07/25/88
Guidance on Certification of Compliance with Enforcement
Agreements
MEMORANDUM JUL. 25, 1988
SUBJECT: Guidance on Certification of Compliance with Enforcement Agreements
FROM: /s/ Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and
Compliance Monitoring
TO: Assistant Administrators
Regional Administrators
Regional Counsels
I. BACKGROUND
Over the past several years, EPA has initiated record numbers of civil
judicial and administrative enforcement actions. The vast majority of such
actions have been resolved by judicial consent decree or administrative
consent order.
The terms of many of these settlements require the violator to perform
specific tasks necessary to return to or demonstrate compliance, to
accomplish specific environmental cleanup or other remedial steps, and to
take prescribed environmentally beneficial action.
Settlement agreements typically specify that the violator perform
certain required activities and thereafter report their accomplishment to
EPA. Verification that the required activities have actually been
accomplished is an essential element in the overall success of the Agency's
enforcement program.
II. PURPOSE
The focus of this advisory guidance is on verification of compliance
with settlement agreements which require specific performance to achieve or
maintain compliance with a regulatory standard. EPA has ongoing
responsibility for ensuring that settling parties are in compliance with the
terms of their negotiated agreements. To this end, the Agency may require
that a responsible official ( as that term is defined herein ) personally
attest to the accuracy of information contained in compliance documents made
available to EPA pursuant to the terms of a settlement agreement.
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The inspection programs of EPA and other federal regulatory agencies are
based of necessity on the concept that a limited number of regulated
facilities will be inspected each year. Conversely, this means that a large
number of regulated parties can operate for extended periods of time without
being the subject of an on-site inspection by EPA staff. Hence, it is
crucial to ensure that all required compliance reports are received from the
regulated facility in a timely manner. In addition--and equally as
important--timely review of such reports must be undertaken by EPA to ensure
that the reports are adequate under the terms of the settlement agreement.
EPA experience shows that the majority of regulated parties make good
faith efforts to comply with their responsibilities under the environmental
laws and regulations. Nevertheless, the Agency must have effective
monitoring procedures to detect instances of noncompliance with a settlement
agreement. A vital component of these procedures will be to ensure that the
environmental results obtained in the enforcement action are indeed achieved
and that criminal sanctions, where appropriate, are available to respond to
instances of intentional misrepresentation or fraud committed by such
violators.
EPA will ensure that all responsible officials entering into settlement
agreements with the Agency are held accountable for their subsequent actions
and the actions of any subordinates responsible for the information
contained in compliance reports submitted to the Agency.
III. GUIDANCE
A. Certification by Responsible Corporate Official
The terms of settlement agreements, as well as any certification
language in subsequent reports to the Agency, should be drafted in a manner
to trigger the sanctions of 18 USC Section 1001, 1/ in the event that
false information is knowingly and willfully submitted to EPA.
1/ United States Code, Title 18, Section 1001 provides:
"Whoever, in any matter within the jurisdiction of any department
or agency of the United States knowingly and willfully falsifies,
conceals or covers up by trick, scheme, or device a material fact, or
makes any false, fictitious or fraudulent statements or representations,
or makes or uses any false writing or document knowing the same to
contain any false, fictitious or fraudulent statement or entry, shall be
fined not more than $10,000 or imprisoned not more than five years, or
both."
There are four basic elements to a Section 1001 offense: (1) a
statement; (2) falsity; (3) the false statement be made "knowingly and
willfully"; and (4) the false statement be made in a "matter within the
jurisdiction of any department or agency of the United States". United
States v. Marchisio, 344 F.2d 653, 666 ( 2d Cir. 1965 ).
Submission of such false information
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may also expose the defendant(s) in judicial consent decree falsification
incidents to both civil and criminal contempt proceedings.
This provision of law is a key sanction within the federal criminal code
for discouraging any person from intentionally deceiving or misleading the
United States government.
1. Signatories to Reports
Settlement agreements should specify that all future reports by the
settling party to the Agency, which purport to document compliance with the
terms of any agreement, shall be signed by a responsible official. The term
"responsible official" means as follows: 2/
2/ For NPDES matters, the definitions of "responsible official" and
"certification", as set forth in 40 CFR Section 122.22, may be used as
alternative language to this guidance.
a. For a corporation: a responsible corporate officer. A
responsible corporate officer means: (a) A president, secretary, treasurer
or vice-president of the corporation in charge of a principal business
function, or any other person who performs similar policy- or decision-
making functions for the corporation, or (b) the manager of one or more
manufacturing, production, or operating facilities employing more than 250
persons or having gross annual sales or expenditures exceeding $35 million (
in 1987 dollars when the Consumer Price Index was 345.3 ), if authority to
sign documents has been assigned or delegated to the manager in accordance
with corporate procedures.
b. For a partnership or sole proprietorship: a general partner
or the proprietor, respectively.
2. When to Require a Certification Statement
The requirement for an attestation by a responsible official is always
useful as a matter of sound regulatory management practice. Such a
requirement is more urgent,
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however, where a regulated party has a history of noncompliance or where
prior violations place one's veracity into question. 3/
3/ While personal liability is desirable to promote compliance, it should
be noted that corporations may be convicted under 18 USC Section 1001 as
well. A corporation may be held criminally responsible for the criminal
acts of its employees, even if the actions of the employees were against
corporate policy or express instructions. See U.S. v. Automated Medical
Laboratories, 770 F.2d 339 ( 4th Cir. 1985 ); U.S. v. Richmond, 700 F.2d
1183 ( 8th Cir. 1983 ). Moreover, both a corporation and its agents may
be convicted for the same offense. See U.S. v. Basic Construction Co.,
711 F.2d 570 ( 4th Cir. 1983 ).
3. Terms of a Certification Statement
An example of an appropriate certification statement for inclusion in
reports submitted to the Agency by regulated parties who are signatory to a
settlement agreement is as follows:
"I certify that the information contained in or accompanying
this ( submission ) ( document ) is true, accurate, and
complete.
"As to ( the ) ( those ) identified portions(s) of this
( submission ) ( document ) for which I cannot personally verify
( its ) ( their ) truth and accuracy, I certify as the company
official having supervisory responsibility for the person(s)
who, acting under my direct instructions, made the verification,
that this information is true, accurate, and complete." 4/
4/ It is inevitable that in negotiating consent agreements, counsel for
respondents will seek to insert language in the certification statement
as to the truth of the submissions to be the "best information" or to
the "fullest understanding" or "belief" of the certifier. Such
qualifiers should not be incorporated, since the provisions of 18 USC
Section 1001 provide for prosecution for making false statements
knowingly and willfully--not for forming erroneous beliefs, etc.
B. Documentation to Verify Compliance
Typical settlement agreements require specific steps to be undertaken by
the violator. As EPA staff members engage in settlement negotiations and
the drafting of settlement documents, they should identify that
documentation which constitutes the
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most useful evidence that the action required has actually been undertaken.
The most useful evidence would be that information or documentation that
best and most easily allows the Agency to verify compliance with the terms
( including milestones ) of a settlement agreement. Examples of
documentation to substantiate compliance include, but are not limited to,
invoices, work orders, disposal records, and receipts or manifests.
Attachment A is a suggested type of checklist that can be developed for
use within each program area. 5/
5/ EPA or a State may be unable to confirm the accuracy of certifications
for an extended period of time. Therefore, it is suggested that,
whenever certification by a respondent / defendant is required, the
order / decree provide that "back-up" documentation--such as laboratory
notes and materials of the types listed in the examples in the text
above--be retained for an appropriate period of time, such as three
years. See, for example, the 3 year retention time in 40 CFR Section
122.41(j)(2).
The checklist includes examples or specific documentary evidence which can
be required to substantiate that prescribed actions have, in fact, been
undertaken.
IV. SUMMARY
This guidance is to provide assistance to EPA employees who negotiate
and draft settlement documents. It is appropriate when circumstances so
dictate that such documents contain sufficient certification language for
ensuring, to the maximum extent possible, that all reports made to EPA,
pursuant to the terms of any settlement agreement, are true, accurate, and
complete, and that such reports are attested to by a responsible official.
The Agency must incorporate within its overall regulatory framework all
reasonable means for assuring compliance by the regulated community. The
inclusion of compliance by the language, supported by precise documentation
requirements, in negotiated settlement agreements may, in appropriate
instances, mean the difference between full compliance with both the letter
and the spirit of the law, and something less than full compliance. In the
case of the latter, the violating party is then subject to the sanctions of
the federal criminal code.
Attachment A
MEANS OF CERTIFYING COMPLIANCE
WITH CONSENT AGREEMENTS
( Examples )
__________________________________________________________________________
! Action Required By ! Violator's Official ! Documents Accompanying!
! Consent Agreement ! Certifies That: ! Certification: !
!_______________________!________________________!_________________________!
*Purchase pollution *Equipment purchased *Invoice
control equipment.
*Installation *Equipment installed *Invoice for work with
and tested photograph.
*Ongoing operation *Operating as required *Continuous monitoring
and maintenance tape
*Periodic sample results
*Maintenance of records.
*Meet discharge *Discharge levels have *Continuous monitoring
levels been met tapes
*Periodic sample results.
*Labeled transformers *Transformers have *Photographs
been labeled.
*Do risk study *Study has been *Study report and
completed recommendations.
*Hire employees *Employees have been *Personnel records
hired *Position descriptions
*Entry on duty dates
*Salary data.
*Use complying *Verifying complying *Documents to verify VOC
coatings coatings are used content.
*Train employees *Employee training has *Educational materials and
( e.g., work been completed record of employee
practices ) attendance at
training session.
*Set up environmental *Unit has been *Same as above re:
auditing unit established personnel
*Orientation and *Charter of audit group
instruction completed.
ATTACHMENT A
MEANS OF CERTIFYING COMPLIANCE
WITH CONSENT AGREEMENTS
( Examples )
*Dispose of PCBs *PCBs disposed of in *Copies of manifests
lawful manner.
*Replace PCB *New transformers *Copies of purchase and
transformers installed installation receipts.
*Register pesticide *Applicator *Copies of certificates
certification of certification has
applicator been accomplished.
*Remove cancelled *Removal has been *Copies of correspondence
product from the accomplished with customers and
market documentation of
removal
*Copies of customer lists
for independent
verification by EPA and
states.
*Comply with *Compliance with *List of locations of all
asbestos removal asbestos removal jobs
and disposal and disposal
regulations regulations on a
a job-by-job basis.
*Monitor waste stream *Waste stream has been *Discharge Monitoring
properly monitored Report.
*Sludge removal *Sludge removed by *Copies of invoices on
milestone deadline sludge removal.
*Conduct groundwater *Groundwater monitoring *2/A ( quality analysis )
monitoring accomplished in tests; certification
appropriate manner by laboratory.
*Collect and analyze *Soil samples collected *Same as above
soil samples analyzed in specified
manner.
*Remove contaminated *Contaminated soils *Copies of contract
soils and dispose removed and disposed documents and
of in compliance of in compliance manifests
with RCRA with RCRA.
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