AUDIT POLICY UPDATE
53 Disclosures Under
Audit Policy, Including
13 Settled Cases
To date, 53 companies have come
forward and disclosed environmental
violations to EPA under the interim
and final Audit/Self-Policing
Policies. Of the 53 companies, EPA
has settled cases with 13 companies
and is in the process of negotiating
the remaining cases. In the 13
settled cases, EPA waived all
penalties against 12 companies and
greatly reduced the penalties for 1
company.
Vol.1, No.l
April 1996
Companies Receiving Audit Policy
Relief:
Austin Sculpture, Pharr, TX
Auto Trim, Inc., Brownsville, TX
Bortec Industrial, El Paso, TX
Gobar Systems, Brownsville, TX
Invacare, McAllen, TX
Lambda Electronics, McAllen, TX
Magnatek, Brownsville, TX
Midwestern Machinery , Minneapolis, MN
Norton Company, Stevensville, TX
TRW Vehicle Safety Systems, McAllen, TX
TRW Automotive Product Remanu.,McAllen, TX
Teccor Electronics, Brownsville, TX
Thomson Saginaw Ball Screw, Saginaw, MI
The final Audit Policy was
announced on December 22, 1995 as
part of the Clinton Administration's
Reinvention of Environmental
Regulation. Under the final Audit
Policy, EPA will greatly reduce —
and may waive completely — penalties
for companies that voluntarily
disclose and fix violations
discovered through environmental
audits or compliance management
programs.
and use of Polychlorinated Biphenyls
(PCBs) contained in business
equipment it purchased. PCBs,
regulated under the Toxic Substances
Control Act, are persistent
bioaccumlators which cause birth
defects, hormonal disruptions, and
possibly cancer in humans and
animals.
In correcting the violation, the
company properly disposed of over 195
Ibs. of PCBs contained in 65 large
capacitors that were being unsafely
stored. The Audit Policy made it
possible to reduce the original
penalty amount of $15,000 to zero.
Siibst.ant.ial Penalty Reduction in
Michigan TRI Case
A Michigan manufacturer of
precision metal parts for airplanes
voluntarily discovered and corrected
its failure to file Toxic Release
Inventory (TRI) reports required
under the Emergency Planning and
Community Right-to-Know Act (EPCRA).
The TRI reports provide information
to communities and the public about
toxic releases to the environment
which in turn has been an impetus for
industry to dramatically reduce toxic
releases. Local communities and
citizens have the right to know this
information to make decisions
affecting their lives and families.
The Audit Policy made it possible to
reduce Thomson's original penalty
from $60,797 to $5,000.
As part of the settlement, Thomson
performed a Supplemental
Environmental Project (SEP) which
involved the replacement of 2500 Ibs.
of solvents with a safe water-based
process. Another required SEP will
eliminate the use of over 7000 Ibs.
per year of other toxic chemicals.
Penalty Waiver in Minnesota
PCB Case
A 48-year-old Minnesota company
that refurbishes business equipment
voluntarily discovered and corrected
violations involving improper storage
Penalty Waiver in 11 Texas
Hazardous Waste Cases
The remaining settled cases involve
11 Texas companies that operate
facilities in the Maquiladora (U.S.
Border) region in Mexico. These
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companies had violated the transport
manifest provisions of the Resource,
Conservation, and Recovery Act
(RCRA), e.g., failure to include
an accurate EPA identification number
for the hazardous waste, generator,
or transporter on the manifest forms.
The manifest forms are critical for
tracking hazardous waste to help
ensure its proper treatment,
recycling and disposal and to prevent
uncontrolled release of these
dangerous chemicals which can cause
serious harm to public health and the
environment.
The companies came forward after
EPA Region 6 presented the interim
audit policy at the Reynossa
Maquiladora Association Annual
Environmental Forum in July 1995.
Thereafter EPA waived all penalties
for all of the companies under the
audit policy. Normally, settlements
for these types of violations range
from $20,000 to $45,000.
Audit Policy Docket Contains
Wealth of Information
EPA established the Audit Policy
Docket to make information related to
the EPA audit policies and
environmental auditing publicly
available. In addition to hundreds of
letters and other documents, the
Docket contains over 300 comments
that can be obtained by calling 202-
260-7548 or faxing 202-260-4400 and
referencing docket n umber C-94-01.
EPA Contacts for Making Disclosures
Regulated entities that wish to take
advantage of the Policy should
contact the appropriate EPA Region:
Region 1 (New England): 617-565-3441
Region 2 (NJ,NY): 212-637-5039
Region 3 (mid-atlantic): 215-597-7265
Region 4 (south,SE): 404-347-3555
Region 5 (IL, IN,MI,MN, OH,WI) : 312-886-9296
Region 6 (AR, LA, MM, OK, TX) : 214-665-2210
Region 7 (IA,KS,MO,NE): 913-551-7281
Region 8 (CO,MT,ND,SD,UT,WY):303-294-7583
Region 9 (AZ,CA,HI,NV): 415-744-1364
Region 10 (AK,ID,OR,WA): 206-553-1073
Audit Policy Update is published
periodically by EPA-OECA to provide
information to the public and regulated
community regarding developments under the
EPA Audit Policy.
Editor: Brian Riedel
Audit Policy Provides Significant
Incentives to Discover, Disclose and
Correct Environmental Violations
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Under the final Audit/Self-Policing
Policy, EPA will not seek gravity-
based penalties and will not
recommend criminal prosecution for
companies that meet the requirements
of the Policy. Gravity-based
penalties represent the "seriousness"
or "punitive" portion of penalties
over and above the portion
representing the economic gain from
non-compliance. The Policy requires
companies:
* to promptly disclose and correct
violations,
* to prevent recurrence of the
violation, and
* to remedy any environmental harm
The Policy excludes:
* repeated violations,
* violations that result in serious
actual harm, and
* violations that may present an
imminent and substantial
endangerment
Corporations remain criminally
liable for violations resulting from
conscious disregard of their legal
duties, and individuals remain liable
for criminal wrongdoing. EPA retains
discretion to recover the economic
benefit gained as a result on
noncompliance, so that companies will
not be able to obtain an economic
advantage over their competitors by
delaying investment in compliance.
Companies that do not discover
violations through an audit or CMS,
yet meet all of the other Policy
conditions, will receive 75%
mitigation of gravity-based
penalties.
The Final Audit/Self-Policing
Policy was published in the Federal
Register on December 22, 1996 (60 FR
66706). It took effect on January 22,
1996. For further information,
contact the Audit Policy Docket or
call 202-564-4187.
EPA to Shortly Issue Q&As
EPA plans to issue a Question and
Answer document on the Final
Audit/Self-Policing Policy by the end
of May 1996. The Q&A document will be
available in the Audit Policy Docket.
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