EPA Modernizes the Audit Policy

By Patrick D. Joyce, Jeryl L. Olson, and Craig B. Simonsen

The U.S. Environmental Protection Agency is modernizing its self-disclosure policy, commonly known as the Audit Policy, through a centralized "eDisclosure Portal" to receive and automatically process self-disclosed civil violations of environmental laws. 80 Fed. Reg. 76476 (December 9, 2015).

The new Portal will serve as an alternative to traditional paper or telephone disclosures, with the EPA encouraging users to use the eDisclosure Portal to make the disclosure process faster and more efficient.  EPA hopes that the eDisclosure Portal will encourage more violators to self-disclose in a timely manner.

The eDisclosure portal will accept new disclosures involving almost all types of civil violations, which will be placed into two categories:

• Category 1 Disclosures: all EPCRA violations except CERCLA 103/EPCRA 304 chemical release reporting violations and EPCRA violations with significant economic benefit.
• Category 2 Disclosures: all non-EPCRA violations, EPCRA violations where the violator cannot meet the Audit Policy "systematic discovery" (audit) requirement, and all EPCRA/CERCLA violations excluded from Category 1.

Pre-existing unresolved EPCRA disclosures may be resubmitted through the eDisclosure system within 120 days after launch of the portal, or by April 7, 2016.

In its eDisclosure Information Sheet, EPA notes that it is retaining the incentives outlined in its "New Owner Policy," but that it will continue to "accept and process new owner disclosures outside the eDisclosure system."

The requirements for the voluntary disclosure process, including the twenty-one (21) day disclosure period, will remain the same.  An online Compliance Certification will be due within sixty (60) days of submitting the initial online disclosures (or within ninety (90) days for Small Businesses Compliance Policy disclosures), but violators may request an extension for Category 2 disclosures.

EPA will spot check Category 1 disclosures to ensure accuracy and all Category 1 electronic Notices of Determination are conditional upon the accuracy of the representations made by the violator.  EPA will screen Category 2 violations for criminal violations and other serious issues.

While the benefits of the eDisclosures process for the Agency are apparent, companies considering disclosures should carefully consider the pros and cons of disclosure, the timing requirements, and the risks associated with disclosures.

For any self-disclosure questions, and for assistance with any of your disclosures, please contact the authors, your Seyfarth Shaw attorney, or any member of the Environmental, Safety & Toxic Torts Team.

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