Environmental Risk Easier To Manage Nowadays

June 5, 2002
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LANSING — Managing environmental risk is easier for a company executive to do today than it was, say, two decades ago. Today, most government agencies spend more time helping firms comply with regulations than they do charging companies with violations.

The state of Michigan is in that mode, too. At least that is the opinion of Assistant Attorney General Michael Leffler, who heads the state’s environmental enforcement division and who told the Business Journal that he doesn’t necessarily speak for Attorney General Jennifer Granholm or Gov. John Engler.

“I think in the early days of environmental enforcement there was sort of a command-of-control mentality where the emphasis was on finding violations, suing violators and sort of making them an example for others. I think those days have passed,” said Leffler.

Those days faded away partly because policy shifted. Leffler said states like Michigan and the Federal government have somewhat changed their approaches to managing how others manage the air, water and soil. If companies unintentionally commit a violation today, agencies help firms get back on the right side of the environmental law. Fifteen years earlier, the same agencies might have charged, fined and even jailed executives for similar violations.

“It’s more towards compliance assistance, than sort of a scorched-earth enforcement policy,” he said.

That, however, is not his only explanation for the shift. Leffler, who has been in the AG office for 27 years, nine of those in the criminal division, said the change also reflects a more informed regulated community that has a better grasp of what it needs to do.

“We’re 23 years down the road on some of these environmental statutes and, as I think you would expect, unless you’re much more cynical than I am, that as corporations and businesses became more familiar with their environmental responsibilities under the law that the level of compliance out there would be greater,” he said.

“I believe that is part of what has happened. I think that most corporate citizens are stepping up to the plate and recognizing what their environmental responsibilities are and taking care of them,” he added.

“So in that sense, it’s not surprising to me that the need for enforcement would be somewhat less acute than it was in the early days when, in some instances, companies really didn’t know what they were required to do with a massively complicated environmental enforcement scheme.”

Another reason for the switch is that the law, not just the policies, has also changed. In Michigan, Part 201 replaced the old state statute a few years ago. Lawmakers likely saw that as a practical change as much as a legal one because proving status liability for an environmental problem is easier than proving who caused it.

“When you change the statutory schemes, you also change the ease with which certain enforcement actions can be brought. It’s certainly much more difficult to prove a causation case than it is to prove a status-liability case,” he said.

“But that was a legislative decision, and it’s one that the state is entitled to make. Those of us who go to law school because we want to be prosecutors or enforcers probably aren’t quite as pleased as we were once,” he said with a smile overtaking his voice. “But that was a fair thing for the Legislature to do.”

Now those shifts in agency policies, corporate understanding and state law don’t mean that civil or criminal investigations of a possible violation have ended.

For a civil case, Leffler said the AG relies on the investigative staff of the state’s Department of Environmental Quality or Department of Natural Resources, depending on the particular potential offense. His own office doesn’t have investigators or scientists on board.

After DEQ or DNR finishes its investigation and a charge is warranted, the agency turns the matter over to the AG for enforcement.

A criminal investigation follows pretty much the same process. But the difference is in the charge. A criminal review usually means that an allegation contains the charge that the potential offender committed the action knowing it was an illegal thing to do.

“The whole environmental regulation business depends on a concept that I call ‘data integrity.’ No government agency has enough people to go out and do in-person monitoring of the activities of businesses. The fact of the matter is the statutes depend on those businesses faithfully and accurately reporting what they discharge to the state,” said Leffler.

“One of the issues that would probably get someone at least a review by the people who do our criminal prosecutions would be allegations that the data provided has been intentionally compromised,” he explained.

“We’re not out to treat innocent mistakes as criminal acts. But if we find out that someone has intentionally misreported discharges or has doctored lab reports, that is something that we would take particularly seriously and would certainly look at in terms of criminal prosecution because the whole system depends on the accuracy of the data we get.”

Leffler said environmental statutes carry significant fines, but not severe penalties. Those are found in the state’s penal code, one that can be used against someone who has knowingly violated environmental regulations.

Fudging the data, falsifying a permit, lying on a notarized document or mailing a false report to the state can be prosecuted under the criminal charges of false pretense, perjury, forgery or uttering and publishing — all felonies that carry prison terms of up to 14 years.

“We can’t allow anyone to intentionally comprise that data without at least getting a look from us,” he said.

“We have a number of regular penal statutes that we can also use and overlay on environmental activity.”

So even though managing environmental risk is easier today than yesterday, executives who may be thinking of tempting fate should think again.

“Don’t just look to the environmental statutes and say, ‘OK, I haven’t committed a crime here,’” offered Leffler. “You’re not absolved from your responsibility to obey all the other penal statutes just because you’re under a fairly rigorous regulatory scheme.”

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