Overview
The second Trump administration has launched a broad deregulatory agenda at the US Environmental Protection Agency (USEPA), refocusing the Agency's mission and redirecting enforcement priorities and resources. The implications for enforcement against chemical manufacturers under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Toxic Substances Control Act (TSCA)1remain uncertain. Now is the ideal time to leverage USEPA's Audit Policy self-disclosure provisions.
As the Trump administration reorganizes USEPA's Office of Enforcement and Compliance Assurance (OECA), adjusts the Agency's enforcement priorities, and reallocates enforcement resources at both USEPA and the US Department of Justice (USDOJ), companies should not reduce their compliance efforts. Instead, businesses should conduct internal audits, review product stewardship and environmental, health, and safety procedures, and ensure that all activities and products comply fully with FIFRA, TSCA, and other applicable federal environmental laws. Proactive measures—including voluntary self-disclosure under USEPA's Audit Policy—can reduce or eliminate enforcement risk and safeguard companies against future shifts in regulatory priorities.
Beyond routine compliance, environmental self-audits are critical in transactional due diligence, both before and after mergers, acquisitions, and other corporate transactions. These voluntary audits serve dual purposes: identifying potential environmental liabilities associated with a target company and demonstrating a proactive commitment to compliance that can mitigate enforcement risk under USEPA's self-disclosure policies. In today’s deregulatory environment, where enforcement priorities may be unpredictable, such due diligence provides essential legal and business protections.
Pre-acquisition audits allow buyers to uncover legacy violations, potential cleanup obligations, and gaps in compliance systems that could pose post-closing liabilities. Post-acquisition audits, conducted promptly after closing, can identify previously undisclosed violations and enable timely voluntary disclosures under USEPA's Audit Policy or analogous state programs. Historically, USEPA has provided substantial penalty mitigation—or even complete penalty elimination—for companies that self-disclose and correct violations discovered through qualified audits, particularly when performed in good faith and not under imminent enforcement threats. Additionally, USEPA provides enhanced incentives for new owners to evaluate compliance at recently acquired facilities or within product lines. Depending on the specific terms of a corporate transaction, purchasers who identify violations through self-audits may, in some cases, be reimbursed by the seller.
For companies in heavily regulated sectors—particularly chemical manufacturing, formulation, and distribution—self-audits are invaluable in demonstrating diligence, reducing transactional risk, and protecting the value of acquisitions. In an era of shifting enforcement priorities and reduced federal oversight, thorough documentation of these efforts can establish "good actor" status, support defenses in enforcement actions or litigation, and strengthen credibility with regulators, investors, and the public. Whether for transactional due diligence or ongoing compliance management, self-auditing remains one of the most effective tools for managing environmental risk in uncertain regulatory times.
USEPA's deregulatory momentum accelerated after the US Supreme Court's 2024 decision limiting judicial deference to agency interpretations of statutes, forcing federal agencies to navigate new legal constraints. Combined with an expressed preference for deregulation, these developments have created uncertainty about enforcement priorities. However, this uncertainty does not relieve businesses of compliance obligations. Environmental groups already are preparing citizen suits to fill perceived enforcement gaps, and several states are strengthening their programs to maintain public health protections. Courts, states, and advocacy groups will continue to push back against regulatory rollbacks.
For companies, the message is clear: Do not wait for enforcement to resume. Now is the time to self-audit, enhance corporate compliance programs, and when appropriate, make voluntary disclosures at both federal and state levels. Businesses that act proactively are better positioned to avoid penalties, maintain public trust, and navigate shifting regulatory priorities. Guidance from experienced professionals—drawing on decades of regulatory experience—can help companies design tailored compliance strategies during this period of significant uncertainty.
