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                                 United States General Accounting Office

     GAO                             Testimony






     For Release                     Observations on EPA  and State
     on Delivery
     Expected at                     Enforcement Under the Clean Water Act
     9:30 a.m. EDT
     Tuesday
     May 14, 1991






                                 Statement of
                                 Richard L. Hembra, Director
                                 Environmental Protection Issues
                                 Resources, Community, and Economic
                                 Development Division

                                 Before the
                                 Subcommittee on Water Resources
                                 Committee on Public Works and Transportation
                                 House of Representatives


                                               Property of COC Library


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1991


    GAO/T-RCED-91-53                                                               GAO Form 160 (12/87)










Mr. Chairman and Members of the Subcommittee:



     We are pleased to be here today to discuss the Environmental

Protection Agency's (EPA) enforcement activities under the Clean

Water Act. Our views are based on a number of GAO evaluations of

EPA and state enforcement, as well as other assessments conducted

by EPA's Office of Inspector General and by EPA itself (see

attachment).



     In summary, Mr. Chairman, our experience with EPA's water

quality programs suggests that strong enforcement by EPA and the

states is fundamental to their success. Effective enforcement

serves as a deterrent to violations and, when violations do occur,

helps to ensure that appropriate corrective action is taken in a

timely manner.



     Specifically, our work clearly indicates that:



      --Enforcement of our nation's water quality laws continues to

        be weak and sporadic. Despite serious and longstanding

        violations, most enforcement actions are mild, informal

        "slaps on the wrist" rather than formal actions such as

        administrative orders or fines and penalties. Further,

        even in the relatively few cases where penalties have been

        assessed, they are often significantly reduced or dropped

        without adequate documentation.













      --An effective enforcement program requires the development

        of criteria that (1) allow regulators to set enforcement

        priorities and (2) identify what types of enforcement

        actions are appropriate and when they should be taken.

        Although EPA has made some progress in recent years in both

        of these areas, additional improvements are still needed.



      --EPA headquarters' oversight of its regional offices and

        state enforcement activities is essential so that policy-

        making officials (1) know whether timely and appropriate

        enforcement is being taken and (2) can hold program

        officials accountable when it is not. EPA headquarters

        officials often have not tracked or followed up on

        enforcement activities. As a result, many enforcement

        problems remain unresolved.



     Thus, Mr. Chairman, EPA still has a long way to go before

enforcement serves as an effective deterrent against violations of

the Clean Water Act. Until then, violators will continue to enjoy

competitive advantages over those complying with the Act, and the

Act will not realize its full potential in protecting the nation's

waters. Before I discuss the points outlined above, I would like

to provide a little background on how enforcement is integrated

into EPA's key water quality programs.




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BACKGROUND



     EPA implements many of its primary water quality programs

through permits that limit pollutant levels. Under the National

Pollutant Discharge Elimination System Program (NPDES), limits are

placed on the pollutants sewage treatment plants and industries

discharge directly into the nation's waters. Under the National

Industrial Pretreatment Program, limits are placed on pollutants

that industrial facilities discharge indirectly into these waters

through sewers that service municipal wastewater treatment

facilities. These pollutant discharges often include toxic

chemicals from industrial wastewater. In the Municipal Sludge

Management Program, limits are placed on the toxicity allowed in

sewage sludge generated as a by-product of the wastewater treatment

process.



     To determine if the limits are being complied with, pollutant

levels are to be monitored and any violations reported to the

regulatory authority. In turn, these violations are to elicit an

enforcement response that can range from informal actions, such as

verbal warnings or written notices of violation, to formal actions

such as fines or penalties. The type of action to be taken depends

on various factors, including how significant and long-standing the

violations are, whether the violations are intentional, and how

successful informal actions are in correcting them.




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ENFORCEMENT PROBLEMS HAVE

BEEN PERSISTENT



     Past GAO evaluations of EPA's water quality programs have

consistently identified a reluctance on the part of EPA and the

states to take strong enforcement actions. For example:



      --Our 1983 report on the NPDES program revealed widespread

        and long-standing noncompliance with permits before formal

        enforcement actions were taken by EPA or the states. In

        some cases, noncompliance continued for years.



      --Our 1988 report on federal facilities' compliance with

        NPDES permits also documented that despite widespread

        significant noncompliance, EPA and the states rarely took

        timely enforcement actions. EPA and state regulators took

        timely enforcement actions in only about one of six cases.



      --Our 1989 report on the pretreatment program suggested that

        the absence of aggressive enforcement by treatment plants

       was an important underlying cause of discharge limit

        violations. For example, while about 60 percent of the

        plants served informal written notices of violation to

        dischargers, only 5 percent levied administrative fines.

        Furthermore, the plants often failed to escalate




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        enforcement when informal measures to correct violations

        were unsuccessful.



     Some recent reviews conducted by EPA's Office of Inspector

General and by other EPA offices have also found serious problems

with enforcement of water programs. For example:



      --A 1990 Inspector General report on the NPDES program found

        that EPA regions and states had not assessed penalties in

        accordance with the agency's civil penalty policy, and had

        not adequately documented penalty reductions. In one case,

        ï¿½ state initially assessed a penalty of $1,000,000 against

        ï¿½ violator, but then reduced it to $57,000, and then only

        collected $15,000. The study also found that EPA was not

        ensuring that penalties recover the economic benefit

        enjoyed by violators for continued noncompliance.



      --EPA's Office of Water Enforcement and Permits 1989 mid-year

        evaluation found that state enforcement actions had

        decreased significantly and expressed concern with the "low

        level" of state enforcement activities.



     Taken together, these evaluations show that poor enforcement

can often be traced to fundamental program weaknesses. Mr.

Chairman, I would now like to briefly discuss EPA's progress in




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addressing the weaknesses in its water quality enforcement

programs.



CRITERIA NEEDED FOR EFFECTIVE

ENFORCEMENT PROGRAMS



     our prior work revealed that some of EPA's water quality

enforcement programs have not included criteria to identify

significant noncompliance or timely and appropriate enforcement

actions. Although EPA has taken some steps to correct these

weaknesses, the important role that these criteria play in an

effective enforcement program warrants continued oversight of

EPA's progress.



Settinci Enforcement Priorities



     With limited resources, environmental regulators are unable to

take enforcement actions against all violators. Many environmental

programs therefore include a system for setting enforcement

priorities to target the most serious violators for enforcement

action. A key part of such a system is the criteria for

determining when noncompliance is "significant" enough to warrant

an enforcement action.



     Our report on EPA's pretreatment program illustrates how the

lack of criteria to determine significant noncompliance can foster


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inconsistencies among enforcement actions against discharge

violators. For example, EPA headquarters considered a discharger

in significant noncompliance with discharge limits if 66 percent or

more of the measurements (analyses of its wastewater) exceed the

same daily maximum limit or the same average limit in a 6-month

period. EPA's Region IV, on the other hand, considered a

discharger in significant noncompliance if 20 percent or more of

the wastewater samples collected during the past 12 months contain

one or more violations, provided more than four samples were

taken. After dischargers complained to EPA and the states about

such inconsistencies, EPA established a definition of significant

noncompliance to be used in enforcing pretreatment program

requirements.



     We also identified the lack of significant noncompliance

criteria as a problem in our 1990 report on EPA's interim sludge

management program. To improve the prospects for an effective

permanent program, we recommended that EPA develop criteria for

significant noncompliance before the permanent program begins.

Although EPA acknowledged the need for such criteria, it does not

plan to formally establish significant noncompliance criteria until

after the final sludge management regulations are issued, currently

scheduled for January 1992. We continue to believe that EPA should

not delay promulgating significant noncompliance criteria.






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Establishinci Timely and Appropriate Criteria



     Our prior reports also illustrate the importance of

identifying specific criteria for when enforcement action is

required, and for the type of action appropriate for a given

violation. Our report on the sludge management program found that

the absence of such criteria led to significantly inconsistent

enforcement responses among the states. For example, one state

without formal criteria relied heavily on informal actions (such as

sending written notices to violators) and allowed for a maximum

fine of only $100. In contrast, another state used specific

criteria for timely and appropriate enforcement. A key aspect of

these criteria was the use of escalating steps that strengthened

the enforcement actions until compliance was reached. If these

actions did not lead to compliance, the case could be referred to

the state's Department of Justice. Continued failure to comply

could result in fines up to $10,000 per day.



    Acknowledging the possible need for timely and appropriate

enforcement criteria for its sludge management program, EPA plans

to develop these criteria sometime after its final sludge program

regulations are issued, which is currently scheduled for January

1992. Here again, to avert enforcement problems, we continue to

believe that EPA should not delay promulgating timely and

appropriate enforcement criteria.











     Our report on the pretreatment program also demonstrated the

value of timely and appropriate enforcement criteria. We found

that the traditional role of the wastewater treatment plant as a

service-oriented facility in the local community can make it

politically difficult to take strong enforcement actions against

industrial dischargers that pay local taxes and employ local

residents. One treatment facility with a weak enforcement record

had an industrial user who was reportedly discharging particularly

toxic metals at an average of 3,130 percent over its permit limits.

Timely and appropriate criteria could help avoid this type of

problem by allowing the treatment plant to claim it is simply

"following the rules" when taking an enforcement action.



    Although EPA has developed timely and appropriate criteria

guidance for pretreatment enforcement, the guidance allows for a

great deal of discretion on the part of enforcement officials.

Accordingly, the guidance acknowledges that EPA oversight is

imperative to ensure that enforcement officials are, in fact,

taking appropriate actions.



     Mr. Chairman, I would now like to discuss the critical role

oversight plays in an effective enforcement program.










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IMPORTANCE OF EPA HEADQUARTERS OVERSIGHT

OF REGIONAL OFFICE AND STATE

ENFORCEMENT ACTIVITIES



     Although criteria for significant noncompliance and timely and

appropriate actions are vital elements of an effective enforcement

program, systematic EPA headquarters oversight over its regional

offices and over state enforcement is critical to a program's

success. Headquarters oversight is necessary to identify cases in

which timely and appropriate enforcement actions are not being

taken and to follow up with program officials to discuss why such

actions are not taken and how they can be resolved.



     Our prior reports and ongoing reviews of EPA's water quality

programs indicate that EPA's regional offices and states frequently

do not adhere to EPA's enforcement criteria and that greater

headquarters' oversight is needed. For example, our report on

federal facilities' compliance with the Clean Water Act noted that

despite the absence of timely and appropriate enforcement actions

by EPA regional offices and the states, headquarters did not

consistently make follow-up phone calls to the regions to discuss

the cases. As a result, some federal facilities remained in

significant noncompliance for up to 2 years without receiving an

enforcement order.






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     Our report on the pretreatment program also concluded that

greater EPA oversight was needed to deal with limited enforcement

against noncomplying wastewater treatment facilities. in fact, we

noted that EPA's Office of Water cited ineffective oversight as a

material program weakness under the Federal Managers' Financial

Integrity Act. Our report on the sludge management program also

stressed the need for greater EPA oversight of regional and state

enforcement activities.



     Recent EPA evaluations have also called for improved

headquarters' oversight. For example, the EPA Inspector General's

1990 report on NPDES enforcement concluded that greater compliance

could be achieved if EPA increased its oversight of the enforcement

program. Similarly, the 1989 mid-year evaluation by the agency's

Office of Water Enforcement and Permits concluded that greater

attention needed to be paid to encourage state enforcement efforts.



     Given the critical role oversight plays in an effective

enforcement program, we are continuing to include this component in

our ongoing reviews of EPA's water and other environmental

programs. For example, in a review of the NPDES program in the

Great Lakes area, we plan to examine EPA's enforcement and

oversight activities. In another review, we are examining EPA's

penalty policies and practices carried out under a number of

environmental laws. This review will also examine the adequacy of

headquarters' oversight of regional and state penalty practices.


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CONCLUS IONS



     In summary, Mr. Chairman, the ability of our nation's

environmental laws to protect health and the environment depends

greatly on effective enforcement programs. Without enforcement,

dischargers have little incentive to incur the cost of pollution

control. At the same time, industrial dischargers that do abide by

program requirements are unfairly placed at a competitive

disadvantage with those who choose not to invest in pollution

control equipment and practices.



     Effective enforcement programs, in turn, need criteria that

identify significant noncompliance and timely and appropriate

enforcement actions. once these criteria are in place, vigilant

oversight by EPA headquarters is needed to ensure that the

criteria are followed consistently and that appropriate actions are

taken when they are not.



     EPA acknowledges the importance of these key enforcement

components and has taken some steps to incorporate them more

effectively into its programs. However, significant problems still

remain, and are likely to become more difficult to resolve as

environmental requirements become increasingly more stringent. We

have in the past made recommendations to EPA to deal with a number




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of these problems and will continue to pay close attention to

EPA's enforcement efforts.







     Mr. Chairman, this concludes my prepared statement. I would

be happy to respond to any questions at this time.







































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ATTACHMENT                                                  ATTACHMENT


     Selected GAO and EPA RePorts on Water Proaram Enforcement



Water Pollution: Serious Problems Confront Emeraina Municipal
Sludae Manaaement Proaram (GAO/RCED-90-57, Mar. 5, 1990).

Consolidated RePort on the National Pollutant Discharae
Elimination System Permit Enforcement Proaram (EPA/IG E1H28-01-
0200-0100154, Jan. 4, 1990).

Cappina RePort on The Computation, Neaotiation, Mitication, and
Assessment of Penalties Under EPA Proarams  (EPA/IG E1G8E9-05-0087-
9100485, Sept. 27, 1989).

Office of Water Enforcement and Permits National Mid-Year
Evaluation (EPA/OWEP, July 1989).

Water Pollution: Improved Monitorina and Enforcement Needed for
Toxic Pollutants Enterina Sewers (GAO/RCED-89-101, Apr. 25, 1989).

Water Pollution: Stronaer Enforcement Needed to Improve Compliance
at Federal Facilities (GAO/RCED-89-13, Dec. 27, 1988).

Wastewater Discharaes Are Not ComDlvina With EPA Pollution Control
Permits (GAO/RCED-84-53, Dec. 2, 1983).


























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