Environmental violations are the result of inspections or the aftermath of a toxic release to the air; water or soil. Depending on the circumstances; the citing agency and the time length of the release of environmental violations penalties can range from simply corrective action to millions of dollars in fines and corrective action. The more egregious environmental violations are usually publicized to the affected community and beyond. Publicly held companies also have to report these environmental violations in their annual report according to The Sarbanes-Oxley Act of 2002. In several cases the corrective action and restoration of the environment happens a lot quicker that the repair to a company’s reputation to the community, stakeholders and shareholders. Textbook examples are the BP and Exxon Valdez spills. To help with the process of mending fences with the affected community and stakeholders, there is a program called a Supplemental Environmental Project or SEP.
A SEP is a project that benefits the environment or public health. It must improve, restore, protect, or reduce risks to public health and/or the environment beyond compliance with environmental laws. Communities where environmental laws have been violated can directly benefit from SEPs. As part of the settlement, the agreement may require the defendant/respondent to undertake supplemental environmentally beneficial expenditures that exceed regulatory requirements.
Most federal or state actions against businesses or individuals for failure to comply with the environmental laws are resolved through settlement agreements. As part of a settlement, an alleged violator may voluntarily agree to undertake an environmentally beneficial project related to the environmental violations in exchange for mitigation of the penalty to be paid. In settlement of environmental enforcement cases federal, state and local agencies insist upon terms that require defendants/respondents achieve and maintain compliance with environmental laws and regulations and where appropriate, pay a penalty for violations.
Although federal and state agencies may have different types, here are the basic categories of SEPs:
Other acceptable SEPs would be those that have environmental merit but do not fit within the categories listed above. These types of projects must be fully consistent with all other provisions of the citing agency’s SEP Policy and be approved on a case-by-case basis.
Projects that are generally not allowed as SEPs for the purpose of settlements include:
Ditthavong & Steiner, P.C. has a strong reputation in helping companies that are being threatened by SEP related environmental violations. Ditthavong & Steiner work with clients to develop a customized legal strategy that fits the economics of the client.
The author Leonard Robinson is a former Gubernatorial appointee serving served under four California Governors and is currently the Senior Sustainability Strategist for Ditthavong & Steiner