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Risk Management - Avoid Penalties by Self-Reporting Violations to U.S. EPA

Checking for compliance, promptly disclosing violations found, correcting them, acting to prevent future violations, and making the information available to surrounding communities are the responsible actions for companies to take

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California companies disclose environmental violations

Ten California companies that voluntarily disclosed and corrected environmental violations had penalties waived by the U.S. Environmental Protection Agency, the result of EPA policies that have been successful in getting companies to make good-faith efforts in self-policing their own environmental compliance.

The recent self-disclosure cases had potential penalties ranging from $8,700 to $196,000 for environmental violations that the agency determined caused no serious or actual harm to human health or the environment. Altogether, the 10 companies avoided $668,100 in penalties.

Solution: Check for compliance, promptly disclose violations found, correct them, act to prevent future violations, and make the information available to others

"This is a win for communities, for business, and for the EPA," said Nate Lau, the EPA's Communities and Ecosystems Division associate director for the Pacific Southwest region. "Checking for compliance, promptly disclosing violations found, correcting them, acting to prevent future violations, and making the information available to surrounding communities are the responsible actions for companies to take."

In the cases cited, each company discovered the violations on its own and reported the violations to the EPA. Because the companies satisfied all conditions of the EPA’s self-disclosure policies and there was no economic benefit gained, the EPA waived potential penalties.

The recent self-disclosure cases include:

Facility name: Allfast Fastening Systems
Location: City of Industry, Calif.
Business: Manufacture fastening systems primarily for aerospace industry
Violations: Failure to report copper, nickel, nitric acid for calendar years 2002 and 2003.
Potential Fine: $121,900

Facility name: Arch Mirror West
Location: Newark, Calif.
Business: Manufacture glass products
Violations: Failure to report xylene and lead for calendar year 2003.
Potential Fine: $12,900

Facility name: BJB Enterprises, Inc.
Location: Tustin, Calif.
Business: Manufacture polyurethane and epoxy resin mixtures/compounds Violations: Failure to report mercury compounds and diisocyanates for calendar years 2001-2003.
Potential Fine: $76,800

Facility name: Formica Corp.
Location: Rocklin, Calif.
Business: Manufacture laminate composed of paper and resins Violations: Failure to report formaldehyde and phenol for calendar years 2001-2002.
Potential Fine: $92,400

Facility name: Hightower Plating
Location: Orange, Calif.
Business: Metal stamping and electroplating
Violations: Failure to report chromium, nickel, and cobalt for calendar
year 2002; chromium and nickel for calendar years 2003 and 2004. Potential Fine: $42,300

Facility name: Impressions, Polishing and Plating, Inc. (No longer in operation)
Location: Orange, Calif.
Business: Electroplating, polishing, anodizing and coloring
Violations: Failure to report lead compounds and nitric acid for calendar years 2004-2005.
Potential Fine: $17,500

Facility name: M. Argueso
Location: Rosemead, Calif.
Type of Business: Chemicals and chemical preparations
Violations: Failure to report 4,4 isopropyldenediphenol for calendar years 2004 and 2005.
Potential Fine: $8,700

Facility name: Net Shapes, Inc.
Location: Ontario, Calif.
Business: Produces metal castings for aerospace, defense and commercial use
Violations: Failure to report nickel and chromium for calendar years 2001-2004; cobalt for reporting years 2001-2002, 2004.
Potential Fine: $196,000

Facility name: Peterson Systems International
Location: Duarte, Calif.
Business: Manufacture polyurethane products
Violations: Failure to report methylene chloride for calendar years 2001 and 2002.
Potential Fine: $11,000

Facility name: Polyclad Laminates
Location: Elk Grove, Calif.
Business: Manufacture laminated plastic plate and sheet Violations: Failure to report MEK for calendar year 2002, methanol for calendar year 2003, copper and methanol for calendar year 2004.
Potential Fine: $88,600

EPA's Audit Policy for Penalty Reductions

Under the EPA's audit policy, the agency may reduce penalties up to 100 percent for violations that are voluntarily discovered through an audit or management system, promptly disclosed to the agency, quickly corrected, and satisfies other audit policy conditions. The policy excludes criminal acts, violations resulting in serious actual harm to public health or the environment, and repeat violations.

EPA's Small Business Compliance Policy

Under the EPA’s small business compliance policy, the EPA will eliminate or significantly reduce penalties for businesses with fewer than 100 employees that voluntarily discover violations of environmental law and promptly disclose and correct them.

Chemical Reports by Facilities and States

Federal law requires certain facilities using chemicals over specified amounts to file annual reports to the EPA and the state that estimate the amounts released to the environment, treated or recycled on-site or transferred off-site for waste management. The information is then compiled into a national database called the Toxics Release Inventory and made available to the public.

More Information about EPA Audit Policies

More information about the audit policy can be found at: For more information on the small business policy, go to To find information on the Toxics Release Inventory program visit: The U.S. EPA's environmental databases, including the TRI data, can be accessed at:

Edited by Carolyn Allen
| compliance | environmentally friendly businesses | epa | risk management | governance | social responsibility | reporting |


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