Missouri Votes Conservation - Audit Privilege // “Dirty Secrets Bill”

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Audit Privilege // “Dirty Secrets Bill” (retired)
Resources Issues 2007

(updated 9/19/05)

HB130 was introduced by Representative Walt Bivens (R-97). A few hearings were held, but the bill died in committee without a vote on the House floor.

HB130 would have given corporations immunity for self-reported infractions of environmental laws, and would have made any self-reported environmental problems privileged information that would not be accessible to neighbors or to watchdog groups.

On the face of it, this bill sounds like a correction to a minor issue. Proponents of the legislation (mostly business lobbyists) say that the bill addresses a small problem with the state’s reaction to self-reported environmental infractions. Let’s say a company has an environmental mishap – a bucket of turpentine is spilled. If the company reports the infraction to DNR, the agency issues a warning which goes on file, becomes part of the public record, and makes the company subject to increased risk of criminal and civil litigation. Proponents of audit privilege way that this legislation would make it easier for businesses to self-report infractions, resulting in cheaper, more effective enforcement.

There are three fundamental problems with environmental audit bills, including HB130. First, these bills make companies immune from prosecution if they self-report problems. “Oops, we released PCBs into the Missouri River. But we told the government about it, so they can’t come after us.” It’s a little more complicated that this – there have been some weak safeguards written into the law to prevent flagrant abuse of this provision. However, these so-called safeguards were vaguely written, and a decent corporate lawyer would be able to tie up enforcement in the courts for years. And there was little in the HB130 to differentiate between turpentine buckets and major chemical spills.

Second, the language in HB130 made self-reported incidents privileged information. “Privilege” is a strong legal term, used to describe the relationship between patients and doctors, or between lawyers and their clients. Privileged information is not admissible in a court of law, and people cannot find out about it. For instance, if HB 130 had passed and if someone moved next door to an industrial complex, they would not be able to find out whether or not there had been any chemical spills or other forms of pollution hazards. (This is why opponents of this kind of legislation call it a “dirty secrets bill.”)

This brings us to the third major objection to this legislation. Recall that audit privilege is designed to allow companies to self-report minor incidents without fear of retribution from state regulators. Well, there has been no instance of prosecution by the state on any self-reported environmental problem. In fact, the Missouri Department of Natural Resources already has a policy of working out any potential problems self-identified by the companies they regulate. The company may have been required to pay for clean-up, but there is no record of a company being given a punitive fine for a self-reported infraction. In other words, these laws create huge loopholes in environmental protections in order to shield companies from regulatory abuses that have never happened.