U.S. EPA Announces New “Strategic Civil-Criminal Enforcement Policy”
On April 17, 2024, the U.S. Environmental Protection Agency (EPA) published its “Strategic Civil-Criminal Enforcement Policy,” a landmark new internal enforcement policy for its civil and criminal enforcement offices (the Policy) that signals a paradigm shift in how the agency will assess, coordinate, and prosecute civil (including administrative) and criminal environmental enforcement. In the Policy, EPA states that it has already started increasing communication and collaboration between its enforcement offices in recent years, which EPA believes has led to better case screening and more consistent enforcement responses across regions. But the Policy goes far beyond those less formal efforts and reflects EPA’s stated goal to continue toward an integrated approach, moving away from its prior, more bifurcated approach to civil and criminal enforcement.
2022 Sidley Energy Enforcement Update
This Sidley Energy Enforcement update covers:
- Federal Energy Regulatory Commission (FERC) approves settlement between Enforcement staff and Coaltrain
- Both FERC and Commodity Futures Trading Commission (CFTC) enforcement reports highlight the respective agency’s continued commitment to strong enforcement
- U.S. Court of Appeals for the Fifth Circuit upholds FERC’s finding that BP manipulated the natural gas market but remands to FERC to recalculate its $20 million penalty
- CFTC orders Glencore to pay a record-setting penalty of $1.186 billion
- CFTC and Securities and Exchange Commission (SEC) orders over $1.8 billion in fines against 11 firms for recordkeeping failure — employees using unapproved method of communications such as texts and WhatsApp on personal devices
Head of DOJ Environmental Division Announces Enforcement Priorities
Todd Kim, Assistant Attorney General at the U.S. Department of Justice (DOJ) Environment and Natural Resources Division (ENRD), delivered remarks at the American Bar Association’s National Environmental Enforcement Conference on December 14, 2021. He provided insight into what DOJ plans to prioritize in environmental enforcement, centered on criminal enforcement, climate change, and environmental justice.
Kim emphasized that the purpose of enforcement is to ensure that businesses are properly incentivized to comply with the law through deterrence and to provide a level playing field, while protecting public health and the environment. He noted that DOJ has prioritized fighting corporate crime and is revising applicable polices, so ENRD will consider pursuing potential environmental and non-environmental crimes, as well as a business’s environmental and non-environmental track record in prosecution decisions.
Kim focused on methods of sector-wide enforcement, citing the Petroleum Refinery Initiative that involved settlements covering 112 refineries in 37 states since 2000. Kim also expressed an interest in more penetrating identification of all involved parties within a business, as well as in the full supply chain, where relevant. This focus could be especially impactful for importers of chemicals, pesticides, or wood products.
With these various tools in mind, Kim cited climate change and environmental justice as the two highest priority issues. For climate change, he indicated greater enforcement for air emissions from petrochemical plants and from facilities with refrigeration systems. For environmental justice, he provided a general assurance that ENRD is paying greater attention to potential violations in communities of color and low-income communities that may be disproportionately burdened by environmental hazards and harms.
Sidley Energy Enforcement Update
This Sidley Update addresses the following:
- District court judge finds that FERC may not pursue joint and several liability and disgorgement in Coaltrain case – FERC seeks interlocutory appeal.
- FERC Report on Enforcement highlights increased enforcement activity in 2021.
- FERC approves settlement between Enforcement staff and Golden Spread.
- FERC orders penalties against GreenHat Energy, LLC and individuals.
- DOJ and CFTC charge Puerto Rico resident and his firm for misappropriation of nonpublic information and fictitious trading.
