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Volume XI, Number 261

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Louisiana 31st State in Union With an Environmental Audit Privilege Law

The Louisiana Legislature, with Governor Edwards’ approval, finally passed an environmental audit privilege law. It has been decades in coming. Public interest organizations have been fearful that industry would hide violations behind such laws. (They were concerned that pollution releases below reportable quantities (RQs) could be kept secret, however such releases already have to be reported to the Louisiana Department of Environmental Quality (LDEQ) if permits are being violated.) Act 481 was passed by the Legislature this summer and signed by the governor on June 29 and becomes effective August 1. Act 481 amends La. R.S. 30:2030 et seq. to provide that information submitted to the LDEQ in voluntary self-audits remains confidential until the LDEQ makes a final decision on the case (e.g., corrective action completion, penalties), but only up to two years. Written requests for confidentiality will probably be advisable. Information already required by law to be reported to the LDEQ — e.g., discharge monitoring reports, air deviation reports, RQ releases — will not be confidential. It appears that operational and maintenance issues and company proprietary information are within the main protective scope of the new law.

The new law requires the LDEQ to promulgate notice and comment, implementing rules under the Louisiana Administrative Procedure Act. This includes rules on procedures for submission of audit results to the LDEQ, fees (minimum is $1,000), incentives (reduction or elimination of civil penalties), and exceptions to the law. The proposed rules will require public comments and be subject to legislative oversight.

For instance, the LDEQ might draw from the popular Texas guide to its Environmental, Health, and Safety Audit Privilege Act. Tex. Rev. Civ. Stat. Ann. Art. 4447cc. The Texas Commission on Environmental Quality has procedures that require advance notice to it of a proposed audit and later a disclosure of a short summary of violations found and measures taken to correct them. Presently, the LDEQ procedures are mostly unknown. Louisiana’s civil penalty immunity is not as broad as that of Texas.

The new act sets out exceptions to matters that are not eligible for the privilege, including violations with serious harm, those with imminent or substantial endangerment, LDEQ self-discovery of violations, and violations that already require agency reports (e.g., in monitoring, sampling, prior mandatory auditing). Again, these provisions may eliminate most chemical discharges from protection under the act, leaving operational and maintenance problems covered. Prescription (normally five years for enforcement) is also suspended until the LDEQ makes a final decision on the scope of the audit privilege and civil immunity on each audit violation result submitted to it.

The US Environmental Protection Agency’s (EPA) website includes a list of five states with an audit privilege law, four states with immunity, and 21 states with both privilege and immunity, including Mississippi and Texas. Louisiana is now the 31st state to add a law providing either privilege or immunity. Some states have attorney general opinions and EPA memoranda of understanding to support their laws, but so far Louisiana does not have these provisions.

At face value, Louisiana will grant a temporary (up to two years) audit privilege on the voluntary reporting, but, unlike the more robust civil immunity in Texas’ program, only discretionary immunity will be exercised on civil penalties. (For general information, ASTM E2107-20 is a standard format for case-by-case environmental regulatory compliance audits, but it is not necessarily applicable here.) We will have to wait for the LDEQ rulemaking to see the final scope of the law.

Meanwhile, EPA has on its compliance website, its own self-policing incentive policy known as e-disclosure, which Louisiana operations may want to utilize in addition to the new law.

© 2021 Jones Walker LLPNational Law Review, Volume XI, Number 204
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About this Author

Stanley Millan, Litigation Attorney, Jones Walker Law Firm
Special Counsel

Stan Millan is a member of the firm's Business & Commercial Litigation Practice Group, and he divides his practice between transactional and litigation work. His practice consists of environmental law, administrative law, green and government contracts law. He is LEED® AP-certified by the U.S. Green Building Council. Mr. Millan's practice extends to the entire panoply of air, water, and waste regulation, including compliance counseling and defense before the U.S. Environmental Protection Agency (EPA), the Louisiana Department of Environmental Quality (LDEQ), and...

504-582-8328
Alex Prochanska, Jones Walker Law Firm, Business and Real Estate Attorney
Special Counsel

Alex Prochaska is special counsel in the firm’s Business & Commercial Transactions and Real Estate Practice Groups in the Lafayette and Baton Rouge offices. Mr. Prochaska’s practice focuses on environmental law, including regulatory issues involving permitting and compliance, transactions, and environmental litigation.

Prior to joining Jones Walker, Mr. Prochaska spent six years as an attorney with the Louisiana Department of Environmental Quality (LDEQ) with the last two as Special Counsel to the Assistant Secretary of the Office of...

337-593-7616
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