Why Should Anyone Care About Environmental Fraud?

Environmental issues present some of the most pressing legislative challenges of this century. Catastrophic environmental incidents are often publicized, but there’s a bigger issue that has been insufficiently addressed: the intersection between corporate interests and the safety of our ecosystems. Tackling this issue is increasingly vital, because a lot of companies are seriously hurting the environment, and not enough is being done to incentivize more responsible corporate conduct.

Any organization that routinely destroys the environment needs to be held accountable.

There are three major reasons for the slow progress in environmental reform as it relates to corporate responsibility:

  • The legislation that combats environmental fraud is less streamlined and more complicated than similar anti-fraud laws in other industries, such as healthcare or finance.
  • The term “environmental fraud” has acquired political connotations, and even though we all have to live on the same planet, political divisiveness around this issue has slowed meaningful reform.
  • Corporate lobbyists are skilled at infiltrating federal issues. For example, the Environmental Protection Agency (EPA) is regularly lobbied by companies like Shell and Valero.

We should all care about environmental fraud, because the stakes could hardly be higher. This is the world we live in, the air we breathe, the water we drink, and the ecosystem that sustains our life. Destroying it destroys us.

The systems that aim to stop environmental fraud aren’t perfect, but they are certainly a step in the right direction. With greater adherence to the existing legislation, progress is possible.

Here are three major environmental concerns that regulators frequently address.

Air quality

Innovation in vehicles has come a long way since the invention of the automobile. Car companies have scrambled to keep up with the demands of an increasingly eco-friendly population, frequently boasting of enhanced, environmentally conscious technology in their cars.

Unfortunately, some companies have been caught cutting corners in an effort to appear eco-friendly, while secretly causing a more negative environmental impact than they’d care to admit. Volkswagen faced a massive scandal for this reason in 2015, and admitted to having designed 11 million cars that could pass emissions tests despite not actually meeting those standards.

Mitsubishi faced similar allegations in 2016, and admitted to lying about the fuel efficiency of 625,000 of its cars.

Both car companies have been accused of violating the Clean Air Act (CAA), instituted in 1970, which governs the amount and nature of permitted emissions of air pollutants, and sets the standards for lawful reporting procedures.

The CAA allows private citizens to sue environmental fraudsters on behalf of the federal government. In contrast to False Claims Act’s rewards for whistleblowers (which can be between 15% to 30% of any government recovery over $1 million), awards for CAA lawsuits are capped at $10,000.

Responsible oil drilling

Oil drilling has been a mainstay in the American economy for quite some time, but it has detrimental effects to the environment when not strictly regulated. Oil spills have been particularly devastating for local ecosystems.

From 2010 to 2014, Norwegian company DSD Shipping knew that its pollution prevention equipment was deficient and failing, but the company continued operations without reporting the damage. As a result, they illegally discharged approximately 20,000 gallons of oil-contaminated wastewater into the ocean and then falsified their records.

DSD was placed on a three-year probation from oil drilling, and had to pay $2.5 million to the government, $500,000 of which went to a local Sea Lab Foundation. The company’s misconduct violated the Act to Prevent Pollution from Ships (APPS) and the Clean Water Act.

APPS requires ships to have compliant, functional equipment to prevent excessive oil spills.

Clean drinking water

Flint is the most prominent recent example of a Safe Water Drinking Act violation, but this type of issue has happened before and, reports indicate, will most likely happen again.

Due to the severity of the situation in Flint, an amendment to the SWDA was introduced. Public water agencies will now be required to inform their constituents of elevated lead levels in their drinking water.

The amendment also gives the EPA a heightened responsibility to keep customers updated on deficiencies when public water utilities fail to do so.

Combating environmental fraud

Enforcement of environmental law regulations is still evolving. It has unfortunately become a political issue, and it involves corporations that make a lot of money from oil and other potentially environmentally damaging products.

There are any number of arguments and denials that stand in the way of meaningful environmental reform. Detractors argue that companies who commit environmental fraud create jobs, that they give us fuel, or that effective reform costs money—taxpayer money.

It’s important to remember, however, that environmental fraud routinely wastes taxpayer dollars, in addition to causing unnecessary and sometimes irreparable damage to our environment. Therefore, ensuring that private companies and public entities adhere to the bare minimum of environmental standards should not be at all political.

It should be a matter of common sense and public safety.