Imagine having to tell your boss that the EPA has just levied a large fine against your company for violating a federal environmental regulation that you did not even know was applicable to your facility. That’s exactly what happened to one east coast company in August of this year. They were fined $157,500 for failing to have a required oil spill plan on file, which is a clear violation of the Clean Water Act. The scary thing about this situation is that it could happen to numerous other companies across the United States due to their lack of full compliance with environmental regulations. Right now, you are probably thinking that this could never happen at your facility because your facility is fully compliant with all federal and state environmental regulations, but are you so sure?

One of the biggest reasons why most companies fail to be in compliance is not due to negligence on their part, but their lack of knowledge about all applicable regulations affecting their facility. For example, did you know that if you have greater than 1,320 gallons of aboveground oil storage on-site, you probably need an oil spill plan (Spill Prevention, Control, and Countermeasure Plan)?  Or if your facility has a 55-gallon drum of sulfuric acid on-site which is typically used for pH control or equipment cleaning, then your facility has certain reporting obligations related to the storage of this material?   And for those facilities that have developed the proper plans in the past, have they been updated to reflect the current facility conditions?  An out-of-date, inaccurate, or incomplete plan can also be considered a violation.

Chances are that you were unaware about one of the above mentioned regulations or one of the many thousands of other federal and state environmental regulations. It’s easy to understand why you may not be completely up-to-speed on the nuances of every environmental regulation because most likely environmental compliance is only a small part of your daily responsibilities and with ever-changing regulations it can be difficult to keep up with the latest ones. However, one small mishap in regards to your company’s environmental compliance could ultimately cost thousands of dollars. For instance, environmental regulatory entities have the ability to levy extremely high fines that would result in many companies having to close their doors. In most cases though, the monetary fines levied against facilities are not extremely detrimental  to the survival of a facility, but they can still significantly impact the bottom line. Additionally, there are other costs associated with environmental violations such as the employee responsible for environmental compliance losing their job due to the fallout from the violation, an uncomfortable workplace for employees involved in the situation, or potential criminal prosecution by the EPA against the organization’s “responsible official.” (The EPA has the authority to consider criminal prosecution charges in extreme cases of “willful and knowingly” neglect of environmental regulations.) Hence, it is very likely that if an environmental regulation agency finds your facility in non-compliance, then your facility is very likely to receive more than just a “slap on the wrist” whether it is in the form of a monetary fine, loss of an employee, or criminal prosecution.

While the cost of environmental non-compliance may be difficult to associate with an exact dollar amount, there are obviously significant costs associated with failing to be in compliance. Thus, it is vital for all facilities to be proactive in managing their environment compliance program to ensure that they do not face sanctions from the EPA or state agency in the future. And, since most facilities are unsure of their current compliance status or may believe they are completely in compliance, it is advisable to have a third party conduct an environmental audit in order to determine the actual level of the facility’s compliance with environmental regulations. Being proactive to find and address compliance issues will help your facility save money in the long-run because the costs stemming from an environmental compliance violation coupled with the cost associated with correcting the problem areas at your facility will cost significantly more than addressing those issues in the first place would.

* Be sure to check out next month’s follow-up article on the Cost of Environmental Compliance.