The Michigan Attorney General's office has publically stated that it intends to dramatically increase the number of criminal cases it brings for violation of state and federal environmental laws. The federal government has already formed a task force in the state comprised of agents from the FBI and the EPA to increase its criminal enforcement activity.
"But I don't have to worry," you are probably saying to yourself, "my company may make mistakes, but certainly we are not criminals." Guess again. As a result of the very low standards of liability that apply to criminal environmental statutes, certain overly zealous prosecutors believe that virtually any mistake, even innocent, can be transformed into a criminal violation. A number of the criminal environmental laws provide for "strict liability," which means that a party can be prosecuted criminally for even innocent or accidental violations. And the penalties can be draconian. Under the hazardous waste laws, for example, even a misdemeanor violation can result in penalties of up to $25,000 per day for each day of the violation and up to one year in jail. These penalties can be applied even if you and your company had no idea that you were violating the hazardous waste laws. The situation for felonies is little better. Courts around the country have ruled that companies and individuals can be prosecuted for a felony violation of environmental laws even if they were not consciously aware that their conduct was illegal. In many jurisdictions, all that is required is knowledge by the company that the material they are handling (illegally) could be considered hazardous.
As a result of these new initiatives against corporations and individuals, the number of criminal and civil prosecutions has skyrocketed. In 1999, the EPA claims to have collected $3.6 billion in penalties, up 80% from the previous year. "Criminal" defendants in environmental cases were sentenced to a record 208 years of prison time. The federal government alone commenced 241 criminal prosecutions.
The Michigan Attorney General reportedly intends to focus its enforcement activities in three areas: wetland protection, self-reporting violations and fraudulent billing under the long-defunct MUSTFA program. The self-reporting issues are particularly problematic for corporations that deal with any kind of hazardous substances.
You and your company must begin preparing now for the oncoming onslaught. Although there is no such thing as a safe harbor against liability, there are certain fundamental, commonsense steps your company can take to avoid liability. The first is to audit all of your waste handling practices. In most cases, you should retain your lawyer to handle the audit to insure that the protections of the attorney-client privilege apply. Although Michigan has an audit statute that purports to protect companies that perform audits, in reality the statute specifically carves out "criminal conduct" from the protections. Since the state and federal governments can take the position that virtually any conduct that violates the law is "criminal," the audit statute's protections are largely illusory.
An audit can be relatively simple. When was the last time you pulled out your companies environmental permits? The fine print, boilerplate language in those permits are a fertile ground for inadvertent (yet amazingly "criminal," if one accepts the government's position) violations. By taking the simple, expedient action of touring your plant with permits in hand and closely reviewing each machine, each waste stream and each disposal practice in light of the language in the permits, you can discover and fix many potential problems before the government fixes them for you.
Educate your employees. In addition to having them attend seminars and workshops, a discussion of the latest rules and procedures should be a regular item on the agenda for management or employee meetings. Encourage your employees to report any suspicions they have directly with management and promise them that they will be rewarded for rooting out (and fixing) potential environmental violations. You should also perform exit interviews of departing employees and ask them about any environmental problems. Disgruntled, former employees are perhaps the number one source for criminal referrals.
Two last bits of obvious advice. First, if you discover a problem, fix it. Do not wait until tomorrow because, to paraphrase the pop singer John Fogerty, "tomorrow may never come." Second, don't violate the law. If you are unsure about the quality of the data you are reporting to the government, check it or rerun the test(s) before reporting. Are you thinking about increasing production? Examine your permits first to make sure you will not end up violating your emission standards. Do you have a brand new retrofit that will make a process or machine safer? Check your permit first to insure that you are not "modifying" the equipment in a manner not covered.
Very few companies that will soon be prosecuted by the government fall into the category of what reasonable people would call "criminals." Rather, they will consist of well meaning organizations that did not commit sufficient resources to environmental compliance or ignored hints that there might be problems. These companies and their management will find themselves "dependent on the kindness of strangers" to avoid going to jail; a position you do not want to be in if the "stranger" is a federal or state prosecutor.