(199a) Impact of Environmental Regulatory Compliance: Corporate Responsibility and Economic Consequences

Process industries, like refineries, operating many sources such as reactors, scrubbers, boilers, cogen units, etc. must comply with the requirements of various regulatory agencies having jurisdiction (AHJ). Although the processes and associated equipment are operated in accordance with design and operating conditions, strict compliance with applicable codes as stipulated in their operating permit conditions specific to the equipment are equally important. Published data suggest that many industries have not given importance to compliance, because of the fact that they have to meet production targets and maximize profit. More often than not, corporate management is not accustomed to the impact of noncompliance unless they are audited unannounced, and hefty penalties are levied. Many corporate managers mistakenly think that in the post-COVID era, compliance is not a priority.

The US Environmental Protection Agency (EPA) has authority from US Congress by which a violation can be fined up to $37,500 a day, up to 180 days, depending upon the severity of the violation. In addition, local AHJs can impose fines, too. In some cases, litigation for causing adverse environmental and human health and safety is also possible. Despite mitigating the violations, keeping the facility continually in compliance is a challenge due to the required additional resources and associated costs. Some industries use site specific compliance tracking systems. However, they fail to keep up with the growing regulations that affect their operations. Therefore, facilities must take regulatory compliance very seriously, not only to avoid fines, but to meet their economic goal and not be exposed to the public as a “big polluter, with no corporate social responsibility”.

This paper assesses the compliance status of a few industries based on open source data collected from the AHJs, types of violations issued, mitigation efforts taken, and areas of future potential violations. Recommendations are made as to how such facilities can remain in compliance, responsibilities of the operating personnel, and audit methods including periodic inspections. A specific compliance tracking software tool is discussed to aid the facilities to stay in compliance.