See additional articles on
Freedom of Information

EPA Proposes Changes to Business-Secret Rules
By Joseph A. Davis

The U.S. Environmental Protection Agency has proposed changing the rules under which it keeps confidential certain information which businesses submit to EPA to meet various legal requirements.

The action could both increase and decrease the amounts of information reporters could get from EPA under the Freedom of Information Act (FOIA). A coalition of business groups has been pushing EPA to expand its definition of "confidential business information" (CBI).

The proposal will be aired at a March 7, 2001, hearing in Washington, DC. It was published as an advance notice of proposed rulemaking in the Federal Register of December 21, 2000 (pp. 80394-80397).

The notice puts on the table, for resolution by the Bush/Whitman administration, CBI issues that had lingered unresolved through most of the Clinton administration. In the same notice, EPA withdrew a previously proposed CBI rule, published on November 23, 1994 (59 FR 60445). Controversies and complexities had kept it from being finalized. The CBI rules currently in effect at EPA were set in 1976 (40 CFR part 2, subpart B).

Normally, reporters have a right to see most EPA information -- for example, information on what pollutants a company may be discharging into a community’s waterways under its Clean Water Act permit. Some environmental laws, such as EPCRA, explicitly require EPA to make certain information public. Even absent such specific disclosure requirements, reporters can ask for almost any information under FOIA. Certain environmental laws and FOIA, however, specifically exempt confidential business information from disclosure requirements.

In the December 21, 2000, notice , EPA proposes what it calls "up-front substantiation" of CBI claims. That is, companies or permit- holders must submit information substantiating their claim of confidentiality at the same time as they submit the information they want to protect.

Up-front substantiation could reduce the amount of information sheltered from disclosure to reporters and the public. Under current EPA procedures, once a company has submitted supporting information with a claim of confidentiality, EPA keeps that information confidential until it has had a chance to rule on the confidentiality claim. Because EPA is so backlogged, the mere claim of CBI for particular information submitted to the agency has been enough to shelter it from FOIA for years. Under EPA’s current CBI rules, the agency usually does not require businesses to submit substantiation of their confidentiality claims until someone actually asks for disclosure of the information in question.

Up-front substantiation should cut down on frivolous, overly broad, and groundless claims, and speed EPA decisions on others.

One further wrinkle: when confidentiality is claimed for information submitted in a substantiation, EPA rules currently make that information even more protected from FOIA than ordinary CBI. EPA is proposing to eliminate the automatic sheltering of CBI substantiations.

Mosaic Effect?

The December 21 EPA notice also solicits comment on the so-called "mosaic effect." Industry groups have argued that a company’s competitors may be able to assemble individual bits of EPA-held information, not themselves qualifying as CBI, into a bigger picture giving competitors strategic information they would not otherwise know.

The "mosaic effect" concept was put forth in a 1999 white paper, "Governmental Accountability for Environmental Information Policy," by Mark Greenwood of the Washington, DC, law firm Ropes & Gray. In it, he represents the views of the Coalition for Effective Environmental Information -- a consortium of companies and trade groups in the automobile, forest products, oil, chemical, electric, plastics, pharmaceutical, aerospace, and manufacturing industries. The paper proposes several actions which could restrict public access to information, especially electronic information, about industry activities.

EPA held a "stakeholder forum" on information issues in Chicago on November 15-16, 1999, at which "No consensus was reached on whether the ‘mosaic effect’ exists," the notice said.

According to the notice, the "mosaic effect" has been recognized in several court decisions. EPA and the courts handle such claims on a case-by-case basis, but there is currently no systematic agency policy restricting the aggregation of information. In soliciting comment, the notice asks for specific examples of harm from a mosaic effect, and ideas on how to prevent possible harm without stifling the public’s right to know.

No representatives of the "working press" (other than this reporter, who attended as a participant) were present at the November 1999 meeting of stakeholders. Assembly of facts into a bigger picture, some journalists argue, is one of the key techniques of journalism, particularly "computer-assisted reporting." For example, a reporter might look through EPA’s database on water pollution discharge permits to assemble a picture of the environmental performance of a large company with plants all over the United States.

But such integration of scattered information is just what some companies are worried about. For example, a competitor could use water permit data, Toxics Release Inventory data, and other EPA databases to come to conclusions about a company’s production volume, production efficiency, and amount of inventory. Such economic intelligence, which is not of itself something EPA needs to collect, would help one company know another’s strengths and vulnerabilities, Greenwood argues.

Streamlining CBI

Much of the EPA notice is about ways to streamline the current CBI process. Current regulations allow EPA to make determinations about whether information qualifies as CBI generically ("class determinations") rather than always on a case-by-case basis. Certain companies, the notice says, are concerned about the use of class determinations and would rather have their cases treated individually. The notice asks for comment on this issue.

EPA faces a conflict. The law requires the agency to conduct rulemaking based on a public record which allows public comment and judicial review. At the same time, other laws require EPA to protect CBI. One of the mechanisms EPA has used to bridge this gap is to aggregate data in ways that provide a meaningful statistical picture, while masking the identity of particular companies or plants. EPA currently has no guidelines on how to do this, and the notice solicits comments on whether (and what) guidelines should be developed.

EPA keeps the files containing CBI in certain places separate from other records. Over the years, such files accumulate and grow old. One part of the EPA notice asks for comment on the idea of following guidelines of the National Archives and Records Administration for archiving or destroying old records.

EPA also asks for comment on the idea of having businesses submit "redacted copies" of a document (along with the original document) when they claim information in the document as CBI. This would save EPA the time required to manually delete the confidential information when it releases the rest of the document.

Reprinted with permission. Published in Environment Writer newsletter February 2001, by the National Safety Council's Environmental Health Center.