Manage compliance information, don’t fear it

Hong Huynh

Environmental professional

A compliance audit should be conducted by an environmental professional who is qualified and has specific experience in the related industry. Detailed knowledge of the facility’s business, operation and industry enable the professional to ask relevant questions and consider issues that less experienced professionals often overlook, but are otherwise critical to enforcers. An experienced professional can also better assess whether there are gaps that need to be addressed before finalizing the audit.

Critical legal questions could arise during the audit, and an experienced professional recognizes the need to pursue an alternative course of action. For example, the professional may need to know whether the facility is considered an existing or a new source because such a status determines the required pollution control technology. In that case, the answer helps the professional determine whether the facility has installed adequate equipment.

Audit privileges

A facility may be reluctant to conduct an audit for many sympathetic reasons: What will it do with the information generated? What if there is noncompliance? What is the cost of fixing the problem?

Tools exist to help structure an environmental audit that could diminish some of these fears. In some states, an environmental audit conducted at the direction of the attorney, and resulting in an attorney-client communication or attorney work product, is protected from being disclosed in a civil or criminal proceeding and third-party litigation.

First, under the attorney-client communications privilege, communications related to an environmental audit are considered privileged if the facility seeks legal advice from an attorney on the audit and makes the communications in strict confidence. Courts have found the privilege to exist between the attorney and the facility’s environmental professional when the professional is helping the attorney in providing the advice.

Second, the attorney work-product privilege protects from disclosure information that was prepared in anticipation of litigation and by or for the facility, or by its representative.

Finally, some states have an environmental audit privilege law. For example, Oregon law protects qualified audit reports and other information from being admitted as evidence in any civil or administrative proceeding. To qualify, the environmental audit must be a voluntary, internal and comprehensive evaluation that is designed to identify and prevent noncompliance and to improve compliance status. The information generated must be appropriately labeled and can be field notes, findings, conclusions, drafts, memoranda, drawings, photographs and electronically recorded information, maps, charts, graphs and surveys.

Unfortunately, Washington has not passed such laws. Therefore, audits conducted outside of the attorney-client communication and attorney-work product privileges could be forced to be made public.

Mandatory reporting of violations

Once the audit results are obtained, the facility must determine whether the violations must be reported to an agency. While some violations do not need to be reported, others do. Reporting is mandatory, for example, in the following instances: releases of a reportable quantity of hazardous substances, releases of hazardous substances into the public water system, releases from an underground storage tank system; and violations of certain permit conditions. These generally represent current and ongoing conditions.

Additionally, and unlike Oregon, Washington requires the reporting when the owner or operator of a facility discovers past releases of hazardous substances. The trigger for this mandatory reporting is that the release may pose a threat to human health or the environment. Releases meeting this standard must be reported within 24 hours of discovery if they came from an underground storage tank system. Other qualified releases must be reported within 90 calendar days of discovery. Therefore, the owner and operator have the burden of ascertaining whether the discovered release could pose a threat to human health or the environment.


A facility subject to environmental regulations should know its compliance status. The information collected from efforts to ascertain that status should not be feared, particularly when it is being done within a plan that considers the use of existing legal tools to manage such information.

Hong N. Huynh is a partner at Miller Nash LLP, focusing on environmental and natural resources law in Washington and Oregon. She can be reached at

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