This fall, EPA will unveil eDisclosure, a web-based system to more efficiently receive and process compliance violations self-disclosed under its 2000 Audit Policy and Small Business Compliance Policy.

These policies offer penalty mitigation and other incentives for companies that discover, promptly disclose, and quickly correct environmental compliance violations and take steps to prevent future violations. While the new system will make reporting easier and speed the resolution process, the requirements of the audit policies will remain unchanged.

In general, to take advantage of the penalty mitigation under the audit policy, the following conditions must be met:

  1. Systematic Discovery (discovery of the violations through an environmental compliance audit or through an environmental management system review) – required for 100% penalty mitigation, otherwise only 75% mitigation
  2. Voluntary Discovery
  3. Prompt Disclosure – within 21 days of discovery
  4. Discovery, Disclosure Independent of Government/Third Party Plaintiff
  5. Correction and Remediation – within 60 days after discovery unless written agreement/order
  6. Prevent Recurrence
  7. No Repeat Violations – can’t have same or closely related violation at same facility within past 3 years
  8. Other Violations Excluded (serious actual harm, imminent and substantial endangerment)
  9. Cooperation

The portal will accept new disclosures involving almost all types of civil violations. Pre-existing unresolved EPCRA disclosures can be resubmitted through the eDisclosure system within 90 days after launch of the portal, but preexisting disclosures that are subject to audit agreements will be resolved outside the eDisclosure system through a Notice of Determination (NOD), Consent Agreement and Final Order (CAFO), or Consent Decree (CD).

To use the eDisclosure portal, reporters must: (1) register with the system; (2) promptly disclose their violations online within 21 days of discovery; and (3) submit an online Compliance Report certifying that any noncompliance was timely corrected. The Compliance Report is usually due within 60 days of submitting an initial online Audit Policy disclosure (or within 90 days for Small Business Compliance Policy disclosures), but limited reporting deadline extensions will be available in certain circumstances.

Compliance violation disclosures resolved through the portal will be resolved either as a “Tier 1” or “Tier 2” disclosure.

Tier 1 Disclosures will include EPCRA violations that meet all Audit Policy or Small Business
Compliance Policy conditions, but do not include:

  1. CERCLA 103/EPCRA 304 chemical release reporting violations; or
  2. EPCRA violations with significant economic benefit as defined by EPA.

For disclosures that qualify as Tier 1, the eDisclosure system will automatically issue an electronic Notice of Determination (eNOD) confirming that the violations are resolved with no assessment of civil penalties, conditioned on the accuracy and completeness of the submitter’s certified eDisclosure.

Tier 2 disclosures will include:

  1. All non-EPCRA violations;
  2. EPCRA violations where the violator can only certify compliance with Audit Policy Conditions 2-9 (i.e., discovery was not systematic), and
  3. EPCRA/CERCLA violations excluded from Tier 1.

For disclosures that qualify as Tier 2, the eDisclosure system will automatically issue an electronic Acknowledgement Letter (AL) confirming EPA’s receipt of the disclosure, and promising that EPA will make a determination as to eligibility for penalty mitigation if and when it considers taking an enforcement action for environmental violations.

The systematic discovery of compliance violations is the key to potential penalty mitigation and is the only path to full mitigation. Periodic compliance audits by an outside party can uncover violations and reduce their impact.

For more information on EPA’s audit policy and on the eDisclosure system, go to http://www2.epa.gov/compliance/epas-audit-policy.