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Guidance for Compliance Screening for Project XL: Document

Guidance for Compliance Screening for Project XL
I. Introduction

This guidance is consistent with and is the XL program-specific application of the Agency's comprehensive screening framework, "Compliance Screening for EPA Partnership Programs." The primary purpose of conducting a compliance screen to determine a potential project participant's eligibility for Project XL is to enable EPA to make an informed judgment regarding the likelihood of the participant's ability to achieve superior environmental results in Project XL, as well as the appropriateness of providing the participant with any regulatory flexibility sought. Information on the current compliance status and the compliance history of a potential project participant will document whether a facility has an existing enforcement problem that must be addressed or could reveal patterns of behavior and/or compliance trends that might shed light on the participant's capabilities or corporate attitude. Such screening will also help avoid conflict or interference between Project XL goals and any enforcement efforts addressing violations of environmental law, as well as prevent situations where the Agency and an XL participant are simultaneously in cooperative and adversarial postures.

The primary purpose of updating the compliance screen prior to a high-visibility recognition event is similar. During the time between a participant's acceptance into Project XL (and its initial compliance screen) and any high-profile events, enforcement activity associated with the participant may have occurred which would make the involvement of high-ranking Agency officials in recognition events inappropriate and awkward. The update screen should uncover any such potential pitfalls and help avoid undercutting Agency credibility or unnecessarily complicating environmental enforcement actions.

Appendix A attached is a chart providing an easy reference to specific screening elements discussed in the guidance.

Appendix B, also attached, provides a list of Headquarters and Regional contacts who can provide assistance in areas such as conducting a screen and interpreting information received as a result of a screen.

II. Eligibility to participate in Project XL

A. Purposes of screening for eligibility to participate in Project XL:

To avoid conflict or interference between Project XL and enforcement efforts for violations of environmental laws.
To identify and preclude those who might have significant environmental compliance problems from participation in a program which offers such important regulatory flexibility benefits.
To avoid situations where the Agency and program participant are simultaneously in cooperative and adversarial postures.
·To ensure that program managers and Agency officials are fully informed about the compliance status of participants, and to avoid any surprises. B. Criteria for screening for eligibility to participate in Project XL:
1. XL participation should be presumptively barred until the following problems are resolved, or sufficient time passes:
    a. Criminal activity by potential participant Screen will check for: Any corporate criminal conviction or corporate plea; any criminal investigation, conviction or plea involving the proposed XL facility; and any ongoing criminal investigation/prosecution of the corporation or corporate officer; covering all EPA-administered environmental laws or other statutes used in prosecuting or enforcing environmental crimes (e.g., 18 U.S.C. §1001, etc.). States will provide information on state-based criminal investigations/prosecution as part of required State support for project. Participants are presumptively barred if screen shows:
Corporate conviction or plea for violations of federal environmental law involving corporation or corporate officer, within the past 5 years.
Conviction or plea of employee at same facility for violations of federal environmental law, within past 5 years.
·Ongoing investigation/prosecution of corporation, corporate officer, or employee at same facility for violations of federal environmental law.

Rationale: Such criminal activities evidence the most serious of all violations and the highest level of disrespect for the environmental laws by a potential project participant. It clearly would be inappropriate to engage in a project which offers regulatory flexibility with a criminal offender. Accepting a partcipant into Project XL while there is an ongoing or pending criminal investigation or prosecution would inappropriately complicate or undercut that important enforcement activity.
State-based criminal actions against a potential XL project participant should be treated no differently than Federally-based actions. For purposes of XL, we should give the same degree of deference/treatment to State criminal prosecutions as to Federal prosecutions. Undertaking an XL project with a facility at which a State enforcement action is pending or ongoing would undercut the legitimacy of the XL State support process. Thus, the principle preventing interference between ongoing enforcement efforts and XL negotiations applies to all enforcement activities, regardless of whether the State or Federal government is prosecuting for violations of environmental law.
b. Planned, pending or ongoing enforcement action at facility. Screen will check for: Any planned, pending or ongoing enforcement actions at the facility (applies to those facilities at which the XL project is proposed; may be corporate-wide if XL project is to be applied business-wide). States will be asked for information on pending State-based civil enforcement actions, as part of required State support for the project. Participants are presumptively barred if screen shows:
·Unresolved, unaddressed SNC or SV;
·Planned but not yet filed judicial or administrative action;
·Ongoing litigation;
·Outstanding obligations under an order or decree that are integrally related to the XL proposal; or
·Situations where a potential participant is not in compliance with the schedule and terms of an order or
decree.
Rationale: Deferring the participation of facilities at which there are planned, pending or ongoing enforcement activities prevents XL negotiations from interfering with, complicating or undercutting enforcement efforts for violations of environmental laws at those same facilities, and vice-versa.
Note that participation is allowed in situations where a SNC or SV has been formally addressed in an order or decree, as long as the outstanding obligations under the order or decree are not integrally related to the XL proposal.
State-based criminal actions against a potential XL project participant should be treated no differently than Federally-based actions. For purposes of XL, we should give the same degree of deference/treatment to State criminal prosecutions as to Federal prosecutions. Undertaking an XL project with a facility at which a State enforcement action is pending or ongoing would undercut the legitimacy of the XL State support process. Thus, the principle preventing interference between ongoing enforcement efforts and XL negotiations applies to all enforcement activities, regardless of whether the State or Federal government is prosecuting for violations of environmental law. c. Company currently debarred or suspended from procurement or nonprocurement programs Screen will check for: Companies debarred or suspended from EPA's procurement or nonprocurement programs.
Participants are presumptively barred if screen shows:

·Appearance on EPA debarment or suspension list for procurement or nonprocurement programs (available on Internet on GSA homepage at www.arnet.gov/epls/; updated weekly).

Rationale: Undertaking a regulatory flexibility project with a company that is barred or suspended from otherwise doing business with the Agency undercuts the effect and purpose of suspension or debarment. 2. The following factors should be considered on a discretionary basis in determining eligibility: a. Prior history of noncompliance at facility (violations now resolved) Screen will check for: Facility-specific civil and criminal violations within the last 3 years (applies to those facilities at which the XL project is proposed; may be corporate-wide if the XL project is to be applied business-wide). Participants may be deferred from participation if screen shows:
·History of civil or criminal environmental violations (e.g., those most likely to be excluded from the program would include those with three prior SNCs or SVs or criminal problems); or
·Violations resulting in a serious threat to human health and the environment or an imminent hazard order; or
·Other significant recent violations.
b. Overall environmental compliance history of potential participant
·Significant problems, or a pattern of significant non-compliance, in a potential participant's overall civil and criminal compliance history, with respect to the full spectrum of Federal environmental laws, when such information is available.
·Presence of pending or ongoing citizen suits against facility.
III. Updating compliance status of XL project participants prior to high-visibility recognition events
A. Purposes of updating compliance status of XL project participants prior to high-visibility recognition events:


·To avoid undercutting Agency credibility with inappropriate "seal of approval" and recognition as environmental "good actor."
·To avoid situations where the Agency and program participant are simultaneously in a cooperative or laudatory and an adversarial posture.
·To avoid conflicting with or unnecessarily complicating ongoing or planned environmental enforcement actions.

NOTE: "High visibility" recognition is defined as involving high-level government officials, including but not limited to White House and Congressional officials, and EPA's Administrator, Deputy Administrator, Assistant Administrators, General Counsel, Associate Administrators, and Regional Administrators. Such recognition can include award events, ceremonies, plaques, certificates or other written or oral material related to the XL Program or referencing a company's successful participation in XL, during which a high-level official (AA/RA-level or higher) is present or endorses the company. B. Criteria for updating compliance status of XL project participants prior to high-visibility recognition events:

1. Participation in a recognition event with Agency officials should be presumptively barred until the following problems are resolved, or sufficient time passes: a. Criminal activity by project participant Screen will check for: Updates on any corporate criminal conviction or corporate plea; any criminal investigation, conviction or plea involving the proposed XL facility; and any ongoing criminal investigation/prosecution of the corporation or corporate officer; covering all EPA-administered environmental laws or other statutes used in prosecuting or enforcing environmental crimes (e.g., 18 U.S.C. §1001, etc.). States will be asked by Regions to provide information on state-based criminal investigations/prosecution.

Participants are presumptively barred from the event if screen shows:
·Corporate conviction or plea for violations of federal environmental law involving corporation or corporate officer, within the past 5 years.
·Conviction or plea of employee at same facility for violations of federal environmental law, within past 5 years.
·Ongoing investigation/prosecution of corporation, corporate officer, or employee at same facility for violations of federal environmental law.

Rationale: Such criminal activities evidence the most serious of all violations and the highest level of disrespect for the environmental laws by potential project participant. It would be inappropriate for Agency officials to participate in a high-visibility recognition event with a criminal offender, as it would undercut Agency credibility. Also, participating in such an event while there is an ongoing or pending criminal investigation or prosecution would inappropriately complicate or undercut that important enforcement activity, and vice-versa.
State-based criminal actions against a potential XL project participant should be treated no differently than Federally-based actions. For purposes of XL, we should give the same degree of deference/treatment to State criminal prosecutions as to Federal prosecutions. Undertaking an XL project with a facility at which a State enforcement action is pending or ongoing would undercut the legitimacy of the XL State support process. Thus, the principle preventing interference between ongoing enforcement efforts and XL negotiations applies to all enforcement activities, regardless of whether the State or Federal government is prosecuting for violations of environmental law. b. Planned, pending or ongoing enforcement action at facility. Screen will check for: Any planned, pending or ongoing enforcement actions at the facility (applies to those facilities at which the XL project is proposed; may be corporate-wide if XL project is business-wide).
States will be asked by Regions to provide information on state-based civil investigations/prosecution.
.
Participants are presumptively barred from an event if screen shows:

· Unresolved, unaddressed SNC or SV;
· Planned but not yet filed judicial or administrative action;
· Ongoing litigation; or
· Situations where the participant is not in compliance with the schedule and terms of an order or decree.

Rationale: It would be inappropriate for Agency officials to participate in a high-visibility recognition event at a facility at which there is a planned, pending or ongoing enforcement activity, as it would undercut Agency credibility. Also, participating in such an event while there is a planned, pending or ongoing enforcement activity would inappropriately complicate or undercut enforcement efforts for violations of environmental laws at the same facility, and vice-versa.
State-based criminal actions against a potential XL project participant should be treated no differently than Federally-based actions. For purposes of XL, we should give the same degree of deference/treatment to State criminal prosecutions as to Federal prosecutions. Undertaking an XL project with a facility at which a State enforcement action is pending or ongoing would undercut the legitimacy of the XL State support process. Thus, the principle preventing interference between ongoing enforcement efforts and XL negotiations applies to all enforcement activities, regardless of whether the State or Federal government is prosecuting for violations of environmental law.


IV. Process for compliance screening

A. Process for conducting Compliance screens:

 

1. Conduct of screen for eligibility to participate in Project XL
In most cases, it is expected that the Associate Administrator or Deputy Regional Administrator will delegate screening responsibilities and activities to the appropriate person managing the voluntary program who will be responsible for daily operations.
See, Appendix B for a list of contacts in Headquarters and Regional offices. OR Lead The Office of Reinvention (OR), as lead for Project XL, should initiate the screening process once a formal proposal has been received. OR should contact, with full information about the project participant's identity and the location of the facilities to be screened, the Office of Compliance (which will check the IDEA database and the Agency debarment list), the appropriate Regional Enforcement contacts designated by the Deputy Regional Administrator (who will check for recent Regional activity that does not appear in IDEA, and make any necessary clarifications to IDEA information), the Office of Criminal Enforcement, Forensics, and Training (which will check HQ and Regional criminal enforcement sources), and the Department of Justice (which will check databases for Federal environmental statutes not administered by EPA). OR should also request information on citizen suits from the project participant.
Screening should be requested once the formal proposal is received, except in certain situations where pre-proposal discussions have yielded a sufficiently mature description of the project, and enough information about the participant and facility that an earlier screen is warranted.
Generally, OECA will need at least two weeks to produce a basic compliance screen. If more than ten firms or facilities are involved, then more than two weeks will be needed to conduct investigations and provide the requested information. OECA is committed to providing information as soon as possible and as close to within the two-week time frame as possible, depending on the number of screens requested and the priority of such screens. 2. Conduct of screen for updating compliance status of Project XL participants prior to high-visibility recognition events a. OR Lead OR, when the lead for recognition, should initiate the screening process as soon as it knows about the recognition event. OR should contact the appropriate Regional Enforcement contacts designated by the Deputy Regional Administrator (who will update any recent Regional activity) and the Office of Criminal Enforcement, Forensics, and Training (which will check HQ and Regional criminal enforcement sources).
OCEFT needs at least two weeks to produce a basic enforcement screen. If more than ten facilities are involved, then more than two weeks will be needed to conduct investigations and provide the requested information. OECA is committed to providing information as soon as possible and as close to within the two-week time frame as possible, depending on the number of screens requested and the priority of such screens. b. Regional Lead When a Region is the lead for recognition, the Deputy Regional Administrator (as the Senior Enforcement Manager in the Region and the Reinvention Action Council member) is accountable for all screening decisions, and should ensure that a process exists in the Region through which the XL Program office or contact can initiate the screening process as soon as it knows about the recognition event. The Region should conduct a screen to update any recent Regional activity and contact the Office of Criminal Enforcement, Forensics, and Training (which will check HQ and Regional criminal enforcement sources).
OCEFT needs at least two weeks to produce a basic enforcement screen. If more than ten facilities are involved, then more than two weeks will be needed to conduct investigations and provide the requested information. OECA is committed to providing information as soon as possible and as close to within the two-week time frame as possible, depending on the number of screens requested and the priority of such screens.
B. Process for Decision making about the effect of screening findings:
1. Decision-making on eligibility to participate in Project XL OR and the Region(s) involved with a particular XL project jointly should make the decision on a potential project participant's eligibility to participate in Project XL, consistent with this guidance. OECA, through OPPA, will be available for consultation or to aid in any interpretation of the guidance. OECA concurrence will be necessary if OR or the Region(s) suggests a departure from this guidance for a particular project. 2. Decision-making on updating compliance status of Project XL participants prior to high-visibility recognition events OR and the Region(s) involved with a particular XL project jointly should make the decision on the appropriateness of Agency officials participating in recognition events with the Project XL participant, consistent with this guidance. When a Region is the lead for an XL Project, the Deputy Regional Administrator (as the Senior Enforcement Manager in the Region and the Reinvention Action Council member) is accountable for all screening decisions. OECA, through OPPA, will be available for consultation or to aid in any interpretation of the guidance. OECA concurrence will be necessary if OR or the Region(s) suggests a departure from this guidance for a particular project. 3. Procedure for deviating from this guidance
As mentioned above, in unusual circumstances OR or the Region may believe that an exception should be made for a particular XL participant. The decision to seek an exception should be made by the Associate Administrator for OR or by the DRA. When the issue is elevated to the Associate Administrator or DRA, the project manager in OR or the Region should also contact the OECA representative named in Appendix B so that OECA can assist in defining issues of concern and determining the necessary level of OECA management involvement. Ultimately, the decision to deviate from this guidance requires concurrence from the AA for OECA in consultation with the Associate Administrator from OR.


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