministry of Housing, Spatial Planning and Environment (VROM), the
Polish Ministry of Environmental Protection, Natural  Resources and Forestry, and the Katowice
Ecology Department in Poland.
      The  principal author of that edition was Cheryl Wasserman of USEPA, with  contributions
from Jo Gerardu of VROM. This new edition relies heavily on their pioneering work.

UPDATES TO THIS HANDBOOK

      This text can be periodically updated  to include new enforcement  developments and
examples from INECE participants. Readers  and users are encouraged to send their ideas,
examples,  and comments to the Secretariat of the International Network for Environmental
Compliance and Enforcement at
      2300 Wisconsin Avenue, NW, Suite 300B
      Washington, D.C. 20007, USA
      inece@inece.org

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TABLE OF CONTENTS

ABOUT THE INTERNATIONAL NETWORK FOR ENVIRONMENTAL COMPLIANCE
    AND ENFORCEMENT	I
ORDERING INFORMATION	I
ACKNOWLEDGMENTS	II
UPDATES TO THIS HANDBOOK	II
TABLE OF CONTENTS	Ill

1.  INTRODUCTION	1

2.  OVERVIEW OF COMPLIANCE AND ENFORCEMENT PROGRAMS	3
    2.1   Introduction	3
    2.2   Context for Enforcement	3
    2.3   Benefits of Compliance and Enforcement	5
    2.4   Types of Compliance Activities	7
    2.5   Compliance  Monitoring	7
    2.6   Enforcement	8
    2.7   Theories of Compliance Behavior	8
    2.8   Challenges in Developing an Effective Program	9

3.  PRINCIPLES OF EFFECTIVE COMPLIANCE AND ENFORCEMENT	11
    3.1   Introduction	11
    3.2   Environmental Results and Shared Responsibility	11
    3.3   Goals and Strategies	12
    3.4   Good Governance, Rule of Law, and Compliance	12
    3.5   Structure and Resources	13
    3.6   Continuous Evaluation and Improvement	14

4.  SELECTING A MANAGEMENT APPROACH	15
    4.1   Introduction	15
    4.2   Approaches  to Environmental Management	15
    4.3   Finding the Right Mix	17
    4.4   Making the Mandatory Approach Enforceable	19

5.  DESIGNING EFFECTIVE REQUIREMENTS	21
    5.1   Introduction	21
    5.2   Basic Legal Issues	21
    5.3   Balancing Stringency and Feasibility	24
    5.4   Effective General Requirements	24
    5.5   Facility-Specific Requirements	29
    5.6   Ensuring Effectiveness	29
    5.7   The Permitting and Licensing Processes	31
    5.8   Involving Stakeholders	32
    5.9   Coordinating with Other Programs	34

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6.  COMPLIANCE PROMOTION	35
    6.1   Introduction	35
    6.2   Compliance Assistance	35
    6.3   Compliance Incentives	37
    6.4   Market-Based Mechanisms	41

7.  MONITORING COMPLIANCE	43
    7.1   Introduction	43
    7.2   Inspections	44
    7.3   Audits versus Inspections	45
    7.4   Types of Inspections	46
    7.5   Steps in the Inspection Process	47
    7.6   Building an Effective Inspection Program	52
    7.7   Self-monitoring, Self-recordkeeping, and Self-reporting	57
    7.8   Citizen Monitoring	60
    7.9   Area Monitoring	63

8.  ENFORCEMENT	65
    8.1   Introduction	65
    8.2   The Enforcement Process	65
    8.3   Designing an Enforcement Response Policy	67
    8.4   Types of Enforcement Responses	68
    8.5   Choosing Between Enforcement Responses	74
    8.6   Negotiations and Settlements of Disputes	82
    8.7   Citizen Enforcement	86

9.  BUILDING EFFECTIVE PROGRAM INFRASTRUCTURE	91
    9.1   Introduction	91
    9.2   Designing Compliance Assurance Institutions	91
    9.3   Dividing Responsibilities Among Levels of Government	96
    9.4   Role of Civil Society in Compliance Assurance	99
    9.5   Facilitating International and National Networking	101

10. MEASURING AND MANAGING PERFORMANCE THROUGH COMPLIANCE AND
    ENFORCEMENT INDICATORS	104
    10.1  Introduction	104
    10.2  Stage 1. Identifying Indicators	105
    10.3  Stage 2: Developing Indicators	111
    10.4  Stage 3: Using Indicators	113
    10.5  Common  Lessons	115

11. REFERENCES	116
                                                                               IV

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1.      INTRODUCTION

       This handbook outlines some of the important considerations in designing, implementing
and evaluating effective environmental enforcement and compliance programs.  It serves as
background reading for  the training course on the Principles of Environmental Enforcement and
Compliance.  In  1992,  the USEPA created this course in response to a request by Poland's
Ministry of Environmental Protection,  Natural  Resources and  Forestry.   The  Netherlands'
Ministry of  Housing,   Spatial  Planning  and  Environment  contributed  significantly  to the
development of this course. Since its first delivery in 1992, the Principles course has been given
hundreds of times in countries throughout the world.
       Successful implementation of environmental requirements requires significant effort and
forethought. Changes in behavior  are difficult to accomplish on  both a societal and personal
level.  No one formula exists for achieving compliance. There is  merely trial, evaluation, and
adaptation  to find the  most  effective  compliance  strategies for any  given  situation.
Nevertheless, a reliable framework for designing compliance assurance programs has emerged
based  on  the experiences of countries around the world. The  information in this handbook
derives from these experiences.
       Chapter 2 provides a basic overview of the concepts behind successful enforcement and
compliance programs. This overview briefly examines: (1) the specific types of compliance and
enforcement programs;  (2) how compliance and enforcement programs fit into the elements of
an environmental  management cycle; (3)  the benefits that derive from an effective compliance
and enforcement  program; (4) the theories  of compliance behavior and why it is important to
understand these theories when developing a compliance strategy; and (5) some of the general
difficulties and obstacles that may exist to the development of an effective program.
       Chapter 3  describes twelve principles of effective environmental compliance  and
enforcement programs.  These principles are divided into five sections: (1)  a commitment to the
environment; (2) vision, goals and  strategies; (3) governance and  the rule of law; (4) structure,
responsibility  and  resources;  and, (5) continuous evaluation  and  improvement.  While the
strength of any one principle may vary based on  cultural, economic, political and social needs of
a  particular country  or  region,  together they  help  form  the  foundation of  a  successful
environmental compliance and enforcement programs.
       Chapters  4 through 10 build  on  issues discussed  in Chapter 2  and 3.  Chapter  4
discusses three different overlapping management approaches -  voluntary, market-based and
mandatory - that make up the framework underlying most environmental programs. Chapter 5
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looks  at some of the issues to  consider when designing effective  requirements. Chapter 6
provides an overview of what makes up typical compliance assistance and compliance incentive
programs. The importance of compliance monitoring is discussed in Chapter 7, while Chapter 8
examines the basic elements of  enforcement programs and types of enforcement responses.
Chapter 9 discusses how organizations build effective infrastructure and inter-organizational
communication,  and how to do so in the context of an environmental management program.
Chapter 10 examines ways to develop,  measure, use and interpret environmental compliance
and enforcement indicators.

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2.     OVERVIEW OF COMPLIANCE AND ENFORCEMENT PROGRAMS

2.1    Introduction
      Over the past forty years, environmental law has been central to government efforts to
implement a wide  range of environmental programs designed to protect air, water,  natural
resources, wildlife and public health. Countries throughout the world use environmental law to
help address problems such as the discharge of pollutants into the environment, the protection
of flora  and fauna, the handling, storage  and  disposal of  solid and hazardous wastes, the
application of pesticides, preventing air contamination, and protecting the quality and availability
of clean  water.
      However,  simply having environmental laws in  place is  not enough to address these
problems.  Governments must  find ways to ensure that the regulated community meets the
requirements put forth in the environmental laws and their implementing  regulations. Successful
strategies will both encourage and compel behavioral changes within the regulated community
that are  needed to achieve compliance.
      This chapter provides a basic overview of the concepts behind successful  enforcement
and  compliance  programs. The first section  looks  at the  context for  compliance and
enforcement as a part of the environmental management cycle. The second section examines
the  benefits of  an effective  compliance and enforcement program. The  third section discusses
types  of compliance activities.  The fourth section discusses theories of compliance  behavior.
The final section  examines  some of the general difficulties and obstacles that may exist to the
development of an effective program.

2.2    Context for Enforcement
      Environmental compliance and enforcement programs occur as part of a comprehensive
environmental  management cycle.  This cycle typically involves community recognition of
certain environmental problems and governmental acceptance of the need to address these
problems.  From there it often leads to  government establishing specific environmental goals to
address  these  problems and selecting  a management approach or approaches to reach those
goals. When developing mandatory requirements,  government must consider the legal basis for
these requirements and establish compliance and enforcement programs to  ensure that the
regulated community adheres to these requirements. Once implementation begins, evaluations
and adjustments must be made to continually update and improve the programs.

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       Figure 2-1 presents the environmental management cycle. This process is explained in

more detail below the figure.
 FIGURE 2-1:  THE ENVIRONMENTAL MANAGEMENT CYCLE
            Environmental
            Quality

            Sustainable
            Development

            Protect Human
            Health

            Reduce Risk

            Prevent Pollution
                            Management
                            Approach
Voluntary

Market Based

Mandatory
                    Developing
                    Requirements
Constitution

Laws & Legislation

Regulations

Permits

Licenses

Guidance and Policy
                 Compliance and
                 Enforcement
Compliance
 promotion

Compliance
 monitoring

Enforcing the
 requirements

Building Effective
 Program

Program Evaluation
       2.2.1  Awareness and Strategic Planning

       The  environmental  management cycle  starts with  awareness  that  there  is an

environmental problem  and adequate  support  to  address the  problem.   Once  there is

awareness and support for action, program proponents must begin strategic planning  and goal

setting.  These goals may include reducing environmental risk, preventing pollution, or cleaning

up past contamination.

       2.2.2  Selecting a Management Approach

       Once  program  goals  are  set,   the  focus  moves  to  selecting the  most suitable

management approach or combination of approaches,  in order to achieve program goals. For

purposes  of this  book, these approaches are categorized  as  voluntary, market-based, and

mandatory. These approaches are discussed in more  detail in Chapter 4.

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       2.2.3  Developing Effective Requirements
       The selected management approach may require specific laws or regulations.  Laws and
regulations, in turn, include "requirements" that clearly define specific practices and procedures
to directly or indirectly reduce or prevent pollution.  Effective requirements demand that specific
things  be  done or  outcomes  reached.   Chapter 5  discusses  the  creation of  effective
environmental requirements to implement the selected management approach.

       2.2.4  Evaluation and Adjustment
       Once implementation begins, another important phase needs to be initiated—evaluation
of the impact of the program through  the use of compliance and enforcement indicators. This
part of the environmental management cycle is often overlooked or not given the attention that it
warrants.  Evaluation leads to greater awareness of how the program is addressing the targeted
environmental  problem, which  in  turn,  through feedback,  leads  to  better  planning  and
implementation.   The  evaluation process, including the development of compliance  and
enforcement indicators,  will be discussed in Chapter 10.

2.3     Benefits of Compliance and Enforcement
       A  compliance and  enforcement  program  that is effective and  part of  a  larger
environmental  management effort will bring a broad range of benefits to society.  A well-
designed environmental compliance  and  enforcement program  will create both public  and
private value.
       Compliance  creates "public  value" when it  promotes  the rule  of law  and good
governance; ensures fairness and strengthens the  credibility of  environmental  requirements;
protects the goods and services  provided to  a society by a well-functioning ecosystem;  and
protects  public health.   Compliance creates "private value"  when  it increases investor
confidence by  reducing business risks;  stimulates innovation  and increased competitiveness;
and creates new jobs and markets.1  (See Box 2-1).

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BOX 2-1:  CREATING VALUE THROUGH COMPLIANCE
Compliance Creates "Public Value"

Promotes the Rule of Law and Good Governance: The rule of law is essential to good
governance and sustainable development. When individuals or organizations ignore an
environmental requirement, they are not just hurting the environment, but also damaging the
rule of law in that jurisdiction. Corruption and legal uncertainty foster widespread non-
compliance, environmental or otherwise, and vice-versa, eroding the norms and values that
constitute healthy societies.

Ensures Fairness and Strengthens the Credibility of Requirements: A consistent and effective
compliance and enforcement program helps ensure that actors affected by environmental
requirements are treated fairly.  Without an effective compliance assurance program, actors
who violate environmental requirements may benefit compared to actors who choose to
comply. Ultimately, actors will be more likely to comply  if they perceive that the requirements
are fair and do not place them at a competitive disadvantage.

Protects Goods and Services: Compliance assurance protects natural resources so they can
continue to provide valuable goods and services to society, including renewable natural
resources, climate stability, clean air, and fresh water. A recent study, for example, found that
eco-system services amounted to roughly €22  billion or  25 percent of the Scottish GDP.

Protects Public Health: Compliance assurance helps protect public health. In Europe alone, air
pollution is responsible for over 300,000 premature deaths each year. Pollution  imposes a
substantial social cost in terms of increased health care expenses and employee absenteeism.
Strong compliance assurance helps improve public health, economic productivity, and  the
environment.

Compliance Creates "Private Value"

Increases Investor Confidence by Reducing Business Risks: Widespread non-compliance is
often tied to corruption and legal uncertainty, which can  have devastating impacts on economic
development. Firms will be less willing to make investments and assume risks when their legal
rights and responsibilities remain uncertain. An effective compliance assurance program
promotes certainty through the rule of law, thereby helping foster an attractive investment
climate.

Stimulates Innovation and Improves Competitiveness: Environmental requirements can often
save businesses money by stimulating innovation, leading to improvements in product design
and manufacturing processes. These innovations improve pollution prevention strategies and
energy efficiency efforts and result in reductions in waste. Numerous studies indicate that
countries with high environmental standards often have  market-leading firms and better
economic performance than  those with lower standards.

Creates New Jobs and Markets: Compliance assurance creates jobs in new industries. The
most visible beneficiary is the environmental goods and services  sector, which includes,
among other things, pollution abatement technology, waste management, organic products,
eco-certified  resources, and  eco-tourism. These are among the fastest growing industries in
the world.

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2.4    Types of Compliance Activities
       Governments have developed a number of regional and context appropriate policies and
programs to encourage and compel the behavioral changes needed to achieve  compliance.
Although definitions and ways of categorizing these policies and programs vary from country to
country, they generally  involve four  major categories  of activities:  compliance assistance,
compliance  incentives,  compliance  monitoring,  and  enforcement.   Most  often  effective
implementation will involve some combination of these four categories of activities.
       Note: In this Handbook and in other contexts, the terms  "compliance  promotion" and
"compliance assurance"  are used to categorize specific compliance  programs.  Compliance
promotion   refers  to  both  compliance  assistance  and  compliance  incentives programs.
Compliance assurance refers to all compliance-related activities, including enforcement.

       2.4.1  Compliance Assistance
       Compliance assistance encourages observance of the law  through outreach, education,
and  other promotional activities. Compliance assistance activities are designed to improve
compliance by explaining how to comply with legal and regulatory requirements.

       2.4.2  Compliance Incentives
       Compliance incentives are a set of policies and programs that provide concrete benefits
to those organizations that meet certain compliance  objectives. Examples include programs that
reward top-performers or that reduce or waive penalties for facilities that voluntarily discover,
promptly disclose, correct  non-compliance,  and  prevent future environmental violations.
Information campaigns and market-based mechanisms can also include compliance incentives.

2.5    Compliance Monitoring
       Compliance monitoring is one of the key components government agencies and others
use to  ensure that the  regulated community obeys environmental laws and regulations through
on-site visits by qualified inspectors, public reporting of violations,  and by reviewing information
submitted  to it  by the regulated industry as part of self-monitoring and reporting programs.
Compliance monitoring is generally considered to include both self-monitoring by the regulated
entity, and governmental  inspections and investigations.
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2.6    Enforcement
       Enforcement refers  to actions taken by the government against violators to compel
compliance the law. These  provisions generally give a governmental entity authority to impose
sanctions, in either the  administrative,  judicial, or criminal forum, and require the violator to
come into compliance with  the law. Some statutes contain provisions that require a violator to
remedy environmental damage caused  by the violations or that allow the government to clean
up the damage and recover the cost from the violator.

2.7    Theories of Compliance Behavior
       The theories underlying these programs reflect two different government approaches to
achieving compliance, often referred to colloquially in English as the carrot and the stick, which
together both  encourage and compel behavioral  change. The carrot (compliance  promotion
activities) and  the stick (the threat of an enforcement action against  non-compliers) are based
on the rationalists and normative models of behavior.
       The rationalist theory posits that regulated actors follow the logic of consequence.  Put
simply,  everyone acts to maximize  their own  self-interest.  If it is "cheaper"  to violate an
environmental requirement, then regulated actors will do so.  Therefore, rationalists argue that
policies must "deter" this behavior by raising the "costs" of non-compliance.2  Accordingly, they
advocate deterrence-based enforcement.  Generally, for a policy to have a deterrent effect, the
individual or organization must believe that:
       •  There is a high probability of being caught.
       •  The response to violations will be swift, certain, and fair.
       •  The punishment will be severe enough to outweigh the benefits of non-compliance.3
       Deterrence may be enhanced  either by  expanding  monitoring  activities,  improving
enforcement capacity to investigate and  prosecute violations, raising penalties, or increasing
awareness of enforcement.
       Normative theory posits  that regulated actors follow  the logic of appropriateness and
often act in good faith. Compliance occurs (or does not occur) largely because of the regulated
actor's "capacity" (e.g. knowledge of the rules, and financial and technological ability to comply)
and "commitment" (e.g.  perception that the rule is fair).4  Accordingly, these theories  call for
more compliance promotion in the form of assistance, incentives, and  other activities.
       The rationalist and normative models represent opposite ends of the spectrum and each
provides useful  insights into the types of behavior that  lead  to  compliance.  Regulated
communities everywhere generally can  be divided  into three general  categories: (1) those who
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will not comply at all unless they are forced to; (2) those who are "impressionable," and might
comply if presented with incentives, knowledge,  or capacity  to do so;  and (3) those who will
cooperate in all circumstances.  Which one of these categories predominates will vary from
country-to-country  and can help  inform individual  country decisions  about what mix  of
compliance promotion  and  enforcement activities to stress in  efforts to promote the rule of law
and the protection of public health and the environment.

2.8   Challenges in Developing an Effective Program
      Unlike twenty or thirty years ago, most countries now have at least some environmental
programs in place. Efforts to build effective compliance assurance programs therefore are not
starting from scratch.  Today the question usually is how to build upon and  improve existing
efforts.
       How should such  efforts at improvement begin? How  can new  responsibilities  and
efforts be handled with limited program resources? What elements of a compliance assurance
program should be stressed? What legal, policy and technical drivers or barriers are moving  or
slowing these efforts?   How should programs evolve  over time, as policy makers evaluate the
success of previous strategies, and as technological and economic developments suggest new
solutions? These are many of the challenging questions that politicians, legislators, regulators
and  interested  members  of the public may ask as  a government attempts to improve  its
environmental compliance and enforcement programs.
      In many countries, compliance and enforcement programs face significant barriers. The
OECD's publication, Guiding Principles  for Reform of Environmental Enforcement Authorities in
Transition Economies  of Eastern Europe, Caucasus  and Central Asia,5 outlines some of the
regional challenges faced by environmental enforcement authorities, problems that are common
in many parts of the world.  The report states:
      "The transition  period [from communism]  generated  new, and accentuated old
      problems of environmental enforcement systems. These  include, for instance,  a
      greater diversity in the regulated community and lobbying by powerful groups or
      individuals for  special priviledges.   A  number of  studies have shown that
      enforcement has not received sufficient attention from decision-makers, and low
      environmental  performance and  violations of  environmental laws  has been
      widespread. Important factors that nourished non-compliance were the slow pace
      of governance and economic reforms, the  complicated legal framework and poor
      economic situation, societies failure to believe in fair regulation and the erosion of

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       the  rule of law. Limited  powers, scarce financial and  human resources of
       enforcement agecies are  also  major  causes of low effectiveness  in ensuring
       compliance.6"
       There are  no standard  ways to address these complex and  difficult issues. In  some
countries, efforts to improve compliance assurance programs must be closely tied to efforts to
improve the rule of law and governance,  in others it may require placing greater emphases on
education and awareness, while in others it may be a question of finding new resources or using
exisiting resources more efficiently, and in  still others, a heavier  emphasis on legal sanctions
that  compel  behavioural  changes and  punish violators  may  be   needed to demonstrate
increased importance of the law.  In many countries it will be a combination  of all of these, and
more.
       Although each country and jurisdiction faces  a unique set  of political, economic,  social
and culture issues, certain  general principles have emerged as  to what constitutes an effective
compliance and enforcement program.  Understanding these principles will  allow governments
and civil society to better evaluate and  adapt  their environmental  compliance and enforcement
programs to meet the challenges of the  21st Century.
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3.      PRINCIPLES OF EFFECTIVE COMPLIANCE AND ENFORCEMENT

3.1     Introduction
       This  chapter  describes  principles  of  effective  environmental   compliance  and
enforcement programs. These principles build upon the issues discussed in Chapter Two and
provide the underlying context for the Environmental Management Cycle discussed in section
2.2.
       Each country faces a  unique  set  of  challenges  and  capacities to implement  its
environmental laws. However, there are fundamental elements  in all countries that form the
basis of effective environmental compliance and enforcement programs and of legal systems.
These  common  principles,  based on the collective  knowledge  and  experience  of the
International Network for Environmental  Compliance and Enforcement (INECE) and reflective of
international good practice, may be used to improve national environmental compliance and
enforcement programs.
       These principles are divided into five sections: (1)  environmental results  and shared
responsibility; (2) goals and strategies;  (3) good governance, rule of law and compliance; (4)
structure and resources; and, (5) continuous evaluation and improvement.

3.2     Environmental Results and Shared Responsibility

       3.2.1  Firm Commitment to the Environment
       Environmental compliance and enforcement requires strong and consistent institutional
and societal commitments to resolve  specific  public health and  environmental challenges
through effective implementation of environmental laws.

       3.2.2  Comprehensive Framework for Environmental Management
       Effective compliance and enforcement systems need to  operate as part of an overall
framework of the environmental regulatory cycle:  recognition  of certain environmental problems,
selection of the management approach,  development of the legal basis,  implementation of
mechanisms to assure compliance, assessment of results, and program evaluation.

       3.2.3  Collective Effort
       Strengthening environmental compliance and enforcement requires collective efforts
among  institutions  and  individuals. Government officials must  exercise  public  authority
according to the  standards of good governance, including  providing sufficient resources and

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independence to compliance and enforcement programs. Legislators must create clearly written
legislation that is sufficiently  stringent to meet its environmental  goals. The judiciary is
responsible for upholding the rule of law and ensuring that laws are interpreted and applied
fairly, efficiently, and effectively. The regulated community is responsible for complying with the
letter and spirit of the  law. Non-governmental  organizations  play  a leading  role  in public
education and assisting enforcement agencies. The media is responsible for raising awareness
by presenting objective information and analysis. The  international community -  including
donors, international  organizations, and networks - is responsible for strengthening  domestic
efforts through capacity development and the promoting of conditions enabling more effective
compliance and enforcement.

3.3    Goals and Strategies

       3.3.1  Meaningful Targets
       Effective environmental compliance and  enforcement programs have a clearly stated
guiding vision and realistic and measurable  goals  that are consistent with the organization's
mission.  The goals should be  supported  by targets that  describe the results a  program is
expected to achieve in a given time period.
       Environmental  compliance and  enforcement programs  should utilize  a  balance  of
strategies to assure compliance: education and assistance; compliance incentives; monitoring
and  inspections;  and  fair and  differentiated non-compliance  responses. The  balance  of
strategies should  consider the  social, cultural, economic, and political norms of the society, in
addition to the society's broad environmental goals.

       3.3.2  Communication and Outreach
       Competent authorities should communicate these strategies to the regulated community,
civil  society,  and other  government  agencies  in  a comprehensive, comprehensible,  and
transparent  manner.  Governments should  create conditions  for  public  participation  and
information exchange that will build capacity for improved environmental compliance.

3.4    Good Governance, Rule of Law, and Compliance

       3.4.1  Good Governance
       Effective  environmental  compliance and  enforcement depend on  good governance,
which is characterized by institutions that are open,  participatory, accountable, predictable, and
transparent. Good governance requires consistent,  visible,  and transparent efforts against
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corruption through supporting a culture of integrity, including a no tolerance policy for corrupt
practices.

       3.4.2  The Rule of Law
       The rule of law forms the basis for effective environmental compliance and enforcement.
Broadly speaking, 'rule of law' refers to the presence of legal requirements that are transparent
and fairly applied. The rule of law depends upon  an independent judiciary that interprets and
applies the law in an impartial and transparent manner.

       3.4.3  Non-Compliance Response
       Effective  environmental compliance and enforcement programs deter illegal conduct by
creating negative consequences  for violators of the law. Deterrence is strengthened by timely,
predictable, and  appropriate enforcement actions that cause potential violators to determine that
the risk of detection and punishment outweighs the potential benefits of non-compliance. This is
achieved through the implementation of  penalties  - including non-monetary penalties such as
jail time  - that  exceed the economic benefit of  non-compliance  - making non-compliance
ultimately costlier than compliance.

3.5    Structure and Resources

       3.5.1  Policies and Procedures
       Transparent and unambiguous policies and procedures that are based on the law should
be adopted in order to define the roles of competent authorities, their structural units, and
personnel; clarify jurisdictions of national and sub-national authorities; ensure coordination and
sound  decision-making, particularly where this process is likely to be flexible or discretionary;
and ensure steady information flows.

       3.5.2  Adequate Resources and Training
       Competent authorities should have access to the  physical, technical,  and financial
resources that are adequate to their mandate and scope of work. Management should ensure
high  levels  of  professionalism  through  proper  remuneration,  motivation, and  professional
development opportunities for program staff.
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3.6    Continuous Evaluation and Improvement

       3.6.1  Environmental Compliance and Enforcement Indicators
       Program  managers  should identify,  develop,  and use performance  measurement
indicators to improve decision making and resource prioritization, evaluate program efficiency,
and communicate how effectively the  program responds to priority environmental problems.
Creating  a  useful system  of indicators  may  require  a  legal  mandate  for  performance
measurement, long-term commitment from senior management,  and dedicated staff time for
data collection and dissemination.

       3.6.2  Program Evaluation
       Competent  authorities  should  review and evaluate  compliance  and  enforcement
programs both internally and externally on a periodic basis. Such reviews allow an organization
to bring about  overall improvements  in their program and  to  redefine priorities to  reflect
successes,  areas of underachievement, and  shifts in goals. Outcomes of  inspections  and
enforcement should be assessed to see whether the legal provisions and permit conditions
were  enforceable  and practicable  and  whether other  barriers  to  successful   program
implementation exist.

       These principles, and the concepts and issues set forth  in Chapter 2, provide a  basis for
the chapters  that follow. These chapters will discuss  management  approaches to improving
environmental performance and address  issues to  consider  when  designing   effective
requirements. They will also discuss  compliance promotion activities,  compliance monitoring
programs,  and enforcement programs. Finally, they will explore program infrastructure, inter-
organizational communication,  and methods of  measuring  performance through compliance
indicators.
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4.     SELECTING A MANAGEMENT APPROACH

4.1    Introduction
      Three  different overlapping management approaches -  voluntary, market-based,  and
mandatory -- make up the framework underlying most environmental programs. Mandatory and
many market-based approaches require effective environmental compliance and enforcement
programs to ensure that the underlying rules are understood and followed by the regulated
community. Voluntary approaches provide important tools to educate, inform, and motivate
polluters  about  the need to reduce their environmental  impacts despite the lack of  legal
requirements.
      All three approaches can  be designed to target activities posing the greatest risk to
human health and the  environment, reduce pollution, and create incentives for individuals,
businesses, and governments  to find  new,  more cost effective solutions  to  environmental
problems. What makes mandatory approaches different is that they usually work to establish a
base-line of what  is  required  from individuals,  companies,  and  governments in terms of
environmental performance.
      This chapter begins by examining the three different management approaches. It then
examines the general  function of laws, regulations, permits, and guidance. It ends by providing
an overview of the types of environmental requirements that are codified in laws and regulations
and that have served  as the foundation of many of the environmental improvements  made over
the past several decades.

4.2   Approaches to Environmental Management
      Most environmental programs  today contain a mixture  of voluntary,  mandatory,  and
market-based approaches.

      4.2.1  Voluntary Approaches
      Voluntary approaches encourage or assist the regulated community to take action to
ensure its  behavior  is  compliant,  but do  not  require it to take these actions.  Voluntary
approaches include public education, technical assistance,  and the promotion of environmental
leadership by industry and  non-governmental organizations.  Voluntary approaches can be
established by governmental or non-governmental organizations.  Examples of programs  that
use voluntary  approaches include:
      •   Most environmental management system programs such as the International
          Standards  Organization's (ISO) 1400 certification.7
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       •   The Chemical Industry's Responsible Care® Program.8
       •   The U.S. Department of Energy's Climate Challenge Program.9
•
          Industrial research into process changes that prevent pollution.
       4.2.2  Market-Based Approaches
       Market-based approaches use the market to achieve desired behavioral changes. These
approaches  can occur without regulation or build upon mandatory approaches.  Introducing
market forces into a mandatory approach can encourage greater pollution prevention and more
economic solutions to problems. Market- based approaches include:
       •   Fee systems that tax emissions, effluents, and other releases into the environment.
       •   Emissions trading programs that allow companies to trade permitted emission rights
          with other companies.
       •   Offset approaches that allow a facility to propose various approaches to meeting an
          environmental goal, for example, by allowing a facility to emit greater quantities of a
          substance from one of its operations if the facility offsets this increase by reducing
          emissions at another one of its operations.
       •   Auctions whereby the government auctions limited rights to produce or  release
          pollutants.
       •   Environmental labeling/public disclosure, whereby manufacturers are required to
          label products in a way that informs consumers about certain environmental benefits
          or public health or environmental risks, allowing the consumer to make  informed
          choices.

       4.2.3  Mandatory Approaches
       Mandatory approaches require that regulated entities conform to specific  requirements.
The  government then  promotes and enforces  compliance with  these  requirements. These
approaches include:
       •   Banning activities or products outright.
       •   Permitting or licensing certain activities.
       •   Creating an obligation to monitor and report certain activities.
       •   Requiring  an entity to clean up or repair environmental damage.
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4.3    Finding the Right Mix
       A number  of factors  can be  considered  in determining the right  mix of voluntary,
mandatory, and market-based approaches to a particular environmental problem in a particular
jurisdiction. These factors include:
       •  Whether overall program goals are to require certain behavior.
       •  An understanding of what drives environmental performance of different sectors of
          the economy.
       •  An understanding of what drives non-compliant behavior of entities on both a
          sectoral basis and jurisdictional basis.
       •  The political, legislative, economic, and cultural realities of the society in question.

       4.3.1  Overall Program Goals
       The overall program goals will affect the  types of approaches taken.   If the  overall
program goal  is to require certain  behavior, then a mandatory approach  may  be the best
approach. If the overall program goal is to encourage certain behavior, then some combination
of approaches may be required.  Most effective programs will have a mix of mandatory and
voluntary approaches.
        Each  approach has different strengths and weaknesses that may vary from jurisdiction
to jurisdiction. Well-designed  and properly implemented mandatory requirements will provide
greater certainty than voluntary approaches when accompanied by effective enforcement and
compliance programs. Voluntary programs can effectively educate and motivate participants,
but generally will not affect the  overall economic drivers behind a company's environmental
performance goals. Market approaches will  allow organizations greater flexibility to adapt to
changing science  and technological  capabilities,  but they do  not  generally mandate fixed
pollution targets. This can make it difficult to ensure that specific environmental goals  will be
met.

       4.3.2  Understanding What Drives Performance
       A number of  factors - or drivers  - can help change an  organization's environmental
performance.  The drivers often cited for improving environmental performance include:
       •  Enhanced efficiency and lower costs through reduced resource use, waste and
          emissions.
       •  The desire to create a positive public image and improved relationship with
          customers.
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       •   Business requirements, such as those created within a supply chain, by business
          contracts, or through industrial associations.
       •   The desire for regulatory compliance, which can have additional benefits such as the
          increased likelihood of fewer inspections and less scrutiny.
       •   The desire to improve the relationship with government agencies, which can lead to
          faster approval of projects.
       Understanding  how  these  drivers will influence different sectors of the  economy  and
types of organizations will  help government agencies tailor policies  and target  resources,
particularly as they relate to  voluntary and market-based programs.

       4.3.3  Understanding What Drives Non-compliance

       Similarly, a number of factors can drive non-compliance. The reasons listed in Box 4-1
are those used  by the Netherlands Ministry of Housing, Spatial Planning and the Environment
as a way of classifying reasons for non-compliance. Many of these factors, plus  others, will be
applicable in many jurisdictions throughout the world.  Understanding  these factors will help
program  planners  predict the likelihood of success  of new mandatory programs  and decide
where to target enforcement and compliance resources.
BOX 4-1:  ELEVEN REASONS FOR NON-COMPLIANCE
Reasons for non-compliance may include:

Aspects of spontaneous compliance
1.  Knowledge of the regulations.
2.  Cost/benefit ratio.
3.  Degree of acceptance.
4.  Loyalty and obedience of the target group.
5.  Informal monitoring.

Aspects of monitoring
6.  Informal report probability.
7.  Monitoring probability.
8.  Detection probability.
9.  Selectivity of the inspector.

Aspects of sanctions
10. Probability of sanctions.
11. Severity of sanctions.
12. Political, legislative, economic, and cultural realities.
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       Each country will consider what management approach to take  based on its political,
legislative, economic and cultural situation. Existing laws, regulations, and policies, as well as
cultural and  societal  norms, and those businesses, industries, and organizations with  political
and economic influence will all greatly affect the environmental management approaches of a
particular country.
       Compliance officials can influence overall program direction by understanding society's
overall environmental goals, the factors driving environmental performance,  and the factors
affecting non-compliance. With this understanding,  they can operate more effectively within the
political, legislative, economic, and cultural norms of their jurisdiction.

4.4    Making the Mandatory Approach Enforceable
       Ultimately, the laws underlying mandatory  approaches to environmental management
must  be  enforceable. Laws and regulations may  ban certain  activities or products outright,
require permits or licenses  for other activities, impose information collection  and reporting
requirements, define and prohibit violations and provide environmental penalties and remedies
for violations. (See Box 4-2).
       Market-based approaches also depend on enforceable laws to define the property being
traded and to provide incentives  to  use in the market. The  system of labeling  to enhance
consumer choice, for example, may require enforcement  to  avoid  inaccurate  or misleading
labeling.
       An emissions trading system has  elements of both  mandatory and  market-based
management approaches.  The first step in  a  typical trading system is that an  environmental
authority  decides upon an acceptable level of  overall  emissions. The  authority  then issues
permits consistent with the mandatory targets whereby each firm is allowed to release a certain
amount of pollution.   Firms are then free to emit that amount or sell all or  part of their emissions
permit to another firm who may have exceeded their target, providing market incentives for firms
to pollute less than their permits allow.
       The  remaining portion  of  this  handbook focuses on environmental  management
approaches that are  based on enforceable laws, regulations,  and other  requirements.  This is
not to say that voluntary or market-based systems  are not effective in achieving  environmental
protection; they should be considered as an integral part of an overall  approach.  However,
there  is less societal oversight, control and enforcement involved.  This  handbook focuses on
the design and implementation of  compliance and enforcement  programs,  which are, by
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definition, not part of an approach  designed to  motivate voluntary  changes in behavior, but

instead attempt to compel compliance with legal mandates.

BOX 4-2: TYPES OF REQUIREMENTS


Constitution
       Some nations' constitutions guarantee their citizens a clean  and healthy environment,
giving those governments and others the responsibility to protect that right.

Laws
       Laws provide the  vision,  scope,  and  authority  for  environmental  protection  and
restoration.  In some countries, laws also encompass the types of general requirements that
other countries describe in regulations.

Regulations
       Regulations establish the details of a law, e.g., criteria for issuing permits and licenses,
how and when to test for  harmful substances, how the government will conduct itself in an
enforcement action, etc. Regulations are most often developed by the implementing agency that
is charged with compliance and enforcement under the law.

Permits and Licenses
       The  terms permits  and  licenses are usually used  interchangeably.  Permits  typically
control activities related to construction or operation of facilities that generate pollutants. Permit
requirements are often based on specific criteria established in laws or regulations.
       General permits specify exactly what a  class of facilities (e.g., gasoline stations)  is
required to do.  General permits and licenses are used when it is impractical or unnecessary to
issue  a specific permit for each similar, small facility. Facility-specific permits specify exactly
what a particular facility is required to do.  Facility-specific permits often take into account the
particular conditions at the specific facility.
       Licenses are similar to permits. Licenses are  authorizations to manufacture, test, sell, or
distribute a product,  such as a pesticide, that may pose an environmental or public health risk if
improperly used. Licenses may be general or facility-specific.
       Both licenses  and permits are usually issued by the implementing agency.

Guidance and Policies
       Guidance  and  policies  are  tools  for  government  regulators  to interpret  regulatory
requirements and/or  provide a formal statement regarding a particular issue or problem. These
can be  directed toward the regulated  community or toward the  government, prescribing its
actions  in  particular situations.  They  are frequently  used  to  help ensure  fairness  and
consistency in the application of laws and regulations. In most countries, guidance and policy
are not considered legally binding.
       The next chapter discusses important considerations when developing environmental
laws,  including issues of legal authority, institutional framework, and the need for effective and
enforceable requirements.
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5.      DESIGNING EFFECTIVE REQUIREMENTS

5.1     Introduction
       Effective requirements are critical to the success of any compliance and enforcement
program. Without adequate legal authorities, enforcement programs will generally be ineffective.
Unclear,  imprecise,  ambiguous, inconsistent, or contradictory requirements may be difficult or
impossible  to enforce.  Requirements  that rely  on  expensive,  unreliable,  or  unavailable
technologies will make compliance difficult or impossible.
       This chapter outlines some steps that can be taken to design  effective requirements.
These include explanations  about some of the basic  legal issues  in drafting requirements,
balancing the stringency and feasibility of requirements, designing effective general and specific
requirements, and developing strategies for involving stakeholders in the drafting process.

5.2     Basic Legal Issues

       5.2.1  Sufficient  Legal Authority
       An environmental law will be  effective only  if it provides  sufficient legal  authority to
ensure compliance.10 The credibility  of a program  will  erode if non-compliant  actors can
successfully challenge the government's authority  to take certain actions or if the government
does not have the tools to ensure compliance.11
       Some of the powers necessary to ensure program effectiveness are the abilities to:
       •   Issue regulations,  permits, licenses, and guidance to implement the law.
       •   Monitor regulated  actors and gain access to their records and equipment to
          determine if they are in compliance.
       •   Require the regulated community to monitor its own compliance, keep records of its
          compliance activities and status, report this information periodically to the
          enforcement program, and make the information available to the public.
       •   Take legal action against non-compliant  actors, including: (1) imposing a range of
          monetary penalties and other sanctions on actors that violate the law; or (2) imposing
          criminal sanctions on actors who violate  the law (e.g., an  individual or corporation
          that deliberately falsifies data).
       •   Correct situations  that pose  an imminent and substantial threat to public health or the
          environment.
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       5.2.2  Clear Standards

       Clear,  enforceable  standards are  needed  for requirements  to  be  effective.  An
environmental standard is a guideline, usually in the form of a law or regulation, that regulates
the effect of human activity upon the  environment. Standards may specify a desired state (the
level of nitrogen in  the air cannot exceed 0.053 parts per million), limit alterations (e.g. no more
than 10%  of natural forest  may  be damaged), or they may  require the  use of certain
technologies or practices. (See Box 5-1).
 BOX 5-1:  TYPES OF STANDARDS
 Ambient Standards
        Ambient standards, or media-quality standards, are goals for the quality of the ambient
 environment (e.g. air, water). Ambient standards are usually written in units of concentration.
 In the US, ambient standards are used as environmental quality goals and to plan the level of
 emissions from individual sources that can be accommodated while still meeting the area-
 wide goals. Ambient standards may also be as triggers, e.g., when the standard is exceeded,
 monitoring or enforcement efforts are increased. Enforcement of ambient standards usually
 requires relating an ambient measurement to emissions or activities at a specific facility.

 Performance Standards (Emissions and Effluents)
        These  standards  are  widely   used  for  regulations,  permits,  and  monitoring
 requirements.  Performance standards limit the amount or rate of particular chemicals or
 discharges that a facility can  release  into the environment in a  given  period  of time.
 Performance  standards provide flexibility  because  they  allow  sources to choose which
 technologies they will use to  meet the standards. Some requirements introduce additional
 flexibility  by allowing  a source with  multiple emissions to vary its emissions from each stack
 as long as the total sum of the  emissions  does not exceed the permitted total. Compliance
 with emission standards is measured by sampling and monitoring.

 Technology Standards
        These  standards require the  regulated  community  to  use  a particular type of
 technology to control  and/or monitor emissions.  Technology  standards  are particularly
 appropriate when the equipment is known to perform well under the range of conditions
 generally experienced by sources  in the community.  It is  relatively easy  for inspectors to
 determine whether sources are in compliance with technology standards:  the  approved
 equipment must be in place and operating properly. It may be difficult, however, to ensure
 that the equipment is operating properly over a long period of time. Technology standards can
 inhibit technological innovation and pollution prevention if they are not continually readjusted.

 Practice  Standards
        These standards prohibit certain  work activities that have significant environmental
 impacts or require certain mitigating activities. For example, a standard might prohibit carrying
 hazardous liquids in  uncovered  buckets. Like technology standards, it is easy for program
 officials to inspect for compliance and take  action against non-compliant sources, but difficult
 to ensure ongoing compliance.

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 Information Requirements
        These  legal provisions  require a  source of potential pollution (e.g.,  a  pesticide
 manufacturer or facilities involved in generating, transporting, storing, treating, and disposing
 of hazardous waste) to  develop  and  submit  information  to  the government.  Sources
 generating  pollution may be required  to monitor, report, and  maintain  records of levels of
 pollution  generated and whether or not they exceed performance standards. Information
 requirements are often used when the potential pollution  source is a product such as a new
 chemical or pesticide,  rather than a waste.  Manufacturers may be required to test and report
 on potential harmful effects of new products on the environment.
 Product or Use Bans
       A ban  may prohibit a product outright (e.g., no manufacture, sale, or transport of a
 product), or a ban may prohibit particular uses or applications of a product.
       5.2.3  Clear Roles and Responsibilities
       Environmental laws should also create an institutional framework that specifies the roles
and responsibilities of the various levels of government and agencies.  Laws and regulations
need to be clear about the process and procedures by which  the government can take an
enforcement action.

       5.2.4  Fair and  Equitable Rules
       Government credibility is critical to establishing an effective compliance and enforcement
program.  Rules must protect those who have allegedly violated environmental laws from unfair
government actions.   The rights and  responsibilities of those involved in an enforcement
process must be clearly written and accessible to them.
       A government's willingness and ability to impose sanctions related to bribery and the
falsification of environmental data are also very important.
       In addition, government inspection schemes  must be rational  and related  to the laws'
underlying environmental and public health purposes.

       5.2.5  Coordinated with Existing Laws
       When laws are developed and proposed, legislators, government agencies, and interest
groups should work to understand how those laws will affect other environmental laws and  laws
in  other related sectors.  Other sectors with laws that overlap pollution control  and  natural
resource protection may include:
       •   Health—food safety, occupational health and safety, drinking water, consumer
          products, pesticide use, etc.
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       •   Land use planning - transportation, development, siting, etc.
       •   Industry and commerce.
       •   Agriculture.
       Rational coordination  of  laws can  be especially  important in countries with many
agencies sharing  responsibility for environmental protection.  Brazil, in  a situation common to
many countries, faces the challenge of coordinating  over  69 environmental laws  and 53
international environmental-related treaties across the national, state, and municipal levels.12

5.3    Balancing Stringency and Feasibility
       Those  designing  environmental  requirements  should  consider whether  particular
requirements are technologically,  economically, and administratively feasible.  If the government
would  like  to  ban a  particular product or activity,  then it  will  need  to determine whether
alternatives are desirable, and if so, whether they are feasible.
       Social,  economic,  and political factors, as well as regional,  national, and  international
trends may affect how a particular country determines  how stringent to make a particular law or
regulation.
       Stringent requirements can  lead  to  better  and  potentially  quicker  environmental
protection and restoration. In some cases, however, overly stringent requirements  imposed too
early  in  the life  of a program  can cause  the regulated  community to  disregard those
requirements.   Goals  and targets that consistently overreach are  likely  to be  modified,
encouraging industry to wait for  the goals to  be  revised before complying.  Overly  ambitious
requirements,  accompanied by a history of retreat, will undermine compliance with both the
requirements at issue and the overall environmental management program.
       A phased approach may address some of these issues.  The first phase involves less
stringent requirements that do not pose too great a burden for the regulated community.  At a
minimum, this  phase  should  eliminate some  of  the  competitive  advantage for  polluters.
Sometime later, during a second  phase, the program implements more  stringent requirements.
Additional phases may be implemented later in an effort to continue to tighten standards.

5.4    Effective General Requirements

       General requirements  are those  that apply to a class  or group  of entities  or people
and/or a class of activities.
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       5.4.1  Basic Design Principles
       General  requirements  are  most frequently implemented  in the form of (1)  laws, (2)
regulations, or (3) general permits  or licenses that apply to a specific class of facilities (e.g. dry
cleaners). General requirements may apply directly to a group of facilities or may serve as the
basis for developing  facility-specific requirements.  Requirements should:
       •  Be clear and understandable.
       •  Precisely define the sources or activities that  are subject to requirements.
       •  Precisely define the requirements and any exceptions or variances (such as when
          regulated entities may petition the government for an exemption from a general
          requirement).13
       •  Clearly address how compliance is  to be determined by specifying test methods and
          procedures.
       •  Clearly state deadlines for compliance.
       •  Identify what types of compliance assistance  will be offered to the regulated
          community (e.g., training, technical  assistance, etc.).
       •  Describe  how compliance will be monitored.
       •  Establish  enforcement responses for non-compliance.
       •  Be flexible enough to be constructively adapted through individual permits, licenses,
          or variances to different regulatory circumstances.
       •  Be written clearly enough to  be the  basis of criminal prosecution (which is the most
          serious enforcement action).
       •  Be based on technology (e.g., control or monitoring equipment) and methodologies
          that are or soon will be available, reliable, and affordable.
       Box  5-2  provides examples  of  basic  questions  that  can  be  asked  when  legal
requirements are being drafted  into  regulations, general permits, or licenses  that will be
effective.
 BOX 5-2:  CHECKLIST FOR DEVELOPING EFFECTIVE GENERAL REQUIREMENTS
 Definitions
    •   Does the regulation, general permit, or general license clearly define the regulated
        community, the regulated activities, and the regulated substances?
    •   Are any exceptions to defined terms narrow enough to avoid having the exceptions
        undermine the defined terms?
    •   Are the definitions and exceptions precise enough so that compliance assurance
        personnel can identify instances of non-compliance?
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   •   Are defined terms used consistently throughout the text of the regulation, general
       permit, or general license?
   •   Is the legal authority underlying the regulation, general permit, or general license
       clearly articulated?
   •   Are exceptions to the regulation, general permit, or general license defined precisely
       enough to make it clear which groups are exempted?  If sources under a certain size
       are exempted, does the regulation identify how the size of a particular source is to be
       determined?
   •   Are requirements or other end  results measurable? Are the units of compliance clear?
   •   Are more enforceable requirements available, i.e., requirements that are easier to
       measure and less resource-intensive?
   •   Are exceptions clearly described? Is the calculation for exceptions clearly specified?
       If the regulation, general permit, or general license grants exceptions based on
       malfunctions or changes in local conditions, does it specify what emission levels may
       be excused, when, and who makes this determination?
   •   If changed circumstances  may raise or change a requirement, does the regulation,
       general permit, or general license clearly specify these circumstances?  Are the
       changes that must be made clearly defined?
   •   If the requirement is an emission limit or concentration value, does it explicitly state
       the time frame associated with the limit  (e.g., instantaneous, two-hour average, daily)?

Monitoring
   •   Does the  regulation clearly state exactly what the regulated community is required to
       monitor?  Do these  requirements support the compliance goals of the environmental
       law?  For example,  if the compliance goal is to demonstrate that facilities are in
       compliance each day, does the regulation, general permit, or general license require
       daily  self-monitoring and recordkeeping [and reporting]?
   •   What test methods are needed to determine whether a facility is in compliance? Are
       the methods clearly described? Are any allowable averaging times clearly specified?
   •   Does the  regulation, general permit, or general license make falsifying self-monitoring
       data a separate and enforceable violation?
   •   Does the  regulation, general permit, or general license authorize inspection
       procedures that will enable inspectors to gather data needed to determine
       compliance?
   •   Do the procedures cover entering a regulated facility, inspecting documents, and
       collecting samples?
   •   Will inspectors be readily able to determine which facilities are not in compliance?
   •   Will the requirements for inspection and self-monitoring help reduce enforcement
       costs and increase the effectiveness of  inspections?

Self-monitoring
   •   Does the  regulation, general permit, or general license provide a clear schedule for
       self-monitoring?
   •   Does the  regulation, general permit, or general license state the methods to be used
       for self-monitoring?
   •   Does the  regulation, general permit, or general license clearly state what data the
       regulated community is required to record and report?
   •   Will these data show whether or not a facility is in compliance? Will these data provide
       sufficient evidence to document a violation?
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    •   Does the regulation, general permit, or general license provide a clear schedule and
        format for recordkeeping and reporting?
    •   Are the reporting requirements frequent enough to allow timely response to a
        violation?
    •   Is the regulated community required to retain information long enough for enforcement
        purposes?
    •   Does the regulation, general permit, or general license make failure to maintain or
        report records a separate and enforceable violation?
    •   Is the regulated community required to make records available to inspectors upon
        request?
    •   Are any exceptions to the recordkeeping and reporting requirements clearly
        defined/stated?
    •   Will the requirements for reports, records, and inspection/monitoring techniques help
        reduce  enforcement costs and increase the effectiveness of inspections?

 Demonstrating Compliance
    •   Does the regulation, general permit, or general license clearly describe what
        constitutes compliance and how compliance is determined? Is compliance
        determined by field inspections and desk reviews of reports submitted by the
        regulated community, or is the regulation, general permit, or general license self-
        enforcing?
    •   Does the regulation, general permit, or general license clearly state who  (i.e., the
        government or the facility) is responsible for proving compliance or non-compliance?
        Can the environmental  management program independently determine compliance?
        Can the program require the facility to perform certain tests and determine
        compliance?
    •   Does the regulation, general permit, or general license define time limits  by which a
        member of the regulated community must reach compliance? Do the time periods
        have specified beginning and end points?  If compliance is defined by occurrence of
        an event, rather than by a date, is the event discrete enough for an inspector to
        determine whether the facility  is in compliance?
    •   Is the evidentiary burden required to prove a violation clearly described?  Can third
        party data be used as evidence?
    •   Does the regulation, general permit, or general license describe the extent to which an
        inspector can use professional judgment in  determining whether a facility is in
        compliance?
    •   If different government  levels are involved in enforcement programs, does the
        regulation, general permit, or general license clearly describe the responsibilities of
 	each level of government?	
       5.4.2  Size of the Regulated Community

       If possible,  regulators should determine the size  of the regulated community prior to

implementing environmental  laws; otherwise governments may find  that their environmental

requirements are unmanageable.

       For example, a province in the Netherlands passed a law requiring companies to apply

for an exemption if they wanted to use a processing installation to dispose of their wastes. After

the law was passed, the  government  discovered  that 100,000 companies would  need an
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exemption. Inspections alone would have required hiring an additional 200 to 300 inspectors.
The provincial government decided to revise the regulation.  Exemptions are no longer required.
Companies must keep a record of their waste  deliveries and periodically report information on
the most hazardous wastes. Compliance assurance efforts now focus on the waste processors
(about 1,000) rather than the waste producers.
BOX 5-3:  THE IMPORTANCE SMALL AND MEDIUM SIZE BUSINESSES14

       The economic and environmental  significance of small and  medium size businesses
(SMEs) is  significant. For example, in Canada, Mexico and the United States over 98 percent of
the businesses are  Small and Medium Size Enterprises (SMEs). Although most SMEs serve
local markets, they increasingly operate as part of a global market place, purchasing  products
produced abroad, supplying multinational companies and selling directly to overseas buyers.
       SMEs face  widely differing  environmental  issues  based on the  economic sector,
employee  base and jurisdiction in which they operate. A study prepared by the Organisation for
Economic  Cooperation and Development  (OECD) found that in  the  United States, SMEs are
significant contributors to  pollution in  three branches  of manufacturing: chemicals,  primary
metals, and building materials (e.g., stone,  clay, glass). The largest impacts from SMEs were on
biological oxygen demand in water and suspended particles in air, followed by release of toxic
chemicals.
       Because of their size, governments should consider these  factors  when developing
initiatives  for SMEs: (1) The  power of the supply chain, business contracts,  and industrial
associations can be significant for many SME  sectors;  (2) A tailored outreach can be helpful.
Official efforts narrowly tailored to the business sector, size, and location of the SME will be far
more  successful than generic  outreach efforts; (3)  The right partners  are essential. When
governments involve business  associations that have  SMEs as members, the likelihood  of
success is greater; (4) Regulatory compliance  pressure can  motivate the search for the least
expensive solutions that are lawful.
       5.4.3  Size of Regulated Entities

       Regulators should also consider the size of the regulated entity and adjust outreach and

enforcement strategies accordingly. Smaller entities are a major source of pollution and often

may not have in-house expertise or the resources to comply with complicated requirements.

Governments may need to provide greater compliance promotion activities and work with local

governments  and trade  associations to help  understand  the capabilities of  these types  of

businesses and the extent of environmental problems at their facilities. (See Box 5-3).

       5.4.4  Providing for Individual Circumstances

       Requirements that are very specific may leave little room for open interpretation. While

such  requirements may be easier to enforce,  they  might  not allow the flexibility that will

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encourage compliance.   Environmental  management  programs often use  facility-specific
permits or licenses to provide the flexibility that individual circumstances often warrant.

5.5    Facility-Specific Requirements
       Facility-specific requirements are most frequently implemented in the form of permits or
licenses. They are often based on specific criteria established in laws, regulations, or guidance,
but are customized to the specific conditions at the particular facility receiving the permit or
license. These documents may cover only certain requirements (e.g., those concerning a single
environmental media) or may include comprehensive documents covering all requirements that
the facility must meet.

5.6    Ensuring Effectiveness
       Permits and licenses  are  intended to be practical documents that require or  prohibit
specific activities.  To be enforceable, permits and  licenses must generally be clear, precise,
and unambiguous.  Regulatory agencies can take  several practical steps to help ensure that
permits and licenses have these qualities:
       •  Train permit and license writers in the permit and license-writing processes.
       •  Use standard forms to ensure that each permit and license contains all essential
          information.
       •  Where appropriate, use "model"  permits or licenses. A model permit/license contains
          requirements that are generally applicable to a specific type of facility. The model is
          then slightly modified by the permit or license writer to tailor a permit for a specific
          facility.
       •  Provide clear instructions to the permit or license writer on how to prepare the permit
          or license.
       Box 5-4 provides a checklist that  permit and license  writers can use to ensure the
enforceability of permits and licenses.  Writers of facility-specific requirements will  need to
consider whether the permit conditions might conflict with those in any of the facility's existing
permits or licenses.  Conflicts and contradictions between different environmental permits and
licenses can invite non-compliance.  Multimedia permits or licenses that encompass all relevant
environmental requirements  in  a single  document can overcome this potential problem.
Multimedia documents may also  enable permit and license writers to prioritize  requirements
based  on human-health or  environmental  risk, the facility's resources for  compliance, and
feasibility.

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 BOX 5-4: CHECKLIST FOR DEVELOPING ENFORCEABLE FACILITY SPECIFIC
          REQUIREMENTS
 General
     •   Is the length of time that the permit will be valid clearly stated?  Is a date specified to
        indicate when the permit must be reissued and when an application for a new permit
        should be filed?
     •   Does the permit contain a provision stating that the permit must be modified if
        ownership of the facility changes, or if the facility makes changes to its regulated
        processes?
     •   Do the permit conditions conflict with conditions in any other of the facility's permits?
     •   Is there a provision specifying that the permit can automatically be revoked if it is
        discovered that the applicant  deliberately submitted false, misleading, or incomplete
        information during the application process?
     •   Does the permit state whether the owner or operator will be liable for non-
        compliance?

 Requirements
     •   Are the requirements measurable? Are the units of compliance clear?
     •   Does the permit specify that a modification will be required if the requirements or
        criteria change?
     •   If the requirement is an emission limit, does the permit explicitly state the time frame
        associated with the limit (e.g., instantaneous, 3-hour average, daily) and the location
        of where the measurement shall take place?

 Monitoring
     •   Does the permit clearly state  exactly what the facility is required to monitor?  Do these
        requirements support the compliance goals of the environmental regulation?
     •   What test methods are needed to determine whether the facility is in compliance?
        Are the methods clearly described and available to the permittee?  Are any allowable
        averaging times clearly specified?
     •   Does the permit make the act of falsifying self-monitoring data a separate and
        enforceable violation?
     •   Does the permit provide a clear schedule for self-monitoring?
     •   Does the permit authorize inspection procedures that will enable inspectors to gather
        data needed to determine compliance?  Do these procedures cover entering a
        regulated facility, inspecting documents and collecting samples?
     •   Will inspectors be readily able to determine which facilities are not in compliance?
     •   Will the requirements for inspection and self-monitoring help reduce enforcement
        costs and increase the effectiveness of inspections?

 Self-Monitoring
     •   Does the permit clearly state what data the facility is required to record and report?
     •   Will these data show whether or not a facility  is in compliance? Wll these data
        provide sufficient evidence to document a violation?
     •   Is the facility required to report non-compliance with permit requirements?  If so, does
	the  permit specify a deadline  for reporting non-compliance, and the person to whom
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        non-compliance should be reported?
     •  Does the permit provide a clear schedule and format for record-keeping and
        reporting?
     •  Does the permit specify to whom the information should be reported?
     •  Are the reporting requirements frequent enough to allow timely response to a
        violation? Is the facility required to retain information long enough for enforcement
        purposes?
     •  Does the permit make failure to maintain or report records a separate and
        enforceable violation?
     •  Is the facility required to make records available upon request?
     •  Are any exceptions to the record-keeping and reporting requirements clearly spelled
        out?
     •  Will the requirements for reports, records, and inspection/monitoring techniques help
        reduce enforcement costs and increase the effectiveness of inspections?

 Demonstrating Compliance
     •  Does the permit clearly describe what constitutes compliance and how compliance is
        determined?
     •  Does the permit clearly state who is responsible for proving compliance or non-
        compliance (as established by applicable law)?
     •  Does the permit define time limits by which the facility must reach compliance? Do
        the time periods have specified beginning and end points?  If compliance is defined
        by occurrence of an event, rather than by a date,  is the event discrete enough for an
        inspector to determine whether the facility is in compliance?
5.7    The Permitting and Licensing Processes

       The process for writing permits and licenses varies  from one country to another, but

usually includes the following steps:

       •   The facility provides information about its operations and emissions to the

          government agency.

       •   A permit or license writer reviews the information and requests additional information

          if necessary.

       •   The permit or license writer must inform interested parties (e.g., the local community)

          that a permit or license is being prepared.

       •   The permit or license writer must provide an opportunity for any concerned party to

          comment on whether a facility should receive a permit or license and what the

          requirements should be.

       •   If necessary, a negotiation process is used to resolve any disputes among the permit

          or license writer, facility, workers, local community, and other potentially affected

          parties.
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       •   After sufficient information gathering, discussion, and negotiation, the permit or
          license writer decides whether to issue the permit or the license.
       •   There may be a sanction if the permit or license writer discovers that the applicant
          submits false, incomplete, or misleading information.
       The permitting and licensing processes provide opportunities to ensure that facilities
clearly understand what the requirements are and the importance, both from an environmental
and legal perspective, of meeting them.

5.8    Involving Stakeholders
       The process of drafting effective environmental requirements can be informed by input
from  various stakeholders,  including  environmental  management  program  personnel, the
regulated  community,  citizens and  non-governmental  organizations, other environmental
programs, and  government  authorities.  This  process should be governed by administrative
procedures that are transparent and based on the rule of law.

       5.8.1  Compliance Assurance Officials
       Special institutional channels and procedures should allow compliance assurance staff,
including inspectors  and  prosecutors,  to provide meaningful input in the drafting  of general
requirements.   Enforcement and  compliance officials often  have   unique and  real world
experience with different regulatory programs and can see the  strengths and weaknesses for
the enforceability of regulatory proposals.
       One option is to create committees that include  both policymakers and  enforcement
officials.  These committees can  include representatives of all government levels (national,
regional, provincial, and local) that may be involved  in the process of assuring compliance with
the requirements.  Committee members can be responsible for ensuring that  the appropriate
individuals  within the  environmental  management  program  are involved  in drafting  and
reviewing the requirements.
       Comments on the proposed requirements should follow  administrative procedures that
allow for written  comments  and  that establish  a  record of  the decision-making  process.
       Lessons learned about what makes existing requirements effective or ineffective in a
particular region or country might be recorded, studied, and communicated to those  involved in
developing new requirements.  For example, selected requirements could be reviewed  one year
after  coming  into force in  order  to analyze  their  effectiveness and make  any  necessary
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adjustments and to establish an expedited process that can be used to correct specific types of

deficiencies by making limited revisions to general requirements.

       5.8.2  The Regulated Community and Civil Society

       Involving the regulated community and civil  society in developing requirements helps

build support, reduces resistance and conflict, and  eases implementation.  It can also make

requirements more practical, and therefore more enforceable, and it publicizes the requirements

at an early phase, thus "setting the stage" for compliance.  Below are three basic ways to

involve the regulated  community and civil society  in the process of drafting environmental

requirements: informal consultations, formal comment, and field testing. (See Box 5-5).
 BOX 5-5:  INVOLVING THE REGULATED COMMUNITY AND CIVIL SOCIETY
 Informal Consultations
        Policymakers can consult with key representatives of the regulated community and civil
 society informally before developing general requirements. These consultations can be helpful
 in sorting out future problems early and eliminating resistance.

 Formal Comment
        U.S. legal systems require the federal government to publish draft regulations and
 solicit comments from the regulated community and the public. Widely  distributed, low-cost
 government periodicals provide advance notice that new regulations are being developed and
 announce  when they will  be available.  Any organization or  individual can easily obtain and
 review the proposed regulations when they are issued.  Written comments from the public are
 usually accepted for a limited period of time (30 to 90 days in the United States) after the
 proposed  regulation has  been issued.  The  environmental agency prepares  and publishes
 detailed responses to the  comments.  Many of the comments directly concern the difficulty or
 unanticipated effects of compliance.  These comments  provide regulators with  an opportunity
 to rethink  their approach.   The formal responses  to comments reassure  commenting  parties
 that their comments were considered.15

 Field Testing
        In field testing,  specific members of the regulated community volunteer to test general
 requirements  to determine whether the requirements  are  clear and  understandable,  and to
 assess/evaluate the ease and cost of compliance. Policymakers can then make changes to
 the  general requirements before  they  are finally implemented.  Though field testing can
 lengthen the total time it takes to develop a general requirement, it can expose  weaknesses
 that  might otherwise render it unenforceable.  Where  field testing is used, policymakers will
 need to determine  who will fund  it—the enforcement program, the test facility itself, a trade
 association representing the regulated community,  or a combination of these.
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       Involving the non-regulated community (e.g., the general public and non-governmental
organizations) can also be very helpful.  Such involvement is an opportunity to solicit creative
ideas from  knowledgeable  groups.   Civil society has  an interest in clear and  effective
environmental requirements.  Laws, regulations, and permits that provide specific substantive
requirements make it  easier  for  members of civil society to participate in citizen  based
compliance promotion, monitoring, and enforcement.  In addition, the involvement of civil society
helps shield  the  program  from isolation  and  builds broad-based popular support for  the
requirements and  their implementation.
       In  China,  for example, the State  Environmental  Protection Administration recently
passed a regulation to allow greater public participation in  Environmental Impact Assessments.
These Assessments will be  more widely distributed to the public, and citizens will be able to
participate  in the  process  through opinion surveys, consultations, seminars, debates, and
hearings.16

5.9    Coordinating with Other Programs
       It is  important to coordinate the environmental requirements of different  laws and
regulations and to understand  how  they may interact  when implemented. For  instance,
regulations requiring electronics firms to stop chemical solvents in tanks  from  leaking into the
groundwater could be obeyed by releasing solvents into the air, creating an air quality problem.
Other examples include flue-gas scrubbing to reduce harmful air emissions that could lead to
discharges of contaminated water and treatment of contaminated wastewater that produces yet
another waste product requiring responsible processing.
       Several  rulemaking  practices  can be  used  to  avoid  unintended  effects.   First,
environmental laws can require  policymakers  drafting general  requirements to specifically
consider whether  such effects are possible.  Second, individuals who are knowledgeable  about
the different environmental areas can review the requirements.  Third, studies of the regulated
community can examine whether compliance with one law would result in shifting of pollution
from one medium to another.  If cross-media effects are discovered, the  requirements can be
modified to prevent or minimize these effects. Finally, requirements can be defined for all media
at once.
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6.      COMPLIANCE PROMOTION

6.1     Introduction
       In many countries, traditional environmental regulatory programs are being carried out in
conjunction with non-regulatory voluntary programs designed to promote changes in behavior.
Voluntary programs are different from compliance promotion activities, as voluntary programs
have no mandatory component while compliance promotion activities encourage and help the
regulated community to comply with environmental laws and requirements through assistance
and incentive activities.
       This  chapter provides  an  overview of  some  of  these  compliance assistance  and
compliance incentives activities. It begins by examining educational, technical,  and financial
assistance programs that make up compliance assistance efforts.  It then examines compliance
incentives efforts,  such as auditing policies, recognition programs, efforts to provide the public
with information, and market-based mechanisms.

6.2     Compliance Assistance
       Compliance assistance encourages observance of the law through outreach, education,
and other promotional activities. Compliance  assistance  activities are designed to improve
compliance by explaining how to comply with legal  and regulatory requirements. Compliance
assistance  activities  can  cover both statute  specific and sector related  activities. Outreach
programs and technical assistance tools tend to be most successful when they are developed at
regional levels  and are tailored to the needs of specific businesses.
       Compliance  assistance  programs can   help  regulated  firms  reduce  the costs  of
compliance and develop environmental management capacity within  the regulated community.
The success of these initiatives will depend largely on how they are developed, packaged, and
delivered. Compliance assistance programs can include education and technical assistance and
in some cases  financial assistance.

       6.2.1   Education and Technical Assistance
       Education  and technical assistance lay the groundwork for compliance.  These efforts
can help businesses and individuals fully understand their legal responsibilities, and how  they
can meet those responsibilities. Education and technical assistance are particularly important in
the  early  stages  of a new program  or when  legal  and regulatory requirements change.
Education and  technical assistance programs can help the regulated community understand:
       •   Who is subject to requirements?
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       •   What are the requirements?
       •   Why are these requirements important?
       •   What changes (including technical and managerial changes) can be made to comply
          with the requirements?
       •   How can these changes be made (e.g. equipment, operations, human resources)?
       •   What are the consequences of non-compliance (both in terms of costs and benefits)?
       Education and technical assistance outreach can be made through publications (such as
brochures and guidance  manuals);  websites; "hot lines"  or dedicated telephone numbers;
conferences and other meetings; or as part of media announcements.
       Technical  assistance can be provided  by trained  government personnel who visit
individual members of the regulated community to assist them in making  changes, and as part
of special  assistance programs, set up  for example at  universities  or  non-governmental
institutions, that provide a central resource  for information and  advice on how to comply with
legal and regulatory requirements.
       Professional associations are  important government partners for compliance assistance
activities.  These associations usually have established communication networks and access to
industry experts.  They can provide forums for the regulated community and enforcement
program personnel to exchange information and ideas.
BOX 6-1:  IMPROVING WASTE COLLECTION IN THE NETHERLANDS
       Commercial  establishments in the Netherlands are  required to dispose  of  their
hazardous wastes through permitted processors.  However,  getting the waste to the processor
was a  problem for small businesses.  The processors were often  unwilling to pick up small
amounts of waste, and transporting small quantities of waste  long distances  to a processor
placed a disproportionate economic burden on small businesses.  Therefore, small companies
were often out of compliance with the  hazardous waste rules.  The  Dutch  government helped
to solve this problem by establishing a  collection depot in nearly every town in the Netherlands.
Both private citizens and small companies may now discard their  waste at these depots at
regular  times.  This government-facilitated cooperative arrangement was  instrumental in
helping solve the compliance problem.
       Many  countries  are increasingly  focusing compliance assistance efforts  on specific
sectors or types of businesses. By using  this approach, governments can tailor their outreach
efforts  to the specific needs of an industry instead of focusing their efforts on the requirements
of individual statutes.  Many  countries are increasingly using  the  internet to deliver sector
focused compliance assistance material to the user and are cooperating with other countries in
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sharing this information.
          An example of this new approach is the collaboration that is occuring between the
USEPA, the Asian Environmental Compliance and Enforcement Network (AECEN),  and the
environmental agencies  of the Philippines  and Thailand. Over the past decade, USEPA  has
established highly successful, stakeholder-driven,  web-based compliance assistance centers
geared primarily toward  small and medium size business.17 It is now working closely  with the
Philippines,  Thailand, and  ASEAN to share  U.S.  experiences and  provide  feedback on
proposed strategies and  models as these countries develop their own stakeholder driven, web-
based centers.18

      6.2.2   Financial assistance
      Even with education and technical assistance,  cost may be a significant barrier to
compliance.  In some instances,  the government may want to provide direct assistance to the
regulated community in order to help them deal with the initial cost of compliance.
      In the late 1990s, for example, selected firms in Sri Lanka's distillery, textile, and metal
finishing sectors were shown  ways  to reduce waste  generation quantities through simple
process and raw material changes, as well as good housekeeping practices. Demonstration
waste minimization projects such as these  help industries to meet the required environmental
standards while at the same time reducing end-of-pipe treatment costs.
      Some international organizations and national development aid agencies  provide funds
to developing  countries that  could  not  otherwise  afford to  comply  with environmental
requirements. The Compliance Assistance Programme of the Multilateral Fund of the Montreal
Protocol, for example,  has a successful capacity building program that places teams in  regional
offices to deliver  technical  assistance on  Protocol  requirements  directly to developing
countries.19

6.3   Compliance Incentives
      Compliance incentives consist of a set of policies and programs that eliminate, reduce or
waive penalties under certain conditions for business, industry, and government facilities  that
voluntarily discover,  promptly  disclose  and  correct  non-compliance,  and prevent future
environmental violations. Many  audit and special  recognition  programs  are  examples of
compliance incentive  programs.  These programs provide concrete  benefits for companies,
agencies, and individuals that actively monitor their facilities and report problems to appropriate
authorities. Other compliance incentive programs provide the public with specific environmental

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performance information on companies in order to motivate them to improve their environmental
performance.

       6.3.1  Auditing Policies
       Some compliance  incentives  eliminate,  reduce  or waive  penalties  under certain
conditions for business, industry, and  government facilities  that voluntarily  discover, promptly
disclose  and correct non-compliance, and  prevent future  environmental  violations.  Under
USEPA's Audit policy, called Incentives for Self-Policing, Discovery, Disclosure, Corrective and
Prevention of Violations, regulated entities may, at the discretion of the Agency, avoid criminal
prosecution, and have  penalties  reduced or eliminated. But  they  must discover violations
through self-auditing or  under environmental management systems,  self-disclose (prior to the
Agency having  initiated its own investigation), correct  the violations promptly,  and  take
                             90
measures to prevent recurrence.
       Mexico also has a similar program, called the Environmental Auditing  Program (EAP). It
is  based on  a  voluntary agreement between Mexico's Attorney General  for  Environmental
Protection  (Profepa) and a participating organization.  Under the  EAP, a  plan of action is
devised to  recommend preventive and corrective measures related to air, water, soil, solid and
hazardous waste, noise, industrial safety and hygiene, energy, natural resources, environmental
risk,  environmental  management and other  issues with  potential  adverse impacts to  the
environment.
       Participating  organizations are evaluated by independent auditors. Participants agree to
correct violations by a certain date,  and Profepa agrees not to  penalize companies until that
date  has  passed.   Organizations  receive  Profepa's  certification  of  Clean  Industry  for
Environmental Compliance after  an audit  has been completed, an  action plan  has  been
implemented, and all the preventive  and corrective measures have been taken. Organizations
that go further and achieve  stronger  environmental performance under pollution prevention and
eco-efficiency schemes are granted the recognition of Environmental Excellence. Organizations
can use Profepa's performance seals to promote their public image.21

       6.3.2  Recognition Programs
       Environmental regulators  frequently use  incentives  in  the context of  recognition
programs.  Both  Mexico and the United States, for example, have recognition programs, which
provide incentives  to join these  programs  and  maintain high   levels   of  environmental
performance. Mexico's Environmental Excellence Seal (see above, Auditing Policies) is granted
to  organizations that have  engaged  in self-designed  initiatives directed  toward preventing
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pollution, seeking  community  outreach,  developing  suppliers,  solving local  environmental
problems, and participating in pollution cleanup programs, among other measures. To obtain
the seal, organizations  must present documented and operational proof of  environmental
compliance.
       USEPA National  Environmental Performance Track recognizes top performers among
public  or private facilities. To be  recognized  under performance track, facilities must  have,
among other things:
       •   A history of sustained regulatory compliance.
       •   Past environmental achievement and a commitment to continuous environmental
          improvement.
       •   A community outreach procedure in place.
       Facilities accepted into  the program receive special  benefits such as low priority for
federal inspections; special regulatory and  administrative  incentives,  such as flexibility  in
developing  certain air permits; and  more flexible requirements for large generators of hazardous
waste.
       Surveys of regulated communities find that the potential opportunity to forgo or postpone
regulation is the  most important benefit of voluntary approaches.22  Therefore,  environmental
management programs  using  these voluntary  approaches  must balance  the  need  to
demonstrate a commitment to improvements while simultaneously maintaining a credible  threat
of mandatory regulation and enforcement.

       6.3.3  Public Information
       A number of jurisdictions have overcome these problems by developing  a public  rating
system.  Rating systems simplify the flow of information  to the public  by summarizing a
regulated firm's performance into a grade.  The grading scale can be simple (in compliance/not
in compliance) or complicated.   Box 6-2  provides an  example of public grading in Indonesia.
Note that the rating system has two grades above simple compliance, providing inducements to
go beyond the environmental requirements.
       Support of local media is critical to public information campaigns.  To ensure accurate
press reports and foster a working  relationship with the media, the environmental management
program should invite reporters to a detailed presentation of the information campaign, including
an explanation of how the information was  collected and analyzed. The information should also
be in a format that is easily communicated  by the broadcast and print media.
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       Ideally, an information  strategy should be flexible enough to accommodate  regulated
firms with different characteristics. It should be simple and easily understandable by the public.
Finally,  it should offer the regulated  firm a  chance to improve  its performance before the
information becomes public.   Many firms will take this opportunity to come  into compliance
rather than risk damage to their reputations or more severe fines.  (See Box 6-3 for an example
from China).
BOX 6-2: INDONESIA'S ENVIRONMENTAL REPORT CARD "PROPER PROKASIH"23
Compliance Status
Not in Compliance
In Compliance
Color Rating
Black
Red
Blue
Green
Gold
Performance Criteria
Polluter makes no effort to control pollution
and causes serious environmental damage.
Polluter makes effort to control pollution but
not sufficiently to achieve compliance.
Polluter applies effort sufficient only to meet
the standard.
Pollution level is significantly lower than the
discharge standards. Polluter also ensures
proper disposal of sludge, good
housekeeping, accurate pollution records
and good maintenance of the wastewater
treatment system.
All the requirements of Green, plus similar
levels of pollution control for air and
hazardous waste. Polluter reaches high
international standards by making extensive
use of clean technology, waste minimization
pollution prevention, recycling, etc.
       The effectiveness of public involvement in information strategies will vary with the nature
of the sectors and firms regulated. It will be a challenge to bring market pressure on firms that
provide products or services in sectors with limited competition or where a brand name is not
dependent on  public good-will.  Closely held  and  government-owned enterprises also have a
degree of insulation from external  pressure.  But all of these firms can be reached with  carefully
planned strategies.
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 BOX 6-3:  INFORMATION CAMPAIGNS IN CHINA
                                               24
        Faced with difficulty ensuring companies' compliance with pollution regulations, China
 began a program, informally called "GreenWatch," for disclosing industry pollutant discharges
 to the  public.  Pilot efforts,  such as  those  in  Hohhot Municipality and Zhenjiang  City,
 demonstrated that public disclosure of environmental performance could impact a company's
 public image. The results were that "enterprises that improved their performance immediately
 requested new monitoring reports  so that their public ratings could be improved as  well.
 Enterprises  with  poor  ratings  shifted  from  passive  resistance to active  solicitation  of
 inspections, as a means of improving their performance ratings. At the same time, enterprises
 with  good ratings felt continued pressure  to  maintain their environmental performance to
 avoid complaints  from  the public  about backsliding."   In  November 2006, the Chinese
 government decided to extend GreenWatch to every city in the country by 2010.
6.4    Market-Based Mechanisms
       Market-based approaches, such as taxes, charges,  and emissions or permit trading
programs (See Box 6-4) can promote compliance with the law by incorporating externalities into
the cost of doing  business.   Externalities  are "hidden"  costs  to  human health and the
environment associated with  an  activity, such as manufacturing steel.  Because manufacturing
steel creates air pollution, an externality of this activity may be an increase in asthma  rates
among children.  Market-based approaches can help minimize these externalities by stimulating
consumers and  producers to change  their behavior to  more  eco-efficient use  of natural
resources  by increasing costs, reducing consumption, stimulating technological innovation, and
encouraging greater disclosure of actual/total/combined costs  to community.
       Market-based approaches are not usually considered compliance promotion activities
unless they involve promoting compliance with underlying regulatory requirements. Instead they
often either complement regulatory requirements or make them unnecessary.  For example, the
Netherlands, Portugal, the United Kingdom, Spain, and Finland have introduced car registration
taxes which encourage  car buyers to opt for the  cleanest car  models.  These  taxes can
complement existing domestic laws that require minimum fuel efficiency standards  by making
more inefficient but legal cars more expensive.25 (See Box 6-4 for other examples).
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BOX 6-4:  EXAMPLES OF TAXES AND FEES
       In 1995, the Netherlands enacted a tax on the landfilling of waste.  The purpose of this
tax is to address environmental issues of waste  and to  better distribute tax burdens across
different groups by introducing a new tax base. The tax is calculated based on the weight of the
waste. As of 2004, those dumping waste had to pay € 84.78 per ton for waste less than 1,100
kg/m3 and for certain waste streams like dangerous waste and shredder waste and € 13.98 per
ton for waste more than 1,100 kg/m3. Studies have shown that the tax has contributed to a shift
from dumping to prevention, recycling, and incineration of waste.
       Colombia has demonstrated  how discharge fees  can create incentives for regulatory
authorities to  improve  permitting, monitoring,  and enforcement.  In 1997, to  reduce water
pollution, Colombia began charging polluters a fee per unit of pollution emitted.  The fees were
determined based on whether overall pollution reduction targets were being met.  By allowing
Colombia's regional environmental authorities to keep the fees, but requiring reporting of fees to
a centralized authority, this system creates incentives for improved monitoring and enforcement.
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7.      MONITORING COMPLIANCE

7.1     Introduction
       Monitoring compliance is essential  to the success of an environmental management
program.  The collection and analysis of  compliance information  improves decision making
through the following:
       •   Evaluating program progress by establishing compliance status.
       •   Detecting and correcting violations.
       •   Supporting information strategies to promote compliance.
       •   Providing evidence to support enforcement actions and deter non-compliance.
       There are four primary sources of compliance information discussed in this chapter:
       •   Inspections.
       •   Monitoring environmental conditions near a facility.
       •   Self-monitoring, recordkeeping, and self-reporting by the regulated community.
       •   Citizen monitoring.
       These  are  described in  detail below.   Box 7-1 summarizes  the  advantages  and
disadvantages of these four information sources. Additional information may come from reports
of other national, regional, provincial, or local agencies that have related jurisdiction over the
facility; requests for modifications to  permits  or  licenses;  and  environmental audit reports
provided  by  the facility.   However,  as information  on  compliance status is gathered,  an
enforcement program needs a system  (computerized if possible) to store, access, and analyze
the information as needed.
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BOX 7-1: COMPARING SOURCES OF COMPLIANCE INFORMATION
 INFORMATION SOURCE
                                 ADVANTAGES
    DISADVANTAGES
Inspections
                           Provide the most relevant
                           and reliable information.
Can be very resource-intensive.
Monitoring
Environmental
Conditions Near a
Facility
                           Useful for detecting possible
                           violations without entering
                           the facility.

                           Useful for determining
                           whether permit or license
                           requirements are providing
                           adequate environmental
                           protection.
Can be difficult to demonstrate a
connection between the pollution
detected and a specific source.

Difficult or impossible to obtain
precise information.

Resource-intensive in areas of
multiple sources.
Self-Monitoring, Self-
Recordkeeping, and Self-
Reporting by the
Regulated Community
                           Provide extensive
                           information on compliance.

                           Shift economic burden of
                           monitoring to the regulated
                           community.

                           May increase level of
                           management attention
                           devoted to compliance
                           within a facility.
Rely on integrity and capability of
source to provide accurate data.

Place economic burden on the
regulated community and
increase paperwork.
Citizen Monitoring
                           Can detect violations that
                           are not detected by
                           inspections, industry self-
                           monitoring, and reporting.
Sporadically conducted.

Cannot control amount,
frequency, or quality of
information received.

Only a few violations are noticed
by citizens.

May require resources to
respond to erroneous or
irrelevant complaints.
                                                                 26
7.2    Inspections

       Inspections  are the backbone of most  enforcement programs/0   Inspections  are

conducted by government  inspectors  or in some cases by independent parties hired by and

reporting back to the responsible agency.  The inspector's role is not to interpret the law and

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make the final institutional or agency determination of compliance, but rather to gather facts
about a facility, collect and analyze documentation, and record observations.  The inspector
then organizes those observations and  supporting documentation  into a  report for  review
against standards set forth in law.
       Inspectors plan inspections, gather data in and around a particular facility, record and
report on their observations, and sometimes make independent judgments  about whether the
facility is in compliance.  Inspection activities may include, but are not limited to: observing and
documenting observations;  sampling,  measuring, and  photographing;  coring,  drilling,  and
excavating;  reviewing and  copying records; and  seizing equipment, products, materials,  or
records.  Inspections can be very resource-intensive and therefore require careful targeting and
planning.  By standardizing inspection procedures, enforcement officials can help ensure that all
facilities are treated equally and that all the appropriate information is gathered.  By specifying
deadlines for inspection  reports, program managers can help ensure that reports can be made
available to enforcement personnel without delay if there is a possibility of non-compliance.27
BOX 7-2:  BENEFITS OF INSPECTIONS IN VIETNAM
                                                  28
       In 1997, Vietnam for the first time implemented a large-scale, nation-wide inspection for
compliance with environmental requirements. This process entailed close coordination between
branches of the national government (e.g., environment, energy, defense), between central and
local levels of government, and with the mass media. The investigations helped to  increase the
role and influence of the environmental inspectors in society and helped introduce the Law on
Environmental Protection to the public.
7.3    Audits versus Inspections
       Audits are similar to inspections, but whereas inspections are generally conducted by
the government or its agents, audits are conducted for or by a facility for its own purpose and
benefit.29  Audits may be conducted  by internal  staff  or external,  independent  consultants.
These audits may be part of a larger management system, and may be done as a way to get
certification  (such  as ISO certification)  or  to  show suppliers, clients,  or investors that  the
company is complying with its environmental responsibilities. During an inspection, if violations
are found, the government follows standard procedures to ensure that the evidence collected
will be upheld in court.  In contrast, when an audit uncovers violations, evidence generally is not
collected, as there is not an enforcement response to the violations.  The facility may choose to
correct the violation on its own, or may  elect to report the violation to the regulatory agency.
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Some countries have  programs designed to  motivate facilities to come forward and admit to

their violations by  offering  reduced  penalties or shields  from  prosecution.   Audits and

environmental management systems are discussed in more detail in Chapter Six.
BOX 7-3:  INSPECTION POWERS IN GAMBIA
                                           30
       The 1994  Hazardous Chemicals and Pesticides Control and  Management Act gives
inspectors broad powers to investigate potential violations of laws governing  pesticides and
other hazardous chemicals.  The Act provides that an "inspector may, in the performance of his
duties...at all reasonable times without [a]  warrant enter on any land,  premises  or vehicle
where a chemical or pesticide is or may be reasonably suspected to be manufactured, stored,
sold, distributed or used to  determine  whether the provisions of this  Act are being complied
with." Moreover, the inspector may  "take samples of any articles and substances to which this
Act relates and, as may be prescribed, submit such samples for test and analysis."
7.4    Types of Inspections

       Inspections may  be "routine" (there is no reason to  suspect that the facility is out of

compliance) or "for cause" (a particular facility is targeted because there is reason to believe it is

out of  compliance).31    Inspectors  may  notify the  facility  prior to  inspection or arrive

unannounced.

       There are many levels of inspection. (See Box 7-4).  At the most  basic  level,  an

inspector can simply walk through a  plant.  A more complex and time consuming inspection

might require an inspector,  or multiple  inspectors, to spend  time in the facility to  observe

operations, interview plant personnel, and take samples for analysis.

       Inspection goals include:

       •  Identifying specific environmental problems.

       •  Making the source aware of any problems.

       •  Gathering information to determine a facility's compliance status.

       •  Collecting evidence for enforcement.

       •  Ensuring the quality of self-reported data.

       •  Demonstrating the government's commitment to compliance by creating a credible

          presence.

       •  Checking whether facilities that have been ordered to comply have done so.


       Inspections may focus on one or more of the following  questions:

       •  Does the facility have an up-to-date permit or license?
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       •   Has all required pollution monitoring or control equipment been installed?

       •   Is the equipment being operated correctly?

       •   Are records of self-reported data properly prepared and maintained?

       •   Is the facility properly conducting required sampling and analysis?

       •   Do the facility's management plans and practices support the required compliance

          activities?

       •   Are there any signs of willful violation of regulations or falsification of data? Signs

          could include conflicting data, conflicting stories from different employees at the

          same facility, monitoring data for which there is no supporting record or

          documentation, claims that employees are ignorant of the regulations when company

          files show knowledge of these requirements, and complaints from employees or

          citizens in the local community.
 BOX 7-4:  THREE LEVELS OF INSPECTIONS
 Level 1: Walk-Through Inspection
        This type of inspection is limited to a quick survey of the facility.  Inspectors need only
 to walk through the facility to verify the existence of  certain features, such  as control
 equipment or a records repository, or to observe work practices and housekeeping.  These
 inspections establish an enforcement presence, and can also serve as a screening process to
 identify facilities that should be targeted for more intensive inspection.

 Level 2: Compliance Evaluation Inspection
        This level involves a thorough inspection of the facility but does not include sampling.
 It may include visual observations like those  in Level  1; review and evaluation of records;
 interviews with facility personnel; review and critique of  self-monitoring methods, instruments,
 and data; examination  of process and  control devices; and collection of evidence of non-
 compliance.

 Level 3: Sampling Inspection
        This includes the visual and record reviews of the other inspection levels, as well as
 pre-planned collection and analysis of physical  samples.   These inspections are the most
 resource-intensive.
7.5    Steps in the Inspection Process

       Most environmental management  programs use a standardized set of steps for their

inspection process  or minor variations thereof.  Inspections  usually begin with  an opening

conference to explain the inspection process to  the facility.32  Some inspections end  with a

closing conference,  in which the inspector may make facility managers aware of any violations,
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prescribe corrective actions, and  explain the consequences of continuing non-compliance.33

Some countries' enforcement programs do not allow closing conferences because they want to

avoid the risk that information given by the inspector to the facility may somehow compromise

future legal action.  Other countries' legal  systems require inspectors to leave written summaries

of observed violations, putting inspected companies on notice. Box 7-5 contains an example of

the  phases of the inspection process. The following sections take a closer look at several of the

phases.
BOX 7-5:  PHASES OF THE INSPECTION PROCESS
                                                 34
1. Targeting Inspections
       Inspection sites are selected using four criteria: 1) random selection of sites from all of
the identifiable members  of a regulated community,  frequently referred to as  a "neutral
inspection scheme;" 2) a selection that emphasizes a specific sector of the identifiable regulated
community, usually based on enforcement history, potential threat, or other clearly researched
criteria; 3) a selection based on information  received from the public or other external sources
such as a tip  or  complaint;  and 4) emergency responses.  An agency must explain  how it
weighed each of these criteria in a compliance monitoring report made available to the public to
show it that the selections were made in a fair and transparent manner.

2.  Preparation of an Inspection Plan
       This phase entails tasks such as reviewing all available information, contacting everyone
who may  have relevant information, getting administrative clearances, and making necessary
arrangements if samples need to be taken.

3.  Entry into Facility
       Most public agencies seek to obtain consensual entry first. If the entry is denied, they try
to  explain again why the entry is  necessary.  If  denied again,  authorization to enter may be
granted by a legal authority.

4.  Opening Conference
       The purpose of an opening conference is to let the facility know what the agency plans
to  do and why, and also to learn more about the facility operation, plant layout, management
structure, plant processes, plant safety, and other information relevant for the investigation.

5.  Collecting Evidence in the Field
       Evidence is anything  that provides verifiable information that can be used to establish,
certify,  prove,  substantiate,  or  support an assertion.  It can  include physical  samples,
photographs, and copies of facility documents.  The two most common  methods of collecting
evidence in the field  are facility walk-throughs and process-based investigations.35  Interviews
are also one of the inspector's most useful tools for gathering information.
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6.  Collecting Evidence from Records and Reports
       A record is any means of memorializing an event, person, place,  or thing.  Inspectors
have the authority to review relevant firm records to determine compliance. The following are
some common  records  that may  be of  relevance for inspectors: annual reports;  production
records; shipping  reports; manifests; inventory records; sales reports; process records; permits;
quality  control  records;  waste  management   records;  documentation  of   environmental
management systems; employee training  records;  self-monitoring records;  discharge monitoring
reports; licenses;  articles of incorporation;  property records;  logs; maintenance  records; spill
reports; safety records; and accident reports.

7.  Closing Conference
       The closing conference provides an opportunity to confirm inspectors' observations and
review preliminary findings with facility personnel.  This may also be the opportunity to explain
observed violations to the company.

8.  Report Writing
       The objective for generating the report is to organize and coordinate all documentation
and potential evidence in a comprehensive,  understandable, and usable manner.

9.  Referral for Follow-up/Enforcement
       Examples  of follow-up actions include: issuing  a  letter to the  company; informing other
inspecting bodies of the findings  and observations; planning a follow-up  inspection; writing
notices; and possibly initiating a criminal or civil action to induce compliance.

10. Appearance as a Witness
       The inspector may be called as a witness if civil or criminal enforcement actions are
taken.
       7.5.1  Step 1: Targeting Inspections

       More frequent inspections generally  promote improved compliance.  However,  most

enforcement programs generally  do not have  enough  resources to adequately inspect all

regulated facilities.

       A two-tiered  monitoring approach has  proven  effective in  reducing environmental

management costs while maintaining an adequate level  of deterrence.  Under this approach,

"high  risk"  targets—those firms  considered  likely  to be  in non-compliance—receive  more

frequent, thorough, and expensive inspections than "low risk" targets.  In selecting sources for

more intensive inspections, enforcement programs can consider several factors:

       •   A source's potential to harm the environment.

       •   The complexity of the inspection needed to evaluate compliance.

       •   The compliance history of the source.

       •   The compliance history of similar sources.

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       •   The availability of self-reported data.
       Another strategy for conserving  program resources is to start with a less  expensive
inspection.   If the source is in violation, enforcement action  should be taken to require the
source to correct the violation  and conduct more extensive self-monitoring.  If the  monitoring
data indicates a continued violation or if there is any other reason to suspect a violation, another
more intensive  inspection  should  then be  conducted. This shifts some of the burden of data
gathering to the source and postpones resource-intensive inspections until concerns raised in
lower-level  inspections  and  monitoring warrant  greater  expense.   Some  environmental
management programs offer  to  limit enforcement  actions,  and  subsequent penalties, in
exchange for immediate correction of violations discovered during inspections.
       Other considerations in targeting inspections include:
       •   The need to include  a random component in any inspection program.  This will help
          reveal the true scope and nature of different risks by examining problems unlikely to
          be revealed by targeted activities. Random inspection activities can include the
          location, timing, or scope of the inspection.
       •   The need to address multi-media issues.  Most inspection programs have traditionally
          addressed a single environmental medium,  such as air, land, or water.  Many
          government agencies have started stressing multi-media inspections, sometimes by
          combining inspections from different agencies.

       7.5.2  Step 2: Preparation  of an Inspection Plan
       Developing an inspection plan before going on site helps ensure the quality and value of
the inspection. An inspection plan  provides an organized step-by-step approach to conducting
the inspection. Some flexibility, however, is important to allow the inspector to adapt to
unanticipated situations at the facility. The inspection plan must clearly establish duties for each
member of the inspection team.  This promotes efficiency, as well as avoiding any confusion.
Box 7-6 lists some common elements of an inspection plan.

       7.5.3  Step 3: Collecting Evidence
       The inspector is responsible for gathering information to determine whether a facility is in
compliance and for collecting and documenting evidence of any violation. This evidence is used
to support the development of enforcement cases, as well as to  help the inspector prepare for
and give testimony when  required.  Therefore, inspectors are required to  follow appropriate
procedures for preservation of evidence. If standard procedures  are not followed, then there is

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a risk that the evidence may be rejected  in a court  of law and that the  time and expense
invested in building a case will have been wasted. Standard checklists are often developed for
different types of inspections to ensure that the inspections properly cover all of the necessary
aspects and  are fair and  objective.  Sometimes inspectors are responsible for determining
whether a  violation has occurred, while other times,  program  staff  or legal staff make this
determination. Involvement of legal staff is essential in interpreting requirements, to determine
whether there has been a  violation.  Because of the potential risk to subsequent enforcement
cases,  most inspectors in U.S. enforcement programs  do not make decisions about whether a
violation has occurred.
 BOX 7-6:  ELEMENTS OF AN INSPECTION PLAN
 Objectives
        •   What is the purpose of the inspection?
        •   What is to be accomplished?

 Tasks
        •   What information will be reviewed (e.g., permits, licenses, regulations, previous
           inspection reports, and information on the history of compliance)?
        •   What coordination with laboratories, other environmental programs, lawyers, or
           government agencies is required?

 Procedures
        •   Which specific facility processes will be inspected?
        •   Have inspectors established a right of entry to the facility?
        •   Will the inspection require special procedures?
        •   Has a quality assurance/quality control plan been developed and understood?
        •   What equipment will be required?
        •   What are the responsibilities of each member of the team?

 Resources
        •   What personnel will be required?
        •   Has a safety plan been developed and understood?

 Schedule
        •   What will be the time requirements for and order of inspection activities?
        •   What will be the priorities? What must be done, and what is optional to  complete?
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       7.5.4  Step 4: Written Inspection Report
       The inspector must record notes on every aspect of the inspection and gather additional
evidence, such as physical samples, photographs, and copies of facility documents. As soon as
possible  following  the inspection,  the inspector  must prepare  an inspection  report which
references any additional evidence collected (photographs, documents,  etc.). The final report
will serve as the basis for any testimony by the inspector and will  likely be used as evidence  if
enforcement actions are taken.
       Prior to finalizing the report, any samples collected must be sent to a laboratory for
analysis, in accordance with the protocol outlined by the agency to ensure reliable evaluation of
samples.  It is also important to establish  and preserve the chain of custody.  The  evidence
should remain under the care of an  appropriate authority in order to reduce the possibility of the
evidence being corrupted.  The subject of the inspection,  however, may be given the right to
have the samples examined by their own  experts, provided that  rules and procedures are in
place to protect the evidence from tampering.
       Analytical data  should  be  interpreted and presented  in  the final inspection  report.
Elements of an inspection report may include:
       •   The specific reason for the inspection.
       •   Participants in the inspection.
       •   Statement that all  required procedures for conducting the inspection were obeyed.
       •   A chronological  list of all  actions  taken during the inspection.
       •   An inventory of the evidence obtained during the inspection.
       •   Observations made during the inspections.
       •   The results of sample analyses related to the inspection.

7.6    Building an Effective Inspection Program

       7.6.1  Recognizing the  Important Role of Inspectors
       Inspectors have great  influence on  the  success of an  environmental  management
program.  They  are responsible for identifying facilities that are out of compliance, and for
gathering evidence for enforcement actions. They are often the only environmental officials that
a facility manager will ever meet in  person and may serve as the key witnesses in enforcement
cases.
       It  is generally desirable for environmental  management programs that the inspectors
carrying out formal inspections be different from those who perform the  compliance promotion
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and assistance programs. A program should not assign inspectors to monitor the same facilities
where they have  provided special technical assistance. This will help minimize the risk (and
appearance) of preferential treatment by agency staff members who have spent considerable
time and energy consulting with a firm.  In some instances, however, resource constraints and
the need for particular expertise make this difficult.  For example, there may be a limited number
of energy plant inspectors with the requisite technical expertise so an agency may not have
enough  manpower to change inspectors every visit. In cases  such as these, the agency should
set a goal of  changing the  inspector responsible for that facility  as  often  as  practicable -
perhaps every few years.

      7.6.2  Training
      Inspectors  require training in a broad range of skills: legal, technical, administrative, and
communication. (See Box 7-7). They need to be technically competent in the subject matter of
the inspections they perform and  skilled in obtaining crucial facts and collecting and  preserving
evidence of non-compliance.  They also need to be skilled in managing projects, working as part
of a team, and communicating effectively.  Communications range from entry conversations to
complex cross-examination in cases of serious violations.  It is useful if inspectors are trained in
negotiation techniques  and  conflict resolution,  because some  inspections may become
adversarial.   In such cases, inspectors  must be  able  to  prevent a  hostile situation from
escalating.  The  training  and  integrity of inspectors are  critical to effective enforcement
programs.

      7.6.3  Support Resources
      The kinds  of equipment required to support an inspection vary depending on the type
and purpose of inspection.  Equipment needed may include:
      •  Safety  equipment to protect the inspector from any hazards that may be
          encountered during the inspection.
      •  Documentation equipment to record information and evidence, including cameras,
          film, pocket calculators, tape measures, and logbook.
      •  Sampling equipment  to take samples of soil, water, or air.
      •  Equipment to transport samples to avoid contamination.
      •  Analytical equipment to examine the environmental samples taken at the facility.
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BOX 7-7: ELEMENTS OF INSPECTOR TRAINING
Basics of Compliance and Enforcement
      •   Introduction to Environmental Compliance
      •   Summary of Environmental Requirements
      •   Components of an Enforcement Program
      •   Organizational Structure for Compliance and Enforcement
      •   Role of the Inspector/Field Investigator

Legal Aspects of Inspections and Enforcement
      •   Enforcement Litigation
      •   Entry and Information-gathering Tools
      •   Evidence

Pre-inspection Activities
      •   Pre-inspection Planning and Preparation
      •   Administrative Considerations for Inspectors

On-site Activities
      •   Gaining Entry and Opening Conference
      •   Ensuring Inspector Health and Safety
      •   Records Review
      •   Physical Sampling
      •   Interviews
      •   Observations and Illustrations
      •   Closing Conference/Travel Security Measures

Post-inspection Activities
      •   Reports and Files
      •   Laboratory Analysis
      •   Enforcement Proceedings

Communications
      •   Serving as an Expert Witness at Enforcement Proceedings
      •   Press and Public Relations
      •   Communications Skills
      7.6.4  Program Design

      Policymakers have many issues to consider when designing an inspection program. For

example:
      •   Selecting Facilities for Inspection.  How are facilities chosen for inspection?  What
          proportion of inspections should be "routine," and what proportion should be "for

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cause"?  How can routine inspections be distributed fairly and neutrally across the
regulated community?
Announced Versus Unannounced Inspections. When should inspections be
announced versus unannounced? If inspections are announced, the facility's
managers can make sure that the information requested and any essential plant
personnel will be available when the inspector arrives.  Thus, announced inspections
can be more efficient and comprehensive.  Unannounced inspections,  however, are
more likely to discover the plant's true operating conditions. They are particularly
useful when there is reason to believe the source is in violation and is
misrepresenting its self-reported data or is likely to destroy evidence if the inspection
is announced.  On the other hand, if inspectors need to collect particularly detailed
information, it may be necessary to announce the visit so that the relevant experts
are available.
Frequency of Inspection. How often should a particular facility be inspected?
Policymakers will need to balance the cost of inspections with the expected
compliance benefit, while also considering the results of earlier inspections. Sources
that are more likely to fall out of compliance may require more frequent inspections.
Who Should Inspect? Which level of government will provide the most effective
inspection force: national, regional, provincial, or local? Would it be more effective
for the government to contract with an independent group to perform inspections?
Numerous variables need to be considered when making these determinations,
including cost, resources, experience, and political considerations.
Objectivity of the Inspector. Care is needed to ensure that inspectors do not
become so familiar with and sympathetic to certain facilities and facility managers
that their objectivity is compromised.  Some enforcement programs periodically
rotate inspectors to avoid this possibility.
Legal Authority. What legal authority do inspectors have to enter facilities? What
form of identification is used to prove the inspector's authenticity? What procedures
will be taken if the facility refuses to allow the inspection? Must the inspector have
consent before entering? Does the inspector need a warrant?
Role of the Inspector. Should the inspector determine whether a violation has
occurred or simply gather information?  Without a clear role and authority, the
inspection may fail to meet the needs of enforcement.
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Comprehensiveness of the Inspection. What data should inspectors gather?
Should inspections focus on data needed under a particular regulation, permit, or
license, or should inspectors try to gather data relevant to several environmental
regulations, permits, or licenses? The advantage of focused inspections is that it is
easier to train inspectors for these inspections.  The disadvantage is that more
focused inspections may fail to detect non-compliance in areas not specifically
covered by those inspections.
Inspection of Related Activities. To what extent should inspectors gather data on
related company activities that may have an effect on environmental quality, such as
preparedness for chemical emergencies, pollution prevention activities, and waste
minimization programs?  Which environmental media, including land, air, and water,
should inspectors examine?
Data Quality. How can the quality of data  be ensured?  Ways to help ensure data
quality include initial  reporting procedures, processes for review and confirmation of
the data, and schedules and procedures for auditing the  program's reporting and
recordkeeping system. Guidance also should be developed to ensure the quality of
the laboratory analysis supporting the inspection.
Consistency of Sampling and Analytical Procedures.  Use of consistent methods
and procedures for sampling and analysis is important to ensure data quality,
fairness of enforcement, and the value of the results for legal proceedings. Both
inspectors and analytical laboratories require guidance on appropriate procedures.
Documenting the Violation. How should the information gathered by the inspector
be documented? The information's value to the program may depend on factors
such as its clarity, completeness, and utility as evidence  in a court of law.
Closing Conference. Should the inspection include a closing conference? A
closing conference provides an opportunity for the inspector to make company
managers aware of any violations and what the consequences of continuing non-
compliance would be. In some cases, the inspector may suggest ways to correct the
violation.  A closing conference helps educate the regulated community.  However,
information conveyed by the inspector could undermine subsequent legal actions
taken against the facility. For example, facility managers could claim the information
conveyed by the inspector contributed to non-compliance if the information was in
any way misleading or not sufficiently comprehensive. Program lawyers may prefer
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          that inspectors draw no initial conclusions and convey no information about
          compliance to the facility.
       •   Inspector Training.  How can inspectors be adequately trained to gather accurate
          information and (if relevant) provide technical assistance? What training is needed
          to ensure the health and safety of inspectors? Are the inspectors  conscientious of
          ethical conduct and quality assurance?

7.7    Self-monitoring, Self-recordkeeping, and Self-reporting

       7.7.1  What are self-monitoring, self-recordkeeping, and self-reporting?
       Self-monitoring, self-recordkeeping, and self-reporting are three ways  in which sources
can be required to track their own compliance and record the results for government review.  It
differs from the auditing and environmental management systems in that the latter are broader,
often voluntary, measures that  government encourages the  regulated community to adopt in
order to  improve that  community's compliance and  environmental performance.   Self-
monitoring, self-recordkeeping, and self-reporting, in contrast, represent specific requirements
placed on the regulated community to collect and maintain identifiable information.
       In self-monitoring, sources measure an emission, discharge, or performance parameter
that provides information on the nature of the pollutant discharges or the operation of control
technologies.  For example, sources may monitor groundwater quality or  may  periodically
sample  and  analyze effluent  for the presence  and concentration  of  particular  pollutants.
Sources  may also be asked to monitor operating parameters on pollution control equipment
(such as line voltage and electrical current used) that indicate how well the equipment itself is
operating. Operating parameters are generally inexpensive to monitor and provide reliable data
that can  sometimes give a more accurate picture of emissions than occasional sampling and
analysis of the emissions themselves.  This type of monitoring has proved to be a cost-effective
way for enforcement programs  and sources  to assure themselves that controls are  operating
correctly.
       Self-recordkeeping means  that sources are  responsible for  maintaining  their own
records of certain regulated activities (e.g., shipments of hazardous waste).
       Self-reporting  requires   that  sources  provide the  enforcement program  with  self-
monitoring or self-recordkeeping data periodically or upon request.
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       7.7.2  Why choose self-monitoring, self-recordkeeping, and self-reporting?
       Self-monitoring, self-recordkeeping,  and self-reporting, when taken together,  offer a
number of  advantages  over traditional inspections.  They  provide  much more extensive
information on compliance than can be obtained with periodic inspections. They also shift some
of the economic burden of monitoring to the regulated community.  In addition, they provide a
mechanism  for educating the community about the  compliance requirements.  Finally, they
increase the  level  of management  attention  devoted  to compliance  and  may  inspire
management to improve production efficiency and prevent pollution.
       Self-monitoring  requires that reliable and affordable monitoring equipment be available
to the regulated community. Self-monitoring  relies on  the integrity and ability of the source to
provide accurate data.  Reports will be misleading if the source  either deliberately falsifies
information or lacks  the technical  capability to provide accurate data.   Therefore, programs
using these approaches will  need to establish some  way to help ensure accuracy,  e.g., by
requiring self-monitoring  only in facilities  with the  appropriate technical  capability  or by
developing quality control standards for monitoring and  recordkeeping.
       Self-monitoring,  self-recordkeeping,   and   self-reporting  are  often  required   by
environmental regulations.   Firms  have  an  incentive to  under-report, but regulators  can
counteract  this  incentive through more  stringent enforcement of the disclosure  requirement.
Enforcement officials can make these disclosure requirements facility-specific requirements via
permits.   Information  from  self-monitoring,  self-recordkeeping, and  self-reporting  is used
primarily to target inspections. It is also sometimes used as a basis for enforcement actions.
When used in enforcement actions, it is usually supplemented by inspections to corroborate the
accuracy of the  data.

       7.7.3  Designing effective self-monitoring, self-recordkeepinq, and self-reporting
       To use self-monitoring, self-recordkeeping, or self-reporting  as part of an enforcement
program, program officials need to provide guidance  to the regulated community on:  the
standard procedures, methods, and instruments that should be used to obtain the data;  how
frequently data should be collected; and  how the data should be recorded and reported.  Some
issues to consider in developing these requirements are:
       •  Cost. What will the cost and paperwork burden be to industry and government?
          What will the benefits be?  Are the benefits worth the cost?
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       •  Technology Requirements.  Is technology available for monitoring? How much
          does it cost? How accurate and reliable is it?  How easy is it to learn how to operate
          the equipment to get accurate results?
       •  Data Use.  How exactly will enforcement officials use the data?  What information
          will the data provide about violations or compliance success? What is the minimum
          amount of data that will be useful?
       •  Extent of Requirements. Should the source be required to  report all data or just
          data that indicate a potential violation? Proponents of the "all data" requirement
          argue that management pays more attention to routine reporting and that
          enforcement officials can better control the quality of data.  Proponents of
          exceptional reporting36 argue that this approach is much less expensive, and that the
          "all data" approach may discourage sources from voluntarily conducting additional
          monitoring that they feel may be valuable.
       •  Public Disclosure. Should the self-reported data be made available to the public?
          Most U.S. environmental  laws require that self-reported data  be made available to
          the public.  This publicity deters violations and  failure to report, especially when the
          law gives citizens the right to sue sources.
       •  Self-certification.  Should senior industry officials  be required to certify that the
          facility is in compliance?  Increasingly, U.S. laws are introducing this requirement
          and making senior officials personally and criminally liable for false reporting. This is
          an effective way to elicit the attention and cooperation of senior management in
          achieving compliance.  Such requirements are meaningful only if they are backed by
          clear guidance and procedures for self-certification. Self-certification may also
          include a requirement to report violations and efforts to correct them.
       Different  compliance monitoring  program objectives  require  different capabilities in a
self-monitoring system. As a  result,  the structure of a self-monitoring program is affected by the
program's objectives.   For example, a self-monitoring program that is used to  identify cases
warranting enforcement action must identify violations of applicable standards in sufficient detail
and  be based upon sufficiently  reliable data in  order to support  initiation of an enforcement
action.  In contrast, a program that uses source self-monitoring primarily to  increase awareness
in the regulated  community with regard to its environmental compliance status  (and perhaps,
secondarily to deter environmental  violations)  may be broad in scope but require  less active
data management by the regulatory agency.
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       With fixed interval reporting,37 infrequent reporting may make it difficult for the regulatory
agency to make accurate assessments of an entity's environmental performance, as the reports
will not provide  a  cohesive, continuous picture of a facility over time.  On the other  hand,
reporting too frequently may result in  unnecessary burdens on both the regulatory agency and
regulated entities and may also result in information being collected and submitted that has little
added value.  The regulatory agency must ensure that the reporting intervals are appropriate to
meet its goals.  Interval  reporting  may also be dependent on an entity's compliance history or
size.  Entities with good compliance records may not be required to report as often as those with
poor compliance records. Likewise, smaller entities (both in  size and discharge amounts) may
have less of a reporting burden.
BOX 7-8:  SELF-MONITORING IN CANADA
                                         38
        Canada requires self-monitoring  for pulp and  paper manufacturers and metal
mining operations. Frequency of monitoring can range from continuously to monthly. Pulp
and paper mills are required to monitor Biochemical Oxygen Demand three times a week,
Total Suspended Solids daily, acute lethality weekly (using Daphnia magna) and monthly
(using rainbow trout), and pH, flow, and electrical conductivity continuously.
       If a facility fails the monthly acute lethality  test using rainbow trout, the test
frequency is increased to weekly. In addition, pulp and paper facilities are required to self-
monitor the chemicals 2,3,7,8-TCDD and 2,3,7,8-TCDF during  each month in which the
chlorine bleach plant was operating.  If no measurable concentrations are detected for
three months,  the frequency is dropped to quarterly.  The regulated facility may have a
qualified laboratory  onsite to collect and analyze the  samples, or  it may hire outside
contractors to collect or analyze the samples.
7.8    Citizen Monitoring

       7.8.1  Citizen Monitoring Generally
       Citizen monitoring can help government agencies identify violations and is particularly
important when resources for government monitoring are scarce or insufficient. Citizens can
contribute to enforcement efforts by  tracking industrial  environmental performance through
independently compiled emissions data or compliance reports produced by regulated entities.
       In some countries, governmental  institutions make use of citizen monitoring  that may
already be  taking place, independent of any authorizing legal  provisions.  Formal cooperative
partnerships  are  also sometimes  established  between  citizens  and  the  government for
monitoring.  For example, in the United States, a number of citizen organizations teach citizens
to walk streams, identifying locations of pollutant emissions and observing the effects of those
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emissions on water quality or indicator species.  The Izaak Walton League of America is one
such organization that trains citizens to monitor the environment.  Their findings are reported to
federal and state agencies through a national clearinghouse. State agencies also help to fund
the League's training and reporting programs.39
       Another formal  vehicle for public  participation  in monitoring is  the establishment  of
coordination agreements between the government and citizen organizations. In the Philippines,
multi-party  monitoring has enabled local community residents, NGOs,  and industrial project
proponents to join representatives from the Department  of Environment and Natural Resources
to undertake post-environmental impact analysis compliance monitoring.   The Department
institutionalized multi-party team  monitoring by creating, in each regional  office,  a Regional
Community Advisory and  Monitoring Committee whose membership includes  NGOs and the
private sector.  The  law requires that committees be involved in all phases of the environmental
impact analysis, including compliance monitoring.40
       An  increasingly  useful monitoring  mechanism  for  citizen enforcement  of  industrial
environmental  standards is the use of pollutant release  and  transfer registers.  These registers
enable citizens to monitor industrial environmental performance  by  providing detailed facility-
specific data on types, locations,  and  amounts of hazardous substances released on-site and
transferred off-site.   In  several  countries,  including  Canada and the United  States, certain
corporations are required  by law to compile and  submit this data to the federal  government,
which then makes the information publicly accessible.  Equipped with detailed information on
facility-specific emissions, citizens can track compliance, work  directly  with corporations  to
encourage compliance, and help governments identify violations.
       The specific  type of information reported in pollutant release and  transfer registers and
the range of facilities covered vary from country to country.  Key elements that define the scope
of such registers include:  the types of facilities required to report; the thresholds for staff size
and chemical use above which a facility must report; and the types  of pollutants covered and
how their use is quantified.

       7.8.2  Citizen Involvement in Inspections
       Some countries  allow citizens to participate in  compliance inspections conducted by
government officials.  Usually, the citizen  must have been  involved in the complaint process
prior to the inspection.  For example, water quality legislation in Argentina allows private parties
who have filed a complaint about a facility to participate in any inspection of the facility during
the investigation.41   In some countries, government agencies are allowed to contract with citizen
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groups or other associations to enlist their assistance in  inspection efforts.  (See Box 7-9 for
examples).
 BOX 7-9:  EXAMPLES OF CITIZEN INVOLVEMENT IN INSPECTIONS
                                                                 42
        In some countries, government agencies are allowed to contract with citizen groups or
 other associations to enlist their assistance in inspection efforts. For example, under Estonia's
 Nature Protection Act, citizens can be deputized as "public inspectors" to monitor compliance
 with  laws, regulations, and permits  concerning  hunting,  fishing, and  forestry.43  They are
 permitted to write protocols about violations of nature protection rules, but they cannot take
 payment.
       Some countries allow citizens to demand inspections under limited circumstances.  For
 example, in the Czech Republic, under the Building Act, parties to the land planning decision
 and investment permitting process have  the right to demand the inspection of facilities before
 and after completion.44
       7.8.3  Public Complaint Processes
       Public complaint processes facilitate citizen participation in administrative enforcement
efforts  in many countries.   Typically, these processes establish a mechanism for citizens to
submit complaints to the government concerning activities that are causing environmental harm
or ecological imbalance.  The government is then required to address complaints and respond
in a timely manner.  Public complaints can be very useful in drawing government attention to
enforcement problems that may otherwise go unrecognized or escape proper response.
       Some countries have an independent complaint committee or designated staff member
(ombudsman) at the national or local  level established to handle citizen complaints.  These
institutions are  usually funded  by, but otherwise independent of, the  government and  are
competent to deal with complaints on the basis of statutory rules.  Oftentimes, the laws creating
the ombudsman position regulate what kinds of complaints may be reviewed.
       Poland,  for  example,  created  a position  called the Commissioner for Civil  Rights
Protection.  The Commissioner's role is to receive and manage complaints about infringements
of citizens' rights and freedoms determined by the Constitution and other provisions of law. The
position  is  not  specific  to environmental law,   but  environmental  issues  fall under  the
Commissioner's jurisdiction and historically have been the foci  of some  of its activities.  The
Commissioner does  not have authority to rule on administrative matters, but can recommend or
appeal  decisions,  suggest  legislative  initiatives  or  procedural  amendments,  and  pursue
solutions to specific violations to promote compliance with the law.45

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       Citizens may also be able to use informal complaint mechanisms or petitions to draw
government attention to enforcement issues.  In Mexico, for example, the Federal Ecology Law,
and parallel state laws, enables any person to file a complaint with the Federal Environmental
Protection Agency regarding acts or omissions  causing ecological imbalance or injury to the
environment.46   The Agency then  is required to investigate  the  problem and issue publicly
available, non-binding recommendations.  These recommendations may have evidentiary value
for future litigation.  If the Agency finds violations, it may take immediate administrative action.47
Throughout Mexico, this process is the principal vehicle for public participation in administrative
enforcement matters,  and it seems to be an important mechanism for focusing government
attention on enforcement problems. To receive complaints, two states have established toll-free
telephone "hotlines," and another staff has set up a green mailbox.

7.9    Area Monitoring
       Additional information on compliance  status can  be  gained by area monitoring,  i.e.,
monitoring  environmental conditions  near  a facility.   Area  monitoring includes ambient
monitoring, remote sensing, and overflights.

       7.9.1  Ambient Monitoring
       Ambient monitoring includes any monitoring to detect pollutant levels in the ambient air,
ground, or  surface waters near  a facility.  The main problem with ambient monitoring is that it
can be difficult to demonstrate that the pollutants measured came from a particular  facility.
Ambient monitoring is most useful when a source is the only significant polluter in the area or
when its emissions have a characteristic composition that serves to "fingerprint" them. In these
cases, ambient measurements clearly suggest potential violations at a facility and can be used
to target inspections.  Otherwise,  ambient data  rarely can be used alone to prove a violation
because of the difficulty of proving a connection to the source.

       7.9.2  Remote Sensing via Satellite and Aircraft
       Satellites  and aircraft  can  be used  as  remote tools to monitor compliance  with
environmental requirements and help target inspection activities.  Satellites can provide detailed
information on indicators of non-compliance, such as chemical spills, impervious surface area,
forest  cover, oil discharges,  smoke plumes,  illegal development or logging,  and  mining
operations. Commercial satellite imagery is available in sub-meter resolution.
       Similarly, aircraft over flights  can be used for compliance  monitoring  and promotion.
Over  flights can be used  to make detailed,  time-sensitive observations  of potential areas of
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illegal activity.  For example, aircraft-mounted cameras can monitor the location and condition of

dikes and fences at a regulated facility, observe loading and unloading of hazardous materials,

and even record physical evidence such as license plate numbers.  Over flights may also be

used  to detect facilities  subject to  environmental requirements,  detect facilities that may not

have registered for a program or filed required notifications, and determine  the relative locations

of wastewater  discharges, air emissions,  hazardous waste management facilities, water supply

intakes, populated areas, etc. Box 7-10 offers an example of over flights in  the Netherlands.
 BOX 7-10:OVER FLIGHTS IN THE NETHERLANDS
        Over flights have been  used very successfully in the Netherlands.   Airplanes and
 helicopters are  used  in a pollution context to detect illegal discharges and dumps and in a
 biodiversity context to detect illegal timber removal or illegal land clearing.  The responsible
 parties are notified about the detected violations and requested to act where necessary. The
 program became more successful when helicopters began to work simultaneously with ground
 vehicles.  Sighted violations were reported to ground personnel who immediately proceeded to
 the scene  and  dealt with the situation.   Periodic aerial  photographs of wreck yards and
 dumpsites provide a  good record  of these operations and chronicle the change enacted  by
 these enforcement activities.  Where appropriate, these photographs  can be used in later
 investigations.
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8.      ENFORCEMENT

8.1     Introduction
       Enforcement is the backbone to any compliance program. Strategies involving education
and assistance, monitoring  and inspections,  and incentives are only effective  if backed by a
credible threat of enforcement sanctions.
       Effective   enforcement  programs  deter  illegal  conduct   by  creating  negative
consequences for those who violate the law. A single enforcement action can have a cascading
effect on potential wrongdoers, encouraging them to change their behavior to comply with the
law. For deterrence to be effective there  must be: 1) a high likelihood  that the violation will be
detected; 2) swift and predictable responses to violations; 3) responses that include appropriate
sanctions; and 4) a perception among violators that all of these elements are present.
       This section discusses the enforcement process, designing an enforcement response
policy,  types  of  enforcement  responses,  choosing  between  enforcement  responses,
negotiations and settlements of disputes, and citizen  enforcement.

8.2     The Enforcement Process

       8.2.1  Protecting Basic Rights
       Every  nation  has its own unique legal  system,  laws, and culture.   However,  most
democratic institutions have processes to balance the rights of individuals with the government's
need  to act, often quickly,  on behalf of  the  public.  Processes that may be used to ensure
fairness of enforcement responses include:
       •  Notice.  Some enforcement programs require that a notice of violation be issued
          before any formal enforcement action is pursued.  The violator may be offered an
          opportunity to: 1) contest the finding of violation; or 2) correct the violation within a
          specified time frame to avoid further government action.
       •  Appeals. There  are often several points in the enforcement process when a violator
          can appeal the finding that there is  a violation,  the remedial action required by the
          enforcement program, or the severity of the proposed sanction.
       •  Dispute Resolution.  Most enforcement responses are bound to create disputes
          between program officials and facility representatives. In such cases,  programs
          often use special procedures designed to  resolve disputes.
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       In general, the  more an enforcement action would  restrict individual rights,  the more
protection the enforcement process provides, and the longer the process may take before final
action is initiated.

       8.2.2  Supporting the Enforcement Case
       In typical enforcement actions, targeted parties will challenge findings, and officials will
have to defend them in administrative proceedings or court.  Therefore, enforcement officials
should always be  prepared to:
       •   Prove that a violation has occurred.
       •   Establish that the  procedures and policies were fairly and equitably followed and that
          the violator is not being unduly "picked on."
       •   Demonstrate the underlying environmental or public health need for the requirement
          being violated. This need is often met when the requirement is developed. However,
          it may be necessary to reiterate the importance of compliance with the requirement
          to justify and support an enforcement case.  This is particularly true when a case is in
          a jurisdiction where the rule of law  is well developed and it is being argued in front of
          an independent decision-maker who is not familiar with the requirement or its
          environmental or public health basis.
       •   Demonstrate that  a remedy for the violation is available (e.g., pollution control
          equipment, stopping a particular activity). Even though this is not usually the
          responsibility of the government, this information can be  important to negotiations.
       •   Justify the proposed penalty.

       8.2.3  Public Comment
       In some types of  cases and countries, such as in the United States, the  public has a
right to comment on enforcement agreements, orders, and  decrees before they are final.  All
final agreements,  orders, and decrees become publicly available. Public involvement is one way
to ensure that violators are treated fairly and consistently.  Indeed,  it is the violators themselves
who are most likely  to review other  previous enforcement  actions that have been taken and
attempt to use them during negotiations as precedents if they are favorable or distinguish them
if they are not.
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 8.3    Designing an Enforcement Response Policy

        Enforcement response  policies describe  how various enforcement authorities will be
 used to respond to the many different types of violations and violation situations. Such policies
 are important to ensure fairness.  Fairness is particularly important when assessing monetary
 and criminal penalties. Fairness, and the perception of fairness, is critical to the credibility of an
 enforcement program.  Key issues to consider when drafting an enforcement response policy
 are discussed below.

        8.3.1  Criteria for Non-compliance
        Whether a facility is in compliance is not always obvious. Specific guidelines and criteria
 are needed to distinguish compliance  from non-compliance.  These standards help ensure that
 all members of the  regulated community are treated  consistently and that  enforcement  is
 perceived as fair.

        8.3.2  Authorities
        To provide  effective enforcement, the environmental management program needs the
 authority to  act.  In  most  countries,  the range and type of response mechanisms available
 ultimately depend on the number and type of authorities provided to the enforcement program
 by environmental laws and related laws defining the enforcement processes.  These authorities
 provide the  legal  basis for enforcement that is  essential to the power and credibility of an
 enforcement program.  Box 8-1 summarizes  a range of authorities that may be useful for an
 enforcement program.
 BOX 8-1: TYPES OF ENFORCEMENT AUTHORITIES
                                                   48
 Authorities Related to Remedial Actions
       •   Enter a facility.
       •   Take samples.
       •   Take documents.
       •   Question personnel.
       •   Impose a schedule for compliance.
       •   Permanently shut down certain parts of operations or practices.
       •   Temporarily shut down certain parts of operations or practices.
       •   Permanently shut down an entire facility.
       •   Temporarily shut down an entire facility.
       •   Deny a permit.
	•   Revoke a permit.	
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       •   Require a facility to clean up part of the environment.
       •   Emergency powers to enter and correct immediate dangers to the local population or
          environment.
       •   Seek compensation for damage caused by the violation.
Other Authorities
       •   Require specific testing and reporting.
       •   Impose specific labeling requirements.
       •   Require monitoring and reporting.
       •   Request information on industrial processes.
       •   Require specialized training (e.g., in emergency response to spills) for facility
          employees.
       •   Require a facility to undergo an environmental audit.

Authorities Related to Sanctions
       •   Impose a monetary penalty with specified amounts per day per violation.
       •   Seek imprisonment.
       •   Seek punitive damages or fines within specified limits.
       •   Seize property.
       •   Seek reimbursement for government clean-up expenses.
       •   Bar a facility or company from government loans, guarantees, or contracts.
       •   Require service or community work to benefit the environment.
       •   Place limitations on financial assistance.
 8.4    Types of Enforcement Responses

       Enforcement responses generally fall into the following categories (Figure 8-1):
FIGURE 8-1 : TYPES OF ENFORCEMENT RESPONSES

1





Informal or Formal

1
Civil
1

Administrative


1

1


i
Criminal

Judicial

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       8.4.1  Informal Mechanisms

       Informal responses  include phone calls, site visits,  warning letters, and  notices of

violations. (See Box 8-2).  Informal responses advise the facility manager what violation was

found, what should be done to correct it, and when. The goal of informal action is to bring the

violator into compliance.   Many  environment  ministries prefer using  informal, cooperative

methods to gain compliance.   Informal  responses themselves do not penalize and cannot be

enforced, but often lead to more severe response if they are ignored.49
BOX 8-2:  TYPES OF INFORMAL RESPONSES
Telephone Call
       This is the easiest way to notify or remind a source that a violation has occurred and
must be  corrected. The caller may also request that the violator follow up with a letter that
describes what action was taken to correct the violation.

Inspection
       An inspector can make facility managers aware of a problem and provide assistance in
correcting the problem.  At the same time, an inspector can gather data  about the problem.
This better prepares the program  for taking further action, if  necessary, and displays the
program's seriousness about following up if compliance is not achieved.

Warning Letters
       Warning letters  let facility managers know that they are violating the law and  must
correct the situation or face adverse legal action and other consequences. A warning letter may
describe  the  potential sanctions for continued non-compliance,  require a  response from the
violator detailing the corrective action taken, and suggest that the violator meet with compliance
officials to discuss a plan for compliance.  Other responses are considered if the violator fails to
take advantage of this opportunity within a reasonable time.

Notice of Violation
       Notices are more formal  than warning letters. They notify a source  that a violation has
been detected and often give a deadline for taking corrective action.  Notices of violation also
warn about legal action and consequences  that will follow if the violator does not take action by
the deadline.
       8.4.2  Formal Mechanisms

       Formal enforcement mechanisms are backed by the force of law and are accompanied

by procedural requirements to protect the rights of the individual. Formal mechanisms may be

either civil  or criminal as  described below.   Many countries have  both civil  and criminal

remedies, while some  have only criminal and administrative options. As indicated in Figure 8-1,

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civil actions may be either administrative (i.e., directly imposed by the enforcement program) or
judicial (i.e., imposed by a court or other judicial authority). Law must provide authority enabling
the enforcement program to use formal enforcement mechanisms.

       8.4.3  Civil Administrative Enforcement
       There are two major types of civil  administrative  enforcement actions:  orders  and field
citations.
       Civil administrative orders are legal, independently enforceable orders issued directly by
enforcement program  officials.   The  order  defines the violation,  provides  evidence  of  the
violation, and requires the recipient to take corrective action within a specified time period. If the
recipient violates the order,  program managers usually can take further legal action  using
additional orders (or a  court system) to force compliance  with  the  order  directly.   What
distinguishes administrative response from judicial  response,  defined below,  is that the legal
action  is handled  by  an  administrative system  within  the  organization  responsible  for
implementing the enforcement program. The administrative processes may be similar to those
provided by the court system.
       In the United States, administrative enforcement has two advantages.   First, it  does not
require coordination with a separate prosecutorial agency. The other is that the administrative
organization's own  administrative law judges are specialized and  usually more familiar with
environmental requirements  than judges  in  the general court system  may  be.   Therefore,
administrative actions usually are resolved more quickly and require less time and expense than
judicial actions.  This  benefit may not exist,  however, in countries where administrative  law
judges  preside  over cases from  various  administrative  agencies,  not just  environmental
agencies.
       In the United States, as in most countries, administrative orders are not self-enforcing. If
there is not  compliance with the order, further enforcement action must be pursued through the
judicial system.
       Field citations are administrative orders issued by inspectors on-site  in the regulated
facility  or "field."  Typically, they require the violator to correct a clear-cut violation and pay a
small monetary fine.  Field citations are much  like motor-vehicle traffic tickets.  Depending on
the procedural steps defined by  the  program, the violator can  appeal the citation, pay it, or do
nothing and risk more formal enforcement action.  Recipients of field citations are often given
opportunities to be heard and present evidence, but they usually do not have access to the full
procedural protections provided by other enforcement actions.
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       Field citations can be a relatively efficient means to address certain violations that are
clear and do not pose a major threat to the environment.  To issue field citations, inspectors
need training to identify the particular violations for which citations can be written.

       8.4.4   Civil Judicial Enforcement
       Civil judicial enforcement actions are formal  lawsuits before the courts.  Some nations
with civil environmental enforcement authority rely exclusively on civil judicial actions to enforce
environmental laws.  Other nations have adopted both  administrative and judicial mechanisms
to carry out civil enforcement actions.  Where available, administrative enforcement generally is
preferred as  a first response (with some exceptions),  because judicial lawsuits are far more
expensive, require more staff time (and often more sophistication), and may take several years
to complete.
       However, judicial enforcement  has several advantages.  It is often perceived as having
greater significance than administrative enforcement and therefore  more  power  to deter
potential violations and set legal precedents. Also, the courts are often uniquely  empowered to
require immediate action to reduce more severe threats to public health or the environment.  In
particular, courts can  usually  grant preliminary injunctions, which  order the  suspension of
activities that  could cause irreversible harm pending trial. Thus, judicial  enforcement can be
essential  in  emergency situations.   The  courts also play an important role in  enforcing
administrative orders that have been violated and in making final decisions regarding orders that
have   been   appealed.    Therefore,  when  both   administrative  and  judicial enforcement
mechanisms  are  available, civil judicial responses are  generally reserved for more serious or
recalcitrant violators, cases where precedents are needed, or situations where prompt action is
important to shut down an operation or to stop an activity.

       8.4.5   Criminal Enforcement
       Criminal judicial response is generally considered appropriate when a person or facility
has knowingly violated the law, or has otherwise committed a violation for which society has
chosen to impose the most  serious legal sanctions  available. Criminal sanctions may include
imprisonment of culpable individuals in addition to monetary penalties. Criminal  environmental
sentences  now  may  include  supplementary   requirements  such  as  community  service,
environmental audits,  restitution  or  remediation   so that  a  criminal  case  may  achieve
environmental benefits in addition to punishing the wrongdoer.
       Criminal cases require  intensive investigation and  case development.  They require
proof that a violation has occurred and may  require proof that an individual or business (through
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its  employees) was knowingly  responsible for the violation.   Compare  this to a  civil or
administrative case where a sanction can be imposed if the  government  simply proves the
existence of a violation without regard to level of care or intention of the violator.  Criminal cases
typically provide more powerful information-gathering authority  than the civil case.  Therefore,
specially trained criminal investigators may be necessary to develop criminal cases.
       While a criminal response can be the most difficult and expensive type of enforcement, it
can create the most significant deterrence and  normative impact, since it personally affects the
lives of those who are  prosecuted, and  carries with  it a significant social stigma.   Criminal
sanctions can also help educate or shape preferences of potential  violators in the regulated
community.  (See  Box 8-3).  The criminalization of environmental violations raises the norm of
environmental protection to a higher level.  When the public sees people going to jail for non-
compliance, it adds credibility to the norm and thereby promotes compliance.
       The ability to apply criminal enforcement to environmental cases depends on a country's
legal system and on whether appropriate authority is provided  in environmental or other laws.
Non-environmental laws can often support environmental compliance.  For example, in many
jurisdictions there are generic statutes that make it a crime to  report false information to the
government or to  defraud the public.  In addition, an actor may be guilty of homicide if its
environmental non-compliance caused fatalities.
       Where a corporation is guilty  of violating criminal  law,  the company can be placed on
probation or strict judicial  supervision.  The loss of corporate  autonomy serves as  a powerful
deterrent  to other  potential  violators.    Criminal  convictions  often  also carry  different
consequences from those carried by civil  judgments.  A  criminal conviction may result in the
corporation  being barred from  being awarded government contracts, grants, or loans, or open
the corporation to shareholder derivative suits or charges  of securities fraud. In some cases, a
criminal conviction may be admissible against the defendant in subsequent civil cases (whereas
admission of a civil judgment may be barred by a rule of evidence). Under tax and bankruptcy
laws, criminal fines may have treatments different from civil monetary penalties.
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BOX 8-3:  BRAZIL'S ENVIRONMENTAL CRIMES LAW50
       The  Brazilian  Environmental  Crimes  Law was  passed in March of 1998 and  is
considered to be  one  of the  most modern and comprehensive legal  texts focusing  on
environmental crime. Some of the specific articles that give this law force are highlighted and
explained below.

Broad Culpability
       Article 2 is  important because it establishes  culpability, not only for the person who
actually breaks a law, but notably also for any person  in a position of authority who knew about
the illegal activity and failed to stop it or inform the appropriate authorities.

Assignment of Penalties
       Article 6 outlines three general criteria that should be considered in the assignment of
penalties for an environmental law violation. They are:
       •  The seriousness of the act and the intent of the person who committed the act and
          additionally the seriousness of the repercussions of the act on the environment and
          human health.
       •  Whether the person who committed the act has a history of environmental law
          violations.
       •  The financial situation of the person who violated the environmental law.

Aggravating and Mitigating Circumstances
       "Aggravating circumstances" are factors that can make a penalty more severe. The law
requires that these factors be considered when assessing the seriousness of a crime:
       •  Frequency of the environmental crimes.
       •  Whether the offender was motivated by monetary gains, coercing another to commit
          the crime, or serious endangerment of public health.

"Mitigating circumstances" are factors that can make  a penalty less severe.  The law requires
that these factors be considered when assessing the seriousness of a crime:
       •  Low educational level of the offender.
       •  The offender's remorse, exhibited by spontaneous reparation of the environmental
          damage or limitation of the harm caused.

Crimes Against Fauna

       Section I of the law contains a detailed list of actions that are considered to be crimes
against fauna, or animal life. A person who commits one of these acts has automatically
violated the law and is subject to the prescribed penalty, imprisonment for six months to one
year and a fine.
       The law also includes the aggravating and mitigating circumstances that should be
considered when determining the penalties. For example, the penalty is increased by half, if the
crime is committed:
          Against rare species or species considered endangered, even if only at the site of
          violation.
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       •   In the period in which hunting is prohibited.
       •   During the night.
       •   By abusing the license.
       •   Within a protected area.
       •   Using method or instruments capable of provoking mass destruction.

Crime Against Flora
       Section II of the law contains a detailed list of actions that are considered to be crimes
against flora, or plant life.  A person who commits one of these acts has automatically violated
the law and is subject to the prescribed penalty, which varies according to the crime. The law
also includes the aggravating and mitigating circumstances that should be considered when
determining the penalties. Thus, for the examples given here, the penalty is to be increased by
one-sixth to one-third if:
       A result of the act is the decrease of natural waters, soil erosion, or modification of
climatic regime.
       The crime is committed: during the period  of seed dispersion; during the period of
vegetation formation; against rare or endangered  species, even if only endangered at the site of
the crime; during times of flooding or drought; during the night, on Sundays, or holidays.

Pollution and Other Environmental Crimes
       Section III of the law contains a detailed list of actions that are considered pollution and
other  environmental  crimes.   A person who  commits  one of these acts  has automatically
violated the law and is subject to the prescribed penalty.  The law also includes the aggravating
and mitigating circumstances that should be considered when determining the penalties.

Crimes Against Environmental Administration
       The section on crimes against environmental administration generally includes violations
committed by civil servants that harm the environment in  some way. For example, making false
statements or issuing environmental permits illegally. The penalties for each of these types of
violations are  prescribed in the law, as well as the aggravating and mitigating circumstances.
8.5    Choosing Between Enforcement Responses

       Selecting an appropriate enforcement response raises several difficult issues, discussed

below, which often need to be addressed  in an enforcement response policy.  These issues

sometimes may  be addressed in the wording of the authority provided by the environmental

laws.

       8.5.1  When Should Civil or Criminal Responses Be Used?

       In  many  jurisdictions,  administrative,  civil,  and criminal  charges  can be  brought  for

violations  of environmental laws.   Serious violations are usually met with criminal charges.

Many authorities believe that criminal charges should be imposed the second time a company is

found to be out of compliance. Administrative sanctions include  shutting down all  or part of a

company's operations and fining the  company for each  day it remains  out of compliance.

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Criminal  sanctions include prison sentences, fines, forfeiture of property,  and publicizing  the
court's verdict.
       This issue is relevant only to countries that have or are considering implementing both
civil and  criminal authorities.  In some jurisdictions, criminal enforcement actions are generally
reserved for actions that deserve punishment, rather than correction (e.g., where the violation is
intentional). Criminal actions are also used to  ensure the integrity of the  regulatory scheme,
(e.g.,  to  prevent  facilities from operating without a permit or license).   Factors that many
jurisdictions consider when deciding whether to initiate a  criminal enforcement action include
actions that involve:
       •    Falsifying documents.
       •    Operating without a permit.
       •    Tampering with monitoring or control equipment.
       •    Repeated violations.
       •    Intentional violations (e.g., decisions to violate based on greed).
       In addition to these considerations, environmental management programs must weigh
the following when choosing the type of enforcement:
       •    Cost. Civil proceedings are generally less taxing on program resources (e.g., time,
           money, and personnel).  Administrative proceedings tend to be the least costly of the
           three.
       •    Resistance. Criminal cases evoke stronger resistance from  the targeted actor than
           civil litigation, and administrative action receives  less resistance.
       •    Control. Regional program personnel typically have more control over
           administrative proceedings. Civil cases usually involve more "headquarters"
           personnel.  Criminal cases are often litigated by a separate entity (e.g., the
           Department of Justice in the United States).  Administrative actions also avoid use of
           external judges and juries.  (See Box 8-4).

       8.5.2  When Should a Sanction Be Imposed?
       For certain  types of enforcement responses, it  may be  sufficient  to  negotiate a
compliance schedule where the violator agrees to return to  compliance  and  clean up a pollution
situation  by a certain date.  But for other types  of enforcement responses, sanctions may be
needed in addition to other remedies.  When deterrence is important to  a program's compliance
strategy,  maximum impact will be achieved if each  enforcement action  is used to send a
deterrence  message  to the  regulated community.   Sanctions help  send  this  message.
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Sanctions range  from  issuance  of formal  administrative  orders,  formal  notices  of  non-
compliance, and administrative consent orders, to fines, property seizures, facility closures, and
imprisonment.   However,  sanctions may  not  be  appropriate for violations  that  are not
preventable, or that are too minor to focus government resources on imposition  of a sanction.
These considerations need to be balanced in deciding when to impose a sanction.
 BOX 8-4:  GUIDELINES FOR PROSECUTING ENVIRONMENTAL CASES IN THE UNITED
           STATES51
        In 2007, the U.S.  Environmental  Protection  Agency (EPA)  released guidance to help
 determine which criminal  enforcement actions to pursue under its  "high impact policy."  This
 policy is intended to focus EPA enforcement actions on those cases with the greatest potential
 to protect human health and the environment. The policy is a response to criticism that the EPA
 has pursued fewer case referrals for civil and criminal violations of environmental laws in recent
 years.  In selecting environmental  violations against which to bring enforcement actions, the
 guidance considers whether a violation carries significant harm or risk of harm, what cases are
 likely to promote deterrence,  and what cases would  promote  agency and national enforcement
 priorities.
       8.5.3  Should a First Enforcement Response Include a Sanction?
       There are two basic approaches to this issue. One approach does not seek a sanction
for a first violation but imposes a stiff sanction if non-compliance continues.  This approach  is
based  on  the belief that every facility should be  given at least one opportunity to correct its
problems before it receives a sanction.  This first  approach is most successful when violations
are easy  to detect, and when the enforcement program has an excellent track  record of
detecting violations,  diligently following up on violators to verify compliance, and imposing stiff
sanctions for continued non-compliance.
       The second approach is to impose sanctions for first violations. This is based on a belief
that lack of a  penalty may encourage  facilities  to  postpone compliance  activities until the
violation has been detected.  This approach  is essential for violations that are difficult to detect.
Without the threat of a sanction, a facility might be willing to play  the odds that it will not be
detected, with the thought that it will only fix the problem if detection occurs.

       8.5.4  What  Type of Sanction Should Be Used?
       Depending on the authorities provided in environmental laws  (see Box 8-1), enforcement
officials often have a choice among several types of sanctions. As mentioned above, sanctions
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range from issuance of formal  administrative orders,  formal notices of non-compliance, and
administrative  consent  orders to fines,  property seizures, facility closures,  and imprisonment.
The enforcement policy will need to provide guidance on when these various types of sanctions
are appropriate.

       8.5.4.1 Monetary Penalties
       Monetary penalties are  the most common  sanction used in  enforcement responses.
Environmental management programs may choose from numerous kinds of monetary penalties
including fines specified per day per violation; punitive damages, including  treble damages for
violation  for the failure  to comply  with  a government order;  reimbursement  for government
clean-up expenses; and even  disqualification  of the  violating  firms  from  government loans,
guarantees, contracts, or financial assistance.
       An enforcement  policy needs to  provide guidance on how to  calculate an appropriate
penalty for various types of violations. There are two significant constraints on  the amount of a
fine.  First, while theory and empirical evidence suggest that high fines are effective deterrents,
the political will to  apply them is sometimes  lacking.  Second, if the fine is too large (i.e., the
target cannot  afford  to  pay) then it will  be  perceived as  unfair and will undermine both  its
normative and deterrent effect.  Therefore, an appropriate  fine is one  that balances  the
economic factors listed in Box 8-5.

       8.5.4.2  Denial or Re vocation of Permits or Licenses
       Program officials can deny an application for a permit or license or revoke an existing
permit  or license.   This would require a facility either to cease (at least part of) its operation or
operate in clear and direct violation of the law.

       8.5.4.3  Shutdown of Operations
       Program officials may be able to shut down operations. The threat of a shutdown can be
an effective deterrent by directly and immediately affecting a company's profits.

       8.5.4.4  Forced Shifts to  New Technologies and Processes
       Firms found in violation can be forced to re-evaluate their technologies and processes.
This option has the advantage of addressing the environmental impact at issue, while improving
the firm's environmental management  to address future  impacts. Such  "innovation offsets"
cannot only improve  product quality and value  but also  may lower the total  cost by allowing
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 companies  to  use a range of inputs  more efficiently.   Ultimately, this enhanced resource

 productivity can make companies—and countries—more competitive.52

 BOX 8-5: FACTORS THAT MAY BE USED TO CALCULATE A MONETARY PENALTY

 Gravity of the Actual or Potential Harm to the Environment and Human Health.
        Gravity-based penalties are graduated to  reflect the seriousness of the violation. This
 sends a deterrence signal to the regulated community:  the more serious  the violation, the
 greater the penalty will be. Gravity may be calculated based on factors such as:
        •  Volume of release.
        •  Toxicity of release.
        •   History of non-compliance.
        •   Environmental and public health risk or impact.
        •   Importance to maintaining the integrity of the enforcement program.

 Economic Benefit
        Penalties  can remove  the economic  advantage of non-compliance by recovering the
 economic benefit a violator may have gained by not complying. This type of penalty is important
 to maintaining fairness by ensuring that compliant facilities are not economically disadvantaged
 relative to  non-compliant ones.   These  penalties remove  the  economic  benefits of non-
 compliance,  which include  both avoided costs and profits from  postponed expenditures.
 Avoided costs  include operation  and maintenance expenses  that cannot be  spent later, while
 benefits from postponed costs capture the time value of  money  or the interest earned when
 infrastructure or equipment  is not installed when required.   Penalties must be calculated to
 cancel out both benefits.

 Ability to Pay
        Enforcement officials must often consider a violator's  ability  to pay when calculating a
 monetary penalty.  Penalties that are large compared to the  facility's resources could force a
 facility to shut down, which can harm the overall community.  Facilities that are given a  severe
 monetary penalty  may also threaten to move to another area where environmental  regulation
 and enforcement are more lax. In such cases, enforcement officials may want to consider the
 deterrence  benefits of  severe penalties  against the cost  and  hardship  that the  resulting
 unemployment would cause  in the  local  community.  Public pressure  may have substantial
 impact on the monetary penalty level when jobs are threatened.  Asking for substantial penalties
 also raises a risk that violators may choose to contest the penalty  in  court rather than pay it.  A
 series of payments can be arranged in situations where a violator may have difficulty paying the
 full penalty at one time.

 Other Factors
        Other factors may include:
        •   Degree of cooperation by facility personnel with environmental officials.
        •  Whether the violation was self-reported by the facility.
        •   Degree of remorse by the responsible parties.
        •  The strength of the case—a weak case is less likely to withstand appeals on the part
          of the violator.  In such cases, enforcement officials may lower the penalty to avoid
	making it worthwhile for the violator to try to appeal  the penalty.	


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       8.5.4.5 Prison Sentences
       Criminal sanctions for managers or employees of violating facilities can be an extremely
effective deterrent.  Criminal sanctions can be imposed only where allowed by the legal system.
For example, criminal sanctions can be sought if someone knowingly violates an environmental
requirement or fraudulently reports data.   Under U.S. Sentencing Guidelines, sentences for
environmental crimes committed  by  corporations  can be  reduced  if  the corporation can
demonstrate  a comprehensive and  committed corporate compliance program.  This set  of
conditions in the United States seems to be improving corporate concern for compliance.
       Criminal sanctions may be a difficult tool to utilize due to the extreme  stigma associated
with prison and/or the amount of resources often necessary to operate environmental crimes
programs  capable  of routinely  winning  criminal convictions. In  societies  that place great
emphasis on economic development, corporate or industry management officials may command
large amounts of  esteem and  stature.    This  can  make  regulators  hesitant  to  request
enforcement  measures as harsh  as jail  terms, and  difficult  for  judges to impose  criminal
sanctions.  It  could also  pressure regulators to discriminate when  applying such measures.
Both such  results would  tend to undermine respect  for the regulation  and would therefore
impede compliance.53

       8.5.4.6  Denial of Government Funding
       When violators are denied government funding, they are placed on a list of firms from
which government agencies will not purchase goods or services and to which the government
will not provide loans or guarantees.  The lists are shared among all government agencies, and
the firm's name is not removed until the firm returns to compliance.  This is a valuable tactic
when an  industry  depends  on  government purchases,  loans, or  grants but obviously not
applicable to all firms.

       8.5.4.7  Negative  Publicity
       As part of a  sanction, violators may be required to  publicize information  about the
violation.  For example, a company may be required to pay for a full-page advertisement in local
or national  newspapers to proclaim its  guilt.  Company executives  may be ordered to speak in
public about their wrongdoing. In countries with strong public concern for environmental quality
and a free market economy, negative publicity can have substantial economic implications for a
facility.  Negative publicity can also cause a corporation to lose prestige.  Research indicates
that potential loss of prestige can be a powerful deterrent factor.

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       8.5.5  Compensation for Environmental Damages
       Environmental damage compensation can take two basic forms,  monetary payments or
restoration  actions.  Both require measurement of the environmental harm that was caused,
sometimes  a difficult task as intrinsic environmental benefits may be hard to put into economic
terms.  In addition to determining the amount of lost resources a monetary damage assessment
also requires an estimate of the cost of restoring the resource and economic estimates of the
value of the resources lost.
       Damages are not the same as penalties. Both damages and penalties  may be sought
for the same action  or event, for example, the release of a hazardous substance. Penalties are
punitive and are paid to the government for violating the law.  Damages are not punitive; they
are compensation paid, or actions taken, to restore the environment and people injured by the
event.  The government acts in the public interest in seeking restoration damages in the same
way that a company would seek damages for harm done to their property.

       8.5.6  Penalty Calculation
       Penalties must be  administered with great care and balance.  Too light a penalty will not
compel the regulated  community to comply.   If the penalty  is  too  severe, the regulated
community  will  perceive  the regulation as  unfair,  and  may expend resources fighting the
regulation rather than complying with it.
       It is important to keep in mind the difference between theoretical  legal principles and
practical application of these principles.  Generally speaking, a low level of monitoring success
(which is the result  for  monitoring systems) requires high penalties  for  deterrence.  However,
many courts will not deem high penalty levels proportionate to the offenses, and therefore it is
unlikely that high penalties will be upheld or imposed by a court.  Regardless, it is valuable for
regulators to think through the different factors for calculating an appropriate monetary penalty.
(See sample worksheet in  Box 8-6; Box 8-7 provides a case  example of a fixed monetary
penalty).

       8.5.7  Escalation of Sanctions
       When an  initial inspection  reveals  a facility  to  be in  non-compliance,  and  a later
inspection finds continuing violation, additional deterrence may be required.  For this reason, it
may be desirable to have a sliding scale of sanctions, which escalates with each new violation.
At the  top  of the scale may be criminal penalties, both for the companies and for individual
managers.
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BOX 8-6: SAMPLE WORKSHEET TO CALCULATE A MONETARY PENALTY54
Facility Name:  XYZ, Inc.
Money the Facility Saved by Not Complying with Regulations
                                                   Costs avoided    $10,000
                                                   Costs postponed   $ 5,000
                                                         Total  (a)  $15.000
Seriousness of the Violation
PAYMENT CALCULATION MATRIX
Potential for Harm (vertical)
Extent of Deviation from Requirement(s) (horizontal)

High
Medium
Low
High
$5000 to $4000
$2199 to $1600
$599 to $300
Medium
$3999 to $3000
$1599 to $1000
$299 to $100
Low
$2999 to $2200
$999 to $600
$99 to $20
Penalty required based on potential for harm and extent of
deviation from requirement (use the above matrix and personal
judgment to determine the appropriate amount):

      Adjustment for the Duration of the Violation
      Number of days of non-compliance
      Total = [(b) x (20%)] x (c)

      SUBTOTAL
      Subtotal = (a) + (d)

      Penalty Adjustment Factors55
      1. Degree of cooperation (+/-)
      2. History of compliance (+/-)
      3. Supplemental environmental projects56 (+/-)
      4. Ability to pay (-)
      Total = [(f) + (g) + (h) + (i)]x (e)
      TOTAL PENALTY
      Total penalty = (e) + (j)
  (b)
 (c)       50
 (d)  $30.000
 (e)   $45.000
 (f)
 (9)
  (h)
+5%
 -5%
  -10%
-5%
0)
 0)   -$6,750

      $38,250
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8.6    Negotiations and Settlements of Disputes

       8.6.1  The Role of Negotiation

       Enforcement actions create  a stimulus and  context for discussion  and  resolution.

Negotiation is  an integral part of enforcement.  It is often used within the context of  legal

enforcement proceedings, and it enables both the facility and the concerned party or parties to

consider the accuracy of facts, circumstances of the case, and variety of alternative responses.

Negotiation  provides  an   opportunity  to  obtain   additional   information   and   correct

misinterpretations before  pursuing legal action.  It also  provides an opportunity to reach  a

solution that satisfies all parties.  Compliance can be enhanced when a signal  is sent to the

regulated community that, while pursuing an enforcement response, the government is willing to

be responsive  to the concerns and difficulties faced by the regulated community in  achieving

compliance and to work cooperatively to develop a satisfactory solution.
 BOX 8-7:  ASSESSING AND VALUING DAMAGE UNDER THE COASTAL ZONE
           MANAGEMENT ACT OF BARBADOS57
        The Coastal Zone  Management Act,  Law No.  1998-39, stipulates that any  person
 damaging coral is guilty of an offense and is liable on summary conviction to a fine of $300.00
 BED  (approximately  $148.50  US)  for  every square meter  of  coral  reef  damaged,
 imprisonment for five years, or both. There is a standard procedure to determine the extent of
 damage to the coral reef area;  the extent  is usually spatial (length by width), but in some
 cases the depth  of damage is also considered.  This is mainly focused on anchor damage
 from dragging or chain sweeps.  Fines are set forth in the Act.  This method of valuing coral
 reef damage  informs  all  processes  of  assessing compensation  (including out-of-court
 settlements).
        The Act also provides that any person who breaks off a piece of coral  from a reef is
 guilty of  an  offense and  is  liable on summary conviction  to a fine of  $5,000.00 BED
 (approximately $2,475  US), imprisonment  for two years,  or  both.  This  fine is  applied to
 persons caught "picking" corals for sale. As a practical matter, these cases can  be difficult, as
 it is necessary to capture the individual with the corals in their boat while in the process of
 harvesting.
       Negotiation is generally most effective when supported  by a continuing threat of civil

enforcement.  If the threat abates, some facilities might attempt to use negotiation as a means

of delaying compliance.  Program officials  can keep the threat  real by maintaining a strict

schedule for negotiation and a parallel preparation for legal action.
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       The negotiation process will vary from one  culture and program to  another.  Some
negotiations may be face-to-face between enforcement officials and the violator.  Others may
involve a variety of concerned parties (e.g., representatives of the local  community, workers,
and non-governmental organizations).  In some negotiations, particularly where an impasse is
reached, an  experienced  third party  may  be used to  change the dynamics, provide  new
perspectives, and propose possible solutions that had not previously been considered. Box 8-8
describes some typical dispute resolution procedures.
       The result  of negotiations  is a  settlement—a documented  official  resolution  to the
situation, referred to as an "administrative consent order" or a "judicial  consent decree" in the
United States.  The settlement is a legally binding  agreement between the violator and the
enforcement program (administrative) or a  negotiated agreement that must be submitted to a
court for consideration and final approval (judicial).
       Two types of enforcement response usually  are not negotiated.  One is a request by
enforcement officials for information from the violator.  This usually is not  controversial and
therefore does not require negotiation.  The other is the exercise by the enforcement program of
emergency powers to protect public health and the environment. In an  emergency, there is no
time to negotiate.
 BOX 8-8:  TYPICAL DISPUTE RESOLUTION PROCEDURES
 Face-to-face negotiations between program officials and the violator
        These occur either:
        •   Before formal enforcement response is pursued. At this point in the process, the
           negotiation usually focuses on whether there has been a violation.  If agreement is
           reached, there also may be a discussion of the required response and schedule
           for response.
        •   After formal administrative or civil judicial enforcement action is initiated but before
           it is final. These negotiations are carried out during settlement negotiations.  The
           resulting agreement, or an administrative order, is placed before a final decision-
           maker, such as a judge, for approval.

 Presentations before a decision-maker
        In dispute resolution, often a judge or hearing  examiner makes a decision about a fact
 or legal point after hearing both sides of the issue.

 Use of third parties
        Third  parties  (e.g.,  mediators,  arbitrators, and  facilitators) may  be called  for by
 program officials or by agreement of the parties  to break an impasse.  An  experienced third
 party can change the dynamics,  provide new perspectives, and propose possible solutions.
 Specialized third parties are  particularly useful for  resolving highly complex technical  issues
 that a lawyer or judge may be unlikely to understand fully.
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       8.6.2  Creative Settlements: Leveraging Enforcement for Broader Results
       Settlements can include any provisions that the enforcement program is authorized to
impose on a violator.  Depending on their legal authority, environmental officials may have some
latitude to develop creative approaches for solving environmental problems through settlements.
Creative  settlements  can also be used to  leverage  a  single  case  to gain either  greater
environmental benefit  or greater deterrence  than would  have occurred with a conventional
settlement. Examples of creative settlements are described below.
       Creative settlements often are linked to some limited reduction in monetary penalty or to
an agreement to extend compliance schedules.  Creative settlements also may be sought for
violators  with limited  ability to  pay or who demonstrate a strong  level  of cooperation with the
government/enforcement program. In order to be effective, creative settlements should at the
very least seek to capture the economic benefits of non-compliance.

    8.6.2.1   Pollution Prevention
       Pollution  prevention  settlements involve  an agreement  by the  facility to  convert to
practices or processes that reduce or eliminate the generation of pollutants and wastes at the
source.  Pollution is  abated when the volume  or the toxicity of  pollutants  is reduced.  In
manufacturing,  for  example,  pollution  prevention  includes  activities such  as  substituting
chemicals,  reformulating  products,  modifying  processes,  improving  house-keeping,  and
recycling on site.
       Pollution prevention projects may correct  the violation directly or may  reduce pollution
unrelated to the original violation.  Pollution prevention settlements help to ensure that violations
will not recur, and they reduce  the total  risk that a facility's operation poses to  public health and
the environment.

    8.6.2.2   Pollution Reductions Beyond the Level Required for Compliance
       Settlements can be negotiated in which the violator agrees to reduce pollution  beyond
the level  required for  compliance with the requirements.58 For example, a violator may agree to
install more effective control technologies that reduce the overall discharge of pollutants.

    8.6.2.3   Environmental A uditing
       Environmental auditing  is a periodic, systematic, documented, and objective review of a
regulated facility's compliance status, management systems,  and overall environmental risk.
Many nations, as well as the International Chamber of Commerce, have encouraged the use of

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auditing as an essential tool for regulated facilities to ensure compliance and effectively manage
their environmental risks.
       Environmental audits are sometimes required as part of settlements in two situations.
First, they have been used where a source shows  a clear  pattern of violations that suggests a
management problem.  In such cases, a settlement may include an agreement that the source
pays for an environmental audit to identify and correct the  internal management problems that
led to the repeated violations.  Second, if a violation is likely to be repeated at  other facilities
owned by the same company, a settlement may include an agreement that: 1) the company or a
third-party auditor will audit for that violation at the other facilities owned by the company; and 2)
any violation will be reported and corrected.

    8.6.2.4   Environmental Restoration
       As a result of an environmental restoration settlement,  a facility not  only repairs the
damage done to the environment because of the violation, but  also agrees to provide further
enhancement of the local  environment.   If the environmental damage  caused cannot  be
restored, the settlement may require the facility to restore a comparable environment in another
location.

    8.6.2.5   Publicity
       In public  awareness settlements,  the violator agrees to  undertake  some activity to
increase  the awareness in the regulated community of the need for compliance and ways to
achieve it.  For example, the violator could sponsor a series of seminars to  provide information
to a specific industry group on how to correct violations common to that industry. The violator
could also sponsor public announcements on television and  radio to discourage violations or
describe  how new technologies can be used to correct violations.  Violators who sponsor public
awareness projects  must also agree  to  clearly  state to the public that  the project was
undertaken as part of the settlement of an enforcement action brought by the government.

    8.6.2.6   Training
       Training  settlements  can  be used  to  correct internal compliance  problems within  a
company or organization.  Violators  that are industry leaders may be required to design and
conduct compliance training for others within the same industry group.
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   8.6.2.7  Alternatives for Sources Unable to Pay Penalties

       Some violators cannot afford to pay  the monetary penalty normally imposed for the

particular type of violation.   If the authorities decide they should continue to operate, they may

agree to alternatives that do not  present an  undue financial burden that would force the

company to close.  In such cases, they may reduce the penalty, allow for payment over time, or

look for alternatives to monetary payment such as donation of their time and effort for voluntary

improvements to environmental quality.

8.7    Citizen Enforcement

       8.7.1  Citizen Suits

       Some jurisdictions give private parties the right to bring enforcement  actions before

agencies or the courts.   There are numerous benefits to providing opportunities for citizen

enforcement. First, local citizens, directly affected  by the behavior in question,  are oftentimes

better situated to detect and evaluate the impact of that behavior on the environment and their

community. (See Box 8-9). Second, citizen enforcement saves the environmental management

program  money.   Finally,  private  enforcement offers  political  cover to the  environmental

management program when the violator is a wealthy and powerful influence in the jurisdiction.



BOX 8-9:  COMMUNITY ENFORCEMENT ALONG  THE PHILIPPINE COAST59

       The Philippines, which consists of more than 7,000 islands,  is characterized by great
marine biodiversity. However, coastal resources are being severely degraded, in large part due
to over-fishing and destructive fishing practices.   One important  aspect  of efficient fisheries
management is the enforcement of fishery regulations.  Against this background, the  "Bantay
Dagat" is one strategy for protecting marine resources and environments. The Bantay Dagat is
a unique participatory approach designed for coastal law enforcement, which has existed in the
Philippines since the  1970s.  "Bantay Dagat"  literally means "safeguarding the sea." A Bantay
Dagat consists of a group of fishing community members who are usually trained and deputized
as fish wardens and  who cooperate with government law enforcement agencies in the local
enforcement of fishery laws. It is a well-recognized  participatory approach at local levels, and is
generally comprised of volunteers.   Successful Bantay Dagat groups  contribute  to a decreased
use of illegal fishing methods, such  as the use of dynamite or poisonous substances in fishing,
and aim at raising  the level of community awareness with regard to environmental protection
and fisheries management. This, in turn, contributes to increased daily fish catches and greater
municipal revenues from  fisheries.
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       Typically, it is the government's role to enforce environmental laws in court.  However, in
many countries, citizens are given the right to assume or share this function through citizen suit
provisions in the law.  Citizen enforcement suits generally take one of two forms.  Members of
the public or environmental associations can bring an action against  industrial facilities directly
for violating applicable laws or rights.

       Alternatively,  members of the public can bring  an action against the government for
failure to perform nondiscretionary enforcement duties, with the aim  of obtaining a court order
requiring the appropriate  agency to enforce the law.  In either case,  citizen enforcement suits
are designed to protect the public interest by allowing citizens to help ensure that environmental
laws  and rights  are  properly upheld.   To achieve this purpose,  different countries  have
established mechanisms for authorizing  citizen enforcement suits. (See Box 8-10).
BOX 8-10: CITIZEN ENFORCEMENT LAWSUITS IN EASTERN EUROPE60

       Citizen groups have successfully brought lawsuits to promote environmental
enforcement in several Eastern European countries. In Ukraine, the citizen group Environment
People Law filed a lawsuit to stop the construction of a chemical fertilizer terminal.  Construction
had already begun, with local government permission,  before the environmental impact
assessment had been reviewed by national government authorities, as required under Ukrainian
law.  The local branch of the Ministry of Environmental Protection and  Nuclear Safety ordered
an expert examination, or expertiza, of the proponents' environmental  impact assessment,
based on which it rejected the project. More than 10,000 local citizens had also signed a
petition opposing the project.  The proponents appealed to the national-level Ministry office in
Kyiv, which conducted its own expertiza and approved the project.
       Environment People Law then  brought a lawsuit against the national office in the High
Arbitration Court. After initial  procedural difficulties were overcome, the Court found that the
proponents' environmental impact assessment was published two months after the expertiza, in
violation of the public's rights  to be informed and to participate in the expertiza process.
       The Court ordered the Ministry to require the project proponents to cease work on the
project.  This was a landmark victory because it was the first time that  the Court had stopped a
project for failure to comply with an environmental impact assessment requirement.
       For instance, some countries grant citizens access to courts for the express purpose of
environmental enforcement  and institute specific provisions  in their  environmental  statutes
authorizing citizen suits for violations of those laws.  In  the United States, all major federal
environmental statutes grant citizens  the right to bring suit against  "any person" for violation of
that statute, with "person" defined broadly to include individuals, corporations, associations, and
governments.

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       In  some countries, the right to enforce environmental laws  in court is  derived from
general provisions of the civil code.  In Hungary, the civil code allows individuals to sue others
for interfering with or endangering the use of land or property by others. While this provision is
not specific to environmental law, citizens can use it to address environmental violations.61
       Some countries allow citizens to go to court to enforce environmental laws in the public
interest.62 For example, in India, citizens are granted broad access to bring public interest law
suits to defend  their human and social rights.  Litigants need not prove a violation of law, as in
countries  where  access to courts  is established  in environmental  statutes,  but they must
demonstrate a  violation of natural  rights.  Because these suits are filed in the public interest,
citizens must  base their  claims on damages to society—not solely to themselves.  Many
countries, particularly those in Latin America, authorize citizens or citizen organizations to bring
popular actions to enforce environmental  laws.   In  Colombia,  citizen groups can  bring  suit
against any public or private entity causing threat of harm.
       Similarly, the Brazil constitution allows any citizen to file a popular action (acao populare)
to nullify a public administrative act that is injurious to the public property or to state property of
environmental,  cultural, or historical heritage.   Except in  cases of  proven  bad  faith,  the
complainant is  exempt from judicial  costs.63  To  undertake  this litigation, the constitution  also
provides for public prosecutors (the Ministerio Publico), who are charged with undertaking public
civil actions required to protect the environment and social heritage.64
       If the law does allow citizen enforcement, it needs to take precautions to minimize the
overlap with official enforcement actions. It is advisable to require citizen groups to file a notice
of intent to sue,  giving the environmental management program the opportunity to bring an
action first superseding the citizen  complaint. This is to avoid a situation where the same actor
risks having an enforcement action brought against them by both the government and a private
party, which would be perceived as unfair and thereby undermine the legitimacy of the entire
environmental management program.

       8.7.2  Negotiations and Settlement of Citizen Suits
       It is common in the United States for environmental cases,  including citizen enforcement
suits, to be settled outside  the courtroom through  negotiations.   To ensure enforceability,
settlements are often crafted as court-negotiated  consent  decrees, with interim deadlines for
specific actions and penalties for failure to comply. In many cases, there is a role for citizens in
this process.  In addition to  citizen  suit settlements, citizens who  are parties  to, or have an
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interest in, a government enforcement suit often may participate in negotiating the terms of the
consent decrees.
       In several citizen suit agreements under the U.S. Clean Water Act, the alleged violators
have avoided civil penalties by instead paying a sum of money to an environmentally beneficial
project. The U.S. government looks upon settlements involving third-party payments with some
suspicion  and carefully  examines  consent  decrees  containing payments  to environmental
organizations.  However, courts have upheld consent decrees containing such payments.  For
example,  in 1995, the National Environmental Law Center negotiated a consent decree in the
course of a citizen enforcement suit involving the discharge of pollutants by an oil company into
the San Francisco Bay. In addition  to obtaining the rights to future monitoring data, the Center
negotiated for the oil company's $2.2 million (US) in punitive damages to be distributed among
more than twenty local education, restoration, and research projects in the Bay's watershed.65
       Another  mechanism  in the  United States for  achieving citizen-industry  partnerships
during  the settlement of an enforcement case is the use of Good Neighbor Agreements.  Under
Good Neighbor Agreements, companies enter into negotiated contracts with workers, local
community members and associations  to establish a framework  for public assessment of
industrial  environmental conditions.  Common elements of these agreements include provisions
for public disclosure of relevant company information and stakeholder audits, wherein citizens
engage in direct, on-site  evaluations of facilities to identify changes that may be  needed to
ensure environmental compliance,  safety,  and  sustainability.  Good Neighbor Agreements can
also  provide  a  forum for  addressing  community  recommendations for   improvements  in
environmental protocol.
       Each Good Neighbor Agreement  is unique, because the parties, conditions, and issues
vary significantly among cases. However, the Rhone-Poulenc Community Audit Agreement in
Texas  serves  as a  good example for  illustrating  the fundamental elements  of a typical
agreement.66  The agreement arose in the 1990s after an accident at the Rhone-Poulenc plant
released poisonous sulfur dioxide gas into the community. The agreement provided for a safety
and environmental audit to be financed by Rhone-Poulenc and integrated into the company's
hazardous waste facility  permit.  Under the  agreement, the  auditor was  to be approved and
accompanied by a committee comprised of community group members  and facility workers.
Citizens were also given  permission to  conduct additional inspections by appointment.  The
scope  of  the  audit  included regulatory  compliance,  safety  training,  accident  prevention,
emergency response, waste analysis and information systems, monitoring programs, and waste
minimization  practices. The agreement  also  provided for  public disclosure of company
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documents including: a hazard assessment and  risk analysis; lists of accidents, upsets, and
corrective actions;  and waste minimization and reduction plans.  In the agreement,  Rhone-
Poulenc consented to "negotiate in good faith" any recommendations resulting from the audit.67
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9.      BUILDING EFFECTIVE PROGRAM INFRASTRUCTURE

9.1     Introduction
       The  previous  chapters  introduced  the  basics of compliance  assurance, including
planning,  developing  environmental  requirements,  promoting compliance,  monitoring,  and
enforcing requirements.  As with any other organization or program, the effectiveness of the
environmental management program will also depend on its managers, employees, institutional
design,  and  ability to communicate with  other institutions.   This chapter discusses  how
organizations generally build effective infrastructure and inter-organizational communication and
how they do so in the context of an environmental management program.  A well-designed
program  infrastructure will  allow regulators to use their limited  resources  in a way  that
maximizes compliance. In  particular, this chapter will address:
       •   Designing compliance assurance institutions.
       •   Dividing responsibilities among levels of government.
       •   The role of civil society in compliance assurance.
       •   Facilitating national and international networking.

9.2     Designing Compliance Assurance Institutions

       9.2.1  How to Define an Institution: Structure versus Working Methods
       An effective  environmental management program  must have an institutional structure
that furthers the compliance goals of the program.  A strong institution uses limited resources
more efficiently,  and also instills greater public confidence in the integrity of the program.  In
order to do this, the basic functional structures of the program and its working methods must be
clearly defined and incorporated into the strategic plan.

    9.2.1.1   Functional Structures
       This very popular organizational structure is constructed based on the division of labor
according to several criteria, with the idea that specialization brings greater efficiency and higher
output  per person.  This  may produce a  more focused  approach, and improvements  and
innovation within a program may occur because  members with similar interests are  interacting.
Lower turnover  of personnel is a common  characteristic of this structure, where management
and staff development can  be centered around standard types  of functional skills.   Since
communication  across department  lines  can   be  distorted   by  lack  of expertise in other
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departments' fields,  and  even  by territoriality,  managers need to coordinate department
activities carefully to reach the common goals.

   9.2.1.2  Product Divisional Structures
       In industry, this structure  means that each department is in charge of certain products.
In environmental agencies, "products" could be characterized in terms of the issues treated, the
industry sector policed, or the media, such as air or water, controlled.
       This type of structure has the advantage of focusing on results, with greater orientation
towards  public service and satisfaction, easily identifiable accountability  for results achieved,
and more personnel in a position to develop management skills. But product structures can be
more expensive than functional structures, because at the lowest level there can be substantial
redundancy of skills  among personnel.   Conversion  from  product divisional  to  functional
structure can bring impressive savings in administrative costs.

   9.2.1.3  Geographical Divisional Structures
       Regional  or local  offices are  the  basic  units  of geographical  divisional  structures.
Environmental management  programs may wish to  allow their  regional offices to work as
autonomous units, with independent  decision-making guided by  policy  formed at the head
office.  The head office provides services and support, but has little involvement in the daily
management of  the  regional offices.   This structure brings  the benefit of proximity to
environmental problems, their causes, and the  segment  of the  general public  most directly
benefiting  from  agency  work.    But  like  a  product divisional  structure,  it entails higher
administrative costs.  Also, a narrower geographic perspective can foster distortion of the larger
picture, encouraging focus on local problems at the expense of global policy.

   9.2.1.4  Matrix Structures
       Matrix structures are based on projects, with teams working to achieve project goals.
Often a worker has dual subordination to the department manager and  the project manager.
The matrix  structure promotes sharing of  information and coordination  of efforts, increasing
cost-efficiency and flexibility of the organization.  However, the dual subordination can cause
conflicts  over personnel  and budgets, and the  team orientation means  time devoted to
meetings. Both of these features can lead to employee stress, especially at the lower levels.
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   9.2.1.5  Horizontal Structures and Downsizing
       This type of structure arose from dissatisfaction with the layers of middle management
resulting from organizational growth. Called "downsizing" because of the reduction in number of
employees, it is accompanied by two major interrelated changes:
       •  Elimination of one or more hierarchies, usually at the level of middle management.
       •  Delegation of decision-making to a lower level.
       The goal of this structure is to reduce costs by cutting bureaucracy; however,  if decisions
are shifted to a higher level rather  than a  lower level, the top-level  management will  probably
become overloaded.
       Among  different programs  and organizations,  even those serving similar mandates,
there are many different variations  on the  above listed structures.  Factors that may influence
the choice of a given structure include:
       •  Scope of activity.
       •  Complexity of the regulatory framework.
       •  Size of the organization and increasing specialization.
       •  External political, economic, and social factors.
       •  Whether the strategy is preventative, curative, or both.

       Questions to be answered when determining if a given structure is appropriate include:
       •  Which structure will lead to the greatest compliance and the most effective
          enforcement?
       •  Is the structure compatible with policy objectives, legal mandates, and the strategy of
          the environmental management program?
       •  Are there too few or too many hierarchical  levels?
       •  Does the structure promote coordination among its parts?
       •  Does the structure allow for appropriate centralization or decentralization of
          authority?
       •  Does the structure permit the appropriate grouping of activities?

       9.2.2  Mission Statement and Scope of Enforcement
       A mission statement needs to  communicate to the stakeholders and the public the
essence of the organization or environmental management program.  It should be no more than
a few sentences.   It should include a "purpose statement" of the program's goals, a "business

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statement" outlining a plan to reach those goals, and a "values statement" of the basic beliefs
underlying the program.
       A vision statement also helps to define the scope of the program's mandate.  It provides
an image of success, describing the purpose of the group's work, in terms of the expected
contribution to society.
       If the mandate of the program is general, e.g., "Improve environmental conditions," the
institution needs to articulate more specific goals in the strategic plan that will help  it fulfill this
overall mandate.  With such a mandate, there are  innumerable ways to define success.   If the
mandate is more specific, e.g., "Reduce water pollution by reducing tons of pollutants  released
into the ecosystem," there are fewer ways to define success, and the strategic plan will be more
easily focused.

       9.2.3  Institutional Identity and Degree of Independence
       At the institutional level, some agencies have more independence from the legislative or
executive bodies than do others. The environmental management program's mission may be
clearly and narrowly defined by statute, in which case the institution will have little  autonomy.
But in other cases, the program may be free to produce its own regulations within very general
statutory bounds, or the head of the program might be appointed by the executive, but might not
be removable by  the executive.  Then the degree of autonomy of the program will be much
greater.  When designing the  program's infrastructure, it is important to consider the degree of
autonomy that the program is expected to have.

       9.2.4  Internal Communication and Decision-Making Policies
       Well-designed  internal communication can  help employees to understand organization
objectives and  adapt behavior and workplace  processes  to achieve  these  objectives.
Employees want to understand why and how decisions are made, and they learn management
strategies by observing  their immediate  superiors.    Information  should be  presented to
employees in such a way that it is easily absorbed.  The employees should be told why the
information is important and how to use it.
       Often there are barriers to internal communication, stemming from managerial  behavior
or from the organization's  culture or structure.  These barriers cause losses of efficiency and
effectiveness, increased costs, and decreased morale.  Barriers include:
       •   Job insecurity.
       •   Poor communication between management and staff.
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       •   Isolation of employees from one another.
       •   Lack of cooperation or Team Spirit.
       •   Slow or cumbersome processes.
       •   Lengthy and unnecessary meetings.
       •   Transparency.
       Transparency is  important  to  maintaining  public confidence  in  an environmental
management program's  activities.  Increasing  transparency  entails helping the  regulated
community and others to understand what is expected of them and  what they should expect
from the program. It also means making clear why an inspector intends to, or already has, taken
enforcement action.
       Transparency on  the part of inspectors is  particularly  important during  enforcement
actions in the following situations:
       •   Where remedial action is required. Not only must the action be clearly explained in
          writing, but also, if requested, a written explanation of why the action is necessary
          and when it must be carried out should be provided. A distinction should be made
          between best practice advice and legal requirements.
       •   Where opportunity is provided to discuss what is required to comply with the law
          before formal enforcement action is taken (unless urgent action is required, for
          example, to protect the environment or prevent evidence being destroyed).
       •   Where urgent action is required. A written explanation of the reasons should be
          provided as soon as practicable after the event.
       •   Where rights of appeal apply. A written explanation of any rights of appeal against
          formal enforcement action must be given at the time the action is taken.

       9.2.5  Institutional Stability and Continuity
       The development of multi-year and annual strategic plans serves to promote institutional
stability and continuity.   In some countries,  an  environmental management program's policies
may be closely tied to the philosophy of the current government.   If  the government changes
frequently,  it is wise  to  have a safeguard against a rapid reversal of  regulatory policy.  For
example, a notice and comment period might be required before the program or agency can
change rules.  In this way, the  regulated community is informed  and may participate in rule-
changing.   This is important because  regulations  that change too  quickly may fail to elicit
compliance, and that failure in  turn promotes a loss of confidence  in  the regulations,  which
causes another decrease in compliance, and so on.  The resulting cycle leads to a devaluation
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of regulatory instruments, government, and the rule of law.  Regulations certainly can change
without creating such a vicious circle, but it is important to ensure that the regulated community
can keep pace with the changes.

9.3    Dividing Responsibilities Among Levels of Government

       9.3.1  Clarifying Levels of Sub-national Authority
       A basic issue in  developing environmental  management  programs is the extent  of
centralization of responsibility for compliance assurance at the national level.  Decentralization
is  the  process of placing  more enforcement responsibility at the local  level.   There are
advantages and disadvantages to both centralization and decentralization.  A national presence
in  enforcement helps ensure that minimum standards are met, that the program is consistent
and fair, and that national resources are available when necessary.  Involvement of provincial
and local governments in enforcement is useful because these levels are closest to the actual
environmental  problems and are  sometimes better able to efficiently identify and  correct them.
This is particularly true where the  local  problems are minor  compared to problems at the
national level.
       Most environmental  enforcement programs around the world are decentralized to take
advantage of local knowledge of facilities  and the more specialized resources available at the
local level.  Despite this bias towards decentralization,  some programs are centralized where
there is a clear need for  national involvement, e.g., to  handle transboundary pollution; where
local desire to create favorable conditions for industry  may lead to lax enforcement; or where
unique or very specialized  expertise is  concentrated  at the  national level.   For example,
enforcement of U.S. regulations pertaining  to the  manufacture of cars and fuel additives  is
centralized, as are enforcement  programs concerning the  production  of  toxic chemicals and
pesticides.
       Sometimes the national program and provincial, or local,  programs have concurrent
roles.   Sub-national programs may  have the primary  role for  implementing the enforcement
program, but the national government retains authority to intervene if certain criteria are not met.
In  other cases, the national  government may not delegate any responsibility  to the sub-national
level.
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BOX 9-1:  CAPACITY BUILDING FOR DISTRICT BY-LAW FORMULATION AND
          ENFORCEMENT IN UGANDA68
       Uganda  implements a  policy of decentralization  that entails a  transfer  of  rights,
responsibilities,  and authorities  to local governments. Under the National Environmental Act,
the National Environmental Management Authority assists  District Councils and lower local
councils to formulate and enforce environmental by-laws as part of the Environmental  Action
Planning Process. This process seeks to identify environmental issues in need of regulation or
existing  environmental  by-laws  that need  reinforcement.  The  by-law formulation  and
enforcement process incorporates a significant element of public participation, based  on  the
premise that public awareness and endorsement is the key to successful implementation.
       The National Environmental Management Authority has been building the capacity of
district and community leaders  to formulate and enforce environmental by-laws. This training
seeks to:
   •   Introduce environmental  regulation as a tool for environmental management at the
       community level.
   •   Enhance the capacity of  the local leaders to formulate environmental by-laws especially
       regarding decentralized environmental functions and services.
   •   Raise awareness of the local leaders and communities and generate a common
       understanding of the procedures to be followed in environmental by-law formulation
       and enforcement.

       The targeted audience includes local leaders, district and sub-county councilors,  district
technical staff,  sub-county chiefs, resident state attorneys, and local police. These various
officials and staff play distinct,  key roles in formulating and enforcing environmental by-laws,
including:
   •   Identifying environmental problems that need regulation.
   •   Drafting  by-laws.
   •   Passing  and enacting by-laws.
   •   Monitoring compliance with by-laws and enforcing them as necessary.
       9.3.2  Qualification Procedures

       Where authorized by environmental law to do so, the national agency  may establish

criteria for an acceptable sub-national environmental program.  These criteria generally cover

three  areas: legal authority, resources, and personnel.  A sub-national program meets these

criteria for its program to be approved and start running. If an appropriate sub-national program

has not been approved by the  time enforcement is slated to begin,  then the national level

agency can administer its own program.

       9.3.3  National Support to Sub-national Units

       The national agency may provide provincial and local governments with funding for staff

and equipment  through  an annual  grant process.  When the  national agency sets program


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priorities annually in consultation with the sub-national units, agreements reached can specify
national, regional, and local priorities.

       9.3.4  National Oversight of Sub-national Programs
       It is challenging to implement this  type of partnership between different levels of the
government and to use resources most effectively.  Duplication of efforts is a particular hazard.
The national government may interpret its role differently from year to year.  The United States
addressed  these challenges in 1995, when the  Environmental Protection Agency and state
leaders created a National Environmental Performance Partnership System. State participation
in this system, which is voluntary, allows for the implementation of joint  state-national programs
by means of annual agreements.69
       To ensure the effectiveness  of  such programs,  the national  agency  might  conduct
oversight of  sub-national  programs.   To pass oversight inspection,  most  sub-national
environmental programs must:
       •  Clearly identify the regulated community and establish priorities for enforcement.
       •  Have clear, enforceable requirements.
       •  Monitor compliance accurately and reliably.
       •  Maintain high or graduated rates of compliance.
       •  Respond to violations in a timely and appropriate way.
       •  Use penalties and other sanctions appropriately to create deterrence.
       •  Maintain accurate records and provide accurate reports.
       •  Have sound overall program management.

       Direct national level enforcement may become necessary when at least one of these
conditions apply:
       •  The sub-national level requests national involvement.
       •  The sub-national level action is not timely or appropriate.
       •  A case at the sub-national level would set a national legal or program precedent.
       •  A national agency or court order has been violated.

       The national agency may also consider additional factors, such as whether:
       •  The case is nationally significant.
       •  The violation significantly threatens public health or environmental quality.
       •  The violator is gaining significant economic benefit.
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       •   The case involves more than one sub-national entity.
       •   The case involves a repeat violator.
       If the national agency does become involved, it should do so with maximum respect for
the efforts at the sub-national level.  Adequate notice and consultation should occur before
national action.  In some cases, the  national and sub-national level agencies may  take joint
action.

       9.3.5   Dispute Resolution
       When national and sub-national jurisdictions overlap, it is necessary to set up a dispute
resolution  method to settle conflicting views on how a situation should be handled.   In some
cases, there may simply be deference to the national agency.  But in other instances, this may
not make the most sense. There should be a clear procedure for examining the various aspects
of the dispute and making a decision within the terms of the law. The procedure may be internal
agency review, or review by an external  body, such as a special tribunal, mediator, arbitrator, or
court.

9.4    Role of Civil Society in Compliance Assurance

       9.4.1   Non-governmental Organizations and Public Interest Groups
       Citizens can help to shape and implement environmental compliance and enforcement.
They  may  influence  environmental legislation and  enforcement programs  through  lobbying
efforts.  Usually such efforts are coordinated by public interest groups, which may collect and
publicize data on environmental quality and  compliance levels.
       These groups many also track monitoring data collected by  the enforcement agencies
that is made publicly available. They can  serve as environmental  watchdogs,  spotting local
violations that might otherwise escape notice.  In some situations, these groups may file citizen
suits against the environmental agency  (if it failed to do its job), or against individual violators.
Box 9-2 provides an example of participatory management in the Philippines.

       9.4.2    Industry Associations
       Industry or trade associations track and  publicize  developments that may affect their
members.    Therefore, they  can  be  important  dissemination channels  for communicating
requirements,  methods of compliance,  and  compliance  activities.  These associations also
usually try to influence environmental legislation and programs.
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      9.4.3   Trade Unions and Workers' Councils in the Regulated Community

      Workers are generally members of the local community and would therefore benefit from

localized improved environmental quality.  But enforcement actions that result in substantial

process changes  or  shutdown of an operation may cause unemployment.   Consequently,

workers often have strong opinions about some types of enforcement actions. The participation

of workers' councils is important to the success of local compliance and enforcement actions.

These organizations may become involved in the development of requirements and policies for

compliance assurance.  When worker groups are vested  in the environmental  improvements,

individual workers may be more likely to report violations by their facilities.
 BOX 9-2:  PARTICIPATORY MANAGEMENT AND MONITORING OF PROTECTED
           AREAS IN THE PHILIPPINES70
        In the Philippines, protected areas are established and managed through the National
 Integrated Protected Areas  System.   Participatory management for  each  established
 protected area is central to effective implementation of the System.
        Management of each protected area is  supervised by a Protected Area Management
 Board. The Board is composed of representatives of the various local stakeholders such as
 the Department of Environment and Natural Resources (DENR) Regional Executive Director,
 the Provincial Development Officer, representatives from the  Municipal Government, tribal
 communities, concerned NGOs, and  other agencies in the area. The Board members are
 formally appointed by the DENR  Secretary and serve for a term of five years, without
 compensation.  If a protected area has a large  Board  membership, the  Board creates an
 Executive Committee that is chaired by the Regional Technical Director or Provincial Officer
 of the Department and composed  of at least two representatives from the local government,
 concerned NGOs,  and indigenous communities.
        Involvement of local stakeholders in protected area  management through the Board
 has improved public support for the protected areas and the management decisions. Indeed,
 the public has participated at the  early stages  of establishing  many  protected areas and
 developing the management plans.  This, in  turn,  has increased the compliance of  local
 stakeholders with the Integrated Protected Areas System.
      9.4.4    Insurance Companies

      In many countries, citizens can sue firms for personal injury or property damages caused

by environmental  damage.  Therefore, the insurance  companies that end up paying firms'

lawsuit costs have an incentive to educate their clients about environmental requirements, and

to assist them in maintaining compliance.  These companies are a potential ally, and enlisting
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their support for an enforcement program could make that program both more efficient and
more effective.

9.5    Facilitating International and National Networking
       Networks are formed across different boundaries and for different purposes. They range
from domestic to international and from informal to more institutionalized organizations. They
are located within existing organizations, are created by agreements, or arise spontaneously
through regular contact. They can also involve somewhat surprising participants.
       For instance, judges are starting to network more, whether by means of information-
sharing and mutual citation, or actively  by means of forming organizations and cooperating  on
transnational litigation. At the UN Conference on Sustainable Development in Johannesburg in
2002, for instance, UNEP, INECE, and others organized a Global Judges Symposium.  This
symposium brought together judges from around the world to review their role and the rule of
law in the context of sustainable development.
       Networks can  be more flexible and thus potentially more effective, than the large formal
institutions of international governance when it comes to certain functions.  By working directly
peer-to-peer,  trans-governmental networks  can quickly distill  and  disseminate information,
enhance  enforcement cooperation,  harmonize  laws  and regulations,  and  address common
problems from a shared perspective shaped by experience  and expertise.  See Box 9-3  for
examples of enforcement-related networks.


BOX 9-3: EXAMPLES OF NETWORKS

       Interpol -the international police network, facilitates information exchange and provides
assistance to local police efforts. Interpol has also created an environmental crime network,
called Ecomessage, to facilitate information-sharing and enhanced coordination of enforcement
efforts.71

       European  Union   Network   for   the  Implementation   and  Enforcement   of
Environmental Law (IMPEL) - an informal network of the environmental  authorities of the EU
Member States, acceding and candidate countries of the EU, and Norway.  IMPEL's objective is
to create  the  necessary  impetus  in  the  European  Community  to ensure  more effective
application of environmental legislation,  by exchanging information and experiences; providing a
framework for  policymakers, environmental inspectors,  and enforcement  officers to exchange
ideas; and encouraging the development of enforcement structures and best practices.72
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       Environmental Compliance and  Enforcement  Network for Accession (ECENA) -
established by high level officials from the environmental ministries of South Eastern Europe in
2005, as an informal network of environmental authorities from pre-candidate,  candidate, and
acceding countries.  ECENA's mission is  "to protect the environment in its member countries
through effective transposition, implementation and enforcement of EU environmental legislation
by  increasing the effectiveness of inspectorate  bodies  and  promoting  compliance with
environmental requirements."73

       Network  for  Environmental  Compliance and  Enforcement  in  the   Maghreb
(NECEMA) - established  in 2006 as an informal network of environmental authorities in the
Maghreb region of North Africa.  NECEMA's mission is to promote good  governance in the
region through an exchange of innovative policies and practices.74
      Capacity building is a critical  function of enforcement networks. The  Green Customs

network, intended to build the capacity of customs officials, has been created and is supported

by  Interpol,  the  World  Customs  Organization, the  Convention  on  International  Trade in

Endangered  Species of Wild Fauna and Flora, the Basel Convention, and UNEP.  The U.S.

Environmental Protection Agency offers courses to train regulators and environmental officials

in other countries because building regulatory capacity in nations with weak or poorly developed

legal systems allows cooperative enforcement efforts  to occur. Their efforts stem from the

recognition that a global regulatory system based  on trans-governmental networks is only as

strong as its weakest link.

      Box 9-4  contains  an example of  successful  international networking  and Box 9-5

describes an example of successful national networking.
 BOX 9-4: ROLE OF INECE IN ENFORCING COOPERATION ON THE TRANSPORT OF
          WASTE75
        In 2000, 29 containers of chemicals arrived in the harbor of Rotterdam, Netherlands
 from the United States.  In the Netherlands,  the company receiving the containers denied
 being the buyer. The company then claimed that the containers were in transit to Nigeria, but
 communications between the Dutch Government and  Nigeria showed that  the  receiving
 company in  Nigeria had only a post office box  and had no agreement with  the Nigerian
 government to import these chemicals.
        Some of the containers in Rotterdam harbor started leaking, and a search by the Dutch
 Government revealed that  more than 3,000 different chemicals  were in these contaminated
 containers.  According to information received from the U.S. Environmental Protection Agency
 (USEPA), the company  had  received an order from  the local  environmental authorities to
 remove "improperly stored wastes" from its warehouse.  In 2001,  the Netherlands government
 requested in writing that the  company  return  the leaking waste materials voluntarily to the

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United States.  The company continued to refuse, so the Netherlands government began to
incinerate the dangerous chemicals. The owner and the company were brought to court, and
found jointly and severally liable to the Dutch government, USEPA, and the Europe Container
Terminals BV, where the waste was stored in Rotterdam. The owner of the company was also
found criminally liable.
       While official requests were sent to the  U.S. government, it was the communications
through INECE  network channels  with  USEPA  that contributed  to solving  the case
expeditiously.
       Similarly, IMPEL has undertaken an enforcement cooperation project to crack down on
transnational shipments of waste in the European Union. INECE has  worked  with IMPEL on
this project, creating  training exercises to accompany  the first edition of the Principles of
Environmental  Enforcement, in order to build the capacities of enforcement officials attempting
to address the challenges posed by illegal waste in ports.
BOX 9-5:  GAMBIA'S NETWORK OF ENFORCEMENT PERSONNEL76

       The Gambia's National  Environment Agency established a network of enforcement
personnel  in all five geographic Divisions of The Gambia to deal with chemicals and hazardous
waste.   This  network  seeks to respond to the  limited  personnel  resources within  the
Inspectorate of the Agency. The  network comprises  personnel  from  the  Departments of
Agriculture, Livestock, Health, and Customs.  A Ministerial Decree and Gazette sanctioned the
appointment of the personnel. As members of the network, the enforcement personnel act as
inspectors for monitoring chemicals.  Agency inspectors cover the greater Banjul Area. The
members of the network are all  charged with the same responsibilities; different members do
not cover different chemicals. The Agency, through the Agricultural Divisional Coordinators, is
responsible for the coordination of the network.
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10.    MEASURING  AND MANAGING PERFORMANCE  THROUGH  COMPLIANCE AND
       ENFORCEMENT INDICATORS

10.1    Introduction
       Environmental compliance and enforcement programs should  be evaluated at regular
intervals to ensure that the program activities are resulting in the reduction of illegal activity and
in  progress towards the agency's environmental protection goals.  Evaluations can  result in
greater awareness of the nature of the environmental problem and the  best ways to respond to
it, which in turn can lead to revised planning and more effective implementation.
       Performance indicators  make known  information about  operations of and results
achieved. This data can  help  managers of environmental  compliance and  enforcement
programs and directors of environmental protection agencies answer questions such as:
       •  What activities (e.g., inspections, enforcement actions, etc.) are being produced by
         the environmental compliance and enforcement program?
       •  What results or outcomes are being produced by the activities of the environmental
         compliance and enforcement program?
       •  Which elements of the environmental compliance and enforcement  program  are
         performing effectively?
       •  Are there any elements of the environmental compliance and enforcement program
         which raise performance issues that need to be corrected?
       This chapter provides an overview of  how  agencies can identify,  design, and use
indicators. The chapter is based on the Performance Measurement Guidance for Environmental
Compliance and Enforcement Practitioners (2nd edition, 2008),  developed by INECE's Expert
Working Group on Environmental Compliance and Enforcement Indicators.77
       The indicators methodology presented below is organized into three stages or steps: (1)
identifying potential indicators  and  selecting  an  appropriate  combination; (2)  developing
indicators through  designing  and testing;  and (3)  using the indicators  to improve  program
performance and enhance accountability to stakeholders. (See Table 10-1). The best practices
and accompanying guidance related to each stage are based on  the  experiences of national
environmental enforcement and compliance programs from around the world, but may need to
be adapted  or used  selectively depending on  the  specific situation of the program  under
development.
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TABLE 10-1: THREE-STAGE MODEL FOR IDENTIFYING, DESIGNING,

AND USING INDICATORS
                 Stage 1
                Identifying
            Potential Indicators
              Best Practices
              Determine scope
                    ±.
                Consult with
            stakeholders and staff
              Apply logic model
                    I
              Develop guiding
                 principles
              Develop common
                 definitions
              Select criteria for
             evaluatina indicators
            Inventory existing data
                 sources
             Look beyond existing
                   data
              Select appropriate
           combination of indicators
      Stage 2
     Designing
     Indicators
                                            Best Practices
 Use internal teams to
determine how to design
                                         Conduct pilot projects
  Develoc in chases
                                          Consult with exnerts
  Monitor design and
      testing
  Create and distribute
   development plan
  Ensure timely and
  accurate reporting
     Stage 3
      Using
    Indicators
                                                                          Best Practices
 Monitor performance
 with reaular reoorts
                                                                        Analyze performance of
                                                                          organizational units
Review effectiveness of
  specific programs
                                                                          Report to external
                                                                             audiences
   Analyze behind
    the numbers
  Assess and adapt
     indicators
10.2    Stage 1. Identifying Indicators

        10.2.1  Determine the Scope of the Indicators

        A fundamental issue that needs to be resolved at the beginning of any effort to develop
indicators is the scope of  the  effort.  Two questions need  to  be answered to  determine the
scope:

    1.   Will the indicators be comprehensive (that is, will they cover all the legal and regulatory
        frameworks and programs for which the agency is responsible) or focused (covering only
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       a specific law or requirement, industry sector, geographic area or non-compliance
       pattern)?
   2.  Will the indicators be national (that is, covering the national compliance and enforcement
       program) or sub-national (covering a program at the regional/district, state, or
       local/municipal level)?

       10.2.2  Engage Stakeholders
       Since the target audience for environmental compliance  and enforcement indicators is
diverse and comprises a multitude of perspectives, consultation with all stakeholder groups is
key to success in identifying,  designing, and implementing indicators.  Early engagement with
the users - both internal to the organization as well as external groups - will provide invaluable
information to help define the scope of measures  and  priority information needs.  Stakeholder
input helps  to  ensure that measures  will be accepted as  legitimate  indicators of program
performance, and will  have the best chance of meeting the needs of all interested parties.
Stakeholder participation may  also  help  identify all  expected  uses  for the measures and
highlight the need to collect new or different data than that already available. Stakeholders can
include  government   policymakers,   regulators,  sub-national   authorities,   international
organizations, industry, environmental groups, and  the general public.

       10.2.3  Apply a Logic Model
       A logic model can be a useful tool for identifying performance indicators.  Logic models
graphically depict the  relationships between resources  invested,  activities undertaken, and the
results of those activities.   It should clearly demonstrate a results chain  from activities to
outcomes and serve as a "road map" of how the program will achieve its goals.
       To use a logic model  is to observe linked stages and consequences of the program:
inputs,  outputs,  intermediate outcomes, and final  outcomes  or results.   For purposes  of
identifying meaningful compliance and  enforcement indicators, the logic model  can elucidate
what outputs and  outcomes  need to be  measured.  If insufficient inputs  or resources are
available to yield the desired outcomes  at the scope intended, then the scope may be reduced
or outcomes modified to match available resources.  Table 10-2 below presents a generic logic
model example.
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TABLE 10-2: LOGIC MODEL FOR ENVIRONMENTAL COMPLIANCE AND
ENFORCEMENT INDICATORS
Inputs
Resources of the
regulating body

• Number of staff
(e.g., inspectors).

• Budget for
salaries,
contracts, and
computers.

• Number of
vehicles for
inspection.
• Training courses.





Outputs
Activities of the
regulating body

• Number of
inspections
conducted.

• Number of
notices of
violations issued.

• Fines assessed
and collected.

• Number of
training
programs
conducted.

• Number of
persons trained.
Intermediate
Outcome
Behavior change in
the regulated
community
• Change in
pounds of
pollution
discharged.

• Change in
understanding of
how to comply.

• Change in
environmental
management
practices.

• Change in
compliance rate
in targeted
sector.
Final Outcome
Environmental
Impact

• Improved
ambient water
quality.

• Reduced
contaminant
burden in
wildlife.

• Reduction levels
of respiratory
disease in a
defined area.





       10.2.4  Develop Guiding Principles
       Discussions with external stakeholders and program managers and staff will often yield
ideas that are broader than suggestions about specific indicators.  The discussions will also
capture general  principles that can be  used to  guide the identification of indicators.  These
principles are valuable feedback from important audiences, and should be taken into account in
the development and use of indicators.  In developing its own principles,  USEPA drew from
stakeholder input, consultation with experts and practitioners, and a literature review.
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TABLE 10-3: WORKSHEET FOR IDENTIFYING AND SELECTING ENVIRONMENTAL
            COMPLIANCE AND ENFORCEMENT INDICATORS
A. Indicator Summary
Name
A/a me of indicator
Type
e.g., input,
output
Category/Sub-
category
Use if
appropriate to
illustrate how
indicator fits
into specific
project's
hierarchy
Currently
Measured?
Yes /No
Data
Availability
Rank on scale of
1-3, where 1 is
adequate, and 3
is inadequate
B. Indicator Description
Briefly present an objective description of what the indicator is and how the data should be
collected.

C. Reason for Selection
Discuss what the indicator might show and the basis for this assumption.

D. Limitations
Explain any limitations to measuring this indicator.
E. Data Sources
List necessary information and note whether data is currently available.

F. References
List any references that may be useful when measuring this indicator, including examples from
other countries, research documents, etc.

G. Selection Criteria *
Relevant

Transparent

Credible

Functional

Feasible

Comprehensive

      * scale of 1-3, where 1 is adequate, and 3 is inadequate
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       10.2.5  Select Criteria for Evaluating Potential Indicators
       After external stakeholders, program managers, and staff have  identified potential
indicators, those indicators will need  to be evaluated  to determine whether they should be
implemented.   A set of criteria should be used for this evaluation.   The  discussions  with
stakeholders can be useful  for identifying  such  criteria.  The following  are  some suggested
selection criteria for a project to consider:
       •   Relevancy:  Is the indicator  relevant to goals,  objectives, and priorities of the agency
          and to the needs of external stakeholders?
       •   Transparency: Does the indicator promote understanding and  enlighten users about
          program performance?
       •   Credibility:  Is the indicator  based on data that are complete and accurate?
       •   Functionality: Does the indicator encourage  programs and personnel to engage in
          effective and constructive behavior and activities?
       •   Feasibility:  Does the value  of the indicator to the program outweigh the cost of
          implementing and maintaining the measure?
       •   Comprehensiveness: Does the indicator address all the important  operational
          aspects of program performance?
       Proposed  indicators  should  be ranked  in  terms of  the  feasibility criteria, using the
worksheet provided in Table 10-3 or other appropriate methodology. These rankings should be
used, along with comments from key stakeholders,  program  design guidelines,  and other
information, to select indicators to carry over into the next stage of the project.

       10.2.6 Develop  Common Definitions for Key Terms
       The importance of having a clear  set of definitions at the beginning of  any effort to
develop indicators cannot be overstated.   Defining key terms that will  be used in discussions
with stakeholders provides a framework for organizing ideas and  allows agency managers and
external stakeholders to see how potential indicators might be used to improve management of
the program. Of particular importance is the distinction between output and outcome (Box 10-1).

       10.2.7 Inventory Existing Data Sources
       Assessment of existing data  available to support indicators is a key step for identifying
environmental compliance and enforcement indicators.  Are data being collected that can be the
basis for useful  indicators?  Are the data current,  or are they the result of a study or survey that
is out-of-date or no longer conducted?   Is there an existing data system that collects timely and
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accurate data?  Can it be enhanced to accommodate new indicators? For example, if data are

being collected about enforcement actions  issued  by  regional or  district offices and  by the

national program, then such data should provide basic output indicators that can be valuable in

monitoring operations. Collection of enforcement action data might  also be expanded to begin

gathering information  about  results from  enforcement  actions (that is, pollutant reductions),

thereby providing intermediate outcome indicators.
 BOX 10-1: DEFINITIONS OF KEY TERMS
 Input indicators include time, staff, funding, materials, equipment and the like that contribute
 to an activity.   While of limited usefulness by themselves,  input indicators reflect  the
 government's commitment and are important components  for determining  efficiency and
 return on  investment.  When  considered together  with outcomes,  inputs can be  used to
 determine the level  of effort required  to  achieve  an outcome.  Managers  can use this
 information to analyze efficiency in their programs.

 Output indicators are activities,  events, services, and products that reach a  regulated firm.
 Examples include the number of inspections performed, the number of compliance assistance
 workshops provided, and the number of enforcement  cases issued.   These  indicators
 demonstrate a level of effort toward an outcome, but they do not indicate the degree to which
 the outcome is achieved.

 Outcome indicators measure the results of an agency's outputs and are generally divided
 into two categories: intermediate and final outcomes.

       Intermediate outcome indicators measure progress toward a final outcome,  such as
       a change in behavior or other results that contribute to the end outcome.  An example
       of an intermediate outcome of an inspection would be a change in facility management
       practices.

       Final outcome indicators measure the ultimate result the program is designed to
       achieve, such as an improvement in ambient air quality or a reduction in the  number of
       people living in  areas in which pollutant standards were  exceeded.  When final outcome
       indicators are designed with the program's goals and  objectives in mind, they should
       enable managers and others to determine whether the  program's activities, or outputs,
       are achieving those goals.
       10.2.8  Look Beyond Existing Data

       One potential pitfall in the identification of indicators is to consider feasible only those

indicators that can be supported by data that are currently available. Many important potential

indicators  will not  be identified or  given  due consideration if the search  for indicators is
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constrained by using only existing data.  If performance indicators have not been used in the
past, existing data will likely be limited to activities or outputs.  Measuring outcomes,  however,
will likely require setting up a process for collecting new data.

       10.2.9  Select an Appropriate Combination of Indicators
       In selecting indicators it is critical to strike an appropriate balance between outputs and
outcomes.  A mix of output and outcome indicators will be necessary to serve the purposes of
external stakeholders and program  managers  and staff.  Further, using output and outcome
indicators can allow patterns to be identified regarding  what types of outputs produce the most
effective outcomes.   As greater understanding  of these patterns is gained,  program strategies
can be adjusted accordingly.
       In identifying and implementing environmental compliance and enforcement indicators, it
should be recognized that intermediate outcomes can  be a source of very valuable indicators.
In fact, intermediate outcomes should  be emphasized when developing  and  implementing
indicators.  The advantage of intermediate outcomes is that they are often directly caused  by
the activities and outputs  of the program - there is no ambiguity about the causal link between
the enforcement actions and the resulting pollutant reduction, for example. Unfortunately, many
efforts to develop indicators falter when they focus only on outputs and end outcomes.  This is
because it is often  difficult to  demonstrate the link  between  the government activity and
improvements in air or water quality that can be influenced by many factors beyond the scope of
government activity.  Furthermore, measuring changes  in end outcomes can be very expensive,
and the final results may take years to appear.  For all these  reasons, intermediate outcomes
should receive appropriate consideration in any  effort to develop indicators.

10.3   Stage 2: Developing Indicators

       10.3.1  Use Internal Teams to Determine How to Design and Test
       One approach for completing the design is to develop  teams within  the organization to
define the  selected  indicators in precise detail, review available  data, develop information
collection  and reporting  processes as  needed, and establish  a schedule for testing and
implementing the  indicators. Since they are comprised of the organizations' own internal staff,
these  work groups  are  often able to  readily  identify and  overcome  barriers to effective
implementation.  Another benefit of involving internal  staff is  that it increases  their sense of
ownership of the new indicators.
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       10.3.2  Conduct Pilot Projects
       The  use of pilot  projects  to develop  environmental  compliance and enforcement
indicators is highly recommended.  Pilot projects provide a period of time for indicators to be
developed and tested before being implemented fully.  During this period, data can be analyzed,
indicators can be refined or adjusted, and mistakes can be corrected.  Pilot projects can be
designed to test indicators on a small scale (for example, a focused sub-national project as
described above) and can then be expanded and applied on a  larger scale (for example, a
comprehensive national project).  Pilot projects are most helpful when there is a concerted effort
to identify the lessons learned from the project at its conclusion.

       10.3.3  Develop in Phases
       For environmental  compliance and enforcement  programs  developing multiple  new
indicators, it is advisable to implement in phases over a  reasonable period of time. Although
this may mean that the full set of indicators is not available in the immediate future, the time
spent developing them produces more accurate information and spreads the burden  over a
more manageable period of time.

       10.3.4  Consult with Experts
       When sufficient internal expertise does not exist, agencies should not hesitate to bring in
outside experts to fill in knowledge gaps when developing performance indicators.  This  can be
particularly helpful when developing complex measures, such as statistically valid compliance
rates.  Experts in sampling, statistical analysis, and performance-based management of public
programs can provide useful assistance.

       10.3.5  Monitor the Design and Testing
       Developing a new indicator or set of indicators requires ongoing management attention
to ensure that the appropriate data is collected, that it is collected in an efficient manner, and
that the indicators provide the understanding of anticipated program performance.  Monitoring
these tools can  also help determine whether certain indicators need to be dropped from  or
added to the implementation effort.

       10.3.6  Create and Disseminate a Development Plan
       It is important  that a  plan is  developed that describes the tasks  to be completed  to
implement new indicators, and provides a schedule of deadlines for completion of the tasks.
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The plan should also clearly spell out the uses for the new indicators.  The plan should be
disseminated to program managers and staff and to external stakeholders as appropriate.

       10.3.7  Ensure Timely and Accurate Reporting
       Reporting of data,  especially  data to support new indicators, by  internal or external
parties will need to be reinforced through multiple communication mechanisms on an ongoing
basis.  Steps will also need to be taken to ensure the quality of the data (e.g.,  random data
audits, sampling, and verification of specific data fields) through a continuous program of quality
control. One of the most effective ways of ensuring timely and accurate reporting is for senior
managers to demonstrate that they  are  using  indicators to make decisions about program
strategy and resource allocation.

10.4   Stage 3: Using Indicators
       Performance  indicators can  serve  many purposes.   Public management literature
suggests a wide variety of uses for performance indicators by public  sector programs  and
organizations.  Among the most common uses are:
       •   Support strategic and other long-term planning efforts.
       •   Improve program effectiveness.
       •   Identify performance problems and solutions.
       •   Provide data for in-depth program evaluations.
       •   Communicate with public and enhance accountability.
       •   Help make operational and resource allocation requests.
       •   Formulate and justify budget requests.
       •   Motivate personnel to make program  improvements.
       For environmental compliance and enforcement programs, there are at least four ways
to use performance indicators.  These practices are highly recommended, but are best viewed
as a menu from which to choose, rather than a step-by-step process.

       10.4.1  Monitor Performance with Regular Reports
       A monthly or  quarterly report on  performance indicators can be provided to program
managers and staff.  These reports can provide a current account of performance in producing
key outputs and outcomes.  Reports can be organized to present data for a program  as a whole
or to break out data for various program components.  In addition to data about performance
indicators for the current year, in order to provide a benchmark the reports  should also provide
data about performance in the previously completed fiscal/calendar year.
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       10.4.2  Analyze Performance of Organizational Units
       Data from indicators can be organized to provide a current report of performance by a
particular organizational unit, such as a regional or provincial office of a national agency.  These
reports could contain  data  about performance in the current fiscal/calendar  year, three-year
trends  on key outputs and  outcomes, and  comparisons with performances of  other regional
offices.     Such  reports can  lead  to  identification  of  specific  program  management  and
performance issues that might need to be addressed by managers of the organizational unit.

       10.4.3  Review Effectiveness of Specific Programs
       Data from indicators can be used to review the effectiveness of particular programs
(e.g., compliance with clean water laws or requirements).   Studies of the  effectiveness of
specific programs can be organized around six performance-based  questions that provide a
framework for analysis. The six questions are:
   1.  Is the program  contributing to the goal of protecting human health and the environment
       through its actions and strategies?
   2.  Is the program  changing the behavior of the regulated community in ways that lead to
       improved environmental performance?
   3.  Is the program  achieving appropriate levels of compliance in key populations?
   4.  Are we achieving the appropriate levels of enforcement activity in the regulated
       community?
   5.  Is the program  providing appropriate assistance to our state, provincial, and local
       partners to support their work to improve environmental performance?
   6.  Are resources being  used efficiently to achieve optimal  results?

       Under each question, the relevant performance indicators are arrayed to address the
question as thoroughly as possible.  The framework allows data about results and the activities
that produced them to be analyzed.  These data can be examined for patterns and more can be
learned about the combinations, types,  and  amounts  of activities  that produce the most
desirable results.

       10.4.4  Report to External Audiences
       Many environmental agencies  provide  reports to the public in response  to laws or
policies requiring such reports.  For environmental compliance and enforcement programs,
performance indicators can  provide valuable information  to the public, legislative overseers,

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regulated industries, and environmental organizations. Such programs can be well-served by
providing an  annual report  to  external  audiences.  Reports  that  emphasize  results  and
outcomes achieved through activities and outputs of the program can  enhance support for the
compliance and enforcement  mission.  By describing accomplishments in terms that emphasize
results - for  example,  pounds of pollution  reduced through  enforcement actions,  improved
practices at facilities from compliance assistance, or improved rates of compliance in an
industry sector - an account of performance  is  provided  that is  meaningful to multiple
audiences.

10.5   Common Lessons
   As work on programmatic indicators evolves, common lessons that have emerged include:
       •   A combination of indicators - outputs and outcomes, quantitative and qualitative,
          statistical and narrative, aggregated and disaggregated, national and local - is
          necessary to measure performance,  inform management, and serve the full range of
          audiences and  purposes.
       •   Performance indicators are most effective when they reflect management priorities
          and are linked to a limited number of program goals and objectives.
       •   Increased use of outcome indicators  presents many challenges, because agencies
          or programs may influence - but not  necessarily control - outcomes.
       •   Problem-specific, tailor-made performance indicators are effective for evaluating
          performance in solving specific environmental and non-compliance problems.
       •   Performance measures should  be used principally to improve effectiveness and
          manage more strategically, rather than simply to report accomplishments to the
          public in a more interesting way.
       •   When using indicators to improve performance, program managers and staff should
          understand that data from indicators  have their limitations. Such data need a context
          (e.g., a time period, a benchmark, or standard for comparison, etc.) to realize their
          full value  as a management tool.  In many instances, data from indicators provide a
          kind of warning light that signals a need for deeper analysis or further investigation to
          understand the forces and influences that shape program performance.
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11.    REFERENCES

       1 This section is based on a number of important publications and studies,
including1 Inter-American Development Bank website, "Rule of Law," available at
http://www.iadb.org/sds/SCS/site2776e.htm: U.S. ENVIRONMENTAL PROTECTION AGENCY,
Communications Strategies for Enforcement Programs, Capacity Building Support
Document, International Training Workshop, 21 (1996) (emphasizing the importance of
creating the right perception: "It is crucial to make [the regulated community] see and
believe there is a good chance to get caught if they offend the rules.");

Williams, E. et al., Exploring the Value of Scotland's Environment, QUARTERLY ECON.
COMMENTARY (Fraserof Allander Instil), vol. 28, no. 1, Mar. 2004;

Williams, E. et al., The Value of Scotland's Ecosystem Services and Natural Capital, J.
OF EUR. ENVTL. POL'Y, vol. 13, no. 2, Mar.-Apr. 2003;

BBC News, Air pollution causes early  deaths, 21 Feb. 2005, at
http://news.bbc.co.Uk/2/hi/health/4283295.stm :

Massachusetts Institute of Technology News Office, Environmental regulations cut
health costs, MIT team finds, 9 Sept. 2005, at
http://web.mit.edu/newsoffice/2005/health.html;

see a/so USEPA, The Benefits and Costs of the Clean Air Act, 1970 to 1990 (1997)
available at http://www.epa.gov/oar/sect812/copy.html: Friends of the Earth Europe et
al., Reaching the right conclusions: Economic facts and figures on the REACH proposal,
Sept. 2006;
http://www.foe.co.uk/campaigns/safer chemicals/chemical reaction/REACH  facts&figur
es Oct06.pdf:

see also, Pedersen, Finn, et al., Rpt. for DG Environment, The impact of REACH on the
environment and human health, ENV.C.3/SER/2004/0042r,
http://ec.europa.eu/environment/chemicals/pdf/impact on environment  report.pdf;
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See J. Spigelman, Address at the ICAC-lnterpol Conference, Hong Kong; Carothers,
Thomas The Rule of Law Revival, 77 FOREIGN AFFAIRS 95, 97 (1998).

See Porter, Michael E. & van der Linde, Claas, Green and Competitive: Ending the
Stalemate, HARVARD Bus. REVIEW (1995); Porter, Michael E. & van der Linde, Claas,
Toward a New Conception of the Environment- Competitiveness Relationship, J. OF
ECON. PERSPECTIVES, Vol.  9(4), p. 97 (1995 reprinted in MAKING LAW WORK, vol. 2, at
441 (discussing how environmental regulation can encourage innovation);
Cambridge Econometrics & AEA Technology, The Benefits of Greener Business (2003),
http://www.environment-
agency.gov.uk/commondata/acrobat/benefits of  green business1.pdf;

See generally, Dowell, Glenn, Hart Stuart, &Yeung, Bernard, Do Corporate Global
Environmental Standards Create or Destroy Market Value?, 46(8) MGMT. Sci. 1059
(2000), reprinted in MAKING LAW WORK, vol. 2, at 465; Network of Heads of European
Environment Protection Agencies, The Prague Statement: The Contribution of good
environmental regulation to competitiveness (2005), available at
http://inece.org/praguestatement.

       2 Becker, Gary S., Crime and Punishment: An Economic Approach, 76(2) J.
POLITICAL ECON. 169 (1968),  reprinted in MAKING LAWWORK, vol. 1, at 115 (explaining
that potential offenders  respond to both the probability of detection and the severity of
punishment).
       3 Rechtschaffen, Clifford & Markell,  David L. .REINVENTING ENVIRONMENTAL
ENFORCEMENT AND THE STATE/FEDERAL RELATIONSHIP, Chps. 2 & 3 (2003), reprinted in
MAKING LAW WORK, vol. 1,  at 157; Silberman, Jon B., Does Environmental Deterrence
Work? Evidence and Experience Say Yes,  But We Need to Understand How and Why,
30 ENVTL. LAW REPORTER 10523 (2000), reprinted in MAKING LAWWORK, vol. 1, at 379.
       4 Cohen, id. (citing Burby, R.J. & Paterson, R.G. , Improving Compliance with
State Environmental Regulations, 12(4) J. POLICY ANALYSIS & MGMT, 753-72 (1993)).
       5 See, OECD, Guiding Principles for Reform of Environmental Enforcement
Authorities in Transition Economies of Eastern Europe, Caucasus and Central Asia
(2003), available at http://www.oecd.org/dataoecd/36/51/26756552.pdf.
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       6 Id. at p. 3.
       7 ISO, The ISO 1400 Essentials, available at
http://www.iso.org/iso/iso catalogue/management standards/iso 9000  iso  14000/iso 14000 e
ssentials.htm.
       8 Chemical Industry's Responsible Care® Program web site, available at
http://www.responsiblecare.org.
       9 U.S. Department of Energy's Climate Challenge Program web site,  available at
http://www.climatevision.gov/climate challenge/factsheet.htm.
       10 See generally IMPEL Project "Developing a checklist for assessing legislation
on practicability and enforceability" (2006) available at
http://ec.europa.eu/environment/impel/pdf/pe  checklist.pdf.
       11 Shimshack,  Jay P. & Ward, Michael B, Regulator Reputation, Enforcements,
Environmental Compliance, J. ENVTL. ECON. & MGMT. (2005) (discussing the need to
design enforcement systems that enable the regulator to maintain credibility); see also,
Bowles, Chester, PROMISES TO KEEP: MY YEARS IN PUBLIC SERVICE, 1941-1969, 25
(1971) (estimating that 20% of the regulated population automatically complies with any
regulation, 5%  attempts to evade it, and the remaining 75% complies as long as they
think that the 5% will be caught and punished).
       12 De Aragao,  Murillo & Bunker, Stephen, Brazil: Regional Inequalities and
Ecological Diversity in a Federal System, in Engaging Countries: Strengthening
Compliance with International Environmental Accords 437-474 (Weiss & Jacobson, eds.,
1998), reprinted in MAKING LAW WORK, Vol. 1, 337.
       13 Environmental laws may contain provisions that allow a regulated source to
petition the government for an exemption from a general requirement. This exemption is
called a "variance" and contains specific terms and conditions similar to a permit.
Facilities may request variances for many different reasons.  For example, their
operating conditions are different from those that were assumed when the standard was
set, or peculiar physical circumstances (such as naturally contaminated intake water)
make it impossible to  comply.
       14 CEC, Successful Practices of Environmental Management Systems in Small
and Medium-Size Enterprises (2005) available at
http://www.cec.org/files/PDF/ECONOMY/EMS-Report en.pdf, p 4, 27.
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       15 For a database of U.S. laws and regulations currently open for public
comment, see http://www.regulations.gov.
       16 China Watch, SEPA Releases New Measure on Public Participation in
Environmental Impact Assessment Process,  2006, available at
http://www.worldwatch.org/node/3886 .
       17 For a list of USEPA Compliance Assistance Centers, see
http://www.epa.gov/Compliance/assistance/centers/index.html.
       18 Environmental Compliance Assistance Centers Deliver Targeted Help to the
Regulated Community, Thomas, Deborah Limanon, Watcharee, Simachaya, Wijarn,
Nepomuceno, Dolora, http://www.inece.Org/conference/8/papers.html.
       19 UNEP, Saving the ozone layer: UNEP responds to evolving needs of
developing countries in implementing the Montreal Protocol (2002) available at
http://www.unep.org/Ozone/Press  Releases/25March 2002.pdf.
       20 For USEPA's Audit Policy, see
http://www.epa.gov/oecaerth/incentives/auditing/auditpolicy.html.
       21 For information about Profepa's environmental audit policy (in Spanish), see
http://www.profepa.gob.mx/PROFEPA/AuditoriaAmbiental/.
       22 Krahn, Peter, Enforcement versus Voluntary Compliance: An Examination of
the Strategic Enforcement Initiatives Implemented by the Pacific and Yukon Regional
Office of Environment Canada, 1983 to 1998, reprinted in MAKING LAW WORK, Vol. 2, at
305.
       23 Afsah, Shakeb, Laplante, Benoit & Wheeler, David, Regulation in the
Information Age: Indonesian Public Information Program for Environmental Management
(World Bank, New Ideas in Pollution  Regulation, 1997), reprinted in MAKING LAW WORK,
Vol. 2, at 75, 78.
       24 Wang, Hua, et al, Public Ratings of Industry's Environmental Performance:
China's Greenwatch Program, 6th INECE Conference Proceedings, vol. 2 (2002),
reprinted in MAKING LAW WORK, Vol. 2, at 85, 87; see a/so, World Bank, Press Release,
Polluters in China Face Public Scrutiny,  17 May 2006.
       25 For an overview, see, Potter, S. and Parkhurst, G., Transport Policy and
Transport Tax Reform (2005), available at
http://oro.open.ac.Uk/4380/1/Potter and Parkhurst  17 2 05.pdf.
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      26 For more information on inspections and other types of compliance monitoring,
see Zaelke, Durwood,  Kaniaru, Donald and Kruzfkova, Eva, eds., MAKING LAW
WORK: ENVIRONMENTAL COMPLIANCE & SUSTAINABLE DEVELOPMENT, Vol. 2,
at 372-75 (2005) (discussing the literature on inspections as a means of ensuring
compliance and enforcement) [hereinafter MAKING LAW WORK].
      27 See U.S. Environmental Protection Agency, CONDUCTING ENVIRONMENTAL
COMPLIANCE INSPECTIONS, INSPECTOR'S FIELD MANUAL, INTERNATIONAL EDITION (2002),
available at http://www.inece.org/manual [hereinafter EPA Field Manual].
      28 Nguyen, Ngoc Sinh & Phung, Van Vui, A Large Scale Survey Using
Environmental Inspections to Assess and Enforce the Implementation of the Law on
Environmental Protection in Vietnam, 1997, 5th INECE Conference Proceedings, Vol. 1
(1998), reprinted in MAKING LAW WORK, Vol. 1, at 415,  421.
      29 As defined by the U.S. EPA, "audit" means a "systematic, documented,
periodic, objective review by regulated entities of facility operations and practices related
to meeting environmental requirements." Environmental Auditing Policy Statement,
OPPE-FRL-3046-6, 51 Fed.  Reg. 25,004, at 20,006 (July 9 1986).
      30 UNEP, MANUAL ON COMPLIANCE WITH AND ENFORCEMENT OF MULTILATERAL
ENVIRONMENTAL AGREEMENTS (2006) [hereinafter UNEP MANUAL ON COMPLIANCE]; see
a/so, Gambia Hazardous Chemicals and Pesticides Control and Management Act
(1994).
      31 See EUROPEAN UNION NETWORK FOR THE IMPLEMENTATION AND ENFORCEMENT
OF ENVIRONMENTAL LAW, IMPEL REFERENCE BOOK FOR ENVIRONMENTAL INSPECTION
(1999), available at http://ec.europa.eu/environment/impel/pdf/refbook.pdf.
      32 The purpose of an opening conference is to inform the facility of the agency's
intentions regarding the inspection and learn more about the facility's operation and
structure, such as layout, management structure, plant processes, and safety protocols.
EPA Field Manual, supra note 27.
      33 See e.g., EPA Field Manual, supra  note II, at 27.
      34 EPA Field Manual, supra note 27; see also, EUROPEAN UNION NETWORK FOR
THE IMPLEMENTATION AND ENFORCEMENT OF ENVIRONMENTAL LAW, IMPEL MINIMUM
CRITERIA FOR INSPECTIONS (1997), available at
http://ec.europa.eu/environment/impel/impel  guidance doc.htm#min criteria.
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       35 "Process-based investigations are comprehensive facility evaluations that
initially focus on a comprehensive understanding of all facility operation and
maintenance processes. The process-based investigation includes tracking raw
materials through the industrial and support operations; identifying by-product, co-
product and products; identifying wastes generated; and determining how these wastes
are ultimately managed." U.S. EPA, "National Enforcement Investigations Center," at
http://www.epa.gov/compliance/basics/neic.html.
       36 "Exceptional reporting" is reporting that is only required when a violation or
potential violation has been detected.
       37 Whereas "exceptional reporting" only occurs when a violation has been
detected, "fixed interval reporting" occurs at regularly scheduled times, regardless of
whether a violation has  been detected.
       38INECE, International Comparison of Source Self-Monitoring, Reporting, and
Recordkeeping Requirements (1996), available at
http://www.inece.org/PDFDocs/source.pdf.
       39 Casey-Lefkowitz, Susan, et al., The Evolving Role of Citizens in Environmental
Enforcement, 4th  INECE Conference Proceedings, Vol. 1  (1996), reprinted in MAKING
LAW WORK, Vol. 1, 559, 566-567; see also, Izaak Walton  League of America website,
http://www.iwla.org .
       40 DENR Administrative Order 96-37 (2 Dec. 1996), "Revising DAO 21 To Further
Strengthen the EIS System," http://www.emb.gov.ph/laws-eia.htm.
       41 Ley 13.577 Creadon de la Obras Sanitaria de la Nacion, art. 31 and 32,
Decreto 674/89 Reginman contra la Contaminacion de Rios Bs. As. 29/V/89.
       42 Casey-Lefkowitz et al., supra  note 39, at 568-569.
       43 Regional Environmental Center for Central and  Eastern Europe, Status of
Public Participation Practices in Environmental Decisionmaking in  Central and Eastern
Europe, Sept. 1995;  Casey-Lefkowitz et al.,  supra note 39.
       44 Act No. 183/2006 Coll., on Territorial Planning and the Building Code [The
Building Act] (an  amended version of this Act came  into effect on 1 January 2007); see
a/so, Casey-Lefkowitz et al., supra note 39.
       45 The Commissioner for Civil Rights Protection website, available at
http://www.rpo.gov.pl/index.php?s=3.
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       46 Citizen Enforcement: Tools for Effective Participation, INECE 5th Conference
Proceedings (1998), available at http://www.inece.org/CBIdg%20Docs/citenf.pdf;
Environmental Law Institute, Draft Report of Environmental Authority in: A Review of the
Legal and Institutional Framework for Environmental Protection at the State Level
(1996); Ley General de Ecologia Eguilibrada y Proteccion Ambiental, art. 189, discussed
in Katherine M. Bailey, Note: Citizen Participation in Environmental Enforcement in
Mexico and the United States: A Comparative Study, 16 GEO. INTL. ENVTL. L. REV. 323
(2004).
       47 Bailey, id.
       48 This list of enforcement authorities is a hybrid and does not appear in any one
law or country. Depending on the jurisdiction, each authority may be granted directly by
statute or through court order.
       49 Panek-Gondek, Krystyna, Experience of the Inspectorate for Environmental
Protection in Implementation and Enforcement of Environmental Law in Poland, INECE
6th Conference Proceedings (2002), http://www.inece.org/conf/proceedings2/23-
lnspectorate.pdf.
       50 UNEP MANUAL ON COMPLIANCE, supra note 30.
       51 See U.S. EPA website, "Compliance and Enforcement,"
http://www.epa.gov/compliance; see a/so, "U.S. EPA to Release Guidance on Which
Criminal Enforcement Actions the Agency Will Pursue," INECE Newsletter 14,
http://www.inece.org/newsletter/14/.
       52 Porter, Michael  E. & van der Linde, Class , Green and Competitive: Ending the
Stalemate, HARVARD Bus. REVIEW (1995); see a/so, Porter & van der Linde, Toward a
New Conception of the Environment-Competitiveness Relationship, 9(4) J. OF ECON.
PERSPECTIVES 97 (1995), reprinted in MAKING LAW WORK, Vol. 2, at 441.
       53 Oposa, Jr., Antonio A., A Socio-Cultural Approach to Environmental Law
Compliance: A Philippine Scenario, INECE 5th Conference Proceedings, vol.  1 (1998).
       54 This is loosely based on a worksheet used for a U.S. environmental  program.
       55 Adjustments may range from -20% to +20% for factors  1, 2, and 3, and  from -
100% to 0% for factor 4. Selection of appropriate percentages is based on subjective
judgment and should be fair relative to adjustments made when calculating penalties for
other similar violations.
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       56 Supplemental environmental projects are projects the facility is conducting or
will conduct to benefit the environment.
       57 UNEP MANUAL ON COMPLIANCE, supra note 32.
       58 Beyond compliance has been described as a "[voluntary overmeeting of
environmental standards." See Arora, Seema & Gangopadhyay, Shubhashis, Toward a
theoretical model of voluntary overcompliance, 28 J. ECON. BEHAVIOR & ORG. 289
(1995); see also Bruce Smart ecf., BEYOND COMPLIANCE: A NEW INDUSTRY VIEW OF THE
ENVIRONMENT (1992).
       59 Excerpts for this text box are drawn from: Deutsche Gesellschaft fur
Technische Zusammenarbeit (GTZ), Participatory Coastal Law Enforcement Practices in
the Philippines (2003), available at http://www.gtz.de/de/dokumente/en-lesson5.pdf.
       60 Kravchenko, Svitlana, Citizen Enforcement of Environmental Law in Eastern
Europe, 10 Widener L. Rev. 475 (2004), reprinted in MAKING LAW WORK, Vol. 1, 591,
592.
       61 Bandi, Dr. Gyula, Environmental Enforcement in Hungary- Today and
Tomorrow, http://www.inece.org/2ndvol1/bandi.htm; see also, Global Legal Group,
INTERNATIONAL COMPARATIVE LEGAL GUIDE TO: ENVIRONMENT LAW2006,  196,
http://www.iclg.co.uk/khadmin/Publications/pdf/735.pdf.
       62 For more information on public interest litigation and citizen suits, see
Thompson, Jr., Barton H., Symposium: Innovations in Environmental Policy: The
Continuing Innovation of Citizen Enforcement, 2000 U. of Illinois L. Rev.  185 (2000),
reprinted in MAKING LAW WORK, Vol. 1, at 577; for general background on the
procedures for initiating public interest litigation in India, see Helpline law website,
http://www.helplinelaw.com/docs/pub-i-litigation/index.php.
       63 BRAZIL CONSTITUTION at art. 5, § LXXIII.
       64 BRAZIL CONSTITUTION at art. 129.
       65 Nat'l Envtl. Law Center website, "About NELC,"  available at
http://www.nelconline.org/nelc.asp?id2=15157.
       66 Citizen Enforcement: Tools for Effective Participation, 5th INECE Conference
Proceedings (1998), http://www.inece.org/CBIdg%20Docs/citenf.pdf; for  examples of
Good Neighbor Agreements, see Civic Practices Network website, "Good Neighbor
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Agreements: A Tool for Environmental and Social Justice," available at
http://www.cpn.org/topics/environment/goodneighbor.html.
      67 GOOD NEIGHBOR AGREEMENTS, supra note 66.
      68 UNEP MANUAL ON COMPLIANCE, supra note 30.
      69 U.S. EPA website, "About Performance Partnerships," available at
http://www.epa.gov/ocirpage/nepps/about.htm .
      70 UNEP MANUAL ON COMPLIANCE, supra note 30.
      71 For more information, see Interpol, "Ecomessage: Briefing Document,"
available at
http://www.interpol.int/Public/EnvironmentalCrime/Pollution/Eco message.pdf.
      72 European  Network for the Implementation and Enforcement of Environmental
Law, About IMPEL,  available at http://ec.europa.eu/environment/impel/introduction.htm .
      73 Environmental Compliance and Enforcement Network for Accession (ECENA)
website, "Introduction," available at
http://www.rec.org/REC/Programs/rerep/ecena/lntroduction.html .
      74 Network for Environmental Compliance and Enforcement in the Maghreb
(NECEMA) website, available at http://www.inece.org/mena/necema/index.html.
      75 Gerardu, Jo J.A. & Zaelke, Durwood,  The Importance of International
Environmental Enforcement Networks - INECE as an example, ELNI REVIEW, No. 2,
2005, at 3-7.
      76 UNEP MANUAL ON COMPLIANCE, supra note 30.
      77 INECE Secretariat,  Performance Measurement Guidance for Compliance and
Enforcement Practitioners, Second Edition, April 2008, available at
http://www.inece.org/indicators/guidance.pdf.
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                                        USEPA Document Number 300F09002
                 I  N   E   C   E
International Network for Environmental Compliance and Enforcement

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