In a joint letter dated July 18, 2001 sent to colleges and universities throughout New England, the United States Environmental Protection Agency and the Massachusetts Department of Environmental Protection announced a joint College and University Initiative. At an August 1, 2001 informational meeting, the EPA also informed the attendees that the deadline to notify EPA of an intent to participate in the Initiative, originally scheduled for August 30, 2001, has been pushed back to September 30, 2001.
In exchange for conducting and reporting the results of self-audits, New England colleges and universities are being offered a guarantee that they will be placed on the lowest inspection priority by the EPA. At the August 1st informational meeting, the EPA explained that the conduct of the self-audits and disclosure of the results would be handled pursuant to EPA's and DEP's Audit Disclosure Policy (http://es.epa.gov/oeca/auditpol.html and http://www.state.ma.us/dep/enf/enforce.htm#enforce).
In short, the audit disclosure policies provide significant, and in some cases complete, relief from gravity based penalties for non-compliance (but not for any economic benefit realized as a result of non-compliance, which can be significant) if certain conditions are met. These include discovering the violations through voluntary, independent environmental audits. The violations must be disclosed promptly (usually within 21 days) after discovery, remedied on an aggressive schedule (60 days, unless the government agrees to a longer schedule), and measures must be implemented to prevent recurrence of violations. Relief under the audit policies is not available where there has been serious actual harm, or there is an "imminent and substantial endangerment" to public health, or where the violation is of an existing agreement with the regulators.
Your decision whether to participate in the College and University Initiative will likely depend on your inspection history, ability to finance an audit of your campus operations (although the EPA did clarify that an independent, internal Environmental Health and Safety Department may conduct the audits) and resources available to correct issues that are identified in the audits. We have worked with a number of colleges, universities, and other regulated businesses to help evaluate whether a self-audit and disclosure under EPA's audit policy is appropriate.
The United States Environmental Protection Agency and Department of Justice continue their aggressive enforcement campaign targeting universities and colleges around the country. A recent major settlement with the Massachusetts Institute of Technology sheds new light on what the Government seeks to accomplish and how to best handle the negotiations.
Prompted by what it perceived as widespread environmental compliance problems at colleges and universities, EPA began a formal enforcement initiative in the late 1990s. To date, this initiative has resulted in nationwide inspections and numerous enforcement actions including:
- A proposed $500,000 penalty against Brown University in November 2000 for alleged oil spill and hazardous waste violations;
- A $1.7 million settlement with the University of Hawaii in December, 2000 for alleged PCB and waste management violations;
- An $800,000 settlement with the University of Rhode Island announced in April, 2001 for alleged hazardous waste, Clean Air Act and Clean Water Act violations; and
- A settlement valued at $550,000 with MIT in April of 2000 for alleged hazardous waste, Clean Air Act and Clean Water Act violations, as further described below.
Case Study: The MIT Experience
The MIT settlement provides a case study in how a university can successfully handle the resolution of a major EPA enforcement action. EPA conducted a multi-media compliance inspection at MIT in May of 1998. Almost immediately after the inspection, MIT began working with EPA to provide follow-up information and regulatory analysis that laid the groundwork for substantially reducing the number and significance of the violations alleged by EPA. After the Agency completed its inspection report, formal negotiations with EPA and the Justice Department began in January of 2000 regarding alleged violations of the federal Resource Conservation and Recovery Act, the Clean Water Act and Clean Air Act. MIT's negotiating team included its in-house Senior Counsel, its Assistant Director of Environmental Programs, and outside counsel from Palmer & Dodge.
Over the course of more than a year, MIT worked cooperatively, but aggressively, with EPA and the Justice Department to reduce the overall penalty, narrow the scope of the injunctive relief requested and to establish reasonable schedules for the completion of work under the consent decree. As with most settlement negotiations of this type, the discussions focused on the size of the cash penalty, and the scope and type of Supplemental Environmental Projects.
Moreover, the federal government also sought substantial changes in MIT's environmental management programs. MIT pushed hard to develop SEP and management programs that would both satisfy the Government and advance the school's mission.
In April of 2001 the EPA and Justice Department announced the filing of a judicial consent decree with MIT. MIT agreed to a $150,000 fine and several Supplemental Environmental Projects which will serve the MIT community and neighborhoods. MIT also agreed to implement a comprehensive Environmental Management System which will further MIT's position as a leader in environmental, health, and safety management and sustainable development for large academic research institutions. By working cooperatively with the Government, but also aggressively pursuing the goals and objectives that were most important to the Institute, MIT was able to negotiate a workable settlement consistent with its overall mission.
More Enforcement On the Horizon?
We understand that the EPA is not finished with its enforcement sweep at colleges and universities, and that compliance inspections and enforcement actions are on-going. Through our role representing MIT and other colleges and universities as outside counsel in consent decree negotiations with EPA, we have gained practical insights into the strategies that work to minimize exposure to enforcement actions and fines. If you have been inspected already, consider the following:
- Request and review a copy of EPA's written Inspection Report. If there are facts or observations that you believe are in error, let the EPA know before too much time passes and EPA has formed opinions about the seriousness of its case against you.
- Take the opportunity - typically offered by EPA, and required in Clean Air Act cases - to confer regarding EPA's factual and legal findings. It is sometimes possible to reduce or eliminate alleged violations altogether by setting the factual record straight in a face-to-face meeting. Involving experienced counsel either behind-the-scenes or directly in the discussions can be instrumental in affecting the course and tone of EPA's enforcement efforts at this stage.
- If you are notified that an enforcement case is being prepared, signal your willingness to discuss the possibility of resolving the matter prior to formal issuance of the action, and before one-sided, generally unfavorable press releases are issued by the EPA.
- If you have received an enforcement action already, review it carefully to determine if EPA's allegations are factually accurate and its regulatory interpretations are sound. The EPA is almost always willing to negotiate reasonable settlement terms, and the first step in minimizing proposed penalties is to demonstrate that you understand the weakness (and strengths) of the government's case.
Working closely with our college and university clients, we have helped develop effective environmental compliance strategies. When EPA has taken enforcement actions, we have successfully reduced or eliminated penalties altogether and negotiated reasonable, workable settlements.