During the period 1972-1991, The United States Congress passed stringent environmental statutes which the Environment Protection Agency implemented via regulations. The statutes and regulations contain severe civil and criminal penalties. Civil violations resulted in fines, typically payable by the company. The act of willfully and knowingly violating the permit conditions or regulations can result in criminal charges being imposed upon the responsible part, i.e., either the company or individual. Criminal charges can include fines, lawyer fees, court costs and incarceration.

Traditionally, there has been a clear demarcation between civil and criminal sanctions. Recently, the two sanctions have overlapped so that what a few years ago would clearly have been a civil charge may now be classed as a criminal charge. Criminal charges have been extended to include Senior Management who fail to initiate and monitor an environmental program designed to assure environmental compliance. Accordingly, most large and many small operators have initiated audit programs.

Such a compliance review program provides protection from criminal charges for Senior Management but makes Middle Management and first line supervisors more vulnerable unless management provides them with environmental training and monitoring of the effectiveness of the environmental program. Although this paper concentrates on Environmental Compliance Assessment Review [CAR] programs, other types of environmental audits exist. The most important being the Preacquisition/ Predivestiture Audit. This is an audit of a facility prior to purchase or sale with emphasis on recognizing liabilities which might be transferred as the result of the purchase or sale of the facility. Preacquisition/Predivestiture audits are beyond the scope of this paper.

This paper describes steps necessary to (1) form an effective Environmental Compliance Assessment Review [CAR] program, (2) train field and engineering personnel and (3) perform a CAR audit. Additionally, the paper discusses the findings of a number of Exploration and Production [E&P] field audits.

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