Companies With Environmental-Related Concerns Should Pay Attention to DOJ’s Voluntary Self-Disclosure Policy
On February 22, 2023, the U.S. Department of Justice (DOJ) announced the formalization of its voluntary self-disclosure policy for corporate criminal enforcement (VSD Policy) for all U.S. Attorney’s Offices (USAO). The VSD Policy details the circumstances under which a disclosure will qualify as a voluntary self-disclosure under the policy and, in turn, provides incentives to companies to make eligible self-disclosures. One such incentive — provided that the company makes an eligible self-disclosure, fully cooperates, and timely and appropriately remediates the criminal conduct — is that the USAO will not seek a guilty plea unless there are aggravating factors present. This is the first time DOJ has issued nationwide standards for voluntary self-disclosures for corporate criminal enforcement.
2022 Sidley Energy Enforcement Update
This Sidley Energy Enforcement update covers:
- Federal Energy Regulatory Commission (FERC) approves settlement between Enforcement staff and Coaltrain
- Both FERC and Commodity Futures Trading Commission (CFTC) enforcement reports highlight the respective agency’s continued commitment to strong enforcement
- U.S. Court of Appeals for the Fifth Circuit upholds FERC’s finding that BP manipulated the natural gas market but remands to FERC to recalculate its $20 million penalty
- CFTC orders Glencore to pay a record-setting penalty of $1.186 billion
- CFTC and Securities and Exchange Commission (SEC) orders over $1.8 billion in fines against 11 firms for recordkeeping failure — employees using unapproved method of communications such as texts and WhatsApp on personal devices
Quarterly Review: Biden Administration’s Advancement of Environmental Justice
In the second quarter of 2022, the Biden administration took steps to implement the President’s whole-of-government environmental justice (EJ) strategy. Specifically, the U.S. Department of Justice (DOJ or the Department), U.S. Environmental Protection Agency (EPA or the Agency), and U.S. Department of Health & Human Services (DHHS) each announced initiatives to address EJ in a variety of agency functions. Additionally, the White House provided an update on funding available to disadvantaged communities. (more…)
Head of DOJ Environmental Division Announces Enforcement Priorities
Todd Kim, Assistant Attorney General at the U.S. Department of Justice (DOJ) Environment and Natural Resources Division (ENRD), delivered remarks at the American Bar Association’s National Environmental Enforcement Conference on December 14, 2021. He provided insight into what DOJ plans to prioritize in environmental enforcement, centered on criminal enforcement, climate change, and environmental justice.
Kim emphasized that the purpose of enforcement is to ensure that businesses are properly incentivized to comply with the law through deterrence and to provide a level playing field, while protecting public health and the environment. He noted that DOJ has prioritized fighting corporate crime and is revising applicable polices, so ENRD will consider pursuing potential environmental and non-environmental crimes, as well as a business’s environmental and non-environmental track record in prosecution decisions.
Kim focused on methods of sector-wide enforcement, citing the Petroleum Refinery Initiative that involved settlements covering 112 refineries in 37 states since 2000. Kim also expressed an interest in more penetrating identification of all involved parties within a business, as well as in the full supply chain, where relevant. This focus could be especially impactful for importers of chemicals, pesticides, or wood products.
With these various tools in mind, Kim cited climate change and environmental justice as the two highest priority issues. For climate change, he indicated greater enforcement for air emissions from petrochemical plants and from facilities with refrigeration systems. For environmental justice, he provided a general assurance that ENRD is paying greater attention to potential violations in communities of color and low-income communities that may be disproportionately burdened by environmental hazards and harms.
DOJ Launches First Environmental Justice Investigation Under Title VI of the Civil Rights Act
On November 9, 2021, the U.S. Department of Justice (DOJ) announced its first environmental justice investigation under Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from discrimination on the basis of race, color, or national origin. DOJ announced that the investigation initiated by DOJ’s Civil Rights Division’s Federal Coordination and Compliance Section, with the support of the U.S. Attorney’s Office for the Middle District of Alabama, will focus on two issues. (more…)
DOJ Environment and Natural Resources Division Withdraws Nine Guidance Documents From Trump Administration
Earlier this month, the Acting Assistant Attorney General supervising the Environment and Natural Resources Division (ENRD) at the U.S. Department of Justice (DOJ) has issued a memorandum rescinding nine policy or guidance documents issued for ENRD over the past three years. The documents generally concerned enforcement priorities and discretion and payments to third parties as part of settlements. The memorandum cites Executive Order 13,990, signed by President Joe Biden on January 20, 2021, which directs agencies to review agency agencies that may conflict with a range of environmental goals.
A New Roadmap: CFTC Releases Its First-Ever Public Enforcement Manual
On May 8, 2019, the Commodity Futures Trading Commission (CFTC) Division of Enforcement (DOE or Division) released its first publicly available Enforcement Manual. The Manual provides an overview of the Division and sets out the general policies and procedures that guide its Staff in detecting, investigating and prosecuting violations of the Commodity Exchange Act (CEA) and Commission regulations. According to its simultaneous press release, in publishing the Manual the CFTC intends to “increase transparency, certainty, and consistency, and, more generally, to advance the rule-of-law principles that underpin all DOE and CFTC enforcement actions.”
U.S. EPA and DOJ Bring Criminal Prosecution for Tampering with On-Board Diagnostic Systems on Vehicles
Earlier this summer, the Department of Justice (DOJ) and Environmental Protection Agency’s (EPA) criminal office announced criminal charges against employees of an oil and gas operation for tampering with and disabling pollution controls and on-board diagnostic (OBD) systems on the company’s truck fleet. DOJ and EPA charged five employees of Rockwater Northeast LLC, a company that services the hydraulic fracturing industry, for modifying emission control and OBD systems on approximately 30 of the company’s heavy-duty diesel trucks. (more…)
Energy Enforcement Update
This week’s enforcement update covers:
- FERC issues Order to Show Cause to Footprint for alleged tariff violations and submission of false information;
- The Supreme Court denies TOTAL petition for writ of certiorari;
- FERC settles with Duke Energy regarding alleged violation of FERC market behavior rule on communications;
- CFTC orders Société Générale S.A. to pay $475 million penalty to resolve charges of alleged LIBOR and Euribor manipulation; and
- U.S. Department of Justice announces new policy on coordination of corporate penalties.
Energy Enforcement Update
This week’s enforcement update covers:
- CFTC orders Deutsche Bank Securities Inc. to pay $70 million penalty for attempted manipulation of ISDAFIX benchmark;
- CFTC and DOJ announce spoofing charges against banks and individuals;
- FERC files amended complaint in case against Powhatan and Chen;
- Judge grants joint motion on summary judgment procedure in FERC case against Silkman/CES;
- FERC OE files answer to BP motion seeking dismissal based on statute of limitations;
- FERC Chairman testifies on grid performance during recent weather events; and
- FERC Commissioner Rich Glick stresses importance of FERC enforcement regime.