Environmental Liabilities

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APPENDIX 5-J: Sample Self-Assessment Questionnaire for Environmental Compliance Programs

QuestionYes/NoDetails
General Background
Is your company within a highly regulated industry?

☐ Yes

☐ No

Does your company currently have regulatory permits?

  • If so, obtain a list, review, and summarize.

☐ Yes

☐ No

Is your company/facility inspected regularly?

  • If so, obtain and review copies of recent inspections.

☐ Yes

☐ No

Regulatory/Legal Track Record

Does your company have a history of criminal and/or regulatory violations?

If so, review in detail to understand:

  • What were the “root causes” for these violations?

  • What changes, if any, were made in response?

  • Is there sufficient documentation of such corrective measures?

☐ Yes

☐ No

Were the past violations subject to any consent orders?

☐ Yes

☐ No

Have other companies in your industry been investigated or indicted?

If so, review the background:

  • What legal outcome? (civil and/or criminal)

  • What punishments? (fines, consent orders, etc.)

  • What impact did these have upon the organization? (financial, reputational)

☐ Yes

☐ No

Overview of Environmental Compliance Program

Does your company have an environmental compliance program?

  • If yes, review the plan and any policies/procedures/ related documents.

☐ Yes

☐ No

How large is your ethics and compliance program?

  • What is the number of full-time employees who devote more than 50% of time to the compliance function?

  • What is the annual budget/operational cost to maintain program?

  • Does the compliance team believe that these resources are adequate in relation to the environmental compliance risks?

Gather and review the following information:

  • Why was the program created?

  • How long has the program been in place?

  • What areas of law does it cover/focus on?

  • Has it been amended or updated?

    • How many times?

    • When was the latest update?

    • What prompted these revisions?

    • Do you keep copies of all past versions?

Does your company regularly document all functions of its ethics and compliance program?

  • If yes, where are those records maintained, and for how long?

☐ Yes

☐ No

Since a company’s true priorities are reflected in what it funds, monitors, and records, what specific items best demonstrate that your company has earned its “good corporate citizenship merit badge”?

Has your company identified and assigned specific high-level personnel with the overall responsibility to oversee compliance?

  • If yes, what position?

  • Is that position part of senior executive management?

  • Review the job description of the top ethics and compliance officer.

  • What is the reporting authority of the environmental compliance function?

  • Review the organizational chart.

  • Does the environmental compliance officer report to the board of directors?

    • If so, how often has that occurred?

☐ Yes

☐ No

What role does the board of directors play in overseeing the environmental compliance program?

  • How frequently are environmental compliance risk reports issued to the board?

  • What is the nature and frequency of the communications between the chief ethics and compliance officer and the board?

Training and Communications

Is your company’s compliance program communicated to all employees?

  • If yes, how is it communicated?

  • If yes, how frequently?

☐ Yes

☐ No

What involvement does the environmental compliance staff have in training and communication activities? (develops training materials, teaches, monitors hotline, develops new policies, etc.)
Background Checks

Does your company conduct criminal background checks?

  • If yes, on all employees?

  • If yes, on executives as well?

☐ Yes

☐ No

Does your company conduct additional background checks?

  • Verification of education/degrees?

  • Past employment?

  • Past litigation?

☐ Yes

☐ No

Incentives and Discipline

Does the company have a policy to discipline violations and incentivize compliance?

  • What documentation exists of such discipline and/or rewards?

☐ Yes

☐ No

How does the company ensure consistent disciplinary actions and enforcement of its code of conduct/environmental compliance policies and procedures?
How are managers held accountable for their environmental compliance responsibilities?
Hotline

Does your company use a confidential reporting hotline?

  • If yes , is it well-publicized within the company?

  • How is that awareness achieved?

  • How often/frequently is the hotline used?

  • Is there supporting documentation for the calls?

  • Are all calls logged or recorded, along with responses/follow-up?

  • Does this hotline also offer help for employees about how to report misconduct or seek guidance?

  • Is there a nonretaliation policy for such calls/reports?

  • Is that also well-publicized? How?

☐ Yes

☐ No

Apart from the hotline, what are the other mechanisms that employees have for reporting environmental regulatory concerns?

Any documentation of use and follow-up?

Past Internal Investigations

Has your company ever conducted an internal investigation in response to allegations of noncompliance?

  • If yes, how many?

  • How soon was the investigation initiated after the initial report?

  • What were the outcomes?

  • Are they documented?

☐ Yes

☐ No

Does your company have a policy for how to handle responses to allegations of environmental violations?

☐ Yes

☐ No

Who oversees the response?

Who investigates? (internal or external, legal or compliance, or both?)

  • Are the investigators qualified and/or fully trained?

☐ Yes

☐ No

Is there a policy that requires a response to be taken as quickly as possible?

  • What is the time limit for such a response?

☐ Yes

☐ No

Does your company require the investigation to be concluded within a reasonable time after the activity is discovered?

☐ Yes

☐ No

Are these internal investigations documented?

☐ Yes

☐ No

In response to allegations or violations, has your company ever made any adjustments to the ethics and compliance program as a result?

  • If so, please describe.

☐ Yes

☐ No

Auditing/Monitoring
Review your company’s auditing/monitoring protocol that is independent of reactive compliance or responses to the hotline.
What misconduct or crimes may currently be ongoing within your organization? What is that prediction based upon?
Voluntary Reporting
Does your company have a policy on how to handle voluntary reporting of environmental violations?

☐ Yes

☐ No

Do employees receive training on that policy?

☐ Yes

☐ No

Is there documentation of past voluntary reporting?

☐ Yes

☐ No

Remediation

Has your company ever taken actions to correct any violations or taken any disciplinary actions that were revealed by the compliance program?

  • If yes, has your company made any adjustments to the ethics and compliance program as a result?

  • If so, please describe.

☐ Yes

☐ No

What processes are in place to ensure that appropriate remedial measures are taken in response to identified weaknesses?

After any significant “incidents” or violations, does management routinely conduct or authorize a root cause analysis of the underlying violations/misconduct and then make necessary improvements?

  • What documentation exists for such measures?

☐ Yes

☐ No

Past Environmental Program Assessments

Has your company ever conducted compliance program assessments to determine the effectiveness of the program and/or possible areas of exposure or highest risk?

  • Who has conducted these reviews?

  • Internal/external/hybrid

  • What was the focus of such reviews?

  • Review copies of all prior assessments.

☐ Yes

☐ No

Risk Assessment

Does your company regularly conduct environmental compliance risk assessments?

  • If so, how frequently?

  • Who is involved in that responsibility?

  • Review past assessments.

  • What are the most pressing risks facing the company?

  • Have those risks changed over time?

  • Does your monitoring and auditing strategy prioritize these top risks that have the most significant potential adverse impact?

☐ Yes

☐ No

What are the top environmental compliance risks?

What measures are being taken by the company to mitigate/reduce these risks?

Is there a written plan of action to mitigate or reduce these risks?

If your company does not believe it faces any significant regulatory enforcement or compliance risks, what is the basis for that belief?
Enforcement-Readiness (Policies and Training)

Does your ethics and compliance program have specific procedures and training to address:

  • Requests from regulators?

  • Regulatory inspections/audits?

  • Allegations from hotline calls?

  • Subpoena receipts and responses?

  • Search warrant responses?

  • Handling internal investigations?

☐ Yes ☐ No

☐ Yes ☐ No

☐ Yes ☐ No

☐ Yes ☐ No

☐ Yes ☐ No

☐ Yes ☐ No

Miscellaneous

What would your company point to as evidence to demonstrate your company’s positive culture, as well as the right tone at the top?

  • Review and assemble all related documents.

What feature or accomplishment within the ethics and compliance program is your company most proud of, and why?

  • Provide details.

Are you aware of whether your industry has established any such best practices?

  • If so, have you compared your company’s program against these metrics?

☐ Yes

☐ No

What would your current and former employees claim is your company’s level of commitment toward regulatory compliance or sound business ethics?

  • What is that prediction based upon?

Historically, what have been your company’s biggest compliance challenges?

  • If you have overcome them, how was that accomplished?

Currently, what are your company’s biggest compliance challenges?

  • How are you attempting to overcome or address them?

How can you make your ethics and compliance program better or more effective?
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