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Corporate Self-Policing and the Environment

NCJ Number
Criminology Volume: 44 Issue: 3 Dated: August 2006 Pages: 571-708
Paul B. Stretesky
Date Published
August 2006
38 pages
This study used a rational-choice model of corporate crime to determine whether traditional regulatory efforts such as inspections and enforcement actions were associated with the likelihood of a company's disclosing an environmental violation under the U.S. Environmental Protection Agency's (EPA's) self-policing policy, commonly referred to as the audit policy, which waives or reduces penalties when corporations voluntarily discover, disclose, and correct environment violations.
The study found no evidence that inspections and enforcement actions increased a company's use of the audit policy; however, findings suggest that the audit policy is more likely to be used by large companies than by small companies. Also, the audit policy was more likely to be used for violations of reporting requirements than for more serious emissions or permit violations. These findings suggest that regulatory agencies can do little to increase the self-policing of environmental violations. A case-control design was used to compare companies that used the audit policy with companies that could, but did not, use the audit policy. Case-control designs are typically used to identify factors that help differentiate a population of all known cases that experience an event (the event group) from a random sample of cases that do not (the control group). The event group was composed of all companies that reported a violation of a Federal environmental law during the 1999 and 2000 fiscal years. The EPA provided a list of all the names of companies (n=551) that used the audit policy during the 1999 and 2000 fiscal years. The control group consisted of 551 companies randomly selected from thousands of companies that the EPA detected violating a Federal environmental law during the same period as the event group. 2 tables and 57 references