Environmental Crimes: How To Keep Your Company And Its Employees On The Right Side Of The Law

The U.S. government intends to prosecute and punish environmental crimes and criminals more than ever in the past. During the last ten years, the number of prosecutions and convictions witnessed a more than three-fold increase. The cases involve not only corporations violating, intentionally and unintentionally, environmental laws but also the corporate officers and managers operating such companies. Moreover, the prosecutions result in both fines and imprisonment for the companies and individuals involved in violating the nation's environmental laws. Nevertheless, many companies, both inside and outside of the maritime industry have failed to implement adequate measures to prevent criminal violations by employees or to react to a criminal investigation by federal or state law enforcement authorities. Thus, this brief article discusses the federal environmental criminal laws that place companies at risk, offers suggestions on how to comply with such laws and provides guidance on reacting to criminal investigations.

What Federal Laws Place Companies And Individuals At Risk?

This article focuses on the federal legislation used primarily by U.S. Department of Justice lawyers to prosecute environmental offenses. In general, the following legislation represents the eight principal federal environmental statutes:

Rivers and Harbors Act of 1899 (the "Refuse Act");

Federal Water Pollution Control Act (the "Clean Water Act");

Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA");

Clean Air Act;

Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA");

Resource Conservation and Recovery Act ("RCRA");

Solid Waste Disposal Act; and,

Toxic Substances Control Act.

For most marine industry participants, the Refuse Act and the Clean Water Act, as amended by the Oil Pollution Act of 1990, represent the federal environmental statutes that generate the most cases from a civil and criminal liability standpoint. Hence, while this article primarily focuses on the criminal aspects of these two statutes, the general discussion found later in the article provides a general discussion on dealing with criminal investigations and avoiding criminal liability.

The federal government enacted the Refuse Act in 1899 to keep the nation's waterways unobstructed and free from pollution. In general, the statute imposes a duty on all persons and corporations to refrain from discarding any debris or "refuse" in navigable waters. The statute imposes "strict liability" meaning that lack of knowledge or intent generally may not be used as a defense to violations of the law. Moreover, as a misdemeanor offense, the act imposes a fine of up to $25,000 per day and imprisonment for up to a year. The federal sentencing guidelines, however, may be used to significantly increase the fines levied for violations of the Refuse Act. Hence, in at least one recent case, a company received a fine of $2.25 million under the statute because of the extensive and costly clean-up necessitated by its violation.

The Clean Water Act, enacted in the 1970s, represents that other major federal legislation intended to restore and to maintain the chemical, physical and biological integrity of the nation's water. From a general standpoint, the act prohibits pollutant discharges into navigable waters of the United States. The Clean Water Act specifically imposes fines that can reach into the millions and further provides for imprisonment ranging from one year to fifteen years depending on the severity of the offense. Moreover, the Oil Pollution Act of 1990, enacted after the Exxon Valdez spill on the Alaska coast, set forth enhanced criminal penalties under the Clean Water Act for failure to notify authorities of unpermitted discharges of oil or hazardous substances into U.S. waters. The penalties for violating the Oil Pollution Act of 1990 include imprisonment of up to five years...