Self-Auditing and Environmental Compliance

Photo of Secretary and Tim Elliott
The secretary is briefed on pending legal issues by Tim
Elliott, at center, the deputy associate solicitor, and Paul
Smyth, acting associate solicitor, Division of Land and
Water Resources.
Most polluters will never be in compliance with every pollution regulation, Coy and Huffman noted. The vast majority of companies cannot begin to afford the costs of comprehensive monitoring, so they do the best they can. Under these circumstances, a policy encouraging compliance will yield better results in aggregate than a policy threatening an economic death sentence for noncompliance.
While serving as Colorado's attorney general, Norton supported Colorado's 1994 self-audit law which granted companies immunity from state penalties if they disclosed environmental violations before they were caught and agreed to clean up the pollution and fix the problem. The law had strong bipartisan support in the state, and more than a dozen other states have similar statutes. Federal agencies, such as the EPA, have supported self-audits and other nongovernmental environmental assessment and verification programs.
"Companies are more likely to find out if they have environmental problems if there's some hope regulators will work with them,'' Norton explained in 1998, while Colorado's attorney general.
Critics of self-auditing often cite an incident that occurred on the Alamosa River in the foothills of the San Juan Mountains in southwest Colorado. A spill of cyanide and acidic water from a gold-mining operation by the Summitville Consolidated Mining Corporation killed fish and aquatic invertebrates, as well as other wildlife, along a 17-mile stretch of the river. There were no human injuries. The company declared bankruptcy, and its major officers fled the country.
Norton's Colorado supporters and opponents alike say her office did a commendable job in trying to get compensation for the damage, welcoming federal intervention and working with federal prosecutors to win felony convictions against the company and two of its owners. Two former managers of the mine, and the company itself, pleaded guilty to felonies arising from the spill.
The Summitville disaster affected Norton deeply, but not as an example of why self-audit laws will not work. "This was an unusual case, a situation where the individual in question knew about continued environmental problems and continued operations in spite of that," she said.
Self-auditing laws have nothing to do with Summitville-type situations, Norton points out. Self-audit laws benefit conscientious businesses that hire auditors to assess their environmental compliance, then work with regulators to fix problems. The Colorado law denied benefits to 'bad actors' who hid environmental problems or had bad enforcement histories.
"Environmental self-audit laws do not replace regulation," Norton explained. "They assist in solving problems that regulators might otherwise never discover."
For Norton, the lesson of Summitville is that self-auditing must go hand in glove with the ability to bring down the hammer, according to Terry Andersen, a member of the Bush Transition Team at Interior, and director of the Political Economy Research Center, a free-market environmental research group in Bozeman, Montana.
"We need to give good businesses the incentive and the tools to be good environmental citizens," he said. "What Gale Norton will bring is reform, but not revolution. To think she will come in and let the polluters off the hook if they only agree to 'fess up' is wrong."
Huffman agrees. Portraying Norton as indifferent to the enforcement of pollution laws because of her support for Colorado's self-audit law is unfair, he said. "Norton has never advocated a right to pollute." It is equally wrong to caricature her views as anti-environmental because she respects and supports private property rights.
"Norton is an experienced public official who understands that private property is critical to economic prosperity, which in turn is critical to environmental protection," Huffman explained. "And she understands that incentives matter as much to environmental protection as to business success and that business success is essential to environmental protection. She also understands that sometimes the full force of the law is the only remedy. There is nothing extreme or radical about any of that."


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