[Federal Register Volume 59, Number 117 (Monday, June 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14948]


[[Page Unknown]]

[Federal Register: June 20, 1994]


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Part XII





Environmental Protection Agency





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Public Meeting on Auditing; Notice
ENVIRONMENTAL PROTECTION AGENCY

[FRL-5001-6]

 

Notice of Public Meeting on Auditing

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of public meeting to discuss environmental auditing 
policy and related environmental compliance self-evaluation and 
disclosure issues.

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SUMMARY: This notice announces that EPA will hold a public meeting on 
Wednesday, July 27, 1994 in Washington, D.C. which will be devoted to 
environmental auditing policy, and the related issues of self-
evaluation and disclosure. The focus of the meeting, to be chaired by 
the Assistant Administrator for Enforcement and Compliance Assurance, 
will be to consider the need for reinforcing or modifying the Agency's 
existing policy on environmental auditing. The Agency is providing this 
forum for the regulated community and other interested parties to 
present views on whether additional incentives are needed to encourage 
the self-disclosure and prompt correction of environmental violations 
uncovered during facility audits.

DATES: The public meeting will be held on Wednesday, July 27, 1994 from 
8:30 a.m to 5:00 p.m. The meeting will continue, if necessary, at 9:00 
a.m. on Thursday, July 28, 1994.

ADDRESSES: The public meeting will take place on Wednesday, July 27, 
1994, at the Disabled American Veterans (DAV) Headquarters, in the 
Auditorium, located at 807 Maine Avenue, SW., Washington, DC. If 
necessary, the meeting will continue on Thursday, July 28, 1994 at the 
EPA Auditorium, located at 401 M Street, SW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Brian P. Riedel (Coordinator of Public 
Meeting on Auditing), U.S. Environmental Protection Agency, Office of 
Compliance, 401 M Street, SW., Washington, DC, 20460, phone (202) 260-
0321, fax (202) 260-8511 or Ira R. Feldman, Special Counsel, Office of 
Compliance, (Chair of Auditing Policy Work Group), 401 M Street, SW., 
Washington, DC 20460, phone 260-2824, fax (202) 260-8511.

SUPPLEMENTARY INFORMATION:

I. Background

    In a memorandum dated May 13, 1994, Assistant Administrator Steven 
A. Herman announced that, in response to the request of Administrator 
Browner, the Office of Enforcement and Compliance Assurance (OECA) will 
coordinate a reassessment of EPA's current policy regarding 
environmental auditing and self-evaluation by the regulated community. 
OECA will seek to ensure that any decision either to reinforce or to 
change existing policy on environmental auditing is informed by fact. 
Therefore, the approach to the upcoming evaluation of auditing policy 
can best be characterized as an empirical information-gathering effort.
    EPA is committed to investigating the perceived problems relating 
to auditing and self-disclosure. The Agency must, however, develop a 
sufficient information base in order to give serious consideration to 
any policy options. EPA hopes to collect such relevant data through 
implementation of four actions this summer:
    1. EPA will convene the public meeting described in this notice as 
an opportunity for the Agency to obtain a wide variety of views and to 
sharpen the focus on these issues. The range of issues appropriate for 
discussion at the public meeting is outlined under ``Agenda/Focus 
Topics'' section below.
    2. Prior to the public meeting, EPA expects to publish in the 
Federal Register a restatement of the Agency's current audit policy. 
The most recent policy statement on environmental auditing was 
published in the Federal Register on July 14, 1986, at 51 FR 25004.
    3. Published elsewhere in today's Federal Register is a companion 
notice soliciting proposals for the Environmental Leadership Program 
(ELP) pilot projects. EPA expects that the ELP pilot projects will 
generate useful data on auditing methodology and measures. The ELP 
projects may serve as vehicles for experimenting with policy-driven 
incentives.
    4. Finally, EPA will encourage the private sector to collect data 
and survey auditing practices in order to gauge the effect of 
enforcement policies on self-evaluation and disclosure in the regulated 
community.

II. Agenda/Focus Topics for Public Meeting

    The Agency is providing this forum for the regulated community and 
other interested parties to present argument and evidence as to whether 
additional incentives are needed to encourage the self-disclosure and 
prompt correction of environmental violations uncovered during facility 
audits.
    The Agency is particularly interested in receiving information 
relating to the implementation of EPA's 1986 Environmental Auditing 
Policy Statement. To date, the Agency has received only anecdotal 
reports relating to the use of the policy by Federal inspectors and 
prosecutors and their State and local counterparts. EPA is interested 
in specific information, supported with documentation, about both the 
successes and failures associated with the implementation of the 1986 
policy. Matters that involved, or should have involved, penalty 
mitigation are especially relevant.
    At the public meeting, EPA will encourage discussion of specific 
suggestions for auditing policy options. The presentation of evidence 
supporting the viability of these options will be given priority. This 
forum presents an opportunity for the Agency to establish a dialogue 
with the regulated community on ways to provide increased recognition 
and greater certainty of enforcement response (through penalty 
mitigation or other mechanisms) for self-disclosure and correction of 
violations discovered through auditing. EPA is particularly interested 
in options which adapt existing mechanisms or policies, and which 
expand the approaches used in current EPA self-disclosure/penalty 
reduction programs (e.g., the Compliance Audit Program under section 
8(e) of the Toxic Substances Control Act).
    Four States (Colorado, Indiana, Kentucky, and Oregon) have recently 
enacted legislation which, with some variations, creates a ``self-
evaluative'' privilege for audit reports. EPA has consistently opposed 
this approach, principally because of the risk of weakening State 
enforcement programs, the imposition of unnecessary transaction costs 
and delays in enforcement actions, and the potential increase in the 
number of situations requiring the expenditure of scarce Agency 
resources, including the ``overfiling'' of State enforcement actions. 
EPA urges States that are considering a privilege-oriented approach to 
actively participate in the comprehensive process described in this 
notice before pursuing any legislative action. The Agency also 
encourages States that have passed such legislation to present 
documentary justification for this approach at the public meeting.
    The Agency recognizes that significant interest exists with regard 
to the potential use of auditing results in criminal enforcement. 
Discussion of the relationship of auditing to criminal sanctions is 
therefore appropriate at the public meeting. Relevant background 
information includes the Department of Justice document entitled, 
``Factors in Decisions on Criminal Prosecutions for Environmental 
Violations in the Context of Significant Voluntary Compliance or 
Disclosure Efforts by the Violator,'' dated July 1, 1991, and the EPA 
memorandum on ``The Exercise of Investigative Discretion,'' from Earl 
E. Devaney, Director, Office of Criminal Enforcement, dated January 12, 
1994.
    Lastly, EPA is interested in discussion of advances in the field of 
auditing since 1986; any revision of auditing policy should reflect 
more recent trends and developments in the auditing field. At the 
public meeting, discussion may include the potential applicability of 
concepts relating to auditing and environmental management systems 
incorporated into the Draft Corporate Sentencing Guidelines for 
Environmental Violations, dated November 16, 1993, as well as evolving 
international auditing and management standards. Finally, comment is 
expected on the potential role of the Environmental Leadership Program 
pilot projects in promoting auditing practices or implementing auditing 
policy.

III. Information for Participants

    Persons interested in speaking, presenting information, or 
otherwise expressing comments at this meeting should fax their name, 
affiliation, phone number, topic, and a brief statement on what their 
presentation can add to the dialogue, to one of the contacts listed 
above by July 13, 1994. Persons wishing to submit pre-filed testimony 
may send or fax such material to one the contacts listed above. 
Speakers will be notified of their time slot or panel assignment once 
the final format is determined. This meeting will be open to the public 
as space permits, and a transcript of the proceedings will be prepared.

    Dated: June 14, 1994.
Steven A. Herman,
Assistant Administrator, Office of Enforcement and Compliance 
Assurance.
[FR Doc. 94-14948 Filed 6-17-94; 8:45 am]
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