Current Status Bill Number:810 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19950503 Primary Sponsor:J. Verne Smith All Sponsors:J. Verne Smith and Alexander Drafted Document Number:dka\3978ac.95 Residing Body:Senate Current Committee:Labor, Commerce and Industry Committee 12 SLCI Subject:Environmental Audit and Disclosure Immunity Act
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
Senate 19950510 Committed to Committee 12 SLCI
Senate 19950510 Recalled from Committee 13 SMA
Senate 19950503 Introduced, read first time, 13 SMA
referred to Committee
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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:
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.