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Should a Small Business Turn Itself in to the EPA When Environmental Violations Are Discovered? EPA’s small business policy can waive all penalties for eligible businesses

Release Date: 1/4/2001
Contact Information: Donna Heron, (215) 814-5113

Donna Heron, (215) 814-5113

PHILADELPHIA – The very thought that a small business could have violated an environmental regulation can strike terror into the hearts of owners and managers.

Maybe a magazine article sparked the idea, or a conversation with a colleague about environmental issues. No matter how it began, anguish is the result – over the financial consequences when EPA finds out.

Believe it or not, the best solution might be to call the EPA right away instead of waiting for EPA investigators to find the violation themselves during an inspection.

Under its small business policy, the EPA can waive all penalties for eligible small businesses with less than 100 workers if they promptly disclose, correct violations and meet the other conditions in the policy.

By voluntarily contacting the EPA, a business or facility may qualify for a penalty reprieve in situations where corrective action will take weeks or months, or where the company lacks a required EPA or state permit, emission report or other documentation.

Some violations might be easy to correct, such as adding missing labels on drums of used oil or covering containers of chemicals that release pollutants into the air. The important thing is to take appropriate preventive action now to eliminate future violations.

Developing a management plan, putting systems in place, and educating employees about environmental procedures can also work in the company’s financial favor if violations are later found. Documenting procedures, including employee training, signs, checklists and a complete record of all self-audits and actions taken to correct problems can demonstrate the company’s good-faith effort if an EPA inspector later finds a problem. And such internal systems can also help a facility qualify for penalty waivers if it finds and discloses violations.

Company officials should familiarize themselves with EPA’s small business compliance policy. Some of the policy points include:

* reporting potential violations must be voluntary. Reporting that is mandated through regulations or legal action, or violations discovered during an inspection or investigation would not qualify for penalty waivers.

* disclosure must be made in writing within 21 days of discovering the violation.

* the violation must be corrected within 90 days. Extensions can be given to correct the violations within 180 days with an agreed upon compliance schedule, or within 360 days if the small business corrects the violation with pollution prevention measures. Correcting the violation includes remediating any environmental harm associated with the violation and putting into place procedures to prevent the violation from happening again.

After a company discloses a violation, EPA generally sends a follow-up letter requesting more information – about the violation and how the facility meets the criteria in the small business compliance policy. If the facility qualifies to have all penalties waived, EPA issues a written notice of determination.

If, on the other hand, the violations are so extensive that they caused the company to receive a significant economic benefit over its competitors, EPA retains the ability to assess a penalty. Such economic benefits occur rarely, and in the mid-Atlantic region there have been none associated with any small business disclosures.

EPA wants to encourage all facilities to do self-inspections to quickly find and correct violations before they contribute to serious environmental and public health problems. The small business policy as well as the audit policy for businesses with over 100 workers are on EPA’s web site along with a wealth of information under “policies” at http://es.epa.gov/oeca/main/strategy/crossp.html and www.epa.gov/oeca/smbusi.html

For some specific industries and regulations, EPA has developed checklists and frequently asked questions that also are on its web site. EPA Region 3 even has a Business Assistance Center toll free number to help find answers to questions about the policy, financing environmental compliance and technical assistance at 1-800-228-8711.

Disclosures of violations that occur within Delaware, the District of Columbia, Maryland, Pennsylvania, Virginia and West Virginia should be sent to EPA (3EC00), 1650 Arch Street, Philadelphia, PA 19103 or sent by FAX to 215-814-2905.