REGULATORY FOCUS Environmental auditing
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I Michael R. Deland
EPA currently is carefully considering the development of an environmental auditing program as one of its key regulatory reform initiatives. The EPA proposal would build on the inhouse environmental programs now conducted by several hundred different private-sector companies and use them to complement government inspections and enforcement. Underlying the drive by EPA's regulatory reform staff to develop the framework for an environmental auditing (EA) program are several changing factors. First, given the agency's diminishing resources, more efficient methods are needed to ensure environmental compliance. Second, new compliance assurance techniques are needed now that most sources have installed the required pollution control equipment, and the enforcement emphasis begins to shift toward whether that equipment is being operated and maintained properly. Thus far, enforcement has focused on a "snapshot" of compliance status at any given moment, but it is now changing to an analysis of "compliance over time." Finally, more private-sector firms are developing EA programs to ensure compliance and avoid litigation. By formally acknowledging and building upon these "good corporate citizen" efforts, EPA and the states can redirect their enforcement resources toward less "enlightened" firms. Last spring, EPA actively solicited states to initiate a joint EA pilot pro-
gram. In June, Governor Milliken of Michigan formally submitted a request to work with EPA and a citizen's advisory panel to establish such a program. The basic program components would include the development of eligibility criteria to evaluate industry applicants to ensure that only "responsible corporate citizens" participate. Guidelines on what constitutes an acceptable, sufficiently reliable internal audit program would also be developed. The guidelines would emphasize essential performance criteria and would not specify rigid design standards. Industry's position Industry objects to the concept of an EPA audit program for several reasons. First, it fails to find any "carrot" to nurture its incentive to participate. The companies with sophisticated ongoing programs feel that they are now accurately tracking compliance and have no need for "regulatory paraphernalia." Second,the thought of a standardized approach to EA is worrisome on the grounds that companies now have their own tailor-made programs that would not necessarily be appropriate for others. While companies might live with the guidelines of today, they cite ample precedent that such guidelines could become the onerous regulations of tomorrow. However, industry does concede that it can far more readily and efficiently determine compliance than can EPA or state inspectors for the simple reason that "we know where to look." In addition, the increasing numbers of companies conducting their own EA programs uniformly feel them to be of value.
industry. They too have difficulty in perceiving what is in it for industry, and are therefore concerned about the depth of private-sector commitment to a public program. Nevertheless, they share with those companies currently conducting EA programs a belief that such programs are sensible and that the information is needed. They also strongly endorse the concept of building into corporate management structures a group whose success or failure within a company is measured by the degree of the company's compliance. Many of the groups, however, part with both industry and EPA over the issue of whether the compliance components of existing statutes are being met. For example, the Environmental Defense Fund (EDF) is currently suing EPA on the grounds that the agency is failing to meet the mandate of the Clean Air Act by approving SIPs that do not contain requirements for installation and operation of monitoring equipment by owners of stationary sources. Industry and environmental groups agree on the need for environmental audits, but are skeptical about audits becoming a part of EPA's regulatory arsenal. In the face of this concern, EPA appears to be setting a sensible course by proceeding cautiously, by actively soliciting advice from all interested parties, and by seeking to establish a pilot program. Environmental auditing has proven its worth as a compliance assurance technique in the private sector. With imaginative implementation, it has the potential to be a cost-effective, efficient way for EPA and the states to fulfill their obligations as well.
Environmentalists' reactions
The response of environmental groups is surprisingly similar to that of
0013-936X/82/0916-0509A$01.25/0 © 1982 American Chemical Society
Deland writes this monthly column and is counsel to ERT, Concord, Mass.
Environ. Sci. Technol., Vol. 16, No. 9. 1982
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