U.S. GOVERNMENT PRINTING OFFICE

43–045 CC WASHINGTON : 1997

S. HRG. 105–173

ENFORCEMENT OF ENVIRONMENTAL LAWS

HEARING

BEFORE THE

COMMITTEE ON

ENVIRONMENT AND PUBLIC WORKS

UNITED STATES SENATE

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

ON

THE RELATIONSHIP BETWEEN THE FEDERAL AND STATE

GOVERNMENTS IN THE ENFORCEMENT OF ENVIRONMENTAL LAWS

JUNE 10, 1997

Printed for the use of the Committee on Environment and Public Works

(

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
(II)

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

ONE HUNDRED FIFTH CONGRESS

JOHN H. CHAFEE, Rhode Island, Chairman

JOHN W. WARNER, Virginia

ROBERT SMITH, New Hampshire

DIRK KEMPTHORNE, Idaho

JAMES M. INHOFE, Oklahoma

CRAIG THOMAS, Wyoming

CHRISTOPHER S. BOND, Missouri

TIM HUTCHINSON, Arkansas

WAYNE ALLARD, Colorado

JEFF SESSIONS, Alabama

MAX BAUCUS, Montana

DANIEL PATRICK MOYNIHAN, New York

FRANK R. LAUTENBERG, New Jersey

HARRY REID, Nevada

BOB GRAHAM, Florida

JOSEPH I. LIEBERMAN, Connecticut

BARBARA BOXER, California

RON WYDEN, Oregon

JIMMIE POWELL, Staff Director

J. THOMAS SLITER, Minority Staff Director

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CONTENTS

Page

JUNE 10, 1997

OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana .............................. 12

Chafee, Hon. John H., U.S. Senator from the State of Rhode Island ................. 1

Inhofe, James M., U.S. Senator from the State of Oklahoma .............................. 14

Letter, Superfund cleanup sites, Environmental Protection Agency ........... 15

Letter, Response to EPA’s letter on Sand Springs and Vinita sites, ARCO 17

Lautenberg, Hon. Frank R., U.S. Senator from the State of New Jersey ........... 22

Articles from the Washington Post ................................................................. 23

Sessions, Hon. Jeff, U.S. Senator from the State of Alabama ............................. 24

Thomas, Hon. Craig, U.S. Senator from the State of Wyoming .......................... 10

Warner, Hon. John W., U.S. Senator from the Commonwealth of Virginia ....... 26

WITNESSES

Bangert, Patricia S., Director of Legal Policy, Office of the Attorney General

for the State of Colorado ...................................................................................... 34

Prepared statement .......................................................................................... 198

Coleman, Mark, Executive Director, Oklahoma Department of Environmental

Quality, on behalf of the Environment Council of States ................................. 29

Prepared statement .......................................................................................... 188

Dunlop, Hon. Becky Norton, Secretary of Natural Resources, Commonwealth

of Virginia ............................................................................................................. 32

Prepared statement .......................................................................................... 190

Supplemental testimony .................................................................................. 42

Harmon, Robert E., chairman, Harmon Industries, Inc. ...................................... 52

Prepared statement .......................................................................................... 204

Herman, Hon. Steven A., Assistant Administrator, Office of Enforcement

and Compliance Assurance, U.S. Environmental Protection Agency .............. 4

Prepared statement .......................................................................................... 156

Responses to additional questions from:

Senator Allard ........................................................................................... 168

Senator Baucus .......................................................................................... 174

Senator Reid .............................................................................................. 163

Kuehn, Robert R., professor, Tulane Law School, New Orleans, LA .................. 53

Prepared statement .......................................................................................... 207

Robins, Todd E., attorney, U.S. Public Interest Research Group ........................ 55

Prepared statement .......................................................................................... 218

Rubin, Hon. Joseph, Assistant Attorney General, State of Connecticut ............. 39

Prepared statement .......................................................................................... 203

Response to questions from Senator Warner ................................................. 44

Schiffer, Hon. Lois J., Assistant Attorney General, Environmental and Natural Resources Division, U.S. Department of Justice ......................................... 2

Court decision, United States vs. Smithfield Foods, Inc. .............................. 82

Policy, Penalty Mitigation for Small Business, U.S. Department of Justice .................................................................................................................. 79

Prepared statement .......................................................................................... 61

Reponses to additional questions from:

Senator Allard ................................................................................................... 72

Senator Baucus .......................................................................................... 74

Senator Chafee .......................................................................................... 72

Senator Reid .............................................................................................. 75
Page

IV

Tinsley, Hon. Nikki L., Acting Inspector General, U.S. Environmental Protection Agency ........................................................................................................... 7

Prepared statement .......................................................................................... 186

Tulou, Christophe A.G., Secretary, Delaware Department of Natural Resources and Environmental Control ................................................................... 36

Prepared statement .......................................................................................... 201

ADDITIONAL MATERIAL

Articles:

Clean Water, Political Hogwash, Washington Post ....................................... 23

Smithfield Foods Liable for Dumping Hog Wash, Washington Post ............ 24

Court decision, United States vs. Smithfield Foods, Inc. ..................................... 82

Interim Policy on Penalty Mitigation for Small Business, Department of Justice ......................................................................................................................... 79

Statements:

Burr & Forman ................................................................................................. 229

Smithfield Foods, Inc. ...................................................................................... 233
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ENFORCEMENT OF ENVIRONMENTAL LAWS

TUESDAY, JUNE 10, 1997

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, Washington, DC.

The committee met, pursuant to notice, at 9:30 a.m. in room 406,

Senate Dirksen Building, Hon. John H. Chafee (chairman of the

committee) presiding.

Present: Senators Chafee, Warner, Inhofe, Thomas, Sessions,

Baucus, and Lautenberg.

OPENING STATEMENT OF HON. JOHN H. CHAFEE,

U.S. SENATOR FROM THE STATE OF RHODE ISLAND

Senator CHAFEE. Good morning. As chairman of the Environment and Public Works Committee, I’d like to welcome everyone

here to the committee’s oversight hearing this morning on the relationship between the Federal and State governments in the enforcement of environmental laws.

A little over 4 years ago, the committee held an oversight hearing to examine the respective roles different levels of government

should play in the implementation and enforcement of environmental laws. That was the first hearing at which Administrator

Carol Browner testified as administrator of the EPA.

At that hearing, she emphasized the essential role States have

to play in environmental enforcement. Since then, there have been

other reports on the need for greater cooperation and communication between the States and EPA in implementation of the Nation’s

environmental laws.

In 1995, a report from the GAO found that while the relationship

between EPA and the States was then on the upswing, it still had

plenty of room for improvement. That same year, that was the

GAO report, 1995, that same year, the National Academy of Public

Administration issued a report calling for a redefining of the division of labor between EPA and the States.

Among other things, the Academy recommended that States

which demonstrate superior environmental performance should be

granted greater flexibility and autonomy in carrying out environmental programs. That recommendation, of course, leads to the

question of how to assess the level of environmental for which a

State is providing, in other words, how do you tell whether a State

is doing a good job. It’s more difficult than it seems.

That’s because there’s growing recognition that the more traditional methods of assessing State enforcement, such as by counting

up the number of enforcement actions that have been filed, or the
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number of penalties imposed, are not adequate. States that are trying to attain better results in administering environmental programs increasingly are experimenting with more carrots and fewer

sticks.

During this transition period, the challenge is to derive new

methods by which to evaluate, in a better fashion, whether innovative approaches—those undertaken by EPA or by the States—are

working to achieve better results. To the extent the EPA and

States are working on new modes of measurement toward this end,

they’re to be commended.

Now, there are several matters pending in which the EPA or the

Department of Justice has overfiled against a particular company.

So I’d like to say a word about pending actions. I would simply remind members who will hear the witnesses as the day goes on,

that they should refrain from inquiring into details of any pending

matters. The result of this hearing should not compromise the

rights of parties to a pending matter, or to influence the outcome

of any matter.

I would note, the legitimate policy of EPA and the Justice Department not to comment on pending matters. Their silence, or

that of any other parties, with respect to a pending matter should

not be construed as anything other than the exercise of prudent

discretion.

We have three panels today. History shows that the first panel

always gets lavish attention, the second panel gets a little less so,

and the third panel is subject to a hurry-up because it’s lunch time.

Now, I don’t want that to occur. So with an attempt at total fairness, I’m going to restrict this first panel to 35 minutes and the

other panels similar thereto. So everybody will get the same time.

The witnesses in the first panel are Ms. Lois Schiffer, assistant

attorney general, from the Department of Justice; Steve Herman,

assistant administrator for Enforcement at EPA; and Nikki

Tinsley, acting inspector general of EPA. We’ll take them in that

order. Each will have 5 minutes, and then we’ll have a chance for

a question. The lights will go on, you can gauge by the lights. This

means you’ve got a minute to go, when the yellow goes on.

We welcome you, Ms. Schiffer, and I’ve had the privilege of working with Ms. Schiffer for a good number of years. We’re glad to

have you here. Go to it.

STATEMENT OF HON. LOIS J. SCHIFFER, ASSISTANT ATTORNEY GENERAL, ENVIRONMENTAL AND NATURAL RESOURCES DIVISION, DEPARTMENT OF JUSTICE

Ms. SCHIFFER. Thank you, Senator Chafee, for the opportunity to

provide this committee with information about the environmental

enforcement activities of our division.

As the Nation’s Federal environmental law enforcement officers,

we are the cops on the beat to protect the quality of our environment and the health of our communities. We carry out our important task working closely with our partners in the EPA and other

Federal agencies, in the U.S. Attorneys’ offices throughout the

country, and with State Attorneys General and State environmental agencies. Today I will discuss the importance of a strong
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and effective enforcement program nationwide, and how we have

worked to enhance cooperative efforts with the States.

First, the importance of strong and effective enforcement: we

handle cases referred to us from other Federal agencies including

EPA, the FBI, the Coast Guard, and the Corps of Engineers. We

bring criminal prosecutions and civil court enforcement actions to

protect the environment, to remedy environmental harm, to punish

wrongdoers, and to deter future violations. We support citizen suits

as an important enforcement tool. Without vigorous enforcement,

the health of our families, our community, our environment, and

our economy, would all be compromised.

Environmental enforcement protects the economy in several

ways. First, clean air, water and land are essential ingredients for

a healthy economy. Pollution decreases land value and imposes serious health care costs and harms industries, such as fishing, tourism and recreation. Second, companies that fail to comply with our

environmental laws put law abiding businesses at a competitive

disadvantage. A strong enforcement program with penalties that

recapture economic benefit and more to deter the violator is essential to fair and honest competition.

Environmental protection statutes promote and encourage voluntary environmental compliance, and vigorous enforcement drives

such compliance. People comply with laws in part because, if they

do not, they will get caught and sanctioned. As William Reilly, the

Administrator of EPA between 1989 and 1993, stated while at

EPA, ‘‘Enforcement of environmental laws is absolutely essential,’’

and ‘‘is at the very heart of the integrity and commitment of our

regulatory programs.’’

Environmental violations have real victims. Polluting an underground drinking water supply can threaten thousands of people. An

oil spill that damages an entire ecosystem such as the Exxon

Valdez spill in Alaska, may undermine the economic foundation of

surrounding communities. This division’s job is to ensure that the

laws Congress has enacted to prevent such harms are respected

and obeyed, so that these harms do not occur. This is a law and

order program in a critical area. The American public repeatedly

has made clear that it wants and expects environmental protection

and strong enforcement.

Our environmental laws provide national minimum standards so

that people all over the country have a level of environmental protection and health. These standards are particularly important to

assure that States do not seek to attract industry by bidding for

business through lower levels of environmental protection, and to

protect all our citizens, because our Nation’s air and water and contamination from our land can easily travel across State borders.

State enforcement of environmental laws must be viewed in this

context.

Third, cooperation with States: what steps have we undertaken

to promote cooperation with State and local authorities? I’ll mention eight.

First, several years ago, I appointed a counsel for State and local

government affairs to act as a liaison and to assure better cooperation and communication with the States.
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Second, we file and handle cases jointly with States. For example, today we are commencing a joint trial with the State of Ohio

against a company that, for more than a decade, has exceed air

emissions limits on particulates in operation of its boiler.

We work with Law Enforcement Coordinating Committees and

task forces organized through a number of U.S. Attorneys’ offices

to use Federal, State, and local investigative and prosecutive resources most efficiently to fight environmental crime.

Fourth, we have a policy that our civil enforcers notify a State

in advance of filing a suit in that State, absent exceptional circumstances, and invite the State’s participation or cooperation in

the action.

Fifth, we participate in a senior forum with State attorneys general, State environmental commissioners, tribal representatives,

EPA’s Steve Herman and me, to discuss environmental enforcement and compliance issues. Mark Coleman, on a panel later

today, is a member of the forum. We meet regularly, and the meetings are productive.

Sixth, we work with State officials to train State and local prosecutors, investigators, and technical personnel in the development

of environmental crimes cases.

Seventh, I meet often with State attorneys general, keep an open

door and an open phone to their concerns and problems, and generally provide access and cooperation to discuss and address their

concerns regarding cases, including enforcement.

Finally, we have worked to improve and solidify our relationship

with the 94 U.S. Attorneys’ offices across the country, which in

turn have ongoing coordination with State and local agencies.

In conclusion, these steps help assure that we are using our enforcement resources in coordination with States to achieve effective

environmental results. At the same time, we must assure that in

those States where enforcement is not sufficiently vigorous—where

the State does not obtain effective protection through injunctions,

does not obtain penalties that recover economic benefit to assure a

level playing field, and does not obtain penalties with a gravity

component to assure deterrence—the Federal Government brings

enforcement actions. A recent example is the Smithfield case in

Virginia, which I’ll talk about in the questions and answers, since

I can see I’m out of time.

Again, thank you for this opportunity to describe our program as

the Nation’s environmental enforcement officers and the ways we

work with the States to carry out this important mission. I welcome the opportunity to answer your questions.

Senator CHAFEE. Thank you, Ms. Schiffer. We’ll finish the panel

and then have questions for all the members of the panel.

Mr. Herman, who is assistant administrator for enforcement at

EPA. Glad to see you, Mr. Herman. Go to it.

STATEMENT OF HON. STEVEN A. HERMAN, ASSISTANT ADMINISTRATOR, OFFICE OF ENFORCEMENT AND COMPLIANCE

ASSURANCE, ENVIRONMENTAL PROTECTION AGENCY

Mr. HERMAN. Thank you, Mr. Chairman. It’s an honor to be here

this morning, and thank you for the opportunity to testify about

how EPA is working to protect public health and the environment
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through a strong and vigorous enforcement and compliance program.

I would like to make three points in my testimony this morning.

First, the environmental laws this committee has approved and the

Congress has enacted are not worth much without a strong Federal

enforcement program in which both EPA and the States do their

part.

Second, our enforcement and compliance program is balanced

and flexible. We have cut penalties that encourage environmental

auditing and obtained better environmental results through settlements. Our compliance assistance services to industry have won

praise from trade associations and a silver hammer award for their

contribution to reinvention. These efforts co-exist with and are supported by a strong, aggressive and effective law enforcement program.

Third, we can and should give States more flexibility in their

management of Federal programs. But Federal environmental law

also requires States to assume certain responsibilities for both enforcement and public accountability.

Congress has authorized us to enforce environmental law. It is

our responsibility to exercise that authority wisely but firmly, without fear or favor. As with any other law, the public, including responsible companies, expects that we will sanction those who violate the environmental laws we are all required to comply with.

Enforcement accomplishes three critical goals. First, it protects

public health and the environment by assuring a speedy return to

compliance, the elimination or prevention of pollution, and cleanup

of environmental damage. Last year, polluters spent almost $1.5

billion correcting violations, cleaning up hazardous waste sites, and

taking steps to improve the environment and prevent future problems.

Our settlements cut pollutant loading substantially, reducing

nearly 200 million pounds of carbon monoxide, 16.6 million pounds

of lead, and 7.7 million pounds of asbestos.

Second, it seeks to ensure fairness to the regulated community

by ensuring that those who violate the law do not profit at the expense of those who comply. Penalties for serious non-compliance

keep the playing field level. As the General Accounting Office

pointed out in a 1996 report, which found that ‘‘penalties play a

key role in environmental enforcement by deterring violators and

by ensuring that regulated entities are treated fairly and consistently, so that no one gains a competitive advantage by violating environmental law.’’

Finally, it is universally accepted that the threat of enforcement

sanctions does deter violations and encourages responsible self-policing. Ninety-six percent of respondents to a 1995 Price

Waterhouse survey identified fear of inspections as a primary

motivator for environmental auditing. Perhaps more surprising, enforcement pressure was cited as one of the most important drivers

of pollution prevention among both large and small businesses in

a 1996 study, sponsored by EPA.

A meaningful enforcement program, therefore, not only punishes,

but also prevents harm. These are the reasons why we think it is

essential for the Federal Government to maintain a vigorous and
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aggressive enforcement presence, and why we are committed to

doing so.

However, those who believe EPA’s enforcement is solely preoccupied with counting of penalty dollars are fighting law year’s

war. We are proud of our innovations which fuse compliance assistance, auditing incentives and more traditional enforcement into a

dynamic enforcement and compliance assurance program.

Let me give you four examples. First, we have established national compliance service centers to provide plain English assistance to printers, auto service stations, agricultural businesses and

metal finishers. These centers are managed in partnership with

trade associations and have earned a silver hammer award from

the Vice President’s National Performance Review.

Second, we have slashed and in most cases eliminated penalties

for companies that audit and promptly disclose and correct violations. More than 150 companies and 400 facilities have disclosed

violations already under this program. We’ve done this in the sunshine, without privileges for polluters, without indiscriminate amnesties, and without tying the hands of law enforcement officials.

Third, it is our policy to reduce penalties for companies that

agree to innovative environmental projects as part of their settlement for non-compliance. These efforts have yielded more than

$100 million in environmental projects that benefit local communities in fiscal year 1995.

And last but not least, we are working hard to tie all these efforts together by launching a national effort, and this addresses the

point that you made, Mr. Chairman, that will culminate this fall

to develop new measures of enforcement and compliance success.

We are including the States, trade associations, industry and public

interest groups in this effort. This is really a ‘‘put-up’’ or ‘‘shut-up’’

time for everybody to come forward with their ideas on the best

ways to measure our success in this program, and for measuring

compliance also.

Let me just conclude with a couple of words about the State partnership, since my time has expired. We share responsibility for environmental enforcement under the law. While that partnership,

the State-Federal partnership is challenging, we believe joint jurisdiction is fundamentally sound and serves the public well. States

conduct the lion’s share of inspections, and are essential to maintaining an enforcement presence.

The Federal Government is needed where States lack authority,

problems that transcend State boundaries or are particularly complex, and to discourage forum shopping by irresponsible companies,

and to maintain level playing fields across the Nation.

We have taken a more flexible approach to our national environmental performance partnership grants and our performance partnership agreements, which we are working through. Occasional

conflicts should not obscure the fact that our day-to-day working

relationships with States on almost all matters is generally very

good.

Federal law does establish certain responsibilities for States that

manage Federal programs, just as they do for EPA. First, under

Federal statutes and regulations, States must have the authority
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to enforce the requirements of any Federal programs it administers. This includes the ability to obtain——

Senator CHAFEE. Now, Mr. Herman, in keeping with my stern injunction as we opened, we’re going to have to wind up here.

Mr. HERMAN. I will conclude, then, and incorporate the rest of

my information into answers to questions.

But I would say, though, Mr. Chairman, and I apologize for going

over my time limit, is that in all partnerships, EPA and the States

may have diverse views on issues. In fact, many States have diverse views. We need each other, we have to work together, and

I think we are in fact trying to overcome these problems. Where

there is a philosophical difference, figure out how we overcome that

and do our job for the American public.

We are continuing to do that and will continue to do that.

Senator CHAFEE. Fine. Thank you very much.

Ms. Nikki Tinsley, Acting Inspector General of the EPA. We welcome you here.

STATEMENT OF HON. NIKKI L. TINSLEY, ACTING INSPECTOR

GENERAL, ENVIRONMENTAL PROTECTION AGENCY

Ms. TINSLEY. Thank you. Good morning, Mr. Chairman and

members of the committee.

I’m pleased to have the opportunity to discuss independent audits conducted by the Office of Inspector General dealing with issues related to environmental enforcement. EPA is working in

partnership with States and sometimes local agencies to achieve

environmental goals. I will discuss three aspects of a partnership

that are essential if it is to work well.

First, mutually agreed-upon enforcement approaches. Second,

clear agreement on responsibilities. And third, complete and accurate reporting of environmental data. I’ll discuss these areas in

light of our recent audits in the air and hazardous waste programs.

One generally accepted enforcement approach is that of escalating enforcement actions for repeat violations. A violator may initially be required to comply with an administrative order or be assessed a relatively small monetary penalty. If these actions don’t

bring about compliance, the violator could face civil or criminal judicial actions and progressively higher penalties.

We found numerous instances where this progressive enforcement approach was not employed. For example, during a 2-year period, a California glass manufacturing company was fined $1,000

18 times for excess particulate matter emissions. The fines were

not increased, and the company did not move into compliance.

The second enforcement approach is that penalties should be

large enough to negate any economic benefits of noncompliance.

EPA regions we reviewed generally included an economic benefit

component in their penalty assessment. But States generally did

not. When economic benefits are not consistently calculated and

collected, violators gain an economic advantage over those who

comply with the law.

A third enforcement approach is that in order to be fair, penalties must be consistent relative to the seriousness of the violation. We found a great variance when we compared EPA and State

penalties and when we compared penalties between States. For ex-
8

ample, penalties assessed against hazardous waste violators in a

sample of 13 States varied from an average of about $7,000 in

Maryland to almost $60,000 in Texas.

Inconsistencies in enforcement can result in varied levels of environmental protection that put public health and the environment

at risk. The inconsistencies we identified were caused by factors

such as limited State and local resources, State and local concerns

that large penalties would result in industry relocating, and State

and local preferences for different enforcement approaches.

For a partnership between EPA and a State agency to be successful, there must be common agreement about the activities each

will perform. Our audits showed that EPA and the States frequently did not agree on program requirements. To illustrate, I’ll

discuss our audit of EPA and the Pennsylvania Air Enforcement

program.

EPA expected Pennsylvania to report significant violators that it

identified during inspections. In comparison to EPA, the State

placed less emphasis on reporting violators. While Pennsylvania

performed 2,000 inspections at major facilities in fiscal year 1995,

it reported only 6 significant violators to EPA. We reviewed 270 of

the inspections and identified 64 additional facilities that should

have been reported.

Not reporting allowed the State to work with violators to achieve

compliance without EPA involvement. Unfortunately, achieving

compliance sometimes took years, during which the violators were

emitting excessive pollution into the atmosphere. Because EPA was

unaware of these violations, it was not able to exercise appropriate

oversight.

Accurate and complete enforcement data is vital so that we as a

Nation can judge the extent that industry complies with environmental laws, and so that States and EPA can target areas for increased enforcement. We found major omissions and inaccuracies in

both the air and hazardous waste enforcement data systems. The

Pennsylvania example I just described illustrates a data emission

problem, along with the problem of EPA and the State not agreeing

on responsibilities.

I’ve discussed three elements we believe are necessary for effective partnerships between EPA and the States. First, when voluntary compliance cannot be achieved, partners must agree on an

enforcement approach that includes escalating penalties and considers economic benefit and the seriousness of the violations. Second, all partners must understand and accept their responsibilities.

And third, data systems must contain complete, accurate and

timely information on enforcement activities.

That concludes my remarks, and I’d be happy to answer questions.

Senator CHAFEE. Thank you very much, Ms. Tinsley.

I must say, I’m sympathetic to the problems you face. It’s not

easy.

First of all, we’ve got to consider that each State obviously supports the industries within its borders, and doesn’t want to come

down too hard on these industries. At the same time, if they do

levy a fine, one of the problems that constantly comes up is, is the

fine really fair and does it make up for the advantage that that
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company had over an out-of-State competitor who was abiding with

the rules the whole time, while enduring any extra costs that go

with it.

In other words, did the offender get a competitive advantage that

produced profits.

I don’t understand the case you cited—that 18 times in a row the

California company was only fined $1,000.

One of the things you mentioned, Mr. Herman, was experimentation—maybe have the States be laboratories for the enforcement

of environmental laws. How do you do that, when there’s the chill

of the Federal Government coming in and overfiling, coming in on

top?

Mr. HERMAN. I think, Senator, there’s a couple of parts to it. I

think it is very important for the States to have the opportunity

to experiment, to try different approaches, to gear approaches to

the situations in their own States. I think that’s part of the framework that Congress in its wisdom has established.

In doing that, however, there are certain minimum standards

which are in the Federal statutes, and which have to be maintained to guarantee that citizens all over the country have a minimum level of protection. So any experimentation has to go on within certain boundaries.

With regard to overfiling, in fact, we recognize that overfiling is

something of an extraordinary action to take.

Senator CHAFEE. How many times do you think you overfile a

year?

Mr. HERMAN. Last year, we had four overfiles.

Senator CHAFEE. In other words, you came in on top of—a State

court action was proceeding, and you came in on top of that in the

Federal Court?

Mr. HERMAN. That’s correct. It’s a little more interesting than

that, actually. The State action is finished. My understanding is

that in two of those four cases, we actually were invited in because

the State was not able to get adequate relief from their statutes.

But in the previous 2 years, there were 15 overfiles. Again——

Senator CHAFEE. Per year?

Mr. HERMAN. No, total. Prior to that, there was an ECOS study

which ECOS commissioned among the States, which showed that

the States basically were not overrun by overfiles. We used that enforcement tool only when the result that the State got was insufficient or was not taken in timely fashion, where statute of limitations was going to run out, or the relief they got was insufficient.

Recently, you may have read about a fairly extraordinarily overfiling case, which I’ll——

Senator CHAFEE. Why don’t you touch on that briefly.

Mr. HERMAN. That was the Smithfield Ham case, in Virginia.

There were thousands of violations—horrible discharges into the

water. The State was willing to settle for a very modest amount.

EPA overfiled. We were challenged in Federal Court. Last week, a

Federal district judge in a 75-page opinion upheld us on all points.

Now the only issue is the amount of the penalty. All of the overfiling cases really have been where there’s been gross disparity in the

relief that is sought.
10

Senator CHAFEE. Let me just briefly ask a question of Ms.

Schiffer. I was interested, Mr. Coleman, who’s coming up in the

next panel, is chairman of a council you have. Is he with the Attorney General in some State?

Ms. SCHIFFER. He’s head of the environment agency in the State

of Oklahoma.

Senator CHAFEE. OK. Well, he must be all right.

[Laughter.]

Senator CHAFEE. So, this group, this Environmental Council of

States, is what—an organization of the enforcement people from

the States?

Ms. SCHIFFER. I want to separate out two different groups. Mr.

Coleman has been chair of something called ECOS, which is the acronym for the Environmental Council of the States. Mr. Herman

can probably better address the operation and Mr. Coleman’s role

in ECOS.

We also have an informal group of people who are primarily enforcers, Federal and State. This group includes State attorneys general, and personnel from the Justice Department, and U.S. Attorneys’ Offices.

Senator CHAFEE. So you’re a member of that group?

Ms. SCHIFFER. I’m a member of that group.

Senator CHAFEE. And they come to what, advise you on whether

these overfilings are creating chaos?

Ms. SCHIFFER. No. It’s a group that’s designed to just discuss issues that arise in enforcement. It’s very informal and we discuss

a range of issues on and off the record. It is an informal way to

help us all be better enforcers.

Of course, one of the issues that we do discuss is overfilings. And

I’d like to underscore what Mr. Herman has said, about the fact

that they are few in number, the Smithfield case that Mr. Herman

mentioned being a very good example of an overfiling where a company was discharging——

Senator CHAFEE. Well, I don’t want to get into details of that.

Senator Thomas.

OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR

FROM THE STATE OF WYOMING

Senator THOMAS. Thank you, sir.

It seemed to me part of your message was that the rules need

to be enforced. I don’t think anybody objects to that idea. The question is, how do we best work with the local and State governments.

Now, frankly, I wouldn’t have guessed that was the topic from your

conversations. You talked about what you needed to do and so on.

What do you think about moving more of the activities to the

States on the premise that they are closer to it and can indeed do

it better within the framework of the Federal legislation? I didn’t

think you talked much about that. Aren’t we seeking to try and involve the State more? I got the impression you think things are

great the way they are.

Mr. HERMAN. I think on many fronts, Senator, we are trying to

do more. There are several things that have to be looked at, which

I think most of the States would agree with. What are the States’

capabilities in different areas. Some States, there’s a wide range of
11

capability among the States, as everywhere. Different States have

different strengths and different interests.

Where States can handle more, they are in fact handling more.

And we see it all the time. States do most of the enforcement in

our area, so I’ll address enforcement. The overwhelming number of

enforcement actions are taken by States in the country. In our

criminal enforcement programs, a great portion of our resources

and time are spent building capacity among State officials. The response of State, local sheriffs and district attorneys has been overwhelming—they want to get the resources and the support we provide.

Senator THOMAS. One of the difficulties with hearings, generally,

is that you are the first panel and then by the time the other witnesses come, you may be gone. I think one of the future witnesses

will say the crisis of environmental enforcement is now. Do you

agree with that?

Mr. HERMAN. I don’t know what that means.

Senator THOMAS. Well, it means that there’s a crisis in environmental enforcement.

Mr. HERMAN. I think it’s critical that we have strong——

Senator THOMAS. No, that’s not what it means. It means there’s

a crisis in getting the job done, I believe.

Mr. HERMAN. I don’t know if there’s a crisis in getting the job

done. I think some people question whether we should do it.

Senator THOMAS. No, this person will not question that, I am

sure. I think he’s saying it isn’t being done properly.

Ms. SCHIFFER. Senator Thomas, I believe that all of us feel that

we are working very hard to assure that companies and people in

America comply with our environmental laws, and that enforcement is a very important and effective tool to helping move that

along.

We are working cooperatively with States, but it really needs to

be done in a combination with Federal and State enforcement in

order to be effective. It is true that resources have been cut back

with both some State agencies and all of us in the Federal Government are operating under some limited resources now. So that we

don’t always have complete resources to do the very most enforcement that we would like to.

But I think in terms of a crisis of environmental enforcement,

what we have is many companies who will at least in private tell

you that it is important that we enforce so that the companies that

are stepping up to the plate and doing a good job aren’t at a competitive disadvantage vis-a-vis companies that are not taking care

of their pollution control obligations.

Senator THOMAS. These are folks who will say something later,

when you all don’t have a chance to respond. This one, I paraphrase, says, I think there is no EPA-State partnership in some

areas. EPA’s perspective seems to be they own the ranch and we’re

the hired hands. How do you respond to that?

Mr. HERMAN. My perspective is very different. We have reached

out more toward the States than any other prior administration.

We have brought the States into the planning of enforcement, trying to incorporate State and Federal priorities in all our regions.
12

We are dealing with some philosophical problems that we have

to work through. So though I think there are problems, I also am

absolutely confident that we are working them through. We have

had some serious problems, as you know, with regard to the question of State audit laws. We have been negotiating and talking to

States, we’ve reached agreements with States like Texas, Utah,

Michigan and others, in terms of how we proceed, even though

there is some disagreement.

We are doing the training of local people. We are trying to negotiate performance partnership agreements, specifically with regard

to enforcement. Administrator Browner and Deputy Administrator

Hanson are both former commissioners. They both welcome meeting with the commissioners and have had some very serious talks.

I think we’re going through some periods of major changes and

looking at new ways of doing things.

I think as we do them, you don’t get instant agreement. These

are very, very tough problems and they’re tough issues in terms of

balancing different interests and different approaches. There are

people who see the light and know the absolute right way to go.

I think it’s much more complicated than that, and that’s what we

have to have patience to work through with each other.

Senator THOMAS. Thank you.

Senator CHAFEE. Senator Baucus.

OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR

FROM THE STATE OF MONTANA

Senator BAUCUS. Thank you, Chairman.

One of the questions that concerns me is letting States and companies know generally when and under what circumstances the

Federal Government will overfile. That is, even though the State

is proceeding at one level or another, that EPA, the Federal Government believes that the State enforcement action is inadequate.

It seems to me it would be helpful if there’s a general understanding as to how the Federal Government decides to step in, and

under what circumstances and when, etc., so that everyone tends

to know when that might or might not happen.

So how do you decide when to step in? What are the rules and

what are the guidelines? How well publicized are they, how well

known are they? Are they agreed upon? Do they vary significantly

so people don’t know what the rules, standards, guidelines are? I’d

like you to discuss that, please.

Mr. HERMAN. I’ll start. Good morning, Senator Baucus.

There are guidelines. We have guidance called timely and appropriate guidance, which sets out sort of the reasonable amount of

time within which an action should be brought and guidelines for

penalties that should be given.

Senator BAUCUS. And these are well known?

Mr. HERMAN. They should be, yes. They’ve been out there for

quite some time. And I think if you ask the State representatives

that are going to testify after me, and I believe they were worked

through with them in the late 1980’s.

But let me say two other things. One is, in every case as far as

I know that we overfile, we talk to the State first. We try not to

have a surprise. We try and tell them what exactly is our problem
13

with what they’re doing. And they will tell us why they think you

shouldn’t have a problem, or what the situation is, why what

they’re doing is fair.

Second, or third, the problem of overfiling, I think it’s a small

blip when you look at the numbers of actions that are taken by

both the Federal Government and all of the States. The percentage

of overfiles is absolutely infinitesimal. Last year, there were four.

In 1994 and 1995, there were 15.

Prior to that, according to an ECOS survey, it was under 30 for

several years. It’s just not a large universe.

Now, we realize the seriousness of it. And as I said prior to your

coming in, in some cases that I’ve mentioned, the States have actually asked us to come in, because they weren’t able to get adequate

relief under their laws.

But both Ms. Schiffer and I are firm believers in giving the

States advance notice, trying to talk to them about it. Certainly if

there’s time, engaging in some serious discussions about whether

we have to do it, do they want to join us, do they want to change

course.

Senator BAUCUS. Ms. Schiffer.

Ms. SCHIFFER. Thank you, Senator Baucus.

I think the Smithfield case, which was ruled on last week by the

district court in Virginia, is a very instructive example. There we

had a company that was discharging wastewater from its meat

packing operations into a tributary of the Chesapeake Bay over 5

years in complete violation of its permit limits. Its wastes included

cyanide, excess nitrogen, and a variety of other extremely harmful

things, including fecal coliform.

We talked to the State of Virginia about enforcement. The State

of Virginia really took no real enforcement action. Then we notified

the State of Virginia that we were going to file an enforcement action against this extremely serious violator, and 3 days later, without telling us, the State of Virginia filed a case in court asking for

what were relatively modest penalties in the face of these enormous violations.

In fact, the court ruled last week that the Government’s case was

justified, and that there were serious violations here. The penalty

issue has been deferred. The court also ruled that Virginia’s program, which it may consider an example of experimentation, did

not have adequate opportunity for public participation and had an

administrative penalty system where someone could be assessed a

penalty only if they agreed to it. The administrative process

couldn’t impose a penalty on people.

So the court said the State program was therefore not comparable to a Federal program, and actions taken by the State

weren’t going to get in the way of Federal action. That’s an example of where we had what I think of as the three things. We needed

serious injunctive relief here, so that the environment wouldn’t be

harmed any more. We needed a serious penalty that recovered economic benefit. That is what the company——

Senator CHAFEE. I tell you what. We just can’t explore each of

these cases by themselves.

Senator BAUCUS. I want her to give us just a one sentence summary of it, which she’s doing right now.
14

Senator CHAFEE. Well, let’s hear that one sentence, not too many

commas in it.

[Laughter.]

Ms. SCHIFFER. I’ll try. The penalty needs to be high enough to

deter, so that a company doesn’t think it can come in and wait

until it’s caught by a Government authority and then pay what it

would have had to pay in the first instance.

Senator CHAFEE. That’s a great sentence.

Senator BAUCUS. Thank you, Chairman.

[The prepared statement of Senator Baucus follows:]

PREPARED STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE STATE OF

MONTANA

Thank you, Mr. Chairman. I’ll cut right to the chase.

Twenty-five years ago, this committee made a profound decision. It established

national standards for clean water, clean air, and other forms of environmental protection.

And measured by the improvements we see in our air and water, this policy has

been a huge success.

But unless national environmental standards are backed up by a national enforcement policy, it’s national in name only. Compliance can vary widely. And companies

that play by the rules will be placed at a competitive disadvantage compared to

companies in other states that break the law and get away with it.

So I believe that it is critically important to maintain a strong Federal enforcement backstop.

That said, we have to remember that our objective is not enforcement for it’s own

sake. Our objective is compliance to improve the environment.

So I remain interested in further steps that we can take to help companies understand and comply with the law, especially small businesses that can’t afford lawyers, consultants, and audits.

I also am interested in trying to improve the balance between Federal and State

compliance efforts, so that we focus our resources and use them as efficiently and

effectively as possible.

It looks like we have good, balanced panels of witnesses and I look forward to

hearing from them.

Senator CHAFEE. Senator Inhofe.

OPENING STATEMENT OF HON. JAMES M. INHOFE,

U.S. SENATOR FROM THE STATE OF OKLAHOMA

Senator INHOFE. Thank you, Senator Chafee. I was just a couple

of minutes late, so I didn’t get a chance to do an opening statement. So I’d like to submit at the beginning of this meeting my

written statement into the record.

Senator CHAFEE. Let me just say, somewhere in here when I

started, we’re under somewhat of a time constraint. And as I mentioned, the first panel always gets a preferential amount of time,

and so I want to make sure that each panel gets——

Senator INHOFE. I’ll stay within my time. But I’d like to have

that statement in the record, and also the two letters that I referred to in my statement entered in the record entered at the appropriate place.

Senator CHAFEE. Without objection, so ordered.

[The prepared statement of Senator Inhofe follows:]

PREPARED STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE

OF OKLAHOMA

Mr. Chairman, thank you for calling today’s hearing on the relationship between

the Federal and State governments in the enforcement of environmental laws. This

is a very important area and I am glad we are having this hearing today.
15

As the chairman of the Clean Air and Wetlands Subcommittee, I will be looking

at the enforcement of these programs very carefully in the months to come. I am

particularly concerned about the enforcement of several of the Clean Air regulations

particularly the new ‘‘Credible Evidence Rule,’’ the planned enforcement activities

for the ‘‘enhanced monitoring rule,’’ and the manner in which the EPA has been

threatening to cutoff highway funds to the States. But these are issues I prefer to

address in separate Clean Air hearings or in the ISTEA reauthorization process.

Today, I think it is important to address the overall enforcement program of the

Federal Government. I have two main concerns that reach across all environmental

laws.

(1) The States are in the best position to enforce the environmental laws and regulations.

The EPA should be limited to an oversight role for consistency only and for providing advice to the States. They should not be in the business of second guessing

States or playing the big bully on the block. I realize that the majority of enforcement actions are taken by States, but we are now 25 years into our Nation’s environmental programs and the States should take an even greater role. It is time for

us to acknowledge that the States can and should take a greater role in environmental programs, and enforcement issues are an excellent example. The States can

often accomplish activities in a more efficient manner.

I would like to highlight one example. While this is not an enforcement case, it

is a Superfund cleanup case that I mentioned at our last Superfund hearing. It

shows that the States are better equipped to clean up sites faster and more efficiently than the Federal Government, which in turn provides for a cleaner environment.

The example was two refinery waste sites in Oklahoma, Sand Springs and Vinita.

Both are owned by the same company. The clean up at Vinita was directed by the

State of Oklahoma, it cost almost one third as much as the Federal site per cubic

yard of waste ($92 verses $262 per cubic yard) and only took 3 years verses 11 years

at the Federal site in Sand Springs.

After I used this example, the EPA responded with a letter to members of the

Committee explaining how I was wrong. I would like to offer the EPA letter as well

as a response by the company into the record. As you can see by these letters, the

EPA missed my point. Comparing the cost of cubic yard to cubic yard for the same

waste, the State site was faster and cheaper. My point then, as it is today, is that

there are some activities the States do more efficiently which should be left to the

States.

(2) We should get away from enforcement action bean-counting.

I would like to hear some suggestions today on how to get away from enforcement

bean counting. Imposing large fines on someone for failure to file a form properly

does not help anyone including the environment, except as another notch on the belt

of the inspector. We need to change the climate on enforcement-bean counting. I’m

sure some of you will say it is changing or it has changed; but I disagree. The wellpublicized news reports last fall about the Department of Justice complaining that

the EPA had not referred enough cases in 1996 is proof that it is the quantity of

cases that counts, not the quality. While this may very well be a result of Congressional budget influences, we need to get away from this.

If the Agency works out a program for the States to provide assistance to the regulated community to ensure compliance with the environmental laws, and quits

measuring success by the number of cases filed, fines collected, or people jailed; then

our environment will be protected and I will be the first to defend the Agency here

in Congress.

I am glad to see Mark Coleman from Oklahoma here today, I welcome his testimony and that of the other witnesses.

U.S. ENVIRONMENTAL PROTECTION AGENCY,

Washington, DC, March 12, 1997.

Hon. JAMES M. INHOFE,

U.S. Senate, Washington, DC.

DEAR SENATOR INHOFE: At the March 5, 1997 Senate Environment and Public

Works Subcommittee on Superfund, Waste Control and Risk Assessment Oversight

Hearing on S. 8, the Superfund Cleanup Acceleration Act of 1997, you raised a comparison of ARCO’s cleanup costs and timeframes for two Oklahoma sites in your

opening remarks. The Administrator promised we would follow up with you on this

example.
16

As outlined below, it is quite clear that these two sites are in no way comparable

other than the fact they are both in Oklahoma and are currently owned by the same

corporation. The Agency is very concerned that ‘‘old horror stories’’ and the way the

program was operated prior to 1993 continue to dominate the Superfund debate.

The Superfund program is fundamentally different today—a point the Administrator emphasized at the hearing. To that end, we are pleased that you have given

us the opportunity to demonstrate that not all sites are the same and that States

tend to undertake the cleanup only at lesser contaminated sites. We have also included an example of how our Superfund Administrative Improvements have impacted Oklahoma—which we hope you will factor into any discussions of Superfund

Reauthorization.

COMPARISON OF CLEANUPS AT SAND SPRINGS AND VINITA, OK

Site Comparison

While both of these sites are former Sinclair refineries, several differences exist

that prevent a credible direct comparison of cleanup costs and timeframes between

the two sites. The Sand Springs site was judged much more of a threat to public

health and the environment and was listed on the NPL. The Vinita site was evaluated by EPA and referred to the State for action because it presented little health

risk. Key differences include the following:

Volume of Waste Cleaned Up—The Sand Springs cleanup addressed nearly threeand-one-half times the volume of waste at Vinita.

Complexity of Wastes—After closing as a refinery, the Sand Springs site was used

by several other industries, including a chemical recycler, resulting in a significant

degree of contamination from chlorinated solvents and other chlorinated hydrocarbons at the site. As a result, 5000 cubic yards of Sand Springs waste had to be

shipped offsite to a commercial hazardous waste incinerator. In contrast, the Vinita

site contained refinery wastes only, which are much less expensive to remediate

than chlorinated wastes.

Proximity to Population—The Sand Springs site is located in a populated area, adjacent to businesses, near to residences, and adjacent to the Arkansas River, which

is heavily used for recreational purposes. Approximately 300 people work on, or adjacent to, the site. There are four schools, a hospital, an orphanage, and numerous

restaurants within a mile of the Sand Springs site. The Vinita site is in a relatively

remote area, nearly two miles from the town of Vinita.

Ground Water Use—Ground water is used within one-half mile of the Sand

Springs site. There are no water wells within four miles of the Vinita site.

Air Emissions Safeguards—Due to the proximity of population and the chemical

composition of the wastes, there was a major concern with controlling air emissions

at Sand Springs. For example, there was a documented incident which indicated the

presence of hydrofluoric acid gases within the sludge pits. Prior to EPA involvement,

earthwork activities by the city of Sand Springs to construct a storm water retention

basin adjacent to the sludge pits caused a significant release of gases which required the hospitalization of workers and the evacuation of nearby businesses. Due

to this potential for an off-site release of air contaminants, EPA took extra precautions to protect the health and welfare of surrounding businesses and residents,

including the Sand Springs Home for Orphans. EPA required extreme care to be

taken during excavation activities, including emission controls and extensive air

monitoring. Although expensive and time consuming, these protective measures

were necessary to ensure the safety of the community. The more remote Vinita site,

without the complications posed by chemical plant wastes, did not require this degree of protection .

Priority of Site—Due to the types of waste present, the proximity to population,

and the sensitivity of ground water, the Sand Springs site ranked for NPL listing

under the HRS, while the Vinita site fell far short.

Protectiveness of Disposal Cell—The Sand Springs site used a RCRA-caliber vault

for disposal of the stabilized waste, whereas a simple clay-lined cell was used at

Vinita.

Design Costs—Due to uncertainties as to whether the stabilization process would

work effectively on the Sand Springs wastes within allowable air emission levels,

ARCO proceeded with design of an incineration system so that they would have a

fall-back treatment technology ready in case the stabilization did not work. This

added significantly to ARCO’s design costs at Sand Springs but was not a factor at

Vinita. Furthermore, ARCO was able to utilize its extensive (and costly) initial stabilization process studies from Sand Springs to shortcut the design process at

Vinita.

The following matrix compares some characteristics of the two sites:
17

Factor Vinita Sand Springs

Size of site .......................................................... 177 acres ........................................ 200

Volume of waste ................................................. 62,000 cu yds ................................. 213,000 cu yds

Volume of Chlorinated Hydrocarbons ................. 0 ...................................................... 5,000 cu yds

Population within 4 miles .................................. 6,582 ............................................... 15,000

Distance to nearest water well .......................... >4 miles .......................................... <1⁄2 miles

HRS Score ........................................................... 0.94 (prescore) ................................ 28.86

Drums of hazardous materials removed ............ 0 ...................................................... 400

Sand Springs Touted as Ahead of Schedule and Under Budget

The Sand Springs remediation (construction) actually began in 1992 (not 1985)

and took 4 years to complete. At an August 29, 1995 ribbon-cutting to celebrate

completion of construction, ARCO stated that the remedy had been completed 1 year

ahead of the Consent Decree schedule and $10 million under budget.

Impact of Administrative Reforms

In addition to the differences above, it must also be pointed out that the Sand

Springs cleanup was conducted prior to the Superfund Administrative reforms. A

much better example of how EPA is currently addressing the cleanup of abandoned

refineries is the Fourth Street site in Oklahoma City. The Fourth Street site utilized

on-site stabilization/solidification, neutralization, and off-site disposal as the remedy. The waste at the site was an acidic sludge containing high levels of lead. The

remediation of approximately 43,000 cubic yards of sludge was completed on schedule, under budget, and with no lost time accidents, at a total cost of just under $5

million. The volume and type of waste addressed make Fourth Street a much more

credible point of comparison to the Vinita site, even though Fourth Street is in a

much more populated area.

I hope that this clarifies the differences between the sites. If you have any additional comments or questions please contact Kevin Matthews (202–260–5188) in my

office or Ed Curran (214–665–2172) at our Regional Office in Dallas.

Sincerely,

ROBERT W. HICKMOTT,

Associate Administrator.

ARCO,

Los Angeles, CA 90071, April 2, 1997.

Hon. JAMES M. INHOFE,

U.S. Senate, Washington, DC.

DEAR SENATOR INHOFE: Several weeks ago, you were kind enough to forward to

us a letter from EPA which responded to a comparison we had discussed with you

earlier of costs at two ARCO managed Oklahoma remediation sites, Vinita and Sand

Springs. The attached paper responds to the EPA assertions in that letter.

As you will see, we feel that the substantial differences in per cubic yard remediation costs at the two sites—$92 at Vinita, $263 at Sand Springs—must be laid

principally at the door of the CERCLA statute itself. Roughly two thirds of the difference in cost was caused by the procedural complexity and remedy selection decisions driven by the law. One third of the difference, or less, is accounted for by differences in site location and waste.

What we draw from this experience is that CERCLA’s fundamental design—the

bones of the statute—are wrong. And as long as it remains as is, we can expect extravagant costs and lengthy delays of the sort we experienced at Sand Springs. Although EPA has recently made a strong effort to do as much as it can administratively to rationalize the process and choose more sensible remedies more quickly,

it cannot alter the basic structure and commands of the statute.

We would be happy to meet with you to discuss further our experience at the

Oklahoma sites or with Superfund generally. Again, we appreciate your efforts in

seeking reform of this well meant but badly crafted program.

Very truly yours,

KENNETH R. DICKERSON,

Senior Vice President.
18

ATTACHMENT

COMPARISON OF SAND SPRINGS AND VINITA, OKLAHOMA SITES

The principal point we wish to make is that the wastes treated at the Vinita and

Sand Springs site were very similar, but the Sand Springs waste cost more than

three times as much per cubic yard to remediate. Moreover, the Vinita project took

3 years to complete, the Sand Springs project 11 years. These two comparisons

speak volumes about the CERCLA process. State remediation, in this instance, was

far more efficient, faster, cheaper, and protected the public health and the environment. As we will outline below, the differences between the two sites are far less

significant than their similarities. Indeed, the chief difference is that Sand Springs

was listed on the National Priorities List, and Vinita wasn’t.

EPA’s response to Senator Inhofe’s March 5 hearing questions justifies the differences in remediation cost and duration at the two sites based upon a list of factors which at first blush seem a reasonable basis for differentiation. However, we

differ in many respects with EPA’s facts, characterizations, and conclusions:

Waste volumes—Sand Springs waste volume was about twice Vinita’s (not three

and one half times). Apart from that discrepancy, the real point here is that greater

waste volumes should—and usually do—make unit costs significantly cheaper, not

more costly.

Waste complexity—The Vinita and Sand Springs wastes were quite similar—refinery acid sludges—and the remedy eventually selected—solidification—was also the

same. Vinita waste cost $92 per cubic yard to remediate; Sand Springs cost $263

per cubic yard. The cost comparisons we have stated for cleaning up wastes at the

two sites include only refinery waste.

The chlorinated hydrocarbon wastes which EPA mentions were deposited in a totally separate and physically distinct area—the so called Glenn Wynn site. ARCO

had placed no waste at the Glenn Wynn site. Regardless of the lack of physical or

legal relationship, EPA combined the Sand Springs and Glenn Wynn sites and required ARCO to sign a consent decree agreeing to clean up both, this despite the

existence of over 200 potentially responsible parties at the Glenn Wynn site, many

of which were large, financially solvent firms. ARCO complied with the decree,

cleaned up the Glenn Wynn waste, and was then forced to sue the responsible companies. ARCO collected its remediation costs, but lost $4 million in outside legal fees

it was forced to expend in the collection effort (The U.S. Supreme Court has held

that legal fees cannot be recovered in the absence of Congress amending CERCLA).

Nor did ARCO recover compensation for the considerable inhouse management,

legal, and executive time spent to recover the Glenn Wynn costs.

While we didn’t include an extended discussion of the Glenn Wynn issues in our

earlier paper, this matter raises collateral issues (collateral, that is, to remediation

cost and timing problems) pointing to very serious statutory defects in CERCLA.

These are, first, EPA’s unfettered discretion to define NPL sites and require clean

ups which unfairly burden individual parties and, second, the prohibition on recovery of legal fees in contribution actions brought by private parties who have done

more than their share of the clean up.

Proximity to Population—It is true that the Vinita site is rural, and the Sand

Springs site is located in an industrial district of the municipality, although both

sites had people residing within one half mile of the site operations. We agree that

particular care needs to be taken in clean ups where people, water or animals are

close by. In fact, ARCO took scrupulous care to limit exposure to workers and releases to the surrounding environment in both clean ups, and happily adopted additional safeguards at Sand Springs because of the proximity to the community. The

point the government seems to be making, though, is that the difference in the setting of the site accounted for the bulk of the difference in the remediation costs and

timetables. We don’t agree with that view, nor with the implication that the State

of Oklahoma’s program would inadequately protect its people and resources—for a

Vinita or Sand Springs site.

Ground Water—It’s not clear what point the government is making here. Protection of ground water was not a principal or express determinant of the remedy selected at either Sand Springs or Vinita. Each remedy was chosen for source control—keeping people from direct contact with the waste. The remedy was the same

at both sites (solidification and capped containment). An additional target of the remediation process at each location was to isolate the solidified waste from surface

runoff and ground water, and to ensure that if water ever did reach the waste, nothing harmful would leach from it. However, there is no drinking water well anywhere

near the Sand Springs site which could be affected by the waste (the well EPA describes as a half mile away is crossgradient and more than a mile distant from any
19

waste). Moreover, the surface aquifer was contaminated by other industrial sources

upgradient of the Sand Springs site.

Sand Springs costs were boosted considerably by EPA’s requirement that the solidified (non-hazardous, non-leachable) waste be contained in a RCRA vault, but this

was, in our view, an inappropriate decision justified by reference to CERCLA’s statutory framework (requiring the use of applicable, relevant and appropriate requirements—ARARs—from other environmental laws and regulatory regimes), and not

by groundwater concerns. We discuss this issue in more detail below.

Air Emissions Safeguards—As we noted above, ARCO willingly employs state of

the art measures and safeguards to protect workers, nearby people and the environment. While the Sand Springs waste was somewhat more difficult to handle, and

businesses were located immediately adjacent to the site, the protections employed

in the Sand Springs and Vinita clean ups were quite similar, including air emissions

controls, protective equipment, and monitors. In fact, the principal exposures in both

projects were those presented to the remediation workers, who were excavating the

acidic waste which emitted sulfur dioxide fumes before neutralization with lime. At

both sites, perimeter air monitors were installed; and concentrations of sulfur dioxide seldom reached levels of concern at the property boundaries at either site.

It is true that Sand Springs city workers laying a sewer across the site dug into

a lens of refinery acidic waste, which liberated sulfur dioxide—not hydrofluoric acid

gases. This incident undoubtedly helped to propel the Sand Springs site onto the

Superfund list, but added little to the cost differential between the sites—since both

had similar waste and required the same kind of safeguards. We estimate that, at

very most, the combined factors of more acidic waste and closer proximity to people

and businesses may have accounted for a third or less of the difference in costs between the two sites.

Priority of Site—Whether a site qualifies under EPA’s hazard ranking system for

listing should be irrelevant to remediation timing and costs. Indeed, the fact that

EPA regards a site as a priority should accelerate action and drive EPA to quickly

find the most cost effective remedy that protects people and the environment—just

the sort of thing that didn’t happen here. In our experience it rarely ever happens

in a CERCLA remediation setting.

Protectiveness of Disposal Cell—EPA required ARCO to construct a RCRA vault

at Sand Springs which cost substantially more than a clay lined and capped cell of

the sort which was used at Vinita. This accounted for about one third of the difference in costs. RCRA facilities are designed to be used for the containment of hazardous wastes which present a danger to ground and surface waters, not inert, nonleachable, non-hazardous wastes of the sort produced by the remediation processes

at Vinita and Sand Springs.

While ARCO agreed to build the RCRA vault at Sand Springs, in our judgment

it was excessive and neither cost effective nor legally warranted. EPA required the

more costly containment option as a condition of dropping the incineration remedy

which it had initially chosen. In fact, ARCO has cleaned up two other similar refinery waste (EPA-lead) NPL sites in different EPA regions for which capping—without a RCRA vault—was the remedy to which EPA agreed. This illustrates one of

the clear statutory problems with CERCLA—the preference for treatment and

ARARs, combined with EPA’s enormous discretionary power, often and unpredictably leads to remedies which are excessive and which a PRP simply accepts rather

than risk the extreme consequences of a challenge. This is another statutory problem which cries out for legislative change.

Design Costs—EPA is simply incorrect in asserting that ARCO itself chose to design an incineration remedy. ARCO advocated solidification as the remedy, which

EPA refused to accept without extensive site specific testing. Accordingly, the incineration remedy was mandated by EPA in the Record of Decision and strongly objected to by ARCO. ARCO was forced to spend well in excess of $600,000 on the

design of the incineration remedy before State and community opposition, test results, and other factors caused EPA to relent and approve the solidification alternative. Moreover, EPA is incorrect in asserting that Sand Springs studies reduced

the cost of the Vinita remedy—in fact, Vinita was designed and finished before the

Sand Springs solidification remedy was engineered. If anything, experience at the

Vinita project lowered the Sand Springs cost.

The real cost differences between the two sites lay in three areas. First, construction of the RCRA vault and associated logistical difficulties accounted for perhaps

one third of the cost difference. The endless rounds of studies, engineering and design approvals, and extensive oversight required by the CERCLA process accounted

for at least one third of the total difference in per ton costs. The remaining third,

and the only legitimate increase, was caused by the urban setting of the Sand
20

Springs site (most notably construction problems caused by lack of space) and its

slightly different waste.

In the end, we are left with the conclusion that the two projects were—or should

have been—remarkably similar—the only real difference was that Sand Springs was

a Superfund site, and Vinita was not. Wastes and remedies were, but for the illchosen RCRA vault, quite similar. Yet each remediated yard of Vinita waste cost

less than a third of what it took at Sand Springs; and Vinita was completed in 3

years while Sand Springs took eleven. This sort of problem is endemic in CERCLA,

and its source is the statute itself, not the people.

EPA—including its site managers and hazardous waste program executives—are

not the problem. In fact, after the initial skirmishes and disagreements with EPA

during the first several years of the project, the Region VI team in charge of Sand

Springs struggled constantly to bring rationality and speed to decisionmaking. They

only partly succeeded. The difficulty lay—and still lies—in the commands and ambiguity of the law itself.

It is a statute whose design guarantees vicious litigation, agonizingly slow decisions, and unbelievably expensive remedies. It prevents reuse of old industrial property and revitalization of cities. It doesn’t clean up the worst problems first. EPA

has made some progress with its administrative reforms, but cannot fix the core of

this badly conceived statute. Congress must act.

Senator INHOFE. Mr. Chairman, as the chairman of the Clean Air

and Wetlands Subcommittee, I’m very interested in the enforcement. I would really like to mention a couple of things, one was

brought out by Senator Thomas when he talks about the States

being in a better position and how difficult it is in some of these

hearings. Because we’ll make a point, to you, and then you are out

of here. The next group comes up and they repeat everything you

say.

I would only recall to the chairman’s memory the statement that

I made, that proved the point to me, anyway, that the States do

a more effective job, and I used several examples. The example I

used before your committee just a short while ago had to do with

Superfund sites. I compared two sites in Oklahoma, one at Vinita,

OK, and one at Sand Springs, OK, by the same company. And the

one that was done by, directed by the State of Oklahoma cost onethird as much as the Federal site, per cubic yard of waste. In other

words, it was $92 a cubic yard cost to clean up the site that was

under the supervision of the State of Oklahoma, as opposed to $262

a cubic yard of the Federal Government-supervised cleanup. The

State took 3 years, the Federal Government took 11 years.

I see example after example after example, and I’m sure that Administrator Browner is getting tired of me using all these examples.

So anyway, later after that meeting, they refuted that, and I

have letters that I will insert in the record here in the appropriate

place that shows I was exactly on target.

The other area of concern is having to do with what they call

bean counting. You said, Mr. Herman, that that was last year’s

war. When was the war over?

Mr. HERMAN. The what?

Senator INHOFE. This is on measuring performance by the number of arrests or the number of prosecutions, the number of fines.

Mr. HERMAN. I think this is an extremely important question.

The traditional method for EPA to measure its success in enforcement was referrals of cases to the Justice Department, numbers of

inspections, that type of thing. Which I will say in a minute, I do

think have some value.
21

We recognize, though, that that alone was not enough to show

what the program was doing in terms of the environment or possibly even in deterring violations. We have taken several, and I

think this probably came out in my confirmation hearing 4 years

ago, because I think Senator Chafee may have brought up the

beans back then.

But this is what we have done. One, we have started determining what are the environmental impacts——

Senator INHOFE. Mr. Chairman, I see we’re going to have a problem here if he’s on No. 1 and we have several things we’re going

to be talking about. I just asked the question, when was the war

over?

Mr. HERMAN. I don’t know if the war is over. What we are doing

is, we are trying to solve the problem.

Senator INHOFE. Let me get another question out, then. Because

I don’t want to go over my time, here. The Reason Foundation issued a study just last summer, well, first of all, I think the Justice

Department actually made a request that you get into more cases,

which might indicate there are fewer of them out. This was just

last fall, as I understand it, that the Justice Department came out

in a report that the EPA had not referred enough cases in 1996.

But I look at that as proof that it’s the quantity of cases, not the

quality of cases.

The four recommendations that came from the Reason Foundation were: No. 1, more precise language in laws and regulations;

No. 2, restoring criminal intent as a necessary condition of criminal

prosecution; No. 3, measuring enforcement success in terms of environmental improvement rather than numerical standards; and No.

4, respecting the bill of rights. They specifically talk about which

elements of the bill of rights.

Are you familiar with this report, and are you attempting to

meet some of these recommendations?

Mr. HERMAN. I have not seen this report. Although a gentleman

from the Reason Foundation did testify at our hearing on developing new measures, which we held last month in San Francisco.

Senator INHOFE. In writing, Mr. Chairman, I’d like to give him

a copy of this report and ask that he respond to this.

Senator CHAFEE. Is that a Region I report?

Mr. HERMAN. The Reason Foundation, I believe, is in Region IX,

San Francisco.

Senator INHOFE. It’s in California.

Senator CHAFEE. OK, if you can respond to that, Mr. Herman.

Senator INHOFE. Thank you.

Senator CHAFEE. Is the question clear?

Mr. HERMAN. You’re going to give me the report and you want

us to comment on the recommendations?

Senator INHOFE. That’s correct, these four questions which I just

read into the record.

[NOTE: EPA did not submit a response for the record.]

Senator CHAFEE. Thank you. We’ll have a chance, we’ll have a

wind up soon on this panel.

Senator Lautenberg.
22

OPENING STATEMENT OF HON. FRANK R. LAUTENBERG,

U.S. SENATOR FROM THE STATE OF NEW JERSEY

Senator LAUTENBERG. Thanks, Mr. Chairman.

Mr. Herman, I want to ask you, how many matters might have

presented an opportunity for overfiling in the period during which

the four overfilings took place? That was last year, was that the

calendar year or fiscal year?

Mr. HERMAN. That’s correct, the fiscal year.

Senator LAUTENBERG. It was the calendar year. How many matters, do we have any idea how many were filed?

Mr. HERMAN. It’s up in the, counting State actions and our actions, we’re in the realm of 10,000 probably, or more. Those are administrative, judicial.

Senator LAUTENBERG. So there were four times when the EPA

intervened?

Mr. HERMAN. That’s correct.

Senator LAUTENBERG. Has EPA threatened to remove delegation

for various environmental programs from States that have strong

privilege protection laws and in how many instances might that

have occurred?

Mr. HERMAN. There are four or five instances, Senator, where

citizens have filed petitions specifically bringing State programs to

our attention, in which the allegation has been made that the passage of the audit or the audit privilege immunity bill takes away

from the State the necessary enforcement authority that they need.

We have looked into those matters and in some cases we have

determined that if the law were left as it were that the State

wouldn’t have the necessary authority required under Federal law.

Now, what I’m talking about by necessarily Federal authority is

the ability to get injunctive relief, the ability to get penalties, the

ability to respond when there’s an emergency, the ability to prosecute criminals.

In several cases——

Senator LAUTENBERG. That’s sufficient, Mr. Herman. Our time is

running short, and I appreciate the answer. I think that kind of

clarifies what it is we’re talking about.

I for one want to say clearly for the record that I support cooperation and working with the State governments, with the environmental protection departments, whatever they call them, within

the States. But by no means do I think that we ought to step aside,

and when we see something that violates the intent to clean up the

environment, which I believe is EPA’s principal purpose, at times

it is suggested that your mission is harassment and there’s some

sinister plot to nag and pester companies.

But I would submit for the record an editorial done by the Washington Post this past Sunday and an article from the Washington

Post talking about the Smithfield Foods violation. I look at this as

an example so egregious that one can’t ignore it. It says, there were

164 times they were late reporting violations, and violated clean

water laws by as many as 5,330 times by discharging pollutants

containing such things as fecal coliform bacteria, cyanide, phosphorus into the Pagan River.
23

Now, that feeds into the Chesapeake. That’s our water. It’s our

body of water. It’s where striped bass, rockfish, develop. That’s one

of the best spawning areas that we have.

So it belongs to all of the citizens in this country. And for us to

stand by, and these articles clearly identify a weakness and a willingness from the State of Virginia to cooperate with this polluter.

Slap on the wrist and walk away from it.

I would submit that you have no right to forget your assignment

to protect the environment. You have to enforce the laws whether

you choose to or not. If you’ve done it 4 out of 20,000 times, I ask

you, why so many times in that ratio—I mean, you’re just

harassing the devil out of those innocent people.

I thank you, Mr. Chairman.

[The news articles follow:]

[From the Washington Post, June 8, 1997]

CLEAN WATER, POLITICAL HOGWASH

Gov. George Allen’s disdain for Federal water cleanup policy runs deep. Labeling

the Environmental Protection Agency as an interloper, he talks the talk of enforcement by weakens any serious action against polluters. A Federal judge has so ruled

in a case involving Virginia’s largest port producer—also the fattest contributor to

the governor’s efforts to elect Republican legislators. Smithfield Foods has been

found liable for repeatedly dumping illegal levels of hog waste into a Chesapeake

Bay tributary over a five-year stretch—5,330 violations, many of which the governor’s environmental regulators chose to overlook or underrate.

Gov. Allen insists that Virginia, not the EPA, can best rule the State’s waters.

But in finding Smithfield liable, U.S. District Judge Rebecca Beach Smith in Norfolk

dismissed the company’s claim that Virginia is the appropriate enforcement authority. Judge Smith said that Federal authorities were entitled to seek fines because

State law had fewer ‘‘teeth.’’

That is the shortcoming of Virginia’s law and policies. Inadequate sanctions and

go-easy inspections did worsen water quality and endanger public health. Lois J.

Schiffer, assistant attorney general for the environment and natural resources division of the Justice Department, notes the importance of States having uniform

water-quality protections. Businesses should not find room to shop for States with

weak standards.

Judge Smith found Smithfield was late in reporting violations at least 164 times

and repeatedly had violated clean-water laws by dumping pollutants into the Pagan

River. At one point, State officials signed an agreement to exempt the company from

some pollutant limits until Smithfield’s plants could be hooked up to a regional sewage treatment plant. Even if that agreement legally exempted Smithfield—which

Judge Smith said was not clear—it was reached without any opportunity for public

comment.

For three of the past 4 years, Virginia has ranked last among 10 States in the

region in collecting fines from water polluters. Gov. Allen commented last year: ‘‘I

guess what they would prefer, these people who are carping and whining, is we just

shut down these businesses, run them out of the State and all the people who work

for them lose their jobs.’’

Only a day after the latest ruling, Gov. Allen fired 29 senior managers and staff

members of the State’s environmental agency. His aides called it a ‘‘realignment’’

opening the way for employees to apply for newly created posts. But a diverse coalition, including the Virginia Chamber of Commerce, the Virginia Manufacturers Association, the Sierra Club and State’s Municipal League, called ‘‘unwarranted and

poorly timed’’ and a hindrance to efforts to protect Virginia’s environment. Leave

it to the States? Not to Virginia under Mr. Allen.
24

[From the Washington Post, June 3, 1997]

SMITHFIELD FOODS LIABLE FOR DUMPING HOG WASTE

(By Ellen Nakashima and Spencer S. Hsu)

FEDERAL JUDGE SIDES WITH EPA IN VIRGINIA CASE

RICHMOND, June 2—A Federal judge has found Smithfield Foods Inc. liable for

dumping illegal levels of hog waste into a Chesapeake Bay tributary for 5 years in

the 1990s, exposing the giant pork producer to up to $133 million in fines in one

of the largest cases brought under the Federal Clean Water Act.

In a case that has come to symbolize Virginia Gov. George Allen’s permissive environmental policies, the U.S. Environmental Protection Agency sued Smithfield in

December, arguing that the State was ‘‘not doing the job’’ despite a decade of violations by the company. In turn, Allen (R) has attacked the EPA for its criticism of

State policies toward corporate polluters.

U.S. District Judge Rebecca Beach Smith, in Norfolk, sided with the EPA. In a

75-page ruling released today, Smith found that Smithfield was late in reporting

violations at least 164 times and violated clean-water laws as many as 5,330 times

by discharging pollutants containing such things as fecal coliform bacteria, cyanide

and phosphorus into the Pagan River. Smith left for a later, penalty phase of the

court proceeding a formal determination of the number of violations, each of which

can carry up to a $25,000 penalty.

‘‘It is the defendants, and not the public, who are discharging into the Pagan

River,’’ Smith wrote. ‘‘It is defendants, and not the public, who should pay the price

for the damage to the environment.’’

EPA Region III Administrator W. Michael McCabe, who led the criticism of the

State’s inaction, called the decision ‘‘a complete, unqualified victory.’’

‘‘It’s important to us that the citizens of Virginia have the same water quality protections as people in every other State in the country,’’ Assistant U.S. Attorney General Lois J. Schiffer said.

The judge dismissed Smithfield’s claim that Virginia, not the EPA, is the proper

policer of pollution in the State. In a separate action, Virginia’s Department of Environmental Quality sued Smithfield in a State court in August for related violations,

but for far less, estimated at up to $2 million.

Environmentalists welcomed Judge Smith’s ruling. It ‘‘proves that Smithfield

Foods is not an innocent corporation getting beat up by greedy widows and orphans,’’ said Albert Pollard, spokesman for the Virginia chapter of the Sierra Club.

Joseph H. Maroon, Virginia executive director of the Chesapeake Bay Foundation,

praised the decision for ‘‘once again showing that the Federal government as well

as the State has an important role to play in the protection of Virginia’s environment.’’

Smithfield attorney Anthony F. Troy said the company ‘‘in all likelihood’’ will appeal the ruling. Troy said Smithfield still believes it was in the right.

‘‘There’s a difference between discharging of a pollutant and pollution,’’ he said.

‘‘Even if you have discharged in exceedance of the [state water pollution] permit,

have you polluted? Have you harmed the river? The evidence suggests, in fact, that

the Pagan has been improving in quality over the years.’’

In her ruling, Smith criticized Virginia environmental laws as virtually toothless,

noting that the State can impose civil fines only when a polluter consents. ‘‘A penalty provision requiring the consent of the violator does not have the same ‘teeth’

to encourage enforcement’’ as the Federal law, the judge wrote.

Senator CHAFEE. Thank you.

Senator Sessions.

OPENING STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR

FROM THE STATE OF ALABAMA

Senator SESSIONS. Thank you, Mr. Chairman.

I think cooperation is the way to go in all law enforcement. I was

elected attorney general of Alabama in 1994. We formed an environmental crimes working group: EPA, the three U.S. attorneys,

the Attorney General, Coast Guard, State District Attorneys, Alabama Department of Environmental Management. We met regu-
25

larly to decide who best might handle the kind of case that came

up, and we would discuss them and that sort of thing.

I think that is a good model. I would like to ask you, in that line,

it seems to me that the role of EPA might be developing somewhat

like the FBI, which has a very limited number of agents within

every State. The primary day to day work of law enforcement is

done by the police and the sheriffs and the district attorneys.

But when cases of special expertise are needed, cases of perhaps

special national interest or only Federal laws are involved, then

they are involved. How do you see that as a model for the EPA?

Mr. HERMAN. Senator Sessions, I couldn’t agree with you more.

We serve, as you mentioned, we serve on task forces all over the

country, with the Justice Department and with local attorneys general. In fact, in some States, we actually share the office. We are

in the State attorneys generals offices or the local DA’s office. They

meet exactly as you said, discussing cases and deciding who has

the best authorities or the best resources to carry out a specific

task.

We have 200 Federal agents, the EPA has 200 criminal agents.

Almost all of them are out in the country. There is a very small

headquarters——

Senator SESSIONS. Not one in Alabama. I think there are only

four per State, but there’s not a lot of them.

Mr. HERMAN. Some States have more than four. But I will look

into that.

But their primary job, while they do some primary investigating,

there is an enormous amount of capacity building and partnering

with their State and local officials. We have developed film, training films for sheriffs, one was volunteered to us by the actor, Harrison Ford. That’s been very well received by police around the

country.

It’s terrific, and this is the way to go.

Senator SESSIONS. I think it is. But I would point out that even

though you may not have overfiled but four times, there is a tremendous power in EPA when they threaten to overfile. If a settlement has been reached, or a good faith between a prosecutor and

so forth, if the Environmental Protection Agency or the Department of Justice says, well, we don’t care, we don’t think that’s sufficient, we’re going to file a separate case, then a lot of hard work

can be undermined. I think you should show respect, and I trust

you will, in those cases.

Let me ask something specifically. I have observed as a Federal

prosecutor, primarily, great delays in getting chemical analyses

done of sites in order to build a case for prosecution. I’ve seen that

repeatedly. It seems to me one of the roles that EPA could do is

have the kind of chemical experts that could promptly and efficiently go to a site, determine what chemicals have been dumped

there, and get an analysis and be prepared to testify in a matter

of months, instead of sometimes a year or more, is my recollection.

Don’t you think that’s an appropriate role for PEA, to help the

States and local prosecutors?

Mr. HERMAN. Absolutely, Senator. We try to offer that service.

And maybe we could get together with your staff and hear some
26

of the experiences you’ve had, and if they still exist, try and correct

it. I’d be glad to do that.

Senator CHAFEE. Thank you. I must say, it’s very helpful to have

Senator Sessions here, because he’s had a lot of experience in these

matters from the Federal Government, U.S. Attorneys’ Office.

We’re very glad to hear your thoughts. I think this testing thing

is important.

Senator Warner.

OPENING STATEMENT OF HON. JOHN W. WARNER,

U.S. SENATOR FROM THE COMMONWEALTH OF VIRGINIA

Senator WARNER. First, Mr. Chairman, thank you for scheduling

this hearing. My State has been the subject of some discussion this

morning, and we’re very fortunate to have Ms. Dunlop, who will

come up and speak on behalf of my State. I’ll reserve my comments

for later today.

Unfortunately, I’m chairing another hearing of the Senate this

morning, as you are. So I won’t be able to stay, as much as I’d like.

First, Mr. Herman, I want to just talk generally about consent

orders and ask you how important are they to getting people to

comply with the laws.

Mr. HERMAN. I think that a properly crafted consent order is

very important.

Senator WARNER. The key words are ‘‘properly crafted.’’ The ability of your agency to stick by those consent orders, once they’re

given, is another matter. I’m currently involved in several cases involving constituents in my State, one in the furniture industry, another in the meat-packing industry.

There seems to be a feeling in the community, not only in my

State, but elsewhere, the only way you can get people to comply is

to literally threaten them with financial penalties. Would you talk

about that a little bit?

Mr. HERMAN. Well, I think, Senator, as my written statement

shows, our view is that you can get people to comply in various

ways.

Senator WARNER. Enumerate those ways.

Mr. HERMAN. Pardon.

Senator WARNER. Enumerate those ways.

Mr. HERMAN. One is, we try and give information to people

ahead of time, so that they know what to do. Another is, we ask

people to come in and ask for help. A third, however, sometimes

that doesn’t work. We have had instances, and Ms. Tinsley gave

the examples, where companies were given a chance. Somebody

went to them from the State, they identified a problem and the

company didn’t fix it.

I would say that, depending on what that violation was, that the

next time around that company should be fined.

We found a similar situation, which was identified by the inspector general, in Pennsylvania, where the State’s policy at the time

was basically just compliance, no penalties. Companies, when not

faced with penalties, they basically said, well, we can wait. We

don’t have to fix this emission device. The illegal emissions kept

pouring out of the factory.
27

I think you have to look at the situation and then determine

what is the appropriate response, which is what any law enforcement or regulatory authority has to do if they’re carrying out their

job in a responsible way.

Senator WARNER. The consent orders that were issued prior to

the proposed new regulations on air quality, how are the industries

that entered into good faith in those consent orders going to handle

consent order given that now there’s a proposal for difference in

regulation?

Ms. SCHIFFER. Senator Warner, what we clearly look at in case

after case is, did the company have the opportunity to know what

it was supposed to do to comply with the law. In the environmental

area, as in every other area of the law, ignorance of the law is not

a defense. We all learn that right at the very beginning of law

school.

So when we are dealing with environmental matters, we want to

be sure that people have an opportunity to know what they’re supposed to do and then when they have an opportunity to know what

they’re supposed to do, they need to do it.

I know that sometimes companies say, ‘‘we didn’t have a chance

to know, or somebody told us something differently.’’ We look at

those facts case by case. We can’t obviously address the specific

cases you have in mind. We don’t know what they are.

But in general, that’s the approach we take when we’re looking

at what are the obligations of companies to comply with the law

in this area.

Senator WARNER. Well, supposing a group of companies, say an

industry had gotten together and negotiated a consent order or a

letter of understanding, or the various types of things you have,

under the old air regulation, and along come the new proposed air

regulation. Of what value is that previous agreement, and they relied on it to invest considerable capital and go about the expansion

and modernization of their plants. Now they’re faced with potential

of a new order which frankly is in conflict with their ability, given

the various steps that they took under the previous order.

Mr. HERMAN. Senator, without knowing the specifics, what I can

say is that I do know in some instances, in situations like that,

people have made investments or relied on a consent or whatever,

or grandfathered in in certain ways, or there is a sliding schedule

whereby you can phase into something, and there are situations——

Senator WARNER. You will give recognition, then, to the validity

of those previous understandings?

Mr. HERMAN. Pardon.

Senator WARNER. You will give some recognition, in the event

that these new regulations——

Mr. HERMAN. In certain cases, that has been done. Just like with

penalties, you know, a company’s ability to pay, for instance, is

taken into account, going to your first question.

Senator WARNER. All right. Thank you very much.

Thank you, Mr. Chairman.

Senator CHAFEE. Thank you.

Now, we want to thank this panel. Does anybody have a quick

question? All right—Ms. Schiffer, one more sentence.
28

[Laughter.]

Ms. SCHIFFER. Two very quick sentences.

Senator CHAFEE. We’ve got two panels after this. I want to treat

them fairly.

Ms. SCHIFFER. I’ll be quick.

First, there’s been some discussion of philosophical differences

that the Federal Government may have with States. What we do

find, though, is that when you work case-by-case with the State

and get off the philosophy and look at the actual cases, we have

a great deal of success getting along with the States. It doesn’t

mean we always see eye to eye, but it does mean we as a practical

matter are doing a very good job of handling cases and enforcing

our environmental laws together.

Second, I just wanted to underscore and appreciate Senator Sessions’ remarks about our law enforcement coordinating committees

where we get everyone together in the States. They have been very

successful vehicles for really making the best use of everybody’s

abilities and laws and resources. I’d like to thank you for acknowledging that that’s such an effective way for us to enforce our environmental laws.

Finally, in response to Senator Inhofe’s statement that it’s frustrating when you hear later panels, we don’t have an opportunity

to reply, it’s a little frustrating for us, too. I would welcome the opportunity, if we could, as we hear what the later panels have to

say, if we could submit some information for the record in response.

Senator CHAFEE. I would stress what Senator Sessions said. The

power of these overfilings, it isn’t just the number of the overfilings, it’s the threat of the overfilings that is a very powerful tool,

I suspect.

Thank you all very much.

Now we’ll have the next panel come up. Mr. Mark Coleman,

who’s previously been mentioned, and Ms. Becky Norton Dunlop of

Virginia, Ms. Patricia Bangert from Colorado, Mr. Christophe

Tulou from Delaware, and Mr. Joseph Rubin from Connecticut. If

each of you would take your places, please.

Senator SESSIONS. Mr. Chairman.

Senator CHAFEE. Yes, Senator.

Senator SESSIONS. If I may have a moment of personal privilege,

I’d like to introduce Mr. Craig Canizel, the chief of the environmental section of the Alabama Attorney General’s Office. He’s

served under a half dozen attorneys general, founded the environmental crimes section. He remains as head of that today. There’s

few people in this country who are more knowledgeable and experienced in environmental work.

Craig, if you’d stand up, I’d like to welcome you. I’m delighted

to see you here today.

Senator CHAFEE. Well, thank you very much, Senator. We’re delighted to see such a distinguished citizen of Alabama here.

Senator INHOFE. Mr. Chairman.

Senator CHAFEE. Senator Inhofe.

Senator INHOFE. The same request. We’re honored to have Mark

Coleman here today, from Oklahoma. He is the chairman of the

Compliance Committee of the Environmental Council of States. Mr.
29

Chairman, I will have to leave for 20 minutes, until about a quarter after. So I’m hoping I won’t miss your testimony during that

time. And if I do have to leave, I’ll be right back.

Senator WARNER. Mr. Chairman, if I might have the opportunity

to recognize Secretary Dunlop.

Senator CHAFEE. I must say, these witnesses were judicially selected.

[Laughter.]

Senator WARNER. Well, I asked the chairman, and you very

thoughtfully granted the participation in this important hearing by

this very outstanding public servant. She has been in the current

position from the very beginning of Governor Allen’s administration. Prior thereto, she had her own distinguished career in the private sector, as well as other State and Federal offices.

We also recognize in the audience her husband, George Dunlop,

who has served the Senate for very many years in the capacity of

staff director of the Senate Agriculture Committee.

Senator CHAFEE. Thank you.

Senator LAUTENBERG. Mr. Chairman, in Senator Lieberman’s absence, he asked that I convey a welcome to Mr. Rubin, who is from

Connecticut, and who’s a law professor now at Tulane Law School.

He wanted to say that he’s sorry he couldn’t be here, but he is an

Armed Services Committee meeting. So he says hello.

Senator CHAFEE. Well, in the spirit of equality, on behalf of Senator Allard, I’ll welcome Ms. Patricia Bangert, from the State of

Colorado. We’re delighted you’re here, and I know Senator Allard

would want to extend a warm welcome if he could be here.

Now if we’ll proceed, Mr. Coleman, please. Each of you have 5

minutes.

STATEMENT OF MARK COLEMAN, EXECUTIVE DIRECTOR,

OKLAHOMA DEPARTMENT OF ENVIRONMENTAL QUALITY;

CHAIRMAN, COMPLIANCE COMMITTEE, THE ENVIRONMENTAL COUNCIL OF STATES

Mr. COLEMAN. My name is Mark Coleman, I’m the executive director of the Oklahoma Department of Environmental Quality. I’ve

been responsible for the environmental programs in Oklahoma

since 1975.

I’m the chairman of the Compliance Committee of the Environmental Council of States.

Senator LAUTENBERG. I have to correct the record. Mr. Rubin has

nothing to do with Tulane. He is from the Office of the Attorney

General from the State of Connecticut. I was wondering why

Lieberman was sending greetings to Tulane.

Senator CHAFEE. All right.

Mr. Coleman.

Mr. COLEMAN. The Environmental Council of States is a national, non-partisan, non-profit association of State and territorial

environmental commissioners. I appreciate the opportunity to testify before you today regarding the enforcement relationship between the States and the EPA.

In keeping with Congressional intent, the vast majority of enforcement in America is done by State government. State governments bring 9 out of 10 of the Nation’s enforcement actions each
30

year. States have been delegated the Federal programs involving

tens of thousands of permits, and have direct and continuous interface with both the regulated community and the public.

EPA also has a clear role. That role is to assure that we do our

jobs.

I’m pleased to report that although there are many factors that

place strain on the existing enforcement relationship, the States

and EPA are still committed to strengthening the partnership. One

of the most recent endeavors to improve the bond was the formation of the State EPA enforcement forum, which held its first meeting about 2 weeks ago. All 10 EPA regional administrators, a State

representative from each region, and the primary EPA enforcement

headquarters personnel are represented.

EPA has largely delegated responsibility for national programs to

the States, including the primary role of enforcement. There’s general consensus on the basic allocation of enforcement responsibilities.

However, when EPA brings a direct enforcement action, notice I

said a direct enforcement action, not just an overfiling, any time

EPA brings an action in a State wherein the State has jurisdiction,

there is a major opportunity for disagreement.

There’s often concern that the principles setting forth the primary role of the State has been violated. This issue is perhaps the

starting point at which the relationship breaks down. It’s my belief

that if EPA does not first give the States an opportunity to act, in

all enforcement matters in which the State has jurisdiction, the

fragile relationship will weaken.

States believe that enforcement is a tool, not a goal. Compliance

itself is a goal, but not a main goal. Our main goal is and should

be reaching the environmental quality goals that you have set and

that our own legislatures have set. No amount of enforcement and

compliance activity measures will tell us anything about whether

we have or have not met that goal.

Let me give you an analogy. If I were to tell you that the number

of detentions and expulsions in our Nation’s high schools had doubled last year, would you then conclude that our Nation’s students

were better educated than before? I don’t believe so.

Similarly, no State would deny that enforcement is an important

and a necessary tool. We all believe that. But I can also make the

case to you that such an increase in enforcement actions would

mean a terrible breakdown in communications between Government and the regulated communities had occurred. Such a breakdown would mean that there was little chance of improvement in

environmental quality.

There are also the issues of delegations of programs and direct

accountability. First, program delegation in theory is not an issue.

It’s clear that EPA has delegated programs to the States. In delegating this responsibility, they have also delegated the primary enforcement responsibility. If and when EPA strays from this practice, then the question of whether or not the delegation is true

comes up.

State officials feel that once a program is delegated, EPA should

be most concerned with overall program effectiveness, and not

about the details of how States choose to handle an individual en-
31

forcement matter. It’s not to say that EPA does not have a strong

oversight role. They do. Oversight should be there to see to it and

to assure that States have effective compliance and enforcement

programs.

That brings us to the second part of the equation, and that’s accountability. Although EPA is delegated responsibility for administering national programs to the States in keeping with Federal

law, EPA has the view that you, Congress, expect them to have an

ever-increasing number of direct Federal enforcement actions.

These direct enforcement actions are reportedly viewed by Congress and the public as a measuring stick of how well EPA is performing. On the one hand, the message is to give the States the

first opportunity to act. But on the other hand, the message is to

keep the enforcement numbers up. This perceived pressure for direct EPA enforcement may be the source of much of the conflict

with the statutory principle of deferring to the States.

Overfiling is also an important piece of the enforcement relationship. Although the instances of EPA overfiling are relatively few,

the possibility of overfiling and the use of overfiling comes at great

cost, as you have noted.

The potential for overfiling leads to mutual wariness, and if not

done with extreme care, it can rapidly damage the enforcement relationship. The success of EPA is not measured by the number of

enforcement actions it takes, but by the effectiveness of its oversight role.

The basic problem between the States and EPA as it relates to

enforcement is that in recent times, the role assignments have become less clear. Changes in administration at both the State and

Federal level and the natural maturation of programs have resulted in uncertainty and thus inconsistent action.

In my view, the solution to these conflicts is to reaffirm the established roles. In doing so, we can focus the limited resources that

we have toward these roles and accomplish the goal that we all

share in protecting the environment.

Federal enforcement personnel should lead in research and

standard setting and oversight and technical support, and in national information collection. The States should perform their lead

duties in direct program administration, including direct enforcement. Neither party should seek to pick off choice plums from the

other’s role.

We’re not so far from the goals of both levels of Government effectively working together. States already do well over 90 percent

of the enforcement action within the country. Perhaps with your

help, efforts to reduce frustration and unnecessary loss of resources

and credibility due to public disagreements can be significantly reduced. We are working toward that end.

Thank you for your efforts in this regard, and for inviting me to

represent the views of the States.

Senator CHAFEE. Thank you very much, Mr. Coleman.

Ms. Dunlop, we welcome you.
32

STATEMENT OF BECKY NORTON DUNLOP, SECRETARY OF

NATURAL RESOURCES, COMMONWEALTH OF VIRGINIA

Ms. DUNLOP. Thank you, sir. Mr. Chairman, I’m pleased to be

here and have the opportunity to testify. Senator Warner, thank

you for being here this morning. I would like to thank the other

Senators for their interest in this matter.

I also would like to ask, Mr. Chairman, that a full copy of my

statement be inserted in the record.

Senator CHAFEE. That will be true for you and each of the witnesses who wish.

Ms. DUNLOP. Thank you so much.

Well, I’m here today because we’re very proud in Virginia about

what we have done to improve the quality and condition of the environment in our Commonwealth. There’s no question in our mind

that the role and the purpose and the goals of environmental policy

are not how effective is your enforcement, or how effective is your

compliance, but rather, are you improving the quality and condition of the air, the water, the soil, the flora and fauna, that make

up our environment.

That is our goal in Virginia in the environmental area.

We find it really quite surprising that EPA still believes that

their principal role has to be enforcement, and that the role of environmental policy for EPA seems to have little to do with improving

our natural resources and our environment, but much more to do

with enforcement outcomes: how much are you fining people, how

much litigation is there, and how many permit restrictions have

you imposed.

In Virginia, we believe that the Virginia way is the best way. In

the area of enforcement, that is compliance first. We made that

very clear when Governor Allen took office and I became Secretary.

About a year after we made clear that this was our State policy,

the President of the United States, who was Bill Clinton, came to

northern Virginia and announced he had a new policy. It was

called, compliance first.

The Virginia way is a science-based approach which uses all the

resources of State agencies, other government agencies and entities

of the private sector to help and assist companies and local governments and municipalities to reduce site and situation specific emissions which can harm the environment and have a harmful effect

on people and other resources.

Of course, in Virginia we also have in our ‘‘kit bag,’’ as we talk

about this, the tool of enforcement. Enforcement is important when

it is necessary.

If there are willful polluters, if there are people who have 20 instances of continuing the same practice without making any attempt to improve it, we call them bad actors, in the Commonwealth

of Virginia. We are vigorous in going after these bad actors to bring

them into compliance, so that our goal can be realized, which is improving the quality and condition of our natural resources.

Of course, the Department of Environmental Quality does not

have the authority to take legal action, other than the consent orders that were discussed earlier. We, for civil actions in the courts,

must refer cases to our attorney general, which we do. For criminal

prosecutions, we refer the cases to the Commonwealth’s attorney,
33

who then works with the U.S. Attorney to decide who is best able

to bring the action.

I did find it interesting that the Environmental Protection

Agency this morning talked about the possibility that there are

20,000 cases where they could overfile, and yet in 1 year they chose

only four. I think this very well points out that there is some selection process and perhaps some political nature to their decisions.

We also believe in Virginia that we have taken a leading role in

changing the way the improvements to the natural resources and

environment can be managed. Pollution can be prevented and

cleanup of polluted sites can be accomplished.

We believe that this is very important. The way we have restructured our Department of Environmental Quality is organizing by

functions rather than the separate media. So now, in each of our

six regional offices, instead of having separate divisions of air,

waste, and water, we have a permits division, where we have people with expertise in each of these media working together. Corporate citizens, small businesses and indeed, municipalities, can

come and work with one team of people on permitting, compliance

and enforcement that covers across the media.

We also have decentralized the Department of Environmental

Quality in Virginia. I noted, in going through some records, that

this is something that Carol Browner did in Florida when she was

Secretary of Environment. They’re now doing it again in Florida,

so I guess there were some intervening years when someone

thought recentralizing was important.

We have moved our primary activity out to the six regions of Virginia, so that the people in our regional offices can work closely,

more effectively and more directly with the entities that they regulate and be sensitive to the needs and concerns of the people in the

very communities where they live and work.

We also have set up a new mechanism in Virginia to work more

cooperatively with locally elected officials, again, the governments

that are closest to the people. We’ve great success doing this with

our tributary strategy in Virginia, where we’re working to improve

the water quality in the tributaries of the Chesapeake.

Speaking of the tributaries of the Chesapeake, I do hope I have

the opportunity to discuss briefly, in response perhaps to a question, the Smithfield case which seems to have attracted so much attention and comment this morning.

The changes in the way Virginia has done business seems to

have caused EPA to take actions to put themselves in conflict with

the States. Their approach still is enforcement first.

In every public appearance I make with Michael McCabe, the Region III director, his only point recognizing the quality and condition of Virginia’s natural resources, is the amount of the fines that

we have levied in Virginia. He makes no reference to the fact that

we had four non-attainment areas for air quality ozone, and three

of those have now reached attainment in the past 3 years and

qualified for redesignation.

He makes no reference to the fact that in northern Virginia,

which is our one remaining non-attainment area, the Environmental Protection Agency has in fact approved our plan to improve

the way we do tailpipe emissions in garages, and that the air qual-
34

ity in northern Virginia indeed is improving, and our policy is

working very well.

Senator CHAFEE. Ms. Dunlop, could you wind it up, please?

Ms. DUNLOP. Yes.

We find that EPA has continued its top-down approach. There

have been some improvements, but basically, EPA still views itself

as in charge. This partnership with the States is something that

they handed out with the left hand and then the next thing you

hear, the Deputy Administrator of EPA is pulling back the partnership with the right hand.

They have overseen failed programs such as Superfund and

States like Virginia have had to come up with voluntary remediation programs to try to make sure we are cleaning up sites in the

Commonwealth.

Finally, I would say, Mr. Chairman and members of this committee, we believe that the issue really here before us is, is government to be a helpful servant or a fearful master. When George

Washington finished his term as President, he warned the American people about this potential conflict in the future.

I joined State government and I served in the Federal Government because I believe government should be a helpful servant in

administering the laws of our land, not a fearful master. We appreciate the opportunity to be here to share with you our commitment

in Virginia to being a helpful servant in improving the quality and

condition of the natural resources and the environment in our

State.

Senator CHAFEE. Thank you very much, Ms. Dunlop.

And now, Ms. Bangert.

STATEMENT OF PATRICIA S. BANGERT, DIRECTOR OF LEGAL

POLICY, OFFICE OF THE ATTORNEY GENERAL FOR THE

STATE OF COLORADO

Ms. BANGERT. Thank you, Mr. Chairman and members of the

committee. My name is Trish Bangert. I’m the director of Legal

Policy for the Attorney General’s Office in the State of Colorado.

I want to thank the committee very much for the opportunity to

present our views on the EPA-State relationship. I also would like

to submit my written remarks for the record.

I want to address two topics in this oral testimony. The first is

the reality of the EPA-State relationship. And second are some suggestions that might make that relationship work more smoothly.

As to the reality of the relationship, don’t be fooled by EPA hype.

In some enforcement areas, the EPA-State partnership is a total

fiction.

Senator CHAFEE. Is a total fiction?

Ms. BANGERT. Is a total fiction, yes, sir. The reality is, and I

think Senator Thomas alluded to this testimony earlier, very often

EPA thinks they own the ranch and we’re the hired ranch hands.

For example, I don’t see any compromise or cooperation in the

area of self-audits.

Another reality that I want to address here is the effectiveness

of State enforcement efforts in the State-Federal enforcement

scheme. EPA charges that some States, especially those with selfaudit programs, are failing to protect the environment.
35

The reality of the situation, however, is that those charges simply are not true. States like Colorado are working very hard to protect the environment. EPA’s complaint in reality is that we aren’t

doing it in exactly the way they would do it.

EPA loves its own image. In fact, it would like to go into the various States and create a mirror image of itself.

Look at EPA’s January 1997 audit policy update: ‘‘U.S.-EPA Regional Administrator John H. Hankinson, Jr., in a letter dated September 26, 1996, applauded the State of Florida for adopting a policy modeled on EPA’s.’’ The reality is, however, that just because

a new program differs from the EPA model, it doesn’t mean that

that program weakens enforcement in the State.

One such new program is environmental audit. Twenty-two

States, as you know, have passed some sort of legislation to encourage companies to audit their environmental compliance and correct

violations found, either through a privilege or an immunity or both.

Colorado is one of those States.

Now, remember here, we’re talking about violations that probably would not have been found by the companies, and certainly

would not have been found by the enforcers absent the audit. We’re

talking about the positive environmental gain in many instances.

Not only are companies becoming more aware and sensitive to environmental compliance, but problems are being corrected. In addition, companies and State regulators are working together in a cooperative as opposed to an adversarial fashion.

What is EPA’s response to these innovative State laws? Over the

past 5 years, the agency has engaged in a systematic program to

kill the self-audit movement. After trying unsuccessfully to persuade States not to pass the laws, the agency began a program of

intimidation against companies and States utilizing self-audit laws.

For example, in Colorado, several of the companies that have utilized the immunity provisions have received requests from EPA for

information about disclosures. In addition, EPA has threatened to

overfile in those cases.

What does EPA’s response mean to the audit programs? Well, we

might as well throw them out the window. If a company comes forward with evidence of an environmental violation, it’s providing a

blueprint to EPA. In addition, it’s impossible to measure the success of environmental audit programs when companies are discouraged from using them.

EPA’s response and practice nullifies State laws. Now, think

about that for a moment. Not only has EPA spent a lot of public

money to advance its own policy perspective, but without even having to do a public rulemaking or a formal hearing, EPA can dictate

the content of laws to sovereign States.

EPA’s obsession with self-audit laws appears to stem in large

measure from its obsession with numbers. EPA has always measured success in protecting the environment largely by the number

of enforcement actions brought.

In Colorado, we have one quick example in Colorado. We have

a very good school in Colorado called the Colorado School of Mines.

The School of Mines had some grounds on which there was a research institute. That research institute experimented with different mining ores. The result was a waste pile.
36

A water-main break caused EPA to have to come in and remove

that waste pile. In the removal, they laid down a lining. The pile

was put on top the lining, the lining was put there to protect the

ground, and that is to prevent water from going through the waste

pile into the ground.

EPA ordered the State to remove the pile. The State did that.

After the pile was removed, the State started to build a softball

field where the pile was formerly located.

In the process of building that softball field, the workers

breached the lining. Now, remember, this is the lining that was

under the pile that’s no longer there.

Even though they breached a liner that lined nothing, EPA ordered the State to repair the lining and to pay civil penalties. In

the end, the State paid thousands of dollars to repair a liner that

lined nothing, and in civil penalties, thousands of dollars that could

have been spent actually removing threats to the environment.

Senator CHAFEE. Ms. Bangert, we’re going to have your whole

statement in the record. I wonder if you could move on to your suggestions here, because I think they’d be helpful to us.

Ms. BANGERT. I sure can, Senator, thank you.

Three suggestions today. First, is that we recognize that EPA is

very often caught in between its legislative mandates and a desire

to work with the States. We would suggest that there be a shortterm task force or a commission that might be created to review

present laws with an eye toward identifying those provisions that

prevent EPA from allowing States to put their own programs into

effect.

Second, we want to make sure that we identify methods of measuring success. As long as we stick with the number of enforcement

actions models, we’re not going to be able to have innovative approaches.

Senator CHAFEE. Yes, that is a difficult one.

Ms. BANGERT. It is. So we’d recommend a study of this issue

which might ultimately result in some sort of recommendations for

changes.

The final recommendation that we would have is, there does

need to be greater certainty about overfiling. There may be guidelines to penalties, but as far as I know, there are no guidelines to

when EPA actually overfiles.

Senator CHAFEE. Good. That’s very helpful.

Thank you, Ms. Bangert, for those. As I say, your whole testimony will be in the record. We appreciate your thoughts on that.

Mr. Tulou, from Delaware.

STATEMENT OF CHRISTOPHE A.G. TULOU, SECRETARY, DELAWARE DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL

Mr. TULOU. Thank you, Mr. Chairman and members of the committee.

My name is Christophe Tulou and I have been the Secretary of

the Delaware Department of Natural Resources and Environmental

Control since March 1993.

I appreciate the opportunity to join you today to discuss Delaware’s enforcement relationship with the Federal Environmental
37

Protection Agency. The amount and quality of discourse between

EPA and the States is greater today than it has ever been. We are

sharing perspectives on environmental goals for the country, providing suggestions on EPA’s goals and objectives under the Government Performance and Results Act and helping develop performance measures to evaluate our success under the National Environmental Performance Partnership System.

EPA and the States are not that far apart in terms of a shared

vision for our Nation’s environment. Enforcement and the related

issue of regulatory flexibility are the areas of greatest disagreement between us. Our environmental management challenges are

diverse and complex, and our Federal laws and regulations are

often stiff and constraining. Finding room for common sense is

tough.

Delaware’s enforcement relationship with EPA Region III, however, is quite good. Though the relationship continues to be positive, our development of a performance partnership agreement with

Region III has created some friction regarding the role of enforcement and environmental management. We are proud that Delaware was the second State to adopt a performance partnership

agreement.

We wanted to take advantage of EPA’s promise to work in partnership with Delaware to build the capacity necessary to meet our

environmental priorities. We sought a relationship that recognized

that States are at the forefront of environmental management, and

that the fastest way to our mutual goals is through partnership,

not paternalism.

Working very closely with Region III and with the strong support

of regional administrator Mike McCabe, we jointly developed a

model partnership agreement. We agreed to move away from casespecific reviews of our activities toward a more holistic consideration of the State’s environmental enforcement programs, encouraging innovation and creativity and achieving our environmental

goals. To that end, the agreement focuses on outcomes more than

activities or processes.

Despite these assurances in our agreement, I fear that EPA will

insist on greater reliance on enforcement specific activities, focusing on enforcement for enforcement’s sake. We have argued since

the beginning of the performance partnership agreement process

that enforcement should be a part of all our environmental goals,

not a standalone end unto itself.

In short, we view enforcement as an important tool to achieve

our environmental goals, not a goal in its own right. That disagreement continues.

We also contend that compliance is a more relevant and important programmatic goal than enforcement. We should be striving

through whatever means to get all our polluters in compliance.

This distinction between compliance and enforcement is crucial in

determining what States and EPA should be measuring and reporting.

If enforcement is the goal, then we should continue to count

beans, such as penalty dollars collected or enforcement actions

taken. If compliance is the goal, then we should be measuring and

reporting who is in and who is out of compliance. The traditional
38

measures of dollars and enforcement actions are less important if

compliance is the true goal.

Measuring compliance is feasible and relevant. Last year, just

over 70 percent of facilities in Delaware complied with hazardous

waste regulations at the time of inspection. Within 30 days of the

inspection, the percentage rose to 85 percent. Within 180 days, 100

percent of facilities were in compliance.

Overly aggressive and ill-timed enforcement is a dare. It inspires

polluters to assume an adversarial relationship with their environment and regulatory agencies and to challenge enforcers to discover

their misdeeds. Neither States nor EPA can afford that cat and

mouse approach to environmental management. Neither can our

environment.

Nonetheless, enforcement is critical. In fact, in Delaware and

other States, attempting to inject common sense into the regulatory

process, this stick must be bigger than ever. Those polluters who

choose not to participate in our compliance assistance efforts and

those who continually violate environmental obligations should face

the full force of public indignation and legal recourse. In this context, States and EPA can forge a powerful partnership that combines the benefits of compliance and deterrence.

Making the philosophical point about compliance and enforcement, and arguing the failings of traditional enforcement measures

is not enough. States have an obligation to work with EPA to identify clearly the appropriate role for enforcement and how best to

measure our success in getting polluters into compliance and keeping them there.

The State and EPA Region III have initiated a process to identify

which measures of compliance and enforcement would be more useful and appropriate than those that are currently in use. I would

mention that Becky Norton Dunlop and the folks from the Commonwealth of Virginia have been active participants in that process, and I think we’ll be successful as a result of our partnership

there.

Our goal is to make recommendations for inclusion in the Region

III EPA headquarters enforcement memorandum of understanding,

which will be finalized July 1. I understand similar efforts are underway in other EPA regions. As Steve Herman and Mark Coleman

have indicated, there is a relationship between the Office of Enforcement Compliance Assurance and the States to develop a better

relationship.

EPA should and I hope will continue to be a crucial enforcement

partner. We will continue to rely on EPA to assist with our bad actors, help with transboundary pollution problems, set protective national standards, and assure that all States live up to their end of

the environmental protection bargain.

We will also continue to work with EPA through performance

partnership agreements and other means to build the capacity we

need to meet Federal and State environmental goals. We need EPA

just as EPA needs the States. That is what partnership is all

about.

Thank you again, Mr. Chairman.

Senator CHAFEE. Thank you very much, Mr. Tulou.

Mr. Rubin from Connecticut.
39

STATEMENT OF HON. JOSEPH RUBIN, ASSISTANT ATTORNEY

GENERAL, STATE OF CONNECTICUT

Mr. RUBIN. Thank you, Mr. Chairman, members of the committee.

As the head of the Environment Department of Connecticut Attorney General Dick Blumenthal’s office for the past 7 years, I’ve

participated closely in many aspects of the State-Federal environmental enforcement relationship. Overall, I’ve found that relationship to be cooperative and productive.

I would like to focus my remarks on two particular aspects of

that relationship, which I think provide good examples of the relationship at work. The first is a model State-Federal working group

on water enforcement, and the second is a current EPA review of

some of Connecticut’s State enforcement programs.

To begin with the model working group, almost 3 years ago, we

began monthly meetings, including the Connecticut DEP water enforcement staff, our attorney general’s office, and EPA enforcement

and legal staff. This group is composed completely of working level

staff. It has no bureaucratic structure. It doesn’t operate under any

guidance documents. It doesn’t have any protocols. It doesn’t have

any memoranda of understanding. It’s simply a group that instead

of making pronouncements or fighting about turf sits down and

works together on enforcement.

In fact, I think its lack of bureaucratic structure is critical to the

group’s success. What it means is that at each meeting we can discuss current and potential enforcement cases that have come from

anywhere, from inspections, from citizen complaints. Together, the

group can come to an informal consensus about whether a particular problem merits a significant enforcement response or not, and

if it does, together the group can determine which approach will be

most efficient and effective.

In reaching this determination, we consider who has the best

legal tools, who has the available staff, who has the discovery tools,

whose laws would be effective, who has the technical resources. It’s

important to say, this isn’t an all or nothing decision. Often, for instance, we’ll determine that EPA will use its discovery tools and

then perhaps a State enforcement action will result. Or perhaps

the governments will work together. In rare cases, we’ll decide that

a case is important enough that it should be prosecuted jointly by

State and Federal authorities.

This group accomplishes several very important goals. It maximizes the effectiveness of overall enforcement efforts. It eliminates

unknowing duplication of effort, so everybody can best use all of

their resources. It reduces inter-agency competitiveness, and replaces it with cooperation. In effect, by providing each government

with the peer review of the other government, it provides a real

stimulation for everyone to do high quality work. In sum, I submit,

it gives all taxpayers more bang for their environmental buck.

A second example, and one which is somewhat more controversial, is the current ongoing series of reviews, or audits, of State environmental enforcement efforts, which has been produced by EPA

Region I. Region I just completed a draft review of Connecticut

DEP’s enforcement programs about 6 months ago. They expect to

complete their final report this month, any day now.
40

I submit that this periodic review process represents an excellent

compromise and an excellent approach to oversight. Rather than

reviewing every case as it happens and creating an impression on

the part of the State that EPA is trying to direct everything the

State does, instead EPA has initiated a peer review process on a

periodic basis. I think that necessarily has positive results.

In the first place, any peer review process is likely to produce

positive results, because some outside review always helps to identify strengths and weaknesses. In addition, at least in Connecticut’s case, our DEP has already taken significant steps in response

to the draft report to improve areas where problems were identified. I think among the results we’re going to see from that are better documentation and therefore more consistency and more fairness in enforcement actions and some redirection and increase in

staff in certain areas where a particular need was identified.

The report has also very appropriately identified situations

where the DEP effort was strong. Now, of course, no peer review

is painless. And maybe in some cases, EPA failed to recognize some

of DEP’s efforts in the first draft. But overall, the review process

has been very effective and beneficial.

These two examples are certainly not comprehensive. But I think

they do provide a fair snapshot of successes in the State-Federal

enforcement relationship. In my experience, they are exemplary of

the success in that relationship between Region I and Connecticut.

I would urge this committee to continue to encourage the unfettered and unencumbered growth of these cooperative efforts. I

think a national presence is important. We have one environment.

We need to maintain national standards. I think through cooperative efforts such as those that I have described, we are making real

progress in that direction.

Thank you.

Senator CHAFEE. Thank you very much. It sounds like Connecticut’s got a very common sense approach to this.

Senator Warner has to leave, and on my time I’ll permit him to

ask one question.

Senator WARNER. Mr. Chairman, I very much appreciate that. I

just want to see what the reaction of the various State officers are

to this question of the effectiveness of the consent order as a tool

to implement what I believe the goals should be under our environmental laws, that is compliance, rather than just the financial penalties.

I wonder if you could, just each of the State officers give us your

personal and professional opinion as to the use of this tool in discharging your responsibilities to your respective States. Why don’t

we start off with Colorado.

Ms. BANGERT. I think the compliance order certainly can be an

effective tool. But I think that history has shown that commandand-control is in large part inadequate by itself to achieve environmental improvement, and that we need other compliance mechanisms, such as self-audit.

Senator WARNER. Delaware.

Mr. TULOU. We use them quite a bit, and they generally are very

effective. What we try to caution people is that that is not something to be expected under all circumstances. For bad actors who
41

have violated previous consent agreements, another option would

be appropriate.

Senator WARNER. Connecticut.

Mr. RUBIN. Senator, I agree that consent orders are effective in

many situations. But they have a major weakness. If we rely only

or usually on consent orders without penalties then it’s not clear

what incentive industry has to comply before we get to them this

time with this problem. If there is no deterrence in addition to a

consent order, you run a risk that you’re never going to get broad

industry-wide compliance.

Nevertheless, they are valuable in many circumstances.

Senator WARNER. And Virginia.

Ms. DUNLOP. Senator Warner, the fact of the matter is, we think

consent orders are very valuable. We don’t use consent orders to

the exclusion of fines, as you know. We don’t use consent orders to

the exclusion of the environmental audit program. We think these

are all tools that need to be considered.

But consent orders have an important value. One, we sit down,

our Department of Environmental Quality professionals sit down

with parties and agree on what the mechanism needs to be put in

place to fix the environmental problem. The money that needs to

be invested to solve, upgrade, improve the way things are run, so

that the outcome is an improvement in environmental quality.

Oftentimes in Virginia, the consent orders that are negotiated

are accompanied by fines. Sometimes those fines then can be suspended if the company or the municipality in many instances meet

the consent order agreements.

The bottom line, of course, is that for the major entities, EPA

also has the opportunity to review the consent orders.

Senator WARNER. That’s my second—a part——

Senator CHAFEE. Well, now, Senator, we——

Senator WARNER. Just a second, Mr. Chairman, otherwise, the

question dangles.

What value are these tools if in fact the EPA then can somewhat

circumvent your ability to follow through with a course of action

laid down by the State and assess unilaterally, so to speak, their

own penalties? Because that’s the issue.

In other words, it comes down to this question of sovereignty,

Mr. Chairman, the ability of these State officers, to enforce the national laws and the State laws and at the same time, how can industry put any reliance? Suppose a man or a company went out,

a woman, a CEO of a company, and bought $10 million worth of

air equipment to meet the clean air standards. Then they’re putting it in the plant and all of a sudden EPA comes around and decides, oh, no, that’s not going to work out.

Do you want to have Virginia lead off and have each State——

Senator CHAFEE. No, we can’t do that.

Senator WARNER. Well, you asked——

Senator CHAFEE. Senator, you asked for some time. You can ask

for the question in writing. But we’ve got to move along here. You

asked on my time, you’ve used my time up totally.

Senator WARNER. I would ask them to put it in writing, then.

Senator CHAFEE. That’s fine.

[Information to be supplied follows:]
42

SUPPLEMENTAL TESTIMONY OF BECKY NORTON DUNLOP, SECRETARY OF NATURAL

RESOURCES, COMMONWEALTH OF VIRGINIA

This question arises because of an opinion issued by the U.S. District Court E.D.

Va. (Hon. Rebecca Beach Smith), on May 20, 1997. The Court granted the United

States’ Motion for Partial Summary Judgment in its case against Smithfield Foods.

The opinion states that:

Because the Court concludes that Virginia law is not comparable to Section

309(g) [of the Federal Clean Water Act], and thus does not bar the United

States from pursuing an independent penalty action against the defendants, the

court need not address whether the Commonwealth is diligently prosecuting an

administrative action against the defendants.

I will not comment on the legal merits of the Court’s opinion, but only on its practical effects. Under this interpretation of the law, the EPA will be prohibited from

overfiling only if a State enforcement scheme essentially mirrors the provisions of

the Federal Clean Water Act. Thus, a State has two choices: (1) adopt the enforcement scheme contained in the Federal law, or (2) obtain EPA approval of each and

every administrative resolution of enforcement cases. In my view, this offends State

sovereignty, and makes a mockery of State delegation of EPA programs.

As to the regulated community, the effect is also clear. If the State clean water

law differs from the Federal one, even in relatively minor ways, then companies or

local governments must independently obtain the concurrence of both the State and

the Federal authorities for any proposed resolution of a violation.

Note that in the Smithfield case, the Court did not reach the question of whether

Virginia was doing a diligent job of enforcing the law. A State that is doing a firstrate job can still find itself undermined by EPA overfilings.

The EPA has testified that it has decided to overfile in only a handful of the thousands of cases in which it could do so. Based on our experience in Virginia, the EPA

decisions seem arbitrary, and perhaps politically motivated.

A chronology of events in the Smithfield case is attached. As you will see, the

Commonwealth has been attending to violations of Smithfield’s water discharge permit for a number of years, under a number of Governors. The consent orders in

question were negotiated under democratic Governors Baliles and Wilder. EPA had

no objection to them at the time. During the Allen administration these consent orders were reviewed, and found to be sound solutions to the problems at Smithfield.

We have honored and enforced these consent orders, so that very soon Smithfield’s

discharges to the Pagan River will be reduced—not just to the level required by Federal and State law, but to zero. At the same time, Virginia has aggressively pursued

any discharges or other violations that are outside the bounds of the consent orders.

And yet, it is only during the Allen administration that the EPA has seen fit to object to the consent orders with its own lawsuit. Whether or not it is lawful, such

behavior is damaging, irresponsible, and suspect.

CHRONOLOGY OF MULTIPLE ENFORCEMENT ACTIONS AGAINST SMITHFIELD FOODS,

INC. AND SUBSIDIES

Governor Godwin:

February 1977 .................... State Water Control Board Directive issued to Smithfield Packing for permit limit violations.

December 1977 ................... Consent Order approved by State Water Control

Board for ITT Gwaltney, Inc. for permit limit violations.

Governor Dalton:

February 1978 .................... Smithfield Packing referred to Attorney General for

litigation with a request to seek civil penalties for

continued permit limit violations.

May 1978 ............................ Civil settlement of Smithfield action previously referred to Attorney General, including payment of a

$100.00 civil penalty and payment of $25,000.00 to

the oil spill emergency fund.
43

CHRONOLOGY OF MULTIPLE ENFORCEMENT ACTIONS AGAINST SMITHFIELD FOODS,

INC. AND SUBSIDIES—CONTINUED

Governor Robb:

September 1983 .................. Smithfield Packing referred to Attorney General for

violations of Total Kjeldahl Nitrogen (TKN) limits in

permit.

January 1984 ...................... Isle of Wight Circuit Court orders injunctive relief

against Smithfield for TKN violations.

June 1984 ........................... Gwaltney of Smithfield referred to Attorney General

for violations of TKN limits in permit.

December 1984 ................... Isle of Wight Circuit Court fines Smithfield $40,000.00

for violation of January 1984 court order.

June 1985 ........................... Gwaltney of Smithfield, Inc. is fined $1,285,322.00 in

a citizen’s suit brought by the Chesapeake Bay

Foundation.

Governor Baliles:

May 1986 ............................ Consent Order with Smithfield Foods granting interim

TKN limits while they do monitoring and modeling

to determine if permit limits may be relaxed.

January 1988 ...................... Consent Order Amendment requiring modeling to be

done based on previous sampling to recommend

waste load allocations for the Pagan River.

Governor Wilder:

March 1990 ......................... Consent Order requiring Smithfield Foods to study

phosphorous removal and evaluate connection to

Hampton Roads Sanitation District (HRSD).

November 1990 ................... Consent Order Amendment requiring Smithfield to

participate in an HRSD feasibility study.

May 1991 ............................ Consent Order Amendment which required Smithfield

to tie their discharge to HRSD once the line was

constructed and made available to Smithfield, and

to drop their legal challenge to the phosphorous

standard.

Governor Allen:

May 1994 ............................ Owners of three (3) permitted wastewater treatment

facilities contact the Board of Professional and Occupational Regulation (BPOR) to claim that their

signatures had been forged on Discharge Monitoring

Reports by Terry Rettig, their contract wastewater

treatment operator. BPOR forwards copies of the

complaints to DEQ.

October 1994 ....................... Following careful investigation, DEQ concludes that

Rettig submitted false data on behalf of eight (8)

different facilities, including Smithfield Foods.

November 1994 ................... Consent Order Amendment which granted Smithfield

interim relief from new limits for ammonia, cyanide

and Carbonaceous Biological Oxygen Demand

(CBOD) until the connection to HRSD was accomplished.

DEQ notifies the Commonwealth’s Attorney of Surry

County that the County may have been defrauded

by Rettig.

Federal Bureau of Investigation (FBI) notifies DEQ

that they have been contacted by the Surry County

Commonwealth’s Attorney and have taken over investigation of the Rettig matter.
44

CHRONOLOGY OF MULTIPLE ENFORCEMENT ACTIONS AGAINST SMITHFIELD FOODS,

INC. AND SUBSIDIES—CONTINUED

December 1994 ................... DEQ turns over documents from its investigation of

Rettig to the FBI. In accordance with long standing

policy and at the request of the U.S. Department of

Justice (DOJ), further civil enforcement action is

suspended pending investigation and resolution of

the criminal case.

September 1995 .................. FBI requests the assistance of DEQ in reviewing and

evaluating files regarding Rettig’s activities at all

eight (8) facilities.

October 1995 ....................... DOJ obtains subpoenas for multiple permittees, including Smithfield Foods, who had dealings with

Terry Rettig.

February 1996 .................... DOJ releases DEQ to continue to pursue civil enforcement action against Smithfield Foods. DEQ resumes

preparation of the civil enforcement case.

April 1996 ........................... DEQ’s Tidewater Regional Office (TRO) notifies

Smithfield Foods of the pending DEQ enforcement

action, which includes the potential referral of

Smithfield to the Attorney General.

HRSD notifies Smithfield that hookup will be available in June 1996. (Smithfield must connect to comply with its 1991 Order.) DEQ is informed that

Smithfield may refuse to connect to HRSD.

DEQ Central Office of Enforcement suggests that the

referral to the Attorney General be temporarily deferred in order to determine which specific violations of the permit are unrelated to the prior orders

and to determine whether Smithfield will violate

the May 1991 order by refusing to connect to HRSD

in June.

June 1996 ........................... Smithfield connects its discharge to the HRSD line as

required by the May 1991 order. TRO, Central Office and the Attorney General continue to develop

the enforcement case.

August 1996 ........................ DEQ discovers that EPA has referred Smithfield to

DOJ for civil enforcement action without notifying

Virginia.

Virginia files suit against Smithfield Foods for multiple violations of Virginia’s State Water Control

Law.

December 1996 ................... The United States files suit against Smithfield Foods

for multiple violations of the Clean Water Act, including alleged phosphorous ‘‘violations’’ which are

appropriate only under the interim limits provided

in the State Water Control Board Orders.

June 1997 ........................... Smithfield activates the second hookup and begins diverting waste to HRSD, as required by the Commonwealth’s 1991 Consent Order. When this hookup reaches full capacity, Smithfield’s discharge to

the Pagan river should be reduced to zero.

RESPONSE BY JOSEPH RUBIN TO SENATOR WARNER’S REQUEST FOR ADDITIONAL

INFORMATION

Senator Warner has asked me to address his concern that EPA enforcement actions following State consent decrees could undercut the States’ sovereign authority
45

and industry’s reasonable reliance upon settlements with the States. My practical

response to this concern is that I have never seen this problem arise. In my experience, EPA has not overfiled or taken separate additional enforcement action after

a State has taken appropriate action. In addition, in my experience, when a business has a good faith concern as to whether a settlement with a State will also satisfy EPA’s concerns, the business can obtain an answer from EPA. In fact, I have

recently heard Mr. Herman, who is in charge of EPA enforcement, State affirmatively that it is EPA’s policy to answer such questions.

Of course, our Federal system, with dual sovereigns, is always in some degree of

dynamic tension. That tension is inherent in our chosen system of government. I

have seen no practical problems, however, where EPA’s enforcement efforts have

undercut appropriate State enforcement activities. In sum, I see no major problems

with present practices regarding the interplay of the State and Federal enforcement

systems. As I explained in my testimony, I do see excellent examples of a strong

cooperative working relationship between EPA Region 1 and the State of Connecticut.

Senator CHAFEE. Senator Baucus is next.

Senator BAUCUS. Very quickly, Mr. Chairman. I assume that all

of you agree there are appropriate circumstances when overfiling

is appropriate? Does anybody disagree with that statement?

Or I’ll State it differently. Is there anyone who believes that

overfiling is never appropriate?

[No response.]

Senator BAUCUS. There is no one who believes that overfiling is

never appropriate. So you all agree that there are cases when overfiling is appropriate?

Mr. COLEMAN. There are also cases where direct Federal action

is appropriate.

Senator BAUCUS. Correct. I’m just now addressing overfiling.

Ms. DUNLOP. We agree in Virginia that there are not only cases

where it possibly is appropriate, but that the law provides that. We

do think, however, that when EPA talks about partnerships, that

it would be appropriate for them to consult with the State before

they take that step.

Senator BAUCUS. Absolutely. I don’t think anybody has any quarrel there.

No further questions, Mr. Chairman. But I would just hope that

frankly some of these outfits, and you’ve talked about some commissions, some studies, Ms. Bangert, do help work with EPA and

establish guidelines when overfiling would occur, I suppose, or not

occur, so there’s a little better understanding.

Senator CHAFEE. I must say, Mr. Rubin’s testimony indicated

there is some cooperation which seems helpful. I think Mr. Coleman’s involved with that himself.

Mr. COLEMAN. Yes, sir.

Senator CHAFEE. Senator Inhofe.

Senator INHOFE. Thank you, Mr. Chairman. I’m sorry, I had to

leave for just a few minutes there, and I don’t want to ask any

questions that have already been asked. But just let me address,

to our Oklahoman, Mr. Coleman, a couple of things. You were here

when the previous panel was here, weren’t you, Mr. Coleman?

Mr. COLEMAN. Yes, sir.

Senator INHOFE. I made the comment, and it was responded by

the different representatives of the EPA that that was last year’s

war, they’re referring to the policy of measuring performance by

the amount of fines and cases. Do you think that was last year’s

war?
46

Mr. COLEMAN. No, sir.

Senator INHOFE. You feel that’s still going on? There’s some evidence there in Oklahoma, of course, you represent, you chair a national board in this.

Mr. COLEMAN. That’s correct. That issue remains an issue.

Senator INHOFE. Let me ask you another question. I’m going to

be, I’m the chairman of the subcommittee of this committee called

the Clean Air, Property Rights, Wetlands and Nuclear Safety.

As you know, Administrator Browner came out with her changes

in the national ambient air quality standards recommendation, and

if that should become a reality, I’ve often said in the five committee

meetings we’ve had that I would consider that to be an unfunded

mandate. The response we get is, well, it’s not an unfunded mandate, because we wouldn’t be emanated, we would merely be saying

to the States, you have to come up with a program that is going

to bring your State into attainment.

Now, how do you view that from an enforcement position? Would

you consider that to be an unfunded mandate? Share with us what

your thoughts would be in terms of Oklahoma. Should these rules

that she’s suggesting become a reality, I believe it’s July 19?

Mr. COLEMAN. We have worked very hard, as you’re aware, in

Oklahoma, to come state-wide into compliance with the clean air

standards. The new Federal Clean Air Act is a very encompassing

law. It’s an Act that I hope at some time that you all take up the

opportunity to look at in some detail.

But if the standards were changed and we were to fall into nonattainment, the actions that we would have to take would be such

that we would be dipping very deeply into the common, everyday

activities, of everybody in our State. We’ve done everything we

know how to do already.

Senator INHOFE. Let me ask you this. Would you be able, from

an enforcement perspective, let’s take the particulate matter, if

that were to drop down to PM2.5, is the science there and your ability there to offer some type of enforcement?

Mr. COLEMAN. At this point, we don’t know enough about the

sources of the particulates to figure out where we would take actions. That is something as far as we’re concerned that’s very, very

nebulous in terms of the science that exists to determine what type

of enforcement actions we’d need to take.

Senator INHOFE. Mr. Coleman, I see we’re getting real close to

running out of time here, but in Oklahoma, I’ve heard a lot of

things about your compliance assistance program. Could you real

quickly explain to the committee how it works? Because it’s gotten

some national attention.

Mr. COLEMAN. Yes, sir, thank you. About 5 years ago we introduced what we call a customer assistance program. We were the

first State to use that term and develop that program. I believe virtually every State, and I know every EPA region and obviously

headquarters now also uses that term, where there’s some attempt

to reach out to those that we regulate and try to help them come

into compliance.

Not that we didn’t do that in some limited way before. But certainly, particularly as the new Clean Air Act comes into play, and

as we realize the far-reaching impacts of the regulatory net, par-
47

ticularly as it relates to small business, the only way we can help

those people to ever have a chance of attainment is for them to

know what they need to do. Our customer assistance program is

designed to tell people what it is they need to do.

Senator INHOFE. Yes, it’s working very well. Thank you very

much.

Senator CHAFEE. Thank you, Senator.

Regrettably, I have to go. The majority leader has asked me to

come over to a meeting. Senator Baucus is kind enough to——

Senator INHOFE. I don’t mind staying for a little while here.

Senator CHAFEE. Senator Baucus will preside, and I want to express my regrets to the third panel. If I can get back, I certainly

will.

But meanwhile, Senator Lautenberg has a chance for questions.

I want to thank everybody on this panel and express, as I say, express my regrets to the next panel. Senator Baucus, thank you very

much.

Senator BAUCUS [assuming the chair]. Senator Lautenberg.

Senator LAUTENBERG. Thank you very much, Mr. Chairman.

Mr. Coleman, in response to Senator Baucus’ question before,

about when if at all the Federal actions are necessary, you said

that they indeed are at times. I read your statement here, State

officials feel that once a program is delegated, EPA must, should

be most concerned with the overall program effectiveness, and not

about the details how a State handles each individual enforcement.

So there is a role for Federal action, if the State doesn’t enforce

the environmental obligation as we understand it.

Mr. COLEMAN. Yes, sir.

Senator LAUTENBERG. One of the things I think we fail to recognize here, at least fail to discuss at times, is the fact that when

there’s an assault on the environment, whether it comes from Colorado, where my son lives and makes his living, or any other place,

the fact is that if you dump into a river that feeds any of the neighboring State’s activities, possibly drinking water or fishing and so

forth, that you ought not to have the right to spoil my environment

just because I’m one of the eastern-most States in the country and

the prevailing winds are west and the air pollution carries very

well through the air.

So if we can agree on that, and I sense that the mission of some

of the witnesses is to paint EPA as a sinister force trying to embrace all the powers that are relegated to the States, and their

whole mission is to sneak around and punish.

As far as I’m concerned, I can tell you, I want them out there

enforcing the law. I want them to clean the environment for my

grandchildren. Because if there’s one thing that I want to leave my

grandchildren, it’s a clean environment. I want my grandson to be

able to go fishing and know that there are still fish in the streams,

fish in the streams or fish in the ocean.

Ms. Dunlop, you suggested in your comments most directly that

there might be something of a political nature in the few cases that

had Federal intervention as an overfiling. What I sensed is you

wanted them out on one hand and you wanted them in on the

other.
48

So they’re damned if they don’t file more cases, because you said,

well, these four maybe had a political reason for EPA’s involvement. Then you complained in your earlier remarks about too

much involvement by the Federal Government. Do you want more

or less? I’m not exactly sure what you’re talking about.

Ms. DUNLOP. First of all, my comments were pointed at Mr. Herman’s remarks, where he talked about what a great record they

have of only overfiling in four instances when they had 20,000 opportunities.

Senator LAUTENBERG. I didn’t say he was boasting. He was reporting. I asked him how many cases there were.

Ms. DUNLOP. Yes, he was reporting. I will tell you, Senator, that

in the instance that the previous panel spent considerable time on

this morning discussing, in Virginia, the Smithfield case, we do

think there was something political about that. I’d be happy to

share with you some of the details of that case, without getting into

the——

Senator LAUTENBERG. I’m going to help refresh everybody’s memory. This is a report, this is written in a newspaper, so it could very

well be wrong. It says that Smithfield was late in reporting a violation at least 164 times, violated clean water laws as many as 5,330

times, the pollutants they dumped in there were fecal coliform bacteria, cyanide and phosphorus. I wouldn’t like that in my cocktail,

I’ll tell you that.

The judge later left for a penalty phase to the court proceeding

a formal determination of the number of violations, each of which

can carry $25,000 penalty.

It’s the defendants, the judge wrote, and not the public, who are

discharging into the Pagan River.

Did the judge, by the way, in this case, issue a wrong opinion,

in your judgment?

Ms. DUNLOP. No, we think the judge will have another opportunity in August to take a look at the Virginia case and perhaps

have some different comments.

Senator LAUTENBERG. So there is an inference that the judge

didn’t exactly come down, in your view, with the right decision, if

the suggestion is that she’ll have a chance to review it later on.

Does that suggest it will correct some of the impressions?

Ms. DUNLOP. There’s no question, Senator, that the EPA does

have a right to overfile and the facts of this cases were well noted

by the judge. There are——

Senator LAUTENBERG. Are you satisfied with the action that the

environmental department in Virginia took with Smithfield?

Ms. DUNLOP. Yes. I think the Department of Environmental

Quality has taken the proper action. As you probably know, having

studied this case, the consent order was agreed to by appointees of

former Governor Robb and former Governor Baliles, it was negotiated by former Governor Doug Wilder’s administration in 1991

and approved by a sitting Democrat attorney general, the lieutenant Governor of the Commonwealth at the time was a Democrat

and had no comment on it.

This was in 1991.

Senator LAUTENBERG. So what you’re pointing out is that this

was largely political.
49

Ms. DUNLOP. No, what I’m——

Senator LAUTENBERG. I asked you if you were satisfied not with

the performance of Democrats or Republicans, I asked you if you

were satisfied with the performance of the State of Virginia in

curbing this dumping, this pollution.

Ms. DUNLOP. Yes, but what I’m telling you, Senator, in 1991, the

offices of all these Democrat appointees in Virginia, elected Democrat officials, agreed upon a consent order with Smithfield to clean

up the river. The Environmental Protection Agency over——

Senator LAUTENBERG. I didn’t suggest it was Republican. Why do

you persist in identifying them as Democrats? I don’t care who it

was, Democrats or Republicans, they have no right to cooperate or

conspire with a company to dump into that river.

Ms. DUNLOP. They did not conspire with the company. They

came to an agreement on the cleanup. The consent order was reviewed by the Environmental Protection Agency, as all major consent orders are, in 1991. There was no action by the Environmental

Protection Agency on this case until 1996.

Senator LAUTENBERG. Right. They depended on the company and

on those in Virginia who were responsible for administering the

law, for enforcement, to clean up their act.

Ms. DUNLOP. That was happening, sir. The consent order was

being complied with just as it was written. The terms of the consent order were that the DEQ in Virginia and the attorney general

would file a civil action and require payment in fines and other

terms once the hookup was completed to take care of all those actions that occurred from 1991 on. I think that’s what will be

brought out in the subsequent court case.

Senator LAUTENBERG. For 3 of the past 4 years, Virginia has

ranked last in the 10 States in the region in collecting fines from

water polluters.

Thank you very much.

Ms. DUNLOP. Thank you.

Senator BAUCUS. I just have a general question of all of you. We

live in a very complex country. I’m sorry, Senator, did you have a

question?

Senator INHOFE. Just a couple.

Senator BAUCUS. I apologize.

Senator INHOFE. It’s funny how you can get two different inferences hearing the same person talk. I think Ms. Dunlop, when I

heard your references to Democrat and Republican, I got the impression you were showing it was not partisan, as opposed to being

partisan.

Ms. DUNLOP. Yes, sir, Senator. That was my intention. We in the

Allen administration who are Republicans reviewed the consent

order that had been negotiated by previous Democrat office holders,

and agreed that it was the right track to take and the river was

being cleaned up. We had no input from EPA indicating, in 1994

when we took office, that they disagreed with this consent order.

We did not hear from EPA until they announced publicly that they

were filing suit, which was after we announced that we were filing

suit.

Senator INHOFE. Well, that’s exactly the message I got. I have to

make one comment, if I could, Mr. Chairman, about the reference
50

made to the Gestapo tactics. I can assure you that there are Gestapo tactics by the EPA. I think of the story I’ve told so many

times, I have about 20 of them that Administrator Browner gets

tired of hearing.

One was the guy that owned the lumber company in Oklahoma

who had disposed of his crankcase oil legally 10 years ago to a licensed contractor, licensed by the Federal Government and the

County of Tulsa and the city of Tulsa and the State of Oklahoma.

Only to come back and receive a letter from the EPA saying that

they’re going to invoke fines of $5,000 a day because some of that

was traced to a Superfund site.

Now, recognizing that they can’t go through with that, it’s the

idea, the tactic, the fear that is instilled in these people who are

out there and are the law-abiding taxpayers, who are paying for all

this fun we’re having up here. Just a thought, Mr. Chairman.

Senator BAUCUS. I’d like to ask you as a panel whether you don’t

think that still, by and large, this system works pretty well. We

have a very complex, very large country. It’s not 50 countries, it’s

50 States in one country—a federalist system. It’s very complicated.

Each State is different. Each region is different. Each company is

different.

This is not an easy matter. I think most people who serve in the

State capacity or Federal capacity are trying to do a good job, as

each person sees it. Of course, there’s a little bit of localism, people

tend to see the world from their perspective.

I’d like to ask you generally if you think the system, for all of

its warts, still works pretty well. Are the bad actors disciplined?

Most people aren’t bad actors. They may slip here and there, but

by and large, most people, most companies, most independent operators, probably do a pretty good job.

Do any of you agree with my assessment? If you disagree, where

would you like the laws to be significantly changed? I’m not talking

about working around the edges. I’m talking about a major change

in the law.

Mr. TULOU. Mr. Chairman, I’d just like to say that I generally

agree with you. I think what we’re dealing with here is less a statutory issue than it is a cultural issue. I think the environmental

movement is phasing into a quiet revolution. We’ve gone through

20 or 25 years of command and control where we had to do a lot

of aggressive activity in order to get peoples’ attention.

I think the educational process has gone a logical course. I think

we at the States and EPA are in the process now of trying to figure

out how to go from here. I think we need to shift some gears. I

think we need to think in terms of broader environmental goals,

shoot for those environmental goals, worry a little less about the

bureaucratic and programmatic objectives that we might have, and

rely a little bit more on the understanding of their responsibility

that our industrial constituents have and work in partnership better to try to find the best way to get to compliance.

Senator BAUCUS. But I sense that you all are trying to do that.

Mr. TULOU. We are. I think we’re struggling right now because

I think there are pockets in State government and EPA where that

mind shift is not taking place. I think that’s a source of a lot of

the problem.
51

Senator BAUCUS. It’s important to point out some of the problems. But I think it’s much more important to look for some of the

solutions here. I think you’re focusing on that.

A few years ago, I think it was 1994, I asked Administrator

Browner what grade she would give to the Federal-State relationship. She gave it then, in 1994, a B. I’d like to ask you what grade

you’d give it, at least with respect to enforcement. Any of you.

Ms. BANGERT. On behalf of Colorado——

Senator BAUCUS. Now, remember, this works both ways. We’re

talking about the relationship, we’re not talking about EPA. We’re

talking about the relationship.

Ms. BANGERT. I think the relationship in Colorado right now, and

this can change, sometimes from month to month, sometimes from

year to year.

Senator BAUCUS. Just generally during the last year or so.

Ms. BANGERT. I’d say a C.

Senator BAUCUS. Anybody else? Mr. Rubin?

Mr. RUBIN. Senator, I’d say it’s been an A in Connecticut.

Mr. TULOU. B plus.

Mr. COLEMAN. I’d say it depends on what part of the agency

you’re talking about. If you’re talking about the upper levels, like

the assistant administrator for enforcement, Mr. Herman, he’s certainly a man, and his immediate staff are people that are highly

committed. They believe in what they’re doing and I think they’re

trying to effect a change. There’s a need for a change.

Our programs have matured. Our programs are not like they

were when the acts were first passed. Our most recent act is the

Clean Air Act.

Senator BAUCUS. Just roughly, today. The Clean Air Act passed

a long time ago. I’m talking about now.

Mr. COLEMAN. In terms of which act needs to be attacked

first——

Senator BAUCUS. No, generally, the enforcement relationship,

Federal-State relationship with respect to enforcement, just generally.

Mr. COLEMAN. Generally, it’s probably still a B. It’s probably an

A with the top, it’s probably a C with some of the rest.

Senator BAUCUS. Ms. Dunlop.

Ms. DUNLOP. I guess I came through public schools when grades

were tougher. I would say a C. By and large, our technical people

have an excellent working relationship with EPA. But I think average is what we’re looking at now. I think States are——

Senator BAUCUS. Well, what needs to be done to improve it without blaming somebody?

Ms. DUNLOP. I don’t know that—well, let me just say this. First

of all, the Environmental Protection Agency needs to focus the

same and perhaps more resources on the Federal Government facilities in States which in many instances are the cause of most of

our serious pollution problems, at least in the Commonwealth of

Virginia. And they need to be more cooperative with the other Federal agencies.

For instance, on this Smithfield case, Senator, we held up our filing at the request of the Department of Justice.
52

Senator BAUCUS. What must States do to improve cooperation?

What must Virginia do to improve the cooperation?

Ms. DUNLOP. I think we need to continue to have these exchanges of information. The Connecticut experience I think is one

that can be more greatly utilized in Virginia.

Senator BAUCUS. That’s good.

Thank you very much, all of you. We appreciate your help.

We’ll now move to our third panel, which consists of Mr. Todd

Robins, environmental attorney at U.S. Public Interest Research

Group; Professor Robert Kuehn, law professor at Tulane; and Mr.

Robert Harmon, chairman of the board of Harmon Industries, Blue

Springs, MO.

Mr. Harmon, why don’t you proceed.

STATEMENT OF ROBERT E. HARMON, CHAIRMAN OF THE

BOARD OF DIRECTORS, HARMON INDUSTRIES, INC.; ACCOMPANIED BY: TERRY J. SATTERLEE, ESQ., LAW FIRM OF

LATHROP & GAGE L.C., KANSAS CITY, MO

Mr. HARMON. Mr. Chairman and members of the committee, my

name is Robert E. Harmon. I’m chairman of the board of Harmon

Industries, Inc.

I appreciate the opportunity to appear before the committee this

morning to discuss important issues of Federal-State relations in

enforcement of the environmental laws. I am accompanied today by

Harmon’s attorney, Ms. Terry J. Satterlee, of Lathrop & Gage of

Kansas City.

With your permission, I would like to read a brief statement explaining the reasons for Harmon’s interest in this important issue.

Harmon Industries is a leading supplier of railroad signal and

train control and related equipment for use in the railroad industry. The company is headquartered in Blue Springs, MO, and has

assembly and manufacturing facilities across the country. My father founded the company, which is now Harmon Industries, in

1946. Today, Harmon employs more than 1,500 workers throughout

the United States had sales of more than $175 million in 1996. The

company stock is publicly traded on the NASDAQ national market

system.

I believe that Harmon’s case well illustrates the way in which

conscientious, regulated industries who are seeking in good faith to

comply with their obligations under the environmental laws can be

whipsawed by the EPA’s claimed ‘‘overfiling’’ authority. If the EPA

has this authority, regulated industries cannot negotiate binding

agreements with authorized State agencies since the EPA may

later disagree with and completely override the State’s resolution.

One of Harmon’s facilities is located in Grain Valley, MO, which

is a rural, agricultural area outside of Kansas City. The Green Valley plant assembles circuit boards for use in railroad control and

safety equipment.

As was common practice in our industry, prior to 1987, Harmon

employees used small amounts of organic solvents to remove soldering flux from the circuit boards they were assembling. The solvents were kept at the employees’ work benches in small jars. Residues were collected in a 3 to 5 gallon pail and, unfortunately

dumped by Harmon maintenance employees approximately once
53

every 1 to 3 weeks on the ground outside the back door of the

Grain Valley plant. This practice probably began in the late 1970’s.

Harmon’s management was unaware that the employees were

disposing of used solvents until the practice was discovered during

a routine internal safety inspection in November 1987.

In December 1987, while its investigation was ongoing, Harmon

changed its assembly process to a State-of-the-art technology using

non-hazardous cleaning material rather than organic solvents to remove soldering flux from the equipment being assembled. As a result of these changes, Harmon ceased generating hazardous waste

at the Grain Valley facility. These changes had an initial cost of

$800,000, and Harmon incurs an ongoing cost of $125,000 a year

as a result.

Since 1988, the MDNR reported the status of the ongoing investigation to the EPA during quarterly program meetings, and

promptly provided the EPA with copies of significant correspondence, plans and other documents concerning the MDNR’s dealing

with Harmon. In the end, Harmon’s environmental consultants

concluded that the contamination at the Grain Valley plant was

limited and posed no threat to human health and the environment.

In a State court consent decree, negotiated between Harmon and

MDNR, MDNR imposed regulatory sanctions on Harmon, but

agreed not to seek monetary penalties against Harmon based on its

voluntary self-reporting and its prompt action to investigate and

remedy any contamination.

Senator BAUCUS. Mr. Harmon, your 5 minutes have expired.

How much farther do you have to go?

Mr. HARMON. I’m very close.

Senator BAUCUS. That’s in the eye of the beholder. How about,

can you wrap up in 1 minute?

Mr. HARMON. The decree specifically provides that Harmon’s

compliance with the consent decree constitutes full satisfaction and

release from all claims arising from allegations contained in the

plaintiff’s petition. The consent decree provides in paragraph 23(a)

that it will terminate when, among other things, the MDNR issues

a post closure part (b) permit. This condition was satisfied on July

31, 1996.

Even though MDNR has been authorized by EPA to run the

RCRA program in Missouri, and despite Harmon’s extensive dealings and settlement with MDNR, after the entry of the State court

decree, the EPA continued to pursue a separate Federal administrative action, seeking over $2.7 million in RCRA penalties. The

EPA sought these penalties for exactly the same conduct that Harmon was the subject of Harmon’s State court decree with the

MDNR.

I will stop at that. I have a few more paragraphs.

Senator BAUCUS. Thank you.

Professor.

STATEMENT OF ROBERT R. KUEHN, PROFESSOR, TULANE LAW

SCHOOL, NEW ORLEANS, LA

Mr. KUEHN. Good morning, Mr. Chairman and members of the

committee. My name is Robert Kuehn, and I’m a professor at

Tulane Law School in New Orleans. I teach classes in environ-
54

mental enforcement, environmental advocacy and hazardous waste

regulation.

I’d like to discuss the results of some research I published last

year of the appropriateness of devolving all or most enforcement of

Federal environmental laws in the hope it might aid you in reviewing the Federal-State enforcement relationship. Part of my work focused on utilizing the non-ideological public policy criteria of effectiveness, efficiency and equity to compare federally run enforcement programs with State-run programs.

Focusing on effectiveness, as you’ve heard today, one problem in

trying to compare Federal and State enforcement is, there is no

consensus on how to define and measure effective enforcement,

since it could be characterized by enforcement outputs, such as the

number of enforcement actions or outcomes, for example, to increase compliance or lessen pollution.

When they did look at some of the available effectiveness evidence, the General Accounting Office found that the track record

of States in assessing penalties and recovering the economic benefits of non-compliance ‘‘is even more disappointing than the record

of EPA.’’ Such data, however, is complicated by the fact that while

EPA may impose larger penalties, its cases do tend to focus more

on serious offenses. In addition, as numerous speakers today have

noted, penalty amounts alone do not necessarily define effective enforcement.

We do know, however, that historically, when the Federal Government has reduced enforcement and increased State responsibilities, States have also tended to reduce their regulatory activities.

Therefore, reducing Federal enforcement could even decrease the

effectiveness of States.

Turning to efficiency, lack of data prevents a conclusion on the

relative efficiency of Federal and State enforcement programs. It is

clear, though, that Federal enforcement is actually a source of revenue for the Federal Government, taking in $3 to $25 for every dollar spent on enforcement.

While the overlap that occurs because of the existence of both

Federal and State enforcement programs, or from overfiling cases,

would appear to be inefficient, this dual enforcement can have significant deterrent benefits that are otherwise not available alone.

In fact, the mere threat of Federal enforcement clearly enhances

the success of State programs, but makes it difficult to judge the

efficiency or effectiveness of State programs in the absence of the

threatened release of what has often been referred to as the EPA

gorilla waiting in the closet.

Finally, pragmatic devolution of enforcement requires that it be

vested in a level of Government that can assure equitable treatment of businesses and citizens. As markets for goods and services

have become increasingly national, a centralized enforcement program is in a unique position to provide consistent, nationwide enforcement.

Only a significant Federal program can ensure that a company

operating in a State with lax enforcement does not obtain a competitive advantage over a firm operating in a State with more rigorous enforcement Consistent Federal enforcement therefore main-
55

tains a level playing field and minimizes market imbalances that

may result from an equal enforcement among the States.

In addition, if the rationale for the national standards that are

legislated by Congress is that each citizen has a right to the same

level of environmental quality. Many citizens could lose this uniform level of protection if there were no Federal enforcement to ensure that all States provide fundamental environmental protection.

In conclusion, although the data is limited, if we take a pragmatic approach to devolution of enforcement, there is still a need

for Federal enforcement and little support for dramatic devolution

of Federal enforcement. This is not to say that the Federal-State

enforcement relationship could not be improved. I commend EPA

and the States for their efforts in developing oversight reform proposals, such as the new enforcement performance measures, differential oversight and greater use of block grants.

I hope the committee will encourage the States to gather additional data on effectiveness and efficiency, so that disputes over the

proper mix of Federal and State enforcement can be resolved on

sound public policy grounds. I also hope that you will encourage

Federal and State officials to continue to cooperate on enforcement

so that the public will receive what they want and need, a Government program, whether Federal, State or both, that effectively, efficiently and equitably enforces Federal environmental laws.

Thank you.

Senator LAUTENBERG [assuming the chair]. Thank you very

much, Professor.

Mr. Robins.

STATEMENT OF TODD E. ROBINS, ESQ., ENVIRONMENTAL

ATTORNEY, U.S. PUBLIC INTEREST RESEARCH GROUP

Mr. ROBINS. Thank you.

Good morning, Mr. Chairman and members of the committee. My

name is Todd Robins. I’m an environmental attorney with the U.S.

Public Interest Research Group, the national lobbying office for the

State PIRGs, which are non-partisan, non-profit watchdog organizations active in 30 States around the country with nearly a million citizens members.

I also chair the enforcement work group of the clean water network, a national coalition of more than 900 groups.

I would like to say at the outset that I believe many of today’s

speakers share the same goal, which is compliance with the law in

the first instance, in order to achieve the objective of a cleaner environment. I am here today to demonstrate that the way we get

there is not by voluntary approaches that rely on little more than

industry’s good intentions, but instead, by creating a constructive

partnership between EPA, the States, and citizens that maintains

a genuine, firm a predictable threat of serious consequences for

those who choose to violate our pollution laws.

Specifically, I’d like to make three points. The first is that the

failure or unwillingness of States to enforce the law has encouraged

widespread violations of our environmental laws and promoted an

atmosphere in which it simply pays to pollute. The second is that

despite important instances of Federal intervention, the EPA is not

doing enough to ensure the integrity of the programs it oversees.
56

Finally, the no-nonsense approach to Clean Water Act enforcement that we have seen in New Jersey since 1990, characterized

by mandatory minimum penalties for serious violations, has been

remarkably successful, and should serve as a national model for enforcement of the Clean Water Act and other Federal environmental

statutes.

Recently, representatives of polluting industries have made the

claim that environmental compliance is the rule, not the exception.

Our research, however, tells a very different story. In March of this

year, U.S. PIRG released our dirty water scoundrels report, in

which we found that nearly 20 percent of the largest water polluters in this country were listed by EPA in significant non-compliance with the Clean Water Act in at least one quarter from January 1995 through March 1996.

What’s more, these EPA numbers are probably just the tip of the

iceberg. When we looked at industry’s self-reported discharge data

for the first quarter of 1996, we found that the number of large,

industrial polluters that exceeded their pollutant limits by 50 percent or more was more than three times the number that EPA had

listed in significant non-compliance for that quarter.

So not to rain on the parades of those who assert that compliance

and environmental quality are not necessarily connected, but the

latest statistics also show that 40 percent of our waters remain unsafe for fishing and swimming. We think that these findings, when

taken together, as well as those of the EPA inspector general regarding air violations in Pennsylvania, demonstrate gross and unacceptable levels of noncompliance with our environmental laws.

The question then is why are serious and chronic violations so

widespread. The answer, to us, is obvious. Environmental laws are

not being enforced effectively. This problem of inadequate State enforcement is not a new one. But in many States, it appears to be

growing worse. A significant number of States around the country

have explicitly reduced or even dismantled already weak and underfunded environmental enforcement programs, with the promise

that voluntary, handholding compliance assistance efforts will

achieve compliance more efficiently.

Our research shows that that promise has been broken. We have

compiled evidence from around the country showing that while

numbers of inspections, enforcement actions and penalties have declined rapidly and dramatically in many States, rates of noncompliance have remained persistently high, and in some States, have

worsened.

While this evidence is presented comprehensively in my written

statement, brevity requires that I share just a few brief examples

of go easy State enforcement that may be of interest to members

of the committee. For example, in Oklahoma, the State Department

of Environmental Quality has collected a total of $1,000 for water

pollution violations in the past 3 years. Meanwhile, approximately

26 percent of the largest water polluters in Oklahoma were listed

by EPA in significant noncompliance at least once during that

same 3 year period.

In Florida, penalties assessed by the State Department of Environmental Quality are down in some areas by 90 percent. Yet 87

different facilities in Florida were listed by EPA in significant non-
57

compliance with the Clean Water Act in 1995 and 1996. What is

worse is that a substantial number of those polluters were violating

out-of-date permits. Forty-one percent of Florida’s major industrial

facilities are currently operating with expired permits, according to

EPA.

While these examples represent only a sampling, what they illustrate is alarming. Weak enforcement at the State level encourages

noncompliance. Without a credible, predictable deterrent that

makes it more expensive to break the law than to comply with it,

polluters have little incentive to clean up their acts, and law abiding companies who take their environmental responsibilities seriously are disadvantaged.

Given the eagerness of many States to turn their backs on enforcement, we believe that EPA must step up to the plate to ensure

the integrity of the programs it oversees. While a non-intrusive

oversight role may be appropriate when State enforcement is functioning as it should, under current circumstances in some States,

it is critical that EPA act to guarantee that minimum national

standards are met.

Some recent cases, including the Smithfield Foods case, indicate

that Federal intervention can provide the bottom line in protecting

public health and the environment, when States fail to fulfill their

delegated responsibilities. However, EPA could be and should be

doing more. Despite complaints about EPA overfiling by State officials, the EPA enforcement presence, if anything, has dwindled.

Clean water inspections are down 31 percent. Safe drinking water

inspections are down 42 percent. Pesticide inspections are down 80

percent.

Administrative enforcement actions for all statutes, are down 41

percent. Civil referrals from EPA to the Department of Justice are

down 44 percent in clean water cases, 50 percent in clean air cases

since 1994.

To people in communities downstream——

Senator BAUCUS [resuming the chair]. I’ll have to ask you to

wrap up, Mr. Robins.

Mr. ROBINS. I just want to say that to people in communities

downstream or downwind from unaccountable polluters, who are

frustrated by unresponsive State agencies, EPA’s waning commitment to step into the void is troubling. From our perspective, the

New Jersey clean water enforcement act that has shown dramatic

drops in violations as well as fewer enforcement actions, is a remarkable success story. Everybody wins.

The industry wins by paying lower penalties and enjoying a level

playing field. The State wins by producing better compliance more

efficiently. And most importantly, the public wins by having a more

accountable system as well as a cleaner environment.

So building on this success story, U.S. PIRG and the Clean

Water Network strongly supports Senator Lautenberg’s and Senator Torricelli’s Clean Water Enforcement Act, S. 645, as a tough,

pragmatic and proven way to improve environmental enforcement.

Senator BAUCUS. Thank you very much.

Mr. Harmon, I don’t know the specifics of your case, obviously,

but you seem to be saying that even though things were worked
58

out to some degree between your company and the appropriate authority in Missouri, that then the Feds came in.

Mr. HARMON. That’s right.

Senator BAUCUS. Over the top. Do you think that’s unfair? I’m

just asking, generally, do you think the general proposition, there

should never be overfiling by the Fed? The Fed should not step in?

Or is it just wrong in this case. I’m just trying to get a sense of

where you are.

Mr. HARMON. I don’t know that I’m in a position to make that

judgment, from where I sit. But certainly in our case, where we

voluntarily turned ourselves in for a situation that was not hazardous to anybody’s health, and we volunteered to clean it up at our

cost, and we had a court order, consent decree from the State, certainly I think the actions by the EPA were a little bit aggressive

in that regard.

Senator BAUCUS. When did EPA first become aware of your actions or the State.

Mr. HARMON. It was about the same time that the Missouri Department of Natural Resources, I think they communicate with

each other on a quarterly basis. So my assumption would be that

as soon as we turned ourselves in to the Missouri Department of

Natural Resources, they in a very timely manner informed the EPA

of what was going on, and they kept them informed.

Senator BAUCUS. Were you under any illusion, or were there any

discussions as far as you’re aware of between either EPA and the

Missouri enforcement authority and yourself as to what EPA would

or would not do or might or might not do? What did EPA say?

Mr. HARMON. I think it was a surprise to them as well as us.

Senator BAUCUS. A surprise to whom?

Mr. HARMON. To the Missouri Department of Natural Resources,

that there was an overfiling.

Senator BAUCUS. Did anyone ask EPA whether there might be

an overfiling, or what action EPA took?

Mr. HARMON. I’m not aware. Counsel says that the EPA informed MDNR, but the MDNR did not inform us.

Senator BAUCUS. I see.

Mr. HARMON. We were operating in good faith, cleaning up the

contamination and thinking that our consent decree was going to

be adhered to. All of a sudden, we found that not to be the case.

Senator BAUCUS. I don’t want to prolong this, but did you or your

counsel think about directly asking EPA that question, whether

EPA might be interested in an enforcement action?

Mr. HARMON. During the administrative law judge hearing, we

asked him what we should have done differently. He said we

should have communicated with the EPA, both of them together.

Clearly, that was not our understanding in the very beginning. I

don’t think that’s the way it should be done.

In other words, it’s our understanding that the authority rested

in the Missouri Department of Natural Resources in this particular

case.

Senator BAUCUS. Again, I don’t know the specifics of your case,

so it’s hard to comment on it.
59

Mr. HARMON. The litigation is still ongoing. We’re 10 years into

this thing, and millions of dollars. And we’ve got it cleaned up. But

we’re still——

Senator BAUCUS. Mr. Robins, I was curious to hear your testimony. You’re saying not very much is being done. Why?

Mr. ROBINS. Mr. Chairman, our research, U.S. PIRG has been

conducting research into EPA’s compliance.

Senator BAUCUS. Is there a trend? Is there a fall-off?

Mr. ROBINS. What we’ve been doing is tracking our compliance

rates under the Clean Water Act for many years. What we’re seeing consistently is persistently higher rates of noncompliance and

violation levels. But at the same time, where we’re seeing a change

is in the commitment on the part of both States and EPA to enforce

the law effectively.

Senator BAUCUS. A reduction?

Mr. ROBINS. A reduction. We’re seeing several States just slashing environmental budgets, enforcement budgets, enforcement

staff. We’ve seen it in the southeast, we’ve seen it in Rhode Island.

In doing that, they’ve been doing it with a philosophy, we’ve heard

it discussed several times today, a philosophy of compliance assistance, let’s not enforce the law, let’s focus on compliance, as if enforcement is a dirty word.

Our feeling is that helping small businesses to understand and

comply with complex environmental laws is absolutely a justifiable

and important thing to be doing, but only with a bottom line, underlying deterrent that provides an incentive for companies to

abide by the law and does not allow companies to reap economic

benefits from pollution.

Senator BAUCUS. Right. Now, in your judgment, long with the decline in enforcement, has there also been an increase in pollution

levels or not? Or have you measured that?

Mr. ROBINS. Well, it’s an interesting question. People in the public and members of citizen groups are interested in that information. People in communities who are interested in knowing what’s

being dumped into their waters and spewed into their air would

like to know that, we feel like we have the right to know.

In some areas, there is improving access to information like the

toxics release inventory. On the water side, which is where my

area of expertise lies, unfortunately it’s hard to tell what is the

quality of our water and whether it’s improving or not. We have

statistics that show that 40 percent of our Nation’s rivers, lakes

and coastal areas remain unsafe for fishing and swimming.

However, that data is based upon inventories conducted by the

States every 2 years and submitted to EPA and to Congress. Unfortunately, States on average assess about 17 percent of their waterways when they do these surveys, even though the Clean Water

Act enacted 25 years ago requires them to survey all of their waters.

So honestly, water quality is anybody’s guess. I think in some

cases, the water is indeed getting dirtier.

Senator BAUCUS. My time’s expired.

Senator Lautenberg.

Senator LAUTENBERG. Yes, very briefly, Mr. Chairman. I wanted

to ask Mr. Robins whether, if there were mandatory minimums
60

that established a kind of universal level for penalties for those

who violate the laws, do you think that might serve as a substitute

for such things as overfilings or different approaches by the States?

Might that clear up a lot of the problems? Would it be a total substitute?

Mr. ROBINS. I think it’s an absolutely important substitute that

we advocate. I think the experience in New Jersey since 1990

proves that out. In New Jersey in 1990, the State enacted the

Clean Water Enforcement Act which requires the agency in New

Jersey to impose mandatory minimum penalties for serious violations and instances of significant noncompliance.

What we’ve seen, and the New Jersey Department of Environmental Protection has recently concluded, and we agree, is that the

deterrent value and the certainty of that swift and regular response, when there are serious violations, has caused permit holders to take their permits more seriously. So what you’re seeing is

violations dropping by a significant amount, while the numbers of

enforcement actions and penalties that the agency has to pursue is

also dropping.

So they’re getting better results for the environment wish fewer

resources, and it’s important to note that there have been no instances of Clean Water Act overfiling by EPA in New Jersey as a

result. The agency is doing what it’s supposed to. Enforcement is

working the way it’s supposed to, and so what you have is EPA

playing a much more constructive and peripheral oversight role, as

opposed to feeling the need to step into the void of State inaction

to protect bottom line standards.

Senator LAUTENBERG. So it would be one of several tools? You

wouldn’t abolish the opportunity for overfiling if it was called

upon?

Mr. ROBINS. No, absolutely not. The fact of the matter is, our waters and our air do not respect political boundaries. And there are

cases when national interest would require that EPA step in. There

are also cases, and the States have acknowledged this, where there

is a benefit, a strategic benefit to EPA from a farther distance coming in and taking a stronger action.

Senator LAUTENBERG. I would just ask a curious question of Mr.

Harmon. There’s another Harmon company in the stereo and hifi—is that——

Mr. HARMON. Not related.

Senator LAUTENBERG. OK. I was curious, because I know they’re

in other locations.

Mr. HARMON. We get a lot of their mail from time to time.

Senator LAUTENBERG. Do you get any of their bills?

Mr. HARMON. Probably.

[Laughter.]

Senator LAUTENBERG. Mr. Chairman, there are lots of questions

that this panel and the others provoke, but unfortunately time

flies, and I hope that we’ll be able to, if necessary, submit questions

and get written answers.

Thank you very much.

Senator BAUCUS. Yes, thank you, Senator. The hearing record

will be open through Friday for additional questions and for witnesses to respond to points made by other witnesses.
61

Hearing is adjourned.

[Whereupon, at 12:15 p.m., the committee was adjourned, to reconvene at the call of the chair.]

[Additional statements submitted for the record follow:]

PREPARED STATEMENT OF LOIS J. SCHIFFER, ASSISTANT ATTORNEY GENERAL, ENVIRONMENT AND NATURAL RESOURCES DIVISION

I. INTRODUCTION

Mr. Chairman, I am pleased to have this opportunity to meet with you and the

Members of this Committee to discuss how the Environment and Natural Resources

Division—working closely with our partners at the U.S. Attorneys’ Offices, the EPA,

other Federal agencies, and the States—protects the quality of our environment and

the health of our communities. We are the Nation’s environmental cops on the beat.

Through tough and fair enforcement, our job is to ensure that all citizens can

breathe clean air, drink pure water, and enjoy clean lakes and streams; that lawabiding businesses have a level economic playing field on which to compete; and

that environmental bad actors know they will be punished. I am pleased to report

that our environmental enforcement efforts are strong and effective—due largely to

cooperative relationships we have fostered with United States Attorneys, State attorneys general, State agencies, and local prosecutors and investigators throughout

the country.

I would like first to say a few general words about the Environment Division. I

will then discuss some of our enforcement goals; how we have worked to enhance

cooperative efforts with our partners in the States; recent initiatives to make our

enforcement program more effective; and the results we have achieved.

A. The Environment and Natural Resources Division

The Environment and Natural Resources Division is responsible for representing

Federal agencies in environmental and natural resources litigation before Federal

and State courts. We bring affirmative cases and defend challenges to agency actions. Together with our colleagues in the 94 U.S. Attorneys’ Offices, we work closely with client agencies to enforce and defend the Nation’s environmental and natural resources laws.

The Division, once known as the Land and Natural Resources Division, was created in 1909. From the start, the Division represented Federal agencies in matters

related to Federal lands, water issues, and Indian disputes. Over time, our responsibilities have grown to include defensive and affirmative litigation concerning the

protection and use of the Nation’s natural resources and public lands; wildlife protection; Indian rights and claims; cleanup of hazardous waste sites; acquisition of

private property for public purposes; defense of environmental challenges to government activities; and civil and criminal environmental law enforcement.

Our enforcement work has a long history. The Rivers and Harbors Act, for instance, dates back to 1899. Many of the statutes we enforce were adopted in the

1970’s, and were adopted or amended on a bi-partisan basis, often under Republican

administrations. Our mission is to enforce these laws—and to represent the interests of the United States—fairly and effectively. To succeed, we work closely with

a wide variety of individuals and groups, including our client agencies, the U.S. Attorneys’ Offices, and local and State governments.

B. Sections in the Environment and Natural Resources Division

The Environment and Natural Resources Division is divided into ten sections,

each with its own expertise. Four sections have responsibility for affirmative environmental enforcement:

1. The Environmental Enforcement Section conducts affirmative civil litigation to

control and abate pollution. This Section is responsible for judicial enforcement of

most of the pollution abatement statutes and rules that regulate discharges into the

Nation’s air and water and that govern pesticide operations, hazardous waste, and

drinking water. Finally, the Section brings natural resource damage actions on behalf of Federal trustees (including the Departments of Agriculture, Commerce, Defense, Energy, and the Interior), and claims for contribution against private parties

for contamination of public lands and the recovery of money spent to clean up certain oil spills on behalf of the Coast Guard.

Let me tell you about just one of the Section’s notable recent victories, in which

we completed a landmark enforcement action against General Motors Corporation.

We alleged that GM had installed ‘‘defeat devices’’ in more than 470,000 Cadillacs

since 1990 in violation of the Clean Air Act. These defeat devices overwhelm the
62

car’s catalytic converter and emissions control system, causing carbon monoxide

emissions of up to three times the legal limit. We estimate that the Cadillacs have

been responsible for the illegal emission of 100,000 tons of carbon monoxide, which

can impair vision, learning ability, and work capacity. Carbon monoxide is especially threatening to people suffering from cardiovascular disease.

Working with the EPA and the U.S. Attorney’s Office, the Justice Department achieved a $45 million settlement with GM. GM will recall and repair 470,000 Cadillacs, pay a fine, and spend $7 million to offset the pollution caused by its violations. And recognizing California’s unique status under Section 209 of the Clean Air

Act, the Department of Justice and EPA closely coordinated the negotiation and implementation of the General Motors settlement with the California Air Resources

Board.

2. The Environmental Crimes Section plays two primary roles: First, its attorneys

investigate and prosecute criminal violators of Federal environmental statutes. Second, the Section acts as a resource for U.S. Attorneys, the FBI and the EPA, and

State and local investigators and prosecutors. The Section provides highly trained

and experienced prosecutors to assist in resource-demanding trials; offers advice and

expertise to Assistant U.S. Attorneys and agents in their cases; provides training

and policy development to improve the environmental criminal enforcement program; and works with U.S. Attorneys’ Offices on coordinating committees and on

task forces with our State and local law enforcement counterparts.

We bring environmental criminal cases for the same reasons the Department

brings other criminal cases: to promote respect for the law, to achieve adequate deterrence, to provide just punishment, to ensure restitution for victims, and to remedy the harm caused by offenses. Our environmental crimes program is an essential

part of our program to protect human health, the environment, and our natural resources. For example, in 1995 a Federal grand jury in Ohio returned criminal indictments against a barge company, M/G Transport Services, Inc., and some of its employees, including a former vice president and two tow boat captains, charging Oil

Pollution Act and Clean Water Act violations for illegal pollution into the Ohio

River, and of conspiracy to violate the Oil Pollution Act. Following trial, in December 1995, an Ohio jury returned guilty verdicts in the case. In the year following

this indictment and the resulting convictions, the number of unidentified, or ‘‘mystery,’’ oil sheens on the Ohio River system reported to the National Response Center

decreased significantly.

The Department’s criminal enforcement program has long benefited from close cooperation with and support of State and local authorities. For example, in 1994,

Giacomo Catucci was convicted of the illegal disposal in Rhode Island of PCB’s from

an electrical transformer and failure to notify authorities of the release of that hazardous substance. The case, prosecuted by an Assistant U.S. Attorney, was investigated entirely by the Rhode Island Department of Environmental Management.

The State continued its close support of the prosecution all the way through trial.

3. The Environmental Defense Section defends legal challenges to Federal agencies’ rulemakings, regulatory decisions, and permit actions under Federal statutes

that protect the public against pollution. The Section’s clients include the EPA, the

Department of the Interior, the Army Corps of Engineers, and the Coast Guard.

Since Federal agencies generally have the same obligations as private parties to

comply with the environmental laws, the Section also represents agencies sued by

States and citizens groups for violations of environmental laws. In addition, the Section has responsibility for affirmative enforcement of the wetlands laws.

4. The Wildlife and Marine Resources Section is responsible for both civil and

criminal cases arising under the Federal fish and wildlife conservation statutes.

Litigation under these statutes can play out in any of three different contexts: defense of Federal agencies whose programs are challenged as inconsistent with Federal conservation statutes; civil enforcement, usually to enjoin persons from violating Federal conservation statutes; and criminal prosecutions.

Each year, approximately $5 billion in illegal wildlife shipments is traded from

country to country. The global illegal trade in wildlife is said to generate more profit

than illegal arms sales. It constitutes a worldwide black market second in size only

to the drug trade. The Wildlife Section, with local U.S. Attorneys’ Offices, brings

criminal prosecutions to stop international wildlife smuggling, interstate trafficking

in protected species, and Federal wildlife violations such as eagle poisonings and migratory bird sales.

Some of you may have read about Tony Silva, an internationally prominent writer

and lecturer on the plight of endangered parrots in the wild. Last year, Mr. Silva

pled guilty to a far-reaching conspiracy to smuggle into this country highly protected

species of birds trapped in the wild in South America. The smuggling conspiracy

lasted 5 years, and involved rare Hyacinth Macaws worth more than $1 million.
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These birds are so rare that they have the highest level of protection under the Convention on International Trade in Endangered Species (CITES). CITES, which regulates trade in species actually or potentially threatened with extinction, boasts 136

member Nations. Through international cooperation, the treaty furthers member

States’ goal of protecting endangered species and reflects an international consensus

that trade in wild fauna and flora must be done legally, sustainably, and without

further detriment to wild populations. As a result of our effort to stop Mr. Silva’s

smuggling conspiracy, a Federal court sentenced him to 82 months in prison. He is

appealing the court’s refusal to let him withdraw his guilty plea.

Silva was charged as part of Operation Renegade, a U.S. Fish and Wildlife Service

probe of the illegal international smuggling of protected exotic birds or their eggs

from South America, Africa, Australia and New Zealand. The operation has resulted

in convictions of 37 people, over half of whom have been sentenced to prison terms,

making it among the most successful wildlife law enforcement initiatives ever undertaken. In other recent cases, we have prosecuted smugglers who transported rare

snakes and tortoises out of Madagascar by hiding them in airline passenger baggage; a black marketeer who tried to bring an entire tiger skeleton into the United

States; and an individual who smuggled into the country hundreds of endangered

tarantulas. In that case, the court received evidence that depletion of this species

by international smuggling had impaired the search for a cure for Alzheimer’s and

Parkinson’s diseases.

5. The Division’s other sections work on a broad range of issues that reflect the

diversity of our clients and of the Federal environmental and natural resources

laws:

• The General Litigation Section defends agencies sued under statutes that govern management of National Forests and other public lands, and under the National

Environmental Policy Act (NEPA). The Section also litigates claims filed by Indian

tribes against the government and defends against takings claims in the Court of

Federal Claims.

• The Indian Resources Section litigates on behalf of Native Americans pursuant

to the United States’ trust responsibility.

• The Land Acquisition Section handles the acquisition of property by the process

of eminent domain for congressionally authorized public purposes.

• The Appellate Section handles appeals in cases originating in the litigating sections, and assists the Solicitor General when the Division’s cases reach the United

States Supreme Court.

• The Policy, Legislation, and Special Litigation Section provides counsel to the

Assistant Attorney General, has responsibility for correspondence and Freedom of

Information Act matters, and serves as the Division’s ethics advisor and Alternative

Dispute Resolution coordinator. The section also coordinates the Division’s legislative and international work.

• The Executive Office provides administrative support services for the Division.

C. The Division’s Clients

Civil cases, and many of the criminal cases, litigated by the Environment Division

are referred by other Federal agencies—either when those agencies request the Division to file an action, or when they have been sued. The Division’s principal clients

include the EPA and the Departments of Agriculture, Commerce, Defense, Energy,

the Interior, and Transportation. However, we have represented virtually every Federal agency and currently have more than 12,000 pending cases and matters.

II. ENVIRONMENTAL ENFORCEMENT GOALS AND ACCOMPLISHMENTS

A. Overall Goals

With that introduction to the Division’s varied work, let me turn to the Justice

Department’s goals for its environmental enforcement program. We bring criminal

prosecutions and civil enforcement actions to protect the environment, to remedy environmental harm, to punish wrongdoers, and to deter future violations. Our law

enforcement efforts protect our lakes and streams, our drinking water, the air we

breathe, our food supply, the land our children and grandchildren will inherit from

us, and even the ozone layer that protects us from harmful ultraviolet rays. Without

vigorous enforcement of our environmental laws, the health of our families, our communities, our environment, and our economy would all be compromised.

How does environmental enforcement protect the economy? First, clean air and

clean water are essential ingredients for a healthy economy. Pollution decreases

land values, can impose steep health care costs, and harms industries, such as fishing, tourism, and recreation, that depend on robust natural resources. Second, bad

actors—be they international chlorofluorocarbon (CFC) smugglers or companies that
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do not install required pollution control equipment—put law-abiding businesses at

a competitive disadvantage. For example, a national alliance of major chemical companies that have invested in CFC alternatives repeatedly has expressed strong support for the Department’s efforts to stop the illegal import of this ozone-depleting

refrigerant. One of this Division’s jobs is to make sure that any company breaking

the law is brought into compliance, that no competitor gets an unfair head start

from illegal conduct, and that everyone is playing on a level economic field. A strong

and effective compliance program is essential to even-handed application of the environmental laws and to fair and honest competition.

Environmental protection statutes promote and encourage voluntary environmental compliance, but it is a vigorous enforcement program that drives such compliance. While many people comply with the law for the good of the community,

there are many people who would not send their tax checks to the IRS next April

if tax violations carried no penalty. They comply with the tax laws in part because

they may get caught, and sanctioned, if they do not. So, too, we cannot expect voluntary compliance with environmental laws unless those laws are enforced, and enforced vigorously. As William K. Reilly, the Administrator of EPA between 1989 and

1993, stated during his tenure at EPA, the ‘‘enforcement of environmental laws is

absolutely essential’’ and ‘‘is at the very heart of the integrity and the commitment

of our regulatory programs.’’ See Reilly, ‘‘The Future of Environmental Law,’’ 6 Yale

J. on Reg. 351, 354 (1989).

Environmental violations have real victims. Polluting an underground drinking

water supply can threaten thousands of people. An oil spill that damages an entire

ecosystem—such as the Exxon Valdez spill in Alaska—may undermine the economic

foundation of surrounding communities. The risk of harm can sometimes span the

globe, as it does when criminals illegally smuggle chemicals that damage the protective stratospheric ozone layer. The harm from environmental violations may extend

far into the future, affecting the health of generations yet unborn. Damage to natural resources can be permanent, as where a species is lost, a precious wetland is

destroyed, or a drinking water aquifer or fishery is polluted beyond repair. This Division’s job is to ensure that the laws Congress has enacted to prevent such harms

are respected and obeyed.

B. Working to Foster Cooperation With State and Local Authorities

Cooperation with our colleagues in State and local law enforcement is critical to

achieving our goals. As a former local prosecutor, Attorney General Reno is keenly

aware of the importance of State and local law enforcement to the effective implementation of Federal law. This Division works in partnership with the States and

the subdivisions because we share a common mission with State attorneys general,

State environmental agencies, and local authorities. Cooperative enforcement often

maximizes the chances of success, maximizes resources, and avoids duplication and

misunderstandings.

1. Goals of the Federal Relationship With State and Local Authorities

Our Federal environmental laws seek to assure all people in our Nation a basic

level of environmental protection. These laws are implemented through a working

Federalism that is critical to successful environmental compliance. The Federal,

State, and local governments all have important roles. States are primary implementers of our environmental laws, and may have more direct access to information

concerning polluters and their impacts on the local environment. Local governments

often are the most directly affected by environmental violations. The Federal Government has special expertise across the spectrum of environmental issues. We also

have the depth to handle especially large cases, and the reach to address pollution

that spills from one State into another. The national government has the unique

perspective and responsibility to stop industry from pitting one State against another in a race to lower environmental protections for short-term economic advantage at long term cost to our environment, public health, and the economy. Finally,

this Division can help to ensure that protections for all people are enforced if a State

cuts its environmental budget or personnel.

Two elements are essential to an effective working federalism: strong State programs that include strong enforcement, and cooperation among Federal, State, and

local government. In a moment, I would like to tell you about steps this Division

has taken to strengthen its relationships with our colleagues in State and local government. But first, let me illustrate the good results that those cooperative efforts

have brought.

2. Recent Examples of Cooperative Federal-State-Local Relationship

Our working relationship with States generally has been a very cooperative one.

It unquestionably has resulted in better environmental protection. A few examples:
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a. Today, as we are speaking, the Environmental Enforcement Section and the

State of Ohio are scheduled to commence trial of a Clean Air Act case against a

lumber manufacturer in New Knoxville, Ohio. For more than a decade, Hoge Lumber Company has been operating a wood-fired boiler in violation of the State and

Federal emissions limits for particulates, which can lead to respiratory complications. The Ohio EPA unsuccessfully sought time and time again to get Hoge to install additional control devices that would halt its unlawful emissions. Last year,

the State joined our Federal action. Cooperating closely, we filed a joint trial brief,

have coordinated on witnesses, and are proceeding at trial together.

b. In United States v. Marine Shale Processors Inc., lawyers from my Division and

the Louisiana Department of Environmental Quality (LDEQ) shared the counsel

table at trial. The defendant accepted hazardous waste, claimed to recycle it into

‘‘aggregate,’’ and then sold it to the public. The company marketed incinerator ash

for $1 a ton; ash that was high in heavy metals (including lead) was used on roads,

in driveways, and under a house in the community. After an LDEQ inspection revealed numerous environmental violations, the State referred the matter to EPA for

enforcement.

As a result of our joint efforts with the State, a Federal court enjoined Marine

Shale from selling its ash to the public. The company will have to pay a large civil

penalty. Marine Shale is now shut down, and the Federal and State governments

are working to ensure compliance with the environmental laws if and when the facility reopens.

c. Just 2 weeks ago, the State of California and the United States lodged a joint

consent decree resolving claims against Pacific Gas & Electric Company (‘‘PG&E’’).

The consent decree requires PG&E to support environmental enhancement projects

to protect estuaries near Morro Bay and involving the State’s Mussel Watch Program. We alleged in the complaint that PG&E had violated the Clean Water Act

and its discharge permits by submitting and failing to correct incomplete and inaccurate reports. The PG&E reports purported to show that the cooling water system

at PG&E’s Diablo Canyon nuclear power plant complied with the Clean Water Act

by employing available technology to minimize adverse environmental impacts. Information PG&E left out suggested otherwise. For example, up to 90 percent of the

larval fish in the cooling water system perish. The State took the lead in investigating the facts. At the State’s invitation, State and Federal officials joined forces to

prepare for litigation and settlement negotiations. Working together, we negotiated

a precedent-setting settlement that protects the environment and demonstrates the

importance of accurate self-reporting.

d. In United States v. ARCO Pipe Line Co., we worked closely with the States of

Indiana and Ohio to resolve claims arising when an oil pipeline ruptured and discharged approximately 30,000 gallons of diesel fuel into an agricultural field in

Dekalb County, Indiana. The oil flowed through a drainage ditch into Fish Creek,

a tributary of the St. Joseph’s River and, among other injuries, severely harmed fish

populations. One species, the white cat’s paw pearly mussel, is so rare that Fish

Creek is the only place in the world where it is known to exist. Approximately seven

miles of the Creek were impacted by the spill. Under the decree, defendants ARCO

Pipe Line Company and NORCO Pipeline, Inc., will spend $2.5 million to improve

the water quality in Fish Creek, to bring back fish, mussel and wildlife populations

to pre-spill levels, to implement local education programs, and to protect the waterway from future harm.

e. In a case developed with the Commonwealth of Virginia through the Tidewater

Environmental Crimes Task Force, George Madariaga last year pleaded guilty to

knowingly discharging spent sandblast abrasives into the Elizabeth River.

Madariaga’s employees at the Virginia Dry Dock Company, acting under his direction, regularly discharged sandblast abrasives by, among other things, shoving the

materials directly into the water. The company did not stop its unlawful conduct

even after the Virginia Department of Environmental Quality (DEQ) penalized it.

As part of his plea agreement, Madariaga agreed personally to pay the balance of

the State’s civil penalty, which the company still had owed to the DEQ.

As these examples illustrate, we have a good relationship with our partners in

the States. Indeed, since the beginning of Fiscal Year 1996, we have entered into

25 settlements in which States were co-plaintiffs and in which we split penalties

with the States. All told, States have collected almost $12 million from our joint enforcement actions during that period.

3. Initiatives to Foster Cooperative Federal-State-Local Relationship

Federal-state-local cooperation stems partly from steps this Administration has

taken to foster better communications with State and local officials, closer intergov-
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ernmental cooperation, and more efficient efforts. Let me describe a few of our other

initiatives:

First, near the beginning of my tenure as Assistant Attorney General, I created

a new position, the Counselor for State and Local Environmental Affairs. My Counselor works with State and local officials and attorneys in our Division to maximize

environmental enforcement through cooperative efforts, and to act as liaison with

our colleagues in the States and with State organizations.

Second, we have established a policy that our Environmental Enforcement Section

will notify the State in advance of filing a suit in that State, absent exceptional circumstances, and will invite the State’s participation or cooperation in the action.

This policy encourages cooperation and information exchange with the State, and

ensures that the States do not learn about our actions from reading the newspaper.

Just a few days ago, we received a letter from a State Attorney General’s office

thanking us for sending these notices.

Third, we have developed particularly productive relationships with State and

local law enforcement personnel through environmental crimes task forces and Law

Enforcement Coordinating Committees (LECCs) across the country. The Environmental Crimes Section has worked closely with U.S. Attorneys’ Offices to support

these groups. For example, we have supported the Environmental Crime Task Force

in the Eastern District of Missouri, which includes members from all Federal, State

and local law enforcement agencies that have responsibility for the detection, investigation, and prosecution of environmental crimes in that jurisdiction. That task

force has been very successful in coordinating and prosecuting environmental

crimes. Because the State of Missouri has only misdemeanor penalties for violations

of State environmental law, most cases are brought in Federal court. The Missouri

Attorney General has designated two assistant attorneys general to handle cases in

Federal court through the U.S. Attorney’s Office. Similar task forces are thriving in

many other States.

Fourth, in 1994, then-Attorneys General Tom Udall of New Mexico and Deborah

Poritz of New Jersey joined with a number of State environmental commissioners,

tribal representatives, EPA Assistant Administrator Steve Herman, and me to establish a senior forum for the discussion of environmental enforcement and compliance issues. The forum first met in 1994, and has met as many as several times

a year since then. We have been very pleased to join in this process, which facilitates coordination and discussion among policymakers in State and Federal Governments and allows us to share ideas as well as concerns. We participate in many

other such cooperative efforts, and have met often with the National Association of

Attorneys General and the Conference of Western Attorneys General. Indeed, when

I leave this hearing, I will be heading to address a meeting of the National Association of Attorneys General.

Fifth, for a number of years, Department attorneys—including those in this Division and in the United States Attorneys’ Offices—have worked with State officials

to train State and local prosecutors, investigators, and technical personnel in the

development of environmental crimes cases. Much of that work occurs at the Federal Law Enforcement Training Center in Brunswick, Georgia. Department attorneys have helped to develop the basic curricula and regularly teach as faculty. Our

attorneys also assist as faculty and otherwise for State and local training done by

the National Association of Attorneys General, by the four regional State and local

environmental enforcement organizations, and for a wide variety of other training

efforts at the State and local level. Such instruction frequently is a weekly routine

for our Crimes Section attorneys.

Finally, we have worked vigorously to improve and solidify our relationship with

the 94 United States Attorneys’ Offices around the country. These relationships are

vitally important to us, and are critical to the optimal functioning of both the Division and the U.S. Attorneys’ Offices. We work jointly with Assistant U.S. Attorneys

on many of our cases. In other instances, the U.S. Attorneys’ Offices take full responsibility for cases and call upon us only for our special expertise. In January

1997, I sent a letter to all U.S. Attorneys reaffirming our practice and re-extending

our invitation to participate in any pending or future civil environmental enforcement cases in their districts. I encouraged those who had not previously taken advantage of this invitation, to act as lead counsel, co-lead, or as local counsel. I have

received a number of letters from district offices expressing appreciation for this

outreach effort.
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4. Overfiling

a. Overfiling Myths and Reality

I have heard concerns expressed about ‘‘overfiling.’’ Overfiling is both misunderstood as a concept and exaggerated as an occurrence. Overfiling happens where the

Federal Government files an enforcement action after the State has brought an enforcement action for the same violations. There are reasons—good reasons—for us

to bring these cases, which I will describe. And where there are misunderstandings

or disagreements, we are committed to working to establish the best possible communications.

But let me first point out that overfiling does not happen often. We bring such

cases only after a careful review by EPA and this Division. In the past 12 months,

the Justice Department filed only two complaints in an environmental matter where

the State previously had brought an enforcement action for the same violations. In

the first case, against Westinghouse, the Commonwealth of Pennsylvania previously

had entered into consent agreements with Westinghouse, but agreed with our enforcement action, joined as a plaintiff-intervener, and was a party to our consent

decree. The second was the case of United States v. Smithfield Foods, Inc. (E.D.

Va.), which I will be discussing.

Second, when we do overfile, often we do so at the invitation of the State. In 1995,

the Environmental Council of the States (ECOS), released a report on overfiling

within the prior 3 years. That report even included cases in which the Federal Government took administrative or civil enforcement action against a polluter for environmental violations broader in scope than those addressed by any prior State action. Even using that broad definition of overfiling, the ECOS report did not find

widespread concern. More than half of the States that responded reported no overfiling within the previous 3 years. Further, the States reported that, in most cases

of overfiling, the Federal Government had provided notice and engaged in extensive

prior discussions with the States. Most States reported positive relationships with

Federal regional enforcement staff. Thus, overfiling hardly is the bugaboo some

might claim.

We also must recognize the significant and appropriate role for Federal enforcement. Our cases often assist the States. Indeed, State enforcers tell us that the possibility of Federal enforcement enhances the negotiating posture of State environmental agencies as they seek to obtain compliance. The threat of Federal enforcement is a powerful deterrent to violators. For example, one State reported in the

ECOS survey that, ‘‘in more than one case, EPA’s threat of overfiling has helped

the [state] gain a favorable settlement.’’ That threat, like most threats, is effective

only because we can and will deliver as promised.

Some people have suggested that any Federal enforcement in a delegated State

constitutes overfiling. That is not accurate. As I have explained, Federal enforcement serves essential functions and often is invited or welcomed by the States.

This Division also will vigorously defend against challenges by States that want

to weaken environmental protections. We recently prevailed against challenges by

Virginia and Missouri to EPA requirements for an effective Clean Air Act program

in those States. Once again, it is our task to ensure that all people enjoy a basic

level of environmental protection; that all businesses enjoy a level economic playing

field; and that industry does not pit one State against another in a bidding war to

attract industry by compromising environmental standards.

b. United States v. Smithfield Foods, Inc.

As I noted, this Division has filed only two civil judicial enforcement actions in

the past 12 months for violations that previously were the subject of a State enforcement action. In one case, the State agreed with our action. The other case, brought

against Smithfield Foods, Inc., is still pending. The following information is all

based on the public record.

The Smithfield case demonstrates the important role the Federal Government

plays when a State has been unable to bring a recalcitrant company into full compliance with the law. Subsidiaries of Smithfield Foods, Inc., operate two wastewater

treatment plants in Smithfield, Virginia. These plants treat wastewater generated

during hog-slaughtering and meat-processing operations, and collectively discharge

approximately three million gallons of effluent per day into the Pagan River. The

Pagan is part of the James River estuary, which connects to the Chesapeake Bay.

The companies’ discharges are subject to the terms and conditions of a water permit

issued by the Virginia Department of Environmental Quality.

From October 1991 through the present, Smithfield Foods, Inc. and its subsidiaries committed at least five thousand violations of its discharge permit. Over and
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over again, the companies violated effluent discharge limitations, including limitations on fecal coliform, phosphorous and nitrogen. The River has been closed to

shellfish harvesting due to fecal coliform contamination, and the companies’ discharges have contributed to that contamination. Similarly, the companies’ excessive

phosphorous and nitrogen discharges, which at times accounted for 80 percent of the

phosphorous in the Pagan River, contributed to the nutrient loading that has decreased the health and productivity of Chesapeake Bay. The companies’ violations

were serious enough that the United States filed both a criminal and a civil case.

On September 24, 1996, the United States charged the former head operator of

the Smithfield companies’ two wastewater treatment plants with 23 crimes. Eight

of the charges—including illegal discharge of fecal coliform into the Pagan River,

false statements, falsification of reports, and destroying records—were for offenses

committed at the companies’ plants. On October 22, 1996, the operator pleaded

guilty, without a plea agreement, to all 23 counts. On January 16, 1997, he was sentenced to 30 months imprisonment. He is presently incarcerated.

The Federal Government also filed a civil case, against the companies rather than

the individual operator. That is the overfiling case. This Federal action was necessary because, despite the seriousness of Smithfield’s violations, the Commonwealth was taking no action to assess penalties against the companies. Rather, in

the face of threats by the Smithfield Companies to leave the Commonwealth of Virginia if a phosphorus limit was imposed on their facilities, the Commonwealth of

Virginia entered into a series of agreements allowing the Smithfield Companies to

discharge uncontrolled amounts of phosphorus into the Pagan River for 5 years in

return for the Smithfield Companies’ agreement to hook up to a publicly-funded

sewer line when it was constructed and to dismiss the Companies’ challenge to the

phosphorus limit. In fact, in May 1996, the State Water Control Board specifically

directed the Department of Environmental Quality to enforce the consent agreements but to take no penalty action. Recognizing that the State had not succeeded

in halting Smithfield’s violations of the law, EPA referred the matter to this Division for enforcement. Just last week, the district court ruled for the United States,

finding the company liable for effluent limitation violations, and thereby resolving

many of the issues in this case.

When the case was referred to the Department of Justice on August 27, 1996,

EPA had notified Virginia of the referral. EPA regional officials held several conference calls with State officials, and invited the Commonwealth to join the Federal

case. EPA provided the Commonwealth with information on Smithfield’s violations.

As the court later said, ‘‘[t]he Commonwealth declined the EPA’s invitation to join

the Federal action. Although the Commonwealth never mentioned its plan to file its

own enforcement action to EPA, on August 30, 1996, the Commonwealth filed an

action against Smithfield.’’ For the first, time, the Commonwealth sought penalties,

although in amounts far lower than sought by EPA.

Given our efforts to develop a cooperative relationship with the State, we were

surprised by Virginia’s unilateral action, which might have undercut our enforcement action. When we filed our complaint on December 16, 1996, the Smithfield

companies argued that our action was barred by the Commonwealth’s recent suit

and/or consent orders. The court’s recent decision rejected that defense. In a thorough, 75-page opinion, the district court held that Virginia’s action did not bar ours,

in part because Virginia law does not authorize the imposition of administrative

penalties and because Virginia had failed to provide adequate procedures for public

participation.

C. Environmental Crimes Bill

One very important initiative of this Administration that will benefit State, local

and tribal governments is the ‘‘Environmental Crimes and Enforcement Act of

1997,’’ which has been introduced in the House as H.R. 277, and which we hope

soon will be introduced with bipartisan support in the Senate. This bill will enhance

environmental criminal enforcement under a wide range of statutes. It was developed to reflect the needs of and is designed to support law enforcement officials

throughout the country.

The legislation strengthens Federal, State, local, and tribal partnerships by authorizing courts to order convicted criminals to reimburse States, localities, and

tribes for their costs in assisting Federal environmental prosecutions. The bill also

provides for increased punishments when police officers, firefighters, other State

and local officials, or anyone else suffers death or serious injury as a result of an

environmental crime, and extends the statute of limitations where a criminal has

taken steps to cover up or to conceal an environmental crime. The bill adds an ‘‘attempt’’ provision to environmental statutes, similar to those found in more than 170

other Federal criminal statutes, so that we may prosecute the criminal even when
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we stop a crime in progress. This provision will remove a major obstacle to environmental investigations by allowing law enforcement personnel to use environmentally

benign substitutes for hazardous materials in undercover operations. Finally, the

bill will clarify the authority of the courts to provide for restitution in environmental

crimes cases, and to issue orders to ensure that those charged with environmental

crimes do not hide or dispose of assets needed to pay restitution.

D. Some Success Stories

Now I would like to offer a few additional examples that show why our cases are

important; how they address complex and resource-intensive enforcement needs;

how they have a real, direct impact improving the environment; and how they deter

future violations.

1. Multi-State, Multi-Facility Enforcement

Many of our cases are extremely complex, involving multiple facilities in several

States. We recently settled an enforcement action against Georgia-Pacific Corporation for Clean Air Act violations at 19 wood product facilities in Alabama, Arkansas,

Florida, Georgia, Mississippi, North Carolina, South Carolina and Virginia. Under

the settlement, Georgia-Pacific will take steps that will remove 10 million pounds

(5,000 tons) of volatile organic compounds (‘‘VOCs’’) from the atmosphere annually—

an estimated 90 percent reduction at many facilities. VOCs, a precursor to groundlevel ozone, can migrate in the atmosphere for hundreds of miles and are a particular problem in the southeast United States, where these facilities are located. The

United States worked in close cooperation with each of the State environmental

agencies in order to bring about this complex settlement.

2. Comprehensive Injunctive Relief and Environmental Enhancement

Many of our recent cases show the effectiveness of Federal enforcement in securing, in addition to penalties, comprehensive relief to protect and enhance the environment when it is harmed by unlawful pollution.

a. In United States v. Jefferson County, Alabama, (N.D. Ala.), the United States

sued Jefferson County, Alabama, and the Jefferson County Commission for annually

discharging 2.2 billion gallons of raw and partially treated sewage into the Cahaba

and Black Warrior Rivers. The Cahaba is the source of one fourth of the drinking

water for the State, and the Black Warrior runs through downtown Birmingham.

The case was settled by a consent decree that requires the County to cease its illegal discharges, rehabilitate its treatment plants and collection system, pay a

$750,000 penalty, and spend $30 million for the acquisition of riparian lands to help

restore water quality in the rivers.

b. Last January, the Sherwin Williams Company and LTV Steel agreed to settle

separate actions for serious violations of Federal public health and environmental

protections in the southside of Chicago. We alleged that Sherwin Williams had

failed properly to control emissions that impair breathing and had discharged high

levels of organic solvents that created a risk of fire or explosion. We alleged that

LTV Steel had, for years, emitted unlawful levels of coke oven gas. Those gases are

highly toxic and can lead to heart attacks, asthma, and cancer. Under the consent

decree, Sherwin Williams will clean up and restore an old and abandoned industrial

site identified by the City for commercial redevelopment, restore wetlands and protect habitat near Indian Creek and Lake Calumet, install pollution abatement

equipment, and pay a penalty. In the second settlement, LTV Steel will undertake

environmental enhancements to reduce its air emissions below the Federal requirements and will pay a penalty.

c. In another significant action, the United States sued the Tenneco Oil Company

on behalf of the Sac and Fox Nation of Oklahoma to obtain a fresh water supply,

as well as compensatory and punitive damages. Our complaint alleges that Tenneco’s oil production on Sac and Fox lands had destroyed the Sac and Fox Nation’s

groundwater supply. We have reached a settlement in principle with Tenneco, under

which the company will fund construction of water wells to supply water in tribal

areas; purchase 120 acres of land to be placed in trust for the tribe; and make a

cash payment for purposes including cleaning, restoration, and reforestation of a

pecan grove.

3. Environmental Crimes Have Real Victims

Environmental crimes have real victims, as our recent prosecution of one particularly egregious case demonstrates. Last fall, the State of Mississippi requested

EPA’s assistance in the investigation of widespread pesticide misuse along the

State’s gulf coast. EPA set up a task force that included Federal agents, environmental and health agencies in Mississippi, Louisiana, and Alabama, and local

health officials, as well as Justice Department attorneys. The investigation identi-
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fied two Mississippi residents, Dock Eatman, Jr., and Paul Walls, Sr., who were operating unlicensed exterminating businesses and using the highly toxic pesticides

methyl parathion and permethrin to treat homes, day care centers, motels, and restaurants. Methyl parathion and permethrin are restricted by EPA for agricultural

use in uninhabited fields, and exposure to methyl parathion causes serious illnesses.

To protect people from methyl parathion poisoning, homes and businesses contaminated by Eatman and Walls were evacuated or closed. By May 16, 1997, EPA had

relocated more than 1500 people from 399 homes along the Mississippi Gulf coast.

The cost to evacuate and clean up contaminated homes and businesses is expected

to exceed $70 million—of which $60 million has come from the Superfund. We prosecuted Eatman and Walls under the Federal Insecticide, Fungicide, and Rodenticide

Act (FIFRA). At trial, we showed that both defendants had been trained in the legal

and safe use of restricted-use pesticides and had been warned repeatedly that their

application of pesticides to homes and businesses was illegal. Numerous individuals

whose homes had been treated by the defendants described illnesses they and their

families suffered; some of the victims had been hospitalized. On March 13, 1997, a

jury in Biloxi found Dock Eatman Jr., guilty on 21 counts of pesticide misuse. On

May 2, 1997, a jury in Hattiesburg found Paul Walls, Sr., guilty on 48 FIFRA

counts. Sentencing is scheduled for July 7, 1997.

As I mentioned, we recently have been targeting the illegal importation of ozonedepleting CFCs. CFCs are used primarily as refrigerants, solvents, and propellants.

Unfortunately, once in the stratosphere, CFCs destroy the ozone layer that protects

us from ultra-violet radiation; that can cause increased skin cancer, retard growth

in plants and animals, and even disrupt the human immune system. In January

1996, the United States imposed a ban on most CFC importation, although existing

stockpiles can legally be used. After the phase-out began, a black-market in illegally

imported CFCs developed in the United States. Our nationwide Federal offensive

has resulted in significant jail terms and criminal fines for the smugglers. In the

past 2 years, more than two million pounds of CFCs have been seized, with a street

value of more than $18 million.

In another case, we assisted the U.S. Attorney in prosecuting Consolidated Edison

when an explosion in a Con Ed steam manhole in New York City released 200

pounds of asbestos into a crowded city neighborhood. Con Ed quickly learned of the

explosion and the asbestos release. To protect the public, our environmental laws

required Con Ed to report the release immediately. Con Ed did not report it for 4

days, during which time many people were exposed, while Con Ed falsely assured

everyone, including its own employees working on repairs, that no asbestos had

been released. The corporation and an assistant vice president were convicted.

4. Protecting Children’s Health

Protecting children from environmental health risks is a high priority for the

Clinton Administration. Some of this Division’s largest and most successful enforcement cases have addressed the health and safety of children. As the President

stated in his recent Executive Order concerning Protection of Children from Environmental Health Risks and Safety Risks, a growing body of scientific knowledge

demonstrates that children may suffer disproportionately from environmental

health risks. These risks arise because children’s neurological, immunological, digestive and other bodily systems are still developing; they eat more food, drink more

fluids, and breathe more air in proportion to their body weight than adults; and

they are less able to protect themselves from environmental hazards. Executive

Order 13045 directs Federal agencies to improve research to protect children and

to ensure that new safeguards consider special risks to children.

In many of the Environment Division’s Superfund cases involving mining wastes,

such as Bunker Hill in Idaho, Sharon Steel in Utah, Leadville/Cal Gulch in Colorado, the ABEX Site in Portsmouth, Virginia, and NL Industries in Illinois, young

children are subject to disproportionate exposure and risk. In these cases, lead and

other heavy metals hazardous to young children had been left in mine waste and

are easily accessible to children, who may live and play on the waste piles. As a

result of these cases, the companies that benefited from the mining operations are

required to assist in removing the toxic soils from the yards and playgrounds where

the children live and play in the old mining towns of the Silver Valley of Idaho,

Midvale, Utah, Leadville and Aspen, Colorado.

Enforcement efforts under the Safe Drinking Water Act, Clean Air Act and other

environmental statutes also protect children’s health. After working in close cooperation with the State, we recently entered a consent decree in United States v.

Rio Bravo Farms, which involved the Cuna del Valle (Cradle of the Valley) ‘‘colonia’’

in El Paso County, Texas, near the Rio Grande River. Colonias are rural settlements

of generally substandard housing along the U.S.-Mexican border, which frequently
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lack basic infrastructure, such as potable water, sanitary waste disposal systems,

electricity, and paved roads. The United States alleged that Rio Bravo’s concentration of low income residents at the colonia created an imminent and substantial

endangerment because the residents used shallow water wells to obtain water for

household consumption, but the residents also had no choice but to dispose of fecal

material at the colonia in a manner that could contaminate the well water with disease-causing bacteria and viruses found in human feces. Many colonia residents are

new families with young children. Children, the elderly and others with weakened

immune systems are particularly vulnerable to the enteric diseases that are caused

by the consumption of water contaminated with bacteria and viruses associated with

human feces. Under the consent decree, the defendants have constructed and will

maintain a temporary water station at the Cuna del Valle colonia to provide potable

water to residents until the El Paso County Lower Valley Water District Authority

has extended water service lines through the colonia in late 1997, and residents are

able to obtain potable water from the local public water authority. When this occurs,

the defendants will pay any costs associated with connecting the residents to the

water lines.

We also bring criminal cases to punish and deter violations that harm children.

The prosecution in United States v. William Recht Co. (M.D. Fla.) involved two 9-

year-old boys who died after playing in a dumpster in which the defendants had illegally disposed of toluene wastes. Two Recht employees were convicted of two counts

of illegal treatment, storage, and disposal of hazardous waste under RCRA and were

sentenced to 27 months in prison. The corporation entered a guilty plea to the

charge of violating RCRA by knowingly endangering the lives of others.

E. Alternative Dispute Resolution

Although one of our primary responsibilities is to litigate cases to protect public

health and the environment, we seek to avoid litigation where possible. In April

1995, Attorney General Reno issued an order on Alternative Dispute Resolution

(ADR) to promote the use of ADR in appropriate cases. Pursuant to that order, the

Environment Division issued a policy concerning criteria to be used in identifying

cases appropriate for ADR and concerning ADR training for all attorneys. The Division ADR policy calls upon our attorneys to use ADR techniques in their cases

whenever ADR may be an effective way to reach a consensual result that is beneficial to the United States.

We have used ADR with particular success in multiple party Superfund litigation.

In those cases, mediation on allocation issues, such as allocation of the costs incurred by the government for cleanup of a Superfund site among various parties

that are jointly and severally liable for costs, avoids protracted litigation and may

resolve those allocation issues without waiting for further litigation. Two good examples of this are United States v. Allied Signal, et al. (D. N.J.) and United States

v. American Cyanamid et al., (S.D.W.VA.), both Superfund cost recovery cases. Mediation in those cases also resolved contribution litigation filed against the United

States as a defendant.

ADR also is useful in cases or disputes that involve more than one governmental

body or sovereign (e.g., the Federal Government, a State government, and an Indian

Tribe), such as water resource cases. ADR may provide an efficient and cost-effective

solution to such disputes and may resolve the whole dispute—rather than just the

portion presented in litigation. For example, mediation in Wisconsin v. Illinois, a

Supreme Court original action, led to an agreement to resolve a 90-year water allocation dispute involving eight States and the United States, and will avoid years

of litigation that could have cost the taxpayers millions of dollars.

From our experience in the Environment Division, we are learning that ADR can

help to resolve cases or to narrow issues, which in turn may lead to settlement.

Where appropriate, we hope to foster and develop alternatives to the traditional adversarial techniques used to resolve civil legal disputes involving the United States.

III. CONCLUSIONS

This Division’s job is to protect our Nation’s environment, to protect our people’s

health, and to ensure a level playing field through firm, but fair enforcement. I am

proud to say that the attorneys in our Division—working in close cooperation with

our colleagues in our client agencies, the U.S. Attorneys’ Offices, and in State and

local government—are doing a great job and getting visible results.
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RESPONSE OF LOIS SCHIFFER TO ADDITIONAL QUESTION FROM SENATOR CHAFEE

Question 1. Several members have expressed their concern with the reluctance of

Federal agencies to recognize a State’s interest in managing the restoration of principally State environmental assets. One case in point is the restoration of the Fox

River, in Wisconsin. Wisconsin, as I understand it, has not only expressly sought

lead responsibility but has actually initiated agreements for restoration.

If the goal ultimately is clean up, why is it so difficult for the Federal resource

agencies and the Justice Department to allow States to take a lead role?

Answer. The United States is committed to ensuring the most effective cleanup

and restoration of our Nation’s waters. In doing so, the United States has developed

close and constructive relations with State trustees at most sites that implicate both

Federal and State interests. Even at sites where some of the natural resources at

issue are the responsibility of Federal trustees, the United States often has agreed

that the relevant State should carry primary responsibility and the lead role for

damage assessment and restoration. Such decisions are made on a site-by-site basis.

The United States, however, has a responsibility to restore and protect the resources

of the American people.

The restoration of the Fox River cannot be viewed simply as the restoration of

one State’s environmental asset. With each passing year, another 600 pounds of

PCBs are flushed from the river into the Green Bay—Lake Michigan environment.

The PCBs have contaminated the food chain in both the river and bay, and fish consumption advisories have been in place continuously for more than 20 years. Once

the PCBs leave the river, they are for all practical purposes beyond any clean up

or other remedial option. Only by addressing the contamination in the river can the

United States protect significant resources under Federal management, such as: National Wildlife Refuge lands, nationally significant Great Lakes fish stocks (e.g., lake

trout, yellow perch, walleye), lake trout in Lake Michigan stocked from Federal

hatcheries, and migratory birds. Without Federal involvement, the interests of other

States on Green Bay and Lake Michigan and the American people could be compromised.

Although the State of Wisconsin has taken some important steps with regard to

the Fox River, we have reluctantly concluded that those steps will not readily

produce the river-wide restoration needed for the State, tribal, and Federal natural

resources that have been damaged and that remain at risk. For many years, the

Federal Government has deferred to the voluntary, consensus approach advocated

by Wisconsin to address the Fox River. No meaningful cleanup plan has been developed, and no cleanup has taken place. Despite these many years and millions of

Federal dollars spent studying the river, the January 1997 interim agreement between the State and several companies—the agreement mentioned in this question—neither secures, nor even contains a commitment to secure, a river-wide cleanup. Rather, it provides principally for the companies to furnish an unspecified mix

of funding and work for demonstration projects. The companies apparently made

even that limited agreement only after the United States increased its involvement.

We will continue to participate in discussions and negotiations over the river because the United States is responsible for the affected, federally-managed resources.

EPA’s recent proposal to list this site on the National Priorities List likely will increase the Federal interest and concern for the river. Acknowledging that the goal

of all sovereign parties is to ensure a comprehensive clean up of the Fox River and

to restore injured Federal, tribal and State natural resources, the Federal and tribal

trustees, EPA, and the State of Wisconsin have recently made substantial progress

in defining a process by which these parties will work together cooperatively to

achieve this ultimate goal.

RESPONSES OF LOIS SCHIFFER TO ADDITIONAL QUESTIONS FROM SENATOR ALLARD

Question 1. Define what an overfiling is, both administratively and legally.

Answer. There is no one definition of ‘‘overfiling,’’ but we use the term to refer

to the situation in which the Federal Government brings a civil or administrative

enforcement action after a State civil or administrative enforcement action against

the same defendant for the same violations.

Question 2. What are the guidelines for overfiling? Please forward to me those

guidelines and indicate where they can be found.

Answer. Generally, prior to initiation of litigation by the Environment and Natural Resources Division, proposed Justice Department cases are reviewed and referred by the appropriate regulatory agency, such as EPA, the U.S. Army Corps of

Engineers, or the Department of the Interior, and are subject to each agency’s own
73

guidelines. Once a case is referred, this Division’s practice generally is to look at

three questions before deciding to file the lawsuit: • First, is the earlier enforcement effort securing timely compliance with the law,

including appropriate mitigation of any threat to human health or the environment?

Successful enforcement must return a polluter to timely and continuous compliance

with the law, and effective remediation of any wrongful pollution. • Second, did the earlier enforcement effort recoup the economic benefit that the

defendant gained by breaking the law? Bad actors should not profit from their illegal conduct, and law-abiding competitors should not be put at an economic disadvantage. • Third, did the earlier enforcement effort secure a penalty large enough to deter

the violator, and its competitors, from future violations? The penalty must persuade

the violator and similarly situated parties that compliance with the law is in their

best interests and that penalties for non-compliance are not just a cost of doing business. Absent special circumstances, the enforcement effort should recover a penalty

significantly greater than the economic benefit that accrued from noncompliance.

The penalty secured also must account for any recalcitrance shown by the violator

and for any increase in risk posed to human health or the environment.

To date, application of these criteria to cases referred from EPA and other agencies has resulted in only infrequent overfiling.

Question 3. I’m aware that in Texas there was a Clean Air Act overfiling involving

Hoechst-Celanese. In this instance the Texas Air Control Board advised Hoecht-Celanese (HCC) that they were exempt from the benzene National Emissions Standards for Hazardous Air Pollutants (NESHAP) rule and in December 1984 wrote a

letter to the Hoecht-Celanese to that effect and copied the Region VI Administrator

of EPA of their ruling.

On or about 1995 EPA filed a benzene CAA enforcement against Hoechst-Cel- anese. My questions are as follows;

(A) Are the facts above accurate?

Answer. The facts assumed by the question are incomplete. The United States has

filed a Clean Air Act enforcement action against Hoechst Celanese Corporation

(‘‘HCC’’) for violations of the fugitive benzene emissions NESHAP regulation at its

Bishop, Texas plant. Texas has never brought an enforcement action for these violations, and therefore the United States case does not involve an overfiling. The

United States’ action has been stayed pending the outcome of another Federal benzene NESHAP case brought in South Carolina for violations at a different HCC

plant. The district court in the South Carolina case upheld EPA’s interpretation of

the regulation, but held that no penalties could be assessed against HCC because

it allegedly did not have fair notice of EPA’s interpretation. EPA and HCC have

both appealed to the U.S. Court of Appeals for the Fourth Circuit. See United States

v. Hoechst Celanese Corp., 1996 WL 898377 (D.S.C.), appeal pending, Nos. 96–2003,

96–2051 (4th Cir.).

It is true that the Texas Air Control Board (TACB) sent HCC a letter on December 7, 1984, concurring with the company’s conclusion that its Bishop, Texas Plant

was exempt from the requirements of the benzene NESHAP regulation, and that

EPA was copied on that letter. However, as explained below, EPA did not learn

until later that the TACB’s interpretation of the regulation deviated from EPA’s interpretation, because the TACB letter agreed with HCC’s conclusion without stating

the TACB interpretation of the regulation.

(B) If the facts are accurate how could HCC know it was in violation of the CAA?

Answer. Internal company documents, submitted with our summary judgment papers in the South Carolina action, show that HCC knew at that time how EPA interpreted the exemption. HCC also knew that the Bishop Plant would not be exempt

under EPA’s interpretation. For example, the company in September 1984 received

a copy of a letter that EPA had sent to a different facility, explaining EPA’s interpretation; that EPA letter was circulated widely within the company, and one employee at the Bishop Plant wrote ‘‘Read it and weep’’ at the top.

HCC should have asked EPA if HCC had any doubt about the scope of the exemption it claimed. EPA has consistently applied its interpretation of the regulation to

plants, such as the Bishop Plant, that recycle benzene. If HCC had written to EPA

and asked for a determination of how the regulation applied to its facility, as other

companies did, the company would have learned that it was indeed subject to the

regulation. Instead, HCC did not seek such a determination from EPA for any of

its plants, including facilities in States where TACB had no regulatory authority.

(C) Why did it take so long for an overfiling to occur given that EPA had notice

of the written opinion of the TACB in December, 1984?
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Answer. EPA did not file the enforcement action sooner because TACB’s December 7, 1984 letter did not explain TACB’s interpretation of the benzene NESHAP

regulation. Therefore, EPA did not know that TACB was using an inappropriate

method of calculating HCC’s use of benzene and did not know that the State’s interpretation was inconsistent with EPA’s. Indeed, the TACB copied EPA shortly thereafter with a letter it sent to a member of the regulated community expressly informing the regulated party of EPA’s interpretation of the same provision at issue here.

Therefore, EPA had no reason to believe that TACB’s letter to HCC was based on

any different interpretation. EPA learned about the TACB’s interpretation and the

Bishop Plant’s violations of the benzene NESHAP only after EPA commenced enforcement against HCC’s South Carolina facility in 1989.

(D) Is it the opinion of EPA that tardiness in reacting to State actions is beneficial

to the State/Federal relationship?

This was not an instance where EPA was immediately aware of the company’s

violations or HCC had put EPA on notice of the company’s violations. Once HCC’s

unlawful conduct came to EPA’s attention, the Agency took action. The Department

of Justice believes that companies that violate the law should be penalized.

(E) Why was it appropriate to overfile against Hoecht-Celanese, and please include

the guidelines EPA used when the decision was made to overfile? Who made this decision?

As noted above, this case was not an overfiling, because the State of Texas did

not file an enforcement action against HCC. EPA referred the case to our Division,

and I approved the filing of the complaint, based on the factors explained above,

in the answer to Senator Allard’s Question 2.

Question 4. How many overfilings has the EPA taken against companies, municipalities, or other entities based upon activities that were approved by States under

delegated authority previous to 1993?

Answer. We defer to EPA to answer this question.

Question 5. In reply to Mr. Herman’s comment that, ‘‘out of 20, 000 cases EPA

has only overfiled in four’’ in fiscal year 1996, Patricia Bangert of the Colorado AG’s

office replied that in Colorado alone there have been 3 overfilings this year. Is that

accurate, and if not why? If so please forward those cases to my office.

Answer. We defer to EPA to answer this question.

Question 6. Is it true that EPA wrote State legislatures urging them not to pass

environmental self audit bills? If so please include a copy of one of those letters in

your reply for the record.

Answer. We defer to EPA to answer this question. The Attorney General has

strongly opposed environmental audit privilege and immunity legislation as contrary to the public interest by providing secrecy for those who violate the law and

impeding law enforcement. The Department of Justice supports EPA’s December,

1995, audit policy, not laws that would create radically new privileges and immunities for polluters.

Question 7. Can you explain what measures EPA uses to measure success of delegated environmental programs?

Answer. We defer to EPA to answer this question.

Question 8. Would the Administration support a commission to study measures

of success of environmental laws?

Answer. The Department of Justice supports development of additional measures

of environmental results, and indeed is working with EPA to do just that. One EPA

task force, on which the Department of Justice participates, is exploring new ways

to look at measures of environmental compliance and performance, and to develop

such measures. Part of the impetus for that group’s work is the Government Performance and Results Act of 1993. The task force, which plans to have a proposal

out by the fall, has already conducted a number of meetings around the country

with industry and environmental groups, States, other Federal agencies, and other

interested stakeholders. The Department of Justice understands that EPA would be

happy to share the results of this work with the Committee.

RESPONSE OF LOIS SCHIFFER TO A QUESTION FROM SENATOR BAUCUS

Question. At the hearing, Virginia Secretary of Natural Resources Becky NortonDunlop testified about the ‘‘unfair’’ action taken by the Federal Government against

Smithfield Foods. Within the limitations of the Department’s pending matter policy,
75

please describe why, in your view, the United States’ Clean Water Act action

against Smithfield Foods was an appropriate case in which to overfile.

On May 30, 1997, the United States District Court for the Eastern District of Virginia held Smithfield Foods, Inc., and two subsidiaries liable for unlawful pollution

and reporting violations at two wastewater treatment plants. See United States v. Smithfield Foods, Inc., No. 2:96cv1204 (E.D. Va.). The court held that the Smithfield

companies had violated effluent limitations for phosphorus, ammonia-nitrogen,

TKN, fecal coliform, minimum pH, cyanide, oil and grease, CBOD, BOD, and total

suspended solids. See slip op. at 34–35. The court’s opinion is enclosed. This answer

is based on matters in the public record and the court’s opinion.

The Smithfield companies’ plants discharged about three million gallons of effluent each day to the Pagan River, part of the James River estuary, which connects

to the Chesapeake Bay. Since 1970, the Pagan River has been closed to shellfish

harvesting due to fecal coliform contamination, to which the Smithfield companies’

discharges have contributed. Phosphorous and nitrogen discharges from the plants

have contributed to nutrient loadings that have decreased the health and productivity of the Chesapeake Bay. The violations continued for at least 5 years.

The United States brought its civil enforcement action because the Commonwealth for years took no action to require compliance and assess penalties against

the Smithfield companies despite the seriousness of their violations. Rather, in the

face of threats by the Smithfield companies to leave Virginia, the Commonwealth

entered into a series of agreements allowing the companies to discharge uncontrolled amounts of phosphorus into the Pagan River for at least 5 years, in violation

of the State-issued permit and Federal Clean Water Act requirements. In May 1996,

the State Water Control Board specifically directed the State Department of Environmental Quality to enforce the consent agreements but to take no penalty action.

As the district court held, the Commonwealth’s consent orders did not expressly

alter the companies’ obligations to comply with the phosphorus discharge limitation

in their discharge permit, and ‘‘Smithfield indicated in a letter to the [State agency]

that it did not believe the [State’s order] specifically relieved it from compliance

with the limitations in the Permit.’’ See slip op. at 43.

Because the Commonwealth had not halted the Smithfield companies’ serious and

repeated violations, nor assessed a penalty for those violations, EPA referred the

matter to the Justice Department. EPA provided the Commonwealth with information on Smithfield’s violations and invited the Commonwealth to join the Federal

enforcement action. As the court’s opinion states, ‘‘[t]he Commonwealth declined the

EPA’s invitation to join the Federal action. Although the Commonwealth never mentioned its plan to file its own enforcement action to EPA, on August 30, 1996, the

Commonwealth filed an action against Smithfield.’’ See slip op. at 21. The Commonwealth for the first time finally sought penalties, but in amounts far lower than

sought by EPA. Federal enforcement was necessary and appropriate due to the

Commonwealth’s inability or unwillingness to halt the Smithfield companies’ violations and to assess a penalty that would send the message to Smithfield that breaking the law is not cost-effective.

I wish to correct one error in my written statement. The EPA referred this matter

to the Department of Justice on July 27, 1996, not August 27, 1996. However, as

the district court found, the EPA notified Virginia of the referral by August 27, several months before the United States filed its complaint.

RESPONSES OF LOIS SCHIFFER TO ADDITIONAL QUESTIONS FROM SENATOR REID

Question 1. As an Assistant Attorney General, what are your goals for environmental enforcement?

Answer. As I said in my prepared testimony, our mission is to ensure—through

firm, fair enforcement—that all Americans can breathe clean air, drink pure water,

and enjoy clean lakes and streams; to provide law-abiding businesses a level economic playing field on which to compete; and to deter and punish bad actors who

break the law. Vigorous enforcement of our environmental laws protects the health

of our families, our communities, our environment, and our economy.

Environmental statutes achieve results only if enforced. As William K. Reilly, the

EPA Administrator between 1989 and 1993, stated, enforcement of environmental

laws ‘‘is at the very heart of the integrity and the commitment of our regulatory

programs.’’ See Reilly, ‘‘The Future of Environmental Law,’’ 6 Yale J. on Reg. 351,

354 (1989). Our response to unlawful conduct must be firm.

Working closely with our colleagues at the U.S. Attorneys’ Offices, the EPA, other

Federal agencies, the States, and local law enforcement agencies, our environmental

enforcement efforts have achieved superb results. My written statement addresses
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several of our notable successes, and some of our efforts to improve our effectiveness.

Question 2. You have often said that one goal of your enforcement program is to

ensure that any fines assessed adequately secure (or recover) the economic benefit

gained by a company that has violated this nation’s environmental laws. What do

you mean by this? Why is this important?

Answer. Companies that break our environmental laws should not benefit from

their unlawful conduct. The fine or penalty secured in an enforcement action must,

at an absolute minimum, persuade the violator and similarly situated polluters that

timely compliance would have been the better business choice. Law abiding companies also should not be placed at a competitive disadvantage because they complied

while some bad actor did not. Recouping economic benefit, plus more, removes an

incentive to break the law and insures a level economic playing field. Thus, an enforcement action should recover all economic benefits enjoyed by the polluter by failing to comply with the law on time, plus an additional sum so that the violating

company is worse off because it broke the law than it would have been if it chose

to comply.

Question 3. What have you done to improve relationships between the Department and State and local Governments? What effect, if any, has having a career

local prosecutor, Janet Reno, had on your efforts to improve coordination with State

and local governments?

Answer. Attorney General Reno has been a staunch supporter of improved intergovernmental coordination and cooperation, and I subscribe to that view. In fact,

Mark Coleman, the Executive Director of the Oklahoma Department of Environmental Quality and Chairman of the Compliance Committee of the Environmental

Council of the States, testified at the Committee’s recent hearing that relations between top-level State and Federal environmental enforcement officials merited an

‘‘A’’ grade. This Division has taken a number of steps to strengthen ties between

the Department of Justice and State and local governments. For example: • We are notifying States before filing suit. As stated in my written testimony, we

have established a policy that our Environmental Enforcement Section will notify

a State in advance of filing a suit in that State, absent exceptional circumstances,

and will invite the State’s participation or cooperation in the action. This policy encourages coordination and information exchange with the State, and ensures that

the States do not learn about our actions from reading the newspaper. • We are bringing more cases jointly with States. In many of our cases, States are

co-plaintiffs and work closely with our attorneys, through discovery, settlement discussions, briefing, or even sitting together at the trial counsel table. • We are sharing penalties with States in appropriate cases. Since the beginning

of Fiscal Year 1996, we have entered into 25 settlements in which States were coplaintiffs and in which we split penalties with the States. All told, States have collected almost $12 million from our joint enforcement actions during that period.

• We have developed productive relationships with State and local law enforcement in criminal environmental enforcement. Our Environmental Crimes Section

has worked closely with U.S. Attorneys’ Offices to support environmental crimes

task forces and Law Enforcement Coordinating Committees (LECCs) across the

country. As Senator Sessions stated at the Committee’s recent hearing, an environmental crimes working group in Alabama that included the State attorney general,

State environmental agency, the U.S. attorneys, EPA, the Coast Guard, and others,

was a ‘‘good model’’ for law-enforcement cooperation. Similarly, the United States

Attorney’s Office for the Eastern District of Missouri established an Environmental

Crime Task Force, which includes members from all Federal, State and local law

enforcement agencies that have responsibility for the detection, investigation, and

prosecution of environmental crimes in that jurisdiction. The Environmental Crimes

Section has worked closely with the Task Force. The Missouri Attorney General also

has designated two assistant attorneys general to handle cases in Federal court

through the U.S. Attorney’s Office. Because the State of Missouri has only misdemeanor penalties for violations of State environmental law, most cases are

brought under Federal statutes and in Federal court. The task force has been very

successful in coordinating and prosecuting environmental crimes. Similar task forces

are thriving in many other States.

Even where LECCs and task forces do not yet exist, State and/or local government personnel are directly involved in most Federal environmental prosecutions.

Often their contributions extend from the initial investigation through trial of the

case.

In addition, for a number of years, Department attorneys—including those in this

Division and in United States Attorneys’ Offices—have worked with State officials
77

to train State and local prosecutors, investigators, and technical personnel in the

development of environmental crimes cases. Much of that work has been done in

conjunction with EPA’s training program at the Federal Law Enforcement Training

Center in Georgia. Department attorneys have helped develop the basic curricula

and regularly teach there. Our attorneys also assist as faculty and otherwise for

State and local training sponsored by the National Association of Attorneys General,

by the four regional State and local environmental enforcement organizations, and

for a wide variety of other training efforts at the State and local level. Such instruction frequently is a weekly routine for our Environmental Crimes Section attorneys.

• We meet regularly with State and local governments to discuss environmental

enforcement and compliance. In 1994, then-Attorneys General Tom Udall of New

Mexico and Deborah Moritz of New Jersey joined with a number of State environmental commissioners, tribal representatives, EPA Assistant Administrator Steve

Herman, and me to establish a senior forum for the discussion of environmental enforcement and compliance issues. The group has met as many as several times a

year since then. We have been very pleased to join in this process, which facilitates

coordination and idea-sharing among policymakers in State and Federal Governments. We participate in many other such cooperative efforts, and have met often

with the National Association of Attorneys General and the Conference of Western

Attorneys General. We have also met with other State and local entities such as

the Environmental Council of the States and the International City/County Management Association.

• I have created a position in my office that reflects the special importance of our

relationships with State and local governments. Near the beginning of my tenure as

Assistant Attorney General, I created a new position, the Counselor for State and

Local Environmental Affairs. My Counselor works with State and local officials and

attorneys in our Division to maximize environmental enforcement through cooperative efforts, and to act as liaison with our colleagues in the States and with State

organizations.

• We have worked with States to develop the environmental crimes bill. The ‘‘Environmental Crimes and Enforcement Act of 1997,’’ which has been introduced in the

House as H.R. 277, and which we hope soon will be introduced with bipartisan support in the Senate, will enhance environmental criminal enforcement under a wide

range of statutes. It was developed to reflect the needs of, and is designed to support, law enforcement officials throughout the country. The legislation strengthens

Federal, State, local, and tribal partnerships by authorizing courts to order convicted criminals to reimburse States, localities, and tribes for their costs in assisting

Federal environmental prosecutions. Among other things, the bill also provides for

increased punishments when police officers, firefighters, other State and local officials, or anyone else suffers death or serious injury as a result of an environmental

crime. The bill also will respond to the urgent need expressed by State, local, and

tribal officials for additional Federal training on environmental criminal enforcement. It establishes a program dedicated to the training of law enforcement personnel investigating environmental crimes.

Question 4. Can you tell us more about your approach to cases involving small

businesses? How do they differ from your approach to more well-heeled polluters?

Answer. We have taken some special steps regarding penalties for small businesses and to encourage such businesses to participate in Federal and State outreach and compliance assistance programs. Under the Department’s ‘‘Interim Policy

on Penalty Mitigation for Small Businesses’’ (July 19, 1995), a small business may

qualify for extra mitigation of any proposed penalty if it learns of a violation for the

first time through its voluntary participation in a government-sponsored compliance

assistance program and cures any violation as soon as possible. In such cases, I

have directed that we consider compromising as much as 100 percent of the ‘‘gravity’’ component of any proposed penalty. The policy does not apply to violations for

which extra mitigation would be inappropriate, such as criminal acts and actions

that posed an imminent and substantial endangerment to public health or the environment, or to repeat violators. This policy supplements the Department’s regular

exercise of enforcement discretion, under which we may decide not to bring an enforcement action, or to seek less than the maximum penalties due to case specific

circumstances that warrant leniency. The Department’s policy, a copy of which is

attached, encourages small businesses to participate in outreach assistance programs, discover and disclose violations, and cure them as soon as possible. We are

also guided by EPA’s settlement policies in our settlement negotiations, which recognize, among other things, ability-to-pay limitations.

In all our civil cases, we regularly offer parties an opportunity to settle with us

before we initiate litigation, and in all our cases, we seek to ensure that our settle-
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ment offers are appropriate under the circumstances. Where we believe a regulatory

enforcement action for penalties would involve a ‘‘small entity,’’ as defined in the

Small Business Regulatory Enforcement and Fairness Act, we generally refrain

from demanding a specific settlement sum until we ask the small entity for financial

or other information that may bear on an appropriate penalty or injunctive relief.

After analyzing information provided, we make a best and final (absent new information) settlement offer. By presenting a ‘‘best and final’’ offer early, we try to relieve any need the small entity may perceive to litigate or negotiate unnecessarily.

Question 5. What role do citizen suits play in environmental enforcement? Why

is it important that we preserve a role for citizens in enforcing environmental laws?

Answer. Citizen enforcement is an important supplement to Federal environmental enforcement, because the government has only limited resources with which

to bring its own enforcement actions. The responsible exercise of citizen enforcement

authorities provides a strong incentive for regulated entities to comply with the law.

Citizen suits enable those most affected by pollution—those who live, work, or recreate in an area affected by pollution—to ensure compliance with environmental protection laws when Federal, State, and local governments have not acted effectively.
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PREPARED STATEMENT OF STEVEN A. HERMAN, ASSISTANT ADMINISTRATOR, OFFICE

OF ENFORCEMENT AND COMPLIANCE ASSURANCE, ENVIRONMENTAL PROTECTION

AGENCY

I. INTRODUCTION

Thank you, Mr. Chairman, for the opportunity to testify on the Environmental

Protection Agency’s (EPA) enforcement and compliance assurance program and

EPA’s enforcement relationship with the States. Today’s hearing is very timely as

these two issues have received a great deal of attention this past year. I believe that

this attention is entirely appropriate, since effective environmental protection requires not only a strong Federal enforcement presence, but also a solid, dynamic

EPA-state partnership that can adapt to new and changing environmental challenges facing this country at both the local and national levels.

I would like to talk about the two fundamental principles that guide EPA’s own

enforcement approach and the agency’s work with the States. These two principles

are accountability and flexibility.

II. ACCOUNTABILITY TO ENSURE ENVIRONMENTAL COMPLIANCE

Accountability is the central part of EPA’s enforcement and compliance assurance

program. By accountability, I mean that the public expects the regulated community

to obey the law and fully comply with applicable regulations and also expects EPA

to take tough, but fair action against those who fail to do so. We also know that

regulated entities that comply with environmental requirements expect, and rightly

so, EPA to hold noncomplying entities accountable for violations that may place the

violators at a competitive advantage.

EPA ensures accountability by maintaining a strong enforcement program that includes bringing criminal, civil, and administrative actions against violators. A strong

enforcement program punishes wrongdoers, deters potential violators, brings actual

violators into compliance, and can ensure that damage to the environment is rectified. In a March 1996 report, the General Accounting Office emphasized the important deterrent role of penalties:

[P]enalties play a key role in environmental enforcement by deterring violators

and by ensuring that regulated entities are treated fairly and consistently so that

no one gains a competitive advantage by violating environmental regulations.

Water Pollution: Many Violators Have not Received Appropriate Enforcement Action (GAO/RCED–96–23, March 1996). See also, Environmental Enforcement: Penalties May Not Recover Economic Benefits Gained by Violators (GAO/RCED–91–166,

June 1991).

The deterrent value of established enforcement methods has also been confirmed

by a recent study undertaken by EPA’s Pollution Prevention Policy Staff and cosponsored by the U.S. Departments of Energy, Defense, and Commerce entitled

Study of Industry Motivation for Pollution Prevention. The purpose of the study was

to improve the understanding of Federal agencies about how environmental issues

influence core business decisions. Based on information from more than 1000 business people representing randomly-selected lithographic printing companies and

larger manufacturing companies reporting on the Federal Toxics Release Inventory

(TRI), the study showed that environmental enforcement actions were among the

most important factors in getting both TRI respondents and printers to consider environmental issues in the performance of their duties.

EPA has a firm commitment to a strong enforcement program. As shown in our

1996 Enforcement Accomplishments Report, we referred a record 262 criminal enforcement actions to the Department of Justice (DOJ), as well as 295 civil cases—

up 38 percent from 1995. We also assessed a record $76.6 million in criminal penalties and another $66.2 million in civil penalties—up 90 percent from 1995. Our

combined criminal, civil judicial, and administrative penalties for 1996 were the

highest in the history of the agency at more than $172 million. Significantly, EPA

was able to measure for the first time the environmental results of these enforcement actions. This data includes types and amounts of pollutants reduced as a direct result of EPA’s 2,500 enforcement actions taken in 1996, the environmental

benefits and impacts of those completed actions, and the types and amounts of actions taken by regulated entities.

Indeed, the report shows that we are focusing our efforts on the most serious pollutants and health risks, making the polluter pay for noncompliance, and securing

settlements that have a direct, positive impact on public health and the environment. For example, during 1996 polluters spent almost $1.5 billion on correcting violations, cleaning up hazardous waste sites and/or taking additional steps to improve

the environment or prevent future problems. Our settlements also resulted in sig-
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nificant aggregate reductions in the amount of pollutants discharged into the environment, including nearly 200 million pounds of carbon monoxide, 16.6 million

pounds of lead, and 7.7 million pounds of asbestos. The report also punctures the

myth that EPA pursues only so-called ‘‘paper’’ violations that have no real public

health or environmental impacts.

Our commitment to strong enforcement is also reflected in the efforts of our criminal enforcement program. Our Office of Criminal Enforcement, Forensics, and

Training (OCEFT) will soon have 200 specially trained criminal investigators assigned to area offices in 36 cities across the country to work directly with local enforcement agencies in communities at greater risk of environmental crimes. Recognizing the critical importance of cooperation with State and local law enforcement

agencies, OCEFT special agents now participate in more than 90 environmental

crimes task forces nationwide with Federal, State and local law enforcement agencies to share information, establish local priorities, and pursue criminal environmental violations. Since 1992, EPA has participated in 644 joint criminal investigations with State and local law enforcement personnel. OCEFT also devotes significant resources to the training of law enforcement and regulatory personnel from

States and cities across the country.

We are building upon these successes through our National Performance Measurement Strategy. This strategy is developing an enhanced set of performance measures for our enforcement and compliance assurance program. The measures will be

used to supplement our established output measures (i.e., number of civil and criminal cases referred and amount of penalties assessed) with additional outcome measures to better assess the status and trends of regulatory compliance and environmental improvements resulting from our enforcement and compliance assurance activities.

So far, we have held two successful public meetings in Alexandria, Virginia and

San Francisco, California, where we heard from State environmental agencies and

State attorneys general, other Federal agencies, environmental groups and environmental justice advocates, regulated companies and industry associations, academic

experts, and Congressional staff about their ideas for measuring the effectiveness

of environmental enforcement and compliance assurance programs. We are following

up on these two meetings with a series of more focussed discussions with different

stakeholders. EPA will conclude these meetings in mid-September at a ‘‘Capstone’’

conference with a cross-section of stakeholders to identify common understandings,

areas of agreement, and unresolved issues. Finally, EPA will develop a report of

findings and an implementation plan with a schedule by October 1997.

III. FLEXIBILITY TO PROMOTE ENVIRONMENTAL COMPLIANCE

Along with accountability, flexibility is the other principle at the foundation of our

enforcement program. Flexibility is not only necessary to find new and innovative

ways to achieve compliance—for there is often more than one way to comply—but

is also necessary to make the most of limited government resources and target efforts more efficiently on the country’s most urgent health risks and environmental

problems.

Flexibility is a key part of EPA’s enforcement and compliance assistance program.

In fact, the primary purpose of the reorganization of EPA’s Office of Enforcement

into the Office of Enforcement and Compliance Assurance (OECA) in 1994 was to

institutionalize Administrator Browner’s conviction that effective environmental protection must include a range of compliance assistance tools in addition to established enforcement methods. The reorganization was more than just moving boxes

within an organizational chart; it was a vehicle for ensuring that we consider the

best and most effective ways to achieve and maintain compliance. Consistent with

this approach, and the Clinton Administration’s high priority on reinventing environmental regulation, EPA has launched a number of compliance assistance programs and activities over the last few years, including our Compliance Assistance

Centers, Environmental Leadership Pilot Program, Project XL, Common Sense Initiative, and Sector Notebooks. OECA is playing a key role in all of these efforts.

EPA’s Compliance Assistance Centers

In partnership with industry, academic institutions, environmental groups, other

Federal agencies, and the States, EPA has established its national Compliance Assistance Centers. The purpose of the centers is to improve compliance by increasing

awareness of the pertinent Federal regulatory requirements and providing information that will help to achieve compliance. The centers accomplish this by serving as

the first place that businesses, trade associations, and other interested parties can

go to get comprehensive, easy to understand compliance information.
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So far, Compliance Assistance Centers have been established for four industry

sectors: printing, metal finishing, automotive services and repair, and agriculture.

Although the centers have not been in existence for very long, they are already getting a lot of use. For example, the National Metal Finishing Resource Center, which

began operating as a pilot in April 1996, has had more than 1,354 registered users

to date. The Auto Service and Repair Center, opened in June 1996, has received a

total of 130,000 hits to its home page. OECA is now working on four new centers

that will assist municipalities, the transportation industry, small chemical manufacturers, and manufacturers of printed wiring boards.

The Environmental Leadership Program

EPA has promoted a systematic approach to managing environmental issues and

encourages environmental enhancement activities through the Environmental Leadership Program (ELP). For a facility to qualify for the initial phase of ELP, EPA

looked at several criteria, including the facility’s systems for monitoring and maintaining compliance with environmental laws, relationship with its employees, and

involvement with the surrounding community. EPA also examined the company’s investment in environmental enhancement activities, such as environmental restoration, product stewardship, or additional pollution prevention efforts.

During the 1 year pilot phase, which ended in August 1996, ten private companies

and public utilities and two Federal facilities tested the design of specific elements

of the program. ELP pilot participants represented such industries as manufacturing, chemical, printing, pulp and paper, and solid/hazardous waste disposal.

The anticipated benefits of a full scale ELP for facilities would include recognition

as an environmental leader, reduced and/or modified discretionary inspections, and

a limited correction period for instances of noncompliance as long as certain conditions are met. Potential benefits to the environment include increasing the number

of activities that go beyond compliance with existing environmental requirements

and encouraging the implementation of best practices related to self-monitoring and

pollution prevention activities.

Project XL

An acronym standing for ‘‘excellence and leadership,’’ Project XL allows facilities

and communities to pilot environmental activities that produce greater environmental protection than what would be achieved from conventional compliance measures, and often at less cost. In return, EPA provides relief from certain regulatory

requirements, as agreed between EPA, the State, and the project sponsor in consultation with other stakeholders. Thus, the XL program gives participants the

flexibility to develop common sense, cost-effective strategies that will replace or

modify specific regulatory requirements, on the condition that they produce greater

benefits.

There are three projects underway to date, and EPA-proposal teams are developing final project agreements for 11 more projects.

Common Sense Initiative

The Common Sense Initiative (CSI) represents a new approach for creating policies and environmental management solutions that relate to whole industries. It is

an experimental effort to increase the role of collaboration and consensus into the

environmental protection process and to address environmental problems in a more

holistic way. The goal is to encourage the development and creation of innovative

solutions to today’s environmental problems. Six industries are laboratories for testing CSI concepts: Automobile Manufacturing, Iron and Steel, Metal Finishing, Computers and Electronics, Printing, and Petroleum Refining.

Sector Notebooks

Sector notebooks are designed to serve as a resource guide for learning about specific industries and their environmental issues. In October 1995, OECA released

profiles of 18 selected industries. Included in each notebook profile is a description

of the industrial processes used, pollution outputs, pollution prevention opportunities, applicable Federal statutes and regulations, past compliance history, and compliance assistance information. More than 50,000 printed and electronic copies have

been requested and distributed so far to States, locals, individual facilities, Federal

agencies, foreign governments, trade groups, and environmental organizations. Several other industries have asked EPA to produce notebooks for their industries so

that regulators and compliance assistance providers can become more knowledgeable about their industry. EPA is now in the process of developing Notebooks for

an additional eight sectors.

In addition to these activities and programs, EPA has issued policies to promote

environmental compliance in small businesses and communities and, as described
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in more detail below, issued its self-disclosure policy in 1996 to give businesses a

real incentive to self-audit, disclose, and correct violations.

Taken as a whole, these activities and policies demonstrate the agency’s strong

commitment to a flexible, creative compliance assistance program. They are tremendous opportunities for the agency to improve its own operations, for the regulated

community to improve its relationships with the public, the government, and the environment, and for the public to be assured that we are upholding our responsibilities for protecting public health and environment. Ultimately, this flexible regulatory approach enables the agency to be more proactive and strategic in response

to compliance problems.

However, it is important to emphasize that the key to the success of these compliance programs is having a strong enforcement program as a base. This base provides a real incentive for companies to participate in these compliance assistance

programs, because it helps assure them that they will not be put at a disadvantage

to those who ignore their environmental obligations. Further, it assures the public

that special deals are not being cut and that the regulated community remains beholden to the law.

IV. THE EPA-STATE PARTNERSHIP

As stated earlier, effective environmental regulation requires a strong EPA-state

partnership. Most Federal environmental statutes recognize the importance of this

partnership by giving to authorized or approved States the primary responsibility

for implementing and enforcing Federal programs. This framework provides States

the opportunity to craft new and innovative solutions to address local health risks

and environmental problems. But these statutes also recognize the necessity and

importance of the Federal Government’s role and give EPA the authority and responsibility to establish baseline national standards for public health and the environment and ensure that these standards are implemented and enforced fairly and

consistently in all the States.

Therefore, EPA works to ensure that citizens in all our States are afforded a base

level of protection, leaving individual States free to establish and implement more

stringent, but not less stringent, environmental standards. In addition, EPA takes

enforcement action in cooperation with the States or on its own, when necessary,

to prevent the creation of pollution ‘‘safe havens’’ in lax States, and to maintain a

level playing field by protecting companies in States that comply with environmental requirements from being placed at an economic disadvantage to those companies in other States that do not. EPA’s approach to its State partners follows from

these statutory principles as well as the principles of flexibility and accountability

that guide its own regulatory programs.

Flexibility with the States

EPA is pursuing its policy of flexibility with the States through the National Environmental Performance Partnership System (NEPPS). Established by the Administrator and State environmental program leaders in May 1995, the NEPPS provides

a new process by which EPA and the States can work together to establish joint

national and local environmental priorities and then integrate and focus resources

to best address these priorities. These priorities will then be incorporated into our

Performance Partnership Agreements (PPA) and Performance Partnership Grants

(PPGs) with the States. OECA is working with the regions and the States to incorporate enforcement and compliance assurance priorities into these agreements. In

addition, EPA and the Environmental Council of States (ECOS) have recently

formed a work group to help facilitate these efforts and address major enforcement

issues between EPA and States. The first meeting of this work group, chaired by

Mark Coleman, Executive Director of the Oklahoma Department of Environmental

Quality, and myself, was held on May 23 in Arlington, Virginia.

As part of the NEPPS process, EPA and ECOS have been working to develop proposed core performance measures for State enforcement and compliance assurance

programs. These measures would be used to monitor the performance of enforcement actions to deter noncompliance and the performance compliance assistance

and incentive policies. The proposed measures utilize both output measures and outcome measures to track the performance of State enforcement and compliance assurance programs. EPA believes the proposed measures will ensure accountability

to the pubic and allow EPA and the States to begin measuring the effectiveness of

alternative approaches to compliance. EPA is continuing to work with ECOS to put

these measures in place for the fiscal year 1998 cycle of PPAs.

The next step in this NEPPS process is to reduce the reporting burden placed on

States. To meet this goal, EPA and ECOS are developing a set of principles for data

reporting. These principles will be used to evaluate the need for current and future
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reporting requirements and eliminate obsolete and unnecessary reporting requirements, while maintaining or strengthening the data reporting requirements necessary to evaluate compliance trends nationwide. EPA and ECOS are examining efforts underway in several Regions to reduce reporting and will ask them to examine

some of the reporting requirements they suspect are not necessary.

The Necessity of Strong State Enforcement Programs

Just as EPA is committed to maintaining a strong Federal enforcement program,

we expect States to have strong enforcement programs. Strong State enforcement

programs are essential to ensure environmental protection nationwide; further, pollution does not recognize State boundaries and many major companies are no longer

regional, but national in scope and operation.

As I said earlier, there has been a lot of attention focused recently on the EPAstate relationship. In particular, there has been some controversy surrounding the

impact of State audit laws on authorized programs and EPA’s national response to

the Inspector General report in Pennsylvania. EPA’s response to these issues is consistent with the general views I have just expressed. This means that while the

agency is working with the States to promote compliance and increase the flexibility

in the implementation of their authorized programs, EPA still expects States to hold

violators in their jurisdictions accountable by maintaining and utilizing an adequate

enforcement program.

Impact of State Audit Privilege and Immunity Laws on State Enforcement Authority

Regarding State audit laws, we recognize that States may find different ways to

encourage companies to voluntarily discover, disclose, and correct environmental

violations. But, at the same time, we are concerned that some of the approaches

being taken actually can allow polluters to keep secret from the public critical information about potential threats to health and the environment, and can obstruct the

ability of the States and the public to hold the regulated community accountable for

violating environmental requirements.

Let me be clear that we have two distinct issues regarding State audit laws—one

of policy and one of law. On the policy level, we oppose all State audit privilege and

immunity laws in any form. Both EPA and DOJ have repeatedly testified before

Congress and State legislatures that audit privileges make it more difficult to enforce the nation’s environmental laws by making it easier to shield evidence of

wrongdoing. A privilege law invites defendants to claim many types of evidence relevant to a violation as privileged, including sampling data and information concerning the cause of and possible environmental contamination resulting from a violation. A privilege could, consequently, breed litigation and waste government resources as both parties struggle to determine what materials fell within the protected scope of the audit. Furthermore, a 1995 study by Price Waterhouse of 369

businesses entitled The Voluntary Environmental Audit Survey of U.S. Business indicated that a privilege is not needed to encourage voluntary compliance.

Ultimately, an audit privilege invites secrecy and breeds distrust with the community thereby undermining the kind of openness that builds trust between regulators,

the regulated community, and the public necessary for the regulated community to

be able to effectively police itself. We also oppose blanket immunities as a matter

of policy, because, among other things, they can eliminate the important deterrent

effect of penalties and result in disparate treatment of companies in States with different immunity laws.

The second issue we have with these audit laws is legal. Under Federal law, EPA

has to ensure that the States retain certain minimum enforcement authorities required by Federal law for program approval, delegation, and authorization. More

specifically, EPA must assure that a State audit immunity law does not deprive a

State of its authority to obtain injunctive relief and civil and criminal penalties for

any violation of program requirements. In determining whether these requirements

are met, EPA is particularly concerned with whether a State has the authority to:

(1) obtain immediate and complete injunctive relief; (2) recover civil penalties for

significant economic benefit, repeat violations and violations of judicial or administrative orders, serious harm, and activities that may present an imminent and substantial endangerment; and (3) obtain criminal fines and sanctions for willful and

knowing violations of Federal law.

Under Federal law, a State must also have the ability to get information needed

to identify noncompliance or criminal conduct and ensure correction of violations.

Further, it appears that a State privilege law that restricts the public’s legal right

to information regarding a facility’s compliance with environmental requirements or

sanctions ‘‘whistleblowers’’ for divulging information about a company’s noncompli-
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ance runs afoul of minimum Federal requirements. Thus EPA must evaluate State

audit laws in light of these Federal requirements.

Federal law also authorizes citizens to petition the agency to review or withdraw

State programs on the grounds that States lack the enforcement authority necessary

to carry out Federal programs. Recently, citizen groups in the States of Idaho,

Michigan, Texas, Colorado, and Ohio have filed these types of petitions. EPA and

its regional offices are working with the States and these citizen groups to resolve

the agency’s legal concerns with particular provisions of State audit laws. EPA has

also established a task force of senior representatives from EPA headquarters and

regional offices and the DOJ to ensure national consistency in EPA’s response to

these matters. So far, EPA has worked cooperatively with several States, including

Utah, New Jersey, and Texas to make sure that their audit laws do not present an

obstacle to program approval.

EPA’s Self-Disclosure Policy—Encouraging Audits Without Secrecy and Blanket Immunities

Although EPA has clearly and consistently opposed State audit privilege and

broad immunity laws, the agency wants to encourage companies to self-monitor,

self-disclose, and correct violations. Therefore, in 1995, EPA issued its own Incentives for Self-Policing: Discovery, Disclosure, and Correction and Prevention of Violations (60 Federal Register 66706). This policy was a result of an intensive, 18

month public process designed to find the best way to encourage companies to police

themselves while preserving fair and effective enforcement and the public’s rightto-know. The policy reflects thorough review and thoughtful suggestions from DOJ,

State attorneys general and local prosecutors, State environmental agencies, the

regulated community, and public interest organizations.

The policy encourages companies to police themselves by eliminating punitive,

gravity-based penalties for violations that are discovered through an environmental

audit. EPA will also not recommend criminal prosecution for those companies that

disclose violations discovered through an audit, so long as the violations do not suggest high-level corporate involvement or a prevalent management practice to conceal

or condone violations. The policy carefully balances these incentives with conditions

and exceptions to protect public health and the environment and the community’s

right to know. In addition to prompt disclosure and correction, the policy requires

that companies prevent recurrence of the violation and remedy any environmental

damage. Repeat violations or those that present an imminent or substantial threat

to public health or the environment or result in serious harm are excluded from the

policy. As a condition of penalty mitigation, EPA may require that a description of

a company’s due diligence efforts be made publicly available.

Many companies have begun to avail themselves of the benefits provided by EPA’s

policy. Thus far, more than 120 companies have disclosed and corrected violations

at more than 400 facilities under the policy. EPA has settled matters with nearly

half of these companies, waiving penalties in most cases. In addition, several States,

including Florida, California, and Pennsylvania, have fashioned State audit policies

patterned on EPA’s policy, thus reducing confusion in the regulated community in

those States about the effect of voluntary audits.

Concerns With Federal Overfiling

There has been some concern expressed by some States that EPA is preparing to

‘‘overfile’’ against companies in States that have objectionable audit laws. Federal

overfiling is the initiation of a Federal enforcement action, either administrative or

civil, following a State enforcement action. Federal overfiling is in addition to, not

in replacement of, a State enforcement action for the same violation at the same

facility. Let me be clear that EPA has not and will not arbitrarily target companies

in States with audit privilege and immunity laws. However, EPA will continue to

exercise its normal Federal oversight responsibility and retain the right to bring

independent enforcement actions in specific circumstances against regulated entities

that violate environmental requirements in States where the agency believes that

the State has failed to take timely and appropriate enforcement action.

Rather than overfile, the agency prefers to work with the States to determine who

should take the necessary enforcement action. In the rare instance that the agency

does overfile in a State, it does so to protect the public health or the environment

or to maintain a level economic playing field for the regulated community within

and among the States, and we make sure to provide a State notice prior to filing

our own enforcement action.

Statistics show that overfiling is in fact a rare event. As reported by a state-bystate survey conducted by ECOS, the agency overfiled on about 30 cases or 0.3 percent of all Federal enforcement action during fiscal years 1992 through 1994. During
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fiscal years 1994 and 1995, the agency overfiled on a total of 18 cases or about 0.1

percent of State enforcement cases. From October 1995 through September 1996,

there was a total of four overfiling cases. It is important to note that none of these

cases were filed as a result of the impact of State audit laws on the adequacy of

the particular State enforcement actions.

EPA’s National Response to the Inspector General Report in Pennsylvania

Enforcement accountability involves not only retaining the legal authority and capacity to take enforcement action but also having the commitment to take enforcement action when appropriate. I was therefore very concerned by the findings of a

report issued by EPA’s Inspector General (IG) in February 1997. At the request of

EPA’s Region III office, the IG reviewed the Pennsylvania Department of Environmental Protection’s (PDEP) program under the Clean Air Act (CAA). The region

called for the audit, because it was concerned that the State was not reporting significant violators to the region, despite ongoing discussions between the region and

the State. This was not only hampering the region’s oversight responsibility, but

was also a violation of the terms of EPA’s CAA grant to the State. Therefore, the

purpose of the audit was to get an independent determination from the IG about

whether the PDEP was in fact identifying significant violators of the CAA in accordance with Federal policy, and reporting these violators to EPA. The report found,

among other things, that the PDEP had failed to report significant violators to EPA

or take appropriate enforcement action in every case to bring violating facilities into

compliance.

In response to this report, Region III is assessing the current compliance data of

the unreported significant violators identified by the IG and working closely with

Pennsylvania to initiate appropriate enforcement responses as necessary. The Region is also conducting a multimedia evaluation of the State’s environmental enforcement program and is posing the matters raised in the IG report as threshold

issues that must be addressed before PPA discussions can proceed. In addition, I

asked my staff to perform an initial review of our data bases to determine if the

problems in Pennsylvania regarding the reporting of significant violators exist elsewhere. This initial screening strongly suggested the potential for problems in other

States.

Therefore, the Regions and, independently, the IG are working to determine the

level of reporting and enforcement activity in other States under the CAA as well

as other programs. The review will explore the full range of potential verification

approaches, including oversight inspections, State file/data audits, statistical sampling of the regulated community, and concentrated multi-statute reviews of State

environmental compliance and enforcement programs. Each region has also contacted their respective States to discuss the problem revealed by the IG report and

will work closely with them to ensure that the problem is not widespread.

I want to emphasize that EPA’s review will be thorough and fair; we are not

jumping to any conclusions in our review process. Where our review shows that

States are meeting their obligations, we will let them know. Where we believe that

problems exist, we will work with those States to identify the reasons and correct

them. Timely and accurate information reporting by the States is critical for EPA

and State enforcement and cooperation. The agency depends substantially on information from the States to maintain our data bases, take independent enforcement

action as necessary, and develop national enforcement policies and strategies. In return, EPA provides technical and legal support to States in their enforcement actions and often takes joint enforcement actions with States for large, complex, and

multi-state cases.

V. CONCLUSION

Since joining EPA, I have emphasized that we will not run an ‘‘either/or’’ enforcement program. Only a combination of approaches involving tough enforcement actions to ensure compliance, and innovative programs to promote compliance, will be

effective to protect public health and the environment. Therefore, we will continue

to build upon our balanced enforcement and compliance assurance program adhering to the principle that strong enforcement is the central and indispensable element of our efforts to ensure and promote compliance.

We will take this same approach in our relationship with our State partners and

continue to work with them and others to find new ways to promote compliance and

innovation, improve coordination, and lower costs. But, at the same time, we will

work to ensure that States are maintaining and utilizing rigorous, effective enforcement programs.

Thank you again for the opportunity to testify before your committee. I would be

happy to answer any questions you may have.
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PREPARED STATEMENT OF NIKKI L. TINSLEY, ACTING INSPECTOR GENERAL,

ENVIRONMENTAL PROTECTION AGENCY

Good morning, Mr. Chairman and members of the committee. I am pleased to

have the opportunity to discuss recent audits conducted by the Office of Inspector

General dealing with issues related to environmental enforcement activities.

Our work has shown that EPA is pursuing an enforcement program through compliance assistance to the regulated community, backed up by the more traditional

enforcement mechanisms including administrative, civil and criminal remedies. EPA

is working in partnership with State and sometimes local agencies to achieve environmental goals. This morning I would like to discuss three aspects of a partnership

that are essential if it is to work well and achieve its objectives: (1) mutually agreed

upon enforcement approaches; (2) clear agreement on each partner’s responsibilities;

and (3) complete and accurate reporting of enforcement data. I will discuss these

three areas in light of audits we have recently conducted in the Air and Hazardous

Waste Programs.

Enforcement Approaches

Compliance assistance is a key component of an effective enforcement and compliance assurance program. Compliance assistance includes outreach, response to requests for assistance and on-site assistance. By providing clear and consistent descriptions of regulatory requirements, compliance assistance helps the regulated

community understand its obligations. For instance, Texas and Louisiana held

workshops and distributed brochures that described which air emissions rules applied to dry cleaning businesses. Compliance assistance can also help regulated industries find cost-effective ways to comply through the use of pollution prevention

and other innovative technologies. When voluntary compliance is not achieved, EPA

and the States have the authority to use more traditional enforcement actions to

encourage compliance.

One generally agreed upon enforcement concept is that of escalating enforcement

actions for repeat violations. For instance, a violator may initially be required to

comply with an administrative order or be assessed a relatively small monetary penalty. If these actions do not bring about compliance, the enforcement actions may

be escalated to civil or criminal judicial actions and progressively higher monetary

penalties. We found numerous instances where this progressive enforcement approach was not employed. For example, in California, a glass manufacturing company paid a penalty of $1,000 for emitting excessive particulate matter from its furnace. This company was cited 18 times for the same violation within a 2-year period, and each time the penalty was $1,000. During this time, the company also received nine notices of violation for failure to report its excess emissions, and was

fined an average of $645 for each violation. The fact that the company remained

out of compliance for 2 years indicates the enforcement actions (which were not progressively more stringent) were unsuccessful in bringing the company quickly into

compliance.

Another enforcement concept is that penalties should be large enough to negate

any economic benefits of noncompliance. For the most part, EPA regions included

an economic benefit component in their penalty assessments, but the States we reviewed generally did not. For example, five of the nine hazardous waste cases we

reviewed in Louisiana should have included in the penalty calculations the economic

benefits received by the firms for noncompliance, but none were collected. In one

case the calculated economic benefit was $45,000. When economic benefits are not

consistently calculated and collected, complying industries are treated unfairly due

to the lack of a ‘‘level playing field,’’ and varied levels of environmental protection

could put public health and the environment at varying levels of risk.

A third enforcement concept is that compliance with rules and regulations should

be enforced consistently across the country, including the assessment of penalties.

Our audits, however, found a great variance when we compared EPA and State penalties, and when we compared penalties between States. In both the Air and Hazardous Waste Programs we found that penalties assessed by States were much less

than those assessed by EPA. For example, we reviewed 54 randomly selected local

air enforcement cases in California and found, with the exception of a $1 million

penalty, the average assessed penalty was about $1,000. By contrast the penalties

assessed by EPA averaged $31,000. Penalties assessed against hazardous waste violators in a sample of 13 States varied from an average of about $7,000 in Maryland

to almost $60,000 in Texas.

These inconsistencies were caused partly by such factors as limited resources, including a lack of administrative or legal support. Another reason for varying enforcement actions is because Federal, State, and local agencies have preferences for
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different enforcement approaches. Representatives of State and local agencies we

interviewed were concerned that larger penalties would result in negative impacts

on their economies, such as the possibility of industry relocations.

Partnership Responsibilities

In order for a partnership between EPA and a State enforcement agency to work,

there must be common agreement about the activities each will perform. However,

Office of Inspector General audits showed that EPA and the States frequently did

not come to agreement on program requirements, and commitments made were not

fulfilled. To illustrate the problems that can occur in this area, I would like to refer

to an audit we did of EPA and the Pennsylvania Air Enforcement program. EPA

expected the State of Pennsylvania to report all significant violators so that EPA

could carry out its oversight role and take necessary enforcement actions. In comparison to EPA, the State placed less emphasis on reporting violators. While Pennsylvania performed 2,000 inspections at major facilities in fiscal year 1995, it only

reported six significant violators to EPA. We reviewed 270 of the inspections and

identified 64 additional facilities that should have been reported. Pennsylvania did

not believe these violators warranted being reported, and this allowed the State to

work with violators to achieve compliance without EPA involvement. Unfortunately

it took Pennsylvania a long time to resolve some of these violations—sometimes

years—during which time facilities were emitting excessive pollution into the atmosphere in violation of their permits. Because EPA was unaware of these violations,

it was unable to exercise appropriate oversight. This example shows the importance

of EPA and the States having a meeting of the minds on expectations.

This is especially critical in our view because EPA is now awarding new Performance Partnership Grants in lieu of the old categorical grants. These grants necessitate a new cooperative relationship where EPA and States share the same environmental and program goals. No partnership can be successful without such sharing.

Collecting and Reporting Enforcement Data

Accurate and complete data on environmental enforcement is vital to provide a

baseline so that we as a Nation can judge the extent that industry complies with

environmental laws, and to provide the information that States and EPA need to

target areas for increased enforcement. We found major omissions and inaccuracies

in enforcement data systems of both the Air and Hazardous Waste Programs. In the

Air Program, enforcement actions were often underreported and inaccurately characterized. In the San Francisco area, for instance, half of the notices of violation

were not entered into the data system; while in Texas and Louisiana not all enforcement cases were reported, and almost half of those that were reported were not

properly identified as significant violators.

By way of contrast, a data information system must guard against requiring unnecessary reporting. In the Hazardous Waste Program, we found that EPA’s instructions and forms were long and complex, using a programming language that was

difficult to learn and use. As a result many users of the system had problems obtaining usable data and used their own versions instead. EPA is now working with

its State partners through the Waste Information Needs initiative to reduce reporting requirements for States and industry, while ensuring accurate data is available

for tracking national results in areas such as waste minimization.

Conclusion

I have discussed three elements we believe are necessary for effective partnerships between EPA and the States.

• First, partners must agree upon an overall enforcement approach. That approach should include assisting the regulated community to comply with environmental laws and regulations; and must include consistent employment of fines and

penalties when voluntary compliance cannot be achieved.

• Second, all partners must have a clear understanding and acceptance of their

responsibilities. This requires a meeting of the minds on what the partners are

going to be held accountable for, agreement on measures of success, and good faith

efforts to achieve environmental goals.

• Third, data collection and systems must be improved to provide complete, accurate and timely data on enforcement activities. However, systems should not burden

the regulated community with unnecessary reporting requirements.

This concludes my prepared remarks. I will be happy to answer questions.
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PREPARED STATEMENT OF MARK COLEMAN, EXECUTIVE DIRECTOR, OKLAHOMA

DEPARTMENT OF ENVIRONMENTAL QUALITY

My name is Mark Coleman. I am the Executive Director of the Oklahoma Department of Environmental Quality and the Chairman of the Compliance Committee of

the Environmental Council of the States. The Environmental Council of the States

(ECOS) is the national, non-partisan, non-profit association of State and territorial

environmental commissioners. I appreciate this opportunity to testify before you

today regarding the enforcement relationship between the States and the Environmental Protection Agency (EPA).

In keeping with congressional intent, the vast majority of environmental enforcement in America is done by State government. State governments bring 9 out of 10

of the nation’s enforcement actions each year. States have been delegated the Federal programs, involving tens of thousands of permits, and have direct and continuous interface with both the regulated community and public. EPA has a clear role

to assure that we do our jobs.

I am pleased to report that although there are many factors that place strain on

the existing enforcement relationship, the States and EPA are still committed to

strengthening this partnership. One of the most recent endeavors to improve this

bond was the formation of the State/EPA Enforcement Forum, which held its first

meeting May 23, about 2 weeks ago. All ten EPA regional administrators, a State

representative from each region, and primary EPA enforcement personnel will be

working to resolve enforcement issues that compromise the current State/EPA enforcement relationship.

The State/EPA relationship regarding enforcement has been in development for

over two decades. After extensive negotiations, that relationship was institutionalized in 1986 in the Policy Framework for State/EPA Enforcement Agreements. That

document, as amended, remains the foundation for current State/EPA roles in enforcement matters.

The Policy Framework provides a blueprint where States assume primary day-today enforcement responsibility. The document was intended to ensure that clear

oversight criteria were set, procedures for advance consultations and notification established, and there was adequate State reporting to ensure effective oversight.

EPA has largely delegated responsibility for national programs to the States, including the primary role in enforcement. There is general consensus on the basic

allocation of enforcement responsibilities. However, when EPA brings a direct enforcement action in a State, there is often concern that the principle setting forth

the primary role of the State has been violated. The Policy Framework, and subsequent addendum (the latest being 1993), lists four types of cases when EPA may

consider taking direct enforcement action as follows:

1. State or local agency request EPA action

2. State or local enforcement response is not timely and appropriate

3. National precedents (legal or program)

4. Violation of EPA order or consent decree

To complement the four situations when EPA may consider enforcement action,

there are procedures and protocol that have been set up to assist matters. The Policy Framework states, ‘‘A policy of ‘no surprises’ must be the centerpiece of any effort to ensure the productive use of limited Federal and State resources and an effective partnership in achieving compliance.’’ It is clear that the Policy Framework

mandates that if EPA is to initiate enforcement in a State, certain protocols must

be met to promote the spirit of cooperation, trust, and stability in the working relationship between States and EPA.

This last issue is perhaps the starting point at which the relationship breaks

down. It is my belief that if EPA does not first give the States an opportunity to

act in enforcement matters, and if they follow a loose standard when applying the

four above mentioned criteria, the already fragile relationship will continue to weaken.

The States believe that enforcement is a tool, not a goal. Compliance itself is a

goal, but is not our main goal. Our main goal is, and should be, reaching the environmental quality goals that Congress and our legislatures have set. No amount of

enforcement and compliance activity measures will tell us anything about whether

we have met, or will meet, that goal.

Let me give an analogy. If I were to tell you that the number of detentions and

expulsions in our nation’s high schools had doubled last year, would you then conclude that our nations students were better educated than before? No State would

deny that enforcement is an important and necessary tool. But I can also make the

case that such an increase in enforcement actions would mean a terrible breakdown

in communications between government and the regulated communities had oc-
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curred. Such a breakdown would mean little chance of improvements in environmental quality.

It is not only the occurrence of EPA enforcement action in States that creates friction but also how EPA chooses to involve the States once action is planned in a particular State. Since States have primary responsibility for enforcement in most EPA

programs the national enforcement strategy cannot be implemented without active

State participation. If EPA begins to aggressively pursue national or Regional initiatives without adequately involving the States, there is serious potential for damaging the EPA/State relationship.

Whether EPA consistently follows or even remembers these criteria when deciding

the types of cases it will pursue and the mechanisms of involving States once it has

begun are additional opportunities for instances of friction, each of which are very

significant to State programs. There is also the issue of delegation of programs and

direct accountability. The first, program delegation, in theory is not an issue. It is

clear that EPA has delegated programs to States. In delegating this responsibility

they have also delegated the primary enforcement responsibility. If EPA strays from

this practice, then possibly true delegation has not yet occurred. State officials feel

that once a program is delegated, EPA should be most concerned with overall program effectiveness and not about the details of how a State handled each individual

enforcement matter.

This is not to say that EPA does not have a strong oversight role. These oversight

practices should be there to assure that States have effective compliance and enforcement programs. In 1983, a special State-Federal Roles Task Force defined the

roles and responsibilities of EPA and the States for environmental protection in

light of increasing delegations of authority to the States as follows:

Role Function

STATE LEAD, EPA supporting ................................................... Direct program administration

Enforcement

EPA LEAD, State supporting .................................................... Research

Standard setting

Oversight

Technical support

National information collection

This brings us to the second part of the equation, accountability. Although EPA

has delegated responsibility for administering national environmental programs to

the States in keeping with Federal law, EPA has the view that Congress expects

an ever-increasing number of direct Federal enforcement actions and assessment of

Federal mandates. These direct enforcement actions are reportedly viewed, by Congress and the public, as the success measuring stick of how well EPA is performing.

EPA may be receiving conflicting messages of the roles and duties they are to perform to help the States succeed in program management. On one hand, the message

is to give the States the first opportunity to act, but on the other hand, the message

is to keep Enforcement numbers up. This perceived pressure for direct EPA enforcement may be the source of much of the conflict with the statutory principle of deferring to the States.

Overfiling, the term used to describe when EPA pursues lead enforcement action

in a State, is also an important piece of the enforcement relationship. Although the

instances of EPA overfiling are relatively few, the possibility of overfiling and the

use of overfiling comes at a great cost. The potential for overfiling leads to mutual

wariness and if not done with extreme care it can rapidly damage the enforcement

relationship. EPA overfiling sometimes means that communications between EPA

and the States have failed. If EPA has clear communication of what is expected, including notice of EPA’s expectations and the intent of overfiling if these expectations

are not met, then EPA overfiling should rarely occur. The success of EPA is not

measured by the number of enforcement actions it takes, but the effectiveness of

its oversight role.

The basic problem between the States and EPA as it relates to enforcement, is

that in recent times role assignments have become less clear. Changes in administration at both State and Federal levels, expectations from outside focus, and the

natural maturation of programs has resulted in uncertainty (thus inconsistent action) or lack of awareness of the established basic principals. If all the involved parties do not realize and support the roles each has in enforcement, regional offices
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and States are left in the position of determining for themselves the nature and extent of their relationship, this is done with little success.

In my view the solution to these conflicts is to reaffirm the established roles. In

doing so we can focus limited resources towards these roles and accomplish the goal

we all share in protecting the environment. Federal enforcement personnel should

be leading the drive in research, standard setting, oversight, technical support and

national information collection. The States should perform their lead duties in direct

program administration and enforcement. Neither party should seek to pick off

choice plums from the other’s role. When these roles are used in guiding the State/

EPA relationship in enforcement, it can be expected that the presence of existing

tension and frustration will decrease and future conflicts can be avoided.

We are not so far from the goal of both levels of government effectively working

together. States already do take well over 90 percent of enforcement action within

the country. Perhaps with your help the efforts to reduce frustration and unnecessary loss of resources and credibility due to public disagreements can be significantly reduced. Thank you for your efforts in this regard and for inviting me to represent the views of the States.

PREPARED STATEMENT OF BECKY NORTON DUNLOP, SECRETARY OF NATURAL

RESOURCES, COMMONWEALTH OF VIRGINIA

INTRODUCTION

I appreciate the opportunity to present Virginia’s views on State-Federal relations

in the context of environmental enforcement. There is more to policy than enforcement, however, and I caution that enforcement is only one tool in the kit bag of environmental policy. The truth is that enforcement action means ‘‘failure’’ not success. It is certainly not the best tool to improve the quality and condition of the resources which make up our environment. In fact, it is the tool of last resort.

Virginia’s legislature and Virginia’s Governor have, in many important ways, established that policies which focus on compliance with environmental laws are better for the natural resources than policies which focus on enforcement. Virginia has

demonstrated leadership in putting the proper emphasis on the purpose, goals and

objectives of environmental policy, which, of course, is to improve the quality and

condition of the air, water, soil, flora and fauna resources which make up the environment.

Having said that, it is important for the committee to have an understanding of

the entire issue of enforcement, and not simply a current ‘‘cross section’’ of what is

happening. Allow me to provide a brief historical background of where the environmental compliance and enforcement debate has been, and where it is going, in addition to articulating Virginia’s pro-active views on getting results.

HISTORY OF ENFORCEMENT AND VIRGINIA/STATES ACTION IN THE 1990’s

• The 1970’s saw the first, serious enactment of comprehensive, media-specific environmental laws, whose basis was a facility-based permit system.

• The inception of environmental enforcement took place in the mid–1970’s,

when then-EPA Administrator William D. Ruckelshaus took the first enforcement steps in dealing with the permitting issues under the then newly-enacted Clean Water Act. Historical records show that EPA’s first enforcement

steps were difficult to engage, because the Federal Government had never before taken Federal action to meet discharge and emission limits.

• The 1970’s were punctuated with the passage of other permit-driven statutes,

such as the Clean Air Act (in 1970 and amended in 1977) and the 1976 Resource Conservation and Recovery Act and the 1972 Clean Water Act.

• Because of this company-by-company permit system, enforcement by the EPA

was also company-by-company, and in the many cases where government entities were the polluters, on a government jurisdiction by government jurisdiction, basis.

• The 1980–1990 decade witnessed enactment and implementation of far more

punitive measures, in response to serious pollution incidents.

• In 1980, Congress passed the Federal Superfund statute (Comprehensive Environmental Response, Compensation and Liability Act), which provides for

strict, joint and several, and retroactive liability. This turned much of the environmental profession into a lawyers’ business instead of an environmental

science and resource management business.
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• In 1990, Congress passed the Oil Pollution Act, which also provides strong

regulation in the oil and gas sector.

• Once it was understood that these punitive enforcement measures were not particularly effective, environmental policymakers turned up the heat.

• In 1986, EPA issued its first environmental audit policy, which sought to encourage companies to perform environmental audits, but which left the companies at significant enforcement jeopardy. In 1991, the Justice Department’s

Environment Division issued its Audit Policy. These strict enforcement-driven

rules continue to exist today, even as amended by EPA.

• In 1991, EPA issued its first policy on ‘‘Supplemental Environmental Projects’’

by which violators could mitigate part of the civil penalties levied on violations in exchange for a same or greater investment in environmental improvements at or near the same facility. Again, the regulated community has been

left at significant enforcement jeopardy.

• In 1990, Congress passed the Pollution Prevention Act, by which it directed

EPA to begin establishing measures to prevent pollution, in addition to focusing on ‘‘end of pipe’’ permits and enforcement actions.

• In the 1986 Superfund Reauthorization (the Superfund Amendments and Reauthorization Act, ‘‘SARA’’ of 1986), Title III was added (known as the Emergency Planning and Community Right-to-Know Act (EPCRA), which instituted the annual Toxics Release Inventory (TRI) publication. The publication

and dissemination of the annual TRI, published since 1987, has brought the

‘‘sunshine’’ of public disclosure of emissions, and has resulted in considerable

reduction in emissions. This is quite a success story for voluntary compliance

strategies, and has happened in spite of EPA’s preference for non-voluntary

enforcement-litigation strategies.

• In the 1990’s, Virginia and other States took a more comprehensive, pro-active

role in obtaining environmental solutions.

• Virginia and other States ‘‘staffed up’’ with their own environmental expertise,

and subsequently took their own actions to pro-actively lead the environmental results agenda:

—recognizing the inherent deficiencies in the cumbersome, permit-by-permit

and litigation approach to regulatory enforcement, Virginia and other States

formulated their own, outcome-driven compliance measures to improve the

quality and condition of the environment, including:

• implementation of a ‘‘Compliance First, Enforcement Second’’ approach to

expeditiously gain compliance and avoid the hemorrhage of non-compliance while conducting cumbersome litigation;

• as done in Florida by Carol Browner and other States, Virginia ‘‘regionalized’’ its compliance and enforcement system, by which it created a broader, more comprehensive team (permitting, technical, and compliance/enforcement staff) to respond to environmental complaints faster;

• Virginia was the first State to institute a new paradigm for implementation of environmental policy. Previously in Virginia, and in almost all

other States, environmental protection and natural resource agencies had

been organized on what is called a ‘‘media-specific’’ basis. That is, each

environmental department had an Air Division, a Water Division, and a

Waste Division, etc. Each of these divisions employed all the tools of permitting, compliance, and enforcement. The Virginia paradigm has reorganized and streamlined environmental policy management by substituting

the previous media-based divisions for Divisions of Permitting, Compliance, and Enforcement, each with the capability to deal with the media

of air, water, and waste. This new paradigm has empowered regional and

local DEQ officials to expedite improvements in environmental quality.

• Virginia took a new, varied approach, not relying simply on the slow,

often litigious permit-by-permit and administrative enforcement penalty

system:

• instead, we focused on environmental remedies and behavior modification to gain expeditious compliance;

• developed a bifurcated approach:

—cooperatively working with entities who want to get into compliance;

—take formal, punitive action against recalcitrant actors. (E.g., the

U.S. Government/Avtex, the U.S. Army (Vint Hill Farms,

Warrenton Army Training Center), U.S. Navy/Little Creek,

NASA/Wallops Island, Rhinehart/tire pile, multiple private sector
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landfill operators, Smithfield Foods, State government (VDOT,

Dept. of Mental Health, Dept. of Corrections, State universities—

UVa, Va. Tech, James Madison U.)

—work with Commonwealth’s Attorneys and the U.S. Attorneys to

bring the full force of law against criminal polluters.

• targeted ‘‘worst polluters’’ and long-overlooked government facilities,

which are the most egregious and persistent polluters in Virginia. • used compliance incentives by which to encourage, and not discourage, broad groups of entities to pro-actively ‘‘think ahead’’ about their

environmental responsibilities. Among these are:

—development of specific plans of work with specific timelines to

improve emissions performance rather than imposing fines on

cash-strapped municipalities—i.e., non-profit, taxpayer-funded

entities, to take that necessary action to retrofit their municipal

water/wastewater treatment and waste systems (since 1994, Va.

has issued orders to over 110 municipalities, by which they will

fix their water systems, at a cost to them of approx. $1–2 billion);

—encourage environmental audits by which companies and municipalities take the initiative to pro-actively deal with their environmental problems and avoid being the subject of expensive governmental enforcement action, fines and litigation;

—work with and encourage—i.e., not discourage—environmental

entrepreneurs, who wish to run a business for profit while simultaneously and expeditiously repairing an environmental malady

(e.g., Virginia’s Voluntary Remediation Program, by which some

40 companies are voluntarily moving to cleanup contaminated

properties; also quickly encouraging Va. Power to join the Army

Corps of Engineers to clean up the Tidewater Community College site, thus avoiding the legal nightmare of EPA naming the

College as a NPL Superfund site, thus forcing gargantuan cleanup costs on the State government)

—use of specialized grant and tax funds as economic incentives for

unique environmental problems—e.g., the Virginia Waste Tire

Fund and reimbursement allocation for tire pile cleanups, which

has prevented a major environmental crisis for Virginia. Virginia’s Revolving Loan fund to help small communities deal with

long-standing air, water, and waste problems (e.g., the 1996 Tangier Island settlement, ending a 10-year nightmare of environmental litigation and delay in cleanup)

• We are now involved with the States in EPA Region III and ECOS to develop and refine new measures of compliance and enforcement success,

rather than simply relying on numerical action outputs, originated in the

1970’s, that do not measure real environmental results. Frankly, it is an

absurdity and demonstrated failure to measure improvements in environmental quality by the number and amount of fines imposed or litigations

entered into. We believe that a true environmental compliance and enforcement system will:

• measure concrete, physical, and measurable improvements in the

quality of the resources themselves.

• utilize the comprehensive range of environmental tools, from Small

Business Assistance, Compliance Assistance and use of specialized

funds, in preference to punitive litigation;

• by these measures, Virginia has done quite well, including but certainly not limited to:

—real, measurable improvements in Virginia’s air, water and land

(EPA announced this year (including Thursday, June 5) that two

of the 3 Clean Air Act Non-Attainment Areas (Hampton Roads,

Richmond area) will be removed from their non-attainment status, due the technical results from many measures that have

been taken.

—By taking this approach, Virginia has moved to resolve its most serious,

known environmental problems, and, in so doing, has resolved a list of longstanding environmental violations that date to the mid–1980’s.

These are environmental results that count, consistent with the Federal Government Performance and Results Act—not simply the typical ‘‘bean counting’’ exercises (how much in fines, number of lawsuits or orders issued) that continue to char-
193

acterize traditional enforcement. We believe the compliance-first approach is one

that focuses on real solutions, not simply, rhetorical assertions about complex, technical problems.

Virginia’s leadership in streamlining permitting, appropriate use of consent orders, and our compliance assistance initiatives have encouraged new investment in

Virginia that has created the wealth and technological innovations for a continuing

and ever-increasing improvement in environmental quality for the people of the

Commonwealth.

In light of this history, what is an objective view of EPA and how does it work

with States like Virginia?

• A range of disinterested but knowledgeable parties, ranging from former EPA

Administrator Bill Ruckelshaus to EPA’s current Inspector General and Congress’

General Accounting Office are making the same statement that many States are

making: EPA has some serious problems that need to be fixed. To quote from GAO’s

June, 1996 report on the Government Performance and Results Act:

• The Environmental Protection Agency (EPA) was established in 1970 under a

Presidential reorganization plan in response to public concerns over unhealthy

air, polluted rivers, unsafe drinking water, and haphazard waste disposal. Congress gave EPA responsibility for implementing Federal environmental laws.

From the start, however, EPA lacked an overarching legislative mission, and its

environmental responsibilities have yet to be integrated with one another. As

a result, EPA could not ensure that it was directing its efforts toward the environmental problems that were of greatest concern to citizens or posed the greatest risk to the health of the population or the environment itself.

• It was with almost universal approval that Carol Browner testified before this

committee in March, 1993, on her objectives, including her affinity for State environmental programs and providing flexibility to such States and their programs. I agree

with the following insightful remarks she made then, because they were based on

her experience in both Florida as well as in Washington:

This [EPA’s relationship with State, tribal and local governments] is an issue

of particular interest to me, obviously, because of my past experience in a State

environmental agency. I have a real affinity for State environmental agencies

and what they bring to the table. In Florida, we launched a fairly intensive program to delegate a number of our powers to regional, county and city organizations because we felt they brought to the table a real understanding of the issues at hand and a set of resources to do the job that the public demanded.

I think that one of the most important pieces of this Administration will be

to forge stronger relationships with State and local government and to build on

what has already been done. I feel very strongly that we cannot reach environmental objectives until we acknowledge the value of and support of the building

of strong State and local capacity to manage environmental programs.

In response to Senator Baucus’ question regarding EPA allowing States to manage environmental programs, Ms. Browner stated:

Well, it’s a change in how we think about our relationship with the State

agencies. We at EPA are going to have to think a little bit differently about the

State agencies. We’re going to have to recognize the strengths that they bring

to the table, and we’re going to have to allow them to do the job the way they

see fit.

I would just say that the other piece of this is that there are places where—

and we look forward to working with this committee during reauthorization—

where we would like to see greater flexibility in some of the statutes under

which we delegate, to make sure we’re not put in an awkward position of always being responsible for making sure on a permit-by-permit basis that in fact

what Congress intended is being done.

Again in response to Senator Baucus’ question, ‘‘But where can EPA be more

flexible?’’, Ms. Browner stated:

I do think that we can also change how we relate to the States. It’s not all

going to take statutory changes. Part of it is just recognizing within EPA that

we need to behave in a different way.

Again in response to Senator Baucus, Ms. Browner stated:

Well, we have several processes going on right now in terms of dialogs taking

place between EPA and local governments, between State and tribal governments. We need to increase these dialogs. And, quite frankly, we probably need

to swallow hard. I know when I looked at delegating my powers in Florida to

regional governments, it was just a question of sort of saying, ‘‘OK, we’re going
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to do it, and we’re going to trust them.’’ That’s a hard thing. It’s not within our

nature, but we have to do it.

I think there is a growing recognition within the agency at all levels that if

we are going to accomplish our mission, it will only be through the cooperation

of State, tribal and local governments, that they bring such a large number of

resources to the table to help us do our job, and that we have to maximize the

use of those resources so that we can be moving on to the next challenge. . . .

[I] recognize that we at EPA have a tremendous responsibility to improve

that relationship and that we have to reach out to the States in a way that we

never have before.

With Ms. Browner’s mission statement for EPA as context, we ask anew: What is

the relationship between EPA and Virginia?

Answer: Though much of the staff-level relationship is good, however, a number

of unilateral, surprise EPA actions leave Virginia perplexed:

Which EPA are we supposed to deal with? Is it Ms. Browner’s cooperative, collegial approach, or is it that approach punctuated by repeated, rhetoric-laden

surprises by which Virginia has been treated? Examples:

Example: EPA’s Belief in Civil Penalties as a Measure of Enforcement Success.

EPA maintains a steadfast belief, by and through their annual enforcement

accomplishments, that one of the key barometers to the success of environmental enforcement is civil penalties extracted from violators. If this is so, consider the following:

Blue Plains. The District of Columbia’s Blue Plains wastewater treatment

plant is one of the largest plants on the Potomac River, and has had a longstanding, chronic compliance problem which has polluted Virginia waters. So

when the Attorney General of Virginia sought to join in a Federal lawsuit over

the plant, the United States Department of Justice and EPA successfully kept

the Commonwealth out of the suit. Then, when the U.S. got a consent decree

requiring—yet again—that Blue Plains get into compliance (a judgment that it

had received in previous litigation), the U.S. sought and received no civil penalties for the dramatic Clean Water Act violations that had impacted the Potomac River and Virginia Waters.

Lorton. On the heels of this, Virginia sued the U.S. and the District of Columbia for the chronic compliance problems at the Lorton, Virginia wastewater

treatment plant that was polluting Virginia waters. When the Commonwealth

obtained a consent decree calling for $175,000 in civil penalties (some of which

would be waived pending significant environmental plant construction), EPA

Region III wrote to Virginia stating that Virginia’s civil penalty was not high

enough.

Virginia is perplexed: Which EPA are we supposed to deal with? The one that

claims collegiality and joint efforts, or the one that cuts Virginia out of litigation,

seeks no civil penalties for repeated violations, and then separately criticizes Virginia for its civil penalties being too small.

Example: EPA’s Posture on Government Facility Pollution and Responsibility.

Virginia enforcement against government facilities. Virginia has taken the

lead to enforce environmental laws among its own State government, as well

as local and Federal Government. It has enforced against entities varying from

the Virginia Dept. of Transportation to the University of Virginia, as well as

the municipalities mentioned before, at extraordinary cost for environmental

retrofitting and construction. It also must enforce against the largest polluter

in the Commonwealth, the Federal Government, and has done so against Army,

Navy, and NASA facilities, in order to require them to do the same thing as

private entities.

EPA Non-Enforcement at Avtex Fibers. EPA claims to take this same posture,

but there is a serious question about this. Why is it that the Commonwealth

has to sue the Department of Defense, Air Force and NASA to recover Virginia’s

cleanup costs at a toxic waste disaster that they knowingly bailed out and exacerbated, while EPA refuses to enforce against them? In November, 1988, the

U.S., by and through the National Security Council, bailed out Avtex Fibers—

then recognized as the largest polluter in the State—with $43 million, in order

to continue providing specialized rayon for Air Force missiles and the NASA

space shuttle. The NSC meeting included an EPA warning that the plant had

major environmental problems, and that taking such bailout action would bring

on Superfund liability. Notwithstanding this warning, the U.S. bailed the company out and—according to Air Force memos—pushed production ‘‘all the while

knowing an environmental disaster was brewing’’. When Avtex closed and aban-
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doned the facility 1 year later, the U.S. abandoned the facility as well. Since

then, EPA has not taken any enforcement action against the Federal Government, and has been slowly cleaning it up using money from the Commonwealth,

the Superfund, and one private responsible party. The environmental property

damage to this 440 acre site is gargantuan, including a 65-mile health advisory

warning people not to fish in that part of the Shenandoah River. Though Virginia was not responsible for this toxic waste disaster, it is having to pay 10

percent of all of EPA’s cleanup costs and 100 percent of EPA’s future operation

and maintenance costs, at an expected exponential figure. EPA’s posture? They

won’t enforce against a sister agency, due to the Federal Government’s ‘‘Unitary

Executive Theory’’, thus leaving the Commonwealth of Virginia having to pay

for the Federal Government’s knowing environmental damage.

Virginia is perplexed: Which EPA is it supposed to believe? The one who

claims enforcement against the worst polluters is a priority, or the one that sits

idly by as the Commonwealth has to sue the Federal Government to make it pay

back Virginia for the environmental catastrophe it created?

Example: EPA Violation of EPA-Virginia Enforcement Agreement, and Inflammatory EPA Rhetoric

Smithfield Foods. The formal, 1975 enforcement agreement between EPA and

the Commonwealth of Virginia states that, pursuant to delegation, Virginia has

primacy in all NPDES environmental enforcement. That agreement has characterized the relationship since 1975.

So why did EPA surprise Virginia by secretly taking enforcement action

against a private party, Smithfield Foods, when it has known and acquiesced

in the results-driven actions Virginia has taken against that party since 1991?

And, why did EPA take this action after Virginia complied with a request from

EPA, Justice and the FBI not to take civil action, so as not to jeopardize a

criminal investigation? And, when EPA did so, why did EPA make false, rhetorical statements about Virginia?

Virginia is perplexed. Which EPA are we to believe? The collegial one Ms.

Browner suggested, or the hostile one Virginia deals with at Region III that

breaks a 22 year agreement?

Example: EPA’s Posture on Environmental Audits

Like many other States, Virginia enacted an environmental audit and related

limited civil immunity statute. Any immunity was predicated on it being consistent with Federal law. In a survey of all States’ environmental audit statutes,

EPA’s Director of Congressional Relations for Virginia was quoted as saying

that EPA was familiar with Virginia’s environmental audit statute and that,

even though it had criticized it before, the EPA team reviewing these State

audit statutes did not intend to contact Virginia again. Surprisingly, the EPA

Regional Administrator wrote a letter shortly thereafter regarding the Smithfield case, and cited as a criticism of Virginia the same Virginia statute that

EPA had just tacitly approved.

Virginia is perplexed. Which EPA are we to believe? The EPA Headquarters

Team that has reviewed and acquiesced in Virginia’s statute, or the EPA Regional Administrator who takes a contrary view?

Example: EPA’s Posture on Tributyltin (TBT)

In 1988, Congress mandated EPA to conduct a study of tributyltin, a chemical

defoliant agent by which shipyards clean the hull of ships, for purposes of arriving at a national regulatory standard in water. EPA has never done that study.

If that is the case, then why is EPA publicly criticizing Virginia and holding

up EPA’s approval of a major permit over TBT?

Virginia is perplexed. Which EPA are we to believe? The one that is required

to promulgate a national standard with which all States are to comply, or the

one that fails to comply with such Congressional mandate and then criticizes a

State for acting on the EPA created vacuum.

Example: EPA’s Plan for State Delegated Program Flexibility

EPA announced in 1995 that it intended to promulgate a plan by which it

would provide considerably more flexibility to States by which to run delegated

environmental programs. However, shortly after the 1996 election, the Deputy

Administrator of EPA withdrew this plan.

Virginia is perplexed. Considering Ms. Browner’s testimony before this very

Senate committee, which EPA are we supposed to believe? Her firmly stated belief in State environmental programs and EPA flexibility, or EPA’s recent move

to shut off such flexibility.
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Example: EPA’s Non-Responsiveness Regarding Challenge to Virginia’s Water Program Delegation

In November, 1993, a public interest group, the Chesapeake Bay Foundation,

filed a formal petition with EPA Region III by which it sought for EPA to withdraw its 1975 delegation of the NPDES program to the Commonwealth of Virginia. Notwithstanding multiple requests since 1994, EPA Region III has never

made a decision, even though it has historically ranked Virginia as one of its

better States dealing with the water program.

Virginia is perplexed. Considering Ms. Browner’s testimony, which EPA are we

to believe? The collegiality and State flexibility that Ms. Browner articulated, or

the non-responsiveness of Region III?

Example: EPA Overfiling After State Achieves Environmental Resolution

Conclusion: As was stated at a recent meeting of the Environmental Council of

the States, ‘‘states are not branch offices of EPA’’.

These facts remain clear:

• Virginia is achieving real environmental results, and is not relying on 1970’s

barometers to measure 1990’s accomplishments; • Virginia is in the forefront of developing useful, environmentally-sound methods

by which to expeditiously achieve environmental compliance, notwithstanding 1970’s

era-EPA criticism; • Virginia remains perplexed. Why has Ms. Browner’s cooperative, collegial approach somehow gotten lost in EPA between her office and Region III?

Finally, one more note regarding State-Federal relations. On May 30, the U.S.

District Court for the Eastern District of Virginia ruled, in U.S. v. Smithfield Foods,

that Virginia’s statutory water enforcement program is not afforded any deference

from EPA, since it is not comparable to the Clean Water Act’s program. This was

because, the Court reasoned, Virginia’s water law does not have the same administrative civil penalty tools as the Clean Water Act. If this is upheld, then any State

whose State water laws do not contain the same tools as the Clean Water Act should

know that EPA can overfile them, regardless of what environmental progress the

State is making. This effectively means that there can and will be serious questions

by every State’s permittees regarding whether they even need to deal with the

State, since EPA can simply ignore such State action. If this is the result that EPA

sought, then we must truly ask which EPA any State deals with: the one which believes that ‘‘We’re going to have to recognize the strengths that they (the States)

bring to the table, and we’re going to have to allow them to do the job the way they

see fit’’, or the one which wants to turn back the clock, to return to the 1970’s, monolithic ‘‘Big Brother’’ approach to environmental enforcement? Ms. Browner said

that the change would be hard, but that EPA would ‘‘have to do it’’. Despite these

sentiments, they have not done it yet, and it isn’t clear from their actions that they

ever intended to.

HELPFUL SERVANT OR FEARFUL MASTER

The issue about EPA and State relations in regard to enforcement of environmental laws is simply this: Is government to be a helpful servant or a fearful master? This question is at the very core of the reforms and improvements now taking

place in environmental quality policy in the States all across this land.

States, not only Virginia, but in virtually all States, including those whose top environmental officials have long been associated with the ‘‘Enforcement First’’ approach are moving in the same direction as Virginia. Indeed, Florida under Administrator Browner’s leadership, began to initiate Compliance First policies when she

was my counterpart there. States’ environmental agencies, States’ legislatures and

States’ Governors want the quality of the environment in which they and their people live and work to be improved.

States want real and meaningful reform to help them put aside the one-size-fitsall, top down, Washington knows best, litigious approach of the past because the

experience of the past 30 years demonstrates that compliance with national environmental quality goals and standards is the most effective focus of environmental policy. This is the helpful servant approach.

The ‘‘fearful master’’ approach is simply wrongheaded and is proven to be counter

productive in improving environmental quality. The ‘‘fearful master’’ approach demonstrated by EPA for the past 30 years to be its preferred approach, has turned concern for the environment away from its beginnings as a profession of scientists, environmental engineers and resource managers into a profession of lawyers, litigators

and one-size-fits-all regulators and political opportunists.

In his Farewell Address, George Washington warned Americans to always be vigilant to assure that the new American Nation would never allow the government to
197

become a fearful master. Virginia submits that now is the time for Congress to assess this State and Federal relationship as regards environmental policy. Will you

determine George Washington was correct in thinking that the ‘‘helpful servant’’ approach we are now trying to implement in Virginia is far more effective and far

more suitable for a free and prosperous people? I trust you will find this to be true.

INTRODUCTION

1. Virginia has demonstrated leadership in putting the proper emphasis on the

purpose, goals and objectives of environmental policy—which should be to improve

the quality and condition of the air, water, soil, flora and fauna resources which

make up the environment. Believe it or not, EPA seems to believe, or act as if they

believe, that the principal purpose of environmental policy has little to do with improving natural resources and much to do with ‘‘enforcement outcomes’’—which is

bureaucratese for the amount of fines, litigations and permit restrictions which can

be imposed.

• Virginia Way, Compliance First. We call the Virginia Way our ‘‘Compliance

First’’ approach. The Virginia Way is a science-based approach which uses every resource of State agencies, other government agencies and entities, and the private

sector to HELP companies and municipalities reduce site-and-situation specific

emissions which can have a harmful effect on the people, wildlife and the air and

water resources.

• Enforcement when necessary. When Compliance First will not accomplish the

purposes of environmental policy, as is in the case of willful polluters who have

demonstrated themselves to be ‘‘bad actors,’’ Virginia is vigorous and aggressive in

employing all the tools of enforcement at our disposal—including fines, litigation,

cease-and-desist orders, and referral to the Commonwealth’s Attorneys for criminal

prosecution.

2. Virginia has taken the lead in changing the way improvements in environmental

quality are managed, pollution is prevented and clean-up of past pollution is accomplished.

• New Paradigm for implementation of environmental policy objectives. Virginia

has re-organized and streamlined environmental policy management by substituting

for the previous media-based organization of DEQ a new set of Divisions for Permitting, Compliance and Enforcement, each with the capability to deal with the media

of air, water and waste.

• Decentralization. Virginia has moved its permit, compliance and enforcement

process to six regions and Central office within the State, here decision can be made

on site-and-situation specific priorities by people who live and work in the communities they serve.

• Cooperation and involvement with local elected officials. Virginia has established a system to work with local elected officials and governments to develop a

cooperative approach to improving environmental quality. We have had great success with our new Tributary Strategy to improve water quality in the Chesapeake

Bay drainage and elsewhere.

3. These changes have caused EPA to put itself in conflict with the States.

• EPA’s approach is Enforcement First. EPA, in practice (but pointedly not always

in the rhetoric of Administrator Browner and President Clinton) has always been

and continues to exercise an ‘‘Enforcement First’’ approach to environmental policy.

The principal tools in the environmental policy kit bag of EPA are fines, litigation, cease-and-desist orders, ever-more-stringent permit provisions, and referral for criminal prosecution. The States are constantly pressured by EPA to

use these ‘‘enforcement outputs’’ as the tools of preference in carrying out environmental policy objectives. In fact, it seems as if the whole mindset at EPA,

and indeed perhaps with many in Congress, is that these kinds of enforcement

actions are, in fact, the beginning and end of environmental policy. Because this

approach only works best as a matter of last resort, Virginia and many other

States, are shifting emphasis to a compliance-based policy. With this enforcement first approach, EPA puts itself into conflict with the States.

• EPA’s approach is top-down, command and control. EPA is inherently disdainful of de-centralization and regionalism as employed by Virginia and other States.

EPA constantly pressures the States to retain the EPA model of central planning,

central control, central decision making, and centralized one-size-fits-all standards

environmental quality. The States’ increasing emphasis on regional and site-and-situation specific approaches has put EPA into conflict with the States. Indeed, EPA

seems entirely disdainful of the concepts of Federalism, demonstrated by their frequent complaints and agitations about laws and statutes enacted with bi-partisan
198

support by the Virginia General Assembly. With this, EPA puts itself into conflict

with the States.

• Federal Government Polluters get the kid glove treatment. EPA refuses to focus

its attention on resolving the principal pollution problems we have in Virginia (and

in other States)—which are at Federal facilities. For example, the worst pollution

sites in Virginia are sites in which Federal agencies are the responsible parties.

When dodging the Federal responsibilities, EPA puts itself into conflict with the

States.

• Superfund Failure. EPA refuses to modify its failed and counter-productive

Superfund Approach. With this, EPA puts itself into conflict with the States.

• Political Posturing. EPA’s Region III in Philadelphia (in obvious connivance

with the EPA Administrator) engages partisan political posturing that has nothing

to do with improving the quality and condition of the environment. [Cite examples].

With this EPA puts itself into conflict with the States.

Virginia’s relations with EPA can be quite good on the technical level, and my

Agency people appreciate it very much when we can work together in helpful cooperation. Helpful cooperation to improve the quality and condition of the environment is the Virginia Way.

4. Helpful Servant or Fearful Master? The issue about EPA and State relations

in regard to enforcement of environmental laws is simply this: Is government to be

a helpful servant or a fearful master? This question is at the very core of the reforms and improvements now taking place in environmental quality policy in the:

States all across this land.

• States—not only Virginia—but in virtually all States, including those whose top

environmental officials have long been associated with the ‘‘Enforcement First’’ approach—are moving in the same direction as Virginia. Indeed, Florida under Administrator Browner’s leadership, began to initiate Compliance First policies when she

was my counterpart there. States’ environmental agencies, States legislatures and

States governors want the quality of the environment in which they and their people live and work to be improved.

• States want real and meaningful reform to help them put aside the one-sizefits-all, top-down, Washington-knows best, litigious approach of the past because the

experience of the past 30 years demonstrates that compliance with national environmental quality goals and standards is the most effective focus of environmental policy. This is the helpful servant approach.

• The ‘‘fearful master’’ approach is simply wrongheaded and is proven to be counterproductive in improving environmental quality. The ‘‘fearful master’’ approach

demonstrated by EPA for the past 30 years to be its preferred approach, has turned

concern about the environmental away from its beginnings as a profession of scientists, environmental engineers and resource managers into a profession of lawyers, litigators and one-size-fits-all regulators and political opportunists.

• In his Farewell Address, George Washington warned Americans to always be

vigilant to assure that the new American Nation would never allow the government

to become a fearful master. Virginia submits that now is the time for Congress to

assess this State-and-Federal relationship situation as regards to environmental policy. Will you determine George Washington was correct in thinking that the ‘‘helpful

servant’’ approach we are now trying to implement in Virginia is far more effective

and far more suitable for a free and prosperous people? I trust you will find this

to be true.

PREPARED STATEMENT OF PATRICIA S. BANGERT, DIRECTOR OF LEGAL POLICY,

ATTORNEY GENERAL’S OFFICE, STATE OF COLORADO

INTRODUCTION

My name is Trish Bangert. I am presently the Director of Legal Policy for the Attorney General’s Office in the State of Colorado. Prior to that, I was in charge of

the section of the office that handled the environmental and natural resources legal

issues for the State. Before coming to Colorado, I worked in the Solicitor’s Office

at the Department of the Interior. I was at Interior for 11 years, so I know well

the Federal agency perspective on environmental and natural resources issues. I

also teach administrative law at the University of Denver. I want to thank the Committee for the opportunity to present our views on EPA-State relations, especially

EPA’s much-publicized partnership program.

In summary, I think that there is no EPA-State partnership in some areas of environmental enforcement. EPA’s perspective appears to be that they own the ranch

and that we, the States, are the hired ranch hands. For example, there is no com-
199

promise that I can see in the area of self-audit. EPA’s policy is simply to dictate

changes to State laws.

In addition, I would like to respond specifically to the charges made by the EPA

that some States, especially those with self-audit programs, are failing to protect the

environment. In summary, my response is that those charges are hogwash.

States like Colorado are working hard to protect and improve our environment.

Although I do not have specific statistics, I understand that the number of enforcement actions brought by the State has remained relatively steady over the past several years. More importantly, Colorado is working more effectively and efficiently

to improve the environment. For example, there is general agreement that a ‘‘command and control’’ approach to environmental protection, by itself, does not work.

The States, as the laboratories of democracy, are trying out new approaches that

may bring greater protection at lesser cost. One new approach in Colorado and

many other States is self-audit legislation. These statutes encourage companies to

audit their own compliance with environmental laws and correct the violations

found in those audits.

For its part, EPA is resisting innovative State approaches. Rather, the agency is

affirmatively doing everything it can to create mirror images of itself in the several

States. For States that do not like that image, EPA has launched a holy war, composed of negative comments in the press, threats to revoke delegated programs and

overfilings. The end result of this battle inevitably will be that the environment

comes out the loser. Something has to change before this happens. We come here

today to suggest several such changes.

As detailed below, we are suggesting changes primarily in the areas of Congressional oversight of EPA activities, such as overfiling, the methods that are being utilized to measure success in the areas of environmental protection and improvement,

and the legislative provisions applicable to the exercise of State authorities in the

environmental area. We believe these changes are necessary to effectively and efficiently implement environmental protection and improvement. Further, they are

necessary to prevent EPA from presenting roadblocks to new approaches that might

represent positive environmental gains.

ENVIRONMENTAL SELF-AUDIT PROGRAMS

Let me turn to a prime example of EPA recalcitrance in allowing States to experiment with programs that might well result in significant environmental gains—environmental self-audit legislation. Twenty-two States have passed some sort of legislation to encourage companies to audit their environmental compliance and to correct any problems found. In Colorado, we have a statute that gives a qualified privilege for self-audits and provides immunity from certain penalties if violations found

in the audits are promptly corrected. Remember, we are talking about violations

that probably would not have been discovered by the company, and certainly not by

State enforcement officials absent the audit. We are talking about a positive environmental gain. Not only are companies becoming more aware and sensitive to environmental compliance through audits, but, problems are being corrected. In addition, companies and State regulators are working together in a cooperative, as opposed to an adversarial fashion to improve and protect the environment.

What is EPA’s response to these innovative State programs? The agency is trying

as hard as it can to eliminate these laws. In fact, over the past 5 years, the agency

has engaged in a systematic program to kill the self-audit movement. First, it wrote

to State legislatures considering self-audit laws to urge them not to pass the bills.

Second, once bills were passed, the agency enacted policies that clearly expressed

its opposition to the new laws and threatened to overfile in cases in which the laws

were used. Third, the agency began a program of intimidation against companies

and States utilizing the self-audit laws. For example, in Colorado, several companies

utilizing the immunity provisions of the act, including the Denver Water Board, received letters requesting information about violations voluntarily disclosed. Further,

EPA has threatened to overfile in those cases. My understanding is that EPA, in

fact, has overfiled against companies utilizing self-audit laws in other States. Finally, EPA has threatened to revoke the delegation of environmental programs, such

as those under the Clean Air Act, the Clean Water Act and RCRA, in States with

audit laws. I have been told that the EPA regional office in one State invited petitions from the public to revoke the State’s delegated programs.

It is a legitimate question to ask whether EPA’s criticisms of audit laws have

merit. At least in Colorado, we think not. EPA is concerned that States with audit

privilege laws cannot enjoin violations that are harming the public or the environment. Our law retains fill injunctive authority. EPA is concerned that the laws

might allow companies to hide violations. Our law allows a privilege only for infor-
200

mation that would not otherwise have to be disclosed. And, the privilege does not

apply to audits done to evade investigations or for fraudulent purposes. Further,

under our law, a court can order any information released if there is a compelling

need for that information. The EPA is concerned that the States will not be able

to get penalties in certain situations. Under Colorado’s law, immunity is offered only

when violations are discovered in a voluntary self-audit, those violations are corrected, and the violations would not have been reported under a permit condition.

Further, there is no immunity for willful criminal conduct or for repeat violators.

In short, we believe that EPA’s concerns are met by the provisions of our law. Regardless of that fact, EPA is looking at revoking our delegation under the Clean

Water Act in response to a citizen petition. We are told that EPA will be sending

us a letter shortly which details the ‘‘flaws’’ in our statute and asks that we justify

our law.

What does EPA’s negative response mean to State self-audit programs? We might

as well toss them out the window. If a company comes forward with information

about a violation of the environmental laws, it is providing a blueprint to EPA to

bring an action against it. In addition, it is impossible to measure the success of

audit programs if companies are discouraged from participating in them by EPA’s

threats of overfiling. EPA’s response, in practice, nullifies State laws. Think about

that for a moment. Not only has EPA spent a great deal of public money to advance

its policy perspective, but, without even having to do a public rulemaking, or a formal hearing, EPA can change the laws passed by State governments. Texas substantially amended its self-audit law recently to meet EPA concerns. My understanding is that the State gave up, in part, provisions granting immunity in the civil

and criminal areas and gave up audit privilege in the context of criminal cases. This

is not the system envisioned by our founders—an unelected, largely unaccountable

body dictating the content of laws to a sovereign State.

METHODS OF MEASURING SUCCESS AND OVERFILING

The EPA’s obsession with self-audit laws appears to stem in large measure from

its obsession with numbers. EPA has always measured success in protecting the environment in large measure by the number of enforcement actions brought and the

size of penalties assessed. We applaud the fact that the agency has recently come

out with new core performance measures for State enforcement and compliance assurance programs. Five of the eight measures, however, are still traditional enforcement ‘‘beans,’’ that is, the number and size of enforcement actions. The eighth measure is the frequency and impact of the use of audit laws. It is unclear whether this

is a positive or negative value in the measurement of performance.

Measuring success by the number of enforcement actions, as opposed to actual improvement in the environment, causes EPA to overfile when there is no danger to

the public or the environment, but, when penalty amounts are not ‘‘high’’ enough.

This misuse of overfiling authority has the inevitable result of discouraging the

States from attempting innovative approaches to environmental problems.

I am not suggesting that the number of enforcement actions brought is meaningless, but, let’s look at one of the ‘‘beans’’ that EPA counted as a success in Colorado

last year. We have a very good school in our State called the Colorado School of

Mines. A research institute on the School of Mines property did experiments on mining ore. A substantial amount of waste ore was generated, and, a waste pile was

created. A break in a water main necessitated the emergency removal of the waste

pile by EPA to another site. In the removal, a liner was laid down and the pile was

put on top. The EPA ordered the State to permanently remove and dispose of the

pile. The State removed the pile to a waste disposal facility.

The pile being gone, the State proceeded to build a softball field on the site upon

which the pile was formerly located. In the process, workers breached the liner.

Now, remember, the liner was constructed to prevent water running through the

waste pile from getting into the ground. But, there was no pile when the softball

field was under construction. In other words, there was nothing to line. Nevertheless, EPA issued a notice of violation against the State for breaching a liner that

lined nothing. Even though it admitted that there the breach caused no danger to

the public or the environment, EPA ordered the State to repair the liner and to pay

a civil penalty. The State ended up paying thousands of dollars for nothing, thousands of dollars that could have been spent removing real threats to the environment. Yet, this is used as an example of EPA’s enforcement success. Something is

wrong with this picture.
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FEDERAL FACILITIES

I cannot help but mention that EPA’s fine sentiments about protecting the environment extend only to private parties, and, seemingly, not to the Federal Government. The Administration has recently released its Superfund Legislative Reform

Principles. My understanding is that those principles were authored largely by EPA

and released by that agency. Those principles contain several statements which evidence EPA’s retreat on the issue of strong Superfund enforcement. Specifically, one

of the statements is that the Administration opposes any changes to the present law

on Federal facilities. This means that the Administration opposes reforms necessary

to ensure that the Federal Government obeys the law to the same extent as private

parties, reforms such as stronger sovereign immunity waivers.

In addition, the principles abandon the Administration’s support for strong provisions delegating the Superfund program to the States. There is general agreement

that the States can often carry out cleanups in a more efficient and effective manner

than EPA. We in Colorado fought for many years to apply our own laws at the

Rocky Mountain Arsenal. Prior to our victory in our case against the Army, the

United States contended that it could run the cleanup of this former nerve gas facility without any regard for State law, regardless of the environmental consequences

or danger to our citizens. The EPA was largely silent in this battle. The EPA’s principles ensure that they, and not the States, will be in control of Federal facility

cleanups. Yet again, the agency stands in the way of true environmental gains.

SUGGESTIONS

We would offer several suggestions that might improve the EPA-State relationship. First, we recognize that EPA is often caught between its legislative mandates

and a desire to work with the States. The environmental laws must be reviewed

with an eye toward changing those provisions that prevent EPA from allowing

States to experiment by putting their own environmental programs into place. For

example, the courts have interpreted the present Superfund law as not providing

the States substantial authority to implement clean-up programs. We believe that

it was the intention of Congress to create a floor for environmental protection in

the statutes, and, then, to allow the States to accomplish the goals set out in the

statutes in their own fashion. Perhaps a short-term task force or a commission could

be created to review the present laws and recommend changes, if necessary, to implement this intention.

Second, there must be a review of the methods for measuring success in the environmental area. Until we have a legitimate and effective means of measuring success, and as long as we are wedded to the ‘‘number of enforcement actions’’ model,

we will be unable to try new approaches that may well mean greater gains for fewer

costs. We would recommend a study of this issue, perhaps starting with EPA’s new

performance measures, that will result in recommendations for changes to the

present measurement methods.

Third, and specific to EPA, there needs to be greater Congressional oversight with

regard to agency activities. For example, Congress, the States and the public should

know the criteria for overfiling. At present, the authority to overfile is used as a

weapon by EPA to extort changes in State laws and to manipulate the failure of

audit laws. The agency should be required to set out clearly the criteria it will use

for determining whether to overfile in particular cases. Perhaps it should be required to do so after a series of hearings or a formal rulemaking process.

Fourth, as to specific substantive areas, there should be Federal legislation allowing States to experiment with self-audit legislation without EPA interference. We

do not take a position at this time as to whether that legislation should include Federal privilege and immunity provisions. At a minimum, however, it should say that

EPA cannot revoke the delegation of States that have audit laws just because of

those laws, and, that EPA cannot overfile in situations in which the States have

given immunity under their own audit laws.

We would be happy to work with your staffs to implement these suggestions legislatively. Again, we appreciate the opportunity to submit these remarks to the Committee on this important issue.

PREPARED STATEMENT OF CHRISTOPHE A.G. TULOU, SECRETARY, DELAWARE

DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL

Mr. Chairman and Members of the Committee, my name is Christophe Tulou, and

I have been the Secretary of the Delaware Department of Natural Resources and

Environmental Control (DNREC) since March 1993.
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I appreciate the invitation to join you today to discuss Delaware’s enforcement relationship with the Federal Environmental Protection Agency (EPA).

The amount and quality of discourse between EPA and the States is greater today

than it has ever been. We are sharing perspectives on environmental goals for the

country, providing suggestions on EPA’s goals and objectives under the Government

Performance and Results Act, and helping develop performance measures to evaluate our successes under the National Environmental Performance Partnership System (NEPPS). EPA and the States are not that far apart in terms of a shared vision

for our nation’s environment.

Enforcement, and the related issue of regulatory flexibility, are the areas of greatest disagreement between us. Our environmental management challenges are diverse and complex, and our Federal laws and regulations are often stiff and constraining. Finding room for common sense is tough.

EPA has delegated essentially all the major Federal regulatory programs (except

§ 404 of the Clean Water Act dealing with wetlands) to Delaware based upon our

demonstrated performance in environmental management. As part of our acceptance

of full authority for these programs, the State Attorney General provided assurances

regarding our capacity to enforce. According to EPA’s estimates, States account for

87 percent of environmental civil enforcement each year. This estimate excludes

criminal enforcement activities. Though I do not have the figures, I strongly suspect

that DNREC undertakes—along with our Attorney General’s office—an even greater

majority of enforcement actions in Delaware.

Delaware’s enforcement relationship with EPA Region III is very good. Though

the relationship continues to be positive, our development of a Performance Partnership Agreement (PPA) with Region III has created some friction regarding the role

of enforcement in environmental management.

We are proud that Delaware was the second State to adopt a PPA. We wanted

to take advantage of EPA’s promise to work in partnership with Delaware to build

the capacity necessary to meet OUR environmental priorities. We sought a relationship that recognized that States are at the forefront of environmental management,

and that the fastest way to our mutual goals is through partnership, not paternalism.

Working very closely with Region III (and with the strong support of Regional Administrator, Mike McCabe), we jointly developed a model Partnership Agreement.

We agreed to move away from case-specific review of our activities towards a more

holistic consideration of the State enforcement programs, encouraging innovation

and creativity in achieving our environmental goals. To that end, the Agreement focuses on outcomes more than activities or processes. The outcomes we agreed to

achieve are: • correcting promptly violations that threaten Delaware’s environment or the

health of Delaware’s citizens;

• achieving and maintaining widespread compliance with the environmental laws,

both to protect human health and the environment, and to assure that those who

violate the laws do not obtain an economic benefit from their unlawful activity; and

• preventing violations through use of applicable enforcement and compliance

tools and targeted assistance.

Despite these assurances in our Agreement, I fear that EPA will insist on greater

reliance on enforcement-specific activities, focusing on enforcement for enforcement’s

sake.

We have argued since the beginning of the PPA process that enforcement should

be a part of all our environmental goals, not a stand-alone end unto itself. In short,

we view enforcement as an important tool to achieve our environmental goals, not

a goal in its own right. That disagreement continues.

We also contend that compliance is a more relevant and important programmatic

goal than enforcement. We should be striving—through whatever means—to get all

our polluters in compliance. This distinction between compliance and enforcement

is crucial in determining what States and EPA should be measuring and reporting.

If enforcement is a goal, then we should continue to count beans such as penalty

dollars collected or enforcement actions taken. If compliance is the goal, then we

should be measuring and reporting who is in, and who is out, of compliance. The

traditional measures of dollars and enforcement actions are less important if compliance is the true goal. Measuring compliance is feasible and relevant. Last year, just

over 70 percent of facilities in Delaware complied with hazardous waste regulations

at the time of inspection. Within 30 days of the inspection, the percentage rose to

85 percent. Within 180 days, 100 percent of facilities were in compliance.

In Delaware, we work with violators to get them back into compliance as quickly

as possible. Using compliance assistance as an option of first choice, we can usually

achieve that goal much faster, cheaper, and with far greater goodwill than through
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aggressive enforcement. We also create allies for our environmental efforts. In fact,

several of our companies are moving beyond mere compliance by adopting forwardlooking environmental management strategies such as continuous improvement, pollution prevention, and enhanced product stewardship.

Overly aggressive and ill-timed enforcement is a dare: it inspires polluters to assume an adversarial relationship with their environment and regulatory agencies,

and to challenge enforcers to discover their misdeeds. Neither the States nor EPA

can afford that cat-and-mouse approach to environmental management; neither can

our environment.

Nonetheless, enforcement is critical. In fact, in Delaware and other States attempting to inject common sense into their regulatory process. the stick must be bigger than ever. Those polluters who choose not to participate in our compliance assistance efforts, and those who continuously violate environmental obligations,

should face the full force of public indignation and legal recourse. In this context,

States and EPA can forge a powerful partnership that combines the benefits of compliance and deterrence.

Making the philosophical point about compliance and enforcement, and arguing

the failings of traditional enforcement measures is not enough. States have an obligation to work with EPA to identify clearly the appropriate role for enforcement and

how best to measure our success in getting polluters into compliance and keeping

them there. The States and EPA in Region III have initiated a process to identify

which measures of compliance and enforcement would be more useful and appropriate than those that are currently in use. Our goal is to make recommendations

for inclusion in the Region III—EPA Headquarters enforcement Memorandum of

Understanding, which will be finalized in July. I understand similar efforts are underway in other EPA Regions. As Steve Herman and Mark Coleman have pointed

out in their testimony, the Office of Enforcement and Compliance Assurance (OECA)

at EPA is also working closely with ECOS to define a better State-EPA relationship.

EPA should, and I hope will, continue to be a crucial enforcement partner. We

will continue to rely on EPA to: assist with our ‘‘bad actors’’; help with

transboundary pollution problems; set protective national standards; and to ensure

that all States live up to their end of the environmental protection bargain. We will

also continue to work with EPA through Performance Partnership Agreements and

other means to build the capacity we need to meet Federal and State environmental

goals. We need EPA, just as EPA needs the States. That is what partnership is all

about.

Thank you again, Mr. Chairman, for the opportunity to share my views with you

today.

PREPARED STATEMENT OF JOSEPH RUBIN, CONNECTICUT ASSISTANT

ATTORNEY GENERAL

As the head of the Environment Department of Connecticut Attorney General

Richard Blumenthal’s office for the past 7 years, I have participated closely in many

aspects of the State-EPA environmental enforcement relationship. Overall, I have

found the relationship among the Connecticut Department of Environmental Protection (DEP), our office, EPA Region 1, and the United States Department of Justice

to be cooperative and productive. I will focus my remarks on two aspects of this relationship which provide good examples of this relationship at work—a model StateFederal working group on water enforcement efforts, and a current EPA review of

some of Connecticut’s State enforcement programs.

Almost 3 years ago, under the leadership of EPA Region 1 General Counsel Harley Laing and myself, with the full support of the Connecticut DEP, we began

monthly meetings including DEP water enforcement staff, Region 1 water enforcement and legal staff and the Connecticut Attorney General’s office. At some of our

meetings, the EPA Criminal Division and the U.S. Attorney’s Office are also represented. This group, composed entirely of working level staff, operates under an informal, non-bureaucratic structure, with no memoranda of agreement, no guidance

documents, and no protocols. Instead of making pronouncements and fighting about

turf, we actually work cooperatively. In fact, this lack of bureaucratic structure is

a key to the group’s success, because everyone is more willing to cooperate when

we all understand that cooperation is voluntary, and continued success depends on

everyone’s continued voluntary cooperation.

At each meeting, current and potential water enforcement cases which have come

to the attention of any of the participants, whether from citizen complaints or routine inspections, are discussed and reviewed. Together, the group comes to an informal consensus as to whether a case merits serious enforcement action, and whether
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State, Federal, or joint action will be most efficient and effective. In reaching this

determination, the group considers who has the best legal tools, discovery tools,

available enforcement staff, technical resources, and legal staff to prosecute a particular case. This is not an all or nothing decision. Often, we agree, for example,

that Federal discovery may be followed by a State judicial enforcement action, or

that State and Federal technical staff will work together, or, on rare occasions, that

a case should be prosecuted jointly by the State and Federal Governments.

The group accomplishes several important goals—it maximizes the effectiveness

of overall enforcement efforts by eliminating unknowing duplication of effort and by

using everyone’s limited resources most effectively. It greatly reduces inter-agency

competitiveness and goes a long way towards replacing it with cooperation. By, in

effect, providing ongoing ‘‘peer review’’ to all of us, the process also helps stimulate

everyone to timely high quality work. In sum, it gives all taxpayers more bang for

their environmental buck.

Of course this group is not a panacea. Sometimes discussions illuminate the resource limitations of both State and Federal Governments which may limit us. Still,

this group is a model of the best in State-Federal environmental enforcement cooperation.

A second, and somewhat more controversial example of the State-Federal relationship is the series of reviews or audits of State environmental enforcement efforts

produced by EPA Region 1. Several years ago, EPA actively and assertively reviewed many State enforcement actions in federally funded programs on an ongoing

basis. Understandably, the States sometimes resented what they saw as duplication

of effort and ‘‘second guessing’’ by EPA of their enforcement strategies and decisions.

Recently, Region 1 has moved away from such constant and intrusive monitoring

to periodic overall reviews of States’ enforcement efforts in federally funded programs. Region 1 completed a draft review of Connecticut DEP’s enforcement programs about 6 months ago, and expects to complete its final report this month.

This periodic review process represents an excellent compromise between overly

intrusive and resource-wasting oversight, and a complete lack of oversight of the use

of Federal funds. The review process almost necessarily produces positive results.

In the first place, any peer review process always helps to insure high and consistent quality. Programs which are peer-reviewed by outsiders will almost always be

better than those that are not. In addition, at least in the case of Connecticut, our

DEP has already taken many positive steps to improve in areas of concern identified

by EPA in its draft report. These steps should result in improved documentation,

and therefore, consistency, of enforcement actions and decisions. The report is also

leading, within ever-present budget constraints, to improved enforcement staffing in

the water pollution area. Further, the review has, very appropriately, identified

many special strengths and accomplishments of our DEP and its staff. No peer review is painless, and EPA, in its original draft, may have failed to fully recognize

the positive aspects of certain compliance assurance initiatives of DEP. Overall,

however, the review process has been effective and beneficial.

While these two examples—the joint water enforcement working group and the

EPA review of State enforcement programs—are certainly not comprehensive, they

do provide a fair snapshot of successes in the State-Federal enforcement relationship. In my experience, they are exemplary of the success of that relationship between Region 1 and Connecticut, and I urge this Committee to continue to encourage the unfettered and unencumbered growth of these cooperative efforts.

PREPARED STATEMENT OF ROBERT E. HARMON, CHAIRMAN OF THE BOARD OF

DIRECTORS, HARMON INDUSTRIES, INC.

Chairman Chafee, members of the committee, good morning. My name is Robert

E. Harmon. I am the Chairman of the Board of Directors of Harmon Industries, Inc.

I appreciate the opportunity to appear before the Committee this morning to discuss

important issues of Federal-State relations in enforcement of the environmental

laws. I am accompanied today by Harmon’s attorney, Ms. Terry J. Satterlee of

Lathrop & Gage L.C. of Kansas City.

With your permission, I would like to read to you a brief prepared statement explaining the reasons for Harmon’s interest in these issues.

Harmon Industries is the leading supplier of railroad signal, train control, and related equipment for use in the railroad industry. The company is headquartered in

Blue Springs, Missouri, and has assembly and manufacturing facilities across the

country. My father founded the company which is now Harmon Industries in 1946.

Today, Harmon employs more than 1,500 workers in the United States, and had
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sales of more than $175 million in 1996; the company’s stock is publicly traded on

the NASDAQ national market system.

I believe Harmon’s case well illustrates the way in which conscientious regulated

industries who are seeking in good faith to comply with their obligations under the

environmental laws can be whipsawed by EPA’s claimed ‘‘overfiling’’ authority. If

EPA has this authority, regulated industries cannot negotiate binding agreements

with authorized State agencies, since EPA may later disagree with and completely

override the State resolution.

One of Harmon’s assembly facilities is located in Grain Valley, Missouri, which

is a rural agricultural area outside Kansas City. The Grain Valley plant assembles

circuit boards for use in railroad control and safety equipment.

As was common in the industry at the time, prior to 1987 Harmon employees

used small quantities of organic solvents to remove soldering flux from circuit

boards they were assembling. The solvents were kept at the employees’ work

benches in small jars. Residues were collected in a 3 to 5 gallon pail, and dumped

by Harmon maintenance employees approximately once every 1 to 3 weeks on the

ground outside the back door of the Grain Valley plant. This practice probably

began in the late 1970’s.

Harmon’s management was unaware that employees were disposing of used solvents until it discovered the practice during a routine internal safety inspection in

November 1987.

Upon learning of this practice, we promptly took every action we could to stop,

and remedy the effects of, this disposal practice. Harmon’s management immediately ordered the disposal practice stopped, fired an employee who refused to comply and demoted or reassigned several others, and retained environmental consultants to investigate the extent of any resulting contamination. Harmon also voluntarily reported the discontinued disposal practice to the Missouri Department of

Natural Resources (‘‘MDNR’’), the agency delegated the authority by EPA to implement and enforce the Federal RCRA hazardous waste program within the State of

Missouri. It is undisputed that, prior to Harmon’s voluntary notification to MDNR

in June 1988, neither MDNR nor EPA was aware of the way in which Harmon’s

employees had been disposing of solvent residues, or of the contamination of the soil

at the immediate disposal area at Harmon’s Grain Valley plant.

Harmon conducted an extensive scientific investigation of the Grain Valley plant

property between late 1987 and February 1996, with MDNR’s intensive oversight

and approval. As of January 1994, this investigation had cost Harmon over $1.4 million, excluding attorney’s fees and other indirect costs. MDNR issued Harmon a

‘‘post-closure’’ permit in July 1996. Harmon anticipates additional costs of approximately $500,000 during the 30-year post-closure period.

Since June 1988, MDNR reported the status of the ongoing investigation to EPA

during quarterly program meetings, and promptly provided EPA with copies of all

significant correspondence, plans and other documents concerning MDNR’s dealings

with Harmon. To Harmon’s knowledge, EPA has at no time sought to intervene in,

or assume responsibility for, MDNR’s enforcement of RCRA with respect to Harmon.

Besides the costs of investigating and remedying the existing contamination problem, Harmon has instituted costly changes to its manufacturing process to insure

that the past disposal problem does not recur. During December 1987, while its investigation was ongoing, Harmon changed its assembly process to a state-of-the-art

technology using a nonhazardous cleaning material, rather than organic solvents, to

remove soldering flux from equipment being assembled. As a result of these

changes, Harmon ceased generating hazardous waste at the Grain Valley facility.

These changes had an initial cost exceeding $800,000, and Harmon incurs ongoing

costs of approximately $125,000 every year as a result.

In the end, Harmon’s environmental consultants concluded that the contamination at the Grain Valley plant was limited, and posed no significant threat to human

health and the environment. Both MDNR and the EPA have accepted this conclusion. In a State-court consent decree negotiated between Harmon and MDNR,

MDNR imposed regulatory sanctions on Harmon, but agreed not to seek monetary

penalties against Harmon based on its voluntary self reporting and its prompt action to investigate and remedy any contamination. The decree specifically provides

that ‘‘Harmon’s compliance with this Consent Decree constitutes full satisfaction

and release from all claims arising from allegations contained in plaintiff’s petition.’’

The consent decree provides in ¶23(a) that it will terminate when, among other

things, ‘‘MDNR issues a post-closure Part B permit.’’ This condition was satisfied

on July 31, 1996.

Even though MDNR has been authorized by EPA to run the RCRA program in

Missouri, and despite Harmon’s extensive dealings and settlement with MDNR,

after entry of the State-court decree EPA continued to pursue a separate Federal
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action seeking over $2.7 million in RCRA penalties. EPA sought these penalties for

exactly the same conduct which was the subject of Harmon’s State-court consent decree with MDNR.

During the administrative penalty proceedings, both the ALJ and the EPA’s Environmental Appeals Board held, without extended discussion, that EPA had the authority to ‘‘overfile’’ in this way when it was dissatisfied with an authorized State

agency’s resolution of a RCRA case.

We believe EPA’s actions are contrary to the letter and spirit of the RCRA statute, and we accordingly filed suit in Federal court last Friday, June 6, to set aside

the penalty. Because of the importance of the issues presented in Harmon’s case to

regulated industries across the country, Harmon’s position was supported before the

agency by two private parties as amicus curiae, and we anticipate support from industry groups in the court action.

MDNR’s enforcement of RCRA with respect to Harmon’s solvent disposal has been

rigorous, and EPA has never contended that MDNR’s action were inconsistent with

RCRA requirements or otherwise inappropriate. In connection with its extensive investigation of the site, Harmon submitted, revised as requested, and obtained

MDNR approval for, two detailed site investigation plans, as well as a closure and

post-closure plan. Harmon also submitted to MDNR two detailed reports describing

the results of its consultant’s investigations, in addition to the Phase I report Harmon submitted in June 1988. In connection with its investigation of the site, Harmon installed 29 groundwater monitoring wells, drilled 27 soil borings and 69 soil

probes, and took and analyzed a large number of soil and water samples over a 5-

year period before MDNR was satisfied that the extent of contamination at the site

had been adequately defined. Moreover, throughout its investigation Harmon’s representatives were in frequent contact with MDNR.

The practical consequences of EPA’s decision in Harmon’s case are significant.

Congress made clear in RCRA that it intended State agencies to take the lead in

enforcing RCRA’s hazardous waste provisions, subject to the States’ compliance with

the program’s broad, national goals. However, under the EPA’s decision no regulated entity can enter a settlement agreement with an authorized State agency,

without also formally making the Federal EPA a party to the agreement. The possibility always exists, even after conclusion of a final settlement agreement with the

State, that EPA will choose to second-guess the State’s exercise of its enforcement

discretion, and file a duplicative Federal enforcement action. Indeed, during the administrative hearing the ALJ suggested that Harmon should have dealt with both

the State and EPA when it originally negotiated the consent decree. This duplicative, redundant regulation is hardly what Congress intended when it spoke of a

‘‘Federal-State partnership.’’ Any suggestion that the States may be too lenient on

regulated entities, or may settle RCRA disputes based on ulterior motives, are simply unfounded. The States have every incentive to vigorously enforce environmental

laws, and MDNR’s actions in this case (which EPA has not challenged) show that

the States take these responsibilities seriously. While it may be true that the States

are more conscious of the consequences of their regulatory actions on the local economy and the competitiveness of local firms, I assume this is what Congress intended, consistent with Congress’ overall initiative to introduce more cost-benefit

analysis into this country’s enforcement of its environmental laws. Of course, if any

State is consistently disregarding its obligations to vigorously enforce the RCRA program, EPA retains the right to withdraw its authorization of the State program, and

directly enforce RCRA’s hazardous waste program in any such State.

EPA’s standard response to criticisms of its claimed overfiling authority has been

to argue that it needs this authority to insure, at a minimum, that companies which

violate RCRA’s requirements disgorge any economic benefits they derived from their

noncompliance. This argument does not apply here, however. The ALJ rejected

EPA’s argument that Harmon received between $600,000 and $975,000 in economic

benefit through its solvent disposal practice; instead, EPA’s own ALJ ruled that

Harmon received an economic benefit of only $6,072 by failing to dispose of its small

volume of solvent residues through an appropriate offsite disposal facility. MDNR’s

agreement not to seek to recoup economic benefit from Harmon hardly justifies a

separate Federal enforcement action.

The consequences of EPA’s claimed ‘‘overfiling’’ authority are perhaps best illustrated in connection with the RCRA requirement that any hazardous waste disposal

facility must have in place liability insurance to protect against accidental releases

of pollutants. Harmon’s insurance agent attempted to acquire this coverage, but

could not find a policy which would cover defense costs, on-site occurrences, or preexisting pollution, as the RCRA regulations require. After lengthy discussions,

MDNR agreed in the State-court consent decree that Harmon need not comply with
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the insurance requirements, so long as it demonstrated to MDNR twice a year that

it had made reasonable, good-faith efforts to procure the necessary insurance.

During the administrative proceedings, EPA presented no evidence to dispute

Harmon’s testimony that it was unable to obtain the liability insurance required by

RCRA. Nevertheless, the ALJ rejected Harmon’s reliance on the waiver of the liability insurance requirement in the State-court consent decree, since ‘‘[Harmon’s] consent decree is immaterial to EPA’s enforcement action.’’ According to the ALJ, EPA

is free to determine that the State ‘‘has not exercised its enforcement discretion

properly,’’ and therefore Harmon was not entitled to rely on the decree. On appeal,

the EAB specifically refused to reduce or eliminate the penalty based on the liability

insurance requirements, based on Harmon’s reliance on the consent decree with the

State of Missouri, which excused Harmon from the liability insurance requirement.

The EAB reasoned that ‘‘this exercise of enforcement discretion on the part of the

State does not prevent the Region from taking its own enforcement action against

Harmon.’’ Thus, Harmon was penalized by EPA for violating a regulation which an

authorized State agency had agreed would not apply to Harmon in a judicially approved consent decree.

It is our view that RCRA was clearly written to allow the States to control the

implementation of RCRA for so long as they are authorized by EPA. Harmon’s experience illustrates that EPA thinks it can override an authorized State’s implementation of RCRA at any time, for any reason or for no reason. Neither an authorized

State nor a company being regulated can make any agreement free of fear that the

Federal Government will step in and set the agreement aside, even after millions

of dollars have been spent.

Once again, thank you for the opportunity to appear before you to discuss these

important issues. Both Ms. Satterlee and I would be happy to answer any questions

you may have.

PREPARED STATEMENT OF ROBERT R. KUEHN, TULANE LAW SCHOOL,

NEW ORLEANS, LA

I. INTRODUCTION

Mr. Chairman, Members of the Committee, my name is Robert Kuehn and I am

a professor at Tulane Law School in New Orleans, Louisiana, where I teach classes

in environmental enforcement, environmental advocacy, and solid and hazardous

waste regulation. I appreciate the opportunity to testify before this Committee on

the important, and always controversial, topic of the relationship of Federal and

State governments in the implementation of Federal environmental laws.

I would like to discuss today the results of some research that I published last

year on the devolution of enforcement of Federal environmental laws from Federal

agencies to the States (‘‘The Limits of Devolving Enforcement of Federal Environmental Laws’’, 70 Tulane Law Review 2373 (1996)).

Before discussing the specifics of what I found, it is important to keep in mind

that issues of federalism are not new to environmental policy debates. Until the

1970’s, Congress had determined that the Federal Government should play a supporting role in the regulation of pollution by providing grants and technical assistance to the States. The 1970’s then witnessed a rising national concern over the environment and a surge of legislation giving the Federal Government the primary,

and in some areas exclusive, authority over the protection of public health and the

environment. While President Reagan’s ‘‘New Federalism’’ policies of the early

1980’s reversed the trend of centralization and returned some powers to the States,

the Federal Government continued to establish the standards of environmental protection and had the authority and resources to dictate, in large measure, the activities of the States, including their enforcement operations. Recent Federal legislation

on pollution control, the 1990 amendments to the Clean Air Act and the Pollution

Prosecution Act of 1990, signaled another expansion of Federal enforcement power.

While the pendulum swing of federalism is not new, what is new about the most

recent controversy is how widespread the sentiment is for devolving environmental

enforcement powers from the Federal Government to the States and how dramatically some of the current proposals would reduce the Federal role. Not only are

there calls for less oversight of State enforcement activities, but some now advocate

that Federal environmental agencies be prohibited from taking any enforcement action in States with federally-approved environmental programs.
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1See William F. Pedersen, Jr. Federal/State Relations in the Clean Air Act, the Clean Water,

Act, and RCRA: Does the Pattern Make Sense?, 12 Environmental Law Rept.. (Environmental

Law Inst.) 15,069, 15,071 (Dec. 1982) (Congress has failed to confront with any degree of rigor

the issue of which pollution control responsibilities properly belong to the States and which to

the Federal Government). 2 Richard B. Stewart, Pyramids of Sacrifice? Problems of Federalism in Mandating State Implementation of National Environmental Policy, 86 Yale Law Journal 1196, 1215–16 (1977). 3See Lewis G. Green, State Control of Interstate Air Pollution, 33 Law & Contemporary Problems 315, 323–24 (1968). 4See e.g., North American Agreement on Environmental Cooperation (Final Draft), Sept. 13,

1994, art. 5 (U.S. agrees, along with Canada and Mexico, to initiate proceedings to seek appropriate sanctions or remedies for violations of domestic environmental laws and regulations). 5See Thomas Puts in Place Enforcement Strategy to Maximize POTW Compliance with ’88

Deadline, 18 Environmental Rept. 1436, 1437 (1987).

Unfortunately, as with past efforts to decentralize environmental protection, there

has been little serious discussion, much less agreement, regarding the criteria by

which to judge the suitability of devolving enforcement.1

My research reviewed the original arguments for and against Federal enforcement

of environmental laws to determine if these justifications for Federal enforcement

are still supportable. As I set forth more fully below, I found that while some of the

original arguments for Federal enforcement (such as lack of adequate State enforcement commitment and resources) may find less support today, there are still a number of compelling justifications for a meaningful Federal role in enforcement, even

where States have been authorized to implement Federal programs.

Believing that the issue of the proper mix of Federal and State enforcement of

Federal environmental laws out to be based on pragmatic policy grounds, I also

sought to develop and apply some non-ideological criteria for determining the appropriate level of Federal involvement in enforcement. Using the criteria of effectiveness, efficiency and equity, I compared federally-run enforcement programs with

State-run programs. I was surprised to find how little empirical data was available

on the suitability, under these three criteria, of Federal versus State enforcement.

Based on the limited data that I could find, I concluded that public policy criteria

did not support a dramatic reduction in Federal enforcement.

I have set forth more fully below my analysis and conclusions.

II. RATIONALE FOR FEDERAL ENFORCEMENT

Some Federal enforcement of national pollution control laws is still justified on

a number of grounds, even 20 years after the enactment of most Federal statutes.

An obvious justification is that States are, and always will be, particularly ill

equipped to address the interstate effects of pollution. As pollution knows no political boundaries, a pollution source’s noncompliance could impose significant adverse

impacts, or what has been termed ‘‘spillover effects,’’ on another jurisdiction.2 Where

the local jurisdiction enjoys significant benefits from the source’s activities yet bears

little or none of the harm, that governmental entity may have little incentive to enforce pollution laws against the source. A Federal role in ensuring appropriate compliance by sources that may have impacts in other States is therefore essential, particularly since previous attempts to address interstate effects of pollution through

regional compacts proved unsuccessful.3

The growing importance of international environmental agreements further creates an indisputable and growing need for Federal enforcement. If a treaty provides

for a right of the United States to enforce certain pollution standards against a

source in another country or if the United States has entered into an international

agreement to ensure enforcement of its own laws, individual States are in no position to uphold such obligations.4 Indeed, without a significant, continuing Federal

presence in environmental enforcement, the ability of the United States to represent

that its pollution standards will be enforced is debatable.

It is realistic to expect that some State environmental agencies may not vigorously enforce environmental standards against other State agencies or the State’s

political subdivisions. State and local governments operate numerous sources of pollution, such as landfills and sewage treatment plants, and, through their ownership

and operation of buildings and equipment, also generate wastes that are subject to

regulation. In the 1980’s, EPA launched a municipal treatment enforcement initiative to address widespread noncompliance by publicly-owned sewage treatment facilities and the failure of State environmental agencies to enforce compliance.5 Because of concerns that EPA was lacking in its enforcement efforts against facilities

owned or operated by the Federal Government, States argued for and received ex-
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6See e.g., Federal Facility Compliance Act, Public Law 102–386, § 102(a),(b), 106 Stat. 1505–

06 (1992). 7See Richard L. Revesz, Rehabilitating Interstate Competition: Rethinking the ‘‘Race-to-theBottom’’ Rationale for Federal Environmental Regulation, 67 New York University Law Review

1210, 1233–44 (1992); but see Kirsten H. Engel, State Environmental Standard Setting: Is There

a ‘‘Race’’ and is it ‘‘to the Bottom’’?, 48 Hastings Law Journal 271 (1977) (documenting the race

to the bottom). 8See e.g., Adam Babich, Our Federalism, Our Hazardous Waste, and Our Good Fortune, 54

Maryland Law Review 1516, 1533 n.64 (1995) (State officials were responsive to arguments by

members of the regulated community that environmental standards must be reduced); Vicki Arroyo Cochran, EPA Regional Offices: Unequal Protection Under the Law? 48–49 & n.96 (April

1994) (unpublished manuscript, on file with author) (Indiana’s top environmental official says

that companies have threatened to either move to another State or shift resources to other facilities to escape rigorous enforcement). 9 Jerome M. Organ, Limitations on State Agency Authority to Adopt Environmental Standards

More Stringent than Federal Standards: Policy Considerations and Interpretive Problems, 54

Maryland Law Review 1373, 1393 (1995). 10Taking Stock of Environmental Problems: Hearings Before the Senate Comm. On Environment and Public Works, 103d Cong., 1st Sess. 148 (1993) (testimony of Thomas C. Jorling, Commissioner, New York Dept. of Environmental Conservation) (‘‘Governor Cuomo considers the relationship between and among the States now as cannibalism in the competition for economic

activity.’’). 11 Rochelle L. Stanfield, Ruckelshaus Casts EPA as ‘Gorilla’ in States’ Enforcement Closet,

National Journal, May 24, 1984, at 1034, 1035. 12 81 F.3d 1361 (5th Cir. 1996).

panded rights to enforce State environmental statutes against Federal facilities.6

The same arguments that support the need for State enforcement against Federal

facilities favor a Federal role in enforcing environmental laws against States and

their political subdivisions.

One of the most compelling justifications for Federal enforcement is the need to

ensure equal enforcement among the States. Without Federal environmental laws,

including Federal enforcement to ensure that national standards are implemented

nationwide, States are likely to vary widely in the extent of their regulation of pollution. Some States would weaken their standards or lessen enforcement as a way to

induce polluting industries to invest in their States. States that refused to weaken

their standards would risk losing economic development activities to the less restrictive States.

Although the theoretical basis of this ‘‘race to the bottom’’ rationale for Federal

regulation has been questioned,7 State regulators report that the regulated community repeatedly argues, and even threatens, that relaxed standards are needed to

attract new industry or keep companies from moving to other States.8 In addition,

the growing popularity of State laws that prohibit agencies from promulgating regulations more stringent than the counterpart Federal rule ‘‘provides some evidence

that the concern about a ‘race to the bottom’ in the absence of Federal minimum

standards remains valid.’’9 Today, States are engaged in what one Governor called

‘‘cannibalism’’ in their competition to attract new businesses, wooing them with tax

breaks and other taxpayer-financed economic incentives.10 In the present climate of

economic rivalry between States, one would be naive not to believe that, without the

specter of Federal intervention, some States would purposefully reduce their enforcement efforts as an economic incentive.

Federal enforcement also helps avoid certain market imbalances. Companies that

invest in environmental compliance are at a competitive disadvantage if their competitors can avoid those costs because the lax enforcement practices of another jurisdiction overlook some violations of environmental laws. Industries that had invested

heavily in environmental compliance were placed at a competitive disadvantage

when the regulated community perceived in the early 1980’s that the EPA would

not enforce environmental laws.11 Federal enforcement, when aggressively implemented, has the ability to ‘‘level the playing field’’ by initiating enforcement actions,

or forcing reluctant State agencies to initiate enforcement actions, in States with

weak enforcement practices.

In some enforcement matters, the issue is uniquely Federal. For example, United

States v. Marine Shale Processors12 involved the interpretation of EPA’s cryptic regulations differentiating between recycling and waste treatment. Because EPA developed the regulation and had the greatest stake in ensuring that its rule was upheld

by the court and properly applied nationwide, Federal enforcement was fitting.

The centralization of environmental protection was often justified in the 1960’s

and 1970’s by the States’ lack of legal capacity, resources, and commitment to effectively enforce pollution control laws. The development of strong Federal programs,

along with financial assistance to State environmental programs and nationwide

standards for authorization of State programs, have helped stimulate the growth of
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13 Congressional Research Service, for the Senate Comm. on Environment and Public Works,

Federal-State Relations in Transition: Implications for Environmental Policy, 31 (1982). 14 Rebecca Clay, A New Breed of Regulator, Environmental Forum, March/April 1995, at 32,

33–34 (Indiana Department of Environmental Management able to reverse budget cuts by arguing that reductions would mean that State would lose authorization and EPA would assume permitting and enforcement activities). 15Dan W. Lufkin, State Responsibility in Managing the Environment, in Office of Research

and Development, U.S. EPA, Managing the Environment, 351 (1973). 16 Richard J. Tobin, Environmental Protection and the New Federalism: A Longitudinal Analysis of State Perceptions, Publius 93, 105 (Winter 1992) (90 percent of State air and water quality directors agreed that the threat of EPA intervention strengthens the State’s position). West

Virginia’s attorney general stated: ‘Threatening EPA lawsuits is how we get voluntary compliance.’’ Lawrence Mosher, Reagan’s Environmental Federalism—Are the States Up to the Challenge?, National Journal Jan. 30, 1982, at 184, 185. 17 Barry M. Hartman, The Litigation Explosion, in Environmental Law: ALI–ABA Course of

Study Materials 567,569 (American Law Institute-American Bar Association, Feb. 13–15, 1992).

The defendant eventually settled the case for $350,000. Id. 18 U.S. Dept. of Justice, Statistical Report–Fiscal Year 1994 86 (1994); Telephone Interview

with Terry Sykes, Office of Regional Counsel, Region 6, EPA (Nov. 29, 1995); Telephone Interview with Ann Coco, Office of Legal Affairs and Enforcement, Louisiana Department of Environmental Quality (Nov. 13, 1995). 19See Rex Springstein, Twenty Lose Jobs at DEQ—Total of 91 People Left the State Agency

Yesterday, Richmond Times-Dispatch, April 29, 1995, at B1 (Governor cuts 91 jobs at Virginia

Department of Environmental Quality; Reorganization plan calls for reducing staff involved in

enforcement); Office of the Administrator, U.S. EPA, Report of the Task Force to Enhance State

Capacity 5 (July 1993) (increased demands for expenditures and decreased State revenues draw

into question ability of States to continue expansion of environmental management activities). 20Gwendolyn Thompkins, et al., Campaign Watch; A Look at the Day’s Highlights and Happenings, Times-Picayune, Oct. 25, 1995, at A2; Tyler Bridges, Roemer Lashes Back Over Kent

TV Ads, Times-Picayune, Oct. 11, 1995, at A11. The company’s owner spent $500,000 in 1991

and another $500,000 in 1995 attacking former Governor Buddy Roemer; Roemer was defeated

in both elections. Id.

competent State environmental programs.13 Ironically, the desire to avoid federallyrun permitting programs in their States encouraged State legislators to provide the

necessary laws and resources to obtain primacy. Once a State obtains authorization,

the threatened return of the program to EPA has been used by State agencies to

leverage additional funds from State legislators.14

Today, most State programs have the necessary resources and commitment to assume most Federal enforcement. Yet this enhanced capability is due, in large part,

to Federal enforcement program technical and financial assistance to States, EPA’s

prodding of States to take enforcement actions, and the desire of States to avoid a

Federal takeover of enforcement and other regulatory functions. One State environmental commissioner observed that the publicity and implications regarding the

State’s inability to handle its responsibilities that would result if EPA were to take

over pollution compliance responsibilities is ‘‘the greatest incentive for the State to

do the job.’’15

The availability of EPA as a backup to State enforcement efforts also enhances

the State’s effectiveness. State officials overwhelmingly agree that the threat of the

EPA enforcement gorilla bringing its own enforcement action strengthens the

State’s position with polluters.16 Without a strong Federal enforcement program,

State programs would undoubtedly suffer.

Even with the notable improvements in the commitment and ability of States to

enforce environmental laws, in some cases the resources and political influence of

the regulated entity may still overwhelm the State agency. When faced with potential penalties or remediation costs in the millions of dollars or with the potential

closure of their businesses, many regulated entitles are able to dedicate legal and

technical resources that may overpower the limited enforcement resources of State

agencies. For example, a defendant spent $3 million in legal fees fighting a Clean

Air Act enforcement action brought by EPA.17 In fiscal year 1994 alone, the United

States Department of Justice dedicated more than 29,000 work hours (the equivalent of 15 persons working full time for the entire year), and EPA used three employees full time and spent $2 million in litigation support, on a single enforcement

action in Louisiana against Marine Shale Processors; the entire Louisiana Department of Environmental Quality legal staff only consists of 15 lawyers.18 Budget cuts

threaten to reduce further the ability of States to handle enforcement matters, particularly cases with great resource demands.19

Political connections may also affect the enforcement activities of State agencies.

In Marine Shale Processors, the owner of the company spent $1 million of his own

money to defeat the election campaigns of the Governor who had sought to shut the

company down for violations of hazardous waste laws.20 In Virginia, the Governor
211

21Peter Baker, Allen’s Pac Took $100,000 From Company Under Probe, Washington Post, Oct.

25, 1995, at A1. 22Law of Environmental Protection § 6.02[3] (Sheldon M. Novick et al. eds., 1990). 23See Frank P. Grad, Treatise on Environmental Law § 2.03 (1992). 24See Brown v. EPA, 530 F.2d 215 (4th Cir. 1975), vacated and remanded per curium, 431

U.S. 99 (1977) (case remanded because EPA agrees, after losing in court of appeals, to modify

regulations requiring States to enforce Federal transportation control plans); Edward L.

Strohbehn, Jr., The Bases for Federal/State Relationships in Environmental Law, 12

Eenvironmental Law Rept. (Environmental Law Inst.) 15,074, 15,075 (1982). 25 Evan J. Ringquist, Environmental Protection at the State Level 45 (1993). 26 National Academy of Public Administration, Setting Priorities, Getting Results 72 (1995);

Environmental Law Institute, Report of the Colloquium on Federal-State Relations in Environmental Enforcement 7 (1991). 27David R. Hodas, Enforcement of Environmental Law in a Triangular Federal System: Can

Three Not Be a Crowd When Enforcement Authority is Shared by the United States, the States,

and their Citizens?, 54 Maryland Law Review 1552, 1571 (1995). 28Office of Enforcement, U.S. EPA, Enforcement in the 1990’s Project: Recommendations of

the Analytical Workgroups 2–15 (1991).

accepted a $100,000 campaign contribution from a company under investigation by

the State environmental agency and facing millions of dollars in fines for illegally

discharging wastes to a tributary of Chesapeake Bay.21 Even the most capable State

environmental agency may find itself unduly influenced or overwhelmed by a wellheeled, politically influential polluter and, therefore, in need of Federal enforcement.

A final rationale for Federal enforcement is that EPA must be involved in enforcement to ensure that the national pollution control standards it promulgates are enforceable and achievable. ‘‘By splitting standard setting and enforcement between

two governmental levels, the Nation would risk the promulgation and maintenance

of unenforceable standards.’’22

III. RATIONALE FOR STATE ENFORCEMENT

The primary philosophical justification for State enforcement of Federal environmental laws is the principle of federalism, which, as primarily expressed in the

Tenth Amendment, recognizes the limited, enumerated powers of the Federal Government and the residual powers of the States. In particular, States have pervasive

police powers which they were exercising to control pollution long before the Federal

Government entered the field. In enacting Federal environmental statutes, Congress

respected this historical involvement by acknowledging the primary responsibilities

and rights of States in the protection of public health and the environment, including their primary responsibility for enforcement.23

Although efforts by EPA to punish States that failed to enforce Federal environmental statutes were struck down by the courts, there is little support for the contention that the Constitution compels Congress to grant States the exclusive authority to enforce Federal environmental laws.24 Nevertheless, to those who believe that

the Federal Government has become too pervasive or too powerful, devolution is justified as redressing an imbalance that has developed in the decisionmaking power

between the Federal Government and the States.25 Hence, the history of pollution

control, respect for principles of federalism, and the structure of most Federal environmental statutes dictate that the States play a dominant role in enforcement.

A more practical justification for State enforcement is the claim that decentralized

enforcement is more flexible and responsive than enforcement by a centralized

agency such as EPA. The provisions in Federal statutes allowing a State to attain

authorization to enforce the Federal program reflect the belief that the level of government closest to the environmental problem should be the primary enforcer, provided it has the capability and will to enforce.26 But, as outlined above, the capability and will of States to enforce present a problem in most States at one time or

another. Thus, to say that States should enforce where they have the capability and

will does not eliminate the need for Federal enforcement but rather highlights the

concerns that justify Federal enforcement.

By being closer to the problem, State enforcement agencies, in theory, can obtain

better information on the nature of the compliance problem. States have more interaction with the regulated community and are better able to monitor their compliance.27 It is not surprising, therefore, that 90 percent of environmental inspections

are performed by State environmental agencies.28 EPA simply does not have the resources or physical proximity to monitor and inspect sources in 50 States, and it

may be at a particular disadvantage in trying to respond to a situation that requires

rapid governmental action.
212

29See Ringquist, supra note 25, at 44. 30David J. Markell, The Federal Superfund Program: Proposals for Strengthening the Federal/State Relationship, 18 William and Mary Journal of Environmental Law 1, 33 n.86 (1993)

(results of informal survey). 31 Robert V. Percival, Environmental Regulation—Law, Science, and Policy 1014 (1992). 32See Office of Enforcement and Compliance Assurance, U.S. EPA, Enforcement and Compliance Assurance Accomplishments Report, fiscal year 1994 2–4 to 2–12 (1994). 33 Richard P. Nathan, The Role of the States in American Federalism, in State of the States

15, 27 (Carl E. Van Horn ed., 1989). 34See Novick, supra note 22, at § 6.02[3]; Hubert H. Humphrey III & Leroy C. Paddock, The

Federal and State Roles in Environmental Enforcement: A Proposal for a More Effective and

More Efficient Relationship, 14 Harvard Environmental Law Review 7, 13 (1990). On the other

hand, ‘‘EPA’s independent authority to file enforcement actions has no doubt resulted in stronger enforcement actions in some cases enforced at the State level,’’ id. at 40–41, and may make

‘‘bad’’ States better enforcers, Novick, supra note 26, at § 6.02[3]. 35See, e.g., Bob Anderson, DEQ Penalties Down for Fiscal 1996, Baton Rouge Advocate, Jan.

4, 1997, at 1B; Kelly King Alexander, A Toxic Job: The State’s Top Environmental Watchdog

Turns Over the Controversial Portfolio to His Deputy, Greater Baton Rouge Business Report,

State enforcement officials also may be more responsive to local needs and conditions than Federal officials who do not reside in the area.29 This could result in

more enforcement, if enforcement policies and procedures provide for citizen input

and if officials are sensitive to citizen concerns. Conversely, it could give the regulated community greater access to the agency’s personnel and more influence over

enforcement decisions. At least with the enforcement of hazardous waste site cleanups by State agencies, citizens want expanded Federal involvement because they

view States as ‘‘more readily subject to political pressure from industry.’’30

A greater awareness of local conditions may facilitate more flexible, tailored enforcement programs that take into account local geographic, economic and social

conditions and focus on the area’s most severe enforcement problems. Thus, rather

than all States spending the same proportion of resources on a problem regardless

of the local conditions, State officials can focus enforcement programs toward areas

that will result in the greatest amount of compliance and environmental protection

for the same level of enforcement resources. On the other hand, awareness of local

conditions, particularly local economic conditions and the economic and political

power of the violator, may make State regulators less inclined to take necessary enforcement actions. For example, Maryland’s failure to take enforcement action

against a steel manufacturer for extensive, longstanding violations was attributed

to ‘‘the cozy relationship large companies develop with State regulators.’’31 In addition, while the ability to weigh the local costs and benefits may be beneficial to the

immediate area, it may result in an uneven playing field if a local pollution source

is allowed to avoid compliance costs that are imposed by other States.

Rare is the proponent of devolution who does not refer to Justice Brandeis’ observation that one of the benefits of federalism is that it allows States to serve as laboratories of democracy for novel social and economic experiments. Indeed, many

Federal environmental statutes are based on programs that were first developed at

the State level. However, it is also true that EPA has played a major role in numerous advances in enforcement, such as multimedia, industry sector, and environmental justice enforcement initiatives.32 Even where State experimentation does result in an innovative solution, the Federal Government is uniquely situated to take

that successful experiment out of the State lab and see that it is implemented across

the country. In fact, because ‘‘innovative policies’’ tend to be adopted primarily by

a few States with more liberal or progressive State governments,33 the inability of

EPA to diffuse inventions to all States may exacerbate differences in environmental

protection between States if laggard States fail to adopt the new policies.

One of the most compelling original justifications for Federal enforcement has

been diminished by the dramatic growth in the size and capability of State environmental agencies. Because of this growth, some believe that Federal enforcement and

oversight of State programs may at times undermine the efforts of competent State

enforcement agencies by making the State appear less able to handle the State’s

problems, by discouraging violators from resolving their disputes with the State for

fear that EPA may still take enforcement action, or by diverting State resources to

the demands of Federal oversight or to EPA-targeted priorities that may not reflect

the true needs of the State.34

Not all States, however, are equally able or willing to enforce Federal laws. Not

surprisingly, the most eloquent proponents of a reduced Federal role in enforcement

generally are from States with strong State programs. But a Federal enforcement

presence that may seem burdensome in strong States appears absolutely essential

in a State where relaxed environmental enforcement is seen as a way to induce economic development.35 Therefore, although the concern that States lack the resources
213

Nov. 2, 1993, at 22 (enforcement actions and penalty assessments decrease under new governor;

agency accused of protecting economic interests of industry at expense of environment). 36See Ringquist, supra note 25, at 151; Mosher, supra note 16, at 186. 37Office of Enforcement and Compliance Assurance, U.S. EPA, supra note 32, at 2–2 (EPA

brought a record 2,246 enforcement actions; States took 11,334 actions). 38See J. Clarence Davies, Environmental Institutions and the Reagan Administration, in Environmental Policy in the 1980’s: Reagan’s New Agenda 143, 151 (Norman J. Vig & Michael E.

Kraft eds., 1984). 39 Albert R. Hunt, Federalism Debate Is as Much About Power as About Principle, Wall Street

Journal, Jan. 19, 1995, at A19. 40Margaret Kriz, The Green Card, National Journal 2262, 2265 (Sept. 16, 1995); Clean Air

Trust, Americans Want Tougher Stance on Pollution (October 1995) (on file with author). 41 J. Clarence Davies III & Barbara S. Davies, The Politics of Pollution 220 (1975).

and commitment to aggressively enforce environmental laws may be less justified

than in the past, without a significant EPA role in enforcement, compliance and environmental quality would suffer in many States.36

Finally, the Federal Government cannot handle all, or even most, enforcement. In

1994, States brought approximately 80 percent of all enforcement actions.37 Regulatory programs are covering an expanded number of increasingly small sources,

making it even less likely that EPA could handle most enforcement, thereby increasing the benefits of having most enforcement done by the government entity closest

to the problem. This need for State enforcement of Federal programs, however, does

not argue for no Federal role, or even for a reduced Federal role. It does, however,

dictate that the Federal Government not unduly interfere with the primary job of

enforcement performed by the States.

Thus, while some of the original arguments for Federal enforcement may find less

support today, there are still compelling justifications for a significant Federal role

in enforcement.

IV. CRITERIA FOR DEFINING THE LIMITS OF DEVOLVING ENFORCEMENT

While there are many justifications for Federal enforcement of environmental

laws and perhaps an equal number of arguments in favor of State enforcement, a

consensus on the criteria for determining the appropriate level of government to enforce environmental laws is lacking. Most arguments for further or complete devolution of enforcement to the States are ideologically based. Federalism, it is contended,

mandates that without a compelling justification for Federal involvement, the policing of pollution is best left to the States.

Yet federalism claims may mask a hidden agenda of deregulation—an often

unspoken benefit of more decentralized enforcement is not just that it allegedly will

work better or be more responsive to local concerns, but it is also likely to be less

effective and result in less regulation if States are unwilling or unable to aggressively enforce the law. President Reagan’s New federalism was not just an attempt

to transfer power back to the States; it also aimed to eliminate the perceived regulatory excesses of pollution control regulations.38 Devolution wasn’t just an end; it

was also a means to deregulate.

Likewise, some current proponents of devolution mix their calls for a transfer of

power to the States with tales of regulatory excess and a sermon on the virtues of

less government regulation. Even without such obvious deregulatory goals, the hidden agenda behind earlier attempts to devolve enforcement taints the present proponents of devolution and requires proponents to justify a shift in enforcement authority on public policy, not just ideological, grounds.

It is also the case that the public cares less about ideology when it comes to questions about the division of authority between the Federal and State governments

and more about what works and what it costs. When asked whether Federal or

State government should have more responsibility for achieving environmental protection, Americans preferred the Federal Government over State government by a

50 percent to 38 percent margin.39 According to one survey, 60 percent of the public

opposes reducing the compliance powers of EPA, while 70 percent feel the Federal

Government has not gone far enough to protect the environment.40 These polls support the observation that ‘‘[t]here is no guarantee that Washington can do any better, but in the face of State and local failure the American public tends to turn to

the national government. In fact, the public looks to the national government to

solve any major problem, regardless of how successful the other levels of government have been.’’41

Therefore, if we should respect the desires of the public and base the limits of

devolution on who gets the job done rather than on ideology, then what we need

are pragmatic grounds for any further devolution of enforcement authority. Sound

public policy criteria and demonstrated results, not abstract political doctrines of
214

42See Dana A. Rasmussen, Enforcement in the U.S. Environmental Protection Agency: Balancing the Carrots and the Sticks, 22 Environmental Law 333, 338 (1991) (71 percent of public

support more aggressive enforcement of antipollution laws). 43 Robert R. Kuehn, Remedying the Unequal Enforcement of Environmental Laws, 9 St.

John’s Legal Comment. 625 625 & n.2 (1994). 44Marianne Lavelle, Environment Vise: Law, Compliance, National Law Journal, Aug. 30,

1993, at S1, S1. 45Government Has Too Many Rules, Too Little Enforcement, Not Enough Prevention, Environmental Managers Report in BNA Survey, [Special Report] 22 Environmental Report (BNA)

2386, 2386 (1992). 46See Office of Enforcement, U.S. EPA, supra note 28, at 2–13. 47 Novick, supra note 22, at § 6.02[2]. 48Martha Derthick, American Federalism: Madison’s Middle Ground in the 1980s, Pub.

Admin. Rev. 66, 70 (Jan./Feb. 1987). 49 Hodas, supra note 27, at 1586 (quoting letter by Richard D. Morgehstern, Acting Administrator, Office of Policy, Planning and Evaluation, U.S. EPA). 50See State Cleanup Systems More Effective than Federal Superfund Program; Report Says,

[Current Development] 26 Environmental Report (BNA) 982 (1995).

federalism versus nationalism or unspoken agendas of deregulation, should determine the level of government that is most appropriate to enforce environmental

laws.

Surely the first criteria for any pragmatic devolution ought to be the relative effectiveness of Federal and State enforcement. There is great concern that the

present amount of governmental enforcement is inadequate. Polls show that an

overwhelming percentage of the public wants stricter enforcement of existing environmental laws,42 and rightly so, given that violations of Federal environmental

laws are widespread.43 Two-thirds of corporate counsel admitted in 1993 that their

businesses operated in violation of environmental laws during the past year.44 Half

of all corporate environmental managers believe that the Federal Government’s enforcement is inadequate, citing the need for more enforcement to ensure that all

companies are treated equally.45

The difficulty lies, not in gaining agreement on the need for more effective enforcement, but in defining and measuring enforcement effectiveness. While EPA

often focuses its resources on high visibility cases that advance the goal of general

deterrence, States have traditionally taken a less confrontational approach, often

preferring to work informally with the violator to bring it back into compliance.46

Thus, attempts to evaluate the effectiveness of an enforcement program through the

number of enforcement actions or the size of the penalties assessed may overlook

other important measures of compliance. Even if there were agreement on some ‘‘objective’’ measure of enforcement success, because EPA often takes the lead in larger,

more difficult cases, numbers alone are not likely to reflect the relative success of

the two levels of enforcement. Thus, there is no agreement on how to define a successful program.

Ideally, measures of effectiveness could be compared for State-run programs, federally-run programs, and programs with State implementation and Federal oversight. However, there is no published empirical study comparing the effectiveness

of Federal and State environmental enforcement, leading one commentator to observe that although it is often claimed that States have advantages over Federal enforcement, ‘‘[i]t is unclear whether these State advantages are real or primarily received as articles of faith.’’47

Although a systematic study is lacking, a number of observations have been made

about the success of various State and Federal enforcement programs. When Iowa

returned responsibility for its municipal water monitoring to EPA in the early

1980’s, EPA managed to conduct only about 15 percent of the number of inspections

formerly performed by the State.48 An EPA official observed that if only a small

number of delegated States were to return their programs to EPA, because of resource constraints ‘‘there would be less enforcement, not more.’’49

Critics of the Superfund program point to the lengthy time for EPA cleanups and

the small number of completed cleanups, as compared to sites addressed by State

programs, as evidence of the lack of effectiveness of Federal enforcement programs.50 However, this observation overlooks the fact that EPA, by law, focuses on

emergency cleanups and the most hazardous sites. It also fails to acknowledge that

the mere threat of becoming a Federal Superfund site has encouraged responsible

parties to cooperate with State cleanup efforts. Undoubtedly, the influence of EPA’s

independent enforcement authority on the success of State enforcement programs

makes it difficult to predict the results if EPA were to cease enforcement activity.

Problematic as EPA enforcement has been, State enforcement has not necessarily

been any more successful. The General Accounting Office found that the track

record of States in carrying out enforcement of Federal laws, particularly in assess-
215

51Management Deficiencies in Environmental Enforcement: ‘‘Forceless Enforcement’’: Hearing

Before the Senate Comm. on Governmental Affairs, 102d Cong., 1st Sess. 5 (1991) (testimony

of Richard Hembra, General Accounting Office). 52See, e.g., Resources, Community, and Economic Development Division, U.S. General Accounting Office, EPA and the States: Environmental Challenges Require a Better Working Relationship 16–19 (1995); Water Pollution Prevention and Control Act of 1991: Hearing on S. 1081

Before the Subcomm. on Environmental Protection of the Senate Comm. on Environment and

Public Works, 102d Cong., 1st Sess. 687 (1991) (statement of John Martin, Inspector General,

EPA). 53Martin H. Belsky, Environmental Policy Law in the 1980’s: Shifting Back the Burden of

Proof, 12 Ecology Law Quarterly 1, 63 (1984). 54See Congressional Budget Office, Environmental Federalism: Allocating Responsibilities for

Environmental Protection 21–22 (1988). 55 Ringquist, supra note 25, at 20. EPA’s $230 million in enforcement-related costs were less

than 10 percent of the agency’s $2.689 billion fiscal year 1994 operating budget. Telephone

Interview with Terry Ouverson, Office of the Comptroller, EPA (Nov. 27, 1995). 56 Ringquist, supra note 25, at 19–20. 57 Council on Environmental Quality, Environmental Quality: 22nd Annual Report 83 (1992) 58 U.S. Dept. of Justice, supra note 18, at 30, 33, 44. When injunctive relief, supplemental environmental projects and Superfund cleanup activities are included, the Enforcement Section returned $34 for every dollar budgeted; Environmental Crimes returned $7. Id. at 44. 59Office of Enforcement and Compliance Assurance, U.S. EPA, supra note 32, at 2–2; Office

of the Comptroller, U.S. EPA, Budget Analysis Resource System: FY94 Actual by Media, Approp.

(Nov. 1995) (on file with author).

ing penalties and in ensuring that any penalty assessed at least recovers the economic benefit of noncompliance, ‘‘is even more disappointing’’ than the record of

EPA.51 Government studies repeatedly document the failure of States to take necessary enforcement actions for violations of water pollution, drinking water and hazardous waste regulations.52

Historically, withdrawal of Federal enforcement has not resulted in more State

environmental enforcement. When the Reagan Administration greatly reduced Federal enforcement and increased State responsibilities, States also reduced their environmental regulatory activities, especially their enforcement of laws and regulations.53 Indeed, if the withdrawal of Federal authority as a backstop to State enforcement efforts is coupled with reductions in Federal grants for State enforcement

efforts, as is expected over the next few years because of the budgetary problems

of the Federal Government, then State enforcement may become dramatically less

effective than at present.

Therefore, although a lack of data hinders the ability to judge the relative effectiveness of the two enforcement programs, there is no compelling case on effectiveness grounds for eliminating or drastically reducing the Federal role.

Efficiency is the second criterion by which to judge the limits of pragmatic devolution. An efficient enforcement program would maximize enforcement effectiveness

for a given expenditure, generate the lowest enforcement costs for a given level of

compliance, or provide marginal benefits of increased enforcement at least equal to

the marginal costs of additional enforcement.54 Once again, lack of data prevents

a conclusion on the relative efficiency of Federal and State enforcement programs.

It is clear, though, that EPA’s enforcement expenditures are a small part of the

overall Federal budget. Indeed, EPA’s expenditures are only 0.4 percent of the Federal budget, and enforcement makes up only a modest part of EPA’s total operating

budget.55 Moreover, while EPA’s responsibilities have increased significantly, the

buying power of EPA’s budget in 1992 was only 55 percent of what it was in 1978.56

Federal enforcement is efficient, at least when measured in terms of enforcement

dollars spent and relief received, and is even a source of revenue for the government. In 1991, for every dollar spent, civil judicial environmental enforcement actions returned $25 to the U.S. Treasury; criminal enforcement actions returned $3.57

In fiscal year 1994, the U.S. Department of Justice’s Environmental Enforcement

and Environmental Crimes Sections collected more than $80 million in penalties

and fines alone, all on a total budget, including all Superfund cases, of $50 million.58 EPA’s enforcement programs also return more in benefits than they spend

on enforcement. In 1994, EPA recovered $151 million in civil penalties and criminal

fines and more than $740 million in non-Superfund injunctive relief and supplemental environmental projects at a cost of less than $230 million.59 These efficiencies, coupled with the high nationwide rates of noncompliance, make it hard to

justify drastic cuts in Federal enforcement budgets that would have the resulting

indirect effect of devolving an even greater proportion of enforcement responsibilities to the States.

In spite of these impressive statistics, it is generally assumed that States run

their enforcement programs more efficiently than EPA, presumably because State
216

60See Novick, supra note 22, at § 6.02[2]; Congressional Research Service, supra note 13, at

76.61See Derthick, supra note 48, at 70; Stanfield, Ruckelshaus Casts EPA as Gorilla, supra note

11, at 1038. 62Stanfield, Ruckelshaus Casts EPA as Gorilla, supra note 11, at 1038. 63See William H. Rogers, Jr., 4 Environmental Law § 7.23(B)(3)(1992); Novick, supra note 22,

at § 8.02[6]. 64See, e.g., Stewart, supra note 2, at 1219–20. 65See Strohbehn, supra note 24, at 15,079–80. 66See Margaret E. Kriz, Ahead of the Feds, National Journal 2989, 2990 (Dec. 9, 1989).

salaries are less than Federal salaries and, by being closer to the source of the problem, travel and other costs are lower.60 One of the few available comparisons resulted when EPA was forced to resume implementation of Idaho’s air quality program for 15 months beginning in July 1991. One EPA official estimated that it cost

the Federal Government at least double what it cost the State to run the program;

another commentator claims that EPA reportedly spent almost five times as much

to maintain the Idaho program that year as the State would have spent to do the

same job.61

Even this natural experiment suffers from problems that make comparisons difficult. Because EPA could not hire employees for what the agency viewed as a temporary program, EPA was forced to hire more expensive private contractors to implement the program.62 Moreover, while this example suggests that it might cost

EPA more to run an enforcement program (or at least a new program) than it would

cost the State to continue with its existing program, the Idaho example tells us

nothing about the effectiveness of either the State or EPA-run enforcement program.

Therefore, while it might cost more, a federally-run enforcement program might result in greater compliance.

Other issues further cloud any accurate assessment of efficiencies. A certain

amount of overlap and duplication of effort exists between Federal and State environmental enforcement programs, as is true in other areas of dual enforcement,

such as drug-related crimes, civil rights, and workplace safety. The most controversial form of duplication, independent enforcement action by EPA in an authorized

State, is EPA’s most effective means to oversee State enforcement programs and

provides significant deterrence value.63 While overlap increases compliance, if one

level of government could implement all enforcement and attain results comparable

to what are now being achieved by dual enforcement, then costs could be saved. But

this is a very big ‘‘if,’’ the general agreement that, were the Federal Government

to decrease its environmental enforcement activities, many State programs would be

weaker, deterrence would suffer, and noncompliance would increase.

It is also repeatedly suggested that there are certain inefficiencies with nationwide enforcement programs because they focus resources on issues that may not be

problems in particular localities.64 While this is likely true in some circumstances,

national enforcement serves other important goals such as providing equitable treatment of the regulated community and helping ensure equal environmental protection for all citizens. Federal officials could address any such inefficiencies by tailoring enforcement efforts to address local problems and providing greater decisionmaking discretion to State enforcement officials rather than by abolishing Federal

enforcement programs.

Moreover, just as EPA cannot accomplish all enforcement, it is unreasonable to

assume that States can assume all enforcement responsibilities, particularly if there

are reductions in Federal grants to State enforcement programs. In fact, cuts in

Federal grants could have the unintended effect of increasing the need for Federal

enforcement as States may become increasingly reluctant to assume Federal responsibilities that appear to be yet another unfunded mandate and may decide to return

pollution control programs to EPA.65

Finally, pragmatic devolution requires that officials vest enforcement responsibilities in a level of government that can ensure equitable treatment of citizens and

businesses. The desire to ensure that the benefits and costs of environmental protection are evenly distributed was a compelling reason for the establishment of Federal

environmental programs. However, national pollution standards do little to ensure

equal protection if these requirements are not uniformly enforced throughout the

country.

Federal enforcement plays a major role in seeking to ensure fair and equitable

treatment of the regulated community. As markets for goods and services have become increasingly national and international, centralized enforcement programs are

in a unique position to provide consistent enforcement policies and practices.66 If a

company violates a Federal pollution control standard in Louisiana, then it should

expect roughly the same enforcement response as a similarly situated company in
217

67 Ringquist, supra note 25, at 68. 68Margaret Kriz, The Green Card, supra note 40, at 2264. 69See U.S. EPA, National Environmental Performance Partnership System 1 (May 17, 1995)

(on file with author).

California or New York. Only a significant Federal enforcement program, as argued

above in Part II, can maintain this level playing field and minimize the market imbalances that might result from unequal enforcement among the States.

Citizens likewise are entitled to an equitable level of environmental protection.

‘‘The justification for uniform [national] standards is that each citizen has an inherent right to the same level of environmental quality (or the same level of environmental risk).’’67 This expectation of environmental protection has become so pervasive that it is now viewed by persons of every political party ‘‘to be an inalienable

right that they rank alongside liberty and the pursuit of happiness.’’68 If we believe

that businesses should expect similar treatment for violations of the same Federal

standard, then should not a citizen of Louisiana expect that he or she will receive

the same Federal protection from environmental hazards, and a comparable enforcement response for violations of Federal standards, as a person residing in California

or New York?

Balanced against this right of citizens to equal protection is the desire of States

to implement their own enforcement programs. However, important as it may be to

respect federalism and State autonomy, national environmental standards mean

nothing if citizens cannot expect equal enforcement of those standards regardless of

where they live. Thus, if States alone were allowed to enforce Federal standards or

if they were free to ignore noncompliance with environmental regulations or tradeoff

enforcement of environmental laws for promises of economic development, then

many citizens could lose the uniform levels of environmental protection legislated

by Congress. If, as reflected in the legislation of national standards, there is agreement that citizens are entitled to a fundamental level of environmental protection,

then some government entity must be in a position to ensure on a State-by-State

basis that the equal protection of citizens is being safeguarded. Even State environmental officials recognize the role of the Federal Government in ensuring that all

States provide fundamental public health and environmental protection.69

Only Federal enforcement can ensure that citizens, like businesses, are equally

treated and equally protected. Although the need to ensure equal protection of citizens may not justify that the Federal Government perform all or even most enforcement, it does justify a substantial Federal presence to act where and when needed.

As long as we recognize the right of citizens to equal protection from environmental

hazards through the promulgation of uniform national standards, then some Federal

enforcement is necessary to ensure that States respect and protect those rights.

V. CONCLUSION

Based on my analysis, I do not believe that devolution of all enforcement of Federal environmental laws to the States is supportable. The initial justifications for

Federal enforcement, though they have changed over the past two decades, are still

largely valid. In addition, although the available data is limited, the public policy

criteria of effectiveness, efficiency and equity do not support a dramatic reduction

in Federal enforcement. Unfortunately, this lack of data also hinders informed

choices about the proper mix of Federal and State enforcement and makes it difficult to define the appropriate limits of devolving Federal enforcement.

It is apparent from the information that is available that because of resource limitations and respect for principles of federalism, the Federal Government alone cannot and should not administer all, or even most, enforcement. On the other hand,

because pollution has economic and public health impacts that transcend State

boundaries, States cannot execute all enforcement. States also lack the will and resources to address all violations. Environmental enforcement problems are just too

large and too complex for any one level of government to handle.

To argue that there should not be a dramatic reduction in Federal enforcement

is not to suggest that the Federal-State enforcement relationship could not be improved. Reforms are needed that will make enforcement programs work better by

minimizing unnecessary duplication and conflicts between Federal and State programs. EPA and the States are considering a number of new oversight reform proposals, such as the development of new enforcement performance measures, ‘‘differential oversight,’’ and increased use of block grants. Provided that issues of enforcement devolution are resolved on sound public policy, not ideological, grounds,

these proposal have the potential to improve both enforcement and Federal-State relations.
218

Therefore, I urge you to encourage EPA and the States to both: (1) gather additional data on the effectiveness and efficiency of Federal and State enforcement so

that this important issue can be resolved on pragmatic grounds; and (2) continue

efforts to coordinate and cooperate on enforcement so that Federal and State governments can provide the public with what they want and need—effective, efficient and

equitable enforcement of Federal environmental laws.

Thank you for allowing me to testify before the Committee, and I hope that my

remarks are useful to you in addressing this important issue. I will be happy to answer any questions you may have.

PREPARED STATEMENT OF TODD ROBINS, ENVIRONMENTAL ENFORCEMENT,

U.S. PUBLIC INTEREST RESEARCH GROUP

I. INTRODUCTION

Good morning, Chairman Chafee, Senator Baucus and distinguished members of

the Environment and Public Works Committee. My name is Todd Robins; I am an

environmental attorney with the U.S. Public Interest Research Group. U.S. PIRG

is the national lobbying office for the State PIRG organizations active in more than

30 States around the country. The State PIRGs are non-profit, non-partisan environmental and consumer watchdog groups with nearly one million citizen members nationwide. I also chair the Clean Water Network’s Enforcement Work Group, and in

that capacity, work with citizen litigators, citizens suit plaintiffs, and grassroots

groups fighting illegal pollution in their communities around the country. The Clean

Water Network is a national coalition of over 900 groups, including environmental

organizations, labor unions, and commercial and recreational fishers, all dedicated

to strengthening the Clean Water Act and its implementation in the States. All of

these groups have endorsed a Clean Water enforcement platform which calls for

mandatory minimum penalties for serious violations, simplified and strengthened

citizen suit authority, and increased citizen right to know about polluted waterways.

Finally, I am a member of the Steering Committee of the Network Against Corporate Secrecy, a network of environmentalists and community groups around the

country working together to fight corporate secrecy laws and protect the public’s

right to know.

Fair and effective enforcement of our environmental laws is an issue of substantial importance to the PIRGs and its members. We have brought more than 80 successful citizen enforcement suits, recovering over $46 million in payments for violations. Most importantly, New Jersey PIRG helped to write and pass the country’s

strongest Clean Water enforcement law in 1990—a law that has been remarkably

successful, and a law about which I plan to speak in some detail today.

I am here today to provide the Committee, from the perspective of the public interest, an analysis of the environmental enforcement crisis that exists in many

States around the country, and to offer a vision of a more effective Federal-State

partnership and how it could function to address this crisis. I would like to say at

the outset what may otherwise get obscured by this discussion—namely that the

public, the agencies represented here today, and law abiding companies disadvantaged by scofflaw competitors, I believe, share the same goal: which is compliance

in the first place, achieved efficiently. The purpose of my testimony today is to demonstrate that the way we get there is not by voluntary, hand-holding approaches,

but by creating a constructive partnership between the States, EPA, and citizens

that maintains a genuine, firm and predictable threat of serious consequences for

those who choose to violate pollution laws.

Specifically, I would like to make three points. The first is that the failure or unwillingness of States to enforce the law, in conjunction with corporate secrecy, immunity, and deregulatory policies in some States, has encouraged widespread violations of our environmental laws and promoted an atmosphere for scofflaws in which

it simply pays to pollute. The second point is that, despite several important examples of Federal enforcement intervention in the face of inadequate State action, the

U.S. Environmental Protection Agency (EPA) is not doing enough to assure compliance with the laws it oversees, but instead has also measurably reduced its commitment to effective Federal environmental enforcement in recent years. Third, and finally, the firm, but fair, no-nonsense approach to Clean Water Act enforcement that

we have seen in New Jersey since 1990—characterized by mandatory minimum penalties for serious violations, stronger citizen suit provisions, better monitoring and

reporting, and adequate resources—should serve as a national model for enforcement of the Clean Water Act and other Federal environmental statutes. Key aspects
219

1 Joan Heinz, Esq. and Paul Wallach, Esq., on behalf of the Corporate Environmental Enforcement Council, before the U.S. EPA Office of Enforcement and Compliance Assurance, Public

Meeting re: National Performance Measures Strategy, 2/3/97, Alexandria, Va. 2 U.S. EPA Office of the Inspector General, Report of Audit: Validation of Air Enforcement

Data to EPA by Pennsylvania, 2/14/97. 3 Ibid.

4 Ibid.

5 Richard Hembra, Director of Environmental Protection Issues at U.S. General Accounting

Office, Testimony before House Public Works Committee’s Subcommittee on Water Resources,

May 14, 1991.

of the New Jersey law are embodied in Federal legislation introduced this year by

Senators Lautenberg and Torricelli (S. 645).

II. SERIOUS VIOLATIONS OF ENVIRONMENTAL LAWS ARE WIDESPREAD

Recently, representatives of polluting industries have asserted that ‘‘the vast majority of the regulated community has demonstrated its strong commitment to operating within the regulatory structure’’ and that environmental ‘‘compliance is the

rule, not the exception.’’1 However, the data EPA has compiled on Clean Water Act

violations tell a different story. U.S. PIRG has endeavored to tell this story to the

public throughout the 1990’s by researching, analyzing, and releasing this data

showing that an alarming number of major point source polluters seriously and

chronically violate the law.

In March of this year, U.S. PIRG released our Dirty Water Scoundrels report, documenting serious violations of the Clean Water Act by the Nation’s largest facilities

from January 1995 through March 1996. We were disturbed to find that nearly 20

percent of the major industrial, municipal and Federal clean water permit holders

nationwide were listed by EPA in Significant Noncompliance with the Clean Water

Act in at least one quarter during this period.

What’s more, these EPA numbers are probably just the tip of the iceberg. When

we looked at industry’s self-reported discharge monitoring information for just the

first quarter of 1996, we found that 576—or 21 percent—of the nations’s major industrial polluters exceeded their pollutant limits by 50 percent or more. That is

nearly three times the number of companies EPA listed in Significant Noncompliance during this single quarter.

Unfortunately, national rates of compliance with the Clean Air Act are not readily

available. The lack of information is, in part, attributable to the fact that some

States seriously and purposely under-report the number of significant violations of

the Act.2 An EPA Inspector General report earlier this year found that although the

State of Pennsylvania reported only six major air pollution violations in 1995, a review of the data revealed that in fact 64 of 270 Pennsylvania plants (24 percent)

had committed major violations in that year.3 According to that report, the data

‘‘strongly suggests the potential for problems in other States.’’4

III. WIDESPREAD NON-COMPLIANCE HAS BEEN ENCOURAGED BY STATES’ INADEQUATE

ENFORCEMENT

Clearly, when one in every five major Clean Water Act permit holders is a serious

or chronic violator, compliance cannot be said to be the rule. We think the findings

of the U.S. PIRG and the EPA Inspector General reports demonstrate gross and unacceptable levels of non-compliance with our environmental laws. The question,

then, is: why are serious and chronic violations so widespread? The answer is obvious: our Federal environmental laws are not being enforced effectively. Weak and

inconsistent enforcement at the State level encourages non-compliance, creates a

‘‘race to the bottom’’ in which companies shop for States with weak standards, and

disadvantages law abiding companies who take their environmental responsibilities

seriously. Without environmental cops aggressively on the beat, without a credible,

predictable deterrent to illegal pollution, polluters have little incentive to clean up

their acts and plenty of incentive to disregard the law.

Historically Weak State Enforcement

The problem of inadequate State environmental enforcement is not a new one. Indeed, in 1991 Richard Hembra, the Director of Environmental Protection Issues at

the U.S. General Accounting Office, described enforcement of water quality laws as

‘‘weak and sporadic.’’5 According to Hembra:

Despite serious and longstanding violations, most enforcement actions are informal slaps on the wrist rather than formal actions, such as administrative

fines and penalties. Further, even in the relatively few cases where penalties

have been assessed, they are often significantly reduced or dropped . . . With-
220

6 Ibid.

7 EPA Office of the Inspector General, Capping Report on the Computation, Negotiation, Mitigation, and Assessment of Penalties Under EPA Programs, September 1989. 8 Ibid.

9Tom Arrandale, ‘‘Can Polluters Police Themselves,’’ Governing, June 1997. 10 Cushman, 12/15/96. 11 Chesapeake Bay Foundation, Environmental Defense Fund, Petition for Corrective Action,

An Order Commencing Withdrawal Proceedings, and Other Interim Relief With Respect to Virginia’s Water Pollution Control Program, before U.S. EPA Region III, 11/5/93. 12 Joint Legislative Audit and Review Commission of the Virginia General Assembly, Review

of the Department of Environmental Quality, 1997. 13 Ibid. 14 Ibid.

out enforcement, dischargers have little incentive to incur the cost of pollution

control. At the same time, industrial dischargers that do abide by program requirements are unfairly placed at a disadvantage with those who choose not to

invest in pollution control equipment and practices.6

In a 1989 EPA Inspector General audit of enforcement under all EPA programs,

the IG concluded that penalties rarely were sufficient to recover the economic benefit the violator had gained from avoiding compliance.7

When penalties are reduced to below what it would cost to comply with the

environmental laws, they encourage rather than deter noncompliance. Small

fines and lengthy time limits to achieve compliance promote a pay-to-pollute

mentality.8

The Enforcement Crisis Has Worsened

Today, the problem in many States appears to be growing worse. A significant

number of States around the country have explicitly reduced, or even dismantled,

their already weak, under-funded environmental enforcement programs under the

philosophy that voluntary, hand-holding compliance assistance efforts will achieve

compliance more efficiently.9 State and EPA data, as well as anecdotal evidence

from around the country indicates that the opposite is true: as the numbers of inspections conducted, enforcement actions taken, and penalties collected by State environmental departments have declined rapidly and dramatically, rates of non-compliance, as described earlier, have remained persistently high and in some States

have worsened. It is critical to note that when a decrease in enforcement actions

and penalties is accompanied by a parallel decline in violations, as has happened

in New Jersey under a mandatory minimum penalty scheme that I will discuss

later, the goal of compliance efficiently achieved has been met. The data and information U.S. PIRG has gathered from around the United States demonstrate that

most States are nowhere near this goal, and many are headed in the wrong direction.

U.S. PIRG is currently in the process of compiling information on State environmental enforcement into a comprehensive national report. What follows is a sampling of what we have learned, containing data and examples that are either particularly egregious or may be of special interest to members of the Committee:

• The Commonwealth of Virginia and its Department of Environmental Quality

(DEQ) have received significant publicity as a leading example of States’ ‘‘resistance

to vigorous enforcement of Federal environmental laws.’’10 In 1993, citizen groups

filed a petition asking EPA to revoke Virginia’s delegated authority to implement

the Clean Water Act for the Commonwealth’s failure to correct long-standing violations and its failure to pursue adequate enforcement penalties, among other

things.11

Since then, the situation has only deteriorated. According to a recent report by

the Virginia General Assembly’s Joint Legislative Audit and Review Commission,

top DEQ officials ‘‘have chosen to disregard the State’s laws and Constitution and

were skirting Federal environmental requirements to favor industry.’’12 Water inspections are down 38 percent since fiscal year 1990; DEQ has not maintained computerized water compliance information for over 2 years; enforcement referrals to

the Office of the Attorney General have fell from 30 in fiscal year 1989 to 1 in fiscal

year 1996; civil penalties for water violations in fiscal year 1996 totaled $4,000, a

98 percent decline from fiscal year 1994, and civil penalties for hazardous waste violations dropped by 94 percent in the same period.13 According to the report, this decline in enforcement ‘‘does not correlate to any increase in compliance with the

law.’’14

• Although approximately 26 percent of major Oklahoma water polluters were

listed by EPA in ‘‘Significant Non-Compliance’’ with their Clean Water Act permits
221

15 U.S. PIRG, Dirty Water Scoundrels, March 1997, Permit to Pollute, June 1995. 16Oklahoma DEQ, Annual Report, Fiscal Years 1994, 1995, 1996. 17 Internal Sun Oil Memo, from W.R. Clarke to W.T. McCollough, 1/3/89. 18Telephone conversation with B.J. Medley, Citizen Activist, Tulsa, OK, 6/6/97. 19Greg Jaffe, ‘‘Officials Fear EPA Takeover in Alabama,’’ ‘‘The Wall Street Journal Southeast

Journal, 2/14/96. 20 U.S. PIRG, March 1997. 21St. Petersburg Times, ‘‘Has State Environmental Watchdog Lost It’s Bite?’’ 4/13/97. 22 U.S. PIRG, March 1997. 23 U.S. EPA, Region 4 NPDES Permits Update, May 1997. 24 U.S. EPA Region I, Draft Multimedia Review of the Enforcement Programs of the Connecticut Department of Environmental Protection, November 1996. 25 Ibid. 26 U.S. PIRG, June 1995.

at least once from July 1993 through March 1996,15 Oklahoma’s Department of Environmental Quality (DEQ) collected a total of $1,000 in fines for water violations

from fiscal year 1994 through fiscal year 1996.16 The story of DEQ’s Air Quality Division is similar: notices of violation and consent orders have decreased in recent

years, and fines for air pollution violations dropped 86 percent from fiscal year 1994

to fiscal year 1996. Weak air pollution enforcement in Oklahoma is not a new problem, however. One longstanding beneficiary of DEQ’s unwillingness to enforce air

pollution laws has been the Sun Oil Company refinery in Tulsa. According to a January 1989 internal Sun Oil memo, their Tulsa facility reported fewer environmental

violations than other Sun refineries because, among other things, DEQ did not conduct routine inspections of the refinery to monitor compliance.17 More recently, residents nearby the refinery have been pressing DEQ to take action against Sun for

repeated nighttime releases of sulfur, hydrocarbons, and hydrofluorides—some of

which have sent neighbors to the hospital with headaches and lung ailments—but

the department has still never conducted an inspection or issued a Notice of Violation.18

• In Alabama, after several years of steady cuts in the State Department of Environmental Management’s (DEM’s) budget, waterway assessments and discharger inspections are at an all-time low. Inspections dropped 62 percent from 1994 to 1995

alone, and the percentage of waters assessed by the State in 1994 was only 17 percent, the lowest in the southeast.19 Meanwhile, Alabama ranked tenth worst in the

Nation with 44 major water polluters listed in Significant Non-Compliance with the

Clean Water Act from January 1995 through March 1996.20

• According to U.S. PIRG’s March 1997 study, the State of Missouri ranked third

worst in the Nation with 44 percent of its major water polluters in Significant NonCompliance with the Clean Water Act at least once during a recent period. A review

of Clean Water Act permit files at the Missouri Department of Natural Resources

by the Ozark Chapter of the Sierra Club revealed that many of the listed non-compliers have long histories of almost constant violations of water standards. The files

of the State’s two major lead mining companies, Doe Run and Asarco, showed

steady patterns of violations going back as far as 1984 and 1968, respectively. In

fact, the records on Asarco indicate that the company has never been in compliance

with the Clean Water Act, demonstrating that Missouri DNR’s enforcement program

has not provided a credible deterrent that succeeds in returning violators to compliance.

• In Florida, where civil penalties imposed against violators by the Department

of Environmental Protection (DEP) are down in some regions of the State by 90 percent since 1993,21 the State’s recently delegated Clean Water Act permit program

is particularly troubled. In 1995 and early 1996, 87 major facilities in Florida were

listed by EPA in Significant Non-Compliance with the Clean Water Act, the second

highest number of violators in the country for that period.22 What is worse is that

a substantial number of those polluters were violating out-of-date permits: recent

U.S. EPA Region IV statistics indicate that 41 percent of Florida’s major industrial

facilities are operating with expired permits, the worst in the southeastern region.23

• A recent U.S. EPA Region I audit of the Connecticut Department of Environmental Protection’s (DEP’s) enforcement program revealed serious shortcomings in

the department’s water bureau.24 According to the audit, the water bureau shifted

most of its enforcement personnel to other areas in 1993, and since then has conducted significantly fewer inspections and issued many fewer notices of violation for

water violations. In addition, notices and orders issued or negotiated since late 1992

have gone unmonitored.25 During the same period industrial non-compliance with

the Clean Water Act has worsened—with one in five of the State’s major industries

in serious violation from mid–1993 through 199426 and one in four in serious viola-
222

27 U.S. PIRG, March 1997. 28 Ibid. 29 U.S. PIRG, March 1997. 30Telephone conversation with Carolyn Pravlik, Esq., attorney against Laidlaw, 6/6/97. 31 U.S. PIRG, March 1997. 32 Based on U.S. EPA Permit Compliance System data. 33From materials provided by Timothy P. Mulvey, Onandaga Lake Cleanup Corp., 6/5/97. 34Puget Soundkeeper Alliance, 1997. 35Mellman Group poll, January 1997. 36 Robert Keuhn, Tulane Law School, June 1997. 37 Christi Daugherty, ‘‘Polluter, Heal Thyself, Environmental Self-Audits Would Let Louisiana

Polluters Off the Hook,’’ Gambit, April, 1997. 38 U.S. PIRG, March 1997.

tion from 1995 through early 1996.27 The audit also found that DEP ignores chronic

violations, delays initiation of enforcement actions, substantially reduces penalties

without justification, and systematically fails to recover the economic benefit gained

by violators from avoiding compliance.28 Most recently, the department has come

under scrutiny for accepting a relatively low fine from MacDermid chemical company, whose 1994 spill of 1,500 gallons of corrosive, copper-containing liquid into the

Naugatuck River killed 12,000 fish. MacDermid’s C.E.O. has been identified as a political contributor to Governor Jim Rowland. • Recent data show that more than 40 percent of South Carolina’s major industrial water polluters were considered in Significant Non-Compliance with their permits during 1995 and early 1996, the third highest percentage in the U.S. for that

period.29 One company not on that list was Laidlaw, a company that operates a hazardous waste incinerator in the State. When citizens sued Laidlaw for dumping significant quantities of mercury over its permit limits into a nearby stream, the State

Department of Health and Environmental Control (DHEC) imposed a modest penalty in order to block the citizen suit from proceeding. When the court found that

civil penalties that amount to less than the economic benefit to the polluter are not

sufficient to block a citizen suit, DHEC simply relaxed Laidlaw’s mercury limit so

significantly as to make the violations ‘‘go away.’’30

• Although 53 major water polluting facilities in New York committed serious

Clean Water Act violations in 1995 and early 1996,31 the New York State Department of Environmental Conservation (DEC) experienced a 45 percent decline in the

number of formal water enforcement actions it initiated from 1992 to 1996.32 In addition, according to U.S. EPA’s Office of Enforcement and Compliance Assurance,

DEC has issued general stormwater permits to only 14 percent of the 10,000 industrial facilities and municipalities subject to stormwater controls. Among the worst

casualties of DEC’s neglect is Lake Onondaga, widely regarded as the most polluted

lake in the United States. Despite the fact that the lake’s primary polluter, the Metropolitan Syracuse Sewage Treatment Plant (Metro), settled a citizen suit and

agreed in 1988 to develop a plan to come into compliance, today no clean-up plan

yet exists, much less any action to reduce pollution in the lake. In the almost 10

years since the settlement, DEC has taken no affirmative action against the county

to enforce the agreement.33

• From July 1995 to June 1996, 70 percent of the 334 facilities permitted to discharge pollutants into Puget Sound in Washington committed violations, the overwhelming majority of which were repeat violations. Of the violators, 35 percent were

listed as serious or chronic. Nonetheless, the State imposed penalties against only

10 percent of the repeat violators during this period.34

• Although a recent Mellman Group poll showed that an overwhelming majority

of Louisiana voters support stronger clean water, clean air, toxic emissions, and

right to know regulations and believe businesses lobby to weaken environmental

laws out of greed rather than concerns about job losses,35 the Louisiana Department

of Environmental Quality has, nonetheless, steadily reduced its commitment to enforcement of current laws in recent years. From 1991 to 1996, enforcement actions

have declined by 32 percent, the percentage of enforcement actions with penalties

assessed dropped from 14.7 to 5, and the total number of penalty dollars assessed

has dropped by 82 percent.36 In addition, the State House of Representatives has

passed an audit privilege and immunity law that, if enacted, will be among the

broadest and most pro-business self-audit laws in the county.37 Meanwhile, Louisiana ranked eighth worst in the country, with 57 major facilities listed by EPA in

Significant Non-Compliance with the Clean Water Act from 1995 through early

1996.38

• According to a report last year of the Environmental League of Massachusetts

Education Fund, the Massachusetts Department of Environmental Protection has

been substantially less aggressive about penalizing behavior that violates environ-
223

39Donna Tesiero, James Gomes, Enforcement Trends at the Massachusetts Department of Environmental Protection 1989–96, May 1996. 40 Ibid. 41 Ibid. 42 Ibid. 43Telephone Conversation with Laura Hunter, Environmental Health Coalition, San Diego,

CA, 6/5/97. 44 Ibid. 45 U.S. General Accounting Office, EPA and the States: Environmental Challenges Require a

Better Working Relationship, GAO/RCED–95–64, 4/3/95.

mental protection laws in recent years.39 While the department has been issuing

more ‘‘Notices of Non-compliance,’’ (NON) analogous to a warning rather than a

ticket, administrative penalties have dropped by more than half since 1989.40 A recent EPA Region I audit found that NONs were issued when penalties should have

been, including a case where a paper company had multiple serious Clean Water

Act and Resource Conservation and Recovery Act violations.41 Also, inspectors returned to the scene of violations to follow up on subsequent compliance steps in

fewer than 2 percent of the cases during 1995 and 1996, despite State guidelines

requiring subsequent inspections.42

• In California, the San Diego Regional Water Quality Control Board (RWQCB)

announced its formal decision to commit resources to permitting of new facilities,

in order to encourage development, rather than enforcement, according to environmental advocates.43 One example of weak enforcement involved the San Diego

County sanitation district, which caused 3,700 sewage spills, dumping 86 million

gallons of sewage into surface waters that flow into San Diego Bay in the past 7

years. The RWQCB assessed $5 million in penalties, and then settled for $300,000,

despite the fact that the sanitation district had avoided $18 million in costs as a

result of its long history of exceedences.44

While these data and cases represent only a sampling of the many examples of

States beating a retreat from their responsibilities to enforce environmental laws,

they illustrate that an alarming number of States are increasingly allowing for

strong influence by those being regulated, while others are simply dismantling environmental protections altogether. Moreover, when viewed in the context of persistently high rates of environmental non-compliance, these findings demonstrate that

the current approach at the State level of compliance assistance without the underlying deterrent of strong enforcement tools at the ready has sent the message to industry that environmental compliance is voluntary, not mandatory. As State agencies seek to pat the backs of the entities they regulate, with an occasional slap on

the wrist, the result is that, for scofflaws, it pays to break the law, and for lawabiding companies, the playing field is tilted against them.

State Self-Audit and ‘‘Regulatory Innovation’’ Legislation Further Threaten Enforcement

We believe the evidence we have presented raises serious questions as to the ability, or inclination, of the States to protect the environment and the health and safety of their citizens. As for the ability of States to carry out the mandates of Federal

environmental law, an increasing number of State officials make the legitimate complaint that inadequate Federal funding significantly impedes the implementation of

Federal environmental programs.45 Nevertheless, most State officials have chosen

not to join citizen groups and environmentalists in their call to improve environmental funding by shifting the burden from the tax-payers to the polluters. Creating

polluter-pay mechanisms to fund enforcement and other environmental programs

would be practical and equitable in a time of fiscal constraint.

Nevertheless, many State officials have echoed the deregulatory rhetoric of corporate interests that labels EPA, other Federal agencies, and the Federal programs

they oversee as harmful to economic development, and have proceeded to create further, more serious resource shortages by actively cutting their own environmental

agency staffs and budgets.

What is more, many States have pursued environmental policies that reflect this

anti-Federal sentiment and reveal that the problem of inadequate State enforcement

may have more to do with inclination than ability. Although couched in the attractive language of ‘‘flexibility,’’ ‘‘innovation,’’ ‘‘local control,’’ and the like, these policies

seem aimed instead toward effectively minimizing protection of the environment

and public health in what has been characterized as a ‘‘race to the bottom.’’

For example, 21 States, have passed ‘‘audit privilege’’ and/or ‘‘immunity’’ laws that

dangerously undermine both enforcement and the public’s right to know. Citizens

groups in Idaho, Ohio, Colorado, Michigan, and Texas have petitions pending before

U.S. EPA asking the agency to withdraw these States’ authority to enforce Federal
224

46Sanford Lewis, ‘‘Feel-Good Notions, Corporate Power & The Reinvention of Environmental

Law,’’ Good Neighbor Project for Sustainable Industries, 1997. 47 ECOS, ‘‘The Environmental Regulatory Innovation Act of 1997,’’ draft, April, 1997. 48See, for example, U.S. EPA, Draft Reassessment of Dioxin’s Toxicity, 1994.

environmental laws in light of the obstacles the audit laws potentially pose to enforcement and victim compensation. Audit privilege laws, which allow a company

that discovers its own violations and corrects them to conceal all internal evidence

of its violations from the government and citizens, keep vital information out of the

public’s hands. Under audit immunity laws, a company’s voluntary disclosure of information regarding its violations immunizes the company from any civil penalties.

The rationale behind these laws is to give incentives for more thorough, voluntary

internal reviews of corporate behavior.46 However, that rationale, like the rationale

behind voluntary compliance, is based on an assumption of good faith by polluting

companies and largely ignores the potential for abuse. By cloaking routinely generated corporate information in secrecy, audit privilege laws can make it more difficult for those outside, in communities affected by the company’s practices, from

knowing what the company is doing and holding it accountable. The sunshine provided by strong right to know laws, combined with a genuine threat of firm, but

fair enforcement far better serves the goal of encouraging voluntary compliance, as

we have seen in New Jersey, where a strong water enforcement program has companies taking their permits seriously.

In a most recent development, some members of the Environmental Council of the

States, a body of State environmental commissioners, have drafted a legislative proposal to authorize States to develop and implement ‘‘regulatory innovation projects’’

where any Federal standard or requirement under the Clean Water Act, the Clean

Air Act, the Safe Drinking Water Act, or the Resource Conservation and Recovery

Act could be waived with no prior U.S. EPA approval.47 This draft bill, being formally circulated among commissioners and informally circulated in Congress, would

also allow minimum Federal standards to be waived with no requirement of superior environmental performance, and would actually allow projects that increase the

risk to human health or further degrade the environment, as long as the increase

is not ‘‘significant.’’ The bill also makes no guarantee of equal public participation

and accountability in the development of projects, and would prohibit Federal and

citizen enforcement of waived Federal standards.

Proposals such as this are irresponsible and manifestly inconsistent with the

States’ mandate to protect the environment and the public whose health would be

put at risk. Indeed, it is critical to note that, in asserting our grave concern about

the problem of poor or nonexistent environmental enforcement and other deregulatory policies by the States, our interest is not merely in achieving compliance for

compliance’s sake. The widespread violations that occur in the vacuum created by

lax enforcement often have serious consequences for the environment and public

health.

Although the attorney for Smithfield Foods, Inc., the pork producer recently held

liable for illegal dumping into the Pagan River in Virginia, claims ‘‘[t]here’s a difference between discharging of a pollutant [over legal limits] and pollution,’’ the

facts in many cases around the country demonstrate otherwise. To cite from just a

few of the examples discussed earlier, the illegal releases by the Sun refinery in

Tulsa repeatedly sent its neighbors to the hospital, the MacDermid spill in Connecticut killed thousands of fish in the Naugatuck River, and Lake Onandaga has

been pronounced ‘‘dead’’ to aquatic life after decades of violations by the Syracuse

sewage treatment plant. In fact, a scientific consensus is emerging that the threats

to human health and the environment posed by toxic pollution are more insidious

than once thought—toxic chemicals cause not only cancer, but also reproductive,

respiratory, endocrinological, neurological, and developmental health problems in

humans and other animals.48 In addition, these problems can be passed from one

generation to the next.

Therefore, when we talk about poor enforcement and serious violations, more than

the legal status of the violator is at stake, especially for those in communities downwind or downstream, and that is why this is no time to be talking about relaxing

environmental standards and transforming our environmental law system into one

of voluntary compliance.

IV. DESPITE NEED FOR STRONG OVERSIGHT, FEDERAL ENVIRONMENTAL ENFORCEMENT

HAS ALSO DECLINED

When enforcement works the way it is supposed to, providing a credible deterrent

to illegal conduct, States should be able to achieve environmental compliance more
225

49 John Cushman, ‘‘EPA Warns Rhode Island About Water Quality Effort,’’ New York Times,

2/4/97. 50 ‘‘Rhode Island and USEPA Near Deal on State Environment Budget,’’ State Environmental

Monitor, 6/2/97. 51 ‘‘EPA Asks What’s In the Water,’’ The Sun Herald, 9/95. 52 Robert McGhee, Acting Director of Water Management Division, U.S. EPA Region IV, Letter to Barry Royals, Surface Water Division, Mississippi DEQ, 8/9/95. 53 Charles Seabrook, ‘‘U.S. Asked to Control Georgia Waters,’’ The Atlanta Journal-Constitution, 1/11/97. 54 Beth Steward, Cahaba River Society Newsletter, 1997. 55 ‘‘Toothless, Montana’s Water Police Choosing Not to Penalize Most Polluters,’’ Independent

Record, 7/17/94. 56 Ibid.

efficiently, taking fewer actions and imposing fewer penalties because permits are

taken seriously. Under these conditions, as we have seen in New Jersey, the State

is able to assume primary responsibility for the implementation of Federal environmental laws, while U.S. EPA maintains a constructive, but non-intrusive oversight

role.

However, the Federal enforcement role we envision under the alarming conditions

I have described today is somewhat different. From the perspective of the public interest, the eagerness States have exhibited to dismantle many hard-won environmental protections highlights our position that the Federal Government must not

only continue, but improve, its oversight role of maintaining strong national standards. In recent years and months, several—but not enough—examples of EPA fulfilling its oversight role emerge: • In Rhode Island, where the budget of State’s Department of Environmental

Management (DEM) has been repeatedly reduced in recent years and staffing has

dropped by more than 100 employees in the past 2 years, the number of State employees managing wastewater permits has dwindled to just two people.49 As a result, permits for most treatment plants have expired and violations at others persist, causing closed shellfish beds, destroyed habitat, and lost recreational opportunities. Serious problems with DEM’s RCRA, air, and pesticide programs have also

developed.50 In response, U.S. EPA’s Region I intervened earlier this year in Rhode

Island’s budget process, and has been working with the State to rebuild DEM in

order to avoid an EPA takeover of the State’s environmental programs. Recent reports indicate an agreement is imminent and adequate staffing levels will be restored. • In 1995, in what was described as a ‘‘rush to remove barriers to industrial development,’’51 the State of Mississippi significantly slashed the budget and staffing

of the State Department of Environmental Quality (DEQ), resulting in an almost

complete collapse of the department’s water enforcement program. Inspections fell

by a dramatic 96 percent, and expired permits in the State rose 64 percent from

1993. As a result, U.S. EPA Region IV was forced to take over enforcement of industrial and municipal permits, inspection of major permitees, and the drafting of some

permits.52 Tough action by EPA prompted the State to hire 30 additional personnel

to enforce pollution laws.53

• In Alabama, the Jefferson County sewer system has been experiencing overflows and bypasses for at least 20 years. Despite improvements taken by the county,

the lack of attention from the State DEM allowed the problem to grow worse. DEM

never imposed any fines against the county, despite the fact that over one billion

gallons of raw and partially treated sewage mixed with stormwater were discharged

into the Cahaba and Black Warrior creeks in recent years, causing five incidents

where residents were evacuated due to raw sewage flooding in their homes. After

two and a half years of negotiating, citizen plaintiffs, supported by the intervention

of the U.S. Department of Justice, have secured a win-win agreement whereby the

County will develop a remedial plan and pay for a supplemental environmental

project to reduce stormwater polluted runoff into Cahaba and Black Warrior

streams.54

• In Montana, where the State’s water quality enforcement program has been described as ‘‘a toothless dog, snarling and lunging at the end of a short chain,’’55 EPA

intervention in some cases has also made a difference. From 1990–1994, of the 30

water violation cases the State deemed severe enough to warrant action, fines were

assessed in only two, and problems persisted in more than half. In the case of Meadow Gold Dairy, where Spring Creek was virtually destroyed by the company’s

wastewater discharges, the State took nearly 1 year to take formal action, and then

the action was to give temporary approval of the pollution due to threats that the

company would shut down.56 The same day in 1991, EPA filed a $5.2 million lawsuit, eventually collecting $265,000 in penalties for the same violation. Two years
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57Daugherty, Gambit, April 1997. 58 U.S. EPA Office of Enforcement and Compliance Assurance, January 1997. 59 Ibid. 60 Ibid. 61 U.S. EPA Office of Enforcement and Compliance Assurance, 1997. 62 ‘‘Virginirm Fined $3.5 Million in Pollution Case,’’ Waston Post, 10/23/96. 63 ECOS Enforcement Survey, 6/1/95.

later, Meadow Gold again began applying its wastewater illegally. No action was

taken by the State.

• With respect to Idaho, Michigan, Ohio, and Colorado, EPA has maintained a

strong position against these States’ audit privilege and immunity laws. In Idaho,

when EPA notified the State earlier this year that its audit privilege law would

need to be changed before the State could receive final approval to carry out the

Clean Air Act, the State legislature decided to allow the audit law expire at the end

of the year. In addition, EPA has taken a similarly strong stand in Louisiana in

the midst of a heated legislative battle surrounding a particularly pro-business selfaudit proposal, threatening to withdraw the State’s right to administer Federal environmental programs if the law is enacted.57

As these cases indicate, Federal Government intervention can play a critical role

in protecting minimum standards of public health and environmental protection

when States fail to fulfill their delegated responsibilities. However, given the widespread nature of inadequate or nonexistent State enforcement, EPA could be and

should be doing more. Despite cries of EPA ‘‘overregulation’’ by State officials, the

EPA enforcement presence, if anything, has dwindled. Again, the numbers are illustrative:

• While EPA Clean Air Act inspections of stationary sources have increased,

Clean Water Act inspections are down 31 percent, Safe Drinking Water inspections are down 42 percent, Toxic Substances Control Act inspections are

down 38 percent, and pesticidspections are down 80 percent since fiscal year

1994. 58

• Similarly, Administrative Penalty Order Complaints and Administrative

Compliance Orders fll statutes are down byercent since fiscal year 1994 59

• Civil referrals from EPA to the Department of Justice are down 31 percent

for all statutes since fiscal year 1994, with a 44 percent drop in Clean Water

Act cases and a 50 percent drop in Clean Air Act cases. 60

• In the 10 States where EPA has retained responsibility for issuing Phase I

stormwater general permits, EPA has issued permits to only 16 percent of the

near 10,000 facilities potentially subject to storm water controls. 61

Thus, when viewed in the context of EPA’s apparent embrace of ‘‘devolution’’ policies, illustrated by the 20 ‘‘performance partnership agreements’’ EPA has signed

with States giving them increased responsibility for environmental enforcement,

these declining enforcement numbers show a waning Federal commitment to step

into the void when States turn their backs.

In addition, even regarding the audit privilege issue, EPA is signalling a retreat.

In a recent agreement reached with Texas, without consultation with the citizen

group petitioners, EPA gave its approval in March to several proposed amendments

to the State law. If the amendments are enacted by Texas, the audit law would,

nonetheless, continue to hurt the public’s right to know, silence whistleblowers, and

curb citizen enforcement under State law. Finally, despite the angry response in

some quarters to EPA’s ‘‘overfiling’’ in the recent Smithfield Foods case in Virginia,62 even the Environmental Council of the States (ECOS) found in its own 1995

survey that EPA overfiling was not a common occurrence, and that when it did

occur, it was often ‘‘prompted by a mutual belief that the Federal Government has

an enhanced opportunity for success in the action.’’63

In our analysis, then, the problem is not too great a Federal presence, but not

enough.

V. STRONG CLEAN WATER ENFORCEMENT IS WORKING IN NEW JERSEY

Clearly, current State and Federal approaches to enforcement are not working.

Significant cuts in State enforcement budgets and personnel, accompanied by compliance assistance approaches that rely on little more than industry’s good intentions, have failed to efficiently achieve compliance as promised. To figure out what

does work when it comes to improving environmental enforcement, we need only

look as far as the State of New Jersey.
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64 N.J.S.A., 58:10A–14.1.

New Jersey DEP, 1995 Annual Report of the Clean Wateforcement Acarch 196

66 NJ DEP, 1996 Annual Report of the Clean Water Enforcement Act, March 1997. 67Telephone Conversation with Carolyn Pravlik, Esq., 6/6/97. 68 NJ DEP, March 1997. 69 ECOS Enforcement Survey, 1995.

In 1990, New Jersey PIRG helped write and pass the New Jersey Clean Water

Enforcement Act.64 Some of the law’s key provisions include mandatory minimum

penalties for serious violations and significant non-compliance, requirements that

penalties recover the economic benefit gained from violations, strengthened citizen

suit provisions, and uniform monthly monitoring and reporting requirements for all

dischargers.

The Clean Water Enforcement Act has been a remarkable success. The New Jersey Department of Environmental Protection’s (NJ DEP’s) assessment, and we

agree, is that under the Clean Water Enforcement Act, the deterrent value and the

certainty of mandatory minimum penalties has caused permittees to take their permits seriously.65 NJ DEP’s 1996 annual report states that compliance with permit

limits and reporting requirements has significantly improved since passage of the

Act.66 NJ DEP’s numbers are worth a thousand words: since 1992, the total number

of Clean Water Act violations in New Jersey has dropped by 78 percent. According

to one citizen suit attorney with extensive experience in New Jersey, although there

are still some problems with underreporting violations, ‘‘at least companies have

NPDES permits on tfront burner67

At the same time, with dischargers more widely abiding by the law, the number

of enforcement actions naturally has declined as well. By prompting the agency to

take timely enforcement action, especially against serious and chronic violators, the

law ensures that problems are addressed quickly and more effectively, thus reducing

the average amount and the total amount of penalties. Since 1992, enforcement actions are down 67 percent. While penalties rose substantially from 1991 to 1994 as

longstanding non-compliance problems were finally addressed, total penalties are

down 92 percent since 1994, and the average penalty amount dropped 46 percent

from 1993 to 1995 68

Under this approach everybody wins: industry wins by paying lower penalties,

and by enjoying a level playing field while playing under consistent game rules; the

State wins by producing better compliance more efficiently; and, most importantly,

the public wins by having a more accountable system, as well as a cleaner environment. Plus, the program has been self-funding: enforcement is paid for primarily

through a fund made up of penalty dollars collected from violators.

Finally, when enforcement works as it does in New Jersey, the State is able to

assume primary responsibility for the implementation of Federal environmental

laws, while EPA maintains a constructive, but non-intrusive oversight role. It is

worth noting that in the 1995 ECOS enforcement survey, New Jersey reported no

cases of Federal overfilling in Clean Water cases. ‘‘All DEP enforcement programs

enjoy an excellent working relationshith EPA and do not see overfiling on cases by

EPA as a signant issue,’’ 69 the State said.

VI. THE LAUTENBERG–TORRICELLI BILL (S. 645): A SOLUTION

The success story in New Jersey should serve as a model for the rest of the country. The Senators from New Jersey have introduced S. 645, legislation to replicate

key aspects of the New Jersey Clean Water Enforcement Act at the Federal level.

U.S. PIRG, the State PIRGs, and the members of the Clean Water Network strongly

support this bill, because it would bring certainty, predictability, and credibility to

Clean Water Act enforcement throughout the country. Specifically, S. 645 would do

the following:

• By establishing mandatory minimum penalties for serious violations and requiring that all penalties recover the violator’s economic benefit, serious and

chronic violations will be deterred and permitees will take their permits more

seriously. Also, government accountability will be improved and the playing

field for businesses will be leveled.

• By strengthening the right of citizens to enforce the law themselves, communities will be better able to protect themselves and make polluters pay for the

pollution they create.

• By extending reporting and monitoring requirements for dischargers, and by

requiring the government to post signs warning the public of polluted waterways and contaminated fish, the public’s right to know about water pollution

in the places they fish and swim will be fulfilled.
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The time to address the environmental enforcement crisis is now. As the Clean

Water Act approaches its 25th birthday this year, we urge you to support this important piece of legislation that will give States and EPA needed direction and clarity so that they may work together, in a constructive partnership, to realize the

promise of this visionary law.

Thank you very much for the opportunity to share my comments with you today.
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