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Regulatory: Environmental disasters and criminal investigations

The overlap of civil and criminal government investigations can be a thorny issue for businesses

Despite volumes of government regulations related to workplace safety, and enormous resources devoted by businesses to safety, we still experience major industrial disasters. Most recently that list includes the explosion at a West, Texas fertilizer plant, as well as many smaller incidents. Needless to say, such nightmare scenarios raise difficult issues, including the initial emergency response, business disruptions with customers and suppliers, press questioning, inquiries from various elected officials, internal personnel and labor issues, disclosure obligations, and on and on.

The challenges are significantly increased by the number of different government agencies that converge on incident sites. Depending on the type of incident, they may include the Occupational Safety and Health Administration, the Environmental Protection Agency (EPA), the Department of Homeland Security, the Federal Bureau of Investigation, the Coast Guard, the Chemical Safety Board (CSB), the Mine Safety and Health Administration and other federal agencies, in addition to their state counterparts and state and local police. Many of these agencies will be seeking information—in the form of documents, physical site inspections, answers to agency queries and employee interviews—and insisting on very quick responses, typically before the company has completed its own internal investigation.

The situation is made even more demanding by the lack of coordination among the various government entities. The one point at which the government may be well-coordinated is the emergency response immediately following the incident. At some major incidents, for example, the Coast Guard has exercised a unified command. However, once that initial stage is over, all bets are off. The government agencies all have different missions, different resources and different legal authorities, and they generally proceed independently. The result is that the company can expect to receive multiple information requests of different types from different agencies more or less simultaneously, which to some extent will be duplicative but to some extent differ. Each agency also has its own procedures and protocols. Who may be present along with an employee at the employee’s interview, whether the interview is under oath, whether it is transcribed, and whether the employee can get a copy or review the interview transcript, are all questions the answers of which vary from agency to agency. It is critical to fully understand these differences.

A particularly thorny issue, for both the government and businesses, is the overlap of administrative and civil investigative and enforcement actions on the one hand, and the potential for criminal action by the government on the other. This overlap is made very real by the existence of federal environmental criminal provisions that are based, not on criminal intent, but only on strict liability or negligence. For example, it is a crime under the Clean Water Act to discharge harmful quantities of oil in connection with activities under the Outer Continental Shelf Lands Act which affected natural resources of the U.S. as long as the discharges are deemed to have been negligent. And the Migratory Bird Treaty Act contains criminal provisions based on strict liability. Both have been charged in recent cases.

When an agency such as the Chemical Safety Board requests an employee interview, its purpose is not to develop evidence for a criminal prosecution. CSB has no enforcement authority, much less criminal powers. Rather, its role is solely investigatory. It investigates industrial accidents at chemical facilities in order to make reports and recommendations to improve industrial safety. In this regard, the company and the CSB should have shared interests, which would provide a reason for the company to encourage its employees to cooperate with the agency.  Presumably to encourage company employees to speak freely to CSB investigators, the CSB has advised witnesses that it is not its practice to share interviews with other government agencies

Contributing Author

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Ronald A. Sarachan

Ronald A. Sarachan is a partner in Drinker Biddle & Reath's Commercial Litigation Practice Group and co-chair of the White Collar/Internal Investigations Team. He focuses...

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