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Confidentially Yours

Texas-style laws trust polluting companies to police themselves

by Bruce Selcraig

Let's say you're an environmental inspector for the state of Texas. During a visit to one of the several dozen petrochemical plants along the malodorous Houston Ship Channel, a worker informs you that the company recently released 50,000 pounds of cancer-causing benzene into the gritty Houston air. In some states you might immediately begin an investigation or even seek a search warrant. But in Texas, working under a corporate secrecy law George W. Bush sought and signed as governor in 1995, you might be legally bound to ignore the incident. Under Texas law, if the polluter shows that the details surrounding the benzene leak are included in a secret corporate document known as an "environmental self-audit," the company won't be penalized and doesn't have to explain what really happened-not to regulators or the courts, and certainly not to the public. And if you do something as rash as go to the news media with the information, you could be the one facing penalties.

Welcome to George W. Bush's voluntary-compliance culture, which offers a sobering blueprint for what might be coming on the federal level with the help of appointees such as EPA administrator Christine Todd Whitman and Interior Secretary Gale Norton-both of whom share Bush's faith in industry's ability to regulate itself.

The Texas "audit privilege" law is similar to corporate secrecy legislation in some 25 other states. These laws allow a regulated facility to inspect, or audit, itself for environmental violations. If the company finds a violation, reports it, and says it has cleaned things up, it can receive immunity from civil (but not criminal) penalties. Its employees cannot be forced to testify against the firm in civil actions, and almost all documents pertaining to the audit-including maps, charts, and witness statements-are sealed.

Such laws trace their lineage to a case involving the Coors Brewing Company. In late 1992, Colorado regulators docked the brewery a million dollars for its admitted release of volatile organic compounds. Coors complained that it worked with regulators yet still got bludgeoned. So the company, which two years later settled the case for $237,000, sought the help of then-Colorado attorney general Gale Norton (a former lawyer at the anti-environmental Mountain States Legal Foundation, a group originally funded by Joseph Coors) in getting the state legislature to pass the country's first audit-privilege law.

The Lone Star State's version was greatly influenced by the Texas Chemical Council, whose members have lavished campaign contributions on Bush and Texas legislators. "It's a get-out-of-jail-free card for industry," says Austin environmental attorney Rick Lowerre, who was denied self-audit records from waste-giant Browning-Ferris Industries in a Texas pollution case. The Government Accountability Project, a Washington, D.C., group that aids whistleblowers, calls the Texas law "a legislative gag order no whistleblower could survive."

Audit-privilege supporters say that Texas inspectors were spending too much time on law-abiding companies. "It makes no sense to send umpteen inspectors into the same plants year after year," says Texas Chemical Council attorney R. Kinnan Golemon, who also represents ExxonMobil, Shell, and Celanese. The law's sponsors say that if the company fails to voluntarily report a violation, it can still be subject to fines and prosecution should state inspectors find violations on their own.

But that seems unlikely in Texas. Surprise inspections are uncommon, whistleblowers are intimidated, and Texas's environmental cops are understaffed. The Washington, D.C.-based Environmental Working Group found that during 1998 and 1999 Texas ranked first in failing to regulate major violators of the Clean Water Act. And while proponents argue that audit-privilege laws will encourage companies to report more violations, the National Conference of State Legislatures found that the number of audits were about the same in states with audit-privilege laws as in those without.

Further, many question the honesty of those self-audits. The Houston Press reported last year that Phillips Petroleum has conducted 47 self-inspections under the Texas act, some covering all local, state, and federal environmental laws. At least eight were performed at its massive Pasadena, Texas, plant, which had serious problems in the past (23 workers died and 314 were injured in a 1989 explosion), but the company has yet to report a single violation. The paper also revealed that Elf Atochem North America has notified the Texas Natural Resources and Conservation Commission (TNRCC) nine different times that it would be conducting wide-ranging self-audits of its Houston chemical plant, yet it, too, couldn't find any violations. A few years before the state audit law was passed, the company paid a settlement of $900,000 for more than 50 separate alleged violations of federal hazardous-waste laws.

At least Phillips and Elf Atochem were willing to play the corporate shell game. Remember Texas's infamous "grandfathered" facilities that release more than one-third of all the reported industrial pollution in Texas? Al Gore tried to pillory Bush for allowing these aging power plants and refineries built before the 1971 Texas Clean Air Act to escape strict pollution controls. To "green" his record for the 2000 presidential race, Bush signed a law in 1999 that allowed the grandfathered plants to voluntarily sign up for regulation. As of January 2001, only 42 of 760 eligible plants had applied for a permit.

On the federal level, Republican Texas senator Kay Bailey Hutchison liked her state's approach to environmental enforcement so much she and Senate majority leader Trent Lott (R-Miss.) sponsored federal self-audit bills in 1997 and 1999. Both died on the vine, but similar legislation is certain to be born again under President Bush. Ironically, just as Bush headed to Washington, the Texas legislature seemed to be having second thoughts about its laissez-faire pollution laws. In January a key Republican lawmaker predicted that his colleagues will finally join Democrats in closing the loophole that lets grandfathered plants skirt the law, while other Texas legislators are calling for a reorganization of the industry-biased TNRCC. Texas's dirty secret may be that it's ready to clean up its act.

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