Hidden Penalties and Secretive Settlements Make for Lousy Enforcement Policy

by Evan Isaacson

July 29, 2016

If a tree falls in a forest and no one hears it, does it make a sound? More to the point, if law enforcement issues a civil or criminal fine or sentence without anyone knowing, does it have an effect?

Thinking back to my criminal law course, I recall such philosophical discussions over the various theories justifying criminal penalties, such as incapacitation of the perpetrator, justice for the victim, and restoration of damages. But perhaps the most important theoretical basis for punishment – and I would think this is certainly true for punishment of environmental violations – is deterrence.

Leaving the realm of theory and philosophy, some recent stories in the news had me thinking once again about the state of environmental enforcement and the lack of deterrence. As I see it, two things must occur for a penalty to properly deter future violations: (1) the penalty must be severe enough, and (2) the penalty must be communicated to other potential violators.

Starting with the first component of deterrence (severity), an article from Bloomberg BNA last week raised some interesting questions about one aspect of the U.S. Environmental Protection Agency's Next Generation Compliance strategy. The article highlights changes being made to the EPA eDisclosure system, which allows firms to self-report violations under a particular environmental statute, such that these disclosures are now considered public information subject to the Freedom of Information Act (FOIA).

In the article, a number of industry lawyers commented on this change, and several of them made clear that the potential damage to their clients from the public discovering these self-reported violations might discourage them from self-reporting at all. In other words, lawyers may be counseling clients to hide the extent of their pollution and violations, as any future detection and penalties levied against them would be far less costly to the businesses than any brand or reputational damage caused by the disclosure. Of course, these decisions would be made case-by-case, but this would be one stark example of a situation where civil penalties are seen as a cost of doing business, rather than a deterrent to wrongdoing.

But it was another story this week that had me thinking more philosophically about a subtle but pervasive problem with environmental penalties. Blue Water Baltimore, which is a group of waterkeepers in the Baltimore area, filed a motion to intervene in federal court over the modified consent decree governing Baltimore City's work to repair failing water infrastructure. This is not the first time that the group has tried to intervene in this matter, and environmental groups generally have difficulties in these situations because consent decrees and other enforcement actions are often not well publicized, giving public interest groups and concerned individuals little time to take action.

Which harkens back to the initial question: if no one is made aware of an environmental enforcement action, how can it deter others from polluting our water or our air? Take the State of Maryland, for example. The Maryland Department of the Environment's website doesn't link to information about enforcement actions from the homepage. If visitors do a bit of digging, they may find the public notice page of the website, but what they'll see is a section for notices of permit applications received and issued. What they won't find is a section providing useful information about enforcement actions or – more importantly – pending settlements with violators. And if they scroll to the bottom of the page and are able to find the tag labelled "enforcement actions," they'll a few irregular, semi-annual compendiums of enforcement actions, which the department stopped releasing altogether in 2014.

In other words, the department seems to want to keep quiet about the penalties and enforcement actions it takes and does not seem particularly interested in inviting or allowing concerned citizens to participate when it negotiates settlement terms with those who pollute their communities.

And this is not just bad policy; it's also likely not legal. The first section of the federal Clean Water Act clearly provides for "public participation in the … enforcement of any regulation, standard, effluent limitation, plan, or program…" More specifically, federal regulation requires the Department of Justice to provide public notice in its settlements (which it does) and requires states to either allow citizens to intervene as a right in enforcement actions or, as an alternative, to provide other public participation opportunities, including a 30-day public notice period. Many states (including several of Maryland's neighbors) provide such notice, allowing concerned citizens to observe these enforcement actions and hold the government and polluters accountable in the process.

This is not an abstract or theoretical issue. Numerous times in the past year, the terms of a consent decree in Maryland were found to be either ineffective or completely ignored. A large industrial facility in Baltimore was allowed to keep polluting at levels far in excess of that allowed in its permit because its consent decree was not being followed. Maryland's high court even recently granted a rare legal remedy to a property owner due to the state's failure to uphold the terms of a consent decree that was supposed to protect her pond from becoming unusable. And as Blue Water Baltimore is now pointing out, it must be allowed to participate in the final terms of the current settlement between Maryland and Baltimore City in order to prevent another failed consent decree from again delaying efforts to restore Baltimore's Inner Harbor.

To promote transparency, to ensure that polluters are being held responsible for the harm they cause to our health and environment, and to make enforcement of our environmental laws more effective, EPA should require that all states provide public notice about past and pending environmental enforcement actions and settlement negotiations. This basic level of openness can help ensure that we, the people are able to hold violators – and regulators – to account and encourage other potential polluters to invest in pollution prevention efforts.

Excellent blog piece, Evan! FYI, some of the EPA regions used to issue press releases every time they initiated an enforcement action. That practice was discontinued and, in a book chapter, I've argued that it should be reinstated.
— Joel Mintz
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Evan Isaacson, J.D., is a CPR Policy Analyst. He joined the organization in 2015 to work on its Chesapeake Bay program, having previously worked as a policy analyst at the Maryland Department of Legislative Services.

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