As a former regulator (both as an inspector and an attorney, ensuring compliance and enforcing violations) in the environmental law enforcement space, I read EPA Assistant Administrator Susan Parker Bodine’s recent memorandum entitled Transition from National Enforcement Initiatives to National Compliance Initiatives with great interest. Having numerous facility inspections and enforcement settlements under my belt, I have seen firsthand the interplay between compliance and enforcement. To be sure, the threat of enforcement and the deterrence factor associated with resolving an enforcement action are powerful tools. But, if the end goal is compliance with environmental laws, does the road leading there have to be so scary for the regulated community? Whereas many regulated parties commonly see EPA and other environmental agencies as enforcement machines, this proposed transition to a more compliance-oriented approach may be not only a welcome change, but also an appropriate one that will actually improve compliance. After all, Ms. Bodine’s office is entitled the Office of Enforcement and Compliance Assurance (OECA). Isn’t it a good idea to have an equal focus on helping with compliance and on enforcement? And isn’t the point to maximize compliance? Shouldn’t OECA be striving for a world in which its “enforcement” arm goes out of business because it has “assured compliance?” That may be too much for the regulated community to hope for, but the notion of “compliance” initiatives over “enforcement” initiatives is not a bad way to start.
The gist of the memorandum, issued on August 21, 2018 (read the full memo here), as you might gather from my introduction, is that EPA wants to “evolve” its National Enforcement Initiatives (NEI) program into a National Compliance Initiatives (NCI) program. EPA will accomplish the transition in the following manner:
NCI Selection Criteria for the FY 2020-2023 Cycle
Aligned with its strategic plan, EPA proposes priorities for FY 2020-2023 including: nonattainment areas, impaired waters, public health threats posed by drinking water noncompliance, populations vulnerable to air toxics or chemical accidents, and children’s exposure to lead.
Enhanced Engagement with States and Tribes
EPA proposes additional opportunities for states and tribes to engage in the identification and development of the FY 2020-2023 NCIs. Regulated entities will still have an opportunity to provide input during the public comment period following publication in the Federal Register.
Enhanced Compliance Assurance Tools
EPA plans to develop an implementation strategy, in coordination with states and tribes, for each NCI that will identify the appropriate and most effective tools (inspections, informal enforcement actions and formal enforcement actions) for achieving the NCI goals of increasing compliance rates. States will have an opportunity to participate in the development of the implementation strategy. While the focus will be compliance, enforcement actions will remain a key component in the implementation strategy.
Extension of NCI Cycle
The NCI cycle will be extended from two years to four years.
In addition, EPA plans to modify the 2019 NEIs “to highlight the focus on compliance as the goal. . . .”
But, what does this really mean for a regulated entity operating a facility that may fall under one of EPA’s NCI priorities? While a change in the name of a program is a signal of deeper change, EPA needs to be sure it puts those words into action and effectuates the focus on compliance. To be sure, it can be hard to determine in the near term whether the enhanced compliance assurance tools actually translate to higher compliance rates, but, hopefully, the agency will make the effort to show the progress. An important aspect of this transition will be for local regulators to accept and fully implement the transition—to change a common perception among some regulators that regulated entities are trying to skirt regulations. Having been on both sides of the fence, my experience has been that the vast majority of companies intend to comply with requirements and that the intentional violators are few and far between. How can EPA demonstrate that its focus on helping those companies do better is a more productive approach? Indeed, an interesting, but difficult, task will be to evaluate the success of this shift in perspective. EPA acknowledges a lack of reliable information on compliance rates but proposes plans to change that. In my experience, there is a “good news story” out there. Compliance rates have improved over the years as most large companies have strong corporate integrity policies that require compliance, and their employees are professionals who seek to achieve compliance, not only because it is their job but also because they are honest and forthright people. But, to date, that is a story that is less often told—that companies are complying at an incredibly high rate. It is this baseline that EPA should seek to define so that it can truly show the improvements that intuitively should flow from focusing on compliance.
Stay tuned. Only time will tell whether such a shift in perspective will translate to an actual change in compliance rates.