Navigating Voluntary Disclosures Under New EPA/OIG Guidance to Mitigate Violations and Penalties

The EPA Office of Inspector General (OIG) recently issued a report detailing the results of an evaluation of the EPA's process for screening self-reported environmental violations made through its eDisclosure system. The OIG's office concluded that the EPA lacks the necessary internal controls to ensure breaches are disclosed and that disclosures are appropriately screened.

The EPA's Audit Policy allows companies that conduct voluntary audits to disclose violations and take corrective action to reduce penalties and mitigate incentives. In 2015 the audit policy was updated to require electronic reporting using the newly established eDisclosure portal. The eDisclosure portal receives and processes submissions under the audit policy into two categories:

• Category 1: EPCRA violations that meet all nine of the audit policy's conditions
• Category 2: Non-EPCRA violations and violations of EPCRA that do not meet the criteria for Category 1

The findings of the OIG's report are primarily focused on Category 2. The EPA previously stated that it would screen Category 2 disclosures for significant concerns. Companies that use the audit policy and submit a Category 2 voluntary self-disclosure are likely subject to increased scrutiny on the qualifications under the current policies and the resulting follow-up inspections by the EPA.

Listen as our expert panel discusses how the OIC guidance will likely affect the ongoing audit policy and enforcement by the EPA of non-EPCRA violations and how to mitigate risks while utilizing the audit policy.