DOJ Targeting Employees for Criminal Environmental Prosecution: Tips for Minimizing Exposure

In a pre-recorded keynote address to the American Bar Association (ABA) National Environmental Enforcement Conference on December 14, 2021, Assistant Attorney General for the Environment and Natural Resources Division (ENRD) Todd Kim stated, “Only individuals can go to jail, and we have found that criminal corporate accountability starts with accountability for individuals responsible for criminal conduct.”

Kim’s remarks are consistent with DOJ’s intent to prioritize criminal prosecutions of individuals for a variety of corporate crimes, as Deputy Attorney General Lisa Monaco explained in an October address to the ABA 36th Annual National Institute on White Collar Crime. Kim also suggested that DOJ would not restrict itself to environmental statutes when pursuing criminal environmental enforcement. Rather, employees could face charges such as fraud, conspiracy, and obstruction of justice in connection with environmental cases.

The federal government has a long history of prosecuting crimes in environmental cases. DOJ views these cases as an indispensable arrow in its quiver. As Kim explains, “Vigorous and robust enforcement is necessary to ensure appropriate deterrence and thereby protect the public health and the environment, as well as create a level playing field for businesses that obey the law.”

The DOJ Environmental Crimes Section within ENRD works closely with local U.S. Attorney’s offices to prosecute these cases. And sometimes, violations of environmental statutes can result in both criminal and civil enforcement. DOJ refers to these cases as parallel proceedings. In those situations, the civil case is usually stayed until the criminal case has significantly developed or concluded. But where the government draws the line between what is appropriate for a criminal prosecution instead of a civil prosecution has long been a mystery for many in the regulated community. This is particularly true when confronting gray areas in complex environmental laws.

DOJ’s new focus on criminal prosecution of individuals in environmental enforcement actions provides a greater deterrent than the possibility of civil or criminal enforcement against the corporation, itself. Historically, criminal prosecution of individuals for environmental crimes has been used to address extreme conduct leading to serious violations, often, but not always, involving willful conduct. Will DOJ simply prosecute a greater percentage of such egregious cases, or will it begin prosecuting individuals responsible for less egregious violations? Time will tell. But Kim affirms that DOJ will “prioritize prosecuting individuals who commit and profit from corporate malfeasance.”

The Biden Administration has long made clear that it intends to focus more resources on climate change and environmental justice. Kim leaves no doubt that DOJ’s enforcement efforts will follow suit. He notes that the purpose of enforcement is to ensure “public values are achieved,” like protecting public health, and concludes: “Nowhere is that more true than for enforcement efforts that mitigate climate impacts and strive to secure environmental justice.”

Tips for Minimizing Exposure

Honest mistakes or equipment failures can result in non-compliance. These are typically addressed through civil enforcement. However, failure to devote sufficient resources to environmental compliance can lead the government to conclude a company is a bad actor that fails to take its environmental compliance responsibilities seriously, thus increasing the likelihood that non-compliance could be prosecuted criminally. And as Kim’s remarks make clear, a criminal prosecution may not end with the corporate entity but can extend to the individuals whose actions or inaction caused the non-compliance.

Companies can take steps to protect the entity and its employees from criminal prosecution. One obvious tool is voluntary disclosure of environmental violations, utilizing what is commonly referred to as the audit policy. But the audit policy provides mitigation of penalties only in certain circumstances.

There are other prudent everyday steps that a company can take to minimize the potential for either criminal or civil enforcement. These steps help ensure compliance and lower the risk that non-compliance rises to the level of warranting criminal prosecution.

• Review your permits. Ensure your facilities possess all required permits, that those permits are up-to-date, and that they do not impose conditions for which compliance is not possible.
• Maintain up-to-date procedures for compliance with all environmental regulations and permit requirements, with layers of opportunities to identify potential non-compliance.
• Ensure clear delineation of internal responsibilities affecting environmental compliance.
• Ensure employees with those responsibilities are well-qualified and undergo regular, periodic training, and have sufficient time and resources to perform their responsibilities.
• Strictly adhere to all required record keeping and reporting obligations.

And, follow this advice from Kim:

• “Keep track of the compliance steps you take” to help demonstrate a “history of good corporate citizenship.”
• “Undertake comprehensive, periodic environmental audits of business operations to verify compliance with environmental requirements, identify any areas of noncompliance, and provide the mechanisms for correcting deficiencies.”
• “It all comes down to this – a corporate culture that fails to be proactive and hold individuals accountable will lead to bad results.”

It remains to be seen how much of an increase in civil and criminal enforcement there will be under the Biden administration, including a greater focus on how environmental justice will factor into enforcement priorities. But the threat of increasing criminal enforcement against employees, individually, in circumstances where the government would have pursued just the corporation in the past should incentivize corporations and their employees to increase their attention on environmental compliance.