This article examines the factors that affect state adoption of environmental audit legislation and self-policing policies. The results of both a cross-section probit and a Weibull proportional hazard model suggest that political context and state-federal relationships are key factors in adoption decisions while environmental conditions are less significant and institutional capacity is the least important. Overall, the results for audit privilege and immunity legislation are very similar, but several explanatory factors affect adoption of audit legislation and self-policing policies in opposite ways. Finally, these results also suggest that EPA opposition to audit legislation has had a significant deterrent effect.

The discussion begins with describing the nature of the environmental audit, defining its characteristics, examining its necessity, and explaining its weakness. Next, this paper analyzes current approaches for encouraging auditing and protecting the results of a self-evaluation. In addition to safeguards available under common law, some states offer privilege and/or immunity as protection for those who police themselves, while EPA has chosen to provided penalty mitigation. To review the treatment of audits at the federal level requires scrutinizing the policy of the EPA, as well as the approach taken by the Department of Justice (DOJ) and the applicability of the U.S. Federal Sentencing Guidelines. After examining the federal approach, this paper details the initiatives adopted by state governments that offer refuge to entities conducting environmental audits. Although the state statutes contain some unique provisions, they fall largely within the parameters of providing privileged treatment to audit results and offering some form of immunity for those entities that voluntarily disclose their findings. Several of these statutes require the state regulatory agency to evaluate the success of the law in promoting compliance and to report its findings to the legislature, which may then extend the act, if it contains a sunset provision, or modify or repeal the act. This thesis concludes by noting that all states with environmental audit legislation risk disapproval and, perhaps, reversion of regulatory programs delegated to them by the federal government.

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