Audit, Compliance and Risk Blog

For over a decade, the US Environmental Protection Agency (EPA) has required thousands of facilities and organizations to report annual emissions of greenhouse gases (GHGs), in what it refers to as its Greenhouse Gas Reporting Program (GHGRP) (40 CFR part 98). On May 22, 2023, EPA published an extensive set of proposals to update and expand existing requirements. These proposals supplement and supersede proposals published in June 2022 but not acted on by the agency. The remainder of this note summarizes these proposals, focusing not on the many technical revisions to existing requirements but on proposals to target additional activities with reporting requirements. (I’ve written about EPA’s mandatory GHG reporting program several times, including HERE).

Canada has ratified International Labour Organization (ILO) Convention 190, the “Violence and Harassment Convention, 2019” (also referred to as C190). Ratification was made on January 30, 2023, to become effective January 30, 2024. Canada will consider ILO’s “Recommendation 206,” which provides guidelines on how to apply C190, accounting for complementary roles by governments, workers and employers, and their respective organizations. Readers should note that Canada was intimately involved in the development of C190, proving the chair of the ILO Standard-Setting Committee on Violence and Harassment in the World of Work at the 2018 and the 2019 International Labour Conference.

Although the U.S. Occupational Safety and Health Administration (OSHA) has not issued any formal regulations requiring employers to address workplace violence, OSHA’s attention to workplace violence prevention (WPV) have grown steadily over time. As an example, OSHA recently convened a Small Business Advocacy Review (SBAR) Panel to address “Prevention of Workplace Violence in Healthcare and Social Assistance sectors.” In May 2023, the Panel issued its final report, outlining steps OSHA should consider next. This review returned to an agency Request for Information posted in the Federal Register in December 2016, just before President Trump assumed office. The remainder of this note discusses the Panel’s recent findings and recommendations.

On May 1. 2023, the US federal Occupational Safety and Health Administration (OSHA) established a National Emphasis Program (NEP) to focus inspection and enforcement resources on “Falls” in order to “identify and to reduce hazards which are causing or likely to cause serious injuries and fatalities from falls while working at heights,” which OSHA identifies as “the leading cause of fatalities and serious injuries in all industries.” The remainder of this note summarizes the NEP, and OSHA’s general regulatory approaches to fall hazards and fall protection.

On May 25, the United States Supreme court issued its latest decision interpreting the term “waters of the United States” – increasingly referred to by practitioners as “WOTUS” – subject to regulation under the Clean Water Act (CWA) (Sackett v. EPA). This decision narrows the geographic and hydrologic circumstances under which “wetlands” can be considered WOTUS, reinterpreting previous Supreme Court decisions and effectively overruling the latest efforts by the US Environmental Protection Agency (EPA) and US Army Corps of Engineers (Corps) to define WOTUS subject to their respective CWA jurisdictional authorities. (I’ve written several times about the agencies’ rule making efforts, most recently HERE). The remainder of this note summarizes the Supreme Court’s new definition, and the changes it imposes on the physical extent of CWA jurisdiction.

Most regulatory laws provide for civil – and sometimes even criminal – penalties for noncompliance. New legislation typically sets penalty levels (“XXX dollars per day of violation” for example), at levels intended to provide meaningful deterrence and punishment for noncompliance. But over time, the relative sting of these penalties declines with inflation. To counteract the possibility that less painful penalties provide less effective incentives for compliance, U.S. law directs most federal agencies to make annual “cost of living” adjustments to maximum available civil penalty levels (there are no provisions for standing periodic adjustments to criminal penalties).

On May 2, 2023, the Environmental Protection Agency (EPA) published its “Draft National Strategy to Prevent Plastic Pollution,” and issued a formal request for public comments. EPA notes that over the last 20 years, the global annual production of plastic products has more than doubled, and that roughly 23% of global plastic waste is improperly disposed, burned, or leaked into the environment. North America both produces and consumes roughly 19% of global plastics.  To address these issues, the Draft Strategy identifies a set of voluntary actions intended to reduce the volumes of plastic wastes the end up disposed or discarded within the US. EPA describes these measures, and the agency’s related activities, as “endeavors to provide an innovative, equitable approach to reduce and recover plastic and other waste, as well as prevent plastic pollution from harming human health and the environment, particularly for communities already overburdened by pollution.”  The remainder of this note summarizes the 48 pages of the Draft Strategy.

The Occupational Safety and Health Administration (OSHA) “Medical Services and First Aid Standard” requires employers to provide their employees with ready access to medical attention, including treatment and consultation, in the event of an occupational injury or illness. (29 CFR 1910.151). These services can be made available onsite, or at medical facilities in “near proximity” for use by injured employees. This Standard has not been revised since OSHA adopted it in 1998, but the agency has updated and expanded compliance guidance in the intervening 25 years; this includes OSHA’s “Best Practices Guide: Fundamentals of a Workplace First-Aid Program” (2006). The rest of this note discusses these requirements.

Beginning in 2024, the European Union’s (EU’s) Corporate Sustainability Reporting Directive (CSRD) will expand EU rules for corporate reporting of social and environmental information. The CSRD was adopted in November 2022 and took effect in January 2023. It provides new reporting requirements that will be phased in during 2025-2029, superseding the existing EU Non-Financial Reporting Directive (NFRD; which I discussed HERE). It also lowers the threshold for reporting to reach large numbers of somewhat smaller companies. The EU estimates the new rules will apply to approximately50,000 companies (up from 11,700), mostly EU-based but also including non-European companies with sufficient sales in the EU and/or with sufficiently significant EU-based subsidiaries. The Wall Street Journal has estimated that 10,000 additional non-EU companies will also be covered. The remainder of this note summarizes these new requirements, which are still being refined by the EU-sponsored EFRAG organization.

Beginning in 2018 with reporting of 2017 data, the European Union’s (EU’s) Non-Financial Reporting Directive (NFRD) requires targeted companies to provide information to help shareholders and other interests to understand risks faced by the company, and to summarize the company’s activities regarding a variety of social and environmental issues. These requirements will be superseded during 2025-2029 by a new Corporate Sustainability Reporting Directive (CSRD) that clarifies and expands NFRD requirements. The remainder of this note summarizes existing NFRD requirements.