Environmental Protection: EPA Should Develop a Strategic Plan for Its New Compliance Initiative
Released: 2013-01-09T00:00:00

Letter

Background

EPA manages its environmental enforcement and compliance responsibilities primarily through its OECA. OECA monitors the compliance of regulated entities, identifies national enforcement concerns and sets priorities for addressing them, and provides overall direction on enforcement policies. OECA can take enforcement actions, such as fining entities that are in noncompliance with EPA regulations, but most of EPA’s enforcement responsibilities are carried out by its 10 regional offices. These offices carry out program activities under each of the major federal environmental statutes, such as the Clean Air Act and the Clean Water Act, have compliance related responsibilities, and also take enforcement actions. For example, among other things, a regional office can conduct inspections, provide compliance assistance and training to state enforcement programs, and take enforcement actions such as assessing fines for noncompliance with EPA regulations. The regional offices also oversee certain state enforcement programs and implement certain programs in Indian country. Many federal environmental statutes direct EPA to approve or authorize qualified states to implement and enforce environmental programs consistent with federal requirements, and most states have responsibility for multiple laws. EPA-authorized states are to monitor compliance of regulated entities, conduct inspections, take enforcement actions against entities found in noncompliance, and report their actions to EPA.

EPA proposed the Next Generation Compliance initiative in fiscal year 2012 to capitalize on advanced technical capabilities and efficiencies in enforcement and compliance. In developing this new initiative, EPA stated that it wanted to go beyond its traditional enforcement approach of inspecting individual entities and make available, among other things, new and more complete enforcement and compliance information. According to agency documents, the long-term goals of the initiative are to improve compliance and obtain greater health and environmental benefits from EPA’s regulations. The proposed elements of the initiative are described in a brief overview document and some slide presentations that the agency has prepared about the initiative. In summary, according to these materials, the five components of the Next Generation Compliance initiative are the following:

Rulemaking—designing and structuring rules and regulations to ensure greater compliance, such as including requirements for regulated entities to regularly assess their compliance.

Technology—using advanced emissions and pollutants monitoring technology, such as infrared cameras, for compliance monitoring so that regulated entities and the public are better informed about entities’ pollution.

Electronic reporting—using modern information technology to transition from paper to electronic reporting of items such as permit data, compliance information, and enforcement actions.

Transparency—making both current and new entities’ enforcement and compliance information, such as information obtained from advanced emissions and pollutants monitoring and electronic reporting, more publicly available.

Innovative enforcement approaches—employing new or innovative enforcement approaches, such as including tools like advanced emissions and pollutants monitoring or electronic reporting requirements in EPA enforcement settlement agreements with entities.

EPA envisions that Next Generation Compliance benefits will come from (1) designing and structuring rules and regulations to ensure greater compliance by regulated entities; (2) obtaining and making public more and better compliance data so that the public can determine the extent of regulated entities’ compliance with environmental regulations, thereby exerting pressure on violators for greater compliance; and (3) improving the ability of EPA-authorized states to implement their environmental programs. EPA officials informed us that EPA has started provided training to EPA staff on how to incorporate the Next Generation components into designing rules and regulations. As part of this effort, EPA developed a training workbook for staff on how to design rules with an emphasis on increasing regulated entity compliance. With regard to making public more and better compliance data, according to EPA documents, providing information to the public, together with public accountability, can result in greater compliance by regulated entities. For example, EPA stated that reductions in regulated entities’ noncompliance with NPDES permits in certain states may be related to EPA’s increasing the public disclosure of related compliance data, along with the release of state enforcement performance information. These actions, according to EPA, created more pressure on states to enforce and on these entities to comply with NPDES permit requirements. Furthermore, EPA believes that the improved enforcement and compliance data Next Generation Compliance will provide will allow states and EPA to be more innovative in developing new approaches to improving compliance.

EPA Has Taken Steps under Next Generation Compliance to Increase Transparency and Accountability

Since introducing its Next Generation Compliance initiative in fiscal year 2012, EPA has taken four primary steps to increase transparency and accountability in enforcement and compliance. According to EPA documents and officials, these steps provide greater access to data under EPA-regulated programs and make regulated entities more accountable to the public.

First, EPA formed an electronic reporting task force in December 2011 to provide recommendations for converting from existing paper-based reporting requirements to electronic reporting. This action is in support of a broader EPA effort to require regulated entities to electronically report data, such as permit data and compliance information, to EPA and state environmental agencies. According to EPA documents, electronic reporting is not simply e-mailing files to the government, but it is an electronic method that guides the entity through the reporting process. The task force is also developing agency policy to include electronic reporting requirements in all new EPA regulations. According to a senior EPA official responsible for coordinating the Next Generation Compliance initiative, in June 2012, the task force started working with the Environmental Council of the States, a national association of state and territorial environmental agency leaders, to explore how regulated entities could electronically conduct business with EPA and state environmental agencies, including providing electronic submissions of permit applications and modifications, as well as emissions and pollutants data.

Second, the agency formed a work group in April 2012 to identify advanced emissions and pollutants monitoring technology and evaluate how the agency can better use such technology. Among other things, the work group is charged with preparing a national inventory of the advanced monitoring equipment EPA owns or has access to from other sources, such as contractors. The work group’s charter called for it to prepare a report by September 2012 that addresses 10 items and, among other things, provide suggestions to establish formal policies and procedures for deploying and maintaining advanced emissions and pollutants monitoring technology and training staff on its use. According to EPA officials, an interim report that contained initial findings and recommendations from the work group was provided to the OECA Deputy Assistant Administrator on September 29, 2012.

Third, EPA has begun including Next Generation Compliance in its enforcement activities by incorporating elements of the initiative into selected settlement agreements. For example, under an EPA settlement agreement announced in May 2012, a petroleum company agreed to install “state-of-the-art” pollution controls at its refinery, as well as a fence- line emissions monitoring system. According to the terms of the settlement agreement, the company will post data collected from the fence-line monitoring system on a public website. In an EPA agreement announced in April 2012, another petroleum company also agreed to install “state-of-the-art” pollution controls at its refineries and in the process provided resources and assistance to EPA to acquire new scientific information for measuring certain air emissions.us that this settlement agreement, taken in its entirety, is an example of identifying and using advanced technology to both monitor and reduce emissions. In September 2012, EPA formed a work group to advance the use of Next Generation compliance tools in EPA settlement agreements.

Fourth, the agency has increased the public availability of the enforcement and compliance information it currently has available. EPA officials informed us that they are observing the public’s increasing use of EPA’s Enforcement and Compliance History Online (ECHO) website and are continually looking for ways to improve and expand the information publicly available on the website. For example, in January 2012, EPA released a Clean Water Act Discharge Monitoring Report Pollutant Loading Tool on its ECHO website to provide the public with information about pollutants that are released into local waterways. According to EPA documents, the tool allows the public to compare annual pollutant discharge amounts from certain regulated entities under the Clean Water Act and includes a mapping application, toxicity data, and links to other compliance information.

EPA Has Not Developed a Strategic Plan for Its Next Generation Compliance Initiative

EPA has not developed a strategic plan to integrate Next Generation Compliance into its enforcement and compliance program. EPA has prepared a brief overview document and some slides that provide basic information on the initiative’s five components, but these documents are general in nature and provide little specificity regarding EPA’s plans, goals, or performance measures related to Next Generation Compliance. A senior EPA official responsible for coordinating the Next Generation Compliance initiative told us that EPA recognizes the need for a strategic plan for the initiative and expects to prepare one in fiscal year 2013, but he could not provide a specific time frame for either starting or completing the plan.

Federal departments and agencies such as EPA must comply with GPRA requirements and are to follow associated OMB guidance in developing their departmental or agencywide strategic plans. We have previously reported that strategic planning for activities below the agencywide level— such as planning for individual divisions, programs, or initiatives— is a leading practice for successful agencies. In addition, we have previously reported on federal agencies’ strategic planning efforts and have identified additional useful practices to enhance agencies’ strategic plans. Taken together, the strategic planning elements established under GPRA and associated OMB guidance and practices we have identified provide a framework of leading practices in federal strategic planning.These include such actions as defining the missions and goals of a program or initiative and involving stakeholders and leadership in planning, among others. Table 1 lists five selected leading practices in federal strategic planning and their characteristics. We highlight these five practices because EPA’s Next Generation Compliance initiative is still being developed, and these practices are particularly relevant to the early stages of developing a strategic plan.

Without a plan that incorporates leading strategic planning practices such as those included in table 1, EPA cannot be assured that it has established a framework to effectively guide and assess the success of this initiative and cannot be assured that it is effectively integrating the initiative into its overall enforcement and compliance program. For example, we have previously reported when developing a strategic plan, it is particularly important for agencies to define strategies that address management challenges that threaten their ability to meet long-term strategic goals and include a description of the resources, actions, time frames, roles, and responsibilities needed to meet established goals. Without a strategic plan to direct its Next Generation initiative, EPA could waste valuable resources, time, and effort. For example, without proper planning, EPA may pursue emissions monitoring technologies that not all regulated entities—especially the growing numbers of smaller facilities— can fully utilize, thereby requiring EPA to rely on costly individual facility inspections with its limited resources.

EPA acknowledges the need for a plan for the Next Generation Compliance initiative, but it has not yet developed one that clearly articulates a strategy for integrating the initiative into the existing enforcement and compliance program and provides a comprehensive analysis of how the initiative will help to achieve the overall goals of the program. The brief overview documents and slides EPA has developed for the initiative include only general statements about the need for and benefits of the new initiative and descriptions of the initiative’s broad goals. Specifically, EPA’s overview and other documents do not, among other actions, (1) clearly define the goals of the initiative and steps needed to achieve these goals; (2) identify and develop a strategy for including milestones for significant actions to be taken, as well as a description of the resources needed to accomplish them; and (3) ensure that all key stakeholders are involved in both the planning and implementation of the initiative. Without a strategic plan incorporating selected leading practices, EPA may face challenges in helping ensure that the initiative will achieve its long-term goals of improving compliance and obtaining greater health and environmental benefits from the agency’s regulations.

Conclusions

EPA began its Next Generation Compliance initiative in an effort to move beyond its traditional enforcement strategies to improve overall regulatory compliance. As part of the effort, the agency has undertaken several worthwhile steps to increase enforcement and compliance and encourage transparency and accountability. However, the agency has not developed a strategic plan for implementation of Next Generation Compliance and could face challenges in helping ensure that the initiative will achieve its goals of improving compliance and obtaining greater health and environmental benefits from agency regulations if it moves forward without one. Also, without such a plan to direct its Next Generation Compliance initiative, EPA could waste valuable resources, time, and effort and cannot be certain that it effectively integrates the initiative into its overall enforcement and compliance program.

Recommendations for Executive Action

To better integrate Next Generation Compliance into its overall enforcement and compliance program and ensure that the initiative will achieve the goals EPA envisions for it, we recommend that the Administrator of EPA direct the Assistant Administrator of OECA to take the following two actions:

Develop a schedule for completing, in a timely manner, a strategic plan for Next Generation Compliance; and

Ensure that this strategic plan incorporates selected leading practices in federal strategic planning, as appropriate, and describes how Next Generation Compliance is to be integrated into the enforcement and compliance program.

Agency Comments and Our Evaluation

We provided a draft of this report to EPA for review and comment. In written comments, which are included in appendix I, EPA agreed with the report’s recommendations. Regarding the first recommendation, EPA stated it will prepare a strategic plan for Next Generation Compliance in fiscal year 2013. Regarding the second recommendation, EPA stated it will consider incorporating leading practices in federal strategic planning, where appropriate, as it develops the strategic plan. The agency also stated that it anticipates that integrating Next Generation Compliance into its enforcement and compliance program will be a primary component of the strategic plan. EPA also provided technical comments on the draft report, which we incorporated as appropriate.

As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Administrator of EPA, the appropriate congressional committees, and other interested parties. In addition, the report also will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please contact me at (202) 512-3841 or trimbled@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix II.

Appendix I: Comments from the Environmental Protection Agency

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the individual named above, Vincent P. Price, Assistant Director; Cheryl Arvidson; Elizabeth Curda; Cindy Gilbert; Richard P. Johnson; Kirk D. Menard; Carol Herrnstadt Shulman; Kiki Theodoropoulos; and Jason Trentacoste made key contributions to this report.