Leveraging the EPA’s Audit Policy for Compliance and Risk Reduction

For companies facing complex environmental regulations, the US Environmental Protection Agency’s (EPA) Audit Policy offers a structured pathway to reduce enforcement risk while promoting compliance. As explained by Wayne J. D’Angelo and Joseph J. Green of Kelley Drye & Warren LLP, the EPA’s Audit Policy reflects the shift, most notably under the Trump Administration, toward cooperative mechanisms such as compliance assistance and voluntary self-disclosure rather than aggressive enforcement. This approach builds on earlier precedents, including similar compliance-focused strategies during the George W. Bush Administration.

The Audit Policy, in place since 2000, provides substantial benefits for companies that voluntarily discover, disclose, and correct violations. These benefits can include the elimination of 100% of gravity-based civil penalties, waiver of certain economic benefit penalties, and defined timeframes for corrective action. The EPA’s “New Owner” Policy extends additional incentives, allowing acquiring companies to address pre-existing noncompliance with mitigated penalties and greater flexibility in disclosure requirements.

Despite these advantages, D’Angelo and Green caution that environmental auditing under the policy carries its own risks. Companies must manage strict deadlines, such as disclosing violations within 21 days and completing remediation within 60 days. Legal oversight is recommended to preserve privilege and ensure findings are documented, structured, and disclosed effectively. Additionally, companies must account for overlapping federal and state enforcement authority, tailoring disclosure strategies to jurisdictional realities.

For compliance leaders, the EPA’s Audit Policy presents real opportunities to reduce penalties and enforcement exposure; however, success depends on disciplined preparation, timely execution, and informed strategic decisions.