DNR: Green Tier Fact Sheet

For More Information about Green Tier
Contact DNR’s Mark McDermid at 608-267-3125, or visit: http://dnr.wi.gov/org/caer/cea/environmental/index.htm

Performance-Based Environmental Management

Green Tier provides an opportunity for Wisconsin to combine and achieve our economic and environmental goals. Building on the leadership of our business, environmental and government communities, this program supports the Department of Natural Resources’ mandate to protect and enhance our environment, while setting the stage for economic growth.

Purpose and Intent

Green Tier establishes a two-tiered system for voluntary environmental performance that exceeds existing standards. The program provides recognition and incentives for participation, and strives to lower the overall transaction costs associated with environmental performance. Based on two tiers. Participants in Tier 2 of the program can negotiate environmental agreements that may not be possible under the existing regulatory system. Groups of companies or public sector entities can join together with the state in “Green Tier Charters” to pursue common goals that traditional regulators may be fiscally and administratively unable to address.

General Participation Criteria

Participants in Green Tier demonstrate:

  • A strong environmental compliance record, with no recent civil or criminal judgments or citations from the Department of Natural Resources (DNR).
  • A formal environmental management system (EMS) that will be implemented or has been implemented.
  • Annual performance reviews, with the results submitted to the DNR.
  • Prompt follow-up action to any findings of non-compliance discovered during the annual reviews.
  • Continual improvement of environmental performance.
  • Development of negotiated environmental agreements (Tier 2 participants only).

Tier 1 Participation Incentives

  • Initial and annual recognition of participation by the DNR.
  • Use of the Green Tier logo.
  • Assignment of a specific DNR professional as a point of contact within the agency.
  • Lowest level of inspection frequency once an EMS has been adopted.

Tier 2 Participation Criteria and Incentives

Participation criteria for Tier 2 are more rigorous. Tier 2 participants must implement an EMS prior to Tier 2 entry.

Tier 2 participants negotiate customized environmental agreements with the DNR and interested stakeholders, including the public. These flexible agreements carry the force of law and enable significant environmental improvements. Tier 2 agreements may be the most innovative and valuable part of Green Tier, as they support both government efficiency and business competitiveness.

Deferred Civil Enforcement

Both Green Tier levels allow for deferred DNR enforcement of any violations discovered in annual performance reviews. The DNR will not commence civil action if violations are corrected within 90 days of the review, and possibly up to 12 months in some situations. Deferred enforcement is not applicable if the violation involves an imminent threat to public health and the environment, or if the DNR discovers the violations before the company implements an environmental management system.

Charters

An association of public and/or private entities can establish a Green Tier Charter with DNR to encourage and support Green Tier participation among their members. This provides the opportunity for a business sector or a geographic association to join together in establishing and reaching environmental goals.

Results

Participating companies regularly communicate information about compliance and overall system performance to help the DNR and other parties improve the Green Tier program. The purpose of this information sharing is to assure that environmental results achieved are proportional to the amount of regulatory flexibility granted to companies at each level of participation. Green Tier provides for a comprehensive approach to learning. The La Follette School of Public Affairs (UW-Madison) gathers and assesses information about the administrative, environmental, economic and community experience at each tier of the program.

Compliance Auditing
An Environmental Improvement Program

The product of several years of negotiations the compliance auditing provisions of Green Tier are modeled after US Environmental Protection Agency audit policy and are designed to encourage entities to review their practices to assure compliance with environmental laws. The provisions provide a statutory foundation and a legal framework for exercising “due diligence”. There are specific protections built into the law to prevent using the law only to deflect penalties for known or serious practices or practices that may have been employed for economic gain without sufficient regard for environmental consequences.

Purpose and Intent

The program is intended to encourage the use of compliance auditing to improve both awareness of regulatory requirements and compliance with those requirements. The law is also an additional tool that can help build better working relationships based on performance and open communications. With 30-day notice, entities can conduct a compliance audit and have limited liability for violations disclosed as a result of the audit.

Participation Criteria

In order to be eligible for the program, the entity must:

  • 30 days before beginning the environmental compliance audit, notify the Department of Natural Resources(DNR) of the date of the audit, the site or facility or operations or practices to be audited, the general scope of the audit and provide a signed statement acknowledging that any violations discovered before the audit begins are not eligible for the civil forfeiture limitations;
  • conduct an environmental compliance audit within 365 days of the 30-day notice to DNR;
  • submit a report within 45 days after the date of the final written audit report that identifies any violations and includes a plan for corrective action.
  • have the following compliance status at the time that the report is submitted:
  • no civil suit filed by the State within the prior 2 years;
  • no citation issued by DNR or a local governmental unit within the prior 2 years.

Audit Report

The audit report must describe the environmental compliance audit, who conducted it, when it was completed, activities and operations examined, what was revealed by the audit, and any other information DNR needs to fulfill its annual reporting requirement to the Legislature. Specific elements include:

  • violations revealed in the audit and the length of time the violations may have continued;
  • actions taken to remedy the violations; and
  • commitments to remedy the violations within 90 days or a compliance scheduled to be approved by DNR.

The proposed compliance schedule is expected to have the shortest reasonable period for remedy, explain reasons and describe the measures it will take to minimize the effects of the violations. A proposal for stipulated penalties for failure to comply with the compliance schedule is also required. The report must also describe actions taken or proposed to prevent recurrence and a timetable for any proposed actions.

Enforcement

The benefit to the regulated entity for proceeding according to program requirements is a significant limitation on the potential civil forfeiture exposure for violations first identified in the environmental compliance audit.

  • The State may not bring a civil lawsuit to collect forfeitures for violations identified in the audit report:
  • for at least 90 days after the report is submitted
  • or for the time period of the compliance schedule if the regulated entity is in compliance with the agreed upon schedule.
  • If the regulated entity corrects the identified violations within 90 days or within the approved compliance schedule DNR may impose not more than a $500 forfeiture per violation, regardless of the number of days that violation continued.
  • Rather than refer these matters to DOJ for enforcement, DNR is authorized to issue citations to collect the civil forfeiture.

Exclusions
The program identifies 6 specific exclusions from the provisions of this law:

  1. The violation presents an imminent threat or may cause serious harm to public health or the environment;
  2. DNR discovers the violation before the regulated entity submits its report;
  3. The violation results in a substantial economic benefit that gives the regulated entity a clear competitive business advantage;
  4. The violation is identified through monitoring or sampling required by permit, statute, rule, judicial or administrative order or consent agreement;
  5. The violation is a repeat violation of the same requirement at the same facility committed in the same manner, unless it was caused by a change in business processes or activities;
  6. The violation is discovered by the regulated entity before beginning the environmental compliance audit.

Public Notice and Reporting

When DNR receives an environmental compliance audit report that identifies violations, it will issue a public notice and provide at least a 30-day comment period. The DNR may not approve a compliance schedule that extends longer than 12 months after the date of approval of the schedule. The DNR must annually report to the legislature the results of the program.

The Environmental Case for Green Tier
Moving from Compliance to Performance

Major regulatory programs have done a great deal to protect Wisconsin’s air, land and water in the past 30 years. Since their inception, these programs have focused primarily on compliance and enforcement, which was largely appropriate in the 1970s when the Clean Air Act and Clean Water Act were first passed. Now, our environmental challenges are different. Our regulatory focus on compliance may be limiting the capacity of regulators and the regulated community to pursue innovative approaches to environmental management.

Under our traditional environmental regulatory system, we have utilized a “one size fits all” approach to environmental protection. Command-and-control regulation has prescribed the application of specific technologies in an attempt to address and control environmental behaviors. Lacking flexibility to try new environmental approaches, companies have adhered to inefficient practices that often fail to yield meaningful environmental results.

Competitive pressures on Wisconsin’s business community, combined with state budget deficits, compel us to seek a new model that can unite competitive pressure with environmental goals to achieve superior environmental performance.

Green Tier offers the opportunity to enhance the protection and management of our natural resources, as well as our economic and institutional assets.

Changes in Business Practice

Measurable Improvement in Environmental Performance
Using Green Tier, Wisconsin’s business community can promote the development and application of new initiatives to improve environmental performance beyond current standards. These initiatives may include application of new pollution control technologies, production process changes, or introduction of sustainability strategies that yield both economic and environmental benefits. It is important to note that Green Tier participants commit to measurable environmental improvements. This is a substantial improvement over the current “compliance monoculture” that persuades companies to meet only minimum performance requirements.

Higher Assurance of Compliance
Participating companies conduct annual assessments of their environmental performance, including their regulatory compliance status. Results of these assessments are provided to the Department of Natural Resources (DNR). These assessments reduce the potential for noncompliance, help facilities move above the compliance threshold, and improve overall environmental performance.

More Robust Environmental Management
Participants in Green Tier implement formal environmental management systems (EMSs). An EMS makes the environment a formal part of business decision making, challenging a company to move from continual compliance to continual improvement. An EMS requires proactive planning by management, attention to the environment by all employees, and examination of business processes that pose a potentially significant environmental impact (even if the processes are not regulated). Using EMSs, Green Tier participants are likely to identify and minimize potential environmental risks not addressed by our existing compliance-based programs.

Improvements Across Business Sectors
The Green Tier program allows groups of businesses or public entities to join together in establishing charters (i.e., environmental agreements) and shared environmental performance goals. Green Tier Charters leverage the efforts of the DNR to encourage measurable environmental improvements at multiple facilities simultaneously.

Redirection of Agency Resources

Focusing on Facilities that Need Assistance
Business participation in Green Tier reduces the administrative burden placed on the DNR. This can allow DNR staff to focus on facilities that need direction to achieve or maintain compliance. The DNR can focus efforts where expertise is most needed.

Increased Access to Information

Annual Reporting
Participants in the Green Tier program report their environmental performance annually. Annual reports document the company’s regulatory compliance issues, stakeholder involvement activities, and progress in meeting measurable performance improvements. EMS implementation at participating facilities drives continual performance improvements. Over time, these improvements are expected to exceed the reductions in hazardous air pollutants, non-renewable energy consumption and hazardous waste generation achieved through pre-Green Tier pilot programs.

Providing Information, Seeking Feedback
Communities, neighbors, and other interested parties have increased access to information about facilities enrolled in the Green Tier program, and they have greater opportunities to share comments and concerns. Participating facilities commit to working closer with their local communities and those potentially affected by their operations.

The Business Case for Green Tier
Realizing Business Value in Regulatory Innovation

While most companies achieve consistent compliance with regulatory requirements the focus, too often, can be on compliance. Green Tier frees up an entity to think creatively in how to improve their environmental performance and allows the DNR to work collaboratively with them from an economic point of view.

Green Tier legislation allows for increased economic benefits and recognition for actions that yield superior environmental performance. Building on the experience of innovative regulatory programs, Green Tier laws offer responsible Wisconsin companies the opportunity to modify their existing environmental programs in a manner that makes good business sense and good environmental sense.

Green Tier supports those companies that would like to pursue enhanced environmental performance – whether they’re large or small businesses. The law is specifically tailored to both.

Are There Economic Benefits?

The provisions of Green Tier allow companies to tailor an innovative regulatory proposal specific to their particular operation and needs. The second level of Green Tier provides both the applicant and the DNR the ability to negotiate an agreement that is unique to their business operation and that has the potential of offering measurable economic benefits.

Permit and Decision Streamlining – Green Tier has the potential to reduce the turn around time on permits or other decisions by the DNR subsequently reducing internal environmental staff effort, legal counsel time, and consultant costs. One pilot program participant crafted a streamlined construction permit process, managed it internally, and reduced process time by 45 days.

Permit Exemptions – Although existing rules provide construction permit exemptions for very minor projects, under a Green Tier pilot program, one major facility was granted a broader construction permit exemption as long as certain emission parameters were not exceeded.

Testing and Installation of New Technologies – Approval and permit exemptions for the testing and installation of new technologies, especially where energy conservation or emission reductions may occur, have been approved. Wisconsin companies now have the opportunity to modernize their production facilities using new technology, providing them with a competitive edge.

Forward Thinking – The law allows businesses to look at their business and environmental needs together to determine a course of action that will ultimately improve on their environmental performance while allowing them economic gain. For example, this would include meshing business practices related to accelerated depreciation of capital equipment, managing their supply chain, anticipating international demands and securing the necessary regulatory approval to secure required capital.

More Efficient Monitoring, Recordkeeping and Reporting – If a facility has a strong compliance record combined with a well managed environmental management program, there is the potential to negotiate more practical and effective monitoring and reporting than currently contained in permit requirements. One pilot program facility was able to reduce its monitoring and recordkeeping effort equal to approximately one half-time staff equivalent. Another reporting facility reduced their annual monitoring submittals from approximately 230 pages per year to five.

Innovative Technical Solutions – Green Tier encourages companies to propose innovative environmental and production solutions. One imaginative proposal approved under a pilot program reduced the purchase of fuel equivalent to the energy contained in over 300 railroad cars of coal. This reduction was achieved in less than two years.

The actual business value offered by Green Tier legislation, measured in simple economic terms, will vary according to your business and your imagination. Overtime Green Tier will be successful and businesses and the environment will benefit, only if companies participate in the program.

What Is the Intangible Value?

Besides the potential for measurable economic and environmental returns stemming from Green Tier participation, a company may also realize intangible benefits.

Regulatory Recognition – Participants in the Green Tier program will be recognized by the DNR and the agency will publicize this fact.

Improved Agency Relations – Participation in a proactive environmental program can allow communication barriers with the DNR to be breached and provide a greater appreciation of mutual goals.

Employee Pride – Facilities that participate in innovative regulatory programs often see an increased level of employee pride and ownership in environmental activities and the business in general.

Branding – Superior environmental performance through participation in a Green Tier program can help support the brand value of your company.

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