[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2371 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2371

 To encourage owners and operators of facilities to conduct voluntary 
  internal audits of the compliance of the facilities with applicable 
          Federal environmental laws, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 8, 1994

 Mr. Hatfield introduced the following bill; which was read twice and 
       referred to the Committee on Environment and Public Works

_______________________________________________________________________

                                 A BILL


 
 To encourage owners and operators of facilities to conduct voluntary 
  internal audits of the compliance of the facilities with applicable 
          Federal environmental laws, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Environmental Audit Protection 
Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to encourage owners and operators of 
facilities, and other persons conducting activities, regulated under 
applicable environmental laws to conduct voluntary internal 
environmental audits of their compliance programs and management 
systems and to assess and improve compliance with applicable 
environmental laws by protecting the confidentiality of communications 
relating to voluntary internal environmental audits.

SEC. 3. DEFINITIONS.

    As used in this Act:
            (1) Applicable environmental law.--The term ``applicable 
        environmental law'' means--
                    (A) the Federal Insecticide, Fungicide, and 
                Rodenticide Act (7 U.S.C. 136 et seq.);
                    (B) the Toxic Substances Control Act (15 U.S.C. 
                2601 et seq.);
                    (C) the Federal Water Pollution Control Act (33 
                U.S.C. 1251 et seq.);
                    (D) the Oil Pollution Act of 1990 (33 U.S.C. 2701 
                et seq.);
                    (E) title XIV of the Public Health Service Act 
                (commonly known as the ``Safe Drinking Water Act'') (42 
                U.S.C. 300f et seq.);
                    (F) the Noise Control Act of 1972 (42 U.S.C. 4901 
                et seq.);
                    (G) the Solid Waste Disposal Act (42 U.S.C. 6901 et 
                seq.);
                    (H) the Clean Air Act (42 U.S.C. 7401 et seq.);
                    (I) the Comprehensive Environmental Response, 
                Compensation, and Liability Act of 1980 (42 U.S.C. 9601 
                et seq.);
                    (J) the Emergency Planning and Community Right-To-
                Know Act of 1986 (42 U.S.C. 11001 et seq.); and
                    (K) the Pollution Prevention Act of 1990 (42 U.S.C. 
                13101 et seq.).
            (2) Environmental audit.--The term ``environmental audit'' 
        means a voluntary, internal, and comprehensive evaluation of a 
        facility or an activity at a facility regulated under an 
        applicable environmental law, or of a management system related 
        to the facility or activity, that--
                    (A) is designed to identify and prevent 
                noncompliance and to improve compliance with an 
                applicable environmental law; and
                    (B) is conducted by the owner or operator of the 
                facility, by an employee of the owner or operator, by 
                another person conducting an activity regulated under 
                an applicable environmental law, or by an independent 
                contractor.
            (3) Environmental audit report.--
                    (A) In general.--The term ``environmental audit 
                report''--
                            (i) means a report comprised of 1 or more 
                        components, each labeled ``Environmental Audit 
                        Report: Privileged Document'', that is prepared 
                        as a result of an environmental audit; and
                            (ii) includes any supporting information 
                        (such as a field note or record of 
                        observations, finding, opinion, suggestion, 
                        conclusion, draft, memorandum, drawing, 
                        photograph, computer-generated or 
                        electronically recorded information, map, 
                        chart, graph, or survey) that is collected or 
                        developed for the primary purpose and in the 
                        course of the environmental audit.
                    (B) Component.--As used in subparagraph (A), the 
                term ``component'' means any of the following 3 items:
                            (i) An audit report prepared by the 
                        auditor, which may include information on the 
                        scope of the audit, information gained from the 
                        audit, and conclusions and recommendations 
                        relating to the audit, together with exhibits 
                        and appendices.
                            (ii) A memorandum or other document that 
                        analyzes a portion or all of the audit report 
                        and that may include information concerning the 
                        implementation of the report.
                            (iii) An implementation plan that addresses 
                        the correction of past noncompliance, the 
                        improvement of current compliance, and the 
                        prevention of future noncompliance.

SEC. 4. PROTECTION OF ENVIRONMENTAL AUDITS.

    (a) General Rule.--
            (1) In general.--Except as provided in paragraph (2) and 
        subsections (b) and (c), an environmental audit report shall 
        not be subject to discovery and shall not be admitted into 
        evidence in any civil or criminal action or administrative 
        proceeding before a Federal court or agency.
            (2) Exclusion of certain types of information.--Paragraph 
        (1) shall not apply to--
                    (A) any document, communication, data, report, or 
                other information required to be collected, developed, 
                maintained, reported, or otherwise made available to a 
                regulatory agency pursuant to an applicable 
                environmental law, or other Federal, State, or local 
                law, ordinance, regulation, permit, or order;
                    (B) information obtained by observation, sampling, 
                or monitoring by any regulatory agency; or
                    (C) information obtained from a source independent 
                of the environmental audit.
    (b) Waiver.--Subsection (a) shall not apply with respect to an 
environmental audit report to the extent that subsection (a) is waived 
expressly or by implication by the owner or operator of a facility, or 
other person conducting an activity, that is regulated under an 
applicable environmental law, who prepared or caused to be prepared the 
environmental audit report.
    (c) Inapplicability of General Rule.--
            (1) Civil and administrative proceedings.--
                    (A) In general.--In a civil action or an 
                administrative proceeding, subsection (a) shall not 
                apply to an environmental audit report, or a portion of 
                the report, if--
                            (i) subsection (a) is invoked for a 
                        fraudulent purpose; or
                            (ii)(I) the report or portion provides 
                        evidence of noncompliance with an applicable 
                        environmental law; and
                            (II) appropriate efforts to achieve 
                        compliance with the law were not promptly 
                        initiated and pursued with reasonable 
                        diligence.
                    (B) Determination of inapplicability.--In 
                determining whether subsection (a) applies to a report 
                or portion of a report, a court or administrative law 
                judge shall conduct an in camera review of the report 
                or portion of the report.
            (2) Criminal proceedings.--
                    (A) In general.--In a criminal proceeding, 
                subsection (a) shall not apply to an environmental 
                audit report, or a portion of the report, if--
                            (i) subsection (a) is invoked for a 
                        fraudulent purpose;
                            (ii)(I) the report or portion provides 
                        evidence of noncompliance with an applicable 
                        environmental law; and
                            (II) appropriate efforts to achieve 
                        compliance with the law were not promptly 
                        initiated and pursued with reasonable 
                        diligence; or
                            (iii)(I) the report or portion contains 
                        evidence relevant to the commission of an 
                        offense under an applicable environmental law;
                            (II) the Attorney General has a compelling 
                        need for the information;
                            (III) the information is not otherwise 
                        available; and
                            (IV) the Attorney General is unable to 
                        obtain the substantial equivalent of the 
                        information by any means without incurring 
                        unreasonable cost and delay.
                    (B) Determination of inapplicability of general 
                rule.--In determining whether subsection (a) applies to 
                a report or portion of a report, a court or 
                administrative law judge shall conduct an in camera 
                review of the report or portion of the report in 
                accordance with subparagraph (C).
                    (C) In camera review proceedings.--
                            (i) In general.--If the Attorney General 
                        has probable cause to believe that an offense 
                        has been committed under an applicable 
                        environmental law based on information obtained 
                        from a source independent of an environmental 
                        audit report, the Attorney General may obtain 
                        an environmental audit report, or a portion of 
                        the report, for which subsection (a) is invoked 
                        pursuant to a search warrant, criminal 
                        subpoena, or discovery in a criminal 
                        proceeding. The Attorney General shall 
                        immediately place the report under seal and 
                        shall not review or disclose the contents of 
                        the report.
                            (ii) Filing of petition.--Not later than 30 
                        days after the Attorney General obtains an 
                        environmental audit report, or a portion of the 
                        report, under clause (i), the owner or 
                        operator, or other person conducting an 
                        activity regulated under an applicable 
                        environmental law, who prepared or caused to be 
                        prepared the report, may file with the court a 
                        petition requesting an in camera hearing on 
                        whether subsection (a) applies to the 
                        environmental audit report or portion. Failure 
                        by the owner or operator or other person to 
                        file the petition shall constitute a waiver of 
                        subsection (a).
                            (iii) Scheduling order.--As soon as 
                        practicable after the filing of the petition, 
                        the court shall issue an order scheduling an in 
                        camera hearing on the petition not later than 
                        45 days after the filing of the petition.
                            (iv) Review by the attorney general.--
                                    (I) In general.--An order described 
                                in clause (iii) shall allow the 
                                Attorney General to remove the seal 
                                from the report to review the report 
                                and shall place appropriate limitations 
                                on the distribution and review of the 
                                report to protect against unauthorized 
                                disclosure. The Attorney General may 
                                consult with any enforcement agency 
                                regarding the contents of the report as 
                                the Attorney General determines is 
                                necessary to prepare for the in camera 
                                hearing.
                                    (II) Use of information from 
                                review.--The information used in 
                                preparation for the in camera hearing 
                                shall not be used in any investigation 
                                or in any proceeding against the 
                                defendant, and shall be kept 
                                confidential--
                                            (aa) unless and until the 
                                        information is found by the 
                                        court to be subject to 
                                        disclosure under subparagraph 
                                        (A); or
                                            (bb) unless the person 
                                        using the information 
                                        demonstrates that the 
                                        information was obtained from a 
                                        source independent of the 
                                        environmental audit report.
                            (v) Stipulations by the parties.--With 
                        respect to proceedings under this subparagraph, 
                        the parties may at any time stipulate to entry 
                        of an order directing that subsection (a) does 
                        or does not apply to specific information 
                        contained in an environmental audit report.
            (3) Relevance requirement.--Upon making a determination 
        under paragraph (1) or (2) that an environmental audit report, 
        or a portion of the report, should be subject to disclosure, 
        the court may require the disclosure of only such portions of 
        the report as are relevant to an issue in dispute in the 
        proceeding.
    (d) Burdens of Proof.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), a party invoking the protection of subsection (a) shall 
        have the burden of proving the applicability of subsection (a), 
        including, if there is evidence of noncompliance with an 
        applicable environmental law, the burden of proving that 
        appropriate efforts to achieve compliance were promptly 
        initiated and pursued with reasonable diligence.
            (2) Fraud in a civil action.--If a party seeks discovery 
        under subsection (c)(1)(A)(i), the party shall have the burden 
        of proving that subsection (a) is invoked for a fraudulent 
        purpose.
            (3) Attorney general.--If the Attorney General seeks 
        discovery under subsection (c)(2)(A)(iii), the Attorney General 
        shall have the burden of proving the matters described in 
        subsection (c)(2)(A)(iii).

SEC. 5. EFFECT ON OTHER RULES.

    Nothing in this Act shall limit, waive, or abrogate the scope or 
nature of any statutory or common law rule regarding discovery or 
admissibility of evidence, including the attorney-client privilege and 
the work product doctrine.

SEC. 6. APPLICABILITY.

    This Act shall apply to each Federal civil or criminal action or 
administrative proceeding that is commenced after the date of enactment 
of this Act.
                                 <all>
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