USEPA Issues Interim Final Regulations Adjusting Maximum Civil Penalty

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litigation2USEPA Issues Interim Final Regulations Adjusting Maximum Civil Penalty

On July 1, 2016, the maximum civil penalty dollar amount for violations of various environmental laws increased substantially (i.e., up to 150 percent higher) due to inflation. The interim final regulations [81 Fed. Reg. 43019] issued by United States Environmental Protection Agency (USEPA) provides adjustments triggered by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. These adjustments not only increased the current maximum penalty amounts, but requires subsequent annual adjustments for inflation.

For many years, the maximum statutory penalty was $25,000 per day per violation for most statutes. That amount was adjusted in 2009 to a maximum of $37,500 per day per violation, but per-day violations are now significantly higher, as shown in the examples below:

  • $56,467 to $97,750 for violations under the Resource Conservation and Recovery Act (RCRA)
  • $44,539 for violations under the Clean Water Act (CWA) for violations of oil and hazardous substance discharge provisions
  • $53,907 for violations under the Comprehensive Environmental Response, Compensation & Liability Act (CERCLA), which includes most Emergency Planning and Community Right-to-Know Act (EPCRA) violations
  • $93,750 for permit violations under the Clean Air Act (CAA)

The adjusted civil penalty amounts apply to civil penalties assessed after August 1, 2016 (the effective date of the rule), for associated violations that occurred after November 2, 2015. The results of USEPA’s new maximum daily penalties can be found in Table 2 of 40 C.F.R. Section 19.4: Civil Monetary Penalty Inflation Adjustment.

Companies will also want to keep an eye on any penalty increases in states that have responsibility for environmental enforcement. The potential cost of environmental violations has significantly increased, which will likely impact the cost to defend and resolve those violations. Since the stakes are so much higher, attention to compliance is that much more important.

With so many regulations and limited resources afforded to EH&S staff, it is easy for requirements to slip through the cracks. Self-audits can help. There are many resources available for checklists and training materials to aid in compliance. Another approach is to conduct a third party environmental compliance audit to catch mistakes before they are caught by a surprise agency inspection. The benefits of environmental compliance are numerous, including avoiding penalties, which are now much more substantial, improving stakeholder perception, and preventing costly lawsuits.

USEPA and many states have policies and guidance relating to audits and self-reporting violations. Audits are not to be taken lightly—careful planning is required. At EHS Support, we work with our clients’ internal or external legal counsel before proceeding to ensure they have the necessary awareness and legal protections before discovery. Companies must understand the potential consequences, both positive and negative, of moving forward with an audit and proactively working with a regulatory agency to report and resolve violations.

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To find out more information about the USEPA penalty regulations and our third party auditing services, please contact Maureen Hodson or Amy Bauer.

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