EPA audit blasts state water-quality agency

Are North Carolina officials doing a good job of enforcing federal water-pollution limits? Environmentalists don’t think so — and neither does the U.S. Environmental Protection Agency, according to a highly critical audit report issued by the EPA’s Office of the Inspector General. The investigation into how the state Department of Environment and Natural Resources dealt with 21 pollution-permit violators supports local activists’ contention that the state’s enforcement program is weak and disorganized.

Even when the state does levy penalties, it tends to come down hard on small polluters while letting big ones off the hook, charges Clean Water Fund of NC Executive Director Hope Taylor.

“If you look at DENR’s enforcement data, what you will see is a lot of little facilities … paying an amount that is proportionally greater, for the amount of environmental damage they are doing, than large facilities are.”

“It’s a lot easier to pick on the little [polluters], and they have a lot less legal clout,” continues Taylor. “There is a certain amount of intimidation that the larger economic players are able to lever against the regulatory authorities. … We also know — because we’ve been told this by some legislators — that these larger players will call up their legislators [after fines have been assessed against them] and get them to intervene in the regulatory process … with DENR’s division directors.” At press time, Xpress had not received a response from state officials.

The EPA audit report notes, “[The State’s] enforcement policy toward minor dischargers appeared to be generally more stringent than the [EPA] required.

The audit also hints that citizens’ groups may be more effective than the state in enforcing water-pollution laws.

In one local case — Tryon, in Polk County — EPA investigators found that “legal actions taken by a consumer group, rather than negotiations with the State [Water Quality Section]” were the reason the town agreed to end three years of excessive mercury discharges into the Pacolet River.

“The state kept threatening the town, ‘You’re violating your permit — and if you don’t do something about it, we’ll write you another letter,'” says David Bookbinder, the director of environmental enforcement for the American Canoe Association, the Washington, D.C.-based group which filed the lawsuit that finally forced Tryon to clean up its act. (As part of the settlement, the town also agreed to pay $7,000 to the Pacolet Area Conservancy.)

“North Carolina is not in the business of enforcing the Clean Water Act,” complains Bookbinder, though he characterizes the state as “no better or worse” than most others in the country. “It is not a system set up to encourage compliance — it’s set up to encourage business as usual.”

Tomorrow and tomorrow and tomorrow …

Under the federal Clean Water Act, citizens can sue any person, company or government agency that appears to be violating pollution limits. The Canoe Association — one of a growing number of citizens’ groups taking advantage of this grassroots-enforcement provision, along with the Riverkeepers (headed by Robert F. Kennedy Jr.) and the Clean Water Fund of NC — learned about Tryon’s violations by examining the town’s own “discharge monitoring reports,” which all polluters are required to file regularly with local and state regulators.

But the EPA auditors found that North Carolina’s polluters regularly get away with discharging excessive amounts of mercury and cyanide, thanks to the state’s convoluted procedures for dealing with the reports.

Each permit specifies how much of the various pollutants can legally be discharged into the state’s waters. Those limits may be expressed as daily, weekly or monthly figures (or some combination of these), depending on the particular substance in question. The EPA requires regional offices to routinely review each permit-holder’s daily, weekly and monthly reports for violations of these limits.

North Carolina officials, however, dismiss this mandatory review as a “misuse of their resources,” the EPA auditors reported. Instead, staffers at the Department of Environment and Natural Resources’ central office in Raleigh review the report data — looking only for violations of monthly discharge limits. The assumption, they told the auditors, is that “a daily or weekly violation would not occur by itself, but would be accompanied by a violation of a monthly permit limit.” Only when DENR spots a monthly violation does it order a regional office to review the violator’s daily and weekly data — and then only for that particular month.

The fatal flaw in that policy, as federal auditors pointedly reminded state officials, is that for certain pollutants — including mercury and cyanide — North Carolina’s permits establish only daily or weekly limits, not monthly ones. So illegal levels of these pollutants can go undetected for up to a year, until the regional office performs its annual “compliance inspection” of each major permit-holder, reviewing a full year’s worth of daily and weekly monitoring reports.

State officials dismissed such oversights as a “rare occurrence.” But the auditors uncovered such incidents in connection with nearly a quarter of the major permits they reviewed. Four of the 17 cases involved “daily or weekly exceedances” which “state officials in the regional offices did not identify … until [an annual] compliance inspection occurred.”

The worst mercury-violation case the auditors found was at the wastewater-treatment plant for the town of Fuquay-Varina, whose 32 excessive mercury discharges into Kenneth Creek went undetected until a December 1998 inspection turned them up. Six of these had occurred more than a year before — missed, apparently, by the previous annual inspection. Yet the state assessed no penalty for these six violations, say the auditors, “because, according to an environmental engineer at the State regional office, they were instructed not to assess for violations that occurred more than a year before the date on which an assessment was made.”

Bill Reid, a state Division of Water Quality official who worked closely with the auditors, told Xpress that it had never been a “hard and fast” state policy to discard violations that are more than a year old, but he’d heard that the previous DWQ director had been concerned about “what message is this sending to people if we wait this period of time” to issue a citation.

The audit, however, uncovered an even weirder twist in the state’s enforcement procedure: Someone in DENR’s Raleigh office actually does review every one of the monitoring reports, recording all the daily and weekly permit violations they find in a Quarterly Non-Compliance Report. “However,” notes the audit, “this information was not usually made available to State officials in the field. This condition was illustrated by the fact that one State regional supervisor asked us what a QNCR was.”

You pays your money, you takes your choice

The auditors expressed deep concern about the training — or lack of it — given to the state inspectors responsible for policing eastern North Carolina’s huge corporate hog farms. The inspectors told the auditors that the state provides no guidance on what kinds of violations to look for, and no instructions on how to prepare the required enforcement paperwork. Aside from a few meetings a year with their supervisors, the inspectors rely heavily on “on-the-job” training.

“‘On-the-job training’ means that they are sent out to the industries, and who ends up training them? The industry people,” remarks Jan Brewington, who coordinates the Clean Water Fund’s environmental-enforcement campaign.

Animal-feeding operation inspectors can’t inspect a hog farm unless Soil & Water personnel call them in — and “S&W inspectors generally took less stringent enforcement positions with farmers,” notes the audit report. “S&W was viewed by the farmers and the Department as there to assist the farmer more than to monitor and enforce AFO discharges.” Even when illegal discharges were documented, complained the auditors, “The regional inspector [in many cases] claimed to have reinspected the facility via an undocumented ‘informal inspection’ and determined no enforcement action was necessary.”

Another crucial enforcement tool, called the “economic-benefit calculation,” is supposed to ensure that polluters have no economic incentive to exceed their permit limits. When pollution penalties are set too low, it can be cheaper for a big polluter simply to pay the penalty and continue breaking the law than to take the necessary steps to bring the operation into compliance.

The EPA requires the state to consider the economic impact of noncompliance when determining the amount of a penalty. “The objective of the economic benefit calculation [is] to place violators in the same financial position as they would have been if they had complied on time,” the auditors report, quoting from the Clean Water Act.

But state officials admitted to the auditors that they didn’t have anyone on staff who knew how to calculate economic benefit. The state’s one-page form for determining penalty amounts does include “the amount of money saved by non-compliance” as one of eight factors to consider — not as a dollar figure, however, but as a rating, ranging from “not significant” to “extremely significant.”

“We did not locate any document that showed an actual State computation of the violator’s potential savings from noncompliance,” observes the audit report.

Nor did state officials show much concern about the problem. The chief of the Water Quality Section, Tommy Stevens, told the auditors that “economic benefit calculations would have slowed [regional supervisors’] penalty assessment process and the instances where it would have been beneficial were rare.” The state also noted that other enforcement mechanisms, such as sewer moratoriums, are available.

In response, the auditors cited the example of Tabor City, in the southeast corner of the state. According to DENR’s case file, Tabor City’s wastewater-treatment plant failed “eight of 10 tests for toxicity in 1998, nine of 10 tests in 1999, and the last nine tests it took through March 2000 … and failed at least one test each year since 1990.” But even though the state has issued numerous notices of violations and penalties, the town still refuses to negotiate a compliance agreement with the state. Why?

The audit report, quoting a state environmental specialist who works with the town, reveals that regional Water Quality staff “suspects the Town believes that paying the fines is cheaper than paying for a TRE,” or toxicity-reduction evaluation — a study to determine the cause of toxicity levels, usually required by compliance agreements.

But TREs aren’t the only test Tabor City had a problem with. One of the most widely used tools for determining whether a treatment plant is in compliance with its permit is WET (whole-effluent-toxicity) testing, which exposes certain species of aquatic wildlife that are known to be pollution-sensitive. Two of the species North Carolina uses are the fathead minnow and the common water flea.

One WET-testing gambit Tabor City sometimes used, the auditors learned, is “split sampling” — sending parts of the same effluent sample to two different laboratories for testing.

“When State officials received both a ‘pass’ and a ‘fail’ from a split sample,” says the audit report, “their policy was to recognize the ‘pass’ and ignore the ‘fail.’ As stated by the Supervisor of the State’s Aquatic Toxicology Unit: ‘It has been our policy to accept and record the result which lies in favor of the discharging facility.'”

The EPA’s regional WET coordinator tried unsuccessfully to dissuade the state from following this policy, which favors polluters. And the auditors, for their part, urged that “state officials need to protect the environment when interpreting different split-sample results.”

Deja vu all over again?

The EPA audit didn’t make much of a media splash when it was published in late September — probably because its revelations are obscured by a dense alphabet soup of bureaucratic acronyms and technical jargon.

And to complicate matters further, chief auditor John Bishop told Xpress that the auditors had bowed to DENR’s request that they withhold the names of the municipalities mentioned when the report was released to the public. (Xpress learned the identities of Tryon and Tabor City from state staffer Bill Reid.

But the report has apparently raised eyebrows elsewhere in Raleigh. Bob Slade at the Office of the State Auditor confirmed that OSA is preparing to conduct a performance audit of DENR’s water-quality agencies.

For local environmentalists, this may seem like a case of deja vu. Three years ago, acting on complaints from citizen groups, the state conducted a procedural audit of the Western North Carolina Regional Air Pollution Control Agency and found it to be sorely in need of reform. Today, WNC’s air remains dirtier than ever — but the agency charged with protecting it has cleaned up its act, and environmentalists and regulated industries alike are now describing the agency as a model of strong but fair air-pollution enforcement.

The EPA audit is available to the public at http://www.epa.gov/oigearth/list900.html.


Fuquay-Varina is typical of many North Carolina towns whose wastewater-treatment systems haven’t kept pace with the state’s explosive growth. Fuquay-Varina, a bedroom community 20 miles southwest of Raleigh, “is feeling a lot of growing pains, and that’s part of the problem with these small water-treatment plants,” says Jan Brewington of the nonprofit Clean Water Fund of N.C. These plants, she explains, “don’t grow at the rate the population grows. And that’s because it gets to be expensive to update [them], and nobody wants to raise taxes for something as unglamorous as wastewater treatment. And that’s happening all over North Carolina with these small municipalities.”

And Clean Water Fund Executive Director Hope Taylor, who now lives in Asheville, points to her hometown of Oxford, N.C., which accumulated what she calls an “all-time record” of fines — more than $100,000 — during a decade of violations at its overburdened sewage-treatment plant. Meanwhile, the city has continued to recruit new development and appears to be ignoring the pollution problem because the stream into which the plant discharges runs through a minority neighborhood — “a real environmental-justice issue,” says Taylor.

“If you look at the history, most of the fines were pretty minor,” and the city repeatedly reneged on the agreements it reached with the state, she says. “If enforcement had been swift and sure early on, the city would have realized that they couldn’t keep doing this.”

Want to find out who’s been cited lately for polluting your town’s streams? DENR’s Web site now lists all the environmental fines the department issues, including notices of violation issued by the Division of Water Quality (go to http://www.enr.state.nc.us/novs/, where the fines are listed by date under each DENR division). Note that these figures represent the original assessed fines, not necessarily what was actually paid.

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