ASSEMBLY, No. 273
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblymen BATEMAN and DORIA
An Act establishing an environmental audit report evidentiary privilege in certain cases and supplementing Title 2A of New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares that environmental audits can be an effective and meaningful tool in preventing, discovering and correcting violations or potential violations of environmental law and regulation which may pose a danger to the environment, the general quality of life in our State, and the well-being of our neighborhoods and workers, and that for these reasons the regulated community should be strongly encouraged to voluntarily undertake such audits.
The Legislature further finds that in order to encourage owners and operators of facilities and persons conducting activities regulated under federal, State, or local environmental laws to undertake voluntary internal environmental audits of their operations, activities, or environmental compliance programs and management systems, and to assess and, if appropriate and necessary, correct and improve compliance with statutory and regulatory requirements, an environmental audit privilege should be established to protect the confidentiality of communications and documents relating to such voluntary internal environmental audits.
The Legislature further declares that its intent in establishing such privilege is to create a predictable and cooperative regulatory climate for those responsible members of the regulated community who voluntarily undertake such audits in order to determine whether they are in compliance with State, federal and local environmental statutes and regulations, and in those cases where such audits reveal instances of non-compliance or indicate deviations from or infractions of those statutory and regulatory requirements, proceed in a timely, thorough and effective manner to make the improvements and corrections that are necessary in order to come into compliance with those statutory and regulatory requirements.
Finally, the Legislature most strongly declares that the voluntary environmental audit program established under this act should not be misconstrued or implemented in a manner so as to afford any unintended protections, legal defenses or avenues of escape for those few irresponsible and incorrigible members of the regulated community who seek to evade their statutory and regulatory responsibilities to the detriment of all who live and work in this State, and that the provisions of this act in no way interfere or otherwise impede any legitimate investigatory or enforcement activities or any resultant prosecutorial effort against such recalcitrants.
2. As used in this act:
"Environmental audit report" means a set of documents prepared as the result of an environmental audit. The report, which shall be labeled "Environmental Audit Report," shall include a statement setting forth the scope of the environmental audit, a certified index identifying the documents in the report, and the calendar dates on which the environmental audit was initiated and completed. The environmental audit report also may include, as applicable, information gained in the environmental audit, exhibits and appendices, and conclusions and recommendations; memoranda and documents analyzing part or all of the audit report and discussing implementation issues; an audit implementation plan that addresses correcting past non-compliance, improving current compliance, and preventing future non-compliance; documentation associated with the tracking of corrective actions for non-compliance audit findings; and supporting information including field notes and records of observations, findings, suggestions, conclusions, drafts, memoranda, drawings, photographs, environmental sampling results, computer-generated or electronically recorded information, maps, charts, graphs, and surveys, provided, however, that the supporting information is collected or developed for the purpose of and in the course of an environmental audit.
"Enforcement action" means an administrative order or a criminal investigation or prosecution involving any violation that has been designated as a "high priority violation" by the Department of Environmental Protection and the United States Environmental Protection Agency pursuant to the federal "Resource Conservation and Recovery Act," 42 U.S.C.§6901 et seq.; any violation of a requirement in any environmental law which requires that a person notify the department of a discharge, spill, leak, emission, release or other pollution event; or any violation that is the result of the knowing, purposeful, reckless or criminally negligent conduct of the person responsible for the violation. For the purposes of this act, the issuance of a "Notice of violation" shall not constitute an enforcement action, nor shall any violation for which a grace period, or other period during which the violation may be corrected or conformance achieved without prejudice or penalty, is provided by statute, regulation, or order, unless the person responsible for that violation shall fail to correct the violation and achieve compliance within the period prescribed by that statute, regulation, or order.
"Voluntary environmental audit" means a self-initiated, internal evaluation, assessment or review, not otherwise required by statute, regulation or permit, of one or more facilities or an activity at one or more facilities regulated under any federal, State, or local environmental laws, or of management systems related to that facility or activity, that is designated to identify and prevent noncompliance and to improve compliance with statutory or regulatory requirements, and that is conducted by the owner or operator, by the owner's or operator's employees, or by independent contractors;
3. An environmental audit report prepared pursuant to the provisions of P.L. , c. (C. )(now pending before the Legislature as this bill) shall be privileged and shall not be admissible or discoverable as evidence in any legal action, in any criminal, civil or administrative proceeding or review, except as provided in section 4 and section 6 of this act.
4. The privilege established in section 3 of this act shall not apply if:
a. an enforcement action is taken, that enforcement action is contested, and a court of competent jurisdiction, in accordance with the rules of discovery set forth in the New Jersey Rules of Court, requires disclosure of materials and documents pertaining to that enforcement action; or
b. there is a statutory requirement that the violation identified or discovered as a result of the voluntary environmental audit be reported.
The disclosure authorized under subsections a. and b. of this section shall apply only to those sections and portions of the environmental audit report that pertain to the specific violation which is the subject of the enforcement action. All other sections and portions of the environmental audit report shall remain privileged.
In any case where there is a dispute concerning the sections or portions of an environmental audit report subject to disclosure, a court of competent jurisdiction, upon petition of either party, shall conduct an in camera review of those sections or portions subject to dispute and shall, within 45 days of the filing of the petition, render a finding.
5. No person shall use any privileged information to discover any other information and any information so discovered shall be inadmissible in any action or proceeding. If a court or an administrative law judge determines that any information is not privileged, it shall by the entry of appropriate protective orders ensure that information is disclosed only to the extent required for the proper conduct of the subject action or proceeding.
6. The privilege established in section 3 of this act shall not extend to:
a. Documents, communications, data, reports, or other information required to be collected, developed, maintained, reported, or made available to a regulatory agency pursuant to any federal, State or local law, ordinance, regulation, permit or order;
b. Information obtained by observation, sampling, or monitoring by any regulatory agency; or
c. Information obtained from a source independent of the environmental audit.
7. Nothing in this act shall limit, waive or abrogate the scope or nature of any statutory or common law privilege, including the work product doctrine and the attorney-client privilege.
8. Nothing in this act shall limit, waive, or abrogate any reporting requirements or permit conditions.
9. No State, local, or regional regulatory agency may adopt a rule or a permit condition for the purpose of circumventing the privilege established in this act by requiring disclosure of a report of a voluntarily conducted environmental audit.
10. a. Whenever a person responsible for a violation of an environmental law or regulation, discovered as a result of an environmental audit, voluntarily discloses either to the Department of Environmental Protection or to a local government agency the existence of that violation, the department or local government agency, as the case may be, shall not impose a criminal, civil or civil administrative penalty for the violation, provided that the person responsible for the violation discloses the violation within 60 days of completion of the audit, and initiates steps to remedy or reduce the violation, and provided that the person responsible for the violation demonstrates, and the department or local governmental agency, as the case may be, determines, that the violation is not the result of knowing, purposeful, reckless or criminally negligent conduct. For purposes of this subsection, filing a permit application shall constitute adequate steps to achieve compliance.
b. Whenever a person responsible for a violation of an environmental law or regulation, discovered as a result of an environmental audit, does not disclose that violation either to the Department of Environmental Protection or a local government agency, as prescribed in subsection a. of this section, but initiates appropriate steps, prior to any action being brought by an enforcing authority, to remedy or reduce the violation, the department or local government agency, as the case may be, shall consider those steps to remedy or reduce the violation as mitigating factors when considering the criminal, civil or civil administrative penalty to be imposed for the violation. For the purposes of this subsection, filing a permit application shall constitute the initiating step to remedy or reduce the violation. The provisions of this subsection shall not apply in any case where the department or local governmental agency, as the case may be, determines that the violation is the result of the knowing, purposeful, reckless or criminally negligent conduct of the violator.
11. a. Information contained within an environmental audit report and disclosed to the department or local government agency as part of an action to remedy the violation pursuant to section 10 of this act shall be exempt from public disclosure by the department or local government agency.
b. No person who discloses information for the purposes of subsection a. of section 10 of this act or, pursuant to section 4 of this act, is required to do so shall be obligated to disclose whether that information is a portion or section of an environmental audit report or whether a voluntary environmental audit has been performed by the person disclosing that information.
12. Notwithstanding any other provision of law, a person, including any officer or employee of the person, that performs an environmental audit, may not be required to give testimony in a court or administrative proceeding of a governmental agency without the consent of the person concerning the environmental audit, including a report, finding, opinion, or other communication with respect to that report.
13. This act applies to all environmental audits begun on or after January 1, 1994.
14. Nothing herein shall be construed to permit any third party access to any environmental audit report subject to the provisions of this act. For the purpose of this section, third party shall mean a person other than:
a. A State or local enforcing agency; or
b. A person who has particularized property interest sufficient to require a hearing on constitutional or statutory grounds.
15. This act shall take effect immediately.
STATEMENT
The bill establishes a program designed to encourage the regulated community to undertake voluntary environmental audits.
The voluntary environmental audits covered under the proposed program are not those currently required under any current law, regulation, or permit condition or application process. They are self-initiated, internal evaluations, assessments or reviews undertaken by facility owners or operators as a means to identify whether the facility, or a particular process or activity within the facility, is in compliance with environmental requirements set forth in statute and regulation. The information acquired those these audits will enable owners and operators to readily assess their operations, activities, compliance programs, and management systems and, if appropriate and necessary, move in a timely and effective manner to prevent or correct violations or potential violations.
To encourage the regulated community to participate in this program, the bill establishes privilege for certain information and documents relating to voluntary audits and offers immunities from criminal, civil and civil administrative penalties under certain circumstances.
The privilege afforded under the bill applies only to audit information and documents that are included in an "Environmental Audit Report." In addition to all the documentary information and analyses generated by the audit, the report is to include a summary of the scope of the audit, a certified index identifying the specific documentary materials included, and calendar dates citing when the audit was initiated and completed.
The bill clearly specifies that the privilege does not extend to any audit information or documents which:
(1) relate to a violation for which there is a statutory reporting requirement, or
(2) relate to a contested enforcement action and which a court of competent jurisdiction, in accordance with the New Jersey Rules of Court, requires disclosure.
In addition, the bill provides that an enforcing agency may not publicly disclose any audit information it is given by an owner or operator as part of a compliance or remediation immunity agreement.
The bill further provides that a person wishing to take advantage of the immunities afforded under the bill or to fulfill a statutory reporting responsibility is not obligated to disclose whether the information relating to that request for immunity or reporting requirement is part of a voluntary environmental audit.
Furthermore, the bill limits access to a State or local enforcing agency, or any person who has a particularized property interest sufficient to require a hearing on constitutional or statutory grounds.
The immunities offered under the bill are available only in those instances where a violation, discovered as the result of an audit, is disclosed to the appropriate enforcing agency within 60 days of the completion of the audit and initiates steps to correct or remediate the violation. In such cases, there is immunity from any criminal, civil or civil administrative penalty.
If a person does not report a violation which was discovered through an audit, but initiates steps to correct or remediate the violation, there is no immunity, but the substitute does direct the enforcing agency in such cases to consider those steps to correct or remediate as mitigating factors when considering what penalties should be imposed.
The purpose of this bill is:
(1) to establish a predictable and cooperative regulatory environment which will encourage responsible members of the regulated community to undertake voluntary internal environmental audits of their operations, activities, compliance programs and management systems; to assess their effectiveness and, if appropriate and necessary, make improvements and corrections; and
(2) to accord a clearly defined level and scope of confidentiality, protections, and immunities to responsible members of the regulated community who participate in the program and, when discovering violations or non-compliances, move in a timely, thorough and effective manner to make necessary corrections and improvements
The purpose of the bill is not:
(1) to afford any privileges or immunities for violations designated as a "high priority violation" by the Department of Environmental Protection and the United States Environmental Protection Agency pursuant to the federal "Resource Conservation and Recovery Act," 42 U.S.C.§6901 et seq.; any violation of any requirement in any environmental law which requires that a person notify the department of a discharge, spill, leak, emission, release or other pollution event; or any violation that is the result of the knowing, purposeful, reckless or criminally negligent conduct of the person responsible for the violation; or
(2) to afford any unintended protections, legal defenses, or avenues of escape for irresponsible members of the regulated community who seek to evade their statutory and regulatory responsibilities to the detriment of all who live and work in this State; or
(3) to in any way interfere or otherwise impede any legitimate investigatory or enforcement activities and any resultant prosecutorial effort against such persons.
Establishes evidentiary privilege for environmental audits in certain cases.