Reducing the Risks of Environmental Auditing

Reducing the Risks of Environmental Auditing

"An environmental audit is a self-evaluation process that allows an organization to determine whether it is meeting federal, state, and local regulations, as well as its own internal environmental objectives. An audit enables a company to recognize areas of noncompliance and to implement corrective measures before discovery by federal or state inspections."

despite these benefits, there are also risks to conducting environmental audits you should know about.

The “Smoking Gun”

The primary risk is that an audit may uncover an area of noncompliance with environmental laws and regulations but the company does nothing to correct the deficiency.

This is commonly referred to as the "smoking gun." It is important that companies have policies in place to respond to items of noncompliance before initiating the audit, and be aware that it is possible the audit may yield compliance recommendations that are costly to implement.

Lack of Follow-Up

If violations are known but not corrected for whatever reason, the company could be subject to greater penalties than if the violations had never been identified. Failure to complete investigations of potential noncompliance and failure to implement timely corrective actions for instances of noncompliance identified in an environmental audit are two items Agency enforcement inspectors will specifically target when evaluating a facility.

But You Can Reduce These Risks

Although an environmental audit may have inherent risks, these risks can be mitigated. One of the most effective steps to mitigate the risks of an audit is to involve legal counsel during the course of an audit to review the potential liabilities that must be considered during the audit.

Under certain circumstances, it is possible to keep the results of an environmental audit confidential by establishing "attorney-client privilege" where the audit is conducted under the direct supervision of the attorney.

Another method of mitigating risk is to pay careful attention to the information contained in e-mail correspondence related to issues raised in an audit, as well as who will read the e-mail and when it will be read. In most case, e-mails remain on your computer long after they are deleted.

In the event an agency inspection occurs, enforcement personnel will search for e-mails, deleted e-mails, and other documentation that may demonstrate a lack of follow-up in correcting known issues of noncompliance, which may lead to enforcement action.

The simplest method of risk reduction is to have a plan in place before conducting the compliance audit for the diligent follow-up of the issues identified in the audit report, thereby ensuring that corrective action occurs in a timely manner.

Benefits Outweigh the Risks

Environmental auditing as a preventive measure is preferred to government enforcement. Because a voluntary environmental audit usually results in the detection and correction of environmental violations before government intervention, it is a means of minimizing harsh penalties and additional government scrutiny.