The Cost of Non-Compliance | Part 4: How the EPA Calculates Civil Penalties
Uriah Donaldson presented a technical paper at the 2023 IIAR Conference titled The Cost of Non-Compliance: An Objective Analysis of Federal EPA’s Enforcement at Ammonia Refrigeration Facilities. This blog series includes excerpts from his technical paper.
Part 4: How the EPA Calculates Civil Penalties – 1984 Policy & Policies for EPCRA and CERCLA
Though it may be surprising to some, the Federal EPA has a reasonably objective standard for calculating penalties for violations of its regulations. This section examines the EPA’s published enforcement policies and provides examples of how penalties are calculated for violating EPCRA, CERCLA, and The Clean Air Act.
1984 EPA Policy on Civil Penalties
In 1984, EPA published its Policy on Civil Penalties titled, “EPA General Enforcement Policy GM#-21.” This policy would set the tone and foundation for all future enforcement. For the purpose of this paper, it is important to highlight EPA’s three goals for civil penalties: (1) Deterrence, (2) Fair and Equitable Treatment of the Regulated Community, and (3) Swift Resolutions of Environmental Problems.
The Policy explains each of these goals as follows:
“If a penalty is to achieve deterrence, both the violator and the general public must be convinced that the penalty places the violator in a worse position than those who have complied in a timely fashion.”(22)
Fair and Equitable Treatment of the Regulated Community
“Fair and equitable treatment requires that the Agency’s penalties must display both consistency and flexibility. The consistent application of a penalty policy is important because otherwise the resulting penalties might be seen as being arbitrarily assessed. Thus, violators would be more inclined to litigate over those penalties. This would consume Agency resources and make swift resolution of environmental problems less likely.”(23)
Swift Resolution of Environmental Problems
“The Agency’s primary mission is to protect the environment. As long as an environmental violation continues, precious natural resources, and possibly public health, are at risk. For this reason, swift correction of the identified environment problems must be an important goal of any enforcement action.”(24)
September 30, 1999 | EPA Enforcement Response Policy for EPCRA-CERCLA
In 1999, the EPA published a revised policy “to ensure that enforcement actions for violations of CERCLA §103(a) and EPCRA §304, §311 and §312 are legally justifiable, uniform and consistent.”(25) Civil penalties for CERCLA and EPCRA violations are calculated in two stages. First, a deterrence (or base) penalty is assessed which considers the nature, circumstances, extent, and gravity of the violation and uses an objective matrix to determine the base penalty amount. After the base penalty has been determined, other factors, such as ability to pay, prior violation history, etc. are considered to calculate a final proposed penalty.(26)
Because there is subjectivity in the second part of a civil penalty calculation, we will limit our discussion to two common examples of violations and how only the base penalty is calculated for CERCLA and EPCRA violations.
(22) Policy on Civil Penalties: EPA General Enforcement Policy #GM – 21. Feb. 16, 1984. Page 3; (23) Policy on Civil Penalties: EPA General Enforcement Policy #GM – 21. Feb. 16, 1984. Page 4; (24) Policy on Civil Penalties: EPA General Enforcement Policy #GM – 21. Feb. 16, 1984. Page 5; (25) EPA Enforcement Response Policy for Sections 304, 311, 312 of EPCRA and 103 of CERCLA pg. 3; (26) EPA Enforcement Response Policy for Sections 304, 311, 312 of EPCRA and 103 of CERCLA pg. 9
The previous blogs in this series are available in the following links: