Role of Criminal Penalties in Enforcing Violations of Environmental Law

Faulty car airbags, combustible printer parts, and metallic debris in canned foods exemplify the unfortunate offspring of mass-production. A defect in an everyday product is usually easy to spot, either because it causes injury or deviates from the consumer’s expected use of it. Companies are held strictly liable for such defects, meaning that even though they did not intend harm and took every necessary precaution, they still have to compensate consumers of defective products. Consequently, most companies take extraordinary measures to avoid manufacturing and design defects in their products. In short, the process regulates itself.

Unlike defective products, a company’s environmental violations are more difficult to spot: the problem is not as obvious (pollution of a stream vs. an exploding toaster), much of a business’s operations can be hidden from governmental regulators, and the effects (health, economic, etc.) of the violation may only be felt years later. And even then it is difficult to link the adverse effect to a delinquent company. Therefore, the most effective way to remediate environmental violations is to deter a potential culprit from disregarding the regulation by imposing steep civil and, in instances of negligence, criminal penalties. For example, both the Clean Air Act and the Clean Water Act contain provisions allowing criminal penalties for negligent violations of the statutes that can be extended to “any responsible corporate officer.” This clause, known as the responsible corporate officer doctrine, allows high-level corporate officers to be criminally charged, even without actual knowledge of the violations.

Congress has chosen to include provisions for criminal penalties in its environmental regulations for a few reasons. For certain violations, there is a cap on the amount of damages for civil claims. The Oil Pollution Act of 1990 put a $75 million limit on the amount that can be paid for private economic and public natural-resource claims, even though the extent of damage from a violation may exceed this amount. By imposing criminal violations, however, Congress can compel the violating companies to contribute more to help with cleaning up the pollution and compensating those affected. Additionally, many of the largest companies are also the largest polluters, partly because they can afford to be. A $75 million slap on the wrist is unlikely to effectively deter a company like Chevron, whose annual revenue exceeds $200 billion, from cutting corners in its environmental operations. On the other hand, expose that same company (assuming they are found to be in violation of environmental law) to the potential of criminal penalties, and the regulation, now fitted with sharper teeth, can be much more effective.

The basic idea is that by stiffening the backbone of environmental law, regulators can obligate companies and their officers to regulate themselves, forcing them to approach environmental compliance with the same vigor they devote to the development of their own products.

-Kyle Johnson