Confessions of an Environmental Enforcer

Bruce M. Diamond

Bruce Diamond recently joined Swidler & Berlin after serving at the U.S. Environmental Protection Agency (EPA) from 1974 to 1995. When he left the Agency, he was the Director of the Office of Site Remediation Enforcement in EPA's Office of Enforcement and Compliance Assurance, in charge of the enforcement of Superfund and other hazardous waste cleanup laws. Mr. Diamond was previously the Director of the Office of Waste Programs Enforcement, Regional Counsel for EPA Region III, Acting Associate General Counsel for Water in the Office of General Counsel, Deputy Associate General Counsel for the Stationary Source and Air Deterioration Branch, and Deputy Associate General Counsel for the Toxic Substances Division.

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It has become manifest that the manner in which the U.S. Environmental Protection Agency (EPA) imposes, implements, and enforces environmental requirements is in serious need of reform. This was recently and eloquently expressed by former EPA Administrator William Ruckelshaus in his speech at the Environmental Law Institute's 1995 Annual Dinner.¹ Expressions of the need for change have come from many points on the political spectrum, including the White House and the Congress.² Unfortunately, practical measures to accomplish reform must overcome formidable obstacles. The purpose of this Dialogue is to explore the possibilities for a comprehensive approach to reforming the federal civil environmental enforcement program.

The Traditional Enforcement System

Perhaps in part because I spent 10 years of my career in environmental enforcement, I firmly believe that EPA'straditional enforcement activities have produced much beneficial impact. There have been real environmental improvements, and the enforcement program deserves much of the credit. Thus, the critique that follows should not be read as advocating complete abandonment of the traditional approach to enforcement. But in many, probably most, situations, less adversarial approaches are now likely to produce compliance more efficiently and, thus, be more effective in protecting human health and the environment. The time has therefore come to make real changes in the way the business of enforcement is conducted.

Traditionally, the basic theory of environmental enforcement has been that adversarial activity—measured in terms of cases brought and penalties imposed—is intrinsically good, and that the more this activity occurs, the better. With some justification, many enforcers have felt that punitive actions compel not only those who are the immediate objects to comply, but have a broader deterrent effect. Since government personnel can never be expected to detect all violations, this has seemed to be the most practical way to encourage compliance. These ideas stem from the early days of the modern environmental era (beginning in about 1970) and were fostered by the relative simplicity of the regulatory regime in those early days, the focus on "smokestack" industries, and the clear resistance of some members of the regulated sector to the new environmental regime. Moreover, in those days, enforcement of new requirements could often lead to readily apparent reductions in pollution—so the "cause and effect" relationship between enforcement and environmental protection seemed manifest.

The theory that more punitive enforcement activity automatically translates into more environmental benefit has taken on an important political dimension. Because EPA has long reported the amount of enforcement activity as an accomplishment, congressional oversight committees and others interested in monitoring Agency performance have naturally focused on the level of such activity. This focus took on particular importance during the sharp political debates over environmental issues in the early 1980s. At that time, declining numbers of enforcement actions were a rallying point for those decrying the performance of the Gorsuch-led EPA. In the aftermath, EPA's new leadership took great pains to restore the environmental credibility of the administration by, among other things, achieving and touting an increasing number of enforcement outputs.³ Thus, the numbers of enforcement cases filed on an annual basis became a more and more closely scrutinized indicator of environmental vigilance.

In part because EPA has relied almost exclusively on punitive enforcement to encourage compliance, the Agency has no comparative basis for evaluating whether this is the best approach to improving environmental protection. Indeed, the Agency cannot say with any level of precision [26 ELR 10253] what impact its enforcement cases have had, either on compliance with environmental requirements or on the environment itself. EPA has simply filed its cases, counted up its penalties, and assumed it was making progress.

Bean Counting

One core barrier to change is the traditional method for measuring enforcement success. The emphasis on counting formal enforcement actions has the effect of causing other methods of enhancing compliance to be underfunded and underappreciated. Budget limitations encourage Agency officials to put resources into activities likely to have a measurable pay-off. Since current measures of enforcement success place almost exclusive reliance on the initiation (and, to a lesser extent, the resolution) of enforcement cases, funding tends to go to activities that will result in production of that much-craved commodity—the enforcement "bean."

There is an old and rather cynical expression among EPA enforcers that "a bean is a bean is a bean." This means that any case initiation that helps meet a target can be perceived as good, regardless of the relative significance of the case. When all enforcement outputs are counted equally, a relatively minor case, based on good-faith conduct that threatens little or no environmental harm, becomes as valuable as a case against a major violator based on conduct that threatens substantial damage. The "bean-counting" measure of success gives as much credit for an enforcement action brought in response to self-reporting as to one that requires extensive investigation. It gives as much credit for an action of no tangible environmental consequence as for one that may have resolved a serious threat. And it actually holds in higher esteem the action that yields a big penalty than the action against a more flagrant violator who happens to have less money.⁴ Compliance can become a hindrance to the bean harvest, rather than a welcome sign of progress. This doesn't mean that EPA officials encourage violations, but bean counting does tend to isolate enforcement personnel from larger issues of environmental progress.

Bean counting has also dominated the Agency's systems for measuring regional office and individual enforcement performance. An EPA enforcement official who wants to look good and receive recognition, promotion, and other rewards has traditionally needed to make sure that enforcement output targets are met. The resulting end-of-fiscal-year scramble to meet targets is not a pretty sight.

Unfortunately, it is easier to decry bean counting's harmful influence than to find a solution. One virtue of the current approach is that it is easy to count the number of actions taken and the amount in penalties collected. Actual progress may prove harder to measure. For example, the seemingly simple question of whether a facility is in compliance with a particular statute is actually very complicated. Each facility has a wide array of obligations to meet, ranging in significance from absolutely crucial to minor. Different facilities often have quite different obligations (reflecting different sizes, configurations, and processes). A "yes or no" answer to questions about a facility's compliance status will not necessarily yield meaningful information and apparent changes in compliance rates may just reflect different levels of scrutiny. This problem becomes even more complex when the focus is on multiple statutes. Moreover, current budget pressures and efforts to reduce paperwork and reporting burdens will make it difficult for EPA to increase expenditures for information collection and management.

An additional problem is that EPA officials fear that any new approach to enforcement might cause a dip in traditional outputs, which in turn could lead to an adverse political reaction.

Other Barriers to Change

Traditional enforcement has tremendous psychological appeal. To many people, the role of dispenser of justice is much headier than that of facilitator or guide. I must confess that I found the role to be very gratifying. My colleagues and I had the pleasant sensation that we were smiting the environmental Philistines with the regulatory equivalent of the jawbone of an ass. Enforcement provides the enforcer the kind of satisfaction that comes from engaging in a righteous cause. Moreover, many enforcement officials are, by background and training, litigators. Any approach that slights adversarial activity would require a substantial adjustment in attitudes. And beyond the issue of job satisfaction is the issue of having a job at all. Some enforcement officials may see a new approach to environmental enforcement as threatening their positions.

The Need for Reform

Limits of the Adversarial Relationship

Although the traditional approach to environmental enforcement is designed to maximize the impact of individual enforcement proceedings by making examples of unlucky violators, it is nevertheless an expensive way for the government to do business. By their nature, adversarial actions require considerable resources. Although the majority of cases are settled, even a few hard-fought administrative or judicial cases can act as a major multiyear drain on government resources. Moreover, the inspections and other preparatory activities needed to support well-founded formal actions, and the intense negotiations needed to resolve increasingly high-stakes matters are also resource-intensive. In addition, the emphasis on initiation of large numbers of new formal enforcement actions every year (since this is the chief current measure of success) places a long-term drain on resources—the Agency must continue to manage on-going cases it initiated in prior years, as well as initiate new ones.

Current budget pressures on EPA make this issue of resources extremely important. Under the most favorable foreseeable circumstances, EPA's budget can hardly be expected to grow, and is much more likely to shrink. Even under its recent budgets, EPA was expected to carry out a [26 ELR 10254] much more elaborate environmental program with, in real terms, fewer resources than it had in earlier years. In the immortal words of Anne Gorsuch, EPA is already "doing more with less."⁵ This trend is almost certainly going to continue. States, which carry out most enforcement activities, are under similar budget pressures.

This budget situation places a premium on achieving results with the utmost efficiency. But in many situations, traditional enforcement is unlikely to be very efficient. In such situations, measures such as outreach, education, and improved guidance would be likely to produce more compliance faster. Moreover, because such nonadversarial activities can reach a wider audience, they can be used to educate the regulated sector at lower cost to the environmental agency (as well as to the regulated sector) than formal enforcement.

In addition to being expensive, traditional enforcement methods can actually stand as a barrier to enhancing regulated entities' understanding of what is required. This impediment to information exchange has to do with the nature of the adversary process. Enforcement inspections and other related activities are carried out with the goal of maximizing the government agency's position in the event of litigation. This generally means that as little information is voluntarily supplied by the government to the regulated entity as possible, for fear of undermining the government's case. Thus, the inspector and others associated with the process are trained to avoid any but the most necessary interchanges with the regulatee. Unfortunately, the result of this litigation-oriented approach is that the regulated entity is denied assistance in understanding what problems exist and how they may be corrected.

Changed Circumstances

Much has changed since the early, formative days of environmental enforcement. Layers of new requirements have made the regulatory structure extremely complex. Despite recognition of the problem, EPA generally establishes and enforces these regulations without much regard for their interrelationships or cumulative effects on the regulated community. Some aspects of environmental regulation are now so intricate that specialists are needed to understand, let alone comply with, them.⁶

The reach of environmental regulation has broadened, and now affects previously untouched industrial and other sectors. For example, under the Clean Water Act, the old focus on "point sources" (such as wastewater discharge pipes) has broadened to include the troublesome issue of diffuse, "nonpoint source" pollution. A related phenomenon is the virtual disappearance of the (relatively) easy targets of pollution reduction efforts. In the early days, very large reductions in loadings were the order of the day. Increasingly, potential incremental improvements are far smaller, and the relative cost efficiency of controls far lower.⁷

Another important change—that even the most curmudgeonly old enforcer must recognize—is that the general attitudes of the regulated sector have altered over time. Deliberate efforts to evade environmental controls have become rarer (although by no means unknown), the importance attached to compliance has increased, and the resources and management attention devoted to the environmental protection has greatly expanded. Environmental management was once commonly considered a nuisance activity to be conducted and supervised as a corporate backwater function. It has now taken a much more central role, becoming a core part of many companies' management structures.

Against this backdrop of major change, not much has altered in the basic elements of the EPA enforcement program. The enforcement system has changed in some respects—for example, administrative actions are now more prevalent, penalty amounts have generally increased, and states now conduct the vast majority of enforcement activities. But the principal methods employed, and the basic indicators of success have not changed fundamentally for more than 25 years. The primary compliance-oriented activity remains the enforcement inspection—designed and conducted to detect violations. Formal enforcement actions are then pursued with the dual purpose of forcing correction of the violation and collecting a monetary penalty.

In fairness to EPA, and to the Clinton Administration, there has been some very thoughtful discussion of potential new directions and approaches⁸ and a demonstrated willingness to engage in limited pilot projects using innovative methods.⁹ But there is still no prospect of early, widespread change.

A New Direction

Because there are so many political, bureaucratic, and psychological impediments to change, only bold and comprehensive steps offer a realistic prospect of reforming the environmental enforcement system. EPA must develop a clear vision of what it needs to achieve and work to educate its various constituencies about the advantages of the new approach. It must simultaneously revamp its system for measuring success and redirect its resources toward maximum beneficial results. These steps need to be taken now. Otherwise, real change will probably be deferred indefinitely, due to the temptation to tinker and analyze, rather than take the plunge.

At the same time, EPA must maintain an important role for adversarial, punitive activities. There are still those who will evade environmental obligations if they think they can get away with it and who need to be deterred. The resource-intensive, punitive elements of the enforcement process [26 ELR 10255] should be used where they are most appropriate and most useful. Thus, where violations are flagrant, systemic, the result of deliberate behavior or willful neglect, or where serious environmental harm occurs or was threatened, the traditional enforcement "hammer" should be called into play. This will focus deterrence where it does the most good, and can usefully employ the energies of those who thrive on carrying out such activities.

But for other situations more subtle tools should be employed. Education, technical assistance, guidance, and other cooperative activities have the capacity to produce more compliance and more environmental benefit in such nonegregious situations than traditional approaches. Positive incentives also have a role to play. EPA needs to be less wary of praising facilities or companies who work hard to do the right thing, even if they do not qualify for environmental sainthood. Cooperative assistance and praise for those who do well, combined with punishment for those who most seriously err, in other words, a carrot and stick approach, will likely be much more productive than the current "stick only" system.

EPA knows that this is the way it should go and is trying to get there. But what it has not done, or, at least, has not done nearly energetically enough, is pursue the following three things.

New Measures of Sucess. Altering the measure of enforcement success is critical to any effort to reform the EPA enforcement process. Some way other than counting enforcement cases must be found to evaluate whether EPA officials, EPA Regions, States, and the entire enforcement effort, are performing their duties adequately. As long as the current "bean count" exists it will distract attention from other activities and interfere with progress toward a new system.

To begin with, the emphasis given the numbers of compliance-oriented activities undertaken by EPA and states should be the same or greater than that given to enforcement actions. Thus, measures of success should include: the number of training sessions given to regulated entities; the number of nonenforcement compliance-assistance inspections conducted, together with the number of problems uncovered and resolved; the number of compliance problems resolved through other cooperative methods; and the number of compliance guidance documents issued. EPA could also measure, and take credit for, the number of activities voluntarily undertaken by regulated entities to foster compliance, such as institution of compliance monitoring systems.

Another important step would be to revise the way formal enforcement actions are measured. Adversarial actions should be weighted so that those that accomplish the most good in terms of compliance and environmental protection count more than those that accomplish less. Similarly, actions dealing with systematic neglect of environmental responsibilities should count more than those dealing with isolated slip-ups. In addition, enforcement actions resulting from extensive investigations should receive more credit than mere follow-ups to self-reported violations. Such a "weighted bean" system would emphasize the most important activities.

Most importantly, despite the significant practical problems, EPA should begin moving now to a system that places much more reliance on compliance rates. Even if measures of compliance remain imperfect, they should at least shift the Agency's focus closer to the environmental bottom line. With compliance as the benchmark for success, the entire enforcement program will naturally become more closely aligned with the achievement of environmental goals.¹⁰ Formal enforcement actions would then assume their proper status as means to an end, rather than as ends in and of themselves.

Agency officials at all levels must have confidence that engaging in activities other than formal enforcement proceedings will not be construed as weakness or lack of diligence. A climate must be created that encourages the investment of substantial resources in nonadversarial activities—even if a reduction in the bean count occurs.

An Emphasis on Cooperation. EPA must become much more willing to engage with regulated entities in cooperative activities. Of course, it would be unfair to imply that EPA is now opposed to cooperative activities. But despite the many EPA employees who have gone out of their way to work with those they regulate, the enforcement culture has long reinforced a "hard nose" attitude. Indeed, some of EPA's recent efforts to engage in innovative approaches to compliance issues have had to struggle with the legacy of this historical friction. Instances of real or perceived high handedness, elevated to the status of "horror stories," recently have had a substantial negative political impact.¹¹

EPA officials have historically had legitimate reason to fear that cooperative activities might be misinterpreted as inappropriate "coziness" with industry. The Agency's often tumultuous history, particularly the scarlet letter it earned in the early 1980s, has greatly contributed to this attitude. Another contributing factor has been the concern of environmental groups that the greater means of industrial organizations will translate into greater influence with the Agency unless utmost vigilance is maintained with regard to issues of access.

Overcoming these obstacles requires that certain ground rules be followed. For example, every meeting between industrial and EPA representative need not—indeed, should not—be open to all comers. To require such an extreme degree of openness would render the meetings impractical and thoroughly inhibit useful communication. Nevertheless, the results of such meetings must be considered public information and appropriately ventilated before the public. Similarly, EPA must be careful to assure that it listens to all relevant opinions and makes every effort to provide equivalent access to all interested persons. The Agency must continue to maintain a proper arm's-length relationship with all those with whom it interacts. But, especially during staff training, more emphasis should be placed on ensuring that professional detachment is not confused with uncooperative imperiousness.

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Enforcement Response. To determine when to cooperate, and when to meet violations with the traditional heavy hand, EPA must draw a clear distinction between different kinds of violations. Whereas, under the traditional environmental enforcement approach, EPA's response to violations would fall on a spectrum running from somewhat harsh to very harsh, this spectrum should be widened to stretch between cooperative and punitive. Thus, when a company slips up, despite good-faith and strenuous efforts to comply, the result should not be a reduced penalty, but no penalty.

EPA has taken some steps in this direction, albeit small ones. In a June 1995 policy statement,¹² the Agency announced that it would refrain from initiating an enforcement response—or significantly mitigate the severity of its response—when a small business "makes a good faith effort to comply with environmental requirements by receiving compliance assistance, where there is no criminal behavior and no significant environmental or health threat, and when the business corrects the violation within a specified correction period."¹³ EPA also recently announced a modified enforcement response to violations revealed through environmental audits or other self-policing means and promptly reported and remedied.¹⁴

EPA should now expand this tinkering around the edges of the traditional ways of doing enforcement business into a comprehensive new approach. For example, it is true that the new small business policy responds to a real problem with EPA's traditional enforcement approach and that both these businesses and the environment are likely to benefit from the new approach. But there is no compelling logic for not providing the same enforcement response to larger businesses who act in equivalent good faith and meet the other tests of the policy. A more comprehensive policy would create new incentives for good-faith efforts to comply for a great many more facilities and would expand the Agency's ability to shift enforcement resources to situations that will provide more compliance and environmental pay-off.

Inspections. In addition to responding differently, EPA needs to initiate contact differently. Traditionally, EPA inspections have principally involved trying to find bases for bringing enforcement actions. A more balanced approach would mix traditional investigatory techniques with efforts to prevent or cooperatively fix problems. One example would be a form of nonadversarial inspection in which problems found are immediately discussed and resolved, instead of being filed away for later enforcement. Assuming that many more such inspections could be conducted than is possible when the primary object is preparation for litigation, the compliance and environmental benefits which result probably would surpass those achieved by the traditional method.

Public Education. EPA must forcefully and repeatedly articulate its new vision for the enforcement program. The whole environmental enforcement system has been so obsessed with formal enforcement outputs for so long that a few speeches and articles will not focus the attention of the Agency's various constituencies, and its own staff, on what it is the program is actually trying to achieve. Also, the Agency must fend off any suggestions that enforcement reform means that the Agency is "getting soft with polluters." The moralistic terminology of the past must be replaced by a more sophisticated recognition that protecting the environment requires a complex, supple, and calibrated set of approaches. The question, "was EPA tough enough?" needs to be replaced by the far more pertinent question: "did the Agency achieve as much compliance with environmental requirements and protection of the environment as it could have?"

The States' Role

In fiscal year 1994, EPA brought 2,246 formal enforcement actions and obtained $ 891 million in penalties and other remedies.¹⁵ Thus, reforming EPA enforcement would have a very large impact, even if state programs were utterly unaffected. But whatever happens at EPA will also have a ripple effect on state programs. This is particularly true when those changes reinforce tendencies already present in many states. Although it is always dangerous to generalize about states, since each has its own history, structure, and ways of doing business, many states have historically had an attitude toward regulated entities that was less adversarial than the federal attitude. Thus, a federal signal that a more balanced approach is appropriate might well receive a warm reception in many jurisdictions.

An additional factor is the pressure that EPA exerts on states through oversight and grant administration. To the extent that this pressure has "stiffened" state enforcement attitudes, then changes at the federal level would tend to free states to change their own approaches. Ironically, this factor could become even more important as states move toward greater autonomy in the administration of environmental programs. Discussion of "devolution" of environmental regulatory programs has included recognition of the need to hold states accountable for their regulatory programs.¹⁶ Unless attitudes toward enforcement change at the federal level, there is a danger that some form of the "bean count" might become a key feature of the accountability system for state enforcement, with all the obvious unfortunate consequences.

Conclusion

For the foreseeable future, it will remain important that scoundrels be pursued with vigor and treated with sufficient harshness to deter their kind. Nevertheless, EPA can no longer afford to run an enforcement program based on the assumption that all regulated entities are scoundrels. To expand environmental protection in an era of shrinking budgets, EPA must learn to work with, rather than against, responsible members of the regulated community.

1. William D. Ruckelshaus, Stopping the Pendulum, ENVTL. F., Nov./Dec. 1995, at 25.

2. See Beth S. Ginsberg & Cynthia Cummis, EPA's Project XL: A Paradigm for Promising Regulatory Reform, 26 ELR 10059 (Feb. 1996) (discussing Clinton Administration and congressional reform proposals).

3. See EPA, ENFORCEMENT AND COMPLIANCE ASSURANCE ACCOMPLISHMENTS REPORT FY 1994 (May 1995) (available from the ELR Document Service, ELR Order No. AD-1236) [hereinafter EPA 1994 ENFORCEMENT REPORT]. This document discusses new approaches to compliance assurance, but stresses that these new initiatives "did not signal weakening of traditional enforcement" and goes on to tout record numbers of enforcement actions. Id. at 2-2.

4. There probably are many facilities that simply ignore the environmental regulatory framework. They do not provide the notice to regulatory authorities that would place them on the list of facilities that need attention. Because they operate outside the system, they are hard to detect. Moreover, because many are fly-by-night operations, their detection may yield little in the way of penalties, or even formal enforcement actions. Yet their behavior is far more egregious—and can be far more dangerous to the community—than that of a facility that tries to comply but slips up. See EPA Initiative Seeks to Uncover Companies That Elude Regulatory System, Daily Env't Rep. (BNA), Mar. 15, 1996, at AA-1.

5. See James J. Florio, Congress as Reluctant Regulator: Hazardous Waste Policy in the 1980s, 3 YALE J. ON REG. 351, 382 n.39 (Spring 1986) (quoting Gorsuch).

6. The regulations implementing the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901-6992k, ELR STAT. RCRA §§ 1001-11012, come to mind as especially arcane. This is to be expected of regulations which implement a statute that has been judicially characterized as "Cloud Cuckoo Land." Inland Steel Co. v. U.S. Environmental Protection Agency, 901 F.2d 1419, 1421, 20 ELR 20889, 20890 (7th Cir. 1990).

7. One important exception to this situation may exist in the area of pollution prevention and waste minimization, but by and large traditional enforcement methods have played only a marginal role in this area.

8. See Michael M. Stahl, Enforcement in Transition, ENVTL. F., Nov./Dec. 1995, at 19.

9. For example, EPA has recently launched a series of pilot projects testing innovative compliance systems under the umbrella of the Environmental Leadership Program. See EPA, Environmental Leadership Program, 58 Fed. Reg. 4802 (Jan. 15, 1993).

10. In advocating a much-enhanced role for compliance rates, I must add a note of caution. As explained earlier, measuring compliance is not a simple matter, and, if not handled with great care, can produce distorted results. It is therefore critical that the measures used reflect the variety of different situations encountered, and place instances of noncompliance into their overall context. Minor, isolated violations must be distinguishable from severe, systemic ones.

11. This reflects the strong and unfortunate psychological and political tendency to elevate negative experiences and pay less attention to positive ones.

12. EPA, INTERIM POLICY ON COMPLIANCE INCENTIVES FOR SMALL BUSINESS (June 1995) (available from the ELR Document Service, ELR Order No. AD-1209).

13. See Stahl, supra note 8, at 22.

14. EPA, Final Policy Statement on Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violation, 60 Fed. Reg. 66706 (Dec. 22, 1995), ELR ADMIN. MAT. I 35639.

15. See EPA 1994 ENFORCEMENT REPORT, supra note 3.

16. See NATIONAL ACADEMY OF PUBLIC ADMINISTRATION, SETTING PRIORITIES, GETTING RESULTS: A NEW DIRECTION FOR EPA (Summary Report to Congress) 29-30 (Apr. 1995).