Voluntary Self-Disclosures Become Streamlined With Launch of U.S. EPA’s eDisclosure Portal

The U.S. Environmental Protection Agency (U.S. EPA) has streamlined the implementation of its self-disclosure policies through the recently released ‘eDisclosure’ portal.  This automated web-based system allows both small and large businesses to quickly and more efficiently resolve routine types of non-compliance disclosures.  Effective December 9, 2015, disclosures under U.S. EPA’s Audit Policy and U.S. EPA’s Small Business Compliance Policy should be submitted through the eDisclosure portal.

The U.S. EPA issued “Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations” (65 FR 19618, April 11, 2000), also known as U.S. EPA’s Audit Policy, in order to encourage large businesses to voluntarily disclose, correct, and prevent  violations to Federal environmental regulations.  In return, U.S. EPA has reduced civil penalties to those that voluntarily disclose violations.  U.S. EPA has also issued its Small Business Compliance Policy (65 FR 19618, April 11, 2000) to encourage small businesses (i.e., 100 or fewer employees) to voluntarily disclose violations.

Voluntary auditing has been steadily increasing, with the U.S. EPA receiving hundreds of new disclosures every year.  Recognizing and correcting violations, before their discovery by government inspectors, allows for additional cost saving benefits beyond the incentives provided by the U.S. EPA.

All potential violation disclosures are qualified in the eDisclosure system as one (1) of two (2) categories: Category 1 or Category 2.

Category 1

Category 1 disclosures include:

• Emergency Planning and Community Right-to-Know Act (EPCRA) violations that meet all Audit Policy conditions.
• EPCRA violations that meet all Small Business Compliance Policy conditions.

Category 1 does not include:

• Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Section 103/EPCRA Section 304 chemical release reporting violations.
• EPCRA violations with significant economic benefit, as defined by U.S. EPA.

When a Category 1 disclosure is submitted, the eDisclosure system will automatically issue an electronic Notice of Determination (eNOD) confirming that the violations are resolved, with no assessment of civil penalties.  U.S. EPA will spot-check Category 1 disclosures to determine compliance with EPCRA, Audit Policy/Small Business Compliance Policy, and eDisclosure requirements.

Category 2

Category 2 disclosures include:

• All non-EPCRA violations.
• EPCRA violations that do not meet Audit Policy Condition 1 (i.e., the violation was not discovered through an environmental audit or a compliance management system).
• EPCRA/CERCLA violations excluded from Category 1.

When a Category 2 disclosure is submitted, the eDisclosure system will automatically issue an Acknowledgement Letter (AL) confirming receipt of the disclosure.  U.S. EPA will screen Category 2 disclosures for significant concerns, such as criminal conduct or imminent hazards, and will determine the eligibility of penalty mitigation if it considers taking enforcement action for the violation.

Use the following 3-step process for disclosing violations through the eDisclosure portal:

1. Register to File with the Centralized Web-Based Portal
   Register with U.S. EPA’s Central Data Exchange (CDX) system.
2. Submit a Violation Disclosure
   Potential violations (i.e., violations which may not be confirmed), may be disclosed in order to provide the opportunity to determine whether the violation actually occurred and to assess the particular violation.  Disclose potential violations online within 21 calendar days of discovering that the violation may have occurred.  Do not submit any Confidential Business Information (CBI) through the eDisclosure system.  Instead, any follow-up CBI should be submitted manually in accordance with U.S. EPA procedures.
3. Certify Compliance
   Submit a Compliance Certification identifying the specific violation(s) and certifying that the violation(s) have been corrected, and that the Audit Policy or Small Business Compliance Policy conditions have been met.  Compliance Certifications for disclosures submitted under the Audit Policy must be submitted within 60 days of submitting the disclosure.  Compliance Certifications for disclosures submitted under the Small Business Compliance Policy must be submitted within 90 days of submitting the disclosure.

Violation Correction Deadlines:

Except with a few instances when extensions are permitted, a violation under the Audit Policy must be corrected within 60 days of discovering the potential violation.  A violation under the Small Business Compliance Policy must be corrected within 90 days of discovering the potential violation.  These violation correction deadlines are subject to limited extensions, depending on the type of disclosure (i.e., Category 1 or Category 2).

U.S. EPA will allow pre-existing unresolved EPCRA disclosures to be resubmitted through the eDisclosure system within 120 days of the system’s December 9, 2015 launch date (i.e., by April 7, 2016).  A Compliance Certification for such re-submitted disclosures must be submitted within 30 days of the resubmittal.  No extensions are available for pre-existing EPCRA disclosures.

The implementation of the eDisclosure System does not modify the conditions of the Audit Policy or the Small Business Compliance Policy.  Any new owner self-disclosures submitted under U.S. EPA’s New Owner Policy, and any potential criminal violations to the Voluntary Disclosure Board (VDB), will continue to be accepted by the U.S. EPA outside of the eDisclosure system.

If you have questions about submitting your disclosure or about the eDisclosure system, or about conducting multi-media compliance auditing in general, feel free to contact me at (610) 933-5246, extension 155, or at cspeers@all4inc.com.