[Federal Register: August 6, 2003 (Volume 68, Number 151)]
[Notices]
[Page 46604-46606]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au03-75]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
[FRL-7540-5]
Science Advisory Board Staff Office; Request for Nominations for
an Ad Hoc Science Advisory Board Panel on Illegal Competitive Advantage
Economic Benefits
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice.0
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA) Science Advisory
Board (SAB) Staff Office announces the formation of a new SAB advisory
panel to provide advice to the Agency regarding economic benefit
recapture issues, to be referred to as the ``Illegal Competitive
Advantage (ICA) Economic Benefit (EB) Advisory Panel'' (ICA EB Advisory
Panel) and is soliciting nominations for members of the panel.
DATES: Nominations should be submitted no later than August 27, 2003.
ADDRESSES: Nominations should be submitted in electronic format through
the Form for Nominating Individuals to Panels of the EPA Science
Advisory Board provided on the SAB website. The form can be accessed
through a link on the blue navigational bar on the SAB Website, http://www.epa.gov/sab.
To be considered, all nominations must include the
information required on that form. Anyone who is unable to submit
nominations via this form any contact Dr. K Jack Kooyoomijan,
Designated Federal Office (DFO), as indicated below.
FOR FURTHER INFORMATION CONTACT: Any member of the public wishing
further information regarding this Request for Nomination may contact
Dr. K. Jack Kooyoomijan, (DFO), U.S. EPA Science Advisory Board, 1200
Pennsylvania Ave., NW., (1400A), Washington DC, 20460, by telephone/
voice mail at (202) 564-4557, by fax at (202) 501-0582; or via e-mail
at kooyoomijan.jack@epa.gov. For technical information pertaining to the Agency's White Paper
and the supporting background documents, please contact Mr. Jonathan
Libber the U.S. EPA, Office of Enforcement and Compliance Assurance
(Mail Code 2248A), by telephone/voice mail at (202) 564-6102, by fax at
(202) 564-9001; or via e-mail at libber.jonathan@epa.gov.
SUPPLEMENTARY INFORMATION:
Summary
The Environmental Protection Agency (EPA) Science Advisory Board
(SAB) Staff Office is announcing the formation of a new Advisory Panel
to review and provide advice to the Agency concerning the White Paper
addressing the ``illegal competitive advantage'' (ICA) issues related
to EPA's policy of recapturing violator's economic benefit from
environmental noncompliance. Most of the Agency's cases involving
economic focus on the financial gain that arises from relatively
straightforward delayed and/or avoided pollution control costs, and the
Agency's ``BEN'' (Benefits) computer model calculates the economic
benefit in those situations. Where ICA issues arise, the economic
benefit derived from scenarios that do not fit the BEN model's
simplified paradigm of avoided and/or delayed expenditures may or may
not apply. The SAB is soliciting nominations to establish the members
of the new Panel to be known as the Illegal Competitive Advantage (ICA)
Economic Benefit (EB) Advisory Panel (ICA EB Advisory Panel).
The ICA EB Advisory Panel is being formed to provide advice to the
Agency, as part of the EPA SAB's mission, established by 42 U.S.C.
4365, to provide independent scientific and technical advice, and
recommendations to the EPA Administrator on the technical bases for EPA
decision making. The Board is a chartered Federal Advisory Committee,
which reports directly to the Administrator.
Background
A cornerstone of EPA's Office of Enforcement and Compliance
Assurance (OECA) civil penalty program is recapture of the economic
benefit that a violator may have gained from illegal activity, whenever
EPA can effectively measure that gain. Recapture helps level the
economic playing field, discouraging and preventing visitors from
obtaining an unfair financial advantage over their competitors who made
timely and necessary investments in environmental compliance. Since
1984, EPA's policy has been to recapture a violator's economic benefit
from violating the law (See document entitled ``Policy on Civil
Penalties,'' specifically at page 3 and its companion document, A
Framework for Statute-Specific Approaches to Penalty Assessments at
pages 6-11. EPA's Office
[[Page 46605]]
of Enforcement and Compliance Assurance (OECA) has taken lead to
develop these approaches to capture the economic benefits. Both of the
above documents, which describe such policies, can be found at the
following URL http://www.indecon.com.
In some, but not all ways, the analysis is similar to the field of
commercial damages, comparing a hypothetical ``but-for'' scenario to
the actual state of the world. Often the violations involve the failure
to install pollution control equipment in a timely fashion and the
consequent failure to incur operational and maintenance costs during
the period of noncompliance. In most of these cases, a safe assumption
is that all other aspects of the company's operations are identical in
both the compliance (i.e., ``but for'') and noncompliance (i.e.,
``actual'') scenarios. Based on this assumption, the analysis becomes a
relatively straightforward net present value calculation, focusing on
the cost savings from delayed installation and avoided operation of the
pollution control equipment. In the mid-1980s, EPA developed the
``BEN'' computer model to allow lay persons to perform the necessary
present value calculations in these cases. In other situations that may
involve deliberations in a courtroom setting, the Agency may rely for
its economic benefit calculations upon an expert witness, who employs
whatever analytical tool the expert deems most suitable for application
to that particular case. That tool may sometimes be the BEN model, but
the expert would be using BEN only if its analytical framework fit the
expert's approach for that particular case. BEN's application in such a
courtroom setting would therefore be similar to using a straight-
forward spreadsheet application similar to the use of expert testimony
for the basis of the expert's calculations. As a practical matter since
1995, the Agency has been mitigating civil penalties when violators
agree to perform supplemental environmental projects (SEPs).
Proposed Charge to the Panel
The Agency is asking the SAB's ICA EB Advisory Panel to review and
provide advice on a White Paper entitled ``Identifying and Calculating
Economic Benefit that Goes Beyond Avoided and/or Delayed Costs.''
Specific charge questions include the following:
(a) Are there any categories of cases that would be useful for the
Agency to consider in calculating the ICA economic benefit, other than
those that are identified in the White Paper? Should any of these
categories be combined?
(b) How can the Agency more accurately characterize the types of
cases that are described in the White Paper? Have any of the examples
and counter-examples in the White paper been misidentified with regard
to whether they are amenable to the BEN model's simplifying paradigm?
(c) Are there any suggestions for modifying the described
analytical approach to calculate the economic benefits and;
(d) The Agency's proposed approach strives to avoid any double-
counting of the benefit by laying out all the relevant cash flows
stemming from the violations, as opposed to simply adding on the
additional calculations to a BEN run. What additional measures (if any)
should the Agency put in place to avoid such potential double-counting?
Document Availability
The White Paper entitled ``Identifying and Calculating Economic
Benefit That Goes Beyond Avoided and/or Delayed Costs'' to be reviewed
by the Panel can be obtained from the EPA Web site at: http://www.epa.gov/Compliance/civil/programs/econmodels/index.html.
For
further information regarding the White Paper, please contact Mr.
Jonathan Libber at the address provided earlier in this notice. The
following informational background documents are also provided under
http://www.indecon.com, and include the following: BEN Computer Model
Version 2.0; BEN Users Manual dated September 1999, Policy on Civil
Penalties; and A Framework for Statute-Specific Approaches to Penalty
Assessments.
It is the Peer Review White Paper entitled ``Identifying and
Calculating Economic Benefit That Goes Beyond Avoided and/or Delayed
Costs'' that is the focal point of this upcoming advisory. The other
documents serve as background information for the ICA EB Advisory Panel
and the interested public. Additional information will be made
available at the SAB Web site at: http://www.epa.gov/sab where the SAB
will post notices when it develops the narrow cast list of candidates,
lists the biosketches of the shortlist candidates, receives comments on
the shortlist candidates, makes the final selection of the ICA EB
Advisory Panel, posts copies of the Federal Register notices of
upcoming meetings, posts agendas of the ICA EB Advisory Panel, and
posts any other related information specific to the SAB Advisory on
this topic.
SAB Staff Office Request for Nominations
Any interested person or organization may nominate qualified
individuals for membership on the Panel. Individuals should have
expertise in one or more of the following areas: (a) Financial
Economics, which includes Corporate Finance, (b) Economic Benefit
Recapture Issues, (c) Business/Commercial Damages, which includes Anti-
Trust Law, Torts and Economics, (d) Business Economics and Competitive
Strategy, which includes aspects of Statistical Decision-Making and
Game Theory, as well as Competitive Effects of Vertical Integration,
and Quantitative Economics, and (e) Industrial Organization, in the
context of environmental regulations and their enforcement, as well as
Environmental and Regulatory Economics, Environmental Ethics and
Sustainability in this context.
Process and Deadline for Submitting Nominations
Any interested person or organization may nominate qualified
individuals to add expertise in the above areas for the Pane.
Nominations should be submitted in electronic format through the Form
for Nominating Individuals to Panels of the EPA Science Advisory Board
provided on the SAB website. The form can be accessed through a link on
the blue navigational bar on the SAB Web site, http://www.epa.gov/sab.
To be considered, all nominations must include the information required
on that form.
Anyone who is unable to submit nominations using this form may
contact Dr. K. Jack Kooyoomjian at the mailing address in the section
above entitled, For Further Information Contact: Nominations should be
submitted in time to arrive no later than August 27, 2003. Any
questions concerning either this process or any other aspects of the
notice should be directed to Dr. Kooyoomjian.
The EPA Science Advisory Board Staff Office will acknowledge
receipt of the nomination and inform nominators of the panel selected.
From the nominees identified by respondents to this Federal Register
notice (termed the ``Widecast''), SAB Staff will develop a smaller
subset (known as the ``Short List'') for more detailed consideration.
In addition to the expertise listed above in Item 5, criteria
used by the SAB Staff in developing this Short List are given at the
end of the following paragraph. The Short List will be posted on the
SAB on the SAB Web site at:
[[Page 46606]]
http://www.epa.gov/sab, and will include, for each candidate, the
nominee's name and their biosketch. Public comments will be accepted
for 21 calendar days on the Short List. During this comment period, the
public will be requested to provide information, analysis or other
documentation on nominees that the SAB Staff should consider in
evaluating candidates for the Panel.
For the EPA SAB, a balanced advisory panel is characterized by
inclusion of candidates who possess the necessary domains of knowledge,
the relevant scientific perspectives (which, among other factors, can
be influenced by work history and affiliation), and the collective
breadth of experience to adequately address the charge. Public
responses to the Short List candidates will be considered in the
selection of the panel, along with information provided by candidates
and information gathered by EPA SAB Staff independently on the
background of each candidate (e.g., financial disclosure information
and computer searches to evaluate a nominee's prior involvement with
the topic under review). Specific criteria to be used in evaluating an
individual subcommittee member include: (a) Scientific and/or technical
expertise, knowledge, and experience (primary factors); (b) absence of
financial conflicts of interest; (c) scientific credibility and
impartiality; (d) availability and willingness to serve; and (e)
ability to work constructively and effectively in committees.
Short List candidates will also be required to fill-out the
``Confidential Financial Disclosure Form for Special Government
employees Serving on Federal Advisory Committees at the U.S.
Environmental Protection Agency'' (EPA Form 3110-48). This confidential
form, which is submitted by EPA SAB Members and Consultants, allows
government officials to determine whether there is a statutory conflict
between that person's public responsibilities (which includes
membership on an EPA Federal advisory committee) and private interests
and activities, or the appearance of a lack of impartiality, as defined
by Federal regulation. The form may be viewed and downloaded from the
following URL address: (http://www.epa.gov/sab/pdf/epaform3110-48.pdf).
The Panel members will likely be asked to attend up to two public face-
to-face meetings and several public conference call meetings over the
anticipated course of the review.
Dated: July 31, 2003.
Vanessa T. Vu,
Director, EPA Science Advisory Board Staff Office.
[FR Doc. 03-20035 Filed 8-5-03; 8:45 am]
BILLING CODE 6560-50-M