By Peter Montague
US corporations are successfully pursuing a new strategy to evade environmental laws and regulations. The New York Times describes the strategy: "Urged on by a coalition of big industries, one state after another is adopting legislation to protect companies from disclosure or punishment when they discover environmental offenses at their own plants".
In essence, state laws are giving corporations immunity from punishment if they self-report violations of environmental laws.
Furthermore, any documents related to the self-reporting become officially secret, cannot be divulged to the public and cannot be used as evidence in any legal proceedings.
"This is a disaster for environmental enforcement", says David Ronald, chief of the environmental crimes division in the Arizona state attorney general's office. "It has been creeping through the states without anybody paying much attention."
The strategy took root in 1993 when the Oregon passed the first-ever "audit privilege" law, as they are called. Such laws — which have now been passed in at least 21 states and are pending in 13 or 14 others — typically contain the following provisions:
- <~>Corporations that report violations discovered during a self-audit are immune from prosecution for their violations. They cannot be fined or otherwise punished if they disclose violations promptly to government authorities and take "reasonable" steps to achieve compliance.
- <~>Individuals who participate in conducting an environmental audit cannot be called to testify in any judicial proceeding or administrative hearing.
- <~>Perhaps most importantly, if a corporation conducts an environmental self-audit of its operations, the information in the self-audit cannot be disclosed to the public and cannot be used as evidence in any legal proceedings, including lawsuits and/or regulatory actions. Any information related to a self-audit becomes "privileged."
The corporation itself decides what is related to its self-audit. In essence, audit privilege laws allow a corporation to stamp any document "audit-related" and thus exempt it from public disclosure, discovery or use as evidence in any legal proceeding. For companies facing Superfund [toxic clean-up] lawsuits or toxic tort actions, this exemption can translate into billions of dollars in avoided costs.
- <~>Some states, such as Texas, have included additional provisions that make it a crime for employees or government officials to divulge anything related to environmental self-audits. In Texas, if a person divulges such information and it leads to penalties against a polluter, the individual who divulged the information must pay the polluters' fines, penalties and other costs.
Audit privilege laws — which are sometimes called corporate dirty secrets laws, or right to know nothing laws — apply not only to private corporations but also to governments. Thus citizens of a municipality can lose their right to know about pollution from their own local landfill when their state legislature passes an "audit privilege" law.
The 21 states that have passed "audit privilege" laws are: Alaska, Arkansas, Colorado, Idaho, Illinois, Indiana, Ohio, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Montana, New Hampshire, Oregon, South Carolina, South Dakota, Texas, Utah, Virginia, and Wyoming.
The Clinton administration supports environmental self-auditing. It says that companies know how to audit their own facilities better than the government does, and can do a better job of it.
However, initially the administration took the position that companies should receive no immunity from fines or other punishment if their self-audits revealed violations. Further, it initially took the position that self-audit information should not be privileged or secret, saying workers and communities had a right to know what corporations were doing to the environment.
To give these views clout, Environmental Protection Agency administrator Carol Browner threatened to take enforcement authority away from any state that passed a typical audit privilege law. (Most US federal environmental laws allow EPA to delegate enforcement authority to the states with the provision that federal standards must be met.)
Specifically, EPA put Texas on notice that its audit privilege law was unacceptable because it would compromise the ability of all governments to enforce environmental laws. However, in March, Browner reversed her position and said that the Texas law, with minor changes, would be acceptable to EPA.
Most observers believe the administration cut a deal with Texas to appease anti-environment forces in the Congress.
EPA's stance in Texas has been widely regarded as the administration's acceptance of all states' audit privilege laws. More state laws are expected to pass, now that the threat of EPA sanctions has been withdrawn.
However, the anti-environment forces in Congress have refused to be appeased. In June, they proposed national "audit privilege" legislation.
Senate majority leader Trent Lott personally endorsed "the Environmental Protection Partnership Act", which is a standard audit privilege bill.
It gives immunity to violators who self-report violations; and it gives a privilege of secrecy to all information related to self-audits. Notably, it specifically prohibits EPA from revoking enforcement authority of states which pass audit privilege laws. A companion bill has been introduced in the House of Representatives.
As soon as Ohio passed its "audit privilege" law in December 1996, Waste Management, Inc (WMI) demanded that a citizens' group return documents — some of them dating back to 1988 — which the citizens had obtained during litigation aimed at forcing the clean-up of a landfill near Cincinnati.
WMI says the documents are now "privileged" under Ohio law and cannot be used in a federal court case brought by local citizens. Some of the documents in question are stamped "audit" and others were simply claimed to be "audits" after the fact. Thus WMI has revealed unmistakably what "audit privilege" laws are really about.
[From Rachel's Environment & Health Weekly. Like Green Left Weekly, Rachel's is a non-profit publication which distributes information without charge on the internet and depends on the generosity of readers to survive. If you are able to help keep this valuable resource in existence, send your contribution to Environmental Research Foundation, PO Box 5036, Annapolis, Maryland 21403-7036, USA. In the United States, donations to ERF are tax deductible.]