Navigating DOJ’ s New Corporate Enforcement Landscape: Key Considerations for Environmental Voluntary Self-Disclosures( continued from page 12)
Comparing the CEP to the Prior ECS Policy: What’ s New A More Certain Path to Declination. One of the most potentially consequential changes is the heightened certainty and clearer form of outcome for a company that self-reports, fully cooperates, and remediates in a timely manner.
One of the most potentially consequential changes is the heightened certainty and clearer form of outcome for a company that self-reports, fully cooperates, and remediates in a timely manner.
Under the prior ECS Policy, the best a company could expect was that the government would“ not seek a guilty plea,” which left open the possibility of an NPA or Deferred Prosecution Agreement(“ DPA”) 2. Both options impose ongoing obligations and carry potential consequences for any breach of the agreement.
Under the CEP, a qualifying company can receive a Part I declination, or, at worst, a“ near miss” NPA, unless the government identifies particularly egregious or multiple aggravating circumstances. This distinction fits with the proposed framework’ s goals of rewarding companies who self-disclose wrongdoing, cooperate with DOJ investigations, and remediate misconduct.
The“ Near Miss” Pathway: A Potential Major Departure. One of the more significant factors of the CEP is contained in the Part II framework for“ near miss” situations. Part II applies where a company fully cooperated and timely remediated but fell short of a declination either because its self-report did not qualify as self-disclosure or because aggravating factors warrant a criminal resolution. In these circumstances, the CEP provides that the DOJ shall provide an NPA absent“ particularly egregious or multiple aggravating circumstances,” with a term length of fewer than three years, no monitor requirement, and a 50 – 70-percent fine reduction.
The inclusion of a mandatory NPA for companies that fall within the definition of a“ near miss” is potentially a significant departure from the prior ECS Policy. The previous ECS Policy framework provided only that, if a guilty plea is warranted, and notwithstanding a Voluntary Self- Disclosure, prosecutors would“ consider a reduction in the number and type of charges the company must plead guilty to” as well as more lenient recommendations on fines, probation periods, and conditions. Until now, ECS has flatly refused to agree to an NPA in any case involving an environmental violation.
Whether the introduction of a mandatory NPA for“ near misses” under the CEP will alter existing ECS practices warrants close attention.
Divergent Aggravating Factors. Another pointed difference between the new CEP and the superseded ECS Policy relates to the description of the aggravating factors that may limit the benefits of voluntary self-disclosure.
Under the ECS Policy, aggravating factors included misconduct that:( 1) posed a threat of serious adverse impact to the environment, public health and safety, worker safety, wildlife, or natural resources;( 2) involved knowing endangerment of or serious injury or death to any individual;( 3) was deeply pervasive throughout the
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1
An NPA is a voluntary, contractual agreement in which DOJ agrees not to file criminal charges and the company or individual under investigation agrees to meet certain conditions, usually including the payment of a fine. NPAs do not require an admission of wrongdoing and are not filed with the court.
2
A DPA is also a voluntary, contractual agreement, but it involves the filing of a criminal complaint, a detailed admission of wrongdoing, the payment of a fine and restitution, and adherence to probation-like conditions. The adjudication of the criminal charge is deferred, however, and, if the defendant successfully completes the deferral period, the charge is dismissed without a finding of guilt.
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