On December 9, 2015, EPA announced the launch of its new “eDisclosure” portal to receive and automatically process self-disclosures of federal environment law violations. According to EPA, the new electronic portal will more quickly process and resolve such self-disclosures and maximize EPA’s available resources.
In 2000, EPA issued its formal policy on “Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations,” more commonly referred to as the “Audit Policy.” Regulated entities who voluntarily discover, disclose, correct and prevent violations of federal environmental laws benefit from the Audit Policy’s reduction (and in some cases, elimination) of gravity-based civil penalties if the Audit Policy’s requirements are met. Small businesses also receive similar incentives under the Small Business Compliance Policy issued in 2000. These policies’ incentives for self-disclosure and correction of violations enhance the protection of human health and the environment, particularly when EPA’s enforcement resources are stretched.
EPA’s new eDisclosure portal makes no substantive changes to these self-disclosure policies. Rather, it establishes a more streamlined process for the submission and resolution of these self-disclosures.
Disclosures resolved through this portal will be categorized either as “Tier 1” or “Tier 2” disclosures:
- Tier 1 disclosures include EPCRA violations but do not include CERCLA Section 103/EPCRA Section 304 violations with significant economic benefit as defined by EPA. (Entities wishing to self-disclose these excluded violations must do so outside of the eDisclosure portal.) For those self-disclosures qualifying as Tier 1, the system will issue a electronic Notice of Determination (“eNOD”) confirming that the violations are resolved with no assessment of civil penalties, subject to accuracy and completeness of the disclosure. EPA will spot check Tier 1 disclosures for errors and inconsistencies.
- Tier 2 disclosures include all non-EPCRA violations and those EPCRA/CERCLA violations excluded from Tier 1. The eDisclosure system will issue an electronic Acknowledgement Letter confirming EPA’s receipt.
Deadlines under the Audit Policy and the Small Business Compliance Policy remain strict.
- The violations must be disclosed to EPA within 21 days of their discovery.
- Violations disclosed under the Audit Policy must be corrected within 60 days of the date of discovery (under the Small Business Compliance Policy, 90 days). A Compliance Report must be submitted by those same deadlines. If the Compliance Report is not submitted by the deadline, then the self-disclosure will be deemed withdrawn.
- Entities making a Tier 1 disclosure and seeking an extension of this Compliance Report deadline will have their Tier 1 disclosures converted to Tier 2 disclosures.
- Entities making Tier 2 disclosures may obtain a 30-day extension of the Compliance Report deadline without being required to submit an explanation. An additional extension may be requested, up to 90 days, but is not automatic and must be justified with an explanation.
The eDisclosure portal is not designed to receive confidential business information (“CBI”). Thus, disclosing entities must submit sanitized information via the electronic portal and submit a full, unsanitized disclosure outside the portal.
Significantly, EPA announced that there no longer is a presumption of withholding unresolved disclosures from public disclosure under the Freedom of Information Act (“FOIA”). Rather, the presumption is now in favor of disclosure. Thus, upon receipt of a FOIA request calling for unresolved disclosures, EPA will make a determination on a case-by-case basis whether disclosure would harm an interested protected by a FOIA exemption. It would behoove all entities claiming CBI protection for self-disclosures to ensure that their CBI claim substantiation is as robust as possible.