In April 2000, the EPA issued its "Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations," 65 Federal Register 19, 618 (4/11/2000) (known as The Audit Policy). The purpose of a company's self-disclosure of a potential violation is to avoid criminal prosecution and obtain a significant reduction in civil penalty calculations.

A significant time deadline is in the policy – an entity has twenty-one days from the time it discovers the violation may have occurred to disclose the violation (in writing) to the EPA. Repeat violations are not eligible for the Policy. The EPA has also developed guidance for new owners of facilities that give the new owner a "clean start" for prior problems under the old ownership.

Under EPA's revision, small businesses (100 or fewer employees) will be incentivized by significant reduction or elimination of civil penalties for prompt disclosure and correction of environmental problems. The EPA also plans to streamline and modernize its self-reporting of violations by use of electronic filing.

The EPA is planning two webinars to further explain these changes on electronic filing on June 10th and June 15th. You can register here.

Many states also have incentives for self-disclosure of potential violations. Because EPA has oversight of these state programs, it would also be in a company's interest to file both at the federal and state level.