The Independent Counsel

Compliance


Dealing with Command
and Control Regulations


(Third in a series on Compliance)

BY J. ALDEN LINCOLN

Much justifiable criticism has been leveled at so-called "command and control" regulations. The problem is that enforcement agencies establish compliance goals under the applicable legislation and then dictate the means that regulated companies must use to meet those goals. For example, the Clean Air Act calls for a reduction in emissions in order to fight ozone depletion. EPA then defines what technology must be used in achieving that goal. For certain facilities, it might be the maximum available control technology (MACT).

In the area of employment practices the law prohibits discrimination because of age, race, gender or disability. In order to correct past discriminatory practices, a court or the EEOC may dictate a specific affirmative action plan designed to increase the number of people hired from such protected classes. However, this form of regulation fails to give the regulated community credit or incentives for adopting creative means to achieve the stated goals and punishes companies for inevitable technical violations.

In the Clean Air Act example, any one of a number of pollution prevention practices might achieve a better result than using MACT. In the E.E.O. example, a creative training program might prove to be a better way to reach an affirmative action goal.

I suggest a two step approach in order to achieve compliance and, at the same time, earn credit for innovative solutions.

Integrate Compliance and Management Practices.

First, take corrective action and document the action taken through a compliance system. Without such a system, the company's ability to comply with legal requirements will remain divided between the compliance manager and the company lawyer. The lawyer may have working knowledge of specific regulatory requirements, but the operational manager should have the necessary process knowledge. If no individual or group bears the responsibility to meet both quality and compliance standards, compliance can become viewed as a necessary evil that impedes production.

A system such as ISO 9000 integrates compliance with quality control, bringing issues like product quality, environmental controls, employment practices together on the plant floor and providing the front line with the opportunity to avoid problems - floor supervisors are motivated to choose the most environmentally friendly supplies, and at the same time to find ways to continuously improve product quality.

Additionally, management must set goals for operating each unit and provide standards such as emissions per pound, lost time, customer complaints, etc. to measure success. Next, the system's implementation and technical compliance should be audited under the supervision of the company lawyer in order to demonstrate improvements and to point out violations.

Seek Out Enforcement Agency Programs That Provide Compliance Incentives.

Second, have the company lawyer review enforcement agency programs that affect your critical areas of compliance.. He or she should be able to tell you what, if any, incentives are available to reward your proactive efforts. For example, does your company qualify for reduced inspections under OSHA's Voluntary Protection Program? Will EPA offer technical assistance and amnesty under their Small Business Assistance Plan? Can you obtain mitigation or amnesty for technical violations that you discovered in the audit of your benefit plans?

You might be surprised to discover, in dealing with these "command and control" regulations proactively, that many enforcement agencies offer technical assistance and positive incentives for self-reporting inevitable technical violations.

Comment: Proactive compliance programs may provide a basis for innovative solutions and for mitigation of penalties, or immunity from technical violations.

© ASSOCIATION OF INDEPENDENT GENERAL COUNSEL 1995; (all rights reserved). This article is not intended as legal advice. Consult a qualified attorney for assistance concerning a specific issue or problem.