Pollution Pays

An Analysis of the Failure to Enforce Clean Water Laws in Three States

An analysis of federal enforcement records shows that large industrial polluters in Ohio, Michigan and Pennsylvania are routinely breaking the law -- and getting away with it. Big water polluters are almost never fined for their violations, and when they are fined, the penalties are often too low to act as a deterrent to future pollution. For many big polluters, breaking clean water laws has become standard business practice.

Much of the blame for the sad state of clean water enforcement should fall on the shoulders of state governments and their environmental enforcers, who increasingly see themselves as "partners" of the businesses they are supposed to be policing. One representative of the Ohio EPA went so far as to declare: "We are not an enforcement agency." Sadly, clean water enforcement records obtained from the U.S. EPA back up that official's claim.

The Loophole

Industrial facilities discharging wastewater to public sewage treatment plants -- instead of directly into rivers or streams -- are classified as "minor" under the Clean Water Act, regardless of the volume or toxicity of the pollution that they, quite literally, dump down the drain. This reporting loophole virtually ensures weak enforcement of clean water laws against some major industrial polluters.

States are not required to report the violations or compliance status of "minor" facilities to U.S. EPA. This means, for example, that large auto assembly plants dumping their wastewater down the public sewer are considered minor polluters and their compliance with the CWA is not required to be tracked by the EPA. Instead, the publicly financed sewage treatment facilities that receive this pollution are categorized as "major" polluters if they serve a population of 10,000 or more, discharge one million gallons or more of wastewater daily, or have a significant impact on water quality. Further, public water treatment facilities, as opposed to state enforcement authorities, are required to adopt mechanisms to enforce pretreatment standards against industrial discharges.

Michigan Report

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Large industrial polluters in Michigan are breaking the nation's cornerstone water pollution law and routinely getting away with it. Big water polluters are almost never fined, inspection rates are abysmal, and violations of the clean water laws continue largely unabated, according to U.S. Environmental Protection Agency (EPA) Clean Water Act enforcement records.

In 1991, Governor John Engler entered office with a promise to cut bureaucratic waste, make government more efficient, and work with business to clean up the environment.

According to the governor's office, these efforts have been successful: Michigan has "balanced the state's environmental needs with the needs of business and industries to grow and create new jobs" (The Associated Press, September 7, 1998). Moreover, the public should rest assured that this "balanced" approach does not mean that Michigan has gone soft on polluters. According to the chief of Michigan's Department of Environmental Quality, Russell J. Harding: "Operating a facility in violation of state environmental laws places it in a very precarious position with serious financial and legal liability." (Russell J. Harding "Audit Law Encourages Improvement", Ethnic News Watch December 22, 1998). Nothing could be further from the truth.

Findings

EWG analyzed enforcement records from 26 Michigan facilities for April 1997 through March 1999, the most recent two-year period available. These data, audited by industry and state regulators prior to their release, represent an important but limited number of industries. They include all permitted polluters in auto assembly, iron and steel, petroleum refining, pulp manufacturing, and metal smelting and refining industries in the state. They reveal a persistent pattern of violations of state and federal clean water laws by big polluters in Michigan. The records further show that the law breaking is made possible by weak state enforcement efforts, and tiny or non-existent fines. Overall:

Nine years after Governor Engler entered office, breaking clean water laws is standard practice for big industry in Michigan.

  • All of the ten major facilities inspected were in violation of the Clean Water Act at some time in the two-year period analyzed (Table 1). Facilities are designated as "major" based on an EPA classification system that reflects a combination of factors, including toxic pollutant potential, streamflow volume, public health impacts, and proximity to coastal waters.
  • These ten violators broke the law more than half the time they were operating, accruing violations an average of five of the eight quarters in the two-year period analyzed.
  • Four of these companies were in violation of the Clean Water Act for two years straight (each of the eight quarters analyzed).

So-called "minor" polluters foul Michigan waters with impunity

  • Eleven of the 12 so-called minor polluters analyzed violated clean water laws during the past two years. These facilities are not small, but are classified as minor due to a loophole in Clean Water Act reporting requirements (see sidebar page 4). Some of these "minor" polluters have caused big problems (Table 2). For example the S.D. Warren Company in Muskegon spilled 625,000 pounds of sodium chlorate in 1998.
  • Four of the "minor" facilities were out of compliance in every quarter for two years straight (all eight quarters analyzed).
  • On average, these twelve facilities broke the law four of the eight quarters analyzed.

Weak law enforcement makes environmental crime pay in Michigan

  • None of the ten major facilities violating the Clean Water Act between April 1997 and March 1998 were fined by the state of Michigan or the U.S. EPA during that time (Table 1). Even the four facilities that violated the Clean Water Act every quarter for the past two years were not fined during this time.
  • Most major facilities are only inspected once a year. Violation rates would almost certainly be higher if these facilities were inspected more often.
  • Three of the ten facilities analyzed were listed as current "significant violators" of the Clean Water Act, yet none of these facilities have been fined for CWA violations.
  • Minor facilities also got off the hook. None of the 11 "minor" violators were fined for breaking clean water laws, even facilities that broke the law for two years in a row.

Gutting Environmental Enforcement

Governor Engler has won several key administrative and legislative changes that have sharply limited the effectiveness of the state's efforts to enforce environmental laws.

  • Engler created the Department of Environmental Quality (DEQ) in 1995 through an executive order. The DEQ was split from the Department of Natural Resources (DNR) to theoretically protect Michigan's environment more efficiently.

Seventeen citizen oversight committees were eliminated by the split and have not been restored. Field staff have been reduced in both departments while administrative positions have grown. (Michigan Land Use Institute Report, 1998).

  • In 1995, Engler gutted Michigan's Polluter Pay law, shifting the burden of clean up costs to taxpayers instead of holding corporations responsible for their own pollution. (John Fliesher, "State retreats on environmental protection, report says." The Associated Press, October 3, 1998).
  • In 1996, Engler pushed an audit privilege law through the legislature which was later modified when the federal EPA threatened to take over state enforcement if the law was not changed.

According to DEQ head Russell Harding, "The prospect of triggering federal enforcement action had a chilling effect on many businesses. They can now enjoy a high degree of confidence that participating in the audit program will not subject them to federal enforcement attention. " (Russell J. Harding, "Audit Law Encourages Improvement", Ethnic News Watch. December 22, 1998)

This appears to be quite an understatement. Since passage of the audit privilege law in 1996, neither state or federal enforcement of clean water laws has done anything to increase compliance, reduce pollution, or clean up Michigan's waters.

Conclusions

Big business routinely claims that most regulatory actions are initiated by "overzealous big-government regulators" for minor paperwork violations that consume massive amounts of resources for little environmental gain. The facts are that few enforcement actions are brought in the first place and almost none are for recordkeeping violations. In both 1997 and 1996, less than two percent of all environmental enforcement actions nationwide were concluded with only recordkeeping changes. In contrast to the image of a crushing regulatory burden, this analysis shows that there is barely any enforcement at all of existing clean water protections and virtually no pressure for water polluters to comply with current pollution control laws.

Imagine a drunk motorist racing down I-96 at 120 miles an hour. The state highway patrol wouldn't offer to "balance this drunk's needs" with the needs of the people of Michigan. He or she would be thrown in jail and fined for endangering the health of dozens of other Michiganders.

However, if a large industrial facility is endangering thousands of Michiganders by fouling waterways, it's operators are almost never even fined. They are instead considered customers of the Engler Administration, who must be helped to be in compliance with the state's public health and environmental laws.

In spite of all the rhetoric to the contrary, there is little factual evidence that anything other than stepped-up enforcement, larger fines, and tougher federal government oversight will increase compliance with environmental laws and reduce the serious levels of water pollution that continue to foul Michigan's lakes and rivers.

Recommendations

Major improvements in water quality in Michigan could be achieved just by strict enforcement of current laws and regulations. To achieve this goal however, both state and federal environmental enforcement agencies need to vastly improve their enforcement activities.

To improve enforcement of the Clean Water Act:

  • Michigan should set strict limits on the discretion of its regulatory agencies. Facilities should not be allowed to be out of compliance with environmental laws for more than two quarters in any one-year period without facing mandatory penalties. A good example of a more effective state enforcement policy is the New Jersey law that is based on the popular "three strikes and you're out" model.
  • The regional U.S. EPA office should exercise its authority and take over cases when Michigan assesses insufficient fines or delays during the enforcement process.
  • Michigan's audit privilege law should be repealed and replaced with U.S. EPA's audit policy.
  • Citizens should be informed every quarter about the compliance status of Michigan's major companies.

Michigan Table 1. Every major facility* in Michigan has violated the Clean Water Act at least once in the past two years. No fines have been levied.

Company City Number of quarters in violation of the Clean Water Act (4/97-3/99)* Penalties Assessed
Packaging Corp. Of America Manistee, MI 8 of 8 0
Mead Corp.** Escanaba, MI 8 of 8 0
Champion International Corp. Norway, MI 8 of 8 0
National Steel Corp. Ecorse, MI 8 of 8 0
Manistique Papers Inc. Manistique, MI 7 of 8 0
Copper Range Co. White Pine, MI 6 of 8 0
Total Petroleum Inc Alma, MI 3 of 8 0
Stone Container Corp. Ontonagon, MI 2 of 8 0
Menasha Corp. Otsego, MI 2 of 8 0
Rouge Steel Co. Dearborn, MI 1 of 8 0

Source: Environmental Working Group. Compiled from EPA SFIP Data.
* SFIP data used for this report includes all major facilities in five industries: Auto assembly, iron and steel, petroleum refining, pulp manufacturing, and metal smelting and refining industries. Violations are reported on a quarterly basis and no distinction is made between single ans multiple violations.
**Mead Paper disputes the fact that they violated the Clean Water Act in every quarter analyzed.

Michigan Table 2. Eleven of the twelve minor facilities in Michigan have violated the Clean Water Act at least once in the past two years. No penalties were assessed.

Company City Number of quarters in violation of the Clean Water Act (4/97-3/99)* Penalties Assessed
General Motors Flint, MI 8 of 8 0
Ford Motor Co. Wayne, MI 8 of 8 0
Ford Motor Co. Wixom, MI 8 of 8 0
Macsteel Jackson, MI 8 of 8 0
Ford Motor Co. (Michigan Truck) Wayne, MI 4 of 8 0
Ford Motor Co. Dearborn, MI 3 of 8 0
Autoalliance Intl. Flat Rock, MI 2 of 8 0
S.D. Warren Co. Muskegon, MI 2 of 8 0
North Star Steel Co. Monroe, MI 2 of 8 0
General Motors Buick City (Flint), MI 1 of 8 0
Georgia Pacific Corp. Kalamazoo, MI 1 of 8 0
Chrysler Corp. (Jefferson N) Detroit, MI 0 of 8 0

Source: Environmental Working Group. Compiled from EPA SFIP Data.
*Violations are reported on a quarterly basis and no distinction is made between single ans multiple violations.

Ohio Report

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A new computer investigation by the Environmental Working Group shows that large industrial polluters in Ohio are breaking the nation's cornerstone water pollution law and routinely getting away with it. Big water polluters are almost never fined and violations of the clean water laws continue largely unabated, according to U.S. Environmental Protection Agency (EPA) Clean Water Act enforcement records analyzed by EWG.

In 1999, Governor Bob Taft took office, inheriting the environmental legacy of George Voinovich, who was often criticized for hobbling Ohio's environmental agencies and giving far too much access to powerful industry lobbyists in Columbus. The door was wide open for the new governor to improve environmental quality and the enforcement of environmental laws. So far, however, the past has been prologue.

Before Taft's election in November of 1998, he said, "I think we need to enforce existing environmental laws." But he then added the all-important disclaimer: "I think it's important the state enforce laws vigorously but to do so in a way where the state agencies are helpful rather than punitive in their approach to business." (Dan Crawford, "Where they stand." Business First Columbus, October 30, 1998).

Taft's new director of Ohio EPA, Chris Jones, is committed to his boss' approach. According to Jones 'the challenge of improving Ohio EPA's public image attracted him to the job'. (Troy May, "Ohio EPA needs image boost." Cincinnati Business Courier, November 5, 1999). Part of improving Ohio EPA's public image involves "telling the good news about the Ohio EPA, focusing attention on environmental successes." (Randall Edwards, "Ohio's new EPA director faces a host of messy issues." Columbus Dispatch, January 24, 1999). Also high on Jones' agenda "is making the agency work more efficiently for businesses...." (Troy May, "Ohio EPA needs image boost." Cincinnati Business Courier, November 5, 1999).

More bluntly, an Ohio EPA official reportedly told a recent gathering of the Bar Association in Cincinnati "we are not an enforcement agency." (Ohio Citizen Action, Rivers Unlimited, Ohio Chapter of the Sierra Club & Ohio PIRG, "Hidden from the Public: The Distortion of the Ohio EPA's mission." August 5, 1999).

Findings

EWG analyzed Clean Water Act enforcement records from 22 Ohio facilities for April 1997 through March 1999, the most recent two-year period available. These data, audited by industry and state regulators prior to their release, represent an important but limited number of industries. They include all permitted polluters in auto assembly, iron and steel, petroleum refining, pulp manufacturing, and metal smelting and refining industries in the state. They reveal a persistent pattern of violations of state and federal clean water laws by big polluters in Ohio. The records further show that the law breaking is made possible by weak state enforcement efforts, and tiny or non-existent fines. Overall:

Breaking clean water laws is standard business practice for big industry in Ohio

  • Nearly two-thirds (14 of 22) of the "major" facilities inspected violated the Clean Water Act during the two-year period analyzed. Industrial facilities are designated as "major" based on an EPA classification system that reflects a combination of factors, including toxic pollutant potential, streamflow volume, public health impacts, and proximity to coastal waters.
  • Nine of the 14 violators broke the law in at least four of the eight quarters (two years) analyzed for this report.
  • Two of these companies were in violation of the Clean Water Act in each of the past eight quarters analyzed.

Weak law enforcement makes environmental crime pay in Ohio

  • Only two (Ormet Corporation and LTV Steel Company Inc) of the 14 major facilities violating the Clean Water Act during the past two years were fined by the state of Ohio or the U.S. EPA during that time (Table 1). Two facilities violated the Clean Water Act every quarter for the past two years yet incurred no penalties.
  • Two so-called "minor" facilities, Chrysler Corporation in Toledo and Marion Steel Corporation in Marion, also violated the Clean Water Act eight straight quarters and were not fined at all. These facilities are not small, but are classified as minor due to a loophole in Clean Water Act reporting requirements (see sidebar page 4).
  • Most major facilities were inspected only once a year for Clean Water Act violations. Violation rates would almost certainly be higher if these facilities were inspected more often.
  • Six of the 22 facilities analyzed were listed as current "significant violators" of the Clean Water Act, of these only Ormet Corporation was fined for CWA violations during the two-year period analyzed.

Gutting Environmental Enforcement

Former Governor Voinovich pushed through several key legislative and administrative changes that contributed to a state of weak regulatory enforcement in Ohio. These polluter-friendly initiatives are supported by Governor Taft.

  • In June 1994, Voinovich signed the Audit Privileges and Immunity Law which allows companies to investigate their environmental problems and fix them without civil penalty or public notification. The self-audits cannot be used as evidence in any civil or administrative proceeding.

Implementation was delayed until March 1997 after the U.S. EPA concluded that the statute provided too many protections for businesses that break the law.

Even after the changes required by the feds, Crain's Cleveland Business declared the law a victory for Ohio industry: "The good news for businesses is that the premise of the statute remains intact. Companies that investigate and discover environmental problems can correct the problems without fear of civil penalties and negative publicity." (Heather Aley Austin, "Audit law amended to suit U.S. EPA", Crain's Cleveland Business, August 17, 1998).

  • Voinovich also instituted the Voluntary Action Program as a provision in Ohio's Brownfields law in September 1996. The law encourages companies to reclaim industrial sites with a promise not to be sued for environmental violations uncovered during the clean-up. Like audit privilege, citizens groups are not allowed to use the information in lawsuits against the companies, no matter how flagrant or serious the violations.

A coalition of Ohio environmental groups issued a report on the state of the Ohio EPA in August of 1999. The report described environmental enforcement in Ohio as "the weakest since 1972" and concluded the agency has "incrementally altered the mission and trained its personnel that they exist to satisfy a 'customer', the industrial permit seeker the Ohio EPA is supposed to be regulating." (Ohio Citizen Action, Rivers Unlimited, Ohio Chapter of the Sierra Club & Ohio PIRG, "Hidden from the Public: The Distortion of the Ohio EPA's mission." August 5, 1999).

Conclusions

Big business routinely claims that most regulatory actions are initiated by "overzealous big-government regulators" for minor paperwork violations that consume massive amounts of resources for little environmental gain.

The facts are that few enforcement actions are brought in the first place and almost none are for recordkeeping violations.

In both 1997 and 1996, less than two percent of all environmental enforcement actions nationwide were concluded with only recordkeeping changes. In contrast to the image of a crushing regulatory burden, this analysis clearly shows that there is barely any enforcement at all of existing clean water protections and virtually no pressure for water polluters to comply with current pollution control laws.

Imagine a drunk motorist racing down I-71 at 120 miles an hour. The state highway patrol wouldn't help this "customer" comply with the law. He or she would be thrown in jail and fined for endangering the health of dozens of other Ohioans.

However, if a large industrial facility is endangering thousands of Ohioans by fouling waterways, it's operators are almost never even fined. They are instead considered "customers" of the Taft Administration, who must be helped to be in compliance with the state's public health and environmental laws.

In spite of all the rhetoric to the contrary, there is little factual evidence that anything other than stepped-up enforcement, larger fines, and tougher federal government oversight will increase compliance with environmental laws and reduce the serious levels of water pollution that continue to foul Ohio's lakes and rivers.

Ohio Table 1. Fourteen of twenty-two facilities* in Ohio have violated the Clean Water Act at least once in the past two years. Only two fines have been levied.

Company City Number of quarters in violation of the Clean Water Act (4/97-3/99)* Penalties Assessed
LTV Steel Co. Inc. Cleveland, OH 8 of 8 419,000
Bay West Paper Corp. Middletown, OH 8 of 8 0
Ormet Corp. Hannibal, OH 7 of 8 115000
Wheeling-Pittsburgh Steel Corp Mingo Junction, OH 7 of 8 0
Wheeling-Pittsburgh Steel Corp Steubenville, OH 5 of 8 0
WCI Steel, Inc. Warren, OH 5 of 8 0
BP Exploration and Oil Inc Lima, OH 4 of 8 0
USS/Kobe Steel Co. Lorain, OH 4 of 8 0
Timken Co., The Canton, OH 4 of 8 0
Jefferson Smurfit Corporation Circleville, OH 2 of 8 0
AK Steel Corp. Middletown, OH 2 of 8 0
Republic Engineered Steel Canton, OH 2 of 8 0
Frasier Papers Inc., W Carroll West Carrollton, OH 1 of 8 0
BP Oil Corp. Toledo (Oregon), OH 1 of 8 0
Mead Corp. Chillicothe, OH 0 of 8 0
Stone Container Corp. Coshocton, OH 0 of 8 0
Appleton Papers Inc. West Carrollton, OH 0 of 8 0
Ashland Oil Inc Canton, OH 0 of 8 0
Sun Company Inc (R & M) Toledo/Oregon, OH 0 of 8 0
Armco Inc. Mansfield, OH 0 of 8 0
CSC Inc Warren, OH 0 of 8 0
North Star BHP Steel Delta, OH 0 of 8 0

Source: Environmental Working Group. Compiled from EPA SFIP Data.
* SFIP data used for this report includes all major facilities in five industries: Auto assembly, iron and steel, petroleum refining, pulp manufacturing, and metal smelting and refining industries. Violations are reported on a quarterly basis and no distinction is made between single ans multiple violations.

Pennsylvania Report

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Large industrial polluters in Pennsylvania are breaking the nation's cornerstone water pollution law and routinely getting away with it. Big water polluters are almost never fined and violations of the clean water laws continue largely unabated, according to U.S. Environmental Protection Agency (EPA) Clean Water Act enforcement records.

In 1995, Governor Tom Ridge took office promising to overhaul the "job-crushing, community-harassing, regulatory nightmare" of a Department of Environmental Resources (DER). As promised, Ridge split the DER into two new agencies, with the Department of Environmental Protection (DEP) taking over all permitting and enforcement functions, while the Department of Conservation and Natural Resources has responsibility for parks and forestry.

According to Ridge, the newly-formed DEP has ". . .actively pursued an agenda that moves away from the philosophy of heavy-handed regulation and punitive sanctions. Instead, we are moving toward a common sense, compliance driven, consumer oriented strategy." (Remarks given at Pennsylvania Environmental Council Annual Dinner in Philadelphia, May 31, 1995). As if to illustrate this point, Ridge created the "Office of Pollution Prevention and Compliance Assistance" rather than the more traditionally titled "Office of Enforcement."

Wary that this approach might appear soft on polluters, DEP director James Seif assured citizens on Earth Day 1996 that, "Even under the Department of Environmental Protection's new approach to achieving compliance with environmental rules and regulations, fines and penalties will remain an important and powerful tool for those who willfully disregard those laws." (James Seif, "Taking the Next Step: Thorough Enforcement". Published by DEP for Earth Day 1996).

Findings

EWG analyzed U.S. EPA Clean Water Act enforcement records from 23 Pennsylvania facilities for April 1997 through March 1999, the most recent two-year period available. These data, audited by industry and state regulators prior to their release, represent an important but limited number of industries. They include all permitted polluters in auto assembly, iron and steel, petroleum refining, pulp manufacturing, and metal smelting and refining industries in the state. They reveal a persistent pattern of violations of state and federal clean water laws by big polluters in Pennsylvania. The records further show that the law breaking is made possible by weak state enforcement efforts, and tiny or non-existent fines. Overall:

Five years after Governor Ridge entered office, breaking clean water laws is standard business practice for big industry in Pennsylvania.

  • Nearly two-thirds (14 of the 23) major facilities inspected were in violation of the Clean Water Act at some time in the two-year period analyzed. Industrial facilities are designated as "major" based on an EPA classification system that reflects a combination of factors, including toxic pollution potential, streamflow volume, public health impacts, and proximity to coastal waters.
  • These 14 violators broke the law regularly, accruing violations an average of three of the eight quarters in the two-year period analyzed.
  • Even the most recalcitrant environmental law breakers are rarely if ever fined. The Sun Company in Philadelphia was in violation of the Clean Water Act in each of the past eight quarters analyzed, yet was not fined at all during this time.

Weak law enforcement makes environmental crime pay in Pennsylvania

  • None of the 14 companies in violation of the Clean Water Act during the past two years were fined for their violations.
  • Two facilities, Zinc Corporation of America and Bethlehem Steel Corporation, are currently considered "significant violators" of the Clean Water Act. These companies were not fined for their CWA violations during the two-year period analyzed.

Conclusions

Big business routinely claims that most regulatory actions are initiated by "overzealous big-government regulators" for minor paperwork violations that consume massive amounts of resources for little environmental gain. The facts are that few enforcement actions are brought in the first place and almost none are for recordkeeping violations. In both 1997 and 1996, less than two percent of all environmental enforcement actions nationwide were concluded with only recordkeeping changes. In contrast to the image of a crushing regulatory burden, this analysis clearly shows that there is barely any enforcement at all of existing clean water protections and virtually no pressure for water polluters to comply with current pollution control laws.

Imagine a drunk motorist racing down I-76 at 120 miles an hour. The state highway patrol wouldn't offer "compliance assistance" to this individual. He or she would be thrown in jail and fined for endangering the health of dozens of other Pennsylvanians.

However, if a large industrial facility is endangering thousands of Pennsylvanians by fouling waterways, it's operators are almost never even fined. They are instead considered customers of the Ridge Administration, who must be helped to be in compliance with the state's public health and environmental laws.

In spite of all the rhetoric to the contrary, there is little factual evidence that anything other than stepped-up enforcement, larger fines, and tougher federal government oversight will increase compliance with environmental laws and reduce the serious levels of water pollution that continue to foul Pennsylvania's lakes and rivers.

Recommendations

Major improvements in water quality in Pennsylvania could be achieved just by strict enforcement of current laws and regulations. To achieve this goal however, both state and federal environmental enforcement agencies need to vastly improve their enforcement activities. Industry, in turn, needs to operate without such opportunistic disregard for environmental rules it typically helped to write.

To improve enforcement of the Clean Water Act:

  • Pennsylvania should set strict limits on the discretion of its regulatory agencies. Facilities should not be allowed to be out of compliance with environmental laws for more than two quarters in any one-year period without facing mandatory penalties. A good example of a more effective state enforcement policy is the New Jersey law that is based on the popular "three strikes and you're out" model.
  • The regional U.S. EPA office should exercise its authority and take over cases when Pennsylvania assesses insufficient fines or delays during the enforcement process.
  • Citizens should be informed every quarter about the compliance status of Pennsylvania's major companies.
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