General Practice, Solo & Small Firm DivisionMagazine

Natural Resources, Energy, and Environmental Law

Reform of Environmental Regulations: Three Points

By Lois J. Schiffer and Ann C. Juliano

Recently in the game of basketball, the three-point shot was introduced. This new rule fostered more exciting competition and provided greater reward for greater risk. The three-point shot is a modified regulation that opens up the game and allows players to realize new potential.

Discussion about modifying our nation’s systems of government regulation has been extensive. Approaches include the vice president’s program on reinventing government; the Republican Contract with America; broad-based "regulatory reform" legislation; statutes like the Small Business Regulatory Enforcement and Fairness Act; and programs of compliance assistance. Unlike the three-point shot, some of these reform efforts do not aim to improve the system through modified regulations but rather to change the underlying programs.

These proposed modifications should be evaluated in a framework formed by certain background facts. First, the American public supports a clean environment and many think that environmental laws do not go far enough in protecting the environment today. Second, the regulatory programs put into place over the past 25 years to address pollution and environmental protection have been effective in improving our water, our air, and our land. Third, most of our environmental protection regulations are developed and administered through an approach that includes both the federal government and state governments, and on the premise that minimum national standards are important to assure that localities do not bid against each other for industry with promises of less-stringent requirements. Because state governments in this country are not uniform in expertise, excellence, or finances, these minimum national standards are particularly important. Finally, environmental catastrophes will occur, as will prompt requests for an immediate regulatory response. An approach to regulation must account for the eventuality of these concerns and responses.

Against this background, we consider three points. First, will the reform or modification work at least as well as the current system or will it take a step backward? Second, does the reform provide for a fair, level playing field through tough and fair enforcement? Finally, will the reform or modification permit effective responses to novel emergencies, or will it hamper addressing such problems?

Will the Modification Work at Least as Well? Our environmental regulatory systems have been established to achieve better health and a better environment. Modifications must be evaluated to assure that they will move us even further forward toward environmental goals. Further, regulations should be effective, consistent, sensible and understandable.

What Modifications to Regulation Effectively Protect the Environment? The administration has initiated some wide-ranging reforms. For example, through the regulatory reinvention process, all agencies have reviewed all of their current regulations to eliminate or revise obsolete, outdated or inefficient regulations. The administration’s dedication to partnerships with states, businesses, local communities and environmental groups has improved resource management, resolution of disputes, and provided more effective communication among all interested parties.

This administration has also helped small businesses to better meet their environmental obligations. The Clean Air Act provides that states must adopt small business compliance assistance programs. The EPA learned that small businesses were hesitant to make use of these programs. To assist with compliance, the EPA issued a new policy, granting states the flexibility to offer small businesses a window of opportunity to correct a violation discovered through participation in a compliance assistance program.

Certain efforts to modify the environmental regulatory system do not focus on increasing compliance with our statutes protecting our environment; rather, these efforts could force us backward. Even the most recent example, S. 981, the Regulatory Improvement Act of 1997, contains some worrisome provisions. One concern is the possibility that S. 981 could be interpreted as a "supermandate" that wipes away existing regulations and laws if such statutes and regulations cannot be justified under a cost-benefit analysis. The administration has suggested that S. 981 include a "savings provision" that states that the cost-benefit analysis should not be construed to modify or override any statutory standard designed to protect health, safety and the environment.

Similar to past bills, S. 981 contains provisions for judicial review of agency cost-benefit analysis. Judicial review of agency action requires a review of the entire administrative record, rather than one small part. However, because the procedures in S. 981 for cost-benefit analysis are quite detailed, it is possible that the bill could be interpreted to accomplish what prior bills explicitly set out to accomplish—judicial review of every procedural step in the cost-benefit analysis. Any procedural misstep could have resulted in a remand of the entire rule. Needless litigation over the scope of judicial review could be avoided with language explicitly stating that judicial review is limited to that already provided by the Administrative Procedure Act or specific judicial review provisions otherwise applicable to the regulations.

Will the Modification Provide for Tough and Fair Enforcement? Even the most innovative and creative positive incentives for inducing compliance and resolving disputes will fail without the backup of a modern enforcement scheme: administrative, civil, and criminal enforcement and citizens suits.

We have engaged in strong civil enforcement efforts which deter noncompliance and often result in cleanup orders and other injunctive relief with direct environmental benefits. Last year, for example, a United States District Court entered judgment against Dean Dairy Products, Inc. in the amount of $4,031,000 for violations of the Clean Water Act. This case underscores that wrongful profits should be taken away from companies that violate the law. United States v. Municipal Authority of Union Township et al, ___ F.3d ___, 1998 WL 401490 (3d Cir. 1998).

A striking example of the deterrent effect of enforcement occurred in 1995 when a barge company was found guilty of illegal pollution of the Ohio River, and of conspiracy to violate the Oil Pollution Act. In the year following the first convictions, the number of spills and discharges for which there was no identifiable source decreased by 60 percent even though vessel traffic on the waterway that year remained high.

Recently, both federal and state legislators have grappled with one type of reform which would seriously impair enforcement: immunity for self-disclosed environmental violations from civil and criminal enforcement. Providing immunity for violations disclosed to the government would frustrate legitimate enforcement efforts and discourage regulated entities from taking sufficient precautions to avoid violations in the first instance. Further, an immunity provision sends the message that there is no need to take a proactive approach to environmental management because a company can immunize itself from civil and criminal penalties even after it has caused serious environmental problems. Audit privileges also impair effective enforcement.

The EPA has a policy that encourages regulated entities voluntarily to disclose and correct violations of environmental laws. Under this policy, the gravity component of civil penalties is substantially reduced or eliminated for those who voluntarily self-disclose and promptly correct violations. In addition, the EPA does not request voluntary audit reports as a trigger for enforcement investigations. The policy protects public health and the environment by denying penalty reduction eligibility for those violations which result in actual harm, are repeat violations or provide an economic advantage.

Will the Modification Allow Effective Responses to Emergencies? In the environmental arena, emergencies result from any number of events (e.g., oil spills, chemical releases, food contamination). Reform must ensure a method to respond to these emergencies. An important step toward effective response to emergencies is information. A key component of information gathering is the availability of the information to the public.

Lois J. Schiffer is assistant attorney general for the Environment and Natural Resources Division of the U.S. Department of Justice and has been an adjunct professor of environmental law at Georgetown University Law Center since 1986. Ann C. Juliano was a special assistant to Ms. Schiffer and is now a professor at Villanova Law School.


- This article is an abridged and edited version of one that originally appeared on page 175 in Natural Resources & Environment, Winter 1998 (12:3).

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