EPA Science Advisory Board (SAB)

Calculating Violators’ Economic Savings from Violating the Law-- Determining the Benefit Derived from an Illegal Competitive Advantage (ICA)

EPA Designated Federal Officer (DFO):K. Jack Kooyoomjian

Responsible Committee/Panel:Illegal Competitive Advantage Economic Benefit Advisory Panel
A list of members can be found in the final report included in the Advisory Activity linked to this panel or committee.

BACKGROUND.

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Office of Enforcement and Compliance Assurance (OECA) requested SAB advice on a draft White Paper addressing the ``illegal competitive advantage'' (ICA) issues related to EPA's policy of recapturing violator's economic benefit from environmental noncompliance. A cornerstone of OECA’s civil penalty program is recapture of the economic 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. Most of the Agency's cases involving economic have focused on the financial gain that arises from relatively straightforward delayed and/or avoided pollution control costs. 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 draft white paper, ``Identifying and Calculating Economic Benefit that Goes Beyond Avoided and/or Delayed Costs'' attempted to address these issues.