Environmental Law and the Academy:
EPA’s New Campus Compliance Initiative
by Susan M. Campbell and Ross Lipman
Abstract:
As enforcement of environmental laws has waxed and
waned in the private sector during the past two decades, American
colleges and universities have largely been ignored by federal and state
agencies responsible for legal enforcement. Recent EPA enforcement
initiatives are changing this past practice, and educational institutions must
be prepared to meet the challenge of greatly increased regulatory scrutiny.
In this article we explain these recent initiatives, provide an overview of
the environmental regulations to which institutions will find it necessary to
devote attention, and present suggestions for developing an appropriate
strategy to respond to EPA’s initiative.
I.
THE WAKE-UP CALL
In 1999, regional offices of the United States Environmental Protection Agency (EPA)
began to notify colleges and universities throughout the country of a new EPA environmental
compliance initiative targeting higher education. Letters have been sent to college and university
presidents, first on the West Coast, and most recently in EPA Region II on the East Coast,
warning of EPA’s intent to conduct inspections of many institutions this year. If violations are
discovered in the upcoming inspections, EPA has warned, enforcement proceedings may be
commenced, with assessment of monetary penalties against educational institutions found to be
in violation of applicable laws.
According to EPA, the genesis of the inspection program is evidence that a number of
colleges and universities are not in compliance. It is reported that one recent investigation of a
state university resulted in an administrative complaint seeking $1.8 million in penalties. In
another case, an EPA inspection led to a complaint seeking $300,000 in penalties against a
school in northern New England.
In its notification letters, EPA urges institutions to take advantage of its 1995 Audit
Policy before a formal Agency inspection. The pros and cons of undertaking an internal
compliance audit under that 1995 Audit Policy are discussed in Section IV below. In Section II
we first discuss the key environmental statutes and regulations that predictably will be
implicated. In Section III, we address the recommended initial audit.
II.
KEY ENVIRONMENTAL LAWS AT ISSUE
Historically, educational institutions have not been seen as significant sources of
pollution—certainly not in the same category as factories or refineries, for example. Whether
because of the public perception of such institutions as being largely pollution-free or for other
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reasons, institutions of higher education have until now enjoyed a very low profile on the
regulatory radar screen. EPA’s enforcement efforts, as well as those of state agencies, have as a
general rule been focused principally on more visible and traditional “industrial” sources of
pollution.
The reality, however, is that countless activities routinely undertaken every day at
colleges and universities are subject to laws designed to protect human health and the
environment. Recent EPA inspections at these schools have documented not insignificant levels
of noncompliance, especially with regard to laws governing hazardous waste management. A
number of the relevant activities are listed below, together with a brief description of some of the
applicable laws.
1. Storage of certain toxic and hazardous chemicals (e.g., flammable, corrosive, or
reactive materials): the federal Emergency Planning and Community Right-toKnowAct requires that reports of chemical inventories, above threshold planning
quantities, be provided to state and local planning authorities.
2. Disposal of hazardous waste—for example, from chemistry or hospital laboratories:
the federal Resource Conservation and RecoveryAct (RCRA) regulates hazardous
waste from the point of generation to the final disposal site and includes detailed
regulations governing labeling of wastes, limiting storage time, and requiring the use
of documentation for off-site shipments to disposal locations. Certain storage and
treatment activities are allowed only after issuance of a permit. In the event of
uncertainty about whether a particular waste stream is hazardous, RCRA requires that
a generator undertake definitive tests to identify the nature of the waste and thereafter
manage it accordingly.
3. Use of hazardous chemicals: the federal Occupational Safety and HealthAct (OSHA)
and other federal and state laws require that employees be formally trained about the
dangers of chemical exposure, preventive maintenance and response action in the
event of an emergency. Material Safety Data Sheets must be available for such
chemicals, and employers must maintain written documentation of employee training.
4. Generation of “red-bag” waste from hospitals and other clinical locations: in many
cases, state and local regulations strictly govern how potentially infectious waste must
be handled, stored and disposed of.
5. Other waste streams: the federal Clean Water Act and state analogues restrict the
discharge of certain kinds of waste through sink or floor drains. According to the
nature and quantity of wastes discharged in this manner, a wastewater discharge
permit may be required—in some cases from a state environmental agency, in other
cases through a municipally operated treatment works.
6. Spills and other releases of hazardous materials: the federal Comprehensive
Environmental Response, Compensation and Liability Act requires prompt reports to
government agencies in the event of a release (inadvertent or otherwise) of hazardous
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materials to the environment. State law analogues frequently impose similar
requirements.
7. Use of underground storage tanks (USTs) for fuel or other liquids: RCRA provides a
comprehensive scheme for regulating USTs, in many cases requiring the use of leak
detection systems and corrosion-resistant materials.
These are but a few of many activities commonly undertaken on campus that are subject to
comprehensive environmental regulation.
Perhaps contrary to popular opinion, liability under environmental laws need not be
premised on intentional violations, or even negligence. Similarly, neither actual harm to human
health nor damage to the environment are prerequisites to proof of a violation. Instead, strict
liability—without fault—is often the basis for liability. What may appear to be minor
infringements of rules—e.g., lapses in paperwork, or in the frequency of employee training—can
result in sizable monetary penalties. RCRA, for example, provides for imposition of civil
penalties as high as $25,000—for each day of violation. The statute also authorizes criminal
enforcement against individuals as well as organizations—the latter may, upon conviction, be
subject to fines of as much as $1 million. Intent to violate an environmental statute need not be
proven. Put another way, one may not simply avoid knowledge of environmental requirements
and thereby escape criminal liability for noncompliance. For those who think the cost of
environmental compliance is too high, the possibility of six- or seven-figure penalties should
suffice to point out the even higher cost of noncompliance.
III.
HOW TO MEET THE CHALLENGE—INTERNAL AUDITS
The prospect of undergoing, and passing, an EPA inspection is a challenge. The sheer
number and broad scope of environmental regulations seem daunting. The three tiers of
regulation—federal, state and municipal—add to the complexity. Budgetary constraints—
especially in the short-term—place practical limitations on the resources that an institution can,
or may want to, devote to compliance. Yet the consequences of coming up short can be quite
burdensome, financially and otherwise. How best to meet the challenge?
The first step to achieving compliance is to find out whether current violations exist. The
only effective way to make this determination is by undertaking a fairly comprehensive internal
audit. By internal we do not necessarily mean without the assistance of outside advisors, who
may well be essential for purposes of ensuring that all relevant areas are included in the scope of
the audit; instead, we mean an audit designed in the first instance for internal use rather than one
designed for submission to EPA or a state agency.
The primary goal of an audit is to uncover violations of law. Of equally great importance
is promptly correcting such violations, because the consequences of continuing violations after
an audit could well be worse than not undertaking the audit in the first place. After the audit, a
university can no longer claim ignorance of the existence of violations, and failure to take
corrective measures compounds the offense by adding knowledge of noncompliance.
Thorough audits are a critical component in what are commonly known as
“environmental management systems” (EMS), an impressive-sounding term that really means
4
nothing more than a workable program for ensuring compliance. A successful EMS is one that
includes the following components:
1. creating a general policy that expresses the institution’s commitment to comply with
environmental laws;
2. establishing and maintaining procedures to identify the environmental impacts of the
university’s activities, and to identify the regulatory requirements applicable to those
activities;
3. implementing a thorough compliance plan, in part through appointment of personnel
responsible for monitoring compliance and taking corrective action where necessary
(e.g., employee training programs);
4. implementing mechanisms for detecting violations of law (e.g., audits); and
5. providing for appropriate management review to assess the success of the overall
system and, where necessary, to make changes to the environmental policy, targets
and objectives, and procedures.
Fortunately, many of these procedures can be implemented at reasonable cost.
Developing a policy statement, for example, and preparing a chain-of-command chart that
designates university personnel with responsibility for specific areas of compliance are
straightforward tasks that do not require substantial capital resources. Other aspects of EMS
planning, such as ensuring that permits have been obtained for certain regulated activities and
offering in-house training for students or for employees subject to OSHA requirements, can
likewise be handled in an efficient, cost-effective manner.
In the first instance, in order to prepare for the possibility of an EPA inspection in the
near future, it may be necessary to use third-party consultants—e.g., outside lawyers and/or
environmental consulting firms—to assist in uncovering violations in areas where university
administrative employees have not yet received thorough training. Given the internal nature of
the audit, it is important to maximize the confidential nature of the work. This goal can be
furthered by making the audit conclusions, as much as possible, subject to the attorney-client
privilege and attorney work product privileges. Since the attorney-client privilege protects only
confidential communications between a lawyer and his or her client for the purpose of obtaining
or rendering legal advice, the lines of communication should be principally between counsel on
the one hand and the persons conducting the audit on the other hand. In this regard, the
engagement with a consultant should be undertaken by counsel (whether outside or in-house) for
the purpose of obtaining information needed to render legal advice to the institution.
Having appropriate guidance—especially in undertaking the audit—is essential, because
questions will inevitably arise about conflicting obligations and possible pitfalls. For example,
one of the most common issues in this context is the obligation to report releases of hazardous
substances to the environment. An audit may uncover evidence of such releases—perhaps from
leaking containers stored outside, perhaps as a result of historic spills that were poorly
documented. As noted above, both federal and state laws require that certain spills be reported to
regulatory agencies. The written agreement with an environmental consultant should clearly
5
describe the parties’ rights and obligations with respect to any reports to agencies and, in general,
should make clear that such reports are to be made by the university or its counsel—not by the
consultant. The timing and nature of such reports can significantly affect the regulatory response,
and it is quite advantageous to maintain control over how these disclosures are made.
IV.
EPA’S 1995 AUDIT POLICY: SILK PURSE OR SOW’S EAR?
As mentioned at the beginning of this article, EPA’s recent warning letters invite colleges
and universities to avail themselves of the purported advantages of the 1995 Audit Policy.1 This
invitation bears some scrutiny: while there are indeed some potential benefits, there are potential
detriments as well, and an informed decision whether to accept the Agency’s offer must be
premised upon a thorough consideration of a number of factors.
In brief, the policy offers the prospect of reduced civil penalties, and forbearance from
certain criminal prosecutions, for entities that voluntarily discover, disclose, and correct
violations of federal environmental regulations. In order to be eligible for penalty reductions, the
following nine conditions must be satisfied:
1. the violations must be discovered through a documented audit or compliance
program;
2. this discovery must be voluntary, and not the result of legally required monitoring;
3. EPA must be notified in writing within ten days;
4. the violations must be disclosed before any enforcement action, private action, or
imminent discovery by regulators;
5. the violations must be corrected within 60 days of discovery;
6. the educational institution must agree in writing to take steps to prevent a recurrence
of the violations;
7. the same or similar violations must not have occurred within three years at the same
facility, or be part of a pattern of violations;
8. the violations must not have seriously harmed or presented a grave danger to persons
or the environment; and
9. the institution must cooperate with EPA in any investigation.
Satisfaction of these conditions does not mean that EPA will forego monetary penalties
entirely. Penalties generally consist of a sum intended to negate the economic benefit gained
through noncompliance, as well as a punitive component based on the seriousness of the
violation. Under the Audit Policy, EPA will waive only the latter, “gravity-based” part of the
penalty.
1
The policy became effective on January 22, 1996.
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While reduction of a monetary penalty is undoubtedly beneficial, that prospect does not
necessarily provide a sufficient rationale for disclosing to EPA the results of the initial internal
audit.2 Bringing to EPA’s attention the fact of past violations, where no such disclosure is
required by law, has obvious and not-so-obvious downsides. First, to the extent that an
educational institution approaches EPA in the context of seeking penalty concessions under the
Audit Policy, the Agency’s focus predictably will be on (i) a critical assessment of whether the
institution has in fact complied with each of the prerequisites set out in the policy; and (ii)
assuming satisfaction of each of the criteria, the penalty appropriate under the circumstances.
The Audit Policy approach, in a sense, presumes that a penalty should be assessed and directs the
regulatory inquiry toward a determination of the size of the penalty. Second, the Agency
generally fixes penalties for violations of any particular statute by reference to one of the many
penalty matrices that EPA has issued. (These are administrative documents, not promulgated as
regulations.) One important factor in determining the size of a penalty is whether the violation in
question is a first, or a repeat, offense. Not surprisingly, the penalty on a second or third violation
is higher than will be levied the first time around. Thus, disclosure of the existence of a violation
is never a neutral event. Third, the time constraints imposed by the EPA Audit Policy foreclose
flexibility in prioritizing which regulatory violations to address first. An institution would have
to have been fairly prescient, and fairly flush, in order to have adequately budgeted for the costs
of remedying all on-campus environmental derelictions within two months. Given these
considerations, the strategy of conducting a private, internal audit, and then formulating a
prioritized, affordable plan for remedying the violations—without disclosing the results to
EPA—is probably the preferable and most realistic strategy for most institutions.
It is not a bulletproof strategy, however. It is unclear how long EPA intends to allow
institutions to complete their auditing and remedial work before it begins to inspect in earnest. In
Region IX for example, schools were told they had six months to “identify and resolve
compliance problems” before EPA would come knocking. In Region II, the February 2000 letter
to colleges and universities specifies no time-frame, and indicates only that the Agency will be
“inspecting colleges and universities in the spring of the year 2000.” Further, when EPA does
come to inspect, it is still possible that it will file an administrative complaint based solely on
past violations that have since been corrected. However, given (i) the regulatory workload and
personnel shortages, (ii) the primary goal of preventing unnecessary dangers to public health and
the environment, and (iii) the general principle that enforcement action is most appropriate for
repeat offenders rather than institutions that are taking steps in good faith to comply with the
law, such a course of action tends to be the exception rather than the rule.
Once the institution has substantially remedied on-campus violations, it can revisit the
issue of whether to conduct a second audit for disclosure to EPA under the 1995 Audit Policy.
This approach may be strategically advantageous at that stage and should be explored then by
reference to (1) the results of the private, internal audit conducted by the college or university,
and (2) the local EPA Region’s inspection, enforcement and penalty assessment history at that
time.
2
Wholly aside from the guidance offered in the Audit Policy, some information uncovered in the course of an audit
may be subject to reporting requirements anyway, e.g., learning of a chemical spill or release. Information
uncovered in the course of an audit that falls within such reporting requirements must, of course, be provided to the
appropriate agency.
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V.
CONCLUSION
EPA’s new enforcement initiative will come to many colleges and universities as the
environmental equivalent of baptism by fire. A number of institutions will find it necessary to act
very quickly in auditing the areas of concern within the institution and determining how to most
quickly and cost-effectively remedy the problems that are discovered in that process. Conducting
that effort in a fashion that will minimize financial penalty to the university and enable
administrators to direct tight dollars toward remedying violations, rather than paying penalties to
regulators, will add to the challenge. As with any legal strategy, there is a “good,” “better,” and
“best” way to proceed for each institution—best determined going forward, rather than in
hindsight.
Susan M. Campbell is a partner and Co-chair of the Environmental Practice Group of Hughes
Hubbard & Reed LLP, and Ross Lipman is an associate in the Environmental Practice Group.
They can be reached at (212) 837-6070 and (212) 837-6898, respectively.