This is the sixth in a series of seven posts about regulatory compliance priorities and enforcement trends. The first post was about the Commodity Futures Trading Commission (CFTC). The second post was about the Federal Trade Commission (FTC). The third post was about the Securities & Exchange Commission (SEC). The fourth post was about the Food & Drug Administration (FDA). Last week’s post was about the U.S. Department of Agriculture (USDA). Today’s post will be about the Environmental Protection Agency (EPA). Finally, the seventh post, on Thursday February 1, will be about the Federal Communications Commission (FCC).
The U.S. Environmental Protection Agency (EPA) is the US regulator charged with supervising and enforcing federal laws concerning human health and the environment. The USDA was created in 1970 by an order of President Richard Nixon in the course of an executive reorganization that consolidated a number of offices and councils that were created by the National Environmental Policy Act of 1969. The EPA has never been formally elevated to executive cabinet status but is often accorded this rank operationally anyway.
The mandate of the EPA includes running a variety of departments, including the Office of Air and Radiation; the Office of Chemical Safety and Pollution Prevention; the Office of Land and Emergency Management; and the Office of Water. The EPA works with a broad base of legislative standards pertaining to the advancement of general environmental protection measures which can be grouped into several areas, principally air, water, land, endangered species, and hazardous waste. In order to maintain and enforce standards within these broad environmental categories, the EPA has a regional operating model and within that further delegates some administrative responsibility to states, individual industry groups, and other local-level entities.
The EPA frequently works together with other regulatory agencies, particularly the Department of the Interior and the USDA, to manage the diverse scope of its oversight activities insofar as environmental conservation and quality standard-setting objectives coincide. The major federal laws which provide the basis for these activities include the Clean Air Act (1963 with major amendments in 1966, 1977, and 1990, regarding the control of air pollution), the Clean Water Act (1972 with major amendments in 1977 and 1987, regarding the control of water pollution), the Wilderness Act (1964, creating the National Wilderness Preservation System, the Endangered Species Act (1973, regarding the protection of threatened species of fish, wildlife, and plants), and the Resource Conservation and Recovery Act (1976, regarding the disposal of solid and hazardous wastes).
- Shifting scope: For some agencies, the overall deregulation trend is actually just a reflection of efficient investigation and settlement within the pipeline followed by administrative restraint in setting new or expanded priorities. However, in the case of the EPA, it seems that transformative momentum has depended heavily upon outright regulatory rollback and narrowing of scope and enforcement. This has changed the focus of the agency substantively and resulted in a change in the way the EPA positions itself towards the businesses it regulates, moving from a burdensome model of requiring agreements against which it can enforce toward instead a system in which it accepts management representations of regulatory compliance: How Scott Pruitt turned the EPA into one of Trump’s most powerful tools
- Pollution: Pollution control is one area within the EPA’s mandate where the above-contemplated enforcement of federal laws is already demonstrably more lenient than in the past. The below examples will show specific rules where implementation or related designations have been delayed or rolled back, but in general, following up on enforcement and pursuit of civil penalties or punishing companies in violation of federal environmental laws has already been relaxed, especially with regard to pollution violators: Under Trump, EPA Has Slowed Actions Against Polluters, and Put Limits on Enforcement Officers
- Effluent rule: The “effluent rule,” concerning limits on water pollution by coal-fueled power plants, has in deep study, negotiation, and implementation for over a decade. The Office of Water included, over the years, study on the impact that the standards could have on the economy. However, the current EPA regulatory agenda includes considering a major change to direction on the effluent rule, including perhaps rolling it back entirely. These rules are seen by some as unnecessary or excessive, while others view this as an example of deregulation in which science and industry standards are set aside in order to favor participants or projects which cannot meet the standards. While shifting regulatory agendas between administrations is not an unusual practice, seen as re-balancing of the scales of interests, the speed through which this decision-making process has been taken raises questions about the sustainability of the standards and practices that will come from it: Inside the Trump administration’s rollback at the EPA
- Smog rule: The effluent rule is only one example of many rules which the marketplace and state governments are looking for an indication of what direction implementation may take – action or inaction – from the EPA. Another major rule which hangs in the enforcement balance is the 2015 smog pollution rule. The EPA has said that some regions comply with this, but has not made public designations as to the regions that do not. Environmental groups and some states have sued, looking to force the EPA to make these disclosure declarations, and therefore give signals as to the future enforcement fate of the smog rule itself: Court asks EPA when it will move forward with smog rule compliance
…And ensuing conflicts of law: Changes in legal or regulatory strategy at the federal level often lead to inconsistent standards set between state interests. This is especially true in areas of the law or regulation where non-compliance of some states or regions can have adverse effect on other states or regions which are, themselves, totally compliant. Obviously the environment is one of these such areas and conflicts of air pollution controls can one non-complying group of states to have a huge impact on the air quality in other states. These compliant states wish to have the non-compliant states subjected to stricter controls by placing them in a designated “Ozone Transport Region” to recognize the impact that their emissions have on states that are upwind of them: Northeast states sue EPA over air pollution from Midwest
- Clean Power Plan: In light of the US departure from the Paris Agreement, the global accord to reduce emissions worldwide, the EPA has undertaken planning to repeal the Clean Power Plan. The Clean Power Plan would have provided the domestic standards under which the US would work toward compliance with the objectives of the Paris Agreement. Economies of communities and states which in the past relied heavily on the coal industry hang in the balance of these decisions – will they diversify and try to pivot into new businesses that would fit into Clean Power Plan type regulation, or will they retract previous emission reduction views in order to try to rejuvenate fossil fuel-based power generation? EPA Hosts the Beginning of the End of the Clean Power Plan in Coal Country
Be sure to check back next week for the last post in this series, a round-up on FCC regulatory compliance.