Every three years, the United States Environmental Protection Agency (EPA) sets national enforcement initiatives to focus its civil and criminal enforcement resources on specific environmental issues. On September 15, 2015, EPA issued a public notice regarding its proposed national enforcement initiatives for fiscal years (FY) 2017-2019. Of particular note, EPA has proposed to adopt a new enforcement initiative targeting wastewater discharges from the food-processing sector. This proposal marks the first time EPA has identified food processors for a national enforcement initiative.

EPA has not added a new enforcement initiative since before FY 2011. Thus, it seems likely that it will adopt one or more of the new initiatives identified in the proposal. The other two proposed initiatives include air emissions from hazardous waste facilities and organic liquid storage tanks, and accidental chemical releases from a broad swath of regulated sectors. The comment period closed on October 14, 2015, with 44 comments offering both support and opposition to the proposed enforcement initiatives.

EPA’s National Enforcement Initiative Paradigm

EPA develops sector-based enforcement initiatives to address what it deems to be important environmental problems. According to EPA, these environmental problems are national in scope, arise from alleged widespread noncompliance with existing laws, and would benefit from federal attention. The national initiatives are typically coordinated out of EPA’s Headquarters, in Washington, D.C., collaborating with EPA’s ten regional offices. For the targeted sector, an EPA enforcement initiative means heightened national enforcement scrutiny, expensive and resource-intensive document productions, and less flexibility in terms of case-specific considerations in negotiations. As part of this coordinated effort, EPA will ensure that the types of complying actions obtained through the settlements, as well the penalties assessed—nationwide—are consistent for all companies subject to investigation by the Agency.

Recent Federal Enforcement in the Food-Processing Sector

Wastewater discharges are regulated under the Clean Water Act through the National Pollutant Discharge Elimination System (NPDES) permit program. EPA is already actively enforcing wastewater discharge limits in the food-processing sector. In September 2015, EPA announced two separate actions against food-processing companies for such violations. While it did not assess a civil penalty in either matter, it did require the companies to make changes at their facilities that cost $654,000 and $30,000, respectively.

Based on publicly available enforcement data, EPA has resolved over 350 enforcement actions in the past five years with companies operating in NAICS 311 under a variety of environmental statutes, including the Clean Water Act, the Clean Air Act, and the Emergency Planning and Community Right-to-Know Act, among others. These enforcement actions have resulted in over $46 million in penalties and supplemental environmental projects, and almost $418 million in required complying actions.

Why Focus on the Food-Processing Sector?

In the public notice, EPA explained that the food-processing, mining, chemical manufacturing, and primary metals manufacturing sectors “contribute a disproportionate amount” of nutrients and metals, and “are responsible for contributing to surface water pollution.” See 80 Fed. Reg. 55352, 55354 (Sept. 15, 2015). EPA stated that these sectors have “many violations.” Id. EPA provided these reasons as the basis for crafting this national enforcement initiative. While most public comments to the proposal focused on other issues, the American Petroleum Institute (API) specifically addressed the wastewater discharge initiative. In particular, API questioned EPA’s statement about widespread violations in these sectors as EPA provided no data to support its claim. API also noted that EPA failed to identify any criteria regarding the types of facilities that EPA would target within these sectors.

Use of Next Generation Compliance

Finally, EPA indicated that it plans to employ “Next Generation Compliance” approaches in connection with its selected national enforcement initiatives. According to EPA, the Agency will use the latest monitoring technologies and data analytics to identify problems and target particular facilities for enforcement. Next Generation Compliance is a strategy that the enforcement office has sought to implement since FY 2012. There are five components of EPA’s Next Generation Compliance strategy:

Figure adapted from U.S. EPA website, with annotations by King & Spalding

One aspect of the Next Generation Compliance strategy focuses on wider use of new pollutant monitoring technology, i.e., “advanced monitoring.” EPA routinely seeks such technology in settlement of enforcement actions. In fact, EPA released a policy in January 2015 memorializing this practice. Requiring companies to field test new technology enables EPA to advance new compliance monitoring methods for future regulations. It also potentially exposes companies to future lawsuits based on data generated through the technology. Such technology may present quality assurance and other issues, making it inappropriate for use as evidence in an enforcement matter.

EPA has prepared a compendium of Next Generation Compliance examples for the NPDES program. Certain features of Next Generation Compliance that EPA may integrate into a wastewater discharge national enforcement initiative for the food-processing sector include: “transparency,” by requiring companies to post relevant compliance information to the Internet, “advanced monitoring technologies” that will provide real-time pollutant monitoring data to communities, and “innovative enforcement” through third-party monitoring and auditing of settlement requirements, at the settling company’s expense. In its compendium, EPA identified specific settlement agreements illustrating these types of Next Generation Compliance features.     

Compliance Assistance Tools for the Food-Processing Sector

Companies operating in the food-processing sector may soon find themselves subject to heightened federal enforcement attention. Yet, EPA’s enforcement initiative will not be implemented, if at all, until at least October 2016. Accordingly, there are steps that a company can take now to minimize potential enforcement exposure, including a review of its NPDES permit compliance and enhancing its internal compliance procedures. Additionally, EPA provides sector-based multimedia compliance assistance tools. For instance, EPA’s website provides a summary of environmental statutes and regulations potentially affecting food processors. Another helpful compliance tool that EPA supports for the food-processing sector is the Food Processing Environmental Assistance Center, housed at Purdue University in the Department of Food Science.  This tool allows a company to identify its particular operations in a particular state, and generates a list of potentially applicable requirements.

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Author: Ilana Saltzbart, Partner, Washington, D.C., +1 202 626 3745, isaltzbart@kslaw.com.