By Lisa M. Campbell and Lisa R. Burchi
On March 2, 2020, the U.S. Environmental Protection Agency (EPA) issued a final rule on EPA’s procedures for conducting on-site civil inspections. This final rule applies to on-site inspections conducted by EPA civil inspectors, federal contractors, and Senior Environmental Employment employees conducting inspections on behalf of EPA.
This rule is effective March 2, 2020.
This rule explains how EPA inspectors should conduct on-site civil administrative inspections and addresses common elements applicable to on-site civil inspections for compliance with environmental laws.
The elements of the process for conducting on-site civil inspections, and some EPA guidance regarding each element, is as follows.
- Timing of Inspections and Facility Notification -- EPA inspectors should generally conduct inspections during the facility's normal work hours and take reasonable steps to work with the facility to agree on a workable schedule for accessing areas for the inspection.
- Inspector Qualifications -- EPA inspectors must hold a valid credential to perform the inspection, which are issued to inspectors that have completed relevant training.
- Obtaining Consent to Enter -- Upon arrival at a facility, EPA inspectors shall present their valid EPA Inspector Credentials to a facility employee, describe the authority and purpose of the inspection, and where possible seek the facilities' consent to enter. Inspectors are required under certain statutes to advise facility personnel that they can deny entry, but EPA may then seek a warrant for entry.
- Opening Conference -- The EPA inspector shall request an opening conference with available facility representatives or employees, where practicable. The EPA inspector shall discuss the overall objectives of the inspection and may request access to/copies of facility records and request to interview facility employees, as necessary.
- Physical Inspection -- EPA inspectors shall inspect the areas, units, sources and processes relevant to the scope of the inspection. The inspectors will generally document their observations with photos and notes.
- Managing Confidential Business Information (CBI) -- Pursuant to existing statutory and regulatory requirements, inspectors shall complete appropriate, statute-specific, CBI training before managing CBI. The EPA inspectors shall manage all CBI claims made by a facility during an inspection in accordance with 40 CFR part 2, subpart B.
- Interview Facility Personnel -- EPA inspectors may conduct interviews of facility personnel as appropriate. Interviews may include, but are not limited to, the environmental contacts, process operators, contractors, maintenance personnel, process engineers, control room operators, and other employees working in the area(s) of interest.
- Records Review -- Once the records requested by the EPA inspector are assembled, the EPA inspector shall review any records relevant to the facility inspection/field investigation. EPA inspectors may request copies of many different types of records (paper, electronically scanned, downloaded or recorded through other digital storage devices), when appropriate, and record copies of records taken from the facility. An EPA inspector may request records before, during, or after an inspection.
- Sampling -- EPA inspectors may take samples when appropriate. Where applicable and practicable, during the opening conference, the inspector shall offer facility personnel the opportunity to obtain split samples or to collect duplicate samples.
- Closing Conference -- EPA inspectors shall offer a closing conference with available facility employees, as practicable, to discuss any outstanding questions or missing documents and the process for follow up. EPA inspectors may also discuss next steps and how the facility will be contacted on the results of the inspection and identify the appropriate point of contact for further communication and coordination. EPA inspectors may also summarize any potential “areas of concern” identified in the inspection.
- Inspection Reports -- After an inspection, EPA shall share an inspection report with the facility. The content and format of the report may vary depending on the facility, type of the inspection, and the statutory authority upon which the inspection is based.
EPA states this rule was issued to fulfill the objectives outlined in Executive Order 13892 (Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication). In addition to this rule, companies can find more detailed information in EPA’s FIFRA Inspection Manual, most recently updated in August 2019, and available here.
By Lisa R. Burchi and Kelly N. Garson
EPA recently released the Consent Agreement and Final Order (CAFO) for the October 31, 2019, settlement discussed in our blog post “EPA Settles Two Cases Regarding Unregistered and Misbranded Pesticides.” This October 31, 2019, settlement between U.S. Environmental Protection Agency (EPA) Region 3 and AFCO C&S, LLC (AFCO), a chemical company located in Chambersburg, Pennsylvania, to resolve alleged violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Pursuant to the CAFO, AFCO agreed to pay a $1,489,000 penalty to settle the alleged violations that involved the use of 12 products to clean and sanitize food and beverage processing facilities.
The CAFO provides more information on the violations Region 3 alleged. The CAFO allegations state that AFCO sold and distributed 10unregistered pesticide products on at least 1,031 separate occasions in violation of FIFRA Section 12(a)(1)(A). The CAFO also alleges that AFCO sold and distributed a product that made claims beyond those permitted by its FIFRA registration on at least five separate occasions. It additionally alleges that AFCO sold or distributed a misbranded pesticide on 41 separate occasions.
EPA initially collected the information during an inspection of AFCO’s establishment in Chambersburg, Pennsylvania on June 20, 2016. The settlement also addresses violations of a Stop Sale, Use or Removal Order (SSURO) that EPA issued to AFCO on July 13, 2018, requiring AFCO to immediately cease all sales and distributions of the 12 products. The CAFO alleges that AFCO engaged in sales and distributions that violated this order, having sold or distributed the products from at least January 1, 2015, through either August 8 or August 9, 2019. AFCO has since discontinued sales of all of the involved products, except for one registered product, for which EPA issued an Order Modification letter on March 4, 2019, allowing AFCO to recommence sales.
AFCO will pay the civil penalty within one year in 12 equal monthly installments, plus interest payment of $7,954.96, totaling $1,496,954.96.
By Lisa R. Burchi and Kelly N. Garson
The U.S. Environmental Protection Agency (EPA) recently settled two cases involving allegations of non-compliance with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Although the Consent Agreement and Final Orders (CAFO) and Stop Sale, Use or Removal Orders (SSURO) issued in these cases are not yet available online, the penalty amounts at issue -- $200,000 and $1,489,000 -- reflect increased enforcement in targeted areas and EPA’s willingness to seek and obtain heroic penalties.
On November 18, 2019, EPA Region 9 announced that Decon7 Systems LLC (Decon7) would pay a $200,000 civil penalty in a settlement related to FIFRA violations. Specifically, EPA found that Decon 7:
- Sold and distributed two products that were not registered with EPA. These products, “D7 Part 1” and “D7 Part 2,” combined to disinfect hard nonporous surfaces. EPA regulations (40 C.F.R. § 152.15) set forth the conditions under which EPA will consider a product to be a pesticide product required to be registered, including but not limited to products containing certain “active” ingredients and/or making claims to kill, repel, or “disinfect” certain pests (e.g., germs, bacteria, viruses).
- Sold and distributed pesticides that were labeled with false and misleading claims regarding safety and efficacy. In addition to misleading efficacy claims to kill all bacteria, viruses, and fungi, EPA states:
The products also had false and misleading safety claims, which created the incorrect impression that the products were noncorrosive and nontoxic. The products’ formulations in fact could have caused skin burns and irreversible eye damage. The products’ labeling also claimed the products were used by various federal government agencies to clean up buildings following anthrax attacks, implying that the federal government recommends or endorses their use.
- Exported unregistered pesticides that did not include necessary notifications and failed to comply with reporting obligations following a SSURO issued to the company in 2018.
On October 31, 2019, EPA Region 3 announced that it reached an agreement with AFCO C&S, LLC (AFCO), a chemical company located in Chambersburg, Pennsylvania, to resolve alleged FIFRA violations. AFCO agreed to pay a $1,489,000 penalty to settle the alleged violations that involved the use of 12 products to clean and sanitize food and beverage processing facilities. EPA alleges that AFCO sold and distributed ten unregistered pesticide products, a misbranded product, and a product that made claims beyond those permitted by its FIFRA registration.
The settlement also addresses violations of a SSURO that EPA issued to AFCO on July 13, 2018. AFCO engaged in sales and distributions that violated this order. AFCO has since discontinued sales of all of the involved products, except for one registered product.
By Lisa M. Campbell and Lisa R. Burchi
On November 7, 2018, the U.S. Environmental Protection Agency (EPA) announced that it was ordering Pool Water Products Inc. to stop selling an improperly registered pesticide, ALL CLEAR 3” Jumbo Chlorinating Tablets. The announcement states that even though the ALL CLEAR 3” Jumbo Chlorinating Tablets product was registered with EPA, Pool Water Products was selling and distributing an unregistered version of the product made in China that has not been evaluated by EPA.
EPA’s action, which it states applies to nationwide distribution, transport and sales of the product, follows a statewide stop-sale order issued earlier this month by the Arizona Department of Agriculture when state inspectors discovered the unregistered pesticide, which is used to disinfect pools, during an August 30 inspection of the company’s Phoenix warehouse.
This case exemplifies the need for companies to understand Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) registration and amendment requirements, and the importance that a product’s label, formula, and manufacturing process match exactly with the information submitted to EPA and upon which EPA relied in approving the registration. Many composition and processing changes require an amendment to be approved by EPA; failure to do so could result in an enforcement action such as this one.
More information on pesticide registration issues is available on our blog.
By Lisa M. Campbell and Lisa R. Burchi
On February 14, 2018, the U.S. Environmental Protection Agency (EPA) and Amazon Services LLC (Amazon) entered into a Consent Agreement and Final Order (CAFO) whereby Amazon agreed to pay $1,215,700 in civil penalties for approximately four thousand alleged violations under Section 3 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) for the distribution of unregistered pesticide products. Amazon neither admitted nor denied the specific factual allegations, which included:
- Between January 1, 2013, and November 1, 2015, Amazon distributed, held for distribution, held for shipment, or shipped two unregistered pesticide products called “3pcs Cockroach Cockroaches Bugs Ants Roach Kills Chalk”; and “Miraculous Insecticide Chalk” on multiple occasions in the United States.
- Between January 1, 2013, and March 1, 2016, Amazon distributed, held for distribution, held for shipment, or shipped three unregistered pesticide products called “HUA Highly Effective Cockroach Killer Bait Powder”; “R.B.T.Z. Safe Highly Effective Roach Killer Bait Powder Indoor”; “HUA Highly Effective Fly Killing Bait Powder”; and “Ars Mat 60 pcs. Refil for ARS Electric Mosquito Killer Convenient, Clean & Smokeless” on multiple occasions in the United States.
Amazon also agreed to implement a supplemental environmental project (SEP) consisting of the development, deployment, and operation of a publicly available eLearning course, downloadable educational materials, and test on FIFRA requirements and associated regulations (eLearning Project). Although no monetary amount was specified for the implementation of the SEP, the eLearning Project will be a significant undertaking, as the materials will be available in three languages (English, Spanish, and Chinese) and Amazon will require all of its Amazon.com sellers to complete the eLeaming course and pass an associated test prior to allowing such Amazon.com sellers to sell products identified as pesticides. The only circumstance when this requirement will not apply to Amazon.com sellers is when a seller can “demonstrate that the seller's existing compliance program is sufficient to ensure products sold via Amazon.com comply with FIFRA.”
More information on FIFRA enforcement issues is available on our blog under key word enforcement.
By Lisa M. Campbell and Lisa R. Burchi
On February 12, 2018, the U.S. Environmental Protection Agency (EPA) announced it has reached an agreement with Syngenta Seeds, LLC (Syngenta), a pesticide company in Hawaii, to resolve alleged violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) at its farm in Kekaha, Kauai. The settlement includes two penalty components: a $400,000 Supplemental Environmental Project (SEP) for worker protection standard (WPS) training; and $150,000 as a civil penalty.
The Consent Agreement and Final Order (CAFO), issued on February 7, 2018, states the parties are resolving alleged violations under FIFRA Section 12(a)(2)(G) from the use of the registered restricted-use pesticide Lorsban Advanced on an agricultural establishment in Kekaha, Hawaii, “in manners inconsistent with its labeling by not complying with applicable Worker Protection Standard regulations.” Syngenta neither admitted nor denied the allegations but consented to the assessment of the civil penalty and to the other conditions in the CAFO.
EPA’s Press Release states that under the settlement, Syngenta “will spend $400,000 on eleven worker protection training sessions for growers in Hawaii, Guam, and the Northern Mariana Islands.” Specifically, the SEP states it “is intended to assist and provide compliance tools to small-scale growers of agricultural plants that face compliance challenges based on cultural, literacy, or language considerations, and/or geographic isolation.” Further, Syngenta will “also develop compliance kits for use at these trainings and for wider distribution in the agricultural community in English and four other languages commonly spoken by growers and farmworkers in the training locations -- Mandarin, Korean, Tagalog, and Ilocano.” These compliance kits will include the following practical resources, among others:
- Summary documents with corresponding videos addressing the major compliance topic areas within the WPS;
- Worker training resources including, but not limited to, training outlines with materials, tailgate training toolkits, and sign-in sheets; and
- Sample WPS company policies and procedures.
This CAFO and in particular the SEP will be interesting to monitor considering EPA’s recent WPS revisions that became effective on January 2, 2017, and the additional proposed revisions for which comments are expected to be solicited.
More information on FIFRA enforcement issues is available on our blog under key word enforcement. Information on Syngenta’s 2016 CAFO regarding label violations is available in our blog item Syngenta Settles with EPA on Alleged Label Violations.
By James V. Aidala, Lisa M. Campbell, and Timothy D. Backstrom
On December 14, 2017, the Missouri Department of Agriculture (MDA) announced that it issued and collected the first round of fines resulting from investigations regarding the pesticide dicamba. The news release states that the first wave of civil penalties issued to applicators, all from Dunklin County, were issued as “a result of investigations of complaints during the 2016 growing season,” and the “civil penalties, ranging from $1,500 to $62,250, were issued for pesticide misuse (off label use and drift).” Further, in 2016, “Department staff conducted and completed 121 complainant investigations. Those complainants named approximately 60 applicators, who were investigated as a result of complaints. In addition, the Department investigated nearly 100 non-Dicamba related incidents.”
This is the first group of what is anticipated to be a large number of dicamba-related enforcement cases, given the extensive number of, and publicity concerning, the reported incidents involving dicamba. Reported incidents in Arkansas were even more numerous than those in Missouri. About one-third of the reported incidents in Missouri have now been attributed to only six applicators. One applicator alone was cited for 149 discrete violations, which indicates that problems with the new dicamba formulations may be less widespread than some originally feared based on the large number of reported incidents. Moreover, some of the states where the new dicamba products were widely used have reported very few incidents. In the aggregate, this data suggests that better stewardship training accompanied by rigorous enforcement may be sufficient to greatly reduce the future incidence of unexpected off-site movement of the new dicamba formulations.
More information on dicamba issues is available in our blog.
By Lisa M. Campbell, Lisa R. Burchi, and Margaret R. Graham
On September 16, 2016, the U.S. Environmental Protection Agency (EPA) announced it settled an enforcement matter with Syngenta Crop Protection, LLC (Syngenta or Respondent) via a Consent Agreement and Final Order (CAFO) concerning EPA’s allegations that Syngenta violated the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and EPA’s Pesticide Container and Containment Rule (PCCR). The investigation took place over three years, starting in August 2012 and concluding in January 2015. The multi-regional investigation which took place over three years, from August 2012 to January 2015, was conducted by EPA Regions 4, 5, 7, and 8, and found violations in six states: Ohio, Colorado, Iowa, Kansas, Michigan and Missouri.
The CAFO listed the alleged violations in three parts:
- Failure to have repackaging agreements and failure to maintain records concerning the repackaging agreements: In the CAFO, EPA states that it identified numerous and separate occasions when Respondent distributed or sold approximately 19 registered pesticides to approximately 222 refillers “prior to having written repackaging agreements in place with such refillers,” “and/or failed to maintain records of the repackaging agreements with the refillers.” The requirements for such agreements and record keeping are set forth at 40 C.F.R. §§ 165.67(b)(3), 165.67(d), and 165.67(h).
- Distribution and sale of misbranded pesticides: In the CAFO, EPA states that at least seven inspections conducted at different facilities that were refillers of Respondent’s pesticides found pesticides affixed with outdated labels, as well as sales of such products with outdated labels. EPA states that Syngenta was the registrant of all the products at issue and had provided the refillers with the outdated labels for repackaging the pesticide products in refillable containers or bulk tanks on at least 19 separate occasions.
- Failure to maintain data submitted for pesticide registration: In the CAFO, EPA states it conducted an inspection at two laboratories to review compliance with Good Laboratory Practice requirements, and to audit the data for studies submitted by Respondent to EPA to support one of its pesticide registrations. In both cases, Respondent informed EPA that it did not maintain records or raw data associated with the studies and the laboratories confirmed they did not maintain the records at their facilities.
Syngenta neither admits nor denies these allegations, but has agreed to pay a civil penalty of $766,508, as well as to complete an environmental compliance promotion Supplemental Environmental Project (SEP) within four years at a cost of not less than $436,990. Specifically, the SEP will involve a four-year educational awareness training and campaign to educate the regulated community on FIFRA regulatory compliance requirements pertaining to the PCCR. The training will focus on the requirements relevant to bulk pesticide containers, containment, labels, storage, transportation, delivery, clean-out, repackaging agreements, and recordkeeping. The training is intended to increase awareness across a broad array of businesses that handle pesticides, including registrants, refillers, retailers, commercial applicators, and custom blenders of pesticides.
EPA states that the settlement sends “a strong message to pesticide companies to maintain compliance with all federal environmental laws.” Indeed, the breadth of EPA’s investigation and the ultimate size of the penalty signify EPA’s focus on pesticide violations and, particularly, misbranded pesticides. EPA in recent years has focused on labeling violations between registrant and supplemental distributor labels and the issues in this case have some similarities, particularly the need for written contacts between registrants and refillers or supplemental distributors, and also the need to ensure that current pesticide labels are provided before repackaging and relabeling take place.
More information concerning supplemental distributors and repackaging is available in our blog item Registrants Penalized for Actions of Third-Party Pesticide Distributor, our memorandum EPA’s Enforcement Efforts Regarding FIFRA Supplemental Distribution and How to Avoid Noncompliance and in the materials from our webinar EPA's Supplemental Distribution: Enforcement Actions Are Buzzing: How to Avoid Getting Stung.
By Lisa R. Burchi
On June 19, 2015, the United States District Court for the District of Columbia granted a motion for default judgment by the Non-Dietary Exposure Task Force (Task Force) and confirmed an arbitration award against an Indian pesticide manufacturer, Tagros Chemicals India, Ltd. (Tagros) (Non-Dietary Exposure Task Force v. Tagros Chems. India Ltd., 2015 BL 195490, D.D.C., 1:15-cv-00132, 6/19/15). The Task Force sued Tagros after Tagros refused to sign a $500,000 settlement agreement negotiated by the parties in the midst of a Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) arbitration proceeding, and continued its refusal to pay after the Task Force successfully moved the arbitrator to issue an award enforcing the settlement agreement. The Court determined it has jurisdiction because FIFRA “confers jurisdiction on the judiciary to enforce [such] arbitration awards” in federal court and Tagros’ participation in the arbitration allowed the court to exercise jurisdiction over Tagros. The Court found that the arbitration award must be confirmed in full absent evidence of fraud, misrepresentation, or other misconduct by one of the parties, and no such allegations were put forth. The Court also granted the Task Force’s motion seeking permission to register this judgment in other district courts based on information that Tagros’ assets were not in the District of Columbia and evidence of assets in other jurisdictions.
This decision adds to a growing number of recent cases where companies have sought judicial enforcement of a FIFRA arbitration award. Judicial judgments enforcing arbitration awards, in addition to judicial authority to register such judgments in districts where assets are available, are tools data owners are increasingly using to obtain the compensation owed.
By Lisa M. Campbell and Lisa R. Burchi
On June 10, 2015, and June 15, 2015, the U.S. Environmental Protection Agency (EPA) held a webinar entitled “eDisclosure: EPA's Plan to Modernize the Implementation of the Audit Policy and the Small Business Compliance Policy.” During the webinar, EPA set forth its plans to release in fall 2015 a centralized online portal called eDisclosure to allow companies to submit self-disclosures electronically under EPA’s Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations (Audit Policy) and Small Business Compliance Policy. EPA stated that it is developing eDisclosure in an effort to continue to promote the benefits of self-disclosures, while also saving time and resources by modernizing and streamlining the disclosure procedure.
Companies with potential Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) violations that can satisfy all nine conditions of self-disclosure under the Audit Policy (i.e., systematic discovery; voluntary discovery; prompt disclosure; independent discovery and disclosure; correction and remediation; prevent recurrence; repeat violations are ineligible; certain types of violations are ineligible; and cooperation) are eligible for 100 percent penalty mitigation, while companies that satisfy conditions 2-9 (i.e., all except systematic discovery) are eligible for 75 percent penalty mitigation. A related policy for small businesses (those with 100 or fewer employees) modifies the conditions as further incentives (e.g., 100 percent penalty mitigation even if the discovery is not systematic, with longer compliance timeframes).
FIFRA self-disclosures will fall into Tier 2, under which the eDisclosure system will automatically issue an electronic Acknowledgement Letter (AL) confirming EPA’s receipt of the disclosure, and promising that EPA will make a determination as to eligibility for penalty mitigation if and when it considers taking an enforcement action for environmental violations. There are timeframes set for the submission, and/or potential extension, of compliance reports certifying violations have been corrected.
If an extension is sought for more than 60 days (or within 90 days of submitting an online Small Business Compliance Policy disclosure) past the date of discovery of such violation(s), EPA states that eDisclosure will automatically grant the request, but that EPA could later determine, if and when it considers taking an enforcement action, that the correction was not made promptly and thus this Audit Policy condition is not satisfied.
Companies with potential FIFRA violations can benefit from EPA’s development of eDisclosure, as this is a positive step indicating EPA’s support for and interest in encouraging continued use of its Audit Policy There are several issues that companies will need to review carefully, including Central Data Exchange (CDX) registration, protection of confidential business information, special issues for “new” owners disclosing violations of recently acquired companies, and changing EPA policies regarding its potential disclosure of settled and unsettled Audit Policy cases.
EPA will issue in fall 2015 a Federal Register notice simultaneously with its launch of e-Disclosure to describe the new portal and how EPA plans to implement the Audit Policy and Small Business Compliance Policy. Although there is no formal comment period, stakeholders should consider providing input now while EPA is in the midst of developing eDisclosure.