Arizona businesses have a new tool to assist their environmental compliance efforts. On April 12, with the signing of House Bill 2199, Arizona joined over twenty other states by enacting an evidentiary privilege for environmental audits.
The new law provides an incentive for regulated businesses to investigate and correct any environmental noncompliance issues they may have. House Bill 2199 is intended to remove the fear that by taking the initiative to conduct an audit, the regulated entity is essentially “writing its own ticket” for a violation. Under the new law, an environmental audit report prepared by a regulated entity or its outside auditor or consultant is inadmissible as evidence and is not subject to discovery in an administrative proceeding or civil action. Upon discovery of noncompliance, however, the regulated entity must promptly initiate and pursue with reasonable diligence “appropriate efforts to achieve compliance” in order take advantage of the privilege.
The privilege does not apply to information already required to be collected, developed, maintained, or reported under existing environmental laws. It is also not available in criminal proceedings.
Arizona’s new environmental audit privilege should benefit both the regulated community and the environment by encouraging businesses to take a comprehensive look at their environmental compliance profile and take upfront corrective action as needed.