Environmental Protection: EPA's and States' Efforts to Focus State
Enforcement Programs on Results (Testimony, 06/23/98, GAO/T-RCED-98-233).
GAO discussed the Environmental Protection Agency's (EPA) and states'
efforts to focus state environmental enforcement programs on results,
focusing on: (1) what alternative compliance strategies states are
practicing; (2) whether and how states are measuring the effectiveness
of these strategies; and (3) how EPA has responded to these states'
efforts.
GAO noted that: (1) approaches used by 10 states GAO contacted that are
experimenting with alternative compliance strategies generally fall into
two categories: (a) compliance assistance programs that seek to help
dischargers comply with environmental requirements; and (b) programs
that promote more flexible enforcement than is practiced under the
current system; (2) these programs generally target smaller facilities
or businesses that may not understand the requirements and the most
efficient and effective ways of meeting them; (3) among the key flexible
enforcement approaches employed were audit privilege/immunity policies
or laws, which generally encourage facilities to use environmental
auditing to assess their environmental performance and correct the
problems identified; (4) nine of the 10 states had some type of audit
privilege/immunity program, four of which were authorized by the states'
statutes; (5) GAO found broad agreement among the state and EPA
officials GAO contacted that the effectiveness of alternative compliance
strategies should be measured and addressed; (6) yet while GAO
identified a number of innovative efforts under way, states' efforts to
measure the effectiveness of alternative compliance strategies have
proven to be much more difficult than counting and reporting traditional
enforcement outputs; (7) EPA has initiated a number of activities to
improve compliance using nontraditional approaches, such as establishing
compliance assistance centers, rewarding voluntary self-disclosure of
environmental violations, and working jointly with states to develop
results-oriented performance measures; (8) these programs have
complemented and facilitated states' efforts, but the agency has also
maintained a continued emphasis on strong enforcement, noting that the
deterrent effect achieved through enforcement actions motivates
regulated entities to seek compliance assistance and use incentive
policies; (9) some of the differences between EPA and state regulatory
authorities over state intiatives reflect different legal and policy
views; and (10) GAO found, however, that these differences were
exacerbated by inconsistent approaches by different EPA offices on how
the adequacy of state enforcement programs should be
assessed--particularly as it relates to the appropriate balance in
states' use of traditional and non-traditional tools for achieving
compliance.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-RCED-98-233
TITLE: Environmental Protection: EPA's and States' Efforts to
Focus State Enforcement Programs on Results
DATE: 06/23/98
SUBJECT: State-administered programs
Voluntary compliance
Environmental policies
Audits
Federal/state relations
Environmental law
Technical assistance
Accountability
IDENTIFIER: Florida
Illinois
Massachusetts
Texas
Washington
Colorado
Delaware
New Jersey
Oregon
Pennsylvania
EPA National Environmental Performance Partnership System
Washington Snapshots Program
Massachusetts Environmental Results Program
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Cover
================================================================ COVER
Before the Subcommittee on Oversight and Investigations, Committee on
Commerce, House of Representatives
For Release
on Delivery
Expected at
9:00 a.m. EDT
Tuesday
June 23, 1998
ENVIRONMENTAL PROTECTION - EPA'S
AND STATES' EFFORTS TO FOCUS STATE
ENFORCEMENT PROGRAMS ON RESULTS
Statement of Mike Gryszkowiec,
Director of Planning and Reporting
Resources, Community, and Economic
Development Division
GAO/T-RCED-98-233
GAO/RCED-98-233T
(160449)
Abbreviations
=============================================================== ABBREV
EPA -
MDEP -
NEPPS -
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here to discuss the findings of our recent report
on the Environmental Protection Agency's (EPA) and states' efforts to
focus state environmental enforcement programs on results.\1 Most
major environmental statutes allow EPA to delegate the responsibility
for key programs to qualified states. In order for the states to
obtain such responsibility, the statutes generally require them to
have adequate authority to inspect, monitor, and enforce the program.
Recently, some states have supplemented these traditional enforcement
activities with other, more cooperative approaches to improve
compliance through technical assistance and various incentives.
To understand more about the potential for these alternative
strategies to make compliance more efficient and effective, the full
Committee asked us to determine (1) what alternative compliance
strategies states are practicing, (2) whether and how states are
measuring the effectiveness of these strategies, and (3) how EPA has
responded to these states' efforts, focusing in particular on the
agency's objective of holding the states accountable for achieving
environmental results, rather than focusing solely on enforcement
processes.
In summary, Mr. Chairman, we found the following:
-- Approaches used by 10 states we contacted\2 that are
experimenting with alternative compliance strategies generally
fall into two categories: (1) "compliance assistance" programs
that seek to help dischargers comply with environmental
requirements and (2) programs that promote more flexible
enforcement than is practiced under the current system (which
generally prescribes when and what type of "timely and
appropriate" enforcement action is required for a given
violation). Most of the 10 states had developed some kind of
compliance assistance program, which included such activities as
seminars, technical assistance visits, and "plain-English"
guides explaining regulatory requirements. These programs
generally target smaller facilities or businesses that may not
understand the requirements and the most efficient and effective
ways of meeting them. Among the key flexible enforcement
approaches employed were "audit privilege/immunity" policies or
laws, which generally encourage facilities to use environmental
auditing to assess their environmental performance and correct
the problems identified. In return, their audit findings and
other information generated by audits may be granted
confidentiality and/or penalties for violations found may be
waived or reduced. Nine of the 10 states had some type of audit
privilege/immunity program, four of which were authorized by the
states' statutes.
-- We found broad agreement among the state and EPA officials we
contacted that the effectiveness of alternative compliance
strategies should be measured and assessed. Yet while we
identified a number of innovative efforts under way, states'
efforts to measure the effectiveness of alternative compliance
strategies have proven to be much more difficult than counting
and reporting traditional enforcement "outputs," such as the
number of inspections conducted or penalties assessed. Key
challenges to developing results-oriented performance measures
include (1) the frequent absence of the baseline data needed to
determine whether compliance rates or environmental quality have
improved under new strategies and (2) the inherently greater
difficulty and expense involved in quantifying outcomes (such as
industry wide compliance rates) as compared with counting and
reporting enforcement activities.
-- EPA has initiated a number of activities to improve compliance
using nontraditional approaches, such as establishing compliance
assistance centers, rewarding voluntary self-disclosure of
environmental violations, and working jointly with states to
develop results-oriented performance measures. These programs
have complemented and facilitated states' efforts, but the
agency has also maintained a continued emphasis on strong
enforcement, noting that the deterrent effect achieved through
enforcement actions motivates regulated entities to seek
compliance assistance and use incentive policies. This emphasis
has led the agency to raise concerns in cases in which states'
data have shown decreased numbers of enforcement actions and to
object on legal and policy grounds to a number of states' audit
privilege/immunity laws and other programs that it has concluded
compromise the efficacy of the states' enforcement programs.
Some of the differences between EPA and state regulatory
authorities over these state initiatives reflect different legal
and policy views on (1) whether these states' audit privilege
laws compromise the states' authority to enforce federal
environmental law and (2) the appropriate role of EPA and its
state counterparts, particularly on the appropriate level of
EPA's oversight of state enforcement activities. We found,
however, that these differences were exacerbated by inconsistent
approaches by different EPA offices on how the adequacy of state
enforcement programs should be assessed--particularly as it
relates to the appropriate balance in states' use of traditional
and non-traditional tools for achieving compliance.
--------------------
\1 Environmental Protection: EPA's and States' Efforts to Focus
State Enforcement Programs on Results (GAO/RCED-98-113, May 1998).
\2 We visited five states--Florida, Illinois, Massachusetts, Texas,
and Washington--their corresponding EPA regional offices, and other
interested parties to gather detailed information about states'
alternative compliance strategies. Additional information and
insights were gathered from another five states, including Colorado,
Delaware, New Jersey, Oregon, and Pennsylvania.
BACKGROUND
---------------------------------------------------------- Chapter 0:1
As a condition of accepting responsibility for implementing the Clean
Water Act, Clean Air Act, and other environmental statutes, delegated
states must establish enforcement programs approved by EPA to ensure
that the regulated community complies with pollution discharge
limitations and other environmental requirements. Such programs
typically include monitoring compliance by the members of the
regulated community, reporting violations to state and/or EPA
authorities, and taking "timely and appropriate" enforcement action
when necessary. Depending on the nature of the violation, an
appropriate enforcement action could be an informal measure (such as
a verbal warning or written notice of violation) or a more formal
measure (such as a fine or criminal prosecution). These actions must
be taken according to time frames set by the agency. EPA's
regulations generally provide that EPA may withdraw its approval of a
state's program if the state does not act on violations or does not
seek adequate enforcement penalties.
EPA has historically measured the success of states' enforcement
programs by the number of inspections conducted and the number of
enforcement actions taken against violators. The agency has
generally maintained that the emphasis on inspections and enforcement
action is necessary to deter noncompliance and prevent violators from
gaining economic advantage by violating environmental laws.
Increasingly, however, states have cited such enforcement-related
"output measures" as inappropriate indicators of a program's success
and as unduly emphasizing punitive measures when technical
assistance, incentives, and other more cooperative strategies are
needed to increase compliance by some members of the regulated
community. They point specifically to the growing number of small
businesses that must comply with highly complex environmental
requirements. They believe that a wider array of "tools" is needed
to help achieve environmental compliance and that state regulators
should be held accountable for the results their programs achieve,
rather than only for the numbers of enforcement actions they take.
In this connection, EPA, in cooperation with the states, has in place
several efforts to increase enforcement programs' focus on results.
Of particular note, the agency established the National Environmental
Performance Partnership System (NEPPS) in 1995 as an important
incentive to implement new programs and measure their results. NEPPS
is intended to strengthen the effectiveness of the nation's
environmental programs by redefining the federal and state roles to
ensure that public resources are used efficiently to address the most
important environmental problems. One of NEPPS' primary objectives
is to measure and report the progress that states and EPA are making
toward their environmental and programmatic goals. A key element is
EPA's commitment to give states with strong environmental performance
greater flexibility and autonomy in running their environmental
programs. Under the program, states and EPA set environmental
priorities that are based on individual state's environmental
conditions and priorities. The results of these negotiations are
documented in Performance Partnership Agreements (PPA) that explain
the states' objectives, including objectives for enforcement, and
also establish performance measures to gauge progress toward those
objectives.
STATES' EXPERIENCES IN
DEVELOPING AND USING
ALTERNATIVE COMPLIANCE
STRATEGIES
---------------------------------------------------------- Chapter 0:2
States' efforts to provide compliance assistance frequently target
smaller facilities in specific industry sectors. The Washington
Ecology Department's "Snapshots" Program, for example, provides
on-site technical assistance for lithographic printers, screen
printers, and photo processors across the state. Under the program,
the Department's staff have worked with local officials to visit over
1,300 shops, providing customized recommendations to reduce waste
generation, improve waste management, and help the shops achieve
compliance with hazardous waste regulations. Ecology Department
inspectors identify areas that the facility needs to address and then
subsequently apply a follow-up strategy consisting of three
alternative courses of action, depending upon the violations found
during the inspection.
Similarly, Massachusetts' Department of Environmental Protection
(MDEP) created its Environmental Results Program to replace the
existing permitting process with broad performance standards with
which small and medium-sized facilities must certify their
compliance. MDEP's comparison of "before" and "after" inspections of
18 facilities participating in a pilot of this program showed a
post-certification compliance rate of 78 percent--a significant
improvement over the pre-certification rate of 33 percent and the
average statewide industrial compliance rate of 42 percent.
Improvements were noted across the board, both in meeting new
standards created by the Environmental Results Program and in
complying with long-standing regulatory requirements, such as
hazardous waste management standards.
Provisions for audit privilege and/or immunity, used by states to
encourage facilities to undertake environmental auditing, have become
among the more prevalent means of enforcement flexibility exercised
by the states visited. During a typical environmental audit, a
facility voluntarily conducts an examination to determine whether it
is complying with environmental laws and regulations. Statutes in
two of the states we contacted, Colorado and Texas, offer immunity
for certain violations found during audits. Under Texas' law, for
example, with certain exceptions, a facility reporting a violation
pursuant to an environmental audit may not be assessed an
administrative or civil penalty for violations identified and
corrected as a result of conducting the audit. In addition, in Texas
and several other states, environmental audit reports and other
information generated by the audit are not admissible in evidence or
subject to disclosure in certain legal proceedings. As an
alternative to authorizing such programs through legislation, a
number of states encourage environmental auditing through nonbinding
audit policies. Many of these are similar to EPA's own environmental
auditing policy that eliminates or reduces certain penalties but does
not provide either privilege or immunity.
EFFORTS TO MEASURE NEW
STRATEGIES' EFFECTIVENESS
---------------------------------------------------------- Chapter 0:3
EPA and state officials we contacted emphasized the importance of
measuring the effects of compliance and assistance programs. For
example, officials from Florida, Pennsylvania, and Texas cited
innovative programs they initiated that relied less on enforcement
but which, they maintained, actually improved compliance and
environmental quality. However, they noted that without tangible,
measurable proof that the strategy maintained or improved either
compliance or environmental quality, they found themselves vulnerable
to criticism that they were "going soft on polluters." Florida has
since undertaken an extensive effort to measure the results achieved
by each of its major programs, using statistical inspection samples
to obtain compliance rates for different industry sectors. Other
states we contacted have also augmented their efforts to go beyond
measuring the outputs associated with their programs.
Nonetheless, most of the alternative strategies we examined either
were not being systematically evaluated or were still being assessed
on the basis of outputs (such as the number of facilities
participating in a program or the number of workshops conducted)
rather than results. Among the key barriers impeding greater use of
results-oriented performance measures were the following:
-- Because states have only recently begun to measure enforcement
outcomes, they have generally not measured or kept records on
such outcome-related data as industrywide compliance rates.
Without such baseline data, the relative success of new
strategies cannot be easily analyzed.
-- Officials in each of the states we visited cited the difficulty
in quantifying program results. Florida was one of the few
states to have attempted to quantify outcomes, noting that
calculating accurate industrywide compliance rates was an
important part of the state's effort to focus programs on
results. Doing so, however, required a substantial investment
to change the data systems used by the Florida Department of
Environmental Protection and its method of selecting facilities
for inspection.
-- It is inherently difficult to establish a specific causal link
that can isolate the effect of a particular strategy on
compliance rates or environmental quality. State and EPA
officials noted that even when environmental quality can be
quantified, measuring the impacts of enforcement strategies is
complicated by the influence of other factors affecting the
environment, such as the weather and economic activity.
EPA'S RESPONSE TO STATES'
ALTERNATIVE COMPLIANCE
STRATEGIES
---------------------------------------------------------- Chapter 0:4
EPA has initiated a number of activities during the past few years to
encourage voluntary compliance by facilities--thereby alleviating the
need to respond to violations exclusively by means of traditional
enforcement action. Some of these activities are carried out at the
federal level and are viewed as a part of EPA's own enforcement
program. Others bear more directly on state enforcement programs.
Key activities include (1) establishing compliance assistance centers
for automotive repair, metal finishing, and several other industry
sectors; (2) working with states and other interested parties in a
significant and innovative effort to develop results-oriented
measures; and (3) encouraging regulated entities to voluntarily
discover, disclose, and correct violations through environmental
auditing.
EPA's senior leadership has underscored on numerous occasions,
however, that these initiatives are intended to supplement--not
replace--a strong enforcement program. Consequently, senior EPA
enforcement officials recently asked EPA regional offices to focus
their attention on what was perceived to be an unacceptable drop in
the number of enforcement actions by many of the states in the
regions' jurisdiction.
The agency's legal and policy concerns about a possible weakening of
enforcement has also led it to question a number of states'
alternative compliance strategies, such as several states' audit
privilege/ immunity laws, and "amnesty" programs, which, under
certain conditions, allow facilities additional time to correct
violations and return to compliance before enforcement actions are
taken. For example, EPA has expressed concern that some of the audit
privilege/immunity laws may prevent states from meeting basic
requirements for state enforcement authority that are established in
federal laws and regulations and are prerequisites for program
delegation. The agency has been able to negotiate agreements to
resolve these disputes with several states, including Texas,
Michigan, Utah, Virginia, and Wyoming. In an effort to forestall
similar disputes in the future, EPA has issued a "statement of
principles" reflecting the agency's position on whether and how
approval of new state programs (or program modifications) could be
affected by state audit laws that restrict state enforcement and
information gathering authority.\3
While EPA's policy is that compliance assistance and flexible
enforcement should in fact be accompanied by a strong and credible
enforcement deterrent, state officials have noted that the
inconsistent manner in which this policy has been interpreted and
implemented by different EPA offices has led to confusion about the
appropriate balance between traditional enforcement and other
compliance tools. Specifically, officials from each of the 10 states
contacted maintained that a fragmented and inconsistent approach
among different EPA offices on the appropriate use of alternative
compliance strategies has made it difficult to devise a coherent,
results-oriented approach acceptable to all key EPA stakeholders.
The inconsistencies most frequently identified were between EPA
headquarters and regional offices; among the EPA headquarters offices
with key enforcement responsibilities; and between EPA management and
staff responsible for implementing EPA's programs and overseeing
states' actions.
These findings echoed those of an internal December 1996 EPA study
which reported complaints by EPA staff in several regions that "they
had received mixed messages about the relative priority of
enforcement and compliance assurance." Among the consequences cited
by the study were "considerable confusion" among regions and states,
and distrust among the regulated community.
Senior EPA enforcement officials have attempted to clarify the issue
through quarterly meetings between management staff in EPA's Office
of Enforcement and Compliance Assurance and the management teams of
each of EPA's 10 regional offices, "operating principles" that
clarify how to integrate enforcement and compliance assurance
activities, and other actions. They also implemented an ambitious
National Performance Measures Strategy, with wide participation from
various stakeholder groups, to develop results-oriented measures for
the agency's own enforcement effort. Our report acknowledges these
important efforts, noting that they have, in fact, shed some light on
the agency's policy on the appropriate use of alternative enforcement
and compliance tools.
Nonetheless, our interviews with enforcement officials from the 10
states confirmed the difficulty of implementing a multi-faceted
compliance strategy in an organization in which enforcement
responsibility is highly decentralized. The officials expressed a
unanimous view that states are still receiving inconsistent messages
from different EPA offices on this issue. For example, officials
from several states cited inconsistent messages from different EPA
headquarters offices with key enforcement responsibilities. Oregon
officials, for example, cited "internal battles" between EPA's Office
of Enforcement and Compliance Assurance and the agency's program
offices, noting that the two tend to have different initiatives and
priorities, leading to confusion for both the regions and the states.
Colorado, Massachusetts, and Pennsylvania cited similar problems.
The Pennsylvania respondent noted in particular that some offices,
such as the Office of Reinvention, appear to advocate a more risk-
and results-based approach toward enforcement, while others advocate
the more traditional approach that emphasizes counting numbers of
enforcement actions. As another example, Massachusetts' Associate
Commissioner for Enforcement reported that the state's Department of
Environmental Protection has generally experienced few problems with,
and has had greater access to, the EPA Boston office's leadership.
She noted that conflicts generally occur with the region's mid-level
managers "who make the more specific decisions about what data need
to be reported and whether the state can or cannot exercise
flexibility." She also cited similar conflicts with mid-level
managers at EPA's headquarters.
EPA's April 28, 1998, letter responding to our report took issue
with, among other things, our conclusions about inconsistent
implementation by different EPA offices, arguing that they relied too
heavily on impressions, opinions, perceptions, and complaints. We
disagree. As noted above, the problem of inconsistent implementation
was cited by EPA's own Office of Administration and Resource
Management in its December 1996 report. The prospect that EPA did
not solve the problem its own report identified was, in our view,
convincingly substantiated by both the overwhelming consensus of
enforcement and other officials from among a diverse group of 10
states, and by the strength and consistency with which these views
were conveyed.
In this connection, our report also observed that the enforcement
measures EPA says it will use in response to the Government
Performance and Results Act (the Results Act) also raise questions
about the consistency of the agency's message on this matter.
Specifically, the agency's strategic plan for implementing the
Results Act said that EPA is "striving to develop a range of measures
that reflect the broad spectrum of enforcement and compliance
activities, the degree to which they protect human health and the
environment, and industry compliance with applicable laws."
Nonetheless, the actual measures the agency has thus far developed,
as reflected in its Results Act's "Performance Plan," are
overwhelmingly weighted toward numerical targets for inspections,
enforcement actions, and other output measures. Officials from
Delaware, Massachusetts, New Jersey, and Pennsylvania each raised
concerns that EPA's heavy focus on outputs in responding to the
Results Act is inconsistent with the agency's other ongoing
initiatives designed to help states orient their environmental
programs toward results. The New Jersey respondent said that such a
focus on outputs was contrary to the results-oriented manner in which
New Jersey was attempting to negotiate its performance partnership
agreement with EPA under the agency's National Environmental
Performance Partnership System. This system, which is explicitly
intended to focus on achieving environmental results, provides a
framework within which EPA regional offices and states agree on such
matters as which problems will receive priority attention, what their
respective roles will be, and how their progress in achieving clearly
defined program objectives will be measured. EPA's efforts to
develop results-oriented measures for its enforcement and compliance
assurance activities may, if they stay on schedule, eventually
improve the balance in EPA's Performance Plan between measures of
enforcement outputs and the results of enforcement and compliance
activities.
In closing, Mr. Chairman, the differences that have arisen between
EPA and state regulatory authorities over some states' initiatives,
particularly those providing for flexible enforcement, in part
reflect different legal and policy views on whether these initiatives
compromise states' authority to enforce federal environmental laws
and on the appropriate roles of federal and state government in
deciding how environmental compliance can best be ensured. While
these issues will continue to be discussed, our report recommends a
number of steps EPA can take--in concert with the states--to move
toward a system that (1) focuses less on process and more on
achieving desired outcomes through both compliance assistance
activities and conventional enforcement and (2) systematically
measures progress on how well these outcomes are being achieved.
First, the agency needs to work with the states in developing the
kind of information that will allow for a greater focus on results.
Through its National Performance Measures Strategy, EPA plans to
develop at least some of this information--although the effort is
largely intended to refocus EPA's own enforcement program on results.
Nonetheless the effort could be simultaneously designed to help
interested states tap into EPA's effort so that the agency can help
meet the states' own data and analytical needs. In light of the
states' considerable needs in this area, such an effort may be
particularly worthwhile and should be systematically built into the
EPA strategy.
Second, EPA needs to take further actions before the agency is
perceived to be speaking with one voice on the extent to which states
are to be held accountable for achieving results, and particularly on
the appropriate balance between traditional enforcement and other
tools to ensure compliance. We acknowledge the challenge of
maintaining consistency on such an issue in an organization as
complex and decentralized as EPA. However, as we concluded in our
report, we believe EPA can go a long way toward improving the
consistency of its message by ensuring that (1) the expectations set
for the Office of Enforcement and Compliance Assurance, program
offices, and other EPA headquarters and regional offices are
consistent with the agency's operating principles calling for an
appropriate mix of tools to achieve compliance; (2) different EPA
offices with enforcement responsibility more systematically
coordinate their negotiations with, and oversight of, state agencies
on enforcement-related matters; and (3) the enforcement-related
provisions of EPA's Performance Plan, prepared pursuant to the
Government Performance and Results Act, focus on outcomes in a manner
consistent with that of the core performance measures developed under
EPA's National Performance Measures Strategy, the National
Environmental Performance Partnership System, and the agency's other
results-oriented initiatives.
--------------------
\3 Among other things, this statement requires that, at a minimum, a
state must maintain certain authorities, including those that provide
for recovering penalties for significant economic benefit, repeat
violations, and activities that may present imminent and substantial
endangerment as well as authority to obtain fines and sanctions in
criminal proceedings. Also the state must maintain the ability to
obtain information needed to identify noncompliance and criminal
conduct. EPA is currently in discussion with several other states
about bringing their audit laws in line with these principles.
-------------------------------------------------------- Chapter 0:4.1
Mr. Chairman, this concludes our prepared statement. We would be
pleased to answer any questions you or Members of the Subcommittee
may have.
*** End of document. ***