United States Office of Enforcement and EPA 300-N-99-001 

Environmental Protection Agency Compliance Assurance 

AUDIT POLICY UPDATE 

Volume 4, Number 1 Office of Regulatory Enforcement Spring 1999 

10 Telecommunications Companies Disclose, 

Correct Violations Under Audit Policy 

Ten telecommunications companies recently disclosed and promptly 

corrected 1,300 environmental violations at 

more than 400 of their facilities. 

Under proposed and final settlements, the 

companies have corrected violations of the 

Emergency Planning and Community Rightto-Know Act (EPCRA) and/or the Clean 

Water Act’s (CWA) Spill Prevention Control 

and Countermeasure (SPCC) requirements. 

Correction requires properly notifying local 

emergency planning committees of the 

presence of hazardous chemicals and 

preparing spill prevention plans to reduce the 

risk of environmental accidents, and protect 

the safety of those who respond if an accident 

occurs. 

EPA has reached final settlements under 

EPCRA with Cincinnati Bell Telephone 

Company; Cincinnati Bell Long Distance; 

Convergys Customer Management Group; 

Dallas MTA, L.P.; Houston MTA, L.P.; 

PrimeCo Personal Communications; and San 

Antonio MTA, L.P. 

Proposed settlements pending approval by 

the Environmental Appeals Board are with 

Cellco Partnership and its affiliates doing 

business as Bell Atlantic Mobile or Cellular 

One (EPCRA and SPCC), Southwestern Bell 

Telephone Company (SPCC); and United 

States Cellular Corporation (EPCRA and 

SPCC). 

The disclosures were made under EPA’s 

“Audit Policy,” which sharply reduces or 

eliminates penalties for companies that 

voluntarily audit, promptly disclose and 

correct violations. Since the Audit Policy was 

implemented in 1996, environmental violations 

Continued Page 10 

Audit Policy Evaluation and Proposed 

Revisions Near Completion 

Preliminary Findings and User Survey Responses Highlighted 

Since its issuance in December 1995, EPA’s Audit Policy has been widely 

used, generating disclosures of violations 

from approximately 470 entities at more than 

1,880 facilities. 

Discovery and correction of violations 

under the policy have resulted in removal of 

pollutants from the air and water, reductions 

of health and environmental risks and 

improved public information on potential 

NEWS & 

INFORMATION: 

Y2K Incentives 

Policy: Page 3 

Region 9 University 

Compliance Incentive 

Program: Page 3 

EPA Announces 

Voluntary Audit 

Program for Nation’s 

Pork Producers: Page 5 

EPA Issues Audit 

Protocols for Three 

Statutes: Page 7 

National Conference of 

State Legislatures’ 

Report: Page 8 

Md. Company 

Get Penalty Relief for 

‘Disclosure Rule’ 

Violations: Page 9 

Industrial Vegetable 

Oils 

Comply with TSCA 

Sect. 8: Page 9 

DEPARTMENTS: 

From the Assistant 

Administrator: Page 2 

Resources on the ‘Net: 

Page 10 

Information Corner: 

Page 11 

First to 

Industry Must 

environmental hazards and reduced 

environmental pollutants. The policy has 

encouraged companies to expand their use 

of environmental auditing and compliance 

management systems. There also is a very 

high satisfaction rate among users of the 

Audit Policy. 

Those are some findings of an EPA Audit 

Continued Page 4 

This publication is on the Internet at http://www.epa.gov/oeca/apolguid.html 
AUDIT POLICY UPDATE

EPA’s Audit Policy has opened 

o date, 470 

Steven A. Herman 

FROM THE ASSISTANT ADMINISTRATOR 

Office of Enforcement and Compliance Assurance 

sanctions for violations. 

Our results show that EPA’s Audit 

Policy is serving its intended purpose; 

however, we are always trying to 

improve upon it. 

Dec. 22, 1995, Federal Register, we 

are conducting a three-tiered 

evaluation of the Audit Policy’s 

effectiveness. 

EPA Regions to complete an “Internal 

Survey” to evaluate their own 

experiences under the Audit Policy 

and suggest possible revisions to 

enhance implementation efforts. 

Besides receiving public input 

through focus groups and the Office 

of Enforcement and Compliance 

Assurance’s 

Conference, 

satisfaction survey in October 1998 to 

understanding of how the Audit Policy is 

to be applied. 

we have agreed that multi-facility 

disclosures can be made at the end of a 

reasonable period to complete the 

corporate-wide audit, rather than 10 days 

after discovery of each violation at each 

facility. 

negotiating corporate-wide disclosures 

are encouraged to contact Leslie Jones, 

Office of Regulatory Enforcement, (202) 

564-5123. 

EPA is also increasingly focused on 

targeting use of the Audit Policy to 

particular compliance problems within 

particular sectors. 

combine outreach, identification of 

compliance assistance tools like audit 

protocols, and more defined terms for 

audit disclosure and correction. 

T

As promised in the 

In June 1998, we asked 

5th Anniversary 

we sent out a customer 

For example, in some cases 

Companies interested in 

These efforts may 

This issue 

Since its inception in January 1996, 

the door for responsible companies to 

reap the benefits of self-disclosure and 

compliance with federal environmental 

laws and regulations. 

companies have disclosed environmental 

violations under the Audit Policy at more 

than 1,880 facilities nationally, and EPA 

has reduced or waived penalties under 

the policy for 166 companies at 936 

facilities so far. Only 80 companies have 

made disclosures that were determined 

not to involve 

reports on our initiatives to encourage 252 companies 8 that had self-disclosed 

under EPA’s Audit 

violations or were As of March 1999, 470 companies have disclosed Policy to obtain
 ineligible for Audit environmental violations under EPA’s Audit Policy at feedback


Policy relief; the


balance is still under more than 1,880 facilities nationally, and EPA has reduced or concerning their


review. waived penalties under the policy for 166 companies at 936	 experiences under 

the policy. This 

The Agency is 

encouraged by the 

growing trend in corporate-wide 

disclosures under our Audit Policy. In 

this issue, for example, we announce 

settlements with 10 telecommunication 

companies that corrected violations of 

spill prevention and hazard notification 

requirements at 400 facilities. EPA is 

negotiating with other companies in this 

sector, and we expect more settlements 

to follow. We have also granted penalty 

relief for multi-facility disclosures from 

BP Exploration, Burlington Northern 

Santa Fe, Union Carbide Corp., and 

others. These agreements are often 

preceded by negotiations in which EPA 

and the company arrive at a mutual 

facilities so far. 

compliance with Clean Water Act 

requirements by pork producers, 

eliminate “non-notifier” violations at 

chemical plants, and correct TSCA 

violations by oilseed manufacturers and 

RCRA violations at universities and 

colleges. 

For EPA, such initiatives provide an 

efficient and economical means of 

ensuring and improving compliance with 

environmental laws and regulations. For 

regulated industry, these initiatives create 

a level-playing field by offering all 

companies the opportunity to comply 

without the stigma of a hostile 

enforcement action and potentially costly 

month, we expect 

to issue a Federal 

Register notice soliciting comments 

about the effectiveness of EPA’s Audit 

Policy and suggestions for changes to 

the policy. 

Meanwhile, we encourage industry 

to continue to make use of EPA’s Audit 

Policy and compliance incentive 

programs. The continued efforts of 

responsible companies working to stay 

in compliance with environmental laws 

will help meet our common goal of 

protecting the public health and the 

environment. 

Page 2 SPRING 1999 
AUDIT POLICY UPDATE

Y2K Policy Provides Incentives to Test 

Computer-Related Equipment, Disclose Violations 

EPA issued an enforcement policy on Nov. 30, 1998, designed to 

encourage prompt testing of computerrelated equipment to ensure that 

environmental compliance is not impaired 

by the Y2K computer bug. Under the 

policy, EPA stated its intent to waive 100 

percent of the civil penalties that might 

otherwise apply, and recommend against 

criminal prosecution for environmental 

violations caused during specific tests 

that are designed to identify and eliminate 

Y2K-related malfunctions. 

The Y2K issue arises because a 

number of computerized functions 

require recognition of a specific year, day, 

and time but many computers and 

computerized equipment recognize only 

the last two digits of a year’s date (i.e., 

1998 is 98; 2000 is 00). Therefore, when 

the calendar changes to the year 2000, 

computers and equipment with embedded 

computer chips may have difficulty 

interpreting the correct date. They may 

interpret the year to be 1900 or some 

other year. As a result, some computers 

and equipment containing embedded 

computer chips could become 

permanently unable to function properly. 

The policy is similar to the Agency’s 

Audit Policy because it requires facilities 

to identify, promptly disclose, and 

expeditiously correct violations and 

remediate any adverse consequences 

that result from Y2K-related testing. 

Also, it precludes eligibility under the 

policy where there is actual serious harm 

Y2K Policy is available on 

the Internet at 

www.epa.gov/year2000 

or a potentially imminent and substantial 

endangerment. Unlike the Audit Policy, 

it is limited to testing-related violations, 

and only to such violations disclosed to 

EPA by Feb.1, 2000. In addition, eligibility 

is subject to other conditions, such as the 

need to design and conduct the tests well 

in advance of the dates in question, the 

need to conduct the tests for the shortest 

possible time period necessary, the need 

to correct any testing-related violations 

immediately, and other conditions to 

ensure that protection of human health 

and the environment is not compromised. 

The policy’s primary focus is to 

encourage the regulated community to 

test their equipment early and resolve any 

potential environmental compliance 

problems promptly that result from Y2Krelated equipment problems. Where a 

facility, however, tests in accordance with 

the policy’s terms but cannot correct all 

its Y2K-related deficiencies promptly, 

despite its best efforts, it is still likely to 

be in a more favorable position than 

facilities that do not take such steps. 

In response to comments received on 

the policy, EPA has made several minor 

language changes to clarify the Agency’s 

intent, and published the policy in the 

Federal Register on March 10, 1999. 

The policy and more information are 

available on the Internet at 

www.epa.gov/year2000. 

Contact Gary Jonesi, Office of 

Regulatory Enforcement, (202) 564-

4002. 

In a Jan. 19, 1999 letter, EPA 

Region 9 invited all colleges and 

universities in Arizona to participate 

in a compliance incentive program 

that the Region developed to help the 

schools determine their compliance 

with the requirements of the Resource 

Conservation and Recovery Act 

(RCRA). 

EPA is offering the 28 Arizona 

universities and colleges the 

opportunity to conduct environmental 

audits and disclose any violations 

discovered to the Agency for 

consideration under the Audit Policy. 

At the end of the six-month program, 

Region 9 will increase inspections at 

universities and colleges. 

EPA will consider disclosures of 

violations of other than RCRA 

requirements, the compliance incentive 

program focuses on RCRA because 

violations of hazardous waste 

requirements have been documented 

at university laboratory and facility 

operations. 

Contact Brian Riedel, EPA 

Region 9, (414) 755-1380. 

EPA Region 9 Invites Colleges, Universities to Participate in 

RCRA Compliance Incentive Program 

Although 

SPRING 1999 Page 3 
AUDIT POLICY UPDATE

AUDIT POLICY UPDATE

Audit Policy Evaluation


From Page 1 

Policy evaluation, which consisted of an 

internal feedback and a survey of Audit 

Policy users. The findings and proposals 

for several changes to the policy are 

being summarized in a Notice that EPA 

will publish in the Federal Register in 

April. Readers will be invited to provide 

comments. 

Preliminary findings 

Use of the Policy is widespread and 

has increased annually since it took 

effect. The number of multi-facility 

disclosures is increasing as well, with 16 

parent companies disclosing the same 

types of violations at more than 900 

facilities, resulting in nationwide auditing 

and widespread environmental benefit. 

Of the 153 cases settled under the Audit 

Policy for more than 526 facilities, 126 

resulted in no penalty. In eight others, 

the disclosing entity paid a penalty 

representing only the economic benefit 

of non-compliance, with 100 percent 

mitigation of the gravity component of 

the penalty. 

User Survey Responses 

Several months ago, the Agency sent 

a voluntary and anonymous User’s 

Survey to 252 entities that had disclosed 

environmental violations under the Audit 

Policy. Users generally indicated support 

for the compliance incentive approach of 

the policy. “Everyone wins,” stated one 

respondent. Another said “It [Audit 

Policy] enhances compliance, 

environmental performance and 

depolarization of regulators and the 

regulated community.” 

Respondents indicated that the policy 

enhances trust between EPA and 

regulated entities. One respondent noted, 

“It was a very good experience. It 

“EPA demonstrated 

the benefit of 

maintaining 

compliance and 

auditing programs 

through [its] 

willingness to reduce 

penalty amounts on 

self-reported 

violations.” — 

Respondent, Audit 

Policy Evaluation 

allowed the facility to respond proactively 

to address a compliance issue quickly 

without delay.” Another respondent 

noted that the Audit Policy “creates an 

incentive for comprehensive selfauditing.” 

Among other highlights of the survey, 

AUDIT POLICY UPDATE


approximately 50 percent of the 

respondents that had formal 

environmental managements systems 

(EMSs) or auditing programs reported 

that the Audit Policy encouraged 

specific improvements in their EMSs or 

auditing programs. For example, several 

respondents remarked that the use of 

the Audit Policy broadened the scope 

of their awareness of various regulatory 

responsibilities and led to more and 

better auditing. 

Revisions Under 

Consideration 

Based on the survey results and 

other information, EPA is considering 

improvements to the Audit Policy, 

including broadening the prompt 

disclosure period and clarifying that an 

enforcement action taken against one 

facility does not always bar another 

facility owned by the same company 

from obtaining relief under the Audit 

Policy for disclosing the same violations. 

EPA is also proposing changes to the 

policy’s implementation, including a 

commitment to reduce the time for 

processing Audit Policy cases. 

Contact Bob Fentress, Office 

Planning and Policy Analysis, (202) 

564-7023. 

The Audit Policy Update is published periodically for the Assistant Administrator for Enforcement and 

Compliance Assurance by the Office of Regulatory Enforcement. The newsletter is intended to provide 

information to the public and regulated communities regarding developments under EPA’s Audit Policy. 

Director, Office of Regulatory Enforcement: Eric. V. Schaeffer. Editor: Virginia Bueno, (202) 564-8684. Email: 

bueno.virginia@epamail.epa.gov. Attorney-Advisor: Leslie A. Jones, (202), 564-5123. Change of address or 

information on how to subscribe to this newsletter should be sent to the Editor. 

Page 4 SPRING 1999 
AUDIT POLICY UPDATE

EPA and Pork Producers Agree to Audit Program


to Protect America’s Waters


Program Goes Beyond Existing Law by Requiring Independent Inspectors to 

Certify That Clean Water Act Violations are Corrected 

The agreement does not compromise 

the ability of EPA or states to enforce 

the Clean Water Act (CWA). A or 

State agencies will continue to inspect 

and take enforcement action as needed. 

EPA retains all injunctive authority and 

can accelerate the timetable for 

corrections if needed. A 

or state agencies may verify the final 

The compliance audit program 

provides an incentive for pork producers 

to take the initiative to find and correct 

CWA violations and prevent discharges 

to waterways without compromising 

ability of EPA or states to enforce the 

law. Pork producers who undergo the 

assessment and promptly report and 

correct violations will receive seals from 

the NPPC. 

producer is found later to be in violation 

of the CWA. 

The compliance audit program does 

not extend to slaughterhouses, 

pork-processing and packing facilities or 

other ancillary operations. 

EPA will consult closely with the 

states in implementing the compliance 

audit program. States may elect to 

administer the program directly, in which 

case, EPA will refer any disclosures to 

the states for consideration and 

response. 

Additional information about the 

compliance audit program can be found 

at http://www.epa.gov/oeca/ore/ 

porkcap. EPA’s National Agriculture 

Compliance Assistance Center can 

provide additional information about 

EPA’s environmental regulations and 

voluntary pollution prevention 

opportunities. ’s 

Homepage can be found at http:// 

www.epa.gov/oeca/ag or call the 

Center toll-free at 1-888-663-2155. 

Contact Ciannat Howett, Office of 

Regulatory Enforcement, Water 

Enforcement Division, (202) 564-

4031. 

Producers who promptly disclose and correct any 

discovered violations from these audits will receive a much 

smaller civil penalty than they might otherwise be liable for 

under the law. 

EP

In addition, EP

the 

Seals will be withdrawn if a 

The Center 

The EPA and the National Pork 

Producers Council (NPPC) 

announced on Nov. 25, 1998, a voluntary 

compliance program to reduce 

environmental and public health threats 

to the nation’s waterways from runoff 

of animal wastes from pork-producing 

operations. 

Under this initiative, participating pork 

producers will have their operations 

voluntarily assessed for Clean Water Act 

(CWA) violations by certified 

independent inspectors. Producers who 

promptly disclose and correct any 

discovered violations from these audits 

will receive a much smaller civil penalty 

than they might otherwise be liable for 

under the law. 

The program goes beyond existing 

law by requiring participating pork 

producers to certify that the final report 

identifying violations is correct and by 

requiring inspectors to certify that CWA 

violations have been corrected. 

COMPLIANCE 

INCENTIVE PROGRAM 

violations report submitted by 

participating producers, and the producer 

is liable for full penalties for any 

violations not reported or corrected 

through the audit. In addition, the 

agreement does not apply to any 

violations that are the subject of citizen 

suits or that are known to EPA or a state 

prior to the audit. 

Inspecting and taking enforcement 

actions against CWA violations by large 

confined animal feeding operations is one 

of EPA’s highest national priorities. The 

Clean Water Action Plan, which is the 

Administration’s blueprint for completing 

cleanups of our nation’s rivers, lakes and 

streams, has identified polluted runoff 

from industrial feeding operations as a 

leading source of water pollution. In 

conjunction with the Clean 

Water Action Plan, EPA and the U.S. 

Department of Agriculture announced 

a joint animal feeding operations draft 

strategy to control agricultural animal 

waste runoff. The amount of animal 

manure and wastewater generated from 

animal feeding operations can pose risks 

to water quality and public health. 

SPRING 1999 Page 5 
AUDIT POLICY UPDATE

Agency Launches New Compliance


Incentive Program for Industrial


EPA Provides Organic Chemical Sector


Callers 

Advice About 

Audit Policy 

Disclosures 

Parties with questions about 

EPA’s Audit Policy or its 

applicability to specific situations 

can get general advice from EPA 

through several sources without 

having to identify themselves. 

EPA encourages interested 

parties to contact its Audit Policy 

Coordinator, Leslie Jones, at 

(202) 564-5123 with specific 

inquiries. In addition, parties 

may use EPA’s Quick Response 

Team (QRT) as a resource for 

cases of first impression. The 

QRT is made up of representatives 

from EPA Headquarters, EPA 

Regions, and the Department of 

Justice. 

The QRT was developed to 

ensure that determinations for 

eligibility under the Audit Policy 

are expeditious, fair and consistent 

nationally. 

The Audit QRT Chair is 

Leslie Jones, (202) 564-5123. 

EPA has initiated a program that encourages the industrial organic 

chemical sector (SIC Code 2869) to 

perform environmental compliance 

audits and to take advantage of EPA’s 

Audit Policy to self-report any violations 

uncovered during such audits. 

In August 1998, EPA launched the 

compliance incentive program by issuing 

letters to approximately 1,000 industrial 

organic chemical facilities. 

Under the program, EPA has 

received approximately 45 selfdisclosures covering all major 

environmental programs. Many of the 

self-disclosures cover multiple facilities. 

To participate in the program, 

facilities had until Jan. 31, 1999, to 

perform voluntary environmental audits 

of their operations, identify potential 

areas of noncompliance uncovered by 

the audit, and report these findings to 

EPA. The letter also directed interested 

facilities to resources that may assist 

them in understanding their obligations 

under environmental statutes and in 

performing environmental audits. 

The compliance incentive program 

focused on the industrial organic 

Visit http:// 

www.epa.gov/oeca/ore/ 

red for more 

information about the 

Industrial Organic 

Sector (SIC Code 2869) 

Compliance Incentive 

Program 

COMPLIANCE 

INCENTIVE PROGRAM 

chemical sector because of EPA’s 

concern that some facilities may be 

avoiding reporting and other regulatory 

requirements. In addition, more 

enforcement actions have been taken 

in this sector than in any other priority 

sector. 

While the Audit Policy usually 

requires prompt disclosure of a violation 

within 10 days of discovery, under this 

program EPA encouraged companies 

to disclose their violations all at once, 

rather than piecemeal. Thus, civil 

violations disclosed no later than Jan. 

31, 1999, are considered prompt under 

this program, so long as the violations 

are discovered through an audit and 

meet all other policy conditions. The 

exception to the 10-day notice 

requirement does not affect the 

requirement to meet all other conditions 

of the Audit Policy, such as the 

requirement to correct all violations 

expeditiously. 

For more information about the 

compliance incentive program, EPA has 

posted a fact sheet, a list of questions 

and answers about the program, and an 

example of the letters sent out to a 

portion of this sector on its Website at 

http://www.epa.gov/oeca/ore/red. 

Contact Mary Andrews, Office of 

Regulatory Enforcement, RCRA 

Enforcement Division, (202) 564-

4011. 

Page 6 SPRING 1999 
AUDIT POLICY UPDATE

EPA Issues Audit Protocols for Three Statutes;


Nine More Under Development


EPA recently issued four voluntary environmental 

compliance audit protocol manuals, the 

first part of a multi-media set of 13, to 

assist the regulated community in 

conducting environmental audits. To 

date, EPA has issued audit protocols for 

the Comprehensive Environmental 

Response, Compensation, and Liability 

Act (CERCLA), the Emergency 

Planning and Community Right-to-Know 

Act (EPCRA), and the Resource 

Conservation and Recovery Act 

(RCRA). RCRA protocols are 

presented in two volumes, addressing 

generators and treatment, storage and 

disposal facilities. 

EPA developed these protocols to 

encourage businesses and organizations 

to perform environmental audits and 

disclose violations in accordance with 

EPA’s Audit Policy. The audit protocols 

are intended to help provide guidance to 

regulated entities conducting 

environmental audits and to ensure that 

audits are conducted in a thorough and 

comprehensive manner. 

Although the protocols were 

developed originally to assist the 

industrial chemical sector in particular, 

many of the protocols apply to all 

regulated entities. Each protocol offers 

guidance on key requirements, defines 

regulatory terms, and provides an 

overview of the federal laws affecting 

a particular environmental management 

area. It also includes a checklist 

containing detailed procedures for 

conducting a review of facility 

conditions. 

EPA expects to issue nine additional 

protocols this year: Nonhazardous 

Waste Management; Universal Waste 

and Used Oil; Pesticides Management; 

PCB Management; Safe Drinking 

Water Act; Spill Prevention Control and 

Countermeasure Requirements and 

Storage Tank Management; Clean Air 

Act; Clean Water Act; and TSCA. 

Electronic versions of the protocol, 

which can be tailored to a specific facility, 

can be found at the following websites: 

• RCRA generators [Document No. 

EPA-305-B-98-005] at http:// 

www .epa.gov/oeca/ccsmd/ 

gen_pt11.html. 

• EPCRA [Document No. EPA-305-

98-007] at http://www.epa.gov/oeca/ 

ccsmd/epcra.pdf. 

• RCRA TSDF [Document No.EPA305-B-98-006] at http://www.epa.gov/ 

oeca/ccsmd/tsdf.pdf. 

• CERCLA [Document No. EPA305-B-98-009] at http://www.epa.gov/ 

oeca/ccsmd/cercla.pdf. 

Hard copies of the protocols are 

available from EPA’s National Center for 

Environmental Publications and 

Information at 1-800-490-9198. 

Contact Richard Satterfield, Office 

of Compliance, (202) 564-2456. 

On July 13, 1998, EPA reached a 

settlement with East Ohio Gas that 

resolves a series of polychorinated 

biphenyl (PCB) violations disclosed by 

the company. 

In settling the disclosed violations, 

EPA proposed a civil penalty of 

$1,247,460. By qualifying for 

settlement under EPA’s Audit Policy, 

the company will 

The fine offsets the economic benefit 

that East Ohio received by not fully 

complying with PCB regulations. The 

settlement requires the company to 

correct its violations and prevent future 

recurrence. 

PCBs are a group of toxic 

chemicals once widely used in 

industry as coolants and insulators. 

EPA banned the manufacture of 

PCBs in 1979 due to evidence that 

they accumulate in the environment 

and present health hazards. 

TSCA, EPA regulates the proposed 

cleanup, disposal, marking, record 

keeping, storage, and limited use of 

PCBs to protect the public from these 

potentially dangerous chemicals. 

In June 1995, East Ohio Gas selfdisclosed to EPA violations of several 

federal PCB rules at its Clevelandarea facilities, including the failure to 

properly manufacture, use, label, store, 

record or dispose of PCBs and PCBcontaining items. 

disclosed that it failed to prepare, 

carry-out, and have available for 

inspection a spill prevention control and 

countermeasures plan as required by 

the Clean Water Act. In April 1998, 

the company completed a companywide audit to determine its compliance 

with the federal 

East Ohio Gas Self-Discloses and Corrects PCB Violations 

Contact John Steketee, EPA 

Region 5, 

pay a $193,260 fine. 

Under 

Also, East Ohio 

rules. 

(312) 886-0558. 

SPRING 1999 Page 7 
AUDIT POLICY UPDATE

NCSL Report Shows No Increase in Environmental


Audits Due to State Privilege, Immunity Laws


A new National Conference of State Legislatures 

(NCSL) study concludes that there is no evidence to 

support the claim that state audit privilege and immunity laws 

encourage facilities to begin auditing, increase the number of 

audits they perform or disclose more violations. 

Based on the study’s results, EPA believes that its wellestablished position of opposing enactment of federal or State 

audit privilege and immunity laws remains appropriate. 

While more than 75 percent of the 988 facilities surveyed 

are performing audits, the existence of an audit law or policy 

does not appear to influence the level of audit activity. NCSL 

found no statistically significant difference in auditing rates 

based on whether the state in which the facility operates has 

an environmental audit law, audit policy, or no law or policy. 

The study also examined whether there has been any 

increase in auditing among the surveyed facilities during the 

past four years (when environmental audit laws began to be 

enacted). The number of facilities beginning to conduct audits 

increased slightly during that time, as did the number of audits 

conducted by all facilities surveyed. Again, however, NCSL 

found no statistically significant difference in the increase in 

auditing rates over the four-year period for facilities based on 

whether they were located in a state with an audit law, audit 

policy, or neither. 

Additionally, the study found that the majority of facilities 

surveyed had not disclosed violations that had been discovered 

during an audit. Also, the fact that the facility was located in 

a state with an audit privilege and immunity law does not 

appear to make a difference. 

The NCSL report may support EPA’s view that a strong 

environmental enforcement program is the key to achieving 

better environmental compliance and protection. Significantly, 

the study found that inspector presence is a strong motivator 

for auditing. An overwhelming number of facilities (90 

percent) identified measuring compliance with environmental 

laws, and finding and correcting violations before inspectors 

do as very important reasons why they conduct audits. This 

overshadowed any other motivators. 

In 1997, NCSL applied for and received a grant from 

U.S. EPA to perform this independent study with the 

assistance of Abt Associates Inc., of Cambridge, Mass. 

The author of the NCSL report is Larry Morandi, Director, 

Environment, Energy & Transportation Program, (303) 830-

2200. Summary information on the NCSL report is available 

on the Internet at http://www.ncsl.org/programs/esnr/ 

audits.htm. 

Contact Nancy K. Stoner, Director, Office of Planning 

and Policy Analysis, (202) 564-2530. 

EPCRA 

FIFRA 

CWA 

TSCA 

CAA 

CERCL 

SDWA 

RCRA

0 

100 

200 

300 

400 

500 

For Your Information.... 

FACILITIES GRANTED PENALTY RELIEF BY EPA 

How to Get Audit Policy-Related 

Documents 

Documents concerning the development of the Audit 

Policy, settlements under the policy and additional copies 

of this Audit Policy Update can be obtained by 

contacting the Audit Policy Docket located in Room 

4033 of the Ariel Rios Building (1200 Pennsylvania 

Avenue, N.W., Washington, D.C. or by visiting the 

Environmental Auditing Policy Compliance docket at 

http://www.epa.gov/oeca/polguid/enfdock/ 

docketC9401.html. 

Copies are also available by calling (202) 564-2119 

or (202) 564-2614 or by faxing requests to (202) 501-

1011. 

Page 8 SPRING 1999 
AUDIT POLICY UPDATE

Maryland Realty Company First to Get Penalty Relief


under Audit Policy for Lead Paint Disclosure Rule Violations


I

n May 1998, a Maryland property management firm became 

the first company to be approved for penalty relief for 

violations of the Real Estate Notification and Disclosure Rule 

under EPA’s Audit Policy. 

The Disclosure Rule, a public right-to-know initiative under 

the Residential Lead Based-Paint Hazard Reduction Act of 

1992, requires sellers, landlords and agents to provide 

purchasers and tenants with an EPA-approved lead hazard 

information pamphlet. The rule also allows purchasers a 10-

day period to inspect housing units for the presence of leadbased paint and associated hazards. Furthermore, sales and 

leasing contracts must include certain notification and 

acknowledgment languages. 

Grady Management Inc. disclosed four violations of the 

Disclosure Rule after a voluntary self-audit of its 28 apartment 

complexes in Maryland. The violations concerned two 

apartment complexes in which Grady failed to properly disclose 

the presence of known lead-based paint to its tenants, as 

required by the Disclosure Rule. After notifying EPA of the 

violations, Grady promptly abated the lead-based paint in one 

apartment complex and provided the tenants with the correct 

disclosure statement in the other complex. 

Recognizing Grady’s voluntary efforts to find, promptly 

disclose and expeditiously correct violations of the Disclosure 

Rule, EPA waived thousands of dollars in potential penalties 

against Grady after determining that Grady met all of the 

conditions of the Audit Policy. 

Since the Agency began enforcing the Disclosure Rule 

last year, EPA has issued four civil complaints, with penalties 

totaling $439,725 and 22 “Notices of Violations” for violations 

of the rule. 

Contact Claude Walker, Office of Regulatory 

Enforcement, Toxics and Pesticides Enforcement Division, 

(202) 564-4042. 

Six Industrial Vegetable 

Oil Companies SelfDisclose Violations Under 

Audit Policy 

EPA recently settled with six 

members of the National Oilseed 

Processors Association (NOPA) who 

notified the Agency they may have 

violated TSCA Section 8 and 40 C.F.R 

Part 710. The companies requested that 

their self-disclosures be considered 

under the Audit Policy. 

Industrial vegetable oils, animal fats, 

and petroleum oils share common 

chemical and physical properties and 

produce similar environmental effects. 

These oils can contain toxic components 

and produce similar acute toxic effects, 

chronic toxicity, and carcinogenicity. In 

addition, the oils can interfere with water 

treatment, and can have detrimental 

physical effects on animals and spawning 

grounds, such as oxygen depletion and 

suffocation, egg contamination, and 

destruction of food supply and habitat. 

Section 8, commonly known as the 

Inventory Update Rule, requires 

manufacturers, processors and importers 

of certain chemical substances to report 

the chemical identity, quantity and site 

of manufacture, processing or 

importation of these substances every 

four years. EPA uses this information 

to update the TSCA Chemical 

Substances Inventory database. The 

data in the Inventory is considered the 

only reliable source of national production 

volume information for organic 

chemicals. EPA uses the data to justify 

testing and regulatory action. It is also 

used by other federal and state agencies 

to assist in establishing an integrated 

toxics program. 

After conducting environmental 

audits, the six companies, Ag Processing 

Inc, Bunge Corporation, Central Soya 

Company, Inc., Harvest States, Inc., 

Riceland Foods, Inc., and Townsends, 

Inc., confirmed TSCA Section 8 

violations for substances such as soybean 

oil, soya lecithins, acidulated soapstock 

and other similar chemicals. 

All six companies met Audit Policy 

requirements and were not assessed a 

penalty. Under federal law, the 

companies could have been liable for 

$493,000 in total penalties for failure to 

report to the TSCA Inventory. 

Food processors who produce 

products that do not qualify as “foods” 

or “food additives” for purposes of the 

Federal Food, Drug and Cosmetic Act 

are subject to regulation as a chemical 

substance manufacturer under TSCA 

and must comply with the Inventory 

Update Rule. Companies are using 

vegetable oils and other derivatives from 

vegetable processing as an ingredient in 

lubricants, paints, inks, fuels, plastics, 

solvents and a variety of other industrial 

products. 

Contact Kathy Clark, Office of 

Regulatory Enforcement, Toxics and 

Pesticide Enforcement Division, (202) 

564-2164. 

SPRING 1999 Page 9 
AUDIT POLICY UPDATE

Telecommunications Companies Take Advantage of Audit Policy


Page 10 SPRING 1999

have been disclosed at more than 1,800 

facilities nationally. 

The disclosures by the 10 companies 

resulted from an Agency outreach effort 

to the nation’s telecommunications 

companies following on the heels of a 

major settlement by EPA and the GTE 

Corporation in January 1998. The GTE 

settlement resolved 600 EPCRA and 

SPCC violations at 314 GTE facilities 

in 21 states and was the largest Agency 

settlement reached through EPA’s selfdisclosure policy. 

In addition to correcting violations, 

the 10 telecommunications’ companies 

will pay a total of $128,772 for their 

violations, which is equal to the amount 

the companies saved for delayed 

compliance. 

Policy, the Agency has waived or 

proposed to waive more than $4.2 

million in potential gravity-based 

penalties that otherwise could have been 

assessed. 

“These settlements and proposed 

settlements continue to show how EPA’s 

self-disclosure policy benefits the public, 

the environment, and industry,” said 

Steve Herman, EPA’s Assistant 

Administrator for Enforcement and 

Compliance Assurance. e were able 

to settle these cases quickly and 

efficiently, and local and state 

governments will have the information 

they need to protect their citizens and 

their environment in the event of a 

hazardous chemical spill or accident.” 

The Emergency Planning and 

Community-Right-to-Know 

(EPCRA) was enacted to help local 

communities protect public heath, safety, 

and the environment from chemical 

hazards. 

to notify state agencies and local fire 

departments of the presence of sulfuric 

acid, lead, and/or diesel fuel at some of 

their sites. 

chemicals and meet reporting thresholds 

From Page 1 

The 10 telecommunications 

companies disclosed and 

promptly corrected 1,300 

violations at more than 400 

facilities 

@ MEMORANDUM: IMPLEMENTATION OF 

POLICING POLICY FOR 

CRIMINAL VIOLATION 

http://www.epa.gov/oceft 

@ SMALL BUSINESS POLICY 

http://www.epa.gov/oeca/smbusi.html 

@ Y2K ENFORCEMENT POLICY 

http://www.epa.gov/year2000 

@ ‘ENFORCEMENT ALERT’ 

http://www.epa.gov/oeca/ore/enfalert 

RESOURCES ON THE ‘NET 

@ ENFORCEMENT & COMPLIANCE HOMEPAGE 

http://www.epa.gov/oeca 

@ ENFORCEMENT & COMPLIANCE POLICY & 

GUIDANCE 

http://www.epa.gov/oeca/polguid.html 

@ AUDIT POLICY 

http://www.epa.gov/oeca/auditpol.html 

@ AUDIT POLICY INTERPRETIVE GUIDANCE 

http://www.epa.gov/oeca/apolguid.html 

@ CONFIDENTIALITY OF INFORMATION RECEIVED UNDER 

AGENCY’S SELF-DISCLOSURE POLICY 

http://www.epa.gov/oeca/sahmemo.html 

Pursuant to the Audit 

“W

Act 

Nine of the companies failed 

Facilities that have hazardous 

EPA’S SELFDISCLOSURES INVOLVING POTENTIAL 

must submit reports to the appropriate 

agencies by March 1 annually. Under 

SPCC requirements, facilities are 

required to prepare plans that help 

prevent or mitigate spills and keep 

hazardous chemicals from polluting 

streams and other water bodies. All of 

the companies involved have made the 

appropriate notifications and/or 

developed plans, as required by federal 

regulation. 

Notice of the SPCC claims against 

United States Cellular Corporation and 

Southwestern Bell Telephone Company 

was published in the Federal Register 

on Feb. 1, and Cellco Partnership on 

Feb. 10, for a 30-day public comment 

period. The United States Cellular 

Corporation and Cellco Partnership 

matters also include EPCRA claims, 

which are not subject to public comment 

under the law. The Environmental 

Appeals Board must approve these 

consent agreements. 

Contact Phil Milton, Office of 

Regulatory Enforcement, Multimedia 

Enforcement Division, (202) 564-

5029. 
AUDIT POLICY UPDATE

INFORMATION CORNER 

Audit Policy Contacts 

Regulated entities that wish to take advantage of the Policy should fax or send a written 

disclosure to the appropriate EPA contacts listed below. Written disclosure must be made 

within 10 days . 

EPA Office States Contact Phone FAX # 

Region 1 (CT,ME,MA,NH,RI,VT) Joel Blumstein (617) 918-1771 (617) 918-1809 

Region 2 (NJ,NY,PR,VI) John Wilk (212) 637-3918 (212) 637-4035 

Region 3 (DE,DC,MD,PA, Samantha Fairchild (215) 814-2999 (215) 814-2905 

VA,WV) 

Region 4 (AL,FL,GA,KY, Bill Anderson (404) 562-9680 (404) 562-9663 

MS,NC,SC,TN) 

Region 5 (IL,IN,MI,MN,OH,WI) Wm. MacDowell (312) 886-6798 (312) 353-4135 

Region 6 (AR,LA,NM,OK,TX) Charles Sheehan (214) 665-2228 (214) 665-2146 

Region 7 (IA,KS,MO,NE) Becky Dolph (913) 551-7281 (913) 551-7925 

Region 8 (CO,MT,ND,SD, David Rochlin (303) 312-6892 (303) 312-6339 

UT,WY) 

Region 9 (AZ,CA,HI,NV) Leslie Guinan (415) 744-1339 (415) 744-1041 

Region 10 (AK,ID,OR,WA) Jackson Fox (206) 553-1073 (206) 553-0163 

HQ Criminal Enforcement Roy Kime (202) 564-2539 (202) 501-0599 

(All potential criminal violations) 

HQ Multimedia Enforcement Melissa Marshall (202) 564-6002 (202) 564-9001 

(Civil violations of more than one federal statute at more than one EPA Region) 

HQ Quick Response Team Leslie Jones (202) 564-5123 (202) 564-0011 

(Civil violations of one EPA statute at more than one EPA Region) 

of the violation's discovery

SPRING 1999 Page 11 
United States

Environmental Protection Agency

Office of Regulatory Enforcement

2201A

Washington, D.C. 20460

Official Business

Penalty for Private Use $300

Recycled/Recyclable

Printed with Soy/Canola Ink on paper

that contains at least 50% recycled fiber

Bulk Rate

Postage and Fees Paid

EPA

Permit No. G-35

Inside: Spring 1999

‘Audit Policy Update’