S 810 Session 111 (1995-1996)
S 0810 General Bill, By J.V. Smith and Alexander
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 and Disclosure Immunity Act of 1995 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.
05/03/95 Senate Introduced and read first time SJ-3
05/03/95 Senate Referred to Committee on Medical Affairs SJ-3
05/10/95 Senate Recalled from Committee on Medical Affairs
05/10/95 Senate Committed to Committee on Labor, Commerce and Industry
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 AND DISCLOSURE IMMUNITY
ACT OF 1995 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:
SECTION 1. This section may be cited as the "South
Carolina Environmental Audit and Disclosure Immunity Act of
1995".
SECTION 2. Title 48 of the 1976 Code is amended by adding:
"CHAPTER 57
Environmental Audit and Disclosure Immunity
Section 48-57-10. 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 audit findings to regulatory authorities. 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 audit findings to regulatory authorities.
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.
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.
(3) `Environmental audit report' means a document 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 immune
from discovery and is not admissible as evidence in a legal action
including a civil, criminal, or administrative proceeding, except as
provided in Section 48-57-40. 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; or
(3) information obtained pursuant to specific permit
conditions that require monitoring or sampling reports or assessment
plans and management plans required to be 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 subsequent to completion of and
independent of the 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.
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 48-57-50. 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 require
disclosure of the audit report only if the factors set forth in this
section apply. In a civil proceeding, the court, after an in camera
review consistent with the South Carolina Rules of Civil Procedure,
may require disclosure of material for which the privilege provided
for in Section 48-57-30 is asserted only 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 as provided for in Section 48-57-50, may require
disclosure of material for which the privilege provided for in
Section 48-57-30 is asserted, only 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.
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.
(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
reports to be submitted to the department pursuant to an established
schedule;
(2) specific permit conditions 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; or
(5) significant environmental harm or a public health threat
was caused by the 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.
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."
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 before the effective date of this act.
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