State environmental audits offer immunity, privilege to polluters.

Plaintiff lawyers and environmentalists are joining forces to fight against state laws that grant broad immunity from civil liability to those who report their own pollution.

During the past year, proposed state environmental audit laws have been stalled or defeated in California, Florida, Maryland, and Ohio. However, audit laws offering either immunity from civil penalties or privilege for reported information have already passed in 19 states. The privileged information is protected from discovery in civil lawsuits arising from the pollution.

During debate of Florida's proposed audit law, Charles Lee of the Florida Audubon Society described the pollution audit as a "laudable concept taken to the point of greed." (Mark Hollis, Debate Rages over Environmental Bill, Tallahassee Ledger, Mar. 17, 1996).

"What if we have people living downstream from a company that dumps hazardous material ... into the drinking water, and five years later these people come down with throat cancer? They won't be able to find out if that business was responsible," Lee warned.

Pollution audits started out as an idea supported by most environmentalists. Since the EPA lacked an enforcement staff big enough to police its own regulations, companies that conducted self-audits, discovered violations, and came forward with information and a willingness to correct problems would not be prosecuted or fined for violations of the law. After lengthy debate and modification, that EPA policy was issued on December 18, 1995.

Meanwhile, the states had begun enacting laws as early as 1993 treating the results of corporate audits as privileged information protected from disclosure. To date --

* 10 states have adopted laws granting both privilege and immunity: Colorado, Idaho, Kansas, Michigan, Minnesota, Mississippi, South Dakota, Texas, Virginia, and Wyoming;

* states have adopted laws granting only privilege: Arkansas, Illinois, Indiana, Kentucky, New Hampshire, Oregon, and Utah; and

* states have adopted laws that include some immunity provisions but not privilege; New Jersey and Washington.

Apparently, polluters are far more interested in protecting their records against discovery than they are fearful of criminal prosecution. The defeat of the proposed California legislation is instructive on this point. After much negotiation, efforts at compromise failed because the affected business interests insisted on provisions giving internal audits immunity from discovery.

"Once they lost that one, they lost interest," said one negotiator. (Mike Lewis, Pollution Audit Proposals Die in Legislature, L.A. Daily J., Aug. 27, 1996, at 1.)

The EPA has consistently opposed blanket amnesties that excuse repeated noncompliance, criminal conduct, or violations that result in serious harm or risk. The agency has also opposed shielding evidence of violations from regulators or interfering with the public's right to know about noncompliance. Sylvia Lowrance, EPA deputy assistant administrator for enforcement, told listeners at the 1996 meeting of the National Association of Attorneys General, "Privilege and immunity provisions go too far."

Some environmental groups in affected states may sue the EPA over the audit issue. (Cheryl Hogue, Environmentalists Considering Challenges to State Delegation Because of Audit Laws, BNA State Env't Daily, Mar. 27, 1996). The suits are expected to demand that the agency withdraw authority to enforce environmental laws from states that have restrictive discovery and immunity provisions. The EPA routinely delegates authority to enforce federal environmental laws to the states, but that authority can be withdrawn if a state lacks enforcement ability.

In a guidance memo sent to district offices on April 5, the EPA suggested that enforcement authority could be withdrawn if audit immunity and privilege provisions left a state unable to enforce the Clean Air Act, the Clean Water Act, or the Resource Conservation and Recovery Act.

Some industry observers have expressed the opinion that the EPA's threat to withdraw authority is hollow, because the agency could not take over a state's licensing procedures at a time of federal budget cutbacks. On the other hand, enviromentalists argue that the EPA could withdraw authority from one state as an example to others, and no state would want to be the one singled out.

Regardless of how the federal conflict plays out, it is certain that the struggle against overly broad pollution audit provisions will continue in state legislatures.

"In states where audit laws have been defeated, we can expect to see other versions emerge in future legislative sessions," said Annette Wencl, ATLA's director for state affairs. "The people who are advocating these laws are not going to quit after one setback. From what we have seen in the past, they will just keep coming back with more."

For more information about how to get involved in the fight against permissive pollution audit laws, contact Roselyn Vacante at ATLA at [phone], ext. 466.