Companies volunteered for ISO 14000 program
An IndEco articleBy: Judy Simon, John Tidball
Over the last decade or so, governments have been searching for additional tools –beyond prosecution leading to fines or jail terms – to motivate companies to achieve environmental compliance. Up until recently the focus has been on market mechanisms, regulations and voluntary participation by companies in federal and provincial programs to reduce emissions such as greenhouse gases and toxic chemicals and increase resource conservation.
Now a new age of “volunteerism” relating to environmental management systems (EMS) and ISO 14001 is dawning. It is being spearheaded by the courts and by innovative government action. In fact, certain environmental management requirements being imposed exceed 14001 requirements.
The Cases
In January 1996, Prospec Chemicals Ltd. was convicted by the Alberta Provincial Court of contravening conditions of an approval that set limits on emissions of total reduced sulphur. In addition to a monetary penalty, the terms of a negotiated sentence required Prospec to become certified to the ISO 14001 EMS by June 30, 1998. To secure this obligation, Prospec was required to post an irrevocable letter of credit in the amount of $40,000.
In August 1998, Coretec Inc. was convicted by the Ontario Court (Provincial Division) for failing to provide pre-notification of the export of hazardous waste, contrary to the Canadian Environmental Protection Act. In addition to a $30,000 donation to aid environmental causes and a number of community service obligations, Coretec was required to implement an EMS and become certified under ISO 14001 by December 31, 2000.
In the United States, certification to ISO 14001 has been required in ways that do not involve prosecution in the courts. In January 1998, the USEPA reached a settlement agreement with ASARCO, Inc., a mining and smelting company with 38 facilities in 7 states. The settlement avoided litigation over alleged violations of Resource Conservation and Recovery Act and the Clean Water Act. ASARCO agreed to implement a comprehensive EMS that exceeds ISO 14001 standards at all of its facilities.
In June 1998, General Motors reached an agreement with the State of Delaware with regard to allegations that its Wilmington plant had unlawfully discharged VOCs to the atmosphere without a permit and then failed to report the discharge. As part of a comprehensive settlement of administrative proceedings, the State of Delaware agreed to offset a portion of the fines against the GM plant in exchange for certification of the plant to ISO 14001 to be achieved within 24 months. GM’s total fine was US $200,000. GM was also required to prepare a specific environmental statement for the Wilmington plant for the next three years on the plant’s performance and regulatory compliance – a requirement that goes beyond 140001 requirements.
Up until now there has been a lot of talk about how governments might reward voluntary ISO 14001 compliance with a reduction in the regulatory burden that these companies would face. Now this talk is close to becoming action in the State of Wisconsin. There are pilot programs underway to test the effects of ISO 14001 in several companies and to pave the way for state flexibility in regulatory compliance for those companies that achieve a superior level of environmental performance.
The Implications
These five cases are evidence of a growing appreciation by Canadian and U.S. regulators that compliance issues can be addressed through well-designed environmental management systems. The ISO 14001 EMS Specification provides those regulators with an objective benchmark that is independently verified and can lead to continual improvement in environmental management, if re-certification becomes an ongoing activity of the company.
Regulators also benefit from this approach because they are able to transfer much of the burden of ensuring effective environmental management to the regulated company and their independent registrars. This approaches gives the company considerable flexibility in how to meet the requirements – what priorities the company chooses to address, in what way, and over what time period.
These cases suggest that a company would be well served by putting in place an effective EMS. In addition to helping to achieve compliance, our experience working with companies on their EMS shows that a properly designed and maintained EMS that is fully integrated into core business processes can provide due diligence protection, reduce insurance premiums and liability costs, reduce operating costs through waste minimization and reduced maintenance, spur process innovation, boost employee productivity and morale, and enhance customer, supplier, and shareholder loyalty.
Comments? E-mail Judy Simon or John Tidball