Fool Me Once...

I thought you might be interested in this article from last week's Republic. 

Phoenix-based Honeywell Aerospace will pay the largest air-quality settlement ever levied in Maricopa County, a $3 million-plus penalty for alleged violations at five of its Valley facilities.

The article is important because of the size of the fine, but there's an important little tidbit buried inside.  How did the county find the violations?

Many were self-reported by the company after an internal environmental audit.

That's right.  "self-reported by the company after an internal environmental audit."  That's likely to be the last "internal audit" that Honeywell conducts. 

If you were a CEO with an environmental conscience, you might want to know if your pollution-control measures were effective.   Companies that want to do the right thing will often go above and beyond their mandatory reporting requirements and conduct in-house audits to determine the effectiveness of their controls.  They learn a harsh lesson when the results of those internal audits are used against them.  Naturally they only have to learn that lesson once. 

General Motors used to have a program to track the effectiveness of its pollution control systems.  The program provided a powerful tool for GM to improve its pollution control technology on the front end. Then the EPA subpoenaed the data and fined GM for violations that would have otherwise gone undetected.  GM eliminated the program.

It would be a much more effective if truly voluntary auditing and reporting were privileged--the company could maintain the data but it would be immune from discovery.  (Obviously the self auditing and reporting that is required as a condition of the company receiving an air quality permit would not be privileged.)

In the mid 1990s, a bill to provide a privilege for voluntary audits was working its way through the legislature until the media and the environmental community dubbed the bill "The Polluter Protection Act." Legislators who supported the bill were mocked without mercy and the bill died a quick death. 

So now regulators can burn companies like Honeywell.  But only once.  After all, it's pretty clear that once these companies are burned by their own audits, they will stop conducting additional audits. 

That's a worse result for everyone.  Well almost everyone--I'm sure the controversy sold a few extra newspapers and looked good on the Siera Club's fundraising letters. 

Comments

[ron]

Then we wonder why our children grow up thinking that we are giving them a wheelbarrow of c**** when we tell them:

HONESTY IS THE BEST POLICY!

Of course, they already learned that from the NBA

[The Klute]

You're advocating no corporate responsibility.

"Oh sure, we were polluting. Shouldn't have been doing it in the first place. But we found out our problems ourselves! So, because we were honest about it, the state should pick up the tab in cleaning all that c*** up. We'll do better next time, we promise!"

Every time you mention one of these things, you generally preface it by saying "Hey, I like clean air and drinking water as much as the next guy, BUT..."

Has it really moved beyong the provenance of the conservative movement to say: Companies shouldn't pollute in the first place, and if they do they should be responsible for their mess? Isn't the very foundation of conservatism personal (or in this case corporate) responsibility?

This is why so many people see tort reform and deregulation as a free ride for business: "We won't regulate them to start with, and if they screw up, we'll shield them from responsibility later".

[Jack]

Greg - The "polluter protection act" did not die a quick death. It passed out of the Legislature and went to Gov. Symington's desk. He vetoed it, citing problems with the bill, but agreeing with some of the principles involved. Whether a company pays a fine depends on the severity and duration of the problem. I don't have the facts of the Honeywell case, but it sounds like they discovered a pretty significant problem. Is it "payola"? Probably. And we can debate the value of punitive damages. But you can be sure that Honeywell's environmental controls will be more rigorous and proactive in the future. The last thing we want is for a company to make a financial calculation that polluting the environment is worth the cost in fines and penalties.

[SonoranSam]

In fact, your argument makes a strong case for government regulation. As other posters noted, admitting you screwed up doesn't get you off the hook. If you turned yourself in to police for a crime you committed, would you expect to evade criminal penalties?

I strongly suspect Honeywell's fne amount was mitigated by the fact that they self-reported. If they tried to cover it up the fine would have been higher.

And if we allowed polluters to keep their sins secret, they would likely escape civil penalties.

[Jim Torgeson]

That's government at work for you.

[Mr. T]

You conveniently left out the fact that, of that $3 million penalty, only about $750K is an actual fine. The rest of that money is to be used to clean up their plant -- you know, the one violating the environmental laws -- and complete some other environmental projects around the county.

Is it still punitive? Sure. But Honeywell broke the law.