What's Happening?
The Trump administration has initiated a broad deregulatory agenda at the US Environmental Protection Agency (USEPA), refocusing the agency's mission and redirecting enforcement priorities and resources.
This move affects enforcement against chemical manufacturers under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Toxic Substances Control Act (TSCA). Companies are advised to conduct internal audits and review product stewardship and environmental, health, and safety procedures to ensure compliance with federal environmental laws. The USEPA's Audit Policy encourages voluntary self-disclosure to reduce enforcement risks. Environmental self-audits are crucial in transactional due diligence, identifying potential environmental liabilities and demonstrating proactive compliance.
Why It's Important?
The reorganization of USEPA's enforcement priorities under the Trump administration could lead to reduced federal oversight, creating uncertainty for businesses in heavily regulated sectors like chemical manufacturing. Companies that proactively conduct self-audits and disclose violations can mitigate enforcement risks and maintain public trust. This approach is particularly vital in a deregulatory environment where enforcement priorities may be unpredictable. Environmental groups and states are preparing to fill perceived enforcement gaps, emphasizing the importance of compliance. Businesses that act proactively are better positioned to avoid penalties and navigate shifting regulatory priorities.
What's Next?
Companies are encouraged to enhance corporate compliance programs and make voluntary disclosures at both federal and state levels. Environmental groups and states may increase their enforcement efforts to maintain public health protections. Businesses should seek guidance from experienced professionals to design tailored compliance strategies during this period of regulatory uncertainty.
Beyond the Headlines
The deregulatory momentum accelerated after the US Supreme Court's 2024 decision limiting judicial deference to agency interpretations of statutes, creating new legal constraints for federal agencies. This development, combined with a preference for deregulation, has led to uncertainty about enforcement priorities. Companies must remain vigilant in their compliance efforts to avoid potential legal and business risks.
