H*3624 Session 111 (1995-1996)
H*3624(Rat #0471, Act #0384 of 1996) General Bill, By Sharpe
A Bill to amend Title 48, Code of Laws of South Carolina, 1976, relating to
environmental protection and conservation, by adding Chapter 57 so as to enact
the South Carolina Environmental Audit Privilege and Voluntary Disclosure Act
of 1996 so as to define environmental audits and audit reports and to create a
privilege with regard to contents of these reports and to provide
exceptions.-amended title
02/16/95 House Introduced and read first time HJ-7
02/16/95 House Referred to Committee on Agriculture, Natural
Resources and Environmental Affairs HJ-7
03/30/95 House Committee report: Favorable with amendment
Agriculture, Natural Resources and Environmental
Affairs HJ-5
04/05/95 House Debate adjourned until Wednesday, April 12, 1995 HJ-21
04/12/95 House Objection by Rep. Cromer, Rogers, Cobb-Hunter, L.
Whipper, Thomas, Lloyd, McElveen, Baxley, J.
Harris, White, Shissias & Byrd HJ-66
04/19/95 House Objection withdrawn by Rep. J. Harris HJ-29
04/26/95 House Objection withdrawn by Rep. Baxley HJ-112
04/26/95 House Objection withdrawn by Rep. Byrd HJ-114
04/26/95 House Objection by Rep. Sharpe, Cato, R. Smith, Meacham
& Davenport HJ-114
05/09/95 House Amended HJ-183
05/09/95 House Read second time HJ-199
05/09/95 House Roll call Yeas-91 Nays-16 HJ-199
05/10/95 House Read third time and sent to Senate HJ-86
05/11/95 Senate 2/3 vote failed for introduction after May 1 SJ-20
01/16/96 Senate Introduced and read first time SJ-6
01/16/96 Senate Referred to Committee on Labor, Commerce and
Industry SJ-6
03/14/96 Senate Committee report: Majority favorable with amend.,
minority unfavorable Labor, Commerce and Industry SJ-6
04/02/96 Senate Special order SJ-30
04/10/96 Senate Debate interrupted SJ-94
04/16/96 Senate Debate interrupted SJ-36
04/23/96 Senate Debate interrupted SJ-60
04/24/96 Senate Read second time SJ-72
04/24/96 Senate Ordered to third reading with notice of
amendments SJ-72
05/08/96 Senate Debate interrupted until Tuesday, May 14 SJ-33
05/14/96 Senate Amended SJ-110
05/14/96 Senate Debate interrupted SJ-110
05/15/96 Senate Amended SJ-67
05/15/96 Senate Read third time and returned to House with
amendments SJ-67
05/23/96 House Concurred in Senate amendment and enrolled HJ-53
05/30/96 Ratified R 471
06/04/96 Signed By Governor
06/04/96 Effective date 06/04/96
06/04/96 See act for exception to or explanation of
effective date
06/14/96 Copies available
06/14/96 Act No. 384
(A384, R471, H3624)
AN ACT TO AMEND TITLE 48, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO ENVIRONMENTAL
PROTECTION AND CONSERVATION, BY ADDING CHAPTER 57
SO AS TO ENACT THE SOUTH CAROLINA ENVIRONMENTAL
AUDIT PRIVILEGE AND VOLUNTARY DISCLOSURE ACT OF
1996 SO AS TO DEFINE ENVIRONMENTAL AUDITS AND AUDIT
REPORTS AND TO CREATE A PRIVILEGE WITH REGARD TO
CONTENTS OF THESE REPORTS AND TO PROVIDE
EXCEPTIONS.
Be it enacted by the General Assembly of the State of South
Carolina:
Citation to act
SECTION 1. This section may be cited as the "South Carolina
Environmental Audit Privilege and Voluntary Disclosure Act of
1996".
Environmental audits; privilege created; exceptions
SECTION 2. Title 48 of the 1976 Code is amended by adding:
"CHAPTER 57
Environmental Audit Privilege and Voluntary
Disclosure
Section 48-57-10. (A) The General Assembly finds that the protection
of the environment rests principally on the public's voluntary compliance
with environmental laws; that voluntary compliance is most effectively
achieved through the implementation of regular self-evaluative activities
such as audits of compliance status and management systems to assure
compliance; and that it is in the public's interest to encourage these
activities by assuring limited protection of audit findings and of fair
treatment of those who report an environmental compliance violation or
audit findings to regulatory authorities in accordance with Section
48-57-100. In order to encourage owners and operators of facilities and
persons conducting other activities regulated under federal, state,
regional, or local laws to conduct voluntary internal environmental audits
of compliance programs or management systems and to assess and
improve compliance with these laws, an environmental audit privilege is
established and recognized to protect the confidentiality of
communications relating to voluntary internal environmental audits and a
limited protection from penalties is established for those who disclose an
environmental compliance violation or audit findings to regulatory
authorities.
(B) Notwithstanding any other provisions of law, nothing in this
chapter shall be construed to protect individuals, entities, or facilities
from a criminal investigation and/or prosecution carried out by any
appropriate governmental entity.
(C) Notwithstanding any other provision of law, any privilege granted
by this chapter shall apply only to those communications, oral or written,
pertaining to and made in connection with the self-audit and shall not
apply to the facts relating to the violation itself.
Section 48-57-20. As used in this chapter:
(1) `Department' means the South Carolina Department of Health and
Environmental Control.
(2) `Environmental audit' means a voluntary, internal evaluation or
review of one or more facilities or an activity at one or more facilities
regulated under federal, state, regional, or local environmental law, or of
compliance programs, or management systems related to the facility or
activity if designed to identify and prevent noncompliance and to
improve compliance with these laws. For the purposes of this act, an
environmental audit does not include an environmental site assessment of
a facility conducted solely in anticipation of the purchase, sale, or
transfer of the business or facility. An environmental audit may be
conducted by the owner or operator, the parent corporation of the owner
or operator or by their officers or employees, or by independent
contractors. An environmental audit must be a discrete activity with a
specified beginning date and scheduled ending date reflecting the
auditor's bona fide intended completion schedule.
(3) `Environmental audit report' means a document marked or
identified as such with a completion date existing either individually or
as a compilation prepared in connection with an environmental audit. An
environmental audit report may include, but is not limited to, field notes
and records of observations, findings, opinions, suggestions,
recommendations, conclusions, drafts, memoranda, drawings,
photographs, computer-generated or electronically-recorded information,
maps, charts, graphs, and surveys, provided the supporting information is
collected or developed for the primary purpose and in the course of an
environmental audit. An environmental audit report, when completed,
may have these components:
(a) an audit report prepared by an auditor, which may include the
scope and date of the audit and the information gained in the audit,
together with exhibits and appendices and may include conclusions and
recommendations;
(b) memoranda and documents analyzing the report and discussing
implementation issues;
(c) an audit implementation plan that addresses correcting past
noncompliance, improving current compliance, and preventing future
noncompliance.
(4) `Environmental laws' means all provisions of federal, state,
regional, and local laws, regulations, and ordinances pertaining to
environmental matters.
Section 48-57-30. (A) An environmental audit report or any part of an
environmental audit report is privileged and, therefore, immune from
discovery and is not admissible as evidence in a legal action, except as
provided in Sections 48-57-40, 48-57-50, and 48-57-60. These
documents are not entitled to the privilege:
(1) information obtained by observation by a regulatory agency;
(2) information obtained from a source independent of the
environmental audit;
(3) information obtained pursuant to specific permit conditions that
require monitoring or sampling records and reports or assessment plans
and management plans required to be maintained or submitted to the
department pursuant to an established schedule or pursuant to specific
permit conditions, final departmental orders, or environmental laws that
require notification of releases to the environment;
(4) documents prepared either prior to the beginning of the
environmental audit or subsequent to the completion date of the audit
report, and in all cases, any documents prepared independent of the audit
or audit report;
(5) documents prepared as a result of multiple or continuous self
auditing conducted in an effort to intentionally avoid liability for
violations; or
(6) information which is knowingly misrepresented or misstated or
which is knowingly deleted or withheld from an environmental audit
report, whether or not included in a subsequent environmental audit
report.
(B) If an environmental audit report or any part of an environmental
audit report is subject to the privilege provided for in subsection (A), no
person who conducted or participated in the audit or who significantly
reviewed the audit report may be compelled to testify regarding the audit
report or a privileged part of the audit report except as provided for in
Sections 48-57-40, 48-57-50, and 48-57-60.
(C) Nothing contained in this chapter may restrict a party in a
proceeding before the South Carolina Workers' Compensation
Commission from obtaining or discovering any evidence necessary or
appropriate for the proof of any issue pending in the case, regardless of
whether evidence is privileged pursuant to this chapter. Further, nothing
contained in this chapter may prevent the admissibility of evidence which
is otherwise relevant and admissible in a proceeding before the South
Carolina Workers' Compensation Commission, regardless of whether the
evidence is privileged pursuant to this chapter. However, the
commission, upon motion made by a party to the proceeding, may issue
appropriate protective orders preventing disclosure of information outside
of the workers' compensation proceeding.
(D) In a criminal proceeding, any information in the audit report not
otherwise available shall be made available to circuit solicitors and the
Attorney General upon request but shall not be disclosed to the
department, third parties, or their attorneys if the privilege otherwise
applies. This disclosure does not waive a party's right to assert the
privilege under Section 48-57-60. The privilege shall continue to apply
and is not waived in civil and administrative proceedings, and shall not
be discoverable or admissible in civil or administrative proceedings even
if disclosed during a criminal proceeding. If the circuit solicitor, the
Attorney General, or any member of their offices divulges or
disseminates all or any part of the information contained in the
environmental audit report for which the privilege has not been revoked
by a court, the disclosing party shall be subject to the remedies available
to the aggrieved party under common law including, but not limited to,
civil contempt.
Section 48-57-40. (A) The privilege provided for in Section 48-57-30
does not apply to the extent that it is expressly waived in writing by the
owner or operator of a facility at which an environmental audit was
conducted and who prepared or caused to be prepared the audit report as
a result of the audit.
(B) The audit report and information generated by the audit may be
disclosed without waiving the privilege in Section 48-57-30 to:
(1) a person employed by the owner or operator or the parent
corporation of the audited facility;
(2) a legal representative of the owner or operator or parent
corporation; or
(3) an independent contractor retained by the owner or operator or
parent corporation to conduct an audit on or to address an issue or issues
raised by the audit.
(C) Disclosure of an audit report or information generated by the audit
under these circumstances does not waive the privilege in Section
48-57-30:
(1) disclosure made under the terms of a confidentiality agreement
between the owner or operator of the facility audited and a potential
purchaser of the business or facility audited;
(2) disclosure made under the terms of a confidentiality agreement
between governmental officials and the owner or operator of the facility
audited;
(3) disclosure made under the terms of a confidentiality agreement
between a customer, lending institution, or insurance company with an
existing or proposed relationship with the facility.
Section 48-57-45. In order to assert the privilege established in
Section 48-57-30, the facility coordinating the environmental audit shall,
within ten days of commencing the audit, notify the department that an
audit is being conducted, and shall include in that notification the
beginning date of the audit and the scheduled completion date.
Section 48-57-50. In an administrative proceeding before an
administrative law judge, the department may seek by motion a
declaratory ruling on the issue of whether an environmental audit report
is privileged. The administrative law judge may revoke the privilege
granted in Section 48-57-30 to an audit report if the factors set forth in
this section apply. In a civil proceeding, the court, after an in camera
review, may revoke the privilege provided for in Section 48-57-30 if the
court determines that disclosure of the environmental audit report was
sought after the effective date of this chapter, and:
(1) the privilege is asserted for purposes of deception or evasion;
or
(2) even if subject to the privilege provided for in Section
48-57-30:
(a) the material shows evidence of significant noncompliance with
applicable environmental laws;
(b) the owner or operator of the facility has not promptly initiated
and pursued with diligence appropriate action to achieve compliance with
these environmental laws or has not made reasonable efforts to complete
any necessary permit application; and
(c) as a result, the owner or operator of the facility did not or will
not achieve compliance with applicable environmental laws or did not or
will not complete the necessary permit application within a reasonable
period of time.
Section 48-57-60. In a criminal proceeding the court, after an in
camera review, may revoke the privilege provided for in Section
48-57-30 if the court determines that disclosure of the environmental
audit report was sought after the effective date of this act, and:
(1) the privilege is asserted for purposes of deception or evasion;
or
(2) even if subject to the privilege provided for in Section
48-57-30:
(a) the material shows evidence of wilful noncompliance with
applicable environmental laws;
(b) the owner or operator of the facility has not promptly initiated
and pursued with diligence appropriate action to achieve compliance with
these environmental laws or has not made reasonable efforts to complete
any necessary permit application; and
(c) as a result, the owner or operator of the facility did not or will
not achieve compliance with applicable environmental laws or did not or
will not complete the necessary permit application within a reasonable
period of time.
Section 48-57-70. A party asserting the privilege provided for in
Section 48-57-30 has the burden of proving that the materials claimed as
privileged constitute an environmental audit report as defined by Section
48-57-20 and of proving diligence toward compliance. A party seeking
disclosure under Section 48-57-50 has the burden of proving the
condition for disclosure set forth in that section. A solicitor or the
Attorney General seeking disclosure under Section 48-57-60 has the
burden of proving the conditions for disclosure set forth in that
section.
Section 48-57-80. The parties may at any time stipulate to entry of an
order directing that specific information contained in an environmental
audit report is or is not subject to the privilege. In the absence of an
on-going proceeding, where the parties are not in agreement, the
department may seek a declaratory ruling from the circuit court on the
issue of whether the materials are privileged under Section 48-57-30 and
whether the privilege, if existing, should be revoked pursuant to Section
48-57-50 or Section 48-57-60.
Section 48-57-90. Nothing in this chapter limits, waives, or abrogates
the scope or nature of any statutory or common law privilege, including
the work-product privilege or the attorney-client privilege.
Section 48-57-100. (A) If a person or entity makes a voluntary
disclosure of an environmental compliance violation of the state's laws,
or the federal, regional, or local counterpart or extension of these laws,
there is a rebuttable presumption that the disclosure is voluntary, and the
person or entity is immune from any administrative or civil penalties
associated with the issues disclosed. Nothing in this section shall be
construed to provide immunity from criminal penalties.
(B) For purposes of this section, disclosure is voluntary if:
(1) the disclosure is made within fourteen days following a
reasonable investigation;
(2) the disclosure is made to an agency having regulatory authority
with regard to the violation disclosed;
(3) the person or entity making the disclosure initiates an action to
resolve the violation identified in the disclosure in a diligent manner;
(4) the person or entity making the disclosure cooperates with the
appropriate agency in connection with investigation of the issues
identified in the disclosure; and
(5) the person or entity making the disclosure diligently pursues
compliance.
(C) A disclosure is not voluntary for purposes of this section if:
(1) specific permit conditions require monitoring or sampling
records and reports or assessment plans and management plans to be
maintained or submitted to the department pursuant to an established
schedule;
(2) specific permit conditions, final departmental orders, or
environmental laws require notification of releases to the
environment;
(3) the violation was committed intentionally and wilfully by the
person or entity making the disclosure;
(4) the violation was not corrected in a diligent manner;
(5) significant environmental harm or a public health threat was
caused by the violation; or
(6) the violation occurred within one year of a similar prior
violation at the same facility and immunity from civil and administrative
penalties was granted by the department for the prior violation.
(D) To rebut the presumption that a disclosure is voluntary, the
governmental entity shall show to the satisfaction of the court or the
administrative law judge presiding over the enforcement action that the
disclosure was not voluntary, based upon the factors set forth in this
section. No state or local governmental agency may include an
administrative or civil penalty or fine for acts in a notice of violation or
in a cease and desist order based upon an environmental compliance
violation immune from penalties under this section, absent a finding by
the court that the state or local governmental agency has rebutted the
presumption of voluntariness of the disclosure.
(E) A voluntary disclosure made pursuant to this section is subject to
disclosure by the agency pursuant to the South Carolina Freedom of
Information Act.
(F) Final waiver of penalties and fines is not granted until full
compliance has been certified by the department as occurring in a
reasonable time. If full compliance is not certified by the department,
the department shall retain discretion to assess penalties based on the
department's Uniform Enforcement Policy.
Section 48-57-110. No state or local governmental rule, regulation,
guidance, policy, or permit condition may circumvent or limit the
privileges established by this chapter or the exercise of the privileges or
the presumption and immunity established by this chapter."
Time effective
SECTION 3. This act takes effect upon approval by the Governor. The
audit report privilege contained within this chapter does not apply to any
administrative, civil, or criminal proceedings pending or any violations
which were known or discovered by the owner or operator before the
effective date of this act.
Approved the 4th day of June, 1996. |