Riding a New Wave: EPA Considers Dramatic Changes to CWA Enforcement

by Yee Huang

April 19, 2010

A recent Water Policy Report article reported that EPA is considering dramatic changes to its Clean Water Act enforcement and permitting program and oversight of state permitting programs. Many of the changes under consideration, including prioritizing the most significant pollution problems, strengthening oversight of states, and improving transparency and accountability, are long overdue. Passed in 1972, the CWA contains much of the authority needed to clean up water pollution from point sources and certain other sources, but strong enforcement is the key to ensuring the Act’s goals are achieved.

EPA has long applied deterrence-based enforcement, which is based on the idea that regulated entities weigh the cost and benefits of complying with regulations. If the costs of complying with the law are lower than the costs of violating it, a rational regulated entity will comply with the law, goes the theory. If, however, the size of the penalties for violation, discounted by the probability that the government will pursue them, makes it cheaper to violate than to comply, a rational profit-maximizer will choose noncompliance.
Deterrence-based enforcement has four key components:

  1. Sufficient, consistent, and regular compliance monitoring to identify violators;
  2. Prompt initiation of enforcement actions against violators;
  3. A mandate that the violator comply with the applicable laws and regulations; and
  4. Imposition of penalties that serve to both eliminate any economic benefit that the violator gained from its violation and deter future violations.

As EPA Administrator Lisa Jackson testified last year, “The time is long overdue for EPA to reexamine its approach to Clean Water Act NPDES enforcement to be better equipped to address the water pollution challenges of this century.”

In October 2009, EPA issued the Clean Water Act Enforcement Action Plan. The Plan cited many serious obstacles to achieving clean water, namely the proliferation of water pollution sources, the lack of baseline data and national information on the quality of waters; the lack of state enforcement actions; recent Supreme Court decisions that have left regulators confused; and the decline in federal financial assistance and state funding for enforcement programs. The Action Plan says that “state enforcement response to serious violations, whether at large or smaller facilities, is not what it should be.” For major facilities, EPA estimates that enforcement action was taken against only 26 percent of facilities in significant non-compliance in 2008. EPA has traditionally not required states to focus on smaller facilities, even though collectively they can have the same or greater impact on water quality as a major facility.

The Action Plan and the recent Water Policy Report article both indicate that EPA is headed in the right direction. EPA is considering a number of ideas, including:

  • Prioritizing enforcement and permitting changes based on the impact of a facility on impaired waters;
  • Strengthening oversight of state enforcement programs to ensure consistency among programs and to address common problems such as permit backlogs and failure to identify serious violators or take timely enforcement actions; and
  • Improving public availability of enforcement information as a powerful self-policing tool and driver for improved performance and accountability.

Naturally the proverbial “devil is in the details” observation applies: it is much easier to spout the tough enforcement rhetoric than it is to implement it, considering the political and economic interests that inevitably become entangled. Those interests should remember, however, that strong enforcement benefits everyone by leveling the playing field so that regulated entities are neither penalized for compliance nor beneficiaries of non-compliance.

A final observation: EPA should focus equally on the quality of NPDES permits and whether they meet EPA standards, whether they are clear, and whether they are sufficiently protective of water quality. While enforcement actions are important on the back end, strong permits set the tone and level of expectations from the outset.

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