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For many years, businesses have found that conducting internal environmental audits can be a valuable tool to help ensure that operations are performed in compliance with applicable environmental laws and regulations. Environmental auditing, however, invariably raises important issues such as maintaining confidentiality and asserting legal privileges, accurately assessing audit results to identify noncompliance, evaluating the potential benefits and drawbacks of voluntary disclosures to regulatory agencies under "audit policy" programs, and negotiating resolutions with such agencies for voluntarily disclosed violations.

MGKF has substantial experience assisting clients with all facets of environmental auditing. We have performed environmental audits across a variety of industry sectors, including universities, railroads, chemical manufacturers, telecommunications companies, waste industries, and other businesses. Where appropriate, MGKF attorneys and technical consultants have collaborated as team members with client in-house audit personnel and/or third-party consultants, or have designed and overseen audits performed by in-house personnel or outside consultants. Tasks handled by the firm have included, among others, advising on relevant regulatory programs to be covered within audit scopes, designing audit surveys and questionnaires, performing facility inspections, and reviewing findings and draft reports generated by client or third-party auditors.

Because few compliance issues are clear-cut, and determining compliance can present significant consequences for ongoing operations, company reputation, and future facility divestitures, we consider particularly critical our role in helping clients determine if specific audit findings equate to regulatory violations, and ensuring that written audit reports reflect accurate legal conclusions. In addition, the practical knowledge possessed by MGKF's technical consultants, who have been responsible for a variety of environmental compliance and auditing functions in prior positions with industrial companies, consulting firms, and the Department of Defense, offer unusual value to our audit clients. In conjunction with audits, we have also assisted clients in developing environmental management systems and drafting policies, procedures, and guidelines to help maintain future compliance while achieving business objectives.

Further, the firm has counseled several clients in deciding whether to make voluntary disclosures of audit results under the U.S. Environmental Protection Agency's ("EPA") policy entitled "Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations" and analogous state audit policies. Among other benefits, companies voluntarily disclosing violations through these policies or similar programs (provided that several conditions are satisfied) typically receive partial or full waivers of any "gravity-based" component in the civil penalty to be assessed as a part of the ultimate settlement resolving the violations. In each case, however, the benefits of voluntary audit policy disclosures must be weighed against competing factors in correcting potential violations internally without agency interaction.

For clients who choose to make voluntary audit disclosures to regulatory agencies, MGKF helps to ensure that the necessary timing, disclosure, future compliance, and other prerequisites will be achieved to allow companies to qualify under the applicable policies. In these cases, we have represented clients in preparing and submitting audit results to EPA and state agencies, negotiating civil penalties, and drafting the language of consent agreements or other documents formalizing settlement of the disclosed violations. Our frequent representation of clients before EPA and state personnel in a wide range of environmental programs, and the experiences several of our attorneys have gained by previously working at EPA, provide a solid foundation for interacting with the agencies in audit disclosure contexts.

Where clients seek to protect audit results under the attorney-client privilege or other applicable protections, MGKF assists in structuring audit protocols and communication between audit team members to maximize the likelihood that such privileges or protections will be upheld.



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Representative MGKF matters involving environmental auditing include the following:

  • MGKF participated in an environmental audit for a large telecommunications company involving several hundred facilities nationwide. The audit resulted in voluntary disclosures under EPA and several state audit policies, negotiation of a greatly reduced EPA civil penalty, and entry into an EPA consent assessment. Working with the client and an outside consultant, the firm was substantially involved in designing the audit protocol, evaluating findings to identify noncompliance, drafting the audit report, preparing compliance guidelines in a series of environmental regulatory areas, and performing compliance training for client personnel.
  • The firm has counseled two Pennsylvania colleges during environmental audits performed under an agreement between EPA, the Pennsylvania Department of Environmental Protection, and the Association of Independent Colleges and Universities of Pennsylvania. MGKF assisted the colleges by reviewing draft audit reports, evaluating potential noncompliance findings, and preparing disclosures under EPA's audit policy.
  • MGKF assisted in-house personnel of a battery manufacturer in designing and performing compliance audits for manufacturing plants at several locations. In addition to the standard audit components of reviewing documents and operations and determining compliance status, the firm collaborated in updating the company's environmental management system to assist in maintaining future compliance.
  • MGKF legal and technical staff designed and implemented an environmental audit of a family-owned waste hauling firm, including reviewing environmental records, inspecting the facility, and preparing an audit report with recommended corrective actions.
  • The firm serves as environmental counsel to a health care system in the performance of environmental audits of several hospitals and outpatient facilities in multiple states. MGKF worked with the client and its consultant in developing the audit scope, evaluating findings against regulatory requirements and best management practices, reviewing draft reports, and advising on compliance strategies.

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