Document Type




Journal Title

Vermont Journal of Environmental Law

Pub Date







In 1995, the Environmental Protection Agency (EPA) issued a final policy, "Incentives for Self-Policing: Discovery, Disclosure, Correction, and Prevention of Violations."' This policy, more commonly referred to as the Audit Policy, is designed to encourage greater compliance with environmental regulations by providing incentives for facilities to voluntarily disclose and correct violations of environmental regulations.2 More specifically, the Audit Policy eliminates or reduces civil penalties for violations that facilities disclose as the result of a documented self-audit procedure and correct within 60 days.3 Additionally, regulators may choose not to recommend criminal prosecution for these facilities.4 Repeated violations, violations that present a "serious or imminent harm" to human health and the environment, or violations that involve criminal activity are not covered by the policy.5 Supporters of the Audit Policy argue that it is an "efficient and economical means of ensuring and improving compliance with environmental laws and regulations.",6 Opponents argue that this policy ultimately protects polluters from punishment, and thus will have a detrimental effect on the environment because facilities have less incentive to comply.7 Many who do not directly oppose the policy are nonetheless skeptical about its ability to measurably affect compliance because of the uncertain legal status of environmental audits, particularly whether the results of the audit can be used against them in court.8 The goal of this paper is to determine whether the Audit Policy has affected compliance with hazardous waste regulations. The results of this analysis will provide important feedback on the effectiveness of the Audit Policy. The remainder of this paper is organized as follows: Section 2 provides an overview of the related literature on self-policing and compliance; Section 3 presents a theoretical framework for this analysis; Section 4 discusses the empirical approach and the results of the analysis; and Section 5 concludes.

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