In a September 2019 memo, the EPA’s Office of Enforcement and Compliance Assurance (OECA) revised its 2003 guidance for Expedited Settlement Agreements (ESAs) applicable to the Spill Prevention, Control, and Countermeasure (SPCC) program.
According to the OECA, the most significant change is that an SPCC ESA, also called the SPCC ESA Pilot (ESA Pilot), can be offered to facilities that have violated the Facility Response Plan (FRP) requirements promulgated under Section 311(j) of the Clean Water Act (CWA). (In contrast to the SPCC program, FRP requirements apply to facilities with very large oil storage capacities. A facility can be subject to both the SPCC and FRP programs.) The memo also incorporates a provision in a more general ESA guidance document from 2014 that allows ESAs to be offered to repeat offenders provided certain conditions are met. In addition, the memo makes adjustments to the time frame for coming into compliance under an ESA Pilot and to the penalty ceiling for both individual ESAs and combined ESAs agreed to by a single owner/operator.
Types of Violations
In its 2014 guidance, the OECA noted that ESAs have been an important aspect of the EPA’s compliance assurance and enforcement program for many years. Generally, an ESA is appropriate for violations that meet three criteria:
- Easily detected. ESAs are most appropriate for violations that an inspector can witness at the time of inspection or that can be reasonably determined through simple information requests, on-site document review, or readily-accessible data sources. For example, violations eligible for an ESA under the SPCC ESA program must be witnessed by the inspector at the time of inspection.
- Easily corrected. Covered violations should be easy to fix, such that the violator can take measures to ensure compliance within the time frame provided in the ESA offer. The recipient should also be able to certify compliance within the time frame set forth in the ESA offer. The 2014 guidance amended the 30- to 45-day time frame in the previous guidance to no more than 90 days after the owner/operator receives the ESA offer.
- No significant impact. Violations may not result in significant harm to human health or the environment or present an imminent and substantial endangerment. While the 2003 guidance referred to recordkeeping and reporting violations as examples, existing ESA programs recognize that there are a variety of other “minor” violations that could be covered by an ESA.
Hearing Must Be Waived
If the criteria are met, the EPA offers the owner/operator a discounted, nonnegotiable settlement in lieu of a more formal, traditional administrative enforcement process. An ESA is typically a brief settlement agreement that the recipient may accept at the offered penalty amount within a specific amount of time. When the recipient accepts the offer in exchange for a reduced penalty and minimized transaction costs, the recipient agrees to waive the opportunity for a hearing and certifies under penalty of perjury that the violation(s) and harm from the violation(s) have been corrected or will be corrected within a limited period of time as required by the EPA in the ESA. In some instances, the recipient must certify that measures have been taken to prevent future violations.
As noted, under the new memo, repeat violators of SPCC regulations are not automatically disqualified from the ESA Pilot. A repeat violator is one who, in the past 5 years, has had the same or closely related violation(s) that were the subject of an enforcement action at the facility or at other facilities under the ownership, operation, or control of the same violator. The penalty for the violations by a repeat violator should be increased by up to 75 percent; this increase may be waived if the violations are different from the original enforcement action. The ESA may be offered if the original enforcement action was an ESA, but no more than two ESAs can be issued to a facility for the same or closely related violations.
If multiple facilities owned or operated by the same owner/operator are inspected within a 6-month time frame, the owner/operator would not be considered a repeat violator. Instead, each facility would be eligible for an ESA such that the issuance of an ESA to one facility would not exclude eligibility for others or increase the penalty. The total combined penalty for all ESAs issued to an owner/operator may not exceed $47,357 or the current Class I penalty under CWA Section 311(b)(B) as amended for inflation.
The penalty cap for each ESA has been adjusted to $15,000. If the penalty calculation using the Agency’s spreadsheet and facility-size multiplier is above $15,000, the facility does not qualify for an ESA. In such cases, the EPA would use a standard Administrative Penalty Order to resolve the violations.
The 2019 memo includes model documents than can be used for the ESA Pilot.