Region 5 - Office of Regional Counsel

Introduction

At the end of each fiscal year (October 1 through September 30), the ORC prepares a public report describing the number and type of Supplemental Environmental Projects (SEPs) secured through settlement and litigation of enforcement actions during the previous fiscal year.

A SEP is defined by relevant U.S. EPA guidance as an environmentally beneficial project that a violator agrees to undertake in settlement of an enforcement action, but which the violator is not otherwise legally required to perform. To be considered a SEP, the project proposed by the Defendant (or "Respondent" in an administrative action) must be significantly in excess of what is necessary to achieve and maintain compliance with all applicable environmental laws.

The SEP is incorporated as an enforceable term of settlement. In exchange for performance of the SEP, the entity will receive a partial offset against the penalty assessed in settlement of the action.

EPA places particular emphasis upon SEPs since they provide direct environmental and/or public health protection and improvement (and other benefits, such as pollution prevention, environmental justice, and environmental education). While injunctive relief and penalties also achieve this goal, SEPs represent a commitment on the part of a regulated entity to exceed compliance requirements.

How are SEPs different from, and similar to, injunctive relief?

There are significant differences between SEPs and injunctive relief. First, SEPs are limited to EPA enforcement actions - they are not something found throughout the legal system. Second, SEPs only occur in settlement, whereas injunctions can be obtained either in settlement or after a fully contested action. Third, SEPs are projects not necessary for compliance (hence the name "supplemental"). Fourth, EPA typically reduces civil penalties in cases in which SEPs are negotiated, but SEPs do not offset the injunctive relief or other measures required for compliance. Fifth, while penalties play an important role in environmental protection by deterring violators and creating a level playing field, SEPs can play an important additional role in securing significant environmental and/or public health protection and improvements.

However, SEPs are also similar to injunctive relief because they become enforceable requirements to take some action that betters the environment. Thus, for enforcement purposes, EPA records SEPs and injunctive relief together since they both reflect the positive environmental and/or public health results obtained through enforcement action.

SEP Example

During an inspection, EPA finds that Company X has violated the Emergency Planning and Community Right-to-Know Act (EPCRA) by failing to file a Toxic Release Inventory (also known as "Form R") for its use and discharge of trichloroethylene (TCE), a highly toxic chemical. During the inspection, the inspector points out the violation and the company immediately files Form R. Two years later, EPA brings an administrative penalty action seeking a $5,000 penalty for the company's initial failure to submit Form R. No injunctive relief is necessary because the violation is not continuing; thus, EPA can only obtain a civil penalty for the violation. The company, however, agrees in settlement to replace its TCE-based silicone materials cleaner with a water-based cleaner, thereby improving the environment and removing the company's cleaner and cleaning waste from regulation under EPCRA. EPA agrees to reduce the penalty to $1,000.