Non-Owned Disposal Facility Audit Guidelines

Introduction

As a generator of waste, your responsibility for its management extends to knowing that contracted waste haulers and disposal facilities are properly permitted, in compliance, well-managed, and financially responsible. This knowledge is essential because you may be held liable if your contracted hauler or disposal facility is cited, fined, or named a responsible party to a site cleanup. Regulators may ask you to demonstrate the due diligence used when selecting and maintaining waste contractors. For example, you may be asked if, prior to using a disposal facility, you determined whether the disposal site operates responsibly by being financially sound and in compliance with all appropriate laws, permits and regulations regarding screening, handling, treatment and disposal of waste.

The attached audit form is a critical loss prevention tool designed to assist your firm’s risk management efforts to minimize claims or the risk of becoming a potential responsible party to a cleanup.

Each item on the audit form serves to offer protection by helping provide a solid understanding of the disposal facility’s operation.
Documenting Due Diligence Efforts

Use of an audit form will enhance your due diligence efforts; however, a formal Due Diligence Program should also be created to provide context on how this information will be used, such as: documenting the approval process for a new waste vendor, defining what constitutes acceptable or non-acceptable audit findings, determining how a non-approved and approved contractor list is maintained, defining any special conditions under which a facility can be used (i.e., only certain waste streams), describing the frequency of follow-up audits/due diligence, defining who is responsible for doing this work (each facility, corporate staff, etc.), and recordkeeping.

Documentation of effective research into a facility’s status and management will show regulators your due diligence has been adequate. For the contractor you hire, try to complete the form as fully as possible and obtain copies of permits and other information demonstrating the facility’s management practices. After selection of a contractor, periodically update your contractor’s data on this form.

Using This Form

Not all facilities merit the same level of review. The amount of information you obtain depends on several factors including type of waste managed, volume of waste managed, and type of facility (e.g., landfill vs. used oil recycler). Also, in screening out facilities, some criteria may be more important than others. If a contractor has been subject to Notices of Violation, Consent Orders, or other regulatory action, this information may be sufficient to eliminate them from consideration as an approved vendor.

Much of the information on this form can be collected through phone discussions with the facility and regulators. Some can be accessed from the internet. The onsite inspection section will help you verify data obtained over the phone and guide observations of the facility.
In addition, certain operations may find the attached audit format to be insufficient for their documentation needs and may consider the format a “starting point” for their own more intensive audit process, including retaining a specialist firm to conduct the audit.

This document does not constitute a guarantee, a warranty, advice or a representation of any kind and is provided for informational purposes only. It is recommended that in completion of the attached audit form firms consult legal counsel for specific advice regarding degree of liability and responsibility.

XL Environmental • Risk Control Division • 520 Eagleview Boulevard, PO Box 636, Exton, PA 19341 • Phone: 800-327-1414 • Fax: 610-458-7285 • www.xlinsurance.com/environmental

© 2005 XL Specialty Insurance Company. All rights reserved.

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