12/02/88
Enforcement Response Policy for Section 313 of the Emergency
Planning and Community Right to Know Act
ENFORCEMENT RESPONSE POLICY FOR SECTION 313
OF THE EMERGENCY PLANNING AND COMMUNITY RIGHT TO KNOW ACT
ALSO KNOWN AS
TITLE III OF THE SUPERFUND AMENDMENTS
AND REAUTHORIZATION ACT ( SARA )
OFFICE OF COMPLIANCE MONITORING
OFFICE OF PESTICIDES AND TOXIC SUBSTANCES
THE U.S. ENVIRONMENTAL PROTECTION AGENCY
December 2, 1988
ENFORCEMENT RESPONSE POLICY FOR SECTION 313
OF THE EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT
INTRODUCTION
The Emergency Planning and Community Right-to-Know Act ( EPCRA ), also
known as Title III of the Superfund Amendments and both accidental and
nonaccidental releases of toxic chemicals. Section 313 of EPCRA requires
certain manufacturers, processors, and users of over 300 designated toxic
chemicals to report annually on emissions of those chemicals to the air,
water and land. These reports must be sent to the U.S. Environmental
Protection Agency ( EPA ) and to designated state agencies. The first
annual report, for the 1987 calendar year, was due by July 1, 1988. The EPA
is responsible for carrying out and enforcing the requirements of section
313 of the EPCRA and any rules promulgated pursuant to EPCRA.
Section 325(c) of the law authorizes the Administrator of the EPA to
assess administrative civil penalties for violations of section 313. Any
person ( owner or operator of a facility, other than a government entity )
who violates any requirement of section 313 is liable for a civil penalty in
an amount not to exceed $25,000 for each violation. Each day a violation
continues constitutes a separate violation. The Administrator may assess
the civil penalty by administrative order or may bring an action to assess
and collect the penalty in the U.S. District Court for the district in which
the person from whom the penalty is sought resides or in which such person's
principal place of business is located.
The purpose of this Enforcement Response Policy is to assure that
enforcement actions for violations of section 313 and of the section 313
regulations are arrived at in a fair, uniform and consistent manner; that
the enforcement response is appropriate for the violation committed; and
that persons will be deterred from committing section 313 violations.
DETERMINING THE LEVEL OF ACTION
Enforcement alternatives include (1) taking no action; (2) Notices of
Noncompliance; (3) administrative civil penalties and (4) criminal action
under 18 U.S. Code 1001.
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NO ACTION
No action for late reporting is to be taken against persons who submit
reports after July 1, 1988, but prior to August 1, 1988, provided the report
is submitted prior to any contact by EPA or an authorized representative of
EPA in preparation for an inspection. The Agency believes that the impact
on its ability to make this information available to the public will be
minimal during this first 30-day period due to the amount of time to input
the data into the tracking system and data base.
Also, no action is appropriate if a facility is amending its
submissions(s) after the reporting period to reflect improved information /
procedures which were not previously available.
NOTICES OF NONCOMPLIANCE ( NON )
Summary of Circumstances Warranting an NON
Reports containing readily-detectable errors found by EPA during its data
entry process. Facilities must provide corrections in response to the NON
by the specified time of 30 days or be subject to a Civil Complaint ( See
Appendix A for discussion of errors and NONs ). Please note that EPA
reserves the right to issue a Civil Complaint for errors which are egregious
or fraudulent.
Reports with errors which would warrant an NON if found by EPA during data
entry, which are voluntarily disclosed by the facility or found during an
inspection and which are fully corrected within 30 days of their discovery
but within 180 days after the reporting date. EPA reserves the right to
issue a Civil Complaint for errors which are egregious or fraudulent.
Late reports which are submitted within 31-90 days after the due date of
July 1, 1988. Late reports which are submitted within 1-60 days after the
due date of July 1, 1989 / or the first year a report is required if not
1988. Late reports which are submitted within 1-30 days after the due date
of July 1, 1990 and for subsequent reporting years. For a report to be
considered late, it must be submitted to the Agency prior to any contact by
EPA or an authorized representative of EPA in preparation for an inspection
or for purposes of determining compliance or if there is no contact prior to
an inspection, prior to the inspection. AN NON IS APPROPRIATE PROVIDED THE
FACILITY HAS NEVER RECEIVED AN NON FOR LATE REPORTING DURING THE PREVIOUS
FIVE REPORTING PERIODS.
The submission of a form with trade secrets without a sanitized version, or
the submission of the sanitized version of the form without the trade secret
information.
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Summary of Circumstances Warranting an NON ( continued )
Those facilities which report to EPA but report late or not at all to the
state PROVIDED THE FACILITY HAS NEVER RECEIVED AN NON FOR THIS VIOLATION
DURING THE PREVIOUS FIVE REPORTING PERIODS. States may also take action
under their own laws, if applicable.
Recordkeeping violations. Please note that NONs which are issued for
recordkeeping violations will disallow penalty reductions related to
culpability and attitude for future EPCRA section 313 violations. A list of
the various recordkeeping violations are listed below:
- Falsified records.
- No required records / serious recordkeeping deficiencies and
compliance cannot be verified / determined based on the facility's
records.
- Incomplete / inadequate records.
- Records available but not at facility or submitter's headquarters. If
records cannot be presented within 14 calendar days from the date of
the inspection, the violation is failure to keep records in accordance
with the regulations.
Reports which are sent to the incorrect address / office ( i.e., any address
other than that listed in the section 313 regulation or on the Form R or the
Administrator's office ) warrant an NON the first time. A Civil Complaint
is warranted for violations in subsequent years.
Discussion
A Notice of Noncompliance ( NON ) is the appropriate response for errors
in forms submitted to the Agency on a timely basis and which are detected
without an inspection. However, the NON is to state that corrections must
be made within a specified time ( 30 days from receipt of the NON ) or a
Civil Complaint assessing a penalty will be issued. In general, NONs will
be issued for errors as defined in Appendix A. The Agency does reserve the
right to assess a Civil Complaint for those errors which it believes are
egregious ( an example would be underreporting by a large factor, such as
reporting emission of 1,000 pounds when there are a million pounds emitted )
or which EPA believes are fraudulent in nature. The use of NONs prior to
issuing a Civil Penalty is in recognition that this is a new program and
that the facilities for which errors are being identified are for those
facilities which did report.
Although an NON may be issued for any single error, NONs will generally
be issued for those reports containing numerous errors. The Office of
Compliance Monitoring and the Office of Toxic Substances will prioritize
NONs based on available resources. It is likely that this portion of the
policy will be revised to provide for penalties for errors, especially
repeat errors.
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Similarly, an NON is appropriate if a company realizes it has made
errors and submits corrected information on a timely basis, i.e, within 30
days of the discovery of the error and within 180 days of the reporting
date. EPA wants to encourage companies to self audit and to notify EPA of
errors. Again, EPA reserves the right to issue Civil Complaints in
situations of egregious errors or suspected fraud.
NOTE: The exception to issuing an NON for reports with errors are for those
companies which submitted information on the proposed form found in the
proposed regulation prior to July 2, 1988, instead of on the final form.
The Office of Toxic Substances will write a letter to those facilities
indicating that the correct form must be submitted within a specified time.
Failure to submit the corrected form within that specified time may result
in an NON being issued, and a subsequent Civil Penalty if noncompliance
continues.
In reference to NONs for certain late reports, EPA believes an NON is
appropriate for the 31-90 day interval after the reporting due date for the
first year. This is in deference to the start-up of a new and innovative
law which is requiring submissions from facilities, including small-business
users of toxic chemicals, who may never have been required to report on
toxic chemical releases to the Federal government. Due to the time to input
the information into the newly developed data base, late reports submitted
within this time frame will have less impact on the Agency being able to
ensure the availability of data to the public, than a report submitted after
91 days.
NOTE: A Civil Complaint is to be issued which assesses the same penalty as
if the facility failed to report when the report is submitted during this
time frame but after the facility has been contacted in preparation for a
pending inspection or for the purpose of determining compliance or in the
absence of such contact, after the inspection. Regions are encouraged to
document any contact made with a facility regarding an inspection. If
contact is not made, the date for determining if the report is late or is to
be treated the same as a nonreport will be the date of the notice of
inspection. The Agency is taking this position, i.e., distinguishing
between facilities submitting late on their own volition and those
submitting after EPA has contacted the facility in regard to an inspection,
because it wants to encourage noncomplying facilities to report and
discourage nonreporters from waiting until EPA contacts them.
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The decision to issue NONs for the submission of a form with a trade
secret claim without a sanitized version, or of the sanitized version
without the trade secret information is being treated the same as a report
with errors. Please note that this is a violation of section 313 as well as
the trade secret requirements. Other violations pertaining to trade secrets
will be addressed in a separate penalty policy.
The last violation for which an NON is to be issued deals with
facilities which report to EPA but report late or not at all to the state.
This was discussed with State representatives convened by the National
Governor's Association. It was decided that NONs were appropriate for this
first reporting year. One reason is that the information will be available
to the state through EPA's data bases, although at a later time. However, a
repeat violation will be subject to a penalty, i.e., a violation in
subsequent years. This policy in no way precludes states from taking action
under their own laws, if applicable. EPA also reserves the right to assess
a Civil Complaint if the facility refuses to report to the state after the
state has requested the report, or if EPA requests the facility to send the
report to the state.
Note on NONs: In those cases where a Region plans to issue a Civil
Complaint for a nonreporter ( including for a form R submitted after
facility is contacted in regard to an inspection ), any NONs for errors or
other violations should be incorporated into that Civil Complaint with
compliance required within 20 days for those items or additional penalties
provided for. In order to make this work, it is essential that Regions
notify the Office of Compliance Monitoring of any pending action as soon as
possible. Alternatively, the Civil Complaint may be settled with a
provision that failure to correct information as indicated either in the
Complaint or in a subsequent NON is subject to a stipulated penalty.
ADMINISTRATIVE CIVIL PENALTY
An administrative civil penalty will be the appropriate response for:
Nonreporting, including the failure to report for each chemical ( i.e.,
some chemicals reported but not all as required ) and including reports
submitted by a facility after being contacted regarding a pending
inspection or for the purpose of determining compliance or after
inspection.
Incomplete reporting.
Failure to respond to or comply with an NON, as specified in the NON
( i.e., those errors specifically identified ).
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Certain late reporting, as specified, and for repeated late reporting.
Repeat violations which otherwise would warrant an NON, as identified in
the Circumstance Levels.
Other violations not specifically referenced in the discussion of NONs.
Note: See specific list in the next section under Circumstance Levels.
Concurrence
Civil penalties are to be assessed according to this policy. Pursuant
to the Delegations Manual, Regional enforcement personnel must obtain
written concurrence from the Office of Compliance Monitoring, and the Office
of Pesticides and Toxic Substances prior to initiating an administrative
civil penalty for section 313 violations. A region may request the
relaxation of the concurrence requirements once three civil administrative
actions have been successfully issued and closed out. For these actions to
be considered successful, regional cases must have been supported by
adequate evidence of the violation, and the proposed penalties and final
assessment must conform to this section 313 enforcement response policy.
CRIMINAL SANCTIONS
The statute does not provide for criminal sanctions for violations of
section 313. However, 18 U.S. Code Section 1001 makes it a criminal offense
to falsify information being submitted to the U.S. Government. In addition,
the knowing failure to file a section 313 report may be prosecuted as a
concealment proscribed by 18 USC Section 1001.
ASSESSING A CIVIL ADMINISTRATIVE PENALTY
SUMMARY OF THE PENALTY POLICY
To determine the base penalty, determine the circumstance level and the
penalty adjustment level. These factors are incorporated into a matrix
which allows determination of the appropriate base penalty amount. The
total penalty is determined by calculating the penalty for each violation on
a per chemical, per facility basis.
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Once the gravity-based penalty has been determined, upward or downward
adjustments to the penalty amount are made in consideration of these other
factors: culpability, history of prior violations, ability to continue in
business, and such other matters as justice may require, as described in
this policy.
DISCUSSION
The circumstance levels of the matrix take into account the seriousness
of the violation as it relates to the accuracy and availability of the
information to the community, to states, and to the government.
The penalty adjustment level is based on the quantity of section 313
chemical for which the violation is being issued which is manufactured,
processed, or used by the facility, and the size of the total corporate
entity in violation. A large company is defined as a facility for which the
total corporate entity has sales of ten million dollars or more. A small
company is defined as a facility for which the total corporate entity has
sales of less than ten million dollars. The total corporate entity refers
to all sites taken together owned or controlled by the foreign or domestic
parent company.
Thus, a large company which manufactures 10 times or more section 313
chemical than the threshold limit is assessed the highest penalty for the
specific violation ( i.e., based on the circumstance level ). If a company
is large but manufactures / processes / uses less than 10 times the
threshold, the penalty for that violation falls in the appropriate
circumstance level and penalty adjustment level B. If the corporate entity
is small and manufactures / processes / uses 10 times or more of the
violative section 313 chemical, then the penalty remains in the middle
penalty adjustment level B. If the corporate entity is small and
manufactures, processes, or uses less than 10 times the threshold level,
then the penalty for that particular circumstance level falls into penalty
adjustment level C, which is the least penalty for that particular
circumstance level.
A size of business adjustment factor is being used to reflect the fact
that small businesses are deterred by a smaller penalty and that impact of
the penalty is likely to be the same as a larger penalty for a large
company. Thus, the Agency believes that the deterrent effect is comparable.
EPA also recognizes that EPCRA is a new statute affecting a broad range of
facilities and that this law may bring certain small businesses into EPA's
purview for the first time.
Furthermore, penalty policies under other statutes often assess the same
initial penalty for a violation and then provide for substantial adjustments
based on the firm's ability to pay and ability to continue in business. By
making a size of business adjustment up front in the base penalty, the
Agency
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hopes to avoid the large disparity between penalties proposed and penalties
collected.
However, it was pointed out that a small company may manufacture /
process / use a large amount of a section 313 chemical and its emissions may
be substantial. Thus, the two factors are combined and used to determine
the penalty adjustment level of the matrix. Please note that the size of
business level is based on the definition for small business originally
developed in conjunction with the Small Business Administration when the
section 313 rule was being developed and thus has been subject to public
review and comment.
The enforcement-related use of ten times or more the threshold
established in the statute is established as a level which is likely to be
of more interest to the community and to the government, at least initially.
After a review of incoming reports, it was believed that ten times the
threshold level was a reasonable cutoff to distinguish between manufacture /
process / use of a large amount of section 313 chemical.
Definition of Late Report
To be considered a late report instead of a failure to report for those
reports submitted after the deadline of July 1, the report must be submitted
prior to the facility being contacted by EPA or an EPA representative in
preparation for a pending inspection or for purposes of determining
compliance or in the absence of such contact, prior to the date of the
inspection. Any report which is submitted after such contact / inspection
is to be treated the same as a nonreport in assessing the penalty. Regions
are encouraged to keep written records which document any such contact with
the facility.
Definition of Failure to Report
If a report is submitted by a facility after the reporting deadline and
after being contacted by EPA or an EPA representative in preparation for a
pending inspection or for purposes of determining compliance or in the
absence of such contact, after EPA begins an inspection ( i.e., issuance of
a Notice of Inspection ), the violation is considered a failure to report
violation.
If a facility reports to a state but not to EPA, the violation is
considered a failure to report, unless it is submitted late prior to the
contact by EPA or its representative as described in the previous paragraph.
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Notification of Pending Actions
It is the Regional Office's responsibility to notify the Office of
Compliance Monitoring ( OCM ) Case Development Coordinator for that Region
that an inspection has been conducted and a nonreporter detected in order to
avoid the issuance of an NON by OCM for a late report when the nonreporter
submits his report.
For those facilities inspected by the National Enforcement
Investigations Center ( NEIC ) for which violations are found, NEIC will
notify the Region, who will notify OCM. Alternatively, NEIC and the Region
may work out a different arrangement to assure that OCM is informed of the
violation.
PENALTY MATRIX
PENALTY MATRIX *
ADJUSTMENT LEVELS
CIRCUMSTANCE ** A B C
LEVELS
1 $25,000 $17,000 $5,000
2 $20,000 $13,000 $3,000
3 $15,000 $10,000 $1,500
4 $10,000 $ 6,000 $1,000
5 $ 5,000 $ 3,000 $ 500
6 $ 2,000 $ 1,300 $ 200
*/ Penalty is to be assessed for each chemical for each facility.
See discussion on per day penalties for further clarification.
**/ See circumstance definitions below for detail.
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CIRCUMSTANCE LEVELS
Level 1
( $25,000 $17,000 $5,000 )
Nonreporting / failure to report a chemical ( See definition of late report
and failure to report in previous sections. )
Falsified report
Level 2
( $20,000 $13,000 $3,000 )
Late Reporting after 180 days. ( These reports may be subject to NONs if
they contain errors which warrant an NON and subsequent penalties if errors
are not corrected in response to the NON. )
Level 3
( $15,000 $10,000 $1,500 )
Errors ( fail to respond / correct information identified by EPA as an error
during data entry by due dates specified in NON or if errors found during an
inspection, failure to correct information within 30 days of the facility
being informed of the errors ). See section on Initial Offer of Settlement
for error violations identified in NONs.
Serious errors / incorrect reports found through audit / inspection / tip /
complaint / voluntary disclosure. ( Errors which seriously affect the
utility of the data; does not include those which would generally warrant an
NON as a result of data entry. ) Voluntary disclosures of serious errors
are subject to voluntary disclosure reductions.
Level 4
( $10,000 $6,000 $1,000 )
Errors / incorrect reports which are voluntarily disclosed but not disclosed
and corrected within 30 days of the discovery and within 180 days of the
reporting date. These disclosed violations are subject to the first
voluntary disclosure reduction provided errors are corrected prior to
issuance of the complaint.
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Level 5
( $5,000 $3,000 $500 )
Late Reporting ( 91-180 days after the due date for 1986 reports and 61-90
days after the due date for 1989 reports and 1-30 days for 1990 and future
reporting years. Facilities which do not become subject until future years
may have the benefit of 61-90 days after the due date for the first year
they have to report and the 1-30 days thereafter. )
Reports to EPA but not to State and the facility has received a previous NON
from EPA for this violation.
Level 6
( $2,000 $1,300 $200 )
Late Reporting from 1 to 59 days for 1939 reporting year if an NON has been
issued for late reporting or a Civil Complaint for a section 313 violation
for a violation during the 1988 reporting year.
Error corrections not reported to State when responding to NON / Civil
Complaint for errors.
Minor errors in report found through audit / inspection / tip / complaint /
voluntary disclosure and which are not corrected within 30 days of the
discovery.
PENALTY ADJUSTMENT LEVELS
Level A
Facility for which the total corporate entity * has sales of ten million
dollars or more or 50 employees or more ** and which manufactures /
processes / uses the section 313 chemical associated with the violation at
10 times or more the threshold level for reporting.
*/ Total corporate entity refers to all sites taken together owner or
controlled by the foreign or domestic parent company.
**/ Region has discretion to use whichever figures are readily available.
If no information is available, Regions may assume the higher level and
adjust if the facility can show that they are subject to the small
business definition. Please note that to be subject to the section 313
requirements, the facility must employ 10 or more employees.
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Level B
Facility for which the total corporate entity has sales of ten million
dollars or more or 50 employees or more and which manufacturers /
processes / uses the section 313 chemical associated with the violation at
less than 10 times the threshold level for reporting.
Facility for which the total corporate entity has sales of less than ten
million dollars or less than 50 employees and which manufactures /
processes / uses the section 313 chemical associated with the violation at
10 times or more the threshold level for reporting.
Level C
Facility for which the total corporate entity has sales of less than ten
million dollars or less than 50 employees and which manufactures /
processes / uses the section 313 chemical associated with the violation at
less than 10 times the threshold level for reporting.
MULTIPLE VIOLATIONS
Separate penalties are to be calculated for each chemical for each
facility. If a company has 3 facilities and fails to report for the same
chemical at each facility, a penalty is to be assessed for each facility and
for each chemical. Assuming the annual sales exceed ten million dollars and
each facility exceeds the threshold limits by more than 10 times, the
penalty would be $25,000 x 3 or $75,000. If each facility manufactured the
same two chemicals again more than 10 times the threshold, the penalty would
be $25,000 x 3 x 2 or $150,000.
If there is more than one violation for the same facility involving the
same chemical, the penalties are cumulative. For example, if a firm reports
after 180 days and the form also contains major errors which the firm
refused to correct, the penalty is $20,000 plus $15,000. However, since it
is the same form involved, the penalty which will be assessed should be the
$25,000 maximum per day.
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PER DAY PENALTIES
Per day penalties are appropriate for those facilities which continue to
fail to report in subsequent reporting years. Generally, per day penalties
will not be used unless a facility / a company within the corporate entity
has received Civil Complaints for failing to report under section 313, which
has been settled ( i.e., by payment or by a Consent Agreement and Final
Order, or by a Court Order ), for two previous reporting periods.
Per day penalties may also be used for those facilities which refuse to
submit reports or corrected information after a Civil Complaint is issued.
Such refusal may be basis for amending the Civil Complaint to assess per day
penalties or a new Complaint issued which addresses the days of continuing
noncompliance after the initial Civil Complaint is closed, e.g., a facility
may pay the penalty in full and not come into compliance, in which case a
new Civil Complaint should be issued.
In cases where the EPA has determined that facility has knowingly failed
to submit a report, per day penalties may be assessed. Regions should
consult with the Office of Compliance Monitoring prior to issuing a Civil
Complaint with a per day assessment, even if concurrence has been relaxed.
Prior to the relaxation of concurrence, Regions should discuss per day
assessments in advance of submitting the drafted Civil Complaint.
ADJUSTMENT FACTORS
Voluntary Disclosure
Disclosures of nonreporting prior to EPA contacting a facility in
preparation for an inspection are considered late reporters so no further
adjustment is needed provided completed report is submitted. The
circumstance level of the violation is based on the day the report is
submitted.
Disclosures regarding serious errors or incorrect reports will be made
in the following manner:
25% Voluntarily disclosed and corrected within 30 days
of the disclosure.
Additional 25% If disclosed and corrected within 30 days of
discovery.
Please note that disclosures of those types of errors which would
otherwise result in an NON if detected by EPA warrant an NON and not a Civil
Penalty if corrections are made within 30 days of the discovery by the
facility and within 180 days of the reporting period. If a facility reports
the error more than
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180 days after the reporting period, it is subject to a Civil Complaint and
may be eligible for the voluntary disclosure reductions. EPA wishes to
foster self-auditing and submission of corrected forms by facilities on a
prompt basis.
A violation is not considered to be voluntarily disclosed if it is done
after EPA or its representative has contacted the facility in preparation
for an inspection of that facility or for the purposes of determining
compliance or if an inspection has started.
Culpability
The Agency intends to pursue a policy of strict liability in penalizing
for a violation, though some allowance may be made on the extent of the
violator's culpability. The base penalty may be increased or decreased or
may remain the same depending on the violator's culpability.
The principal criteria for assessing culpability are (a) the violator's
knowledge, (b) the violator's control over the violative condition, and (c)
the attitude of the violator.
(a) The violator's knowledge. The lack of knowledge would not reduce
culpability since the Agency has no intention of encouraging ignorance of
EPCRA and its requirements and because the statute only requires facilities
to report information which is available. However, if a violation is
knowing or willful, the Agency reserves the right to assess per day
penalties.
(b) Degree of control over the violation. There may be situations
where the violator may be less than fully responsible for the violation's
occurrence. For example, an employee whose conduct caused the violation may
have been disobeying his employer's instructions. Such situations would
probably warrant some reduction in the penalties. Adjustments may be made
at the Agency's discretion to adjust the penalty downward a maximum 25%.
However, the use of this factor is expected to be rare, and must be
justified.
(c) Attitude of the violator. In assessing the violator's "attitude",
the Agency will look at the following factors: Whether the violator made
"good faith" efforts to comply and the promptness of the violator's
corrective actions. Attitude may justify a penalty adjustment of up to 15%
of the penalty in either direction. Objective evidence such as statements
or actions of the violator should be used to justify such adjustments. This
adjustment is to be made after the Civil Complaint has been issued in the
context of settlement.
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History of prior violations
The penalty matrix is designed to apply to "first offenders". Where a
violator has demonstrated a history or violating EPCRA section 313, the
penalty should be adjusted upward. The need for such an upward adjustment
derives from the violator not being sufficiently motivated to comply
( deterred from noncomplying ) by the penalty assessed for the previous
violation, either because of economic factors consciously analyzed by the
firm, or because of negligence. Another reason for penalizing repeat
violators more severely than "first offenders" is the increased enforcement
resources that are spent on the same violator.
The Agency's policy is to interpret "prior such violations" as referring
only to prior violations of EPCRA section 313. The following rules apply in
evaluating history of prior such violations:
(a) In order to constitute a prior violation, the prior violation must
have resulted in a final order, either as a result of an uncontested
complaint, or as a result of contested complaint which is finally resolved
against the violator, except as discussed in section (d). A consent
agreement and final order ( CAFO ), as well as receipt of payment in
response to a civil complaint, are both considered to be the final
resolution of the complaint against the violator. Therefore, a CAFO, or
receipt of the check, can be used as evidence constituting a prior
violation, regardless of whether or not a respondent admits to the
violation.
(b) To be considered a "prior such violation", the violation must have
occurred within five years of the present violation. This five year period
begins when the prior violation becomes a final order. Beyond five years,
the prior violative conduct becomes too distant to require compounding of
the penalty for the present violation.
(c) Generally, companies with multiple establishments are considered as
one when determining history. Thus, if a facility is part of a company for
which another facility within the company has a "prior such violation", then
each facility within the company is considered to have a "prior violation".
However, two companies held by the same parent corporation do not
necessarily affect each other's history if they are in substantially
different lines of business, and they are substantially independent of one
another in their management, and in the functioning of their Boards of
Directors. In the case of wholly- or partly-owned subsidiaries, the
violation history of a parent corporation shall apply to its subsidiaries
and that of the subsidiaries to the parent.
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(d) For one prior violation, the penalty should be adjusted upward by
25%. If two prior violations have occurred, the penalty should be adjusted
upward by 50%. If three or more prior violations have occurred, the penalty
should be adjusted upward by 100%. Please note that in those cases where
the penalty goes to per day penalties because of previous violations, upward
adjustments would only be appropriate for violations which are committed
after the initial complaint with per day assessments.
In those cases where an NON has been issued for record-keeping
violations, the adjustment factor based on good attitude is not warranted
and should not be given. Additionally, consideration should be given to
whether a culpability finding of willful violation should be made and
appropriate penalty adjustments made.
Application of ability to continue in business.
The matrix incorporates an ability to pay factor. Therefore, the
application of an ability to continue in business adjustment is expected to
be rare. Measuring a firm's ability to continue in business can be very
complex. This adjustment factor should only be applied in making
adjustments to the penalty after the Civil Complaint has been issued. If a
firm raises the issue of inability to pay in its answer, or in the course of
settlement discussions, the firm should be asked to document its inability
to pay. In complex cases, the Agency may need to rely on a management
division economist or an accountant to analyze the firm's ability to
continue in business and, on a case-by-case basis, to further reduce the
proposed penalty. Alternatively, this may be done in accordance with Policy
GM-56 found in EPA's Enforcement Guidance Manual.
Other factors as justice may require.
o New Ownership for "history of violations". It may be unfair in
some cases to burden new ownership with the previous owner's history.
o Environmentally beneficial expenditures. Circumstances may arise
where a violator will offer to make expenditures for environmentally
beneficial purposes above and beyond those required by law, in lieu of
paying the full penalty. The Agency in penalty actions in the U.S. District
Courts under the Clear Air and Water Acts, and in administrative penalty
actions under the Toxic Substances Control Act, has determined that
crediting such expenditures is consistent with the purpose of civil penalty
assessment. Although civil penalties under EPCRA section 313 are
administratively assessed, the same rational applies. This adjustment,
which constitutes a credit against the actual penalty amount, will normally
be discussed only in the course of settlement negotiations. Before the
proposed credit amounts can be incorporated into a settlement,
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the complainant must assure himself that the company is not expending the
funds to come into compliance with other statutes / regulations and has not
already received credits in another enforcement action for the same
environmentally beneficial expenditures. Agreements to come into compliance
with EPCRA would not warrant a reduction in penalty other than in the
context of an attitude adjustment factor. The settlement agreement
incorporating such an adjustment should make clear what the actual penalty
assessment is, after which the terms of the reduction should be spelled out
in detail and in a clearly enforceable manner.
Any conditions which are to be met in exchange for a penalty reduction
are to be imposed in accordance with the Toxic Substances Control Act
Settlement with Conditions Policy which was issued November 22, 1983 ( or in
accordance with any revisions to that policy ).
One area of environmentally beneficial expenditures for which a
reduction in penalty would be appropriate is an agreement to reduce
emissions from the facility or other facilities within the company by a
certain amount within an agreed upon timeframe.
SETTLEMENT
This policy does not set a specific percentage guideline for penalty
reductions in the course of settlement. While, as a general rule, penalties
may be altered in the course of settlement, there should always be a
substantive reason given, which is to be incorporated in any settlement
agreement and consent decree and final order for any penalty reduction.
Any reductions in penalties are to made in accordance with this penalty
policy. In preparing Consent Agreements, Regions should require a statement
signed by the company which certifies that it has complied with all EPCRA
requirements and specifically section 313 requirements at all facilities
under their control. For large companies with many facilities, Regions are
encouraged to inspect a number of facilities, belonging to a corporation
with a history of violation to assure full compliance. This does not mean
prior to taking an initial action but afterwards to assure that the firm has
come into compliance.
Any violations reported by the company or facility in the context of
settlement is to be treated as a self-confessed violation and subject either
as a late report if the company has failed to report or as eligible for the
disclosure reductions.
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If a Region wishes to enter into a Settlement Agreement for the facility
/ company to audit its facility / company, then the Consent Agreement and
Final Order may contain this provision. However, no penalty reductions are
appropriate for the audit which is considered the cost of compliance at this
point in time. The violations detected during the audit are to be assessed
in accordance with this enforcement response policy although reductions for
voluntary disclosure may be given and reports submitted may be assessed as
late reports, even though an inspection has been done.
OFFER OF SETTLEMENT FOR CIVIL COMPLAINTS RESULTING FROM A FACILITY'S FAILURE
TO RESPOND TO AN NON FOR ERRORS
Background
The following policy will be utilized on a pilot basis for the first
year for those cases issued by headquarters. This policy is aimed at
fostering the submission of correct information on a timely basis and
streamlining the enforcement process. It is hoped that companies will
submit a corrected form within the 20 days and then after the form is
determined to be free of readily detectable errors, pay its fine.
If this process becomes as time consuming as a Civil Complaint without
an upfront offer of settlement, then it will be discontinued and settlements
will be based on the larger proposed penalty amount, with adjustments as
specified in this policy, if appropriate.
Policy
For violations involving readily detectable errors for which no response
to an NON is made or the response was inadequate i.e, failed to submit
correct information, a written offer of settlement for $300 is to be made at
the time the initial civil complaint is issued.
This offer is contingent on the facility submitting corrected
information within 20 days of receipt of the Civil Complaint. Payment for
the above penalties must be made in full with no additional reduction with
the exception of ability to continue in business.
If settlement is not made based on the initial offer of settlement,
including the requirement that correct information is submitted within 20
days of the receipt of the Civil Complaint, any settlement agreement is to
exceed the original offer and any and all reductions to the penalty must be
justified based on the specific factors in this policy. The final Consent
Agreement is to specifically identify and justify any reductions.
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Continual Failure to Report or to Submit Corrected Information
Per day penalties may be appropriate if a facility continues to refuse
to submit the required information. In addition, if a facility pays its
penalty and continues to refuse to submit the information as required, then
a criminal referral may be the appropriate response.
APPENDIX A
TRI ERROR TYPES
The Information Management Division ( IMD ) has divided errors found in
TRI submissions into three broad classes:
1. Pre-Tracking Errors - These errors are manually identified, and
involve Form R's which are incorrectly put together. For example,
a Form R should consist of a completed Part I, II, III, and IV.
Failure to include all four parts is a pre-tracking error. Also,
including more than one Part III in a single Form R package is a
pre-tracking error. Pre-tracking errors prevent the submission
information from being entered into the document tracking system.
2. Tracking Errors - These errors are machine identified by the
document tracking system, and involve missing or invalid facility
or chemical identification information. For example, if the CAS
number reported in Part III is 50-00-0 ( the CAS number for
formaldehyde ), and the chemical name reported is Freon 112, the
chemical identity is invalid because the reported CAS number and
the reported chemical name do not match.
3. Major and Minor Errors - These errors are machine identified by the
TRIS database edits on the EPA 3090 mainframe computer. They
involve missing or invalid release data. For example, if the Form
R instructions require a response of "NA" or a value in a specific
data field, and the field is left blank by the submitter, a major
or minor error is created. ( More information about these edits is
found in Toxic Chemical Release Inventory System Physical Design
( appendix C ) available form Ruby Boyd, TRIS Database
Administrator, IMD, 202/475-8387. )
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