A Supplemental Environmental Project (SEP) is an environmentally beneficial project that a company agrees to undertake when settling enforcement actions with either the state or federal governments. The SEP must improve, restore, protect, or reduce risks to public health and/or the environment beyond that achieved by compliance with applicable laws.
Categories of SEPs
A regulated entity should consider the following categories of SEPs when deciding on potential projects. Other SEPs, however, may be approved by the Region.
- Public Health: Provides diagnostic, preventive, or remedial aspects of human health care related to actual or potential damage caused by the violation.
- Pollution Prevention: Reduces the generation of pollution through "source reduction".
- Pollution Reduction: Reduces the amount and/or toxicity of releases into the environment by means other than pollution prevention, such as installation of end-of-process control or treatment equipment or recycling.
- Environmental Restoration and Protection: Enhances the condition of the ecosystem or geographic area adversely affected; includes man-made environments.
- Assessments and Audits: Identifies opportunities to reduce emissions and improve environmental performance.
- Environmental Compliance Promotion: Provides training or technical support to other members of the regulated community to help achieve and maintain compliance, or to reduce pollutants beyond legal requirements.
- Emergency Planning and Preparedness: Provides technical assistance and training to state or local emergency planning and response organizations to enable them to prepare for and respond to chemical emergencies.
Requirements for SEPs
Since SEPs are part of a settlement, they must meet certain legal requirements, such as:
- SEP must improve, protect, or reduce risks to public health, or the environment at large. While in some cases a SEP may provide the alleged violator with certain benefits, there must be no doubt that the project primarily benefits public health and/or the environment;
- A relationship between the SEP and the violation(s) must exist. For example, a company that violates the Clean Air Act may propose a SEP that reduces the amount of pollutants it discharges into the air to an amount below what the law requires;
- A SEP must be voluntary. The project CANNOT be required by any federal, state, or local law or regulation. SEPs may include activities which the violator will become legally obligated to undertake two or more years in the future as long as the regulation or statute does not provide a benefit to the violator for early compliance;
- A SEP cannot have been committed to or started before EPA identifies the violation(s) (e.g., issued a notice of violation, administrative order or complaint) This is because the primary purpose of this Policy is to obtain environmental or public health benefits that may not have occurred "but for" the settlement;
- The EPA plays no role in managing funds or controlling performance of SEP. EPA may, of course, perform oversight to ensure that a project is implemented pursuant to the provisions of the settlement and have legal recourse if the SEP is not adequately performed;
- Type and scope of project are determined in signed agreement. In other words, one cannot just agree to pay a certain sum of money on project(s) to be defined later; and
- SEP must not increase EPA's or any federal agency's resources to perform activities which the Agency is legally required to perform itself. Similarly, a project cannot provide a federal grantee with additional funds to perform a specific task identified in an assistance agreement.