Contributed by Jamie Godbold, Senior Project Manager, PPM Consultants
Owners or operators subject to a variety of environmental regulations in the state of Louisiana will be interested to know that the Louisiana Department of Environmental Quality (LDEQ) has proposed regulations which, once final, will establish a program for voluntary environmental self-audits. These rules, which are similar to the U.S. EPA’s audit policy rules, will allow for penalty reductions up to 100% for qualifying violations. Yes, you read that correctly…100%!
As you might have guessed, not every violation will qualify. There are a few exclusions and conditions to be aware of. For example, a violation that caused serious actual harm to the environment or that presents an imminent or substantial endangerment to the environment or public health won’t qualify. Violations that are similar to prior violations occurring within the past three years or violations that are deliberate or intentional also will not qualify. Any violations discovered by performing required monitoring, sampling or auditing that are required by regulation, permit, etc. (i.e., doing things you specifically already have to do) would also not qualify for penalty reductions. There are a few other exclusions not mentioned here that you will want to consider, as well.
Any violations that are not specifically excluded by the proposed regulation will qualify for penalty reductions if you meet the violation conditions listed in the regulation. The regulation mentions nine conditions that must be met to qualify for the 100% penalty reduction but also allow for a 75% penalty reduction if all but the first condition is met. The nine conditions that a particular violation must meet are briefly summarized below:
- Violation is systematically discovered via an environmental audit;
- Violation is voluntarily disclosed to the agency;
- Disclosure of the violation occurs within 45 days of discovery;
- Violation was independently discovered by the owner/operator (or third party auditor);
- Violation is corrected as expeditiously as possible and not longer than 90 days from discovery;
- Measures are implemented to prevent recurrence;
- Same or similar violations have not occurred within the past three years;
- Violation isn’t excluded (as described above);
- Owner/operator cooperates with the agency as needed.
Now would be a good time to discuss the notifications and reports that must be submitted to the LDEQ under the proposed rule.
Before the audit, you will need to notify the LDEQ of your intent to perform a voluntary environmental audit via submittal of a completed audit form (obtained from the LDEQ). Any deficiencies or omitted data could result in denial, so you will want to wait on the LDEQ to approve your request before commencing with the audit. Note that the proposed rule does not specify how long it might take for the LDEQ to review and respond.
Any violations (or potential violations) that are discovered, as well as any proposed/completed corrective actions, must be disclosed to the LDEQ via submittal of a completed disclosure of violation(s) form (also obtained from the LDEQ). Per the nine conditions discussed above, disclosure must be provided within 45 days of discovery of the violation and violations corrected as expeditiously as possible, not to exceed 90 days. A $1,500 fee is assessed by the LDEQ to review the disclosure form, so be sure to include payment with this submittal. Further, the LDEQ may assess an additional fee, based on hours spent by the LDEQ to review and respond, and the LDEQ may request submittal of a full audit report. As such, it is advisable to provide adequate details with the initial disclosure of violations to minimize review time and subsequent information requests. Upon review of the disclosure form, the LDEQ will acknowledge receipt of the disclosure of violation(s) and will include a concurrence or rejection of the proposed corrective actions. As with the initial notification, the proposed rule does not specify how long it might take for the LDEQ to review and respond to the disclosure report.
Lastly, the proposed rule requires submittal of a final written report upon completion of all corrective actions. The report is to include the notice of the audit, disclosure of violation(s), and certification of completion of all corrective actions. The LDEQ may request submittal of a full audit report as well; however, this would only be required upon request.
To sum things up, the substantial penalty mitigation offered by the proposed self-audit regulation certainly makes the effort to notify and disclose any discovered violations worthwhile (and you probably would disclose those violations anyway). However, not all violations will qualify and owners/operators will need to pay close attention to the timelines and conditions to take full advantage of the penalty reductions offered by the proposed program. And note that the LDEQ reserves the right to collect any monetary benefits realized through noncompliance as well as the right to take enforcement action for violations that are not properly or adequately disclosed or corrected.
You can review the proposed rule at Monthly Regulation Changes 2023 | Louisiana Department of Environmental Quality and submit comments on the rule until August 3, 2023. A public hearing will be held on July 27, 2023.
Have questions about the proposed rule or need help negotiating a potential compliance issue? PPM Consultants can help. For more information or assistance, please contact me at firstname.lastname@example.org.