Environmental crimes.

• Author: Curran, Steve
• Position: Tenth Survey of White Collar Crime

1. Introduction

   Federal enforcement of environmental regulations through criminal prosecution occurs under eight principal statutes. The Clean Air Act (CAA)(1) imposes penalties on those who knowingly violate federal or state regulations designed to achieve ambient air quality standards established by the United States Environmental Protection Agency (EPA). The Federal Water Pollution Control Act (FWPCA), also known as the Clean Water Act (CWA),(2) the Rivers and Harbors Act of 1899 (Refuse Act),(3) and the Safe Drinking Water Act (SDWA),(4) together protect the quality of the nation's surface and groundwater. Under the Resource Conservation and Recovery Act (RCRA),(5) a set of amendments giving teeth to the Federal Solid Waste Disposal Act (SWDA), criminal penalties are imposed on persons who improperly transport, store, or treat hazardous wastes. The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)(6) mandates the cleanup of hazardous substances at contaminated sites. The Toxic Substances Control Act (TSCA)(7) addresses the manufacture, processing and distribution or disposal of chemicals that pose an unreasonable risk of injury to the public or environment. Finally, the manufacture, registration, transportation, sale and use of toxic pesticides is regulated by the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA).(8)

   Most of the federal environmental statutes contain overlapping civil, criminal, and administrative penalty provisions.(9) Congress has altered the criminal penalty provisions of some environmental statutes several times by elevating violations from misdemeanors to felonies and increasing the maximum levels of incarceration and monetary fines for convicted offenders.(10)

   Recently, the EPA suggested that the decision to pursue criminal sanctions should be based primarily on significant environmental harm and culpable conduct.(11) A further elaboration of EPA enforcement policy states, "[c]riminal enforcement is necessary . . . in cases involving knowing or intentional conduct, repeated violations, concealment or falsification of noncompliance, or a cavalier attitude that results in egregious harm or the potential for harm."(12) Other emphases of EPA enforcement policy are cross-media environmental problems,(13) cooperation with other administrative agencies,(14) and environmental audits and pollution prevention plan requirements as part of settlement agreements.(15)

   The decision of the U.S. Department of Justice (DOJ) to pursue prosecution for a violation of a federal environmental statute as criminal rather than civil involves an assessment of a variety of factors.(16) Factors considered include: (1) voluntary disclosure; (2) the degree and timeliness of cooperation; (3) preventive measures and compliance programs; (4) pervasive noncompliance; (5) disciplinary systems to punish employees who violate compliance policies; and (6) subsequent compliance efforts.(17) The goal of this policy is "to encourage self-auditing, self-policing, and voluntary disclosure of environmental violations."(18)

2. New Developments

   1. Trends in Enforcement

      DOJ prosecutions of environmental crimes increased dramatically during the 1980s and resulted in the collection of multimillion dollar criminal fines.(19) DOJ'S Environmental Crimes Section (ECS) and U.S. Attorney offices (USAOs) filed 335 criminal environmental cases against a total of 735 defendants during fiscal years 1988 through 1993.(20) Increasing numbers of CWA and RCRA cases were filed through fiscal year 1992.(21)

      Overall, DOJ closed cases against 630 defendants in criminal environmental cases between October 1, 1987 and May 31, 1993 and achieved an overall conviction rate of 91.1 percent.(22) Federal courts most frequently imposed probation and a fine on the 532 individual and corporate defendants that either pled guilty or were convicted.(23) Over a third (124) of the 337 sentenced individual defendants received some prison time.(24)

   2. New Directions in Enforcement

      To reduce pollution at its source and to minimize the cross-media transfer of waste, EPA is placing a greater emphasis on conducting multimedia inspections rather than focusing on a single medium.(25) This new direction in enforcement will require facilities to be better prepared for inspections in order to minimize resulting penalties.(26)

   3. Reauthorization

      The Superfund law, which outlines how toxic sites should be cleaned, is criticized as one of the nation's most costly and ineffective environmental laws.(27) In fourteen years, only 217 of the 1,177 sites designated for cleanup have been declared clean.(28) A bill that would speed the cleanup of the nation's toxic waste dumps was killed during the 103d Congressional session.(29) The Superfund reform bill, which was an overhaul of the 1980 CERCLA, would have reduced the average time needed for cleanup by twenty-five percent, cut the amount of funding required for cleanups, and provided for the involvement of community activists.(30)

      Disagreement over procedural strategy and legislative language also killed the 103d Congress's chances to reauthorize SDWA although it had previously passed both houses by overwhelming majorities.(31) Senate sources said that the reform effort was doomed by the House of Representatives' failure to act earlier and agree to a formal conference.(32) House sources, however, said they could not go to conference because of jurisdictional concerns and blamed the Senate for not agreeing to a workable compromise.(33) Both the Senate and House bills would have revised the approach to regulating new contaminants in drinking water, changed the standard-setting process for contaminants that are regulated, and created a fund of about one billion dollars annually to help states upgrade water systems.(34)

      A bid to reauthorize CWA also failed, largely due to a proposal to revamp the federal government's wetlands-protection program.(35)

   4. Proposed Sentencing Guidelines

      In December 1993, an advisory group to the United States Sentencing Commission published proposed guidelines for sentencing corporations convicted of federal environmental crimes.(36) The proposed guidelines stated that the major activity a corporation could undertake to lessen its exposure was to establish an environmental compliance program.(37) Under the proposed guidelines, the absence of an effective compliance program could increase criminal penalties up to twenty-five percent, while a successfully implemented compliance program could decrease penalties by as much as forty percent.(38) In April 1994, the U.S. Sentencing Commission elected not to adopt the proposed guidelines, motivated in part by strong dissension over the necessity of a separate chapter strictly for corporate crimes, as well as by the expiration of the term of the chairperson of the advisory group, Commissioner Ilene Nagel.(39)

      Although the proposed guidelines have been shelved for now, their importance should not be ignored. The guidelines were developed by a panel of experts from environmental organizations, industry, and EPA and DOJ attorneys, reflecting their views on the importance and proper scope of environmental compliance programs.(40) It is likely that the minimum components of compliance programs will resurface in EPA, DOJ, and state regulatory programs. Additionally, many features of corporate environmental compliance programs could become part of the Sentencing Guidelines in the future.(41)

3. COMMON ISSUES

   1. Liability

      1. Corporate

         Corporations are generally included in the definition of "persons" for the purpose of criminal prosecution under environmental regulations.(42) When deciding whether to impose criminal sanctions on a corporation, courts focus on the extent of the corporation's control over the alleged violation(43) or the extent to which corporate policy knowingly diverges from environmental requirements.(44)

         Corporations can be vicariously liable for employees' violations (1) if they directly or indirectly supervise illegal dumping conducted by employees;(45) (2) if the corporation could have prevented the violation with reasonable measures;(46) (3) if the employees or agents were acting within the scope of their employment;(47) or (4) if the employee was acting for the corporation's benefit.(48)

      2. Responsible Corporate Officer Doctrine

         Most criminal sanctions under environmental statutes apply to any "person"(49) who violates a regulation.(50) According to the responsible corporate officer doctrine,(51) individual liability is generally imposed upon those with the responsibility or authority to prevent or correct the violation(52) rather than those who commit the physical contaminating act.(53) Although juries may not "find guilt solely on the basis of [the defendant's] position in the corporation,"(54) courts have allowed juries to infer knowledge and/or control of environmental crimes by corporate officers based on circumstantial evidence.(55)

   2. Standards of Enforcement

      1. Negligence

         In limited situations, criminal liability is imposed for negligent acts in violation of environmental statutes.(56)

      2. Knowledge

         Corporate officers and employees will be held liable if they knew, and possibly if they should have known, that their acts constituted a violation of an environmental statute.(57) Most Courts hold that circumstantial evidence can be sufficient to prove knowledge.(58)

         Although some amount of knowledge is required to get beyond mere negligence,(59) courts have generally held that knowledge does not rise to the level of specific intent.(60) The circuits have split on whether or not lack of knowledge of the requirement of a permit is a defense to statutory violations.(61)

      3. Knowing Endangerment

         Some environmental statutes impose more serious criminal liability if violators are convicted of knowingly placing another person in imminent danger of death or serious bodily injury in the course of a statutory...