New guidelines would dictate corporate fines

Abstract

New draft guidelines for penalizing organizations and companies convicted of civil environmental crimes could substantially raise fines and require companies to put in place new mechanisms for monitoring and reporting violations. The guidelines were worked out by the US Sentencing Commission's Advisory Working Group on Environmental Offenses. There are several ways in which the draft environmental guidelines differ from the existing general sentencing guidelines. One important difference involves consideration of mitigating factors in determining the amount of a fine. Mitigating factors include such things as a strong record of environmental compliance by a company or whether that company cooperated with the Environmental Protection Agency in correcting the violation. Under the current guidelines, an organization can get a maximum fine reduced up to 95% if enough positive mitigating factors are present. That means a maximum $1 million fine can, under the best of circumstances, be reduced to $50,000. Under the draft guidelines, that $1 million fine could be cut no more than 50% to $500,000. A second major difference concerns corporate environmental compliance programs. The current guidelines contain recommendations on what should be in such plans. The proposed guidelines, on the other hand, seem to require such programs to contain certainmore » elements if a company is to receive credit for trying to comply with the law. These elements include having policies that require employees to report any suspected environmental violations, having line managers routinely review environmental monitoring and auditing reports, and setting up a hotline by which employees can report violations anonymously and without fear of reprisal.« less