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U.S. EPA and DOJ Announce Sensible Enforcement Efforts

December 20, 2018

Policy Revisions Track AGC Recommendations

The U.S. Environmental Protection Agency (EPA) is piloting a new inspection policy that addresses several of AGC’s long-standing concerns and has the potential to improve the enforcement process and overall industry compliance. The Agency also released memos detailing new best practices for soliciting information from industry to support rulemaking and to determine compliance.  Similarly, the Department of Justice (DOJ) recently announced changes to enforcement policies regarding individual accountability for corporate wrongdoing set forth in the 2015 memorandum from then-Deputy Attorney General Sally Yates (the “Yates Memo”).

Regarding the EPA’s latest approach to compliance inspections, the new policy calls for “real-time” feedback, including a discussion of potential deficiencies and opportunities to promptly correct problems and sets a 60-day goal for completing inspection reports.  When put into practice, these procedures would avoid compounding environmental harm and penalties, which may occur when a company learns of a violation several months after an inspection takes place or even after a construction project is completed.  Click here for more. 

Another sign that EPA is shifting towards a more collaborative, compliance assistance approach is the recent publication of “best practices” for reducing the resources, costs, and time required for companies to produce the information requested (by the agency) for the purposes of regulating or rulemaking under the Clean Water Act (i.e., Section 308 letters).  EPA’s Office of Civil Enforcement released a notable memorandum on “Best Practices for Compliance and Enforcement-Related Information Requests and the Office of Water released a “National Water Program Policy on Use of Clean Water Act § 308 Letters Issued to Nine or Fewer Entities to Support CWA Program Implementation.”  Historically, AGC members have found the information collection process to be adversarial (rather than collaborative) – with the looming threat that failure to accurately comply with these request in a timely fashion could result in civil or criminal penalties.  AGC members should become familiar with these new procedures, in the event an information request letter is received.

Turning to DOJ’s new policy, the most notable revision is to change the approach set out in the Yates Memo that “[t]o be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct.” AGC had raised significant concerns about this “all or nothing” approach that encouraged fishing expeditions rather than calculated enforcement efforts to address the actions of bad actors.  

Furthermore, under the new, revised DOJ policy – spelled out in the Justice Manual (formerly the United States Attorneys’ Manual) and announced by Deputy Attorney General Rod Rosenstein on Nov. 29 – to qualify for “any cooperation credit” companies now have to identify only individuals who play a significant role or were “substantially involved in or responsible” for wrongdoing.  For civil cases, companies now “must identify all wrongdoing by senior officials, including members of senior management or the board of directors.”

For additional information, please contact Leah Pilconis at pilconisl@agc.org or (703) 837-5332.

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