DEVELOPING EFFECTIVE ENFORCEMENT PROGRAMS AT THE STATE LEVEL 

LEE PADDOCK

Assistant Attorney General, State of Minnesota, United States of America

1    THE CONTEXT

The federal nature of the political system, the size of the country, the number of regulated facilities and the pervasiveness of environmental regulations all dictate that the states play a central role in environmental programs in the United States. (1,2) Congress has delegated the implementation and enforcement of most federal environmental laws to states. (2,3) In addition, states have adopted their own environmental laws which, in some cases, are much more

comprehensive than federal environmental laws. Because of the important role of states in the environmental programs in the United States, the experience of states may be useful to other countries in designing their environmental enforcement programs.

This paper focuses on the development of environmental enforcement programs in the State of Minnesota. Minnesota is a mid-sized state with a land area of 218,600 square kilometers and a population of about 4,200,000. The State's economy is based on technology, light industry, agriculture, tourism and timber. There is some mining and oil refining but otherwise little heavy industry. Minnesota consistently has been one of the most innovative states over the past 25 years in addressing environmental problems. It was among the first states to authorize citizens to initiate lawsuits to prevent pollution of the environment, to enact a state hazardous waste disposal site cleanup (Superfund) law, and to require companies to undertake pollution prevention planning. Minnesota was the first state in the United States to adopt an acid deposition standard.

Until the mid-1980s, both national and state environmental programs tended to focus on discharges from larger industrial facilities and on publicly-owned sewage treatment works. The number of regulated facilities was relatively small numbering in the tens of thousands nationally and in the thousands in Minnesota. (4,5) Beginning in 1986 with the expansion of hazardous waste regulations to small quantity generators (those who generate between 100 and 1,000 kilograms of hazardous waste in a month), the number of regulated facilities in the United States and in Minnesota dramatically increased. The scale of the enforcement problem is demonstrated by the number of facilities now subject to environmental regulation in Minnesota. There are nearly 20,000 small quantity hazardous waste generators, 33,000 regulated underground storage tanks, more than 10,000 facilities subject to community right-to- know reporting requirements, 6,000 infectious waste generators and in excess of 17,000 regulated public drinking water supplies. (8,9)

In addition, thousands of other facilities are subject to toxic water pollution requirements under the Clean Water Act and hazardous air pollutant and chlorofluorocarbon restrictions under the Clean Air Act. Finally, thousands of companies and individuals are affected by bans on landfill disposal of waste tires, lead-acid and nickel-cadmium batteries, old appliances and waste oil. In total, far more than 100,000 facilities are now covered by environmental laws in Minnesota. (4,5) Many of these are small businesses and government facilities.

Enforcement programs in most states were originally designed to deal with the relatively small number of larger facilities that were the focus of the environmental regulation in the 1970s. Enforcement authority tended to be centralized in a single state agency and the range of

enforcement tools was usually limited. The two primary enforcement tools were notices of violation (warning letters) and civil judicial enforcement involving penalties and injunctive orders that could be imposed by a court. While this approach to enforcement may have been adequate in the 1970s and early 1980s, it has proved to be inadequate in the context of rapidly expanding environmental programs in the late 1980s. For example, an audit of environmental enforcement programs in Minnesota conducted in 1990 found that the centralized inspection staff of the state hazardous waste regulatory office would be able to inspect small quantity hazardous waste generators (drycleaners, automobile repair shops, printers, etc.) once every 100 to 300 years. (6) The same audit also found that notices of violation were often an ineffective tool in gaining compliance with environmental laws and that civil judicial enforcement was too time consuming and expensive to address the large number of violations in the state. (6)

2 OBJECTIVES IN REDESIGNING MINNESOTA'S ENFORCEMENT SYSTEM

The rapid expansion of environmental programs, the limited number of enforcement tools available to governmental officials and the limited financial and personnel resources available for environmental enforcement necessitated substantial reforms in the enforcement system in Minnesota. To build a more effective and more efficient system, several steps had to be taken. These included expansion in the range of enforcement tools, introduction of enforcement techniques that would more effectively deter violations, increased reliance on a team approach to enforcement, expansion of the universe of regulators, increased enforcement funding and promotion of voluntary compliance. The actions initiated by the Minnesota Attorney General's Office and the Minnesota Pollution Control Agency in the period of 1987-92 to meet these objectives are discussed below.

2.1 Expansion of Enforcement Tools

The principle focus of reform efforts has been on the expansion of enforcement tools available to regulators. Several new enforcement tools have been authorized by the legislature since 1987 including field citations, administrative penalty orders and criminal enforcement. The expanded range of tools permits regulators to more closely tailor enforcement actions to the nature of the violation. Tools such as field citations and administrative penalty orders minimize the procedural requirements that are needed prior to assessing a penalty thereby allowing enforcement officials to handle a much higher volume of cases. At the other end of the spectrum, criminal cases are expected to deter serious violations. Thus, while the criminal cases may require more time and effort to prosecute, they are seen as a cost effective part of an overall enforcement strategy.

2.1.1 Field Citations

Field citations are enforcement documents issued by inspectors in the field, just as a police officer might issue a traffic ticket. Field citations are typically used to address clear-cut violations, requiring the violator to correct the violation and pay a small penalty. The administrative appeal process is usually simplified to avoid long legal proceedings. (1)

Minnesota is using field citations in a two-year pilot project to try to deal more effectively with illegal disposal of used appliances, waste tires and batteries and refuse along roadsides and in state parks. Under the program, staff from the state's Pollution Control Agency (the state's principle environmental regulatory agency) and Department of Natural Resources (the agency that manages state parks and regulates hunting and fishing) are authorized to issue field citations based on the fine schedule set out in Table 1.

TABLE 1

 

An expedited hearing before an administrative law judge is the only method for challenging a field citation.

Experience in the first five months using field citations has begun to demonstrate that they can be an effective tool in addressing smaller environmental violations. Thirty-nine citations averaging slightly over $100 were issued during this period. A significant increase in the number of citations is expected as enforcement personnel become more familiar with the citations process.

Should the field citations pilot project prove successful, the program will likely be expanded to other minor violations of state environmental laws. In addition, local law enforcement agencies that deal with solid waste disposal problems have expressed interest in the field citations program because it may be more efficient than the misdemeanor criminal (maximum jail term of 90 days and maximum fine of $700) sanctions that are currently used by local law enforcement officials to deal with these violations. The burden of proof is higher for the government in criminal proceedings and if a misdemeanor citation is challenged, the court procedure typically is much more time consuming and expensive than an appeal of a civil field citation.

2.1.2 Administrative Penalty Orders

Administrative penalty order (APO) authority allows an administrative agency (rather than a court) to order violations to be corrected and to assess civil penalties. Typically, the penalty order may be appealed either to an administrative law judge or to a court. The U.S. Environmental Protection Agency has used APOs in some of its programs for several years. The maximum penalty that may be assessed in an APO is usually significantly lower than the maximum penalty that could be imposed by a court. The tradeoff is that an APO frequently takes far less time to prepare than a civil case filing and the appeal from an APO often involves an expedited process. APOs are normally issued by a central or regional office of an environmental agency rather than by an inspector as in the case of field citations. About 30 states now have authority to issue APOs.

In Minnesota, APO authority was first granted to the Pollution Control Agency's hazardous waste program in 1987. The use of APOs proved very successful in returning hazardous waste violators to compliance. (6) Because APO's in Minnesota were designed to substituted for the use of notices of violation (NOVs) in many cases, penalties assessed for violations that are not repeat or serious violations are forgivable if the violator corrects the violation within 30 days. During the first three years of issuing APOs, the number of NOVs issued by the Pollution Control Agency dramatically decreased (6), while the number of APOs has increased to close to 100 per year. The forgivable feature of Minnesota's APO law has been controversial. Some feel the approach gives violators one free violation. Others feel that the use of forgivable orders as a substitute for NOVs (which do not include any threat of penalties) is a more effective way of achieving compliance with environmental requirements.

The ceiling for penalties in APOs in Minnesota is $10,000. The ceiling in other states and under the federal law is often higher. Under the Clean Air Act, for example, the maximum penalty that can be assessed by the U.S. EPA Administrator is $200,000. The ceiling for APOs in Minnesota was based on the time necessary to negotiate settlements of civil enforcement actions. An analysis of enforcement actions indicated that almost no penalties were being assessed for violations that would warrant penalties of $10,000 or less because the time needed to negotiate a settlement of a potential civil enforcement case was too great. The result was that, prior to 1987, only NOVs were issued for less serious violations. In Minnesota and most other states, civil enforcement cases are usually settled before a civil court action is actually filed. These settlements are referred to as stipulation agreements or consent orders.

A summary of the use of administrative penalties under Minnesota's hazardous waste program is set out in Table 2.

TABLE 2

Hazardous Waste Administrative Penalties 1/1/88-4/8/92

 

Based on the experience with APOs under the hazardous waste program, the legislature in 1991 extended the authority to issue APOs to any violations of programs administered by the Minnesota Pollution Control Agency. Appeals from APOs are heard before an administrative law judge or in state court. Fewer than five percent of the APOs issued in Minnesota are appealed and only one has been appealed to district court. The use of APOs has allowed the Pollution Control Agency to initiate far more formal enforcement actions at far less cost and using much less staff time for each case than the previous approach of relying on settlements of potential civil judicial cases.

2.1.3 Criminal Enforcement

While state and federal environmental statutes have included criminal sanctions for several years, criminal enforcement was not utilized extensively until the mid-1980s. Criminal enforcement became more prominent for several reasons. First, it was becoming clear that some companies viewed civil penalties simply as a cost of doing business, refusing to change underlying practices that violated the law. (5,8) Second, because of the high cost of disposing of hazardous waste, some traditional ``criminals" became involved in the hazardous waste disposal business. Third, public views changed making some environmental violations such as disposal of hazardous waste so socially unacceptable that legislatures adopted criminal statutes to help prevent the activity. Over 30 states have adopted felony (a felony is a crime punishable by more than one year in prison) criminal statutes for illegal disposal of hazardous waste. Finally, the large number of regulated facilities necessitated the use of enforcement tools such as criminal prosecution that could effectively deter some of the most egregious environmental violations. (5,8)

Minnesota adopted its first environmental felony law in 1983. That law covered illegal disposal of hazardous waste. The law was expanded significantly in 1987 to cover illegal storage, transfer, treatment, transportation and disposal of hazardous waste. In 1990 and 1991, additional crimes were added for failure to report spills of hazardous substances, submitting false statements, discharges of air or water toxics in excess of limits established in a permit, illegal disposal of medical waste, and disposal of solid waste at an unauthorized location in

return for a financial benefit. The Minnesota environmental crimes are set out in appendix A. Criminal enforcement is now one of the routine options considered in enforcement cases where a person is believed to have knowingly violated the environmental regulations covered by the criminal law. Even though less than five percent of all enforcement actions will be criminal cases, the cases are increasingly seen as an important part of the overall enforcement program.

2.2 Deterrence

Because of the rapid increase in the number of regulated facilities beginning in the late 1980s, techniques that not only punished individual violators (specific deterrence) but deterred others from violating environmental laws (general deterrence) became increasingly important. (7) In Minnesota, general deterrence efforts have been focused in three areas: targeting industries or geographic areas of particular concern, better communication about enforcement actions and increased use of criminal enforcement.

2.2.1 Targeting

Targeting of specific industries, pollutants or geographic areas can be an effective method of deterring violations beyond the specific cases developed as part of a targeted enforcement initiative. (1, 7) Minnesota has worked with several states in the central part of the country on two initiatives that involve both geographic and industry targeting. The first effort involved used oil facilities. Several facilities in four states were targeted for simultaneous inspection and sampling to determine whether hazardous wastes were being illegally mixed with used oil.

The second effort involves the coordinated filing of several enforcement actions against hazardous waste transporters in six states. Hazardous waste transporters have been the subject of isolated criminal enforcement actions in several states, but hazardous waste transporters had not been a priority for inspections or enforcement actions. The purpose of the targeted action is to establish a strong enforcement presence among hazardous waste transporters in the central part of the United States to deter illegal conduct.

2.2.2 Communicating about Enforcement Actions

Enforcement actions against individual companies can be leveraged to generally deter environmental violations by better publicizing the enforcement actions. Over the past two years, the state has increased efforts to regularly inform the print and electronic media through press releases and press conferences about key enforcement actions. The media in Minnesota is particularly interested in environmental crimes cases.

A second vehicle for achieving general deterrence through communications about enforcement actions is through newsletters directed to regulated facilities. The Pollution Control Agency publishes newsletters for facilities subject to solid waste, hazardous waste and underground storage tank regulations. The Agency staff is currently considering increasing the coverage of enforcement actions in these publications to increase the impact of the cases.

One of the key elements in designing the hazardous waste transporter initiative discussed earlier was communication about enforcement actions to achieve general deterrence results. Several cases will be filed simultaneously to help garner regional press coverage. The participating states also hope that the initiative will be significant enough that the transportation trade publications will write about the enforcement actions.

Finally, one interesting development in the Minnesota has been the publication of environmental newsletters by corporate law firms. These newsletters often highlight important enforcement cases, thereby enhancing the deterrent effect of the cases.

2.2.3 Criminal Enforcement

Criminal enforcement of environmental laws appear to be particularly effective in generally deterring violations. As one commentator noted:

"The deterrent effect of the environmental statutes is enhanced . .  . if responsible individuals within the corporation know that they may not sanction or participate in illegal activities without subjecting themselves personally to the possibility of substantial fines and/or imprisonment." (8)

Although Minnesota has not attempted to measure the general deterrent effect of environmental crimes cases, experience over the last five years indicates that the effect is significant. Perhaps the best indication that criminal enforcement has a general deterrent effect is the large number of seminars for corporate officials that are now being offered on the issue of environmental crimes and the increasing coverage of environmental crimes issues in trade and legal journals. This trend was particularly noticeable in Minnesota shortly after the state concluded a high profile criminal case against a large manufacturing company that employed over 3,000 people in a rural area of the state.

2.3 Enforcement Teams

Criminal enforcement of environmental laws often involves the expertise and resources of several governmental agencies. Because of the technical nature of the violations and the relatively small number of cases, it is difficult for state and local agencies to assign staff to do environmental crimes work on a full-time basis. Further, it is difficult to marshal these resources on an ad hoc basis. To address this problem, the Attorney General's Office in 1989 created an interagency "Environmental Crimes Team" (E-Team).

The E-Team is made up of two attorneys and two investigators from the Attorney General's Office, personnel from the Minnesota Pollution Control Agency who conduct inspections and provide technical support, a representative from the Department of Transportation (the Department of Transportation is responsible for regulating hazardous waste transporters), a representative of the Department of Agriculture (the Department of Agriculture regulates pesticides) and representatives from the Department of Natural Resources which has over 170 conservation officers throughout the state and the capability to do aerial surveillance with light aircraft.

The mission of the E-Team is to provide centralized support services for the investigation and prosecution of environmental crimes cases statewide. The E-Team serves as an investigatory resource for, and provides technical assistance to local prosecutors who are interested in handling environmental crimes cases. Prosecutors from the Attorney General's Office are available to prosecute cases if a local prosecutor chooses not to handle a case. The E-Team also is responsible for training state agency staff and local environmental and law enforcement staff (including local police officers) about criminal enforcement issues. Finally, the Team works with federal officials to help coordinate federal and state criminal enforcement activities in Minnesota.

The E-Team has proved to be a critical part of Minnesota's environmental crimes enforcement effort.

2.4 Expanding the Universe of Regulators

One of the ways of responding to the rapid increase in the number of regulated facilities is to expand the number of enforcement personnel. Tight budgets in most states in the United States, however, have precluded significant expansion of state enforcement personnel. One method of addressing this problem is to involve personnel from other agencies or units of government who traditionally have not been directly involved in environmental enforcement activities. (1,9) This approach will only succeed, of course, if the other agencies or units of government see clear benefits from their involvement.

The field citations program discussed earlier is an example of expanding the universe of regulators. Under the pilot program, Department of Natural Resources conservation officers are among the persons authorized to issue citations. While these conservations officers had some involvement with enforcement of solid waste disposal laws in state parks and forests prior to the creation of the field citation program, the new program provides a much more effective and efficient tool for these conservation officers. As a result, the officers are more interested in solid waste enforcement. The involvement of the 170 conservation officers in the state will greatly expand the personnel who are enforcing solid waste violations in the state.

A second major initiative to expand the universe of regulators is a study of the role local units of government could play in environmental enforcement. The Dutch government is a leader in developing local governmental environmental enforcement capability. (10). Based on this model, Minnesota is now assessing which enforcement programs could be most effectively enforced at the local level and what resources are needed to support local governmental enforcement. (1,11) Local units of government could be involved in enforcement-related activities in several ways including observing and reporting violations, educating regulated facilities, assisting state officials with enforcement actions, permitting facilities and directly bringing enforcement actions.

The study is examining 16 programs to assess whether local governmental units could assume a greater role in administering these programs. A set of 12 factors are being used to analyze whether greater local involvement would be appropriate. A list of the programs being examined and the evaluation factors are attached as appendix B. The final report from the study is to be submitted to the state legislature in November 1992.

2.5 Expanding Financial Resources

Enforcement funding in Minnesota and in most other states has not increased nearly as rapidly as the enforcement workload has expanded. (4,6) Finding new sources of funding, therefore, is important to the success of enforcement programs. This new funding is coming from two principle sources: fees and penalties.

Over the past five years, the reliance on permit, license and emission fees to support environmental programs including enforcement has increased a great deal. (5,6) At the national level, the best example of the use of fees is the Clean Air Act which requires states to impose a $25 fee for each ton of emissions to support the state air pollution control programs including enforcement. Minnesota also places significant fees on the sale of pesticides and fertilizers, hazardous waste generators, underground storage tanks and facilities that release hazardous substances into the environment, a portion of which is used for enforcement. The increased use of fees reflects a greater emphasis on a ``polluter-pays" philosophy, as well as the need to look to other sources of funding as state budgets have become tighter over the past few years.

A second approach to increasing enforcement funding that Minnesota has pursued is the dedication of a percentage of the funds collected as penalties to additional enforcement activities. The Environmental Enforcement Act of 1991 appropriates about $700,000 to the Attorney General's Office, the Pollution Control Agency and the Department of Natural Resources for environmental enforcement activities. The $700,000 is about one-half of the expected annual environmental enforcement penalties for fiscal year 1992.

The use of penalties to support enforcement programs was controversial. Some opponents asserted that the use of penalties for funding enforcement would encourage the imposition of excessive penalties. The legislation protected against this result by dedicating only about half of the penalties expected to be assessed in a year to enforcement. In addition, the legislature appropriated the funds to the agencies based on specific budgets submitted by the agencies. Using penalties to support enforcement is a growing trend in the United States.

3 INCREASING VOLUNTARY COMPLIANCE

Voluntary compliance has always been critical to the success of environmental programs in the United States. However, because of the rapid expansion in the number of regulated facilities, voluntary compliance is even more crucial now. The state is promoting voluntary compliance in several ways. The first is through education of persons subject to environmental regulations. The Pollution Control Agency conducts workshops, distributes newsletters and prepares regulatory fact sheets in connection with many of its programs. Unfortunately, while many people subject to regulation feel these efforts are a key to increasing compliance, these programs tend to be underemphasized and underfunded.

Another approach to increasing voluntary compliance is through providing technical assistance to businesses. Minnesota is among the national leaders in providing technical assistance to facilities to help them minimize emissions and reduce waste generation. The Minnesota Technical Assistance Program (MnTAP) was created in the early 1980s and operates through the University of Minnesota. MnTAP's original emphasis was on hazardous waste issues, but it now focuses on a broad range of pollution problems. To help maintain credibility with industries it works with, MnTAP is not part of the Minnesota Pollution Control Agency, the state's environmental regulatory agency. Part of the funding for MnTAP comes from emissions fees.

The Attorney General's Office is working on two new programs to promote voluntary compliance. The first is a pilot program to train managers of small and medium-sized businesses on how to develop and implement better environmental management systems for their companies. The Dutch government, as part of their National Environmental Policy Plan, is promoting the development of environmental management programs by businesses in the Netherlands. (10) These programs include the adoption of company environmental policies, compliance and emissions reduction goals, internal monitoring and reporting procedures, internal training programs and periodic auditing of the system. (10) Many large companies in the United States have adopted systems of this type. The pilot project is designed to build on the Dutch concept and the experience of larger U.S. companies to help small and medium-sized companies improve their environmental management programs.

Finally, Minnesota is beginning to assess how its enforcement policies can be best designed to promote voluntary compliance with environmental laws and to promote emissions reductions. Issues that will be part of this assessment include the structure of penalty policies, the use of information obtained from environmental audits conducted by businesses in enforcement actions, and the issue of whether companies who have committed to programs that achieve environmental results well beyond what the law requires should be dealt with differently in an enforcement proceeding than companies that has not made such a commitment.

4 CONCLUSION

The rapid increase in the number of regulated facilities in Minnesota has required a dramatic redesign of the environmental enforcement system in a period of only five years. Results are not yet in for all of the initiatives, but early indications are that the reforms have produced a more efficient and more effective enforcement program.

REFERENCES

  1. United States Environmental Protection Agency Office of Enforcement, Enforcement in the 1990s (October 1991).

  2. United Nations Conference on Environment and Development, United States of America National Report (1991).

  3. National Association of Attorneys General, State Attorneys General Guide to Environmental Law (1990).

  4. Humphrey and Paddock, The Federal and State's Roles in Environmental Enforcement: A Proposal for a More Effective and More Efficient Relationship, 14 Harvard Environmental Law Review 7 (1990).

  5. Paddock, Environmental Enforcement at the Turn of the Century, 21 Environmental Law 1509 (1991).

  6. Office of the Legislative Auditor, Pollution Control Agency (Jan. 1991).

  7. Office of Enforcement, U.S. Environmental Protection Agency, Principles of Environmental Enforcement (Feb. 1992).

  8. McMurray & Ramsey, Environmental Crime: The Use of Criminal Sanctions in Enforcing Environmental Laws, 19 Loyola Los Angeles Law Review 1133 (1986).

  9. Netherlands Ministry of Physical Planning and Environment, Environmental News from the Netherlands 1991-4.

  10. United States Environmental Protection Agency and Netherlands Ministry of Physical Planning and Environment, International Enforcement Workshop Proceedings (1990).

  11. Conerton and Paddock, The Need for a Principled Expansion of the Role of Local Government in Environmental Enforcement, 16 William Mitchell Law Review 949 (1990).

APPENDIX A

Minnesota Environmental Crimes

Crime

Illegal disposal of hazardous waste 5 years $50,000
Illegal storage,treatment, transportation or transfer of hazardous waste 3 years $25,000
Discharge of a toxic water pollutant in violation of a permit limit 3 years $50,000/per day of violation
Illegal sewering of a hazardous substance 3 years $50,000/per day of violation
False statements 2 years $25,000
Illegal disposal of infectious waste 1 year $10,000
Failure to report spills of hazardous substances 2 years $25,000
Discharge of a hazardous air pollutant in violation of a permit limit 3 years $50,000/per day of violation
Disposal of solid waste at an unauthorized location 1 year $15,000

       

APPENDIX B

Local Government Study

MPCA Programs/Activities for potential local delegation

EVALUATION FACTORS