Measuring corporate environmental crime rates: progress and problems

Abstract

The problem of corporate crime rates has been the subject of debate, speculation and operationalization for decades, largely stemming from the complexity of measuring this type of crime. Examining corporate environmental crime poses challenges and creates opportunities for advancing the discussion of corporate crime rates, but criminologists are less familiar with environmental data. In the current paper, we review the strengths and weaknesses of existing environmental data that can be used to construct the components of an environmental crime rate. We also present a corporate environmental crime rate derived from data on violations of the Clean Water Act and describe problems with using it in real world data. Implications for theory, practice and future research are discussed.

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Fig. 1

Notes

  1. 1.

    The Environmental Protection Agency data, for instance, identify and track facility-level violations and legal entities to those violations, largely ignoring the parent company.

  2. 2.

    We focus on violations of laws designed to protect the physical environment. However, we recognize that “environmental crime” is a broader concept as reflected in Interpol’s division of environmental crimes into “pollution” and “wildlife” categories (www.interpol.int/Public/EnvironmentalCrime/Default.asp).

  3. 3.

    Consistent with [19, 5, 2], we define corporate crime as a violation of any legislative requirement (i.e., regulatory, civil, or criminal). We use the terms “violation” and “crime” interchangeably.

  4. 4.

    According to the EPA, pollution refers to the “presence of a substance in the environment that because of its chemical composition or quantity prevents the functioning of natural processes and produces undesirable environmental and health effects” (http://www.epa.gov/OCEPAterms/).

  5. 5.

    This organization is reflected in enforcement and sanctioning practices. Although facilities are likely to be regulated across media types (i.e., have water and air permits), they are largely regulated separately. In fact, enforcement personnel were in separate media offices until 1994. They are now in one central unit called the Office of Enforcement and Compliance Assistance (OECA) [8].

  6. 6.

    This includes the major environmental laws. States have been delegated the authority to enforce the Clean Water Act (1972); the Safe Drinking Water Act (1974); and the Resource Conservation and Recovery Act (1976) [9]. Federal environmental laws set a minimum standard of environmental performance and official response, but states may pass more stringent requirements. Thus, states enforcement federally delegated programs and additional state criteria. Delegated states assume full responsibility for environmental programs, although EPA (through it’s regional offices) may conduct “oversight” of the states to determine the appropriateness of State actions. EPA also retains the option to conduct enforcement actions in states in delegated state programs [8].

  7. 7.

    The current state to federal reporting system has created discrepancies between state and federal data. For a full discussion of these issues, see the ECOS [8] report.

  8. 8.

    Cutter et al [7] attempted to survey state-level enforcement data and experienced considerable difficulty. For those interested in collecting state data, the authors provide useful links to publicly-available state data.

  9. 9.

    Some databases do provide data across media. We discuss the integrated data systems below.

  10. 10.

    The EPA refers to these facilities as “point sources,” or pollution discharges from stationary or fixed locations such as a factory pipe or smokestack. They may be contrasted with “non-point sources” or diffuse emissions without a single point of origin, such as stormwater or agricultural runoff (http://www.epa.gov/OCEPAterms/).

  11. 11.

    AFS is a subset of a larger database called the Aerometric Information Retrieval System (AIRS). AFS contains data on stationary sources or facilities.

  12. 12.

    RCRAInfo was introduced as the new system in the fall of 2000. The previous data system was called RCRIS (Resource Conservation and Recovery Information System) [8].

  13. 13.

    Consent orders, for example, are contracts between the agency and the violator on the steps to be taken to return to compliance. Unilateral orders (non-judicial) on the other hand, are issued by the agency without consent from the violator. These orders instruct the regulated entity on steps that must be taken to avoid further penalty [8].

  14. 14.

    The data is not easily accessible. Researchers may need to file a FOIA to obtain it.

  15. 15.

    Although federal administrative cases are entered into DOCKET, we also found information on federal administrative orders in some media-specific databases (PCS). We suspect there may be overlap in the cases entered into each database but have no way of making a concrete determination.

  16. 16.

    All case information is now captured in the Integrated Compliance Information System (ICIS).

  17. 17.

    Federal EPA does not consider warning letters to be enforcement actions because they have no force of law [8].

  18. 18.

    Other types of regulatory strategies—such as compliance assistance—are not systematically recorded at all [8]. However, these strategies are not sanctions. Compliance assistance is provided in advance to help facilities avoid violations.

  19. 19.

    For one typology of sanction severity, see Hunter and Waterman [11].

  20. 20.

    Even if only one sanction is delivered, the EPA data rarely include a link to a specific violation. The absence of links makes it difficult to establish temporal ordering for research. Researchers can determine the date a sanction was delivered or the date a case was filed, but do not know the date of the violation.

  21. 21.

    For example, RCRA requires facilities that store, treat, or dispose of hazardous waste to apply for a permit [9]. Similarly, the CWA requires facilities that discharge into waterways to identify themselves by applying for a permit. In addition to general monitoring of air quality across the nation, the 1990 revisions to the Clean Air Act require some major industrial and commercial sites that release emissions into the air to obtain permits. Although we focus these few major environmental laws, numerous others rely on facilities to self-report environmental violations. For example, the underground storage tank program requires owners to report leaks from tanks. Similarly, the medical waste program requires self-reports of medical waste disposal [9].

  22. 22.

    Facilities must immediately notify EPA of contaminated samples [9].

  23. 23.

    Facilities may contract with external laboratories or sample and analyze pollution levels themselves [8].

  24. 24.

    Thus, it is important to understand the primary monitoring system used in a particular program when contemplating how to measure environmental crime.

  25. 25.

    The Facility Registry System (FRS) is designed to allow matches across EPA data bases. It provides a single identifier (FRS number) that is linked to identifiers in all media programs (e.g., PCS, TRI, etc) at the state and federal level [14]. FRS also contains the facility name, address, a list of all ownership information drawn from every source, and all previous names of the facility. The Sector Facility Indexing Project (SFIP) also provided links to facility identifiers and links to compliance and inspection history across database within five industries (automobile assembly, pulp manufacturing, petroleum refining, iron and steel production, and the primary smelting and refining of nonferrous metals). The SFIP was “retired” in December of 2004.

  26. 26.

    Envirofacts also provides integrated information, but is not focused on compliance and enforcement.

  27. 27.

    The sheer volume of data maintained in each databases makes these “cuts” necessary.

  28. 28.

    Each program describes and defines “significant” violations in a different way. For example, in PCS and RCRA the term “significant noncompliance” (SNC) is used. In the air database, the term “high priority violators” (HPV) is used [8]. HPV status can be given for chronic violations or for a single violation of an air toxics requirement. The SNC designation in PCS is usually reserved for substantial violations of permitted levels (http://www.epa-echo.gov/echo/dfr_data_dictionary.html#cea).

  29. 29.

    For a description of problems with using ECHO to obtain data, see Cutter et al. [7].

  30. 30.

    Major industrial facilities are distinguished from minor dischargers by the facility’s potential for discharging toxic wastes, the volume and type of wastewater, and whether the receiving water is used for drinking [20].

  31. 31.

    Given the data discrepancies and lack of ownership information at the federal level, one might question why we did not turn to state data. Corporations own facilities in multiple states. Practically speaking it would be difficult to collect data from all 50 states. Even with a government mandate to collect the data, ECOS did not receive all of the requested information. Although the purpose of the report was to provide a new picture of State contribution to enforcement, ECOS [8] was forced to rely on national data to fill in the gaps. Second, even if unlimited resources were available, the data would inevitably suffer from some of the same weaknesses as the headquarters data. For example, differences in definitions across place would not be resolved by collecting the data directly from the States.

  32. 32.

    Although we developed an extensive procedure to match facilities to parent companies, we were unable to overcome the lack of information on minor facilities. Given that ours was a national study, contacting every state for information on minors in specific industries was beyond the resources available for the project.

  33. 33.

    Quantities represent total loads while concentrations are the percent of a pollutant in the water. Regulations specify the type of limits that must be assigned to each parameter, although the permit writers may add additional ones.

  34. 34.

    More frequent reports (usually monthly) are required for pipes that are more active. Reports may be required quarterly or only annually for less active pipes.

  35. 35.

    It is important to note that although this measure does not capture the actual volume of opportunity, it is similar to a rate measure proposed by state EPA officials. For instance, a recent survey of state EPA officials shows that some officials would prefer to calculate a compliance “rate.” One suggestion for calculating the rate was the “total discharge monitoring reports (DMR) reporting periods without violations/Total DMR Reporting periods” ([8]: 41). Thus, our measure is consistent with some EPA reporting preferences.

  36. 36.

    Two sources of information are used to construct measures of sanctions; one is the PCS system itself. The EPA data contains information on actions taken by EPA (national and state). There are several problems with these data. First, it is likely that information on administrative cases in this source (EPA Docket) overlaps with information on administrative orders and penalties in the PCS data, but it is impossible to determine the degree of overlap. Second, the administrative, civil, and criminal cases coded as the more formal actions in the scale currently reflect all cases brought against these companies under the Clean Water Act; thus, the cases may have been brought as a result of other kinds of violations (reporting or compliance schedule violations rather than pollution violations). However, because the EPA targets the most serious violators and the most serious violations (i.e., pollution) for formal enforcement actions it is likely that most of the cases were brought for either repeated pollution violations or repeated violations of many types (e.g., pollution, compliance schedule, and single event violations). For this study, I will examine the enforcement actions that resulted from a pollution violation (i.e., excluding enforcement actions for reporting violations, etc). Finally, the data does not contain links between enforcement actions and specific violations. Thus, although the outcome of interest may be limited to a specific type of pollutant (e.g., BOD), the enforcement action may have been given for any type of pollution (e.g., combining violations for BOD, TSS, and nitrogen).

  37. 37.

    Violation rates are also generally unrelated to sanctions in the bivariate regression models (data not shown).

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Acknowledgment

This research is supported by a grant from the National Institute of Justice (NIJ).

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Correspondence to Carole Gibbs.

Appendix

Appendix

Table 8

Table 8 Summary of EPA databases
Table 9 Relevant acronyms

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Gibbs, C., Simpson, S.S. Measuring corporate environmental crime rates: progress and problems. Crime Law Soc Change 51, 87–107 (2009). https://doi.org/10.1007/s10611-008-9145-1

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Keywords

  • Environmental Protection Agency
  • Crime Rate
  • Enforcement Action
  • Environmental Crime
  • Corporate Crime