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#552 - Right To Know Nothing, 25-Jun-1997

American corporations are successfully pursuing a new strategy to evade
environmental laws and regulations. As the NEW YORK TIMES describes the
new strategy, "Urged on by a coalition of big industries, one state
after another is adopting legislation to protect companies from
disclosure or punishment when they discover environmental offenses at
their own plants."[1] In essence, state laws are giving corporations
immunity from punishment if they self-report violations of
environmental laws. Furthermore, any documents related to the self-
reporting become officially secret, cannot be divulged to the public,
and cannot be used as evidence in any legal proceedings. "This is a
disaster for environmental enforcement," says David Ronald, chief of
the environmental crimes division in the Arizona State Attorney
General's Office. "It has been creeping through the states without
anybody paying much attention."[1]

The strategy took root in 1993 when the Oregon state legislature passed
the first-ever "audit privilege" law, as they are called. Such laws --
which have now been passed in at least 21 states and are pending in 13
or 14 others --typically contain the following provisions:

** Corporations that report violations discovered during a self-audit
are immune from prosecution for their violations. They cannot be fined
or otherwise punished if they disclose violations promptly to
government authorities and take "reasonable" steps to achieve
compliance.

** Individuals who participate in conducting an environmental audit
cannot be called to testify in any judicial proceeding or
administrative hearing.

** Perhaps most importantly, if a corporation conducts an environmental
self-audit of its operations, the information in the self-audit cannot
be disclosed to the public and cannot be used as evidence in any legal
proceedings, including lawsuits and/or regulatory actions. Any
information related to a self-audit becomes "privileged." This
exemption typically covers any documents, notes, communications, data,
or opinions related in any way to the audit. The corporation itself
decides what is related to its self-audit and what is not. In essence,
audit privilege laws allow a corporation to stamp any document "audit-
related" and thus exempt it from public disclosure, discovery, or use
as evidence in any legal proceeding. For companies facing Superfund
lawsuits, or toxic tort actions, this exemption can translate into
billions of dollars in avoided costs.

** Some states, such as Texas, have included additional provisions that
make it a crime for employees or government officials to divulge
anything related to environmental self-audits. In Texas, if a person
divulges such information and it leads to penalties against a polluter,
the individual who divulged the information must pay the polluters'
fines, penalties, and other costs. This is a blatant "anti-whistle-
blower" provision, clearly intended to silence individuals who might
otherwise come forward with information about violations of law.

Audit privilege laws --which are sometimes called Corporate Dirty
Secrets Laws, or Right to Know Nothing Laws --apply not only to private
corporations but also to governments as well. Thus citizens of a
municipality can lose their right to know about pollution from their
own local landfill when their state legislature passes an "audit
privilege" law.

The 21 states that have, so far, passed "audit privilege" laws include:
Alaska, Arkansas, Colorado, Idaho, Illinois, Indiana, Ohio, Kansas,
Kentucky, Michigan, Minnesota, Mississippi, Montana, New Hampshire,
Oregon, South Carolina, South Dakota, Texas, Utah, Virginia, and
Wyoming.

The Clinton administration supports environmental self-auditing. They
say that companies know how to audit their own facilities better than
the government does, and can do a better job of it. However, initially
the administration took the position that companies should receive no
immunity from fines or other punishment if their self-audits revealed
violations. Further, the administration initially took the position
that self-audit information should not be privileged or secret, saying
workers and communities had a right to know what local corporations
were doing to the environment.

To give these views clout, Environmental Protection Agency (EPA)
administrator Carol Browner threatened to take enforcement authority
away from any state that passed a typical audit privilege law. (Most
U.S. federal environmental laws allow EPA to delegate enforcement
authority to the states with the provision that federal standards must
be met.)

Specifically, EPA put Texas on notice that their audit privilege law
was unacceptable because it would compromise the ability of all
governments (federal, state, and local) to enforce environmental laws.
However, in March, 1997, Ms. Browner reversed her position and said
that the Texas law, with minor changes, would be acceptable to EPA. The
Texas law gives both immunity from prosecution AND privilege to the
information produced during a self-audit, and, as we have seen, it
contains a blatant anti-whistle-blower provision.

Most observers believe the administration cut a deal with Texas to
appease anti-environment forces in the 105th Congress. As expected,
EPA's stance in Texas has been widely regarded as the administration's
acceptance of all states' audit privilege laws. More state laws are
expected to pass, now that the threat of EPA sanctions has been
withdrawn.

However, the anti-environment forces in Congress have refused to be
appeased. This month, they proposed national "audit privilege"
legislation. Senate Majority Leader Trent Lott (R-Miss.) personally
endorsed S. 866, "The Environmental Protection Partnership Act," which
is a standard audit privilege bill.[2] It gives immunity to violators
who self-report violations; and it gives a privilege of secrecy to all
information related to self-audits. Notably, S. 866 specifically
prohibits EPA from revoking enforcement authority of states who pass
audit privilege laws. A companion bill has been introduced in the House
of Representatives --H.R. 1884, the "Voluntary Environmental Self-
Evaluation Act."

For five years, corporations have been promoting environmental audit
bills around the country, arguing that such laws would improve
environmental protection and public health. Companies promoting audit
privilege laws include AT&T, Caterpillar, Coors Brewing, DuPont, Eli
Lilly, 3M, Pfizer, Procter & Gamble, Weyerhauser, and Waste Management,
Inc. (WMI).

However, protecting public health may not be the first priority for all
these corporations. For example, as soon as Ohio passed its "audit
privilege" law in December, 1996, WMI demanded that a citizens' group
return documents --some of them dating back to 1988 --which the
citizens had obtained during litigation aimed at forcing the cleanup of
the ELDA landfill near Cincinnati. WMI says the documents are now
"privileged" under Ohio law and cannot be used in a federal court case
brought by local citizens.[3] Some of the documents in question are
stamped "audit" and others were simply claimed to be "audits" after the
fact. Thus WMI has revealed unmistakably what "audit privilege" laws
are really about.

Some 80 citizen groups have formed a vigorous coalition to fight audit
privilege laws. Contact The Network Against Corporate Secrecy led by
Sanford Lewis in Boston: (617) 354-1030; or sanlewis@igc.apc.org. Their
informative Web site can be found at
http://www.envirolink.org/orgs/gnp/nacs_toc.htm .

As we step back and try to get this "right to know nothing" trend into
perspective, it appears to us that this is just another aspect of the
rapidly-growing power of corporations in America and worldwide.

Big corporations approved the passage of all the major U.S.
environmental laws now on the books. (If they had seriously opposed any
of them, they would not be on the books.) These laws impose onerous
requirements for gathering and reporting data. Large corporations
complain about these features of our national laws, but in truth these
reporting requirements provide a competitive advantage for large
corporations vs. small. It is small businesses that get hurt by all the
paperwork that our environmental laws entail. A big company just
assigns a team to the task and gets it done. So big corporations
created our complicated laws, partly for the competitive advantage that
it gives them over their smaller, more nimble competitors.

Occasionally, however, our environmental laws cost some big polluter a
major fine of $50 or $100 million dollars. And toxic tort lawsuits can
cost them hundreds of millions from time to time. To reduce the
likelihood of bearing such costs, big polluters now want "audit
privilege" laws to protect them from public scrutiny and to give them
immunity against major penalties. This retains the burdensome paperwork
in the laws, which gives them a competitive advantage, while reducing
the risks of major costs. The anti-environment Congress is doing its
part to carry out this corporate strategy. Passing a federal "audit
privilege" law would clearly benefit the big polluters. Congress has
already taken other steps that fit into this strategy: the federal EPA
is now so weak that it cannot possibly enforce all the laws on the
books. Speaking of EPA's Carol Browner recently, the NEW YORK TIMES
said in an editorial, "As a practical matter, the task of issuing
individual permits for thousands of companies nationwide is beyond her
staff's capabilities."[4] This weakening has not happened by accident.
Congress has systematically reduced the capacity of the federal
government to enforce our laws. In response, Ms. Browner has willingly
formed voluntary "partnerships" with the states, giving them greater
enforcement authority.

State enforcement is weaker than federal enforcement because states
compete with each other for jobs. Any state that becomes known as a
"pollution haven" will be looked upon favorably by polluters.
Conscientious states find themselves at a disadvantage under these
circumstances.

Sure enough, reports the NEW YORK TIMES, "Pennsylvania and some other
big industrial states are reporting only a handful of major pollution
violations, suggesting that inspectors in those states may be turning a
blind eye to pollution problems.... Federal inspectors said the state
[Pennsylvania] should have found at least 10 times as many violations
as were reported in 1995."[5] The TIMES later said about 25% of all the
states are failing to enforce the nation's environmental laws.[4]

We must note once again that the fundamental problem is the unfettered
power of the modern corporation. The Clinton administration bears as
much responsibility as any in this department. As the TIMES has said,
"Ever since Bill Clinton came to office, he has done more for the
Fortune 500 than virtually any other President in this century...."[6]

Corporations have limited capacity for self-restraint; they want it all
and they want it now and they don't want anyone telling them what they
can and cannot do. Until we recognize this --the nature of the
corporate form --as the key problem of our time, the environment and
human health will continue to deteriorate.

--Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO)

=====

[1] John H. Cushman, Jr., "Many States Give Polluting Firms New
Protections," NEW YORK TIMES April 7, 1996, pg. 1. See also, John H.
Cushman, Jr., "Colorado and Ohio Accused of Skirting Federal
Environmental Laws," NEW YORK TIMES January 30, 1997, pg. B7.

[2] Trent Lott, "Voluntary Environmental Self-Audit," CONGRESSIONAL
RECORD June 11, 1997, pg. S5494.

[3] The attorney representing the citizens is David Altman; phone:
(513) 721-2180.

[4] "Environmental Defiance [editorial]," NEW YORK TIMES December 20,
1996, pg. A38.

[5] John H. Cushman, Jr., "State Neglecting Pollution Rules, White
House Says," NEW YORK TIMES December 15, 1996, pg. A1.

[6] David E. Sanger, "The Big One: Washington's Political Earthquake,"
NEW YORK TIMES September 24, 1995, Section 4 ("Week in Review"), pg. 1.

Descriptor terms: enforcement; audit privilege laws; environmental
audits; right to know nothing; corporate dirty secrets laws;
corporations; Alaska; Arkansas; Colorado; Idaho; Illinois; Indiana;
Ohio; Kansas; Kentucky; Michigan; Minnesota; Mississippi; Montana; New
Hampshire; Oregon; South Carolina; South Dakota; Texas; Utah; Virginia;
and Wyoming; bill clinton; congress;