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04.03.2017 Successfully Managing Environmental Regulatory Inspections By: Phillip L. Conner

Most industrial facilities will, at some point, be inspected by an environmental regulatory agency.  Generally, regulatory agencies have authority to enter public or private property that is governed by an environmental regulation or permit.  For certain facilities, inspections occur at least annually.  Regulatory inspectors generally have discretion as to the extent of their inspection and what is ultimately identified as a violation.  Handling a regulatory inspection in a courteous, reasonable and professional manner will often result in the most beneficial outcome.

Preparation is key to making a regulatory inspection as painless as possible.  In terms of avoiding violations, environmental self-auditing is the best preparation.  Periodic auditing ensures that the appropriate management systems are in place and working.  However, well-meaning documents and even notes created pursuant to a self-audit can become discoverable in a lawsuit or criminal investigation where information can be taken out of context and used against a company.  That’s why facilities should consider having self-audits performed under the attorney-client privilege.  There is no guarantee the attorney-client privilege will protect documents from disclosure in all instances, but structuring the audit with an attorney involved is always a good precautionary measure. 

It is difficult to prepare for a regulatory inspection since most are unannounced; however, a facility should have in place a procedure that can be implemented when an inspector arrives.  At a minimum, someone at the facility who is knowledgeable about environmental issues should be designated to meet with and accompany the inspector.  If possible, the facility should have an alternate person available to handle an inspection should the primary person be absent when an inspector arrives.  In addition, a plan should be in place to notify facility supervisors that an inspection is taking place so the supervisors can do a quick inspection of their respective areas and be sure the areas are ready to be inspected.

If the inspector is not known by facility personnel, the inspector should be asked for identification.  An opening conference should be held in which the purpose of the inspection is discussed.  Afterwards, the inspector should only be escorted to those portions of the facility that are relevant to the purpose of the inspection.  The inspector should understand that he or she is expected to follow all facility safety rules and, for safety’s sake, must remain with the facility escort.

The person designated to accompany the inspector should remain with the inspector at all times.  He or she should ensure that the inspector goes only to those areas of the facility that are relevant to the purpose of the inspection.  Many facilities have predesignated routes along which the inspectors are taken.  The predesignated route that is used depends upon the purpose of the particular inspection, e.g., air inspection, hazardous waste inspection, wastewater inspection, etc.

If an inspector takes samples of any kind, it is generally desirable for the facility to split samples and have its own analyses done.  There are occasions where the results from an agency’s laboratory differ substantially from data obtained from a commercial laboratory.  In such cases, split samples obtained by the company can prove valuable.

On rare occasions, an inspector may want to take photographs of portions of a facility.  If this is the case, ground rules should be established as to what, if anything, can be photographed.  If the facility has in place a policy prohibiting unrestricted photographs, this policy should be explained to the inspector along with the expectation that the inspector follow the policy.  Photographs of confidential processes or equipment should not be allowed.  If the inspector will not agree to the ground rules, the facility has the option of telling the inspector that he or she will need to obtain a search warrant specifying which areas they want to photograph.  Alternatively, the facility representative can try to compromise by offering to take the photographs so that they can be screened by company officials before being sent to the inspector.

Regulatory inspectors will usually want to review various documents and records.  Documents typically reviewed during an inspection include such things as hazardous waste manifests and reports, contingency plans, discharge monitoring reports, Emergency Planning and Community Right-to-Know Act reports, and air permit records.  These documents should be kept in one place so they are easily accessible and not comingled with other documents.  In many instances, violations are cited simply because the facility cannot produce the proper documents during an inspection.  Attorney-client privileged documents and company confidential documents should be kept in a secure location separate from other facility documents.

Environmental inspections are a fact of life for most industrial facilities.  Preparation by the facility through self-auditing and planning of an inspection procedure can pay big dividends.