Regularly Review Your Regulatory Status

August 4, 2019

For those businesses in the industrial and manufacturing sectors, time spent on meeting the vast array of regulatory requirements can seem like time lost from performing the most important purposes of your business, such as developing and manufacturing your products and getting them to the market. However, failing to have a plan in place to meet your federal and state regulatory requirements on the front-end can lead to significant increased expense to your business on the back-end.  This increased expense may be in the form of lost employee time and wages on post hoc regulatory planning and documentation, enforcement of potentially greater regulatory requirements and scrutiny by the particular agency, orfines, penalties, and worse, for more egregious violations.

Therefore, thoughtful planning and recordkeeping to ensure your business is meeting its regulatory obligations can really save your business’s bottom line. One easily overlooked aspect of this planning is that once your company has a regulatory plan and records management system in place, the company cannot then sit back and rest on its laurels. It must also continue to monitor the regulations to which it is subject, as well as its output of products and waste to ensure that its regulatory status has not changed.

One particular example of when it is important to review and verify your regulatory status is if you are a generator of Hazardous Wastes, which are subject to the Resource Conservation and Recovery Act (RCRA) regulatory requirements. As explained in greater detail in a separate article, Generators are divided into one of three separate classifications based on the rate at which the company generates hazardous wastes, from Very Small to Small to Large Quantity Generators, and the reporting requirements vary according to the applicable category. While it is a high threshold to reach the Large Quantity category, the difference between Very Small and Small Quantity generators is small, so it is easy for a facility to fluctuate between these reporting categories from month-to-month based on their variable production levels, which would trigger different reporting requirements.

The U.S. EPA in at least one region has been reviewing for compliance and issuing numerous RCRA Violation Notice Letters[1] to companies who have allegedly violated these requirements. As you might imagine, it could be easy for a company to move between Generator categories, which are divided at 100 kg monthly of generated hazardous waste, from month-to-month based upon production needs. Without a robust tracking and recordkeeping system in place to alert the appropriate personnel of potentially crossing this regulatory reporting threshold, a change in RCRA Hazardous Waste reporting category can be easily overlooked, which could potentially subject your business to time-consuming enforcement actions, consent orders, and even potentially fines and penalties.

While this is one recent example of overlooked reporting requirements, there are potentially many others to which a business or facility is subject, particularly in the Environment, Health, and Safety aspects of the business’s operations. Furthermore, these requirements can apply at either the federal or state level, and the requirements may vary from state to state. For example, your site is likely subject to certain wastewater discharge limitations that are specified by permit under the Clean Water Act (CWA). Also, your facility is potentially subject to air emissions regulations for hazardous air pollutants under the Clean Air Act (CAA). You likely have to report and verify before new chemicals can be used in your products under the Toxic Substances Control Act (TSCA).; Or, you likely have specific notification requirements for the storage and handling of toxic chemicals under the Emergency Planning and Community Right-to-Know Act (EPCRA). Finally, you have to report in the event of certain accidents or injuries at your facility.; You may have to monitor and report on the exposure of your employees to certain toxic chemicals, such as diisocyanates. Or you may even have to establish a hearing conservation program for your employees, all of which can be required under the Occupational Health and Safety Act (OSHA).

Because the extent of regulations that may apply to your facility can seem vast and even overwhelming, it may be beneficial to utilize an environmental consultant or seek legal counsel to perform an environmental compliance audit on your facility. Seeking legal counsel prior to performing an audit can be particularly useful if it has been an extended period of time since any previous audit or review of regulatory compliance, if your facility has been less-than-vigilant in its reporting and recordkeeping, or if you have any other regulatory concerns regarding your facility, as such an investigation can be performed under attorney-client privilege. Finally, you should also seek legal counsel if your business finds itself subject to a Notice of Violation from any regulatory agency. Experienced and knowledgeable counsel can help you navigate the regulatory maze and minimize potential fines and further damage to your company.

[1] https://bracewell.com/blog/ongoing-wave-us-epa-rcra-violation-notice-letters-texas

For more information about "Regularly Review Your Regulatory Status," contact Don P. Gallo at dgallo@axley.com or 262.409.2283 or Patrick Stevens at pstevens@axley.com or 262.409.2296 or Sean W. Frye, P.E. at sfrye@axley.com or 262.409.2287.