In fact a great number of actions are taken against small businesses. Given the immense population of regulated small businesses, EPA and many state agencies have adopted self-audit policies intended to encourage these entities to voluntarily discover, disclose, and correct violations, thereby partly lessening the workload of overextended inspectors.
EPA introduced its Policy on Compliance Incentives for Small Business in 1996. In 2000, the Agency revised and renamed the policy to the Small Business Compliance Policy. The policy has been adopted by many states, and EPA recognizes state policies that match the minimum requirements of the 2000 policy.
Any small business (defined in the EPA policy as a person corporation, partnership, or other entity that employs 100 or fewer individuals) that meets all the requirements of the policy can expect to have the entirety of the gravity-based portion of a monetary fine waived. The policy does not allow reduction of the portion of the monetary fine assessed for any economic benefit an entity realized through non-compliance, but EPA assesses economic-benefit penalties against small businesses only when the benefit is very large.
Most businesses, small or otherwise, steer clear of regulatory agencies unless contact is absolutely unavoidable. As a result, year after year voluntary reporting of violations is never as extensive as EPA would like it to be. Nevertheless, companies that have strong environmental policies or that want to establish such policies may find that participating in the compliance policy of EPA or a state is one good way of mitigating any negative impact from a regulatory violation.
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The policy is here at EPA. It is short and easy to read. Here are a few points to start off with.
- The violation must be voluntarily discovered. In other words it may not be discovered through any required regulatory action such as monitoring or sampling prescribed by a statute, rule, or permit. Neither does a violation discovered by an audit required by a consent order or settlement agreement qualify for a waiver. The policy requires a “good faith” effort by the business to follow-up with any additional information EPA needs to determine the applicability of the policy.
- The violation must be reported within 21 days after any officer, director, employee, or agent of the business becomes aware of any facts that reasonably lead him or her to believe that a violation exists. The violation should be promptly reported to EPA even if there is doubt that a violation exists. EPA the state will make the definitive determination, thereby ensuring that the business meets the disclosure period requirement.
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- The small business has up to 180 days to correct the violation and up to 360 days when correction involves installing pollution prevention measures. Correcting the violation includes remediating any environmental harm associated with the violation as well as putting into place procedures to prevent the violation from happening again. A company that does not meet these deadlines becomes subject to traditional enforcement.
- The policy may not be used under five circumstances – the company has received a warning or been subject to any other enforcement action or citizen suit involving the same requirement within the past three years; the company benefited from the policy because of a violation of the same requirements within the past three years; the company has been subject to enforcement actions for two or more violations of any environmental requirement in the past five years; the violation was discovered through an information request, inspection, or field citation or through a report by a whistleblower; the violation has caused actual harm to public health, safety, or the environment; the violation presents an imminent and substantial danger to public health, safety or the environment; and the violation involves criminal conduct.
Finally, EPA recognizes state small business policies developed for programs that EPA has delegated to the state. When the state chooses to apply its policy in a federally authorized program, EPA will defer enforcement to the state.