EPA Brings Self-Disclosure Process Into The 21st Century, Adding More Transparency

The United States Environmental Protection Agency recently modernized its implementation of its two primary self-disclosure incentive policies - the Audit Policy and the Small Business Compliance Policy - by creating a centralized, web-based "eDisclosure" portal to receive and automatically process regulated entities' self-disclosed civil violations of environmental law. The Audit Policy and Small Business Compliance Policy provide penalty mitigation and other incentives for large and small businesses that discover, promptly disclose and expeditiously correct environmental violations and take steps to prevent future violations. According to EPA, the automated eDisclosure system will make the processing of more routine voluntary disclosures faster and more efficient, and save time and resources for both regulated entities and EPA. Nonetheless, while efficiency is desirable for public and private parties alike, potential users of the new system should bear in mind that self-disclosure of a violation to EPA is the last step in a multi-part and often complicated process of information collection, risk evaluation and decision-making that is best undertaken with the assistance of experienced environmental consultants and legal counsel.

In the future, all self-disclosed civil violations (except for disclosures under EPA's New Owner Policy) must be made through the eDisclosure portal. Entities that disclose potential violations through the portal may qualify for one of two types of automated treatment, Category 1 or Category 2. Category 1 disclosure is available only for minor violations of the Emergency Planning and Community Right-to-Know Act ("EPCRA"). For Category 1 disclosures, the eDisclosure system automatically issues an electronic Notice of Determination ("eNOD") confirming that the violations have been resolved with no assessment of civil penalties, on the condition that the certified eDisclosure is accurate and complete.

Category 2 Disclosures include all non-EPCRA violations, EPCRA violations where the entity can certify compliance with all of the Audit Policy's nine conditions except that the method of violation discovery was systematic, violations of CERCLA § 103/EPCRA § 304's chemical release reporting requirements, and EPCRA violations with "significant economic benefit" (as defined by EPA). For these disclosures, the eDisclosure system automatically issues an electronic Acknowledgement Letter confirming EPA's receipt of the...