LDEQ’s Self-Audit Program Reference Guide

L&M is pleased to offer assistance with LDEQ’s new voluntary self-audit program for our clients. Below is the Reference Guide which provides an overview of the program steps and limitations.

We understand that regulations can be confusing and complex. At L&M, we’re here to help! Our compliance specialists work to implement the solutions that best fit your facility.

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Participation in the Self-Audit Program

In order to participate in the LDEQ’s self-audit program, an owner, or an agent of the owner, must submit a prior notification by completing the department’s most current version of the approved notice of audit form (NOA) as found on the LDEQ website. It should be noted that there is an initial cost for each audit, in the form of a $1,500 submission fee per LAC § 33:I.7013(A)(1). The inclusion of this fee caters this program to facilities that are at risk of facing significant fines for more serious violations. If a facility seems as though it may be at risk of a heavy fine for a violation, the safe option is to enroll and get ahead of the issue before a government audit is performed. The completed notice of audit form must be a written submission sent by certified mail to the LDEQ in order for a facility to state its intent to perform a self-audit. Following the submission of a notice of audit, the department shall acknowledge a facility’s intent to perform a self-audit in order to proceed (LAC § 33:I.7009(A)).

An NOA requires a detailed description of the facility in question as well as the specific processes or operations at the facility that are being audited. Methodology of the audit is also required for the NOA to justify the use of a self-audit. Owners or operators of a facility must specify the division which the audit will fall under Air Quality, Water Quality, Waste Quality, or permits. Clarification that the audit is voluntary is required, as well as if the audit is being performed in association with the purchase or sale of a facility. If the audit is being performed for a sale, information regarding the status of environmental compliance, whether responsibility was under new or former ownership, as well as information about the shareholder status of the companies of involved parties. Lastly, the NOA requires clarification about confidential information which may be included in the document. It is important that the confidentiality of certain documents be confirmed with the Legal Division of the LDEQ prior to submission of the NOA.

After receiving permission to perform a self-audit, the owner or operator of a facility has six months to complete the audit from the day the audit was recognized by the department. If the audit cannot be completed during this time, a request for an extension may be submitted no later than 30 days prior to the expiration date of the audit. To qualify for an extension, sufficient justification must be provided which proves that factors beyond the control of the owner have inhibited the ability to complete the audit (LAC § 33:I.7011(B)).

Reporting Compliance

If a violation is discovered through the self-audit process, the owner must submit the violation to the LDEQ via the approved disclosure of violation(s) form which can be found on the LDEQ website on the same page as the notice of audit form. Like the notice of audit form, the discourse of violation form (DOV) asks for information regarding new ownership of a facility, as well as reiterating information about the initial notice of audit. When disclosing the violation(s), facility owners or operators are asked to describe the violation(s) in detail. The date of discovery, as well as the start and end date of the violation, must be reported. It also must be noted if the same, or a related violation has occurred at the facility within the past three years, as this affects eligibility for the reduction of fines. The most important component of the DOV form is that the disclosure of a violation must also be accompanied by plans or evidence of corrective action which can be taken by the owner to fix the violation (LAC § 33:I.7009(A)(2)).

Part of the DOV form asks for an anticipated date when corrective action will be completed, and this must adhere to state policy. Following the disclosure of a violation, the owner has 90 days from the date of discovery to correct it, unless existing statute, regulation, or permit requires that it be done within a different time frame. Any corrective action that is expected to take more than 90 days must be submitted in writing to the department, and the owner must receive written approval for the exemption. The owner must complete a final report after corrective action is taken which includes the original notice of audit sent to the LDEQ, disclosure of the violations found, and a certification that all corrective action has successfully been completed. In order to certify the completion of corrective action, the owner must detail all actions which have been implemented or will be implemented imminently. If corrective action is underway, a scheduled date of completion must be provided (LAC § 33:I.7011(C)(1)).

Requirements for Penalty Reduction

In order to qualify for a full 100% reduction of civil punishment under the LDEQ’s regulations, all nine of the conditions provided under LAC § 33:I.7011(B)(6) must be met:

The violation was systematically discovered through an environmental audit;
The violation was voluntarily disclosed, rather than discovered through a federal, state, or local requirement prescribed by statute, regulation, permit, judicial or administrative order, or a consent agreement;
The violation was disclosed to the department in writing within 45 calendar days after discovery;
The violation was independently discovered and identified before the LDEQ would have identified the problem through investigation or information from a third party;
The violation was corrected no later than 90 calendar days from the date of discovery;
The appropriate measures to prevent a recurrence of the violation were implemented after the violation was disclosed to the department;
The same or closely related violation has not occurred at the same facility within the past three years;
The violation was not one of the aforementioned exclusions;
The owner or operator has cooperated by providing information as necessary and required by the department.

Per LAC § 33:I.7009(E), In the event that violations were not solely discovered through a systematic environmental audit, only a 75% reduction in penalty fees is available to facilities. If all other conditions are not met, a facility will be deemed ineligible.

Eligible Violations

Any violation discovered and disclosed to the LDEQ may be eligible for penalty reduction so long as they do not include exclusions set by the state. Much like other self-audit programs, LAC § 33:I.7007(A) details listed exclusions which include:

Violations that result in serious actual harm to the environment;
Violations that may present an imminent or substantial endangerment to the environment or public health;
Violations discovered by the department or EPA prior to written disclosure of the violation to the department;
Violations detected through monitoring, sampling, or auditing procedures that are required by statute, regulation, permit, judicial or administrative order, or consent agreement;
Violations subject to the chemical accident prevention provisions of 40 CFR Part 68 and LAC § 33:III.5901;
Violations that are deliberate or intentional; or
Violations that are the same or closely related at the same facility within the past three years.

As explained under LAC § 33:I.7007(A), deliberate or intentional violations are excluded from the list of violations eligible for penalty reduction. LAC § 33:I.7011(B)(7) elaborates on the terms of intentional violations that would prevent full or partial penalty reduction under this program. If any of the following violations are discovered by the LDEQ, penalty mitigation is disallowed:

The owner who made the disclosure willingly or knowingly committed the violation or was responsible for the commission of the violation;
The new owner who made the disclosure recklessly committed, or was responsible for the commission of the disclosed violation and the violation resulted in substantial injury or harm to one or more persons, property, or the environment on-site or off-site;
The violation was committed willfully or recklessly by a member of the new owner’s management, or an agent of the new owner, and the new owner’s policies or lack of prevention systems contributed materially to the occurrence of the violation;
The violation has resulted in a substantial economic benefit that gives the new owner a clear advantage over its business competitors.

Prescription

After the LDEQ receives the voluntary disclosure of violations from the owner or operator of a facility, this program suspends the prescriptive period (also known as the statute of limitations under criminal law), which outside of the program would typically be five years (Liskow). For all audit claims that pertain to violations that fall under the Louisiana Environmental Equality Act, the prescriptive period is suspended for two years, or “upon a final decision” under R.S. 30:2030(A)(2).

Confidentiality

Just as with the suspension of the prescriptive period, all documentation with the results of a voluntary self-audit will be confidential and withheld from public disclosure for a period of up to two years following the disclosure of a violation, or until a final decision is made. However, any final decision made by the department will be public and made available through the department’s website. Despite confidentiality from the public, all documentation that is required by a state or federal agency will be made available if requested per LAC § 33:I.7009(F)(1).

Participation in the self-audit program does not prohibit owners or facilities to request confidentiality of their findings as is congruent with R.S. 30:2030(A)(1)(b).

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