FEATURE
ISO 14000 A STEP TOWARD INDUSTRY
SELF-REGULATION RONALD BEGLEY
New international environmental management standards are seen by industry as a means to reduce regulatory stringency, but U.S. regulators are still on the fence.
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new set of voluntary environmental management standards from the International Organization of Standardization (ISO) is being touted by industry as a framework for redesigning the way it is regulated. The series of principles, known as ISO 14000, is designed to make it easier for businesses to track their own environmental operations and performance. But while business is pursuing this as a new opportunity to ease the regulatory throttle U.S. regulators are waiting to be convinced. Strong public pressure in Europe and the United States has made companies painfully aware that consumers care about the effect business operations have on the environment. This strain, combined with the steadily growing number of regulatory requirements, has led companies to develop their own environmental management systems (EMSs). Beginning with a thorough review of operations that extends into every level of a business, an EMS considers a company's organization and the actions it takes with respect to environmental issues. The benefits of implementing an EMS are varied, ranging from reduced production costs to enhanced public credibility. Most elements of ISO 14000 are not new to the largest corporations, and many are already assessing their EMSs against the ISO draft. Meeting the EMS outlined by ISO should make it easier for importing and exporting companies and multinationals to do business in other countries, which have their own regulatory systems. It also promises to make it easier to measure environmental performance and make meaningful comparisons across borders. The ISO 14000 framework grows out of the now wellestablished ISO 9000 effort. Developed in the late 1980s, ISO 9000 was aimed at improving management quality and deals largely with management systems and plant operations. The standard, like ISO 14000, was developed by a technical committee of the Geneva-based ISO, a coalition of 90 standards-setting groups from around the world, including the nonprofit American National Standards Institute (ANSI). In addition to producing management principles, ISO establishes worldwide standards for everything from film speeds to paper sizes. Since 1992, ISO has been developing internationally applicable standards for environmental management. Each standard is being developed by a separate subcommittee of the ISO inter-
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0013-936X/96/0930-298AS12.00/0 © 1996 American Chemical Society
A fundamental step in establishing an environmental management system such as ISO 14001 is an initial environmental review of a company's operations. The review identifies potential problems and information needed to solve them and pinpoints opportunities for cost savings through the reduction of environmental risk. Barbara Pederson of DuPont reviews hazardous waste compliance at the company's Orange, Texas, site. (Photo courtesy DuPont)
national technical committee that is overseeing the ISO 14000 process. Deciding whether to adopt the standards is a voluntary decision, and many businesses have been playing a wait-and-see game as the standards have been crafted. But now the wait is just about over. The first of the series, a package on EMSs, and another on environmental audits, have been approved by international balloting and will be published in October. But ISO 14000 goes well beyond these two areas. By the time it is completed, ISO 14000 will include standards for product labeling, performance evaluation, and life cycle assessments (see sidebar). ISO's vision of an EMS includes establishing a company environmental policy that reflects "the commitment of top management to compliance witii applicable laws and continual improvement" (i). That policy forms the basis for setting objectives and targets and executing an environmental management program to achieve them through organizational structures, management controls, and accountability. It also involves measuring and monitoring progress toward the targets, addressing problems, and analyzing and revising the management system. However, specific performance goals are not part of the EMS. A market-driven, voluntary standard The experience with ISO 9000 has been that noncompulsory principles are essential requirements of doing business, especially internationally. When a company's customers demand ISO certification as a condition of doing business—or when the customer's customer demands it—demonstrating conform-
ance to the standard becomes a necessity. It is uncertain whether that situation will be repeated with ISO 14000. In Europe, U.S. companies with large export businesses have been closely following independent voluntary standards that have taken hold there. While awaiting the ISO 14000 standards, many European businesses are registering meir facilities under the European Eco-Management and Audit Scheme (EMAS) or the British Standard on Environmental Management Systems (BS 7750). Although similar to ISO 14000, both are considered more stringent than ISO 14000. EMAS in particular is less flexible and more prescriptive than ISO 14000; it has a stronger emphasis on communication with the public and requires contiguous j^Tiproveuient in cu~ vironmental performance not just in management U.S. companies with large export businesses say they expect ISO 14000 to have an effect on their operations. In a 1995 Arthur D. Little survey of 115 large North American businesses, 61% expected mat meeting ISO 14000 would bring "potential competitive advantage," and 48% said that not meeting the standard could constitute a "potential nontariff trade barrier" because customers around the world are expected to require it. But the most enticing prospect for many U.S. companies is the possibility of regulatory relief. That, more than customer or supplier requirements, will fuel the drive to ISO 14000 conformance, some observers say. "We're not seeing anyone in the private sector expecting their suppliers to be certified to ISO 14000. There's a lot of hearsay, but we don't see any company making it a condition of doing business," says John Harris, manager of EMS with Arco Chemical. VOL. 30, NO. 7, 1996 /ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS • 2 9 9 A
DuPont's Barbara McGuinness, manager of EMS and auditing, says the inherent benefits of a wellstructured EMS make ISO 14000 worm it all by themselves. Being deliberate and systematic about environmental procedures, as required by EMSs in general and ISO 14000 in particular, "helps you operate better. The internal improvements and increased efficiency probably outweigh any customer-based advantages." The impending EMS standard—dubbed ISO 14001 because it is the first of the series—calls for identifying "environmental aspects" and effects of "activities, products, or services" (i); establishing documentation procedures; and monitoring, measuring, and auditing the EMS. Although some businesses already do many of these things, they argue that standardizing these activities should assure regulators that they are meeting or exceeding regulatory standards. In return, they are asking for streamlined permitting, reduced monitoring and inspection and more regulatory flexibility overall
"ISO 14000 is a system that
will essentially privatize environmental regulation/'
EPA interested, but cautious Some businesses are waiting until the last T is crossed and the last I dotted before they declare their interest in —James M. Seif, the standards, but others are Pennsylvania impatient, particularly with EPA. The agency is interDepartment of ested in how the ISO 14000 Environmental series might be incorpoProtection rated into federal regulations, but it is proceeding cautiously. EPA is closely monitoring the development of the standards, but says it is officially neutral on ISO 14000 and how it will treat ISO-conforming companies. In public statements on ISO 14000, EPA officials have expressed their interest in the standards and in the possibilities they offer in terms of tracking companies' activities more easily and streamlining some regulatory activities But before signaling how it will proceed the agency is awaiting final results of a series of regulatory pilot projects that incorporate the standards Cheryl Wasserman, associate director for policy analysis in the Office of Federal Activities within EPA's Office of Enforcement and Compliance Assurance (OECA), praises ISO 14000 but stresses that it is a management standard only and does not set environmental performance standards that reflect a company's compliance. "Since EPA is concerned with performance per se and not management, this cannot be sufficient by itself to interface with the agency to meet standards and requirements," Wasserman says. Wasserman points to the ISO EMS standard's "prevention of pollution" language, which she says includes end-of-pipe pollution solutions to a greater extent than EPA's "pollution prevention" language. Pollution prevention is generally concerned with re-
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ducing pollution at its source, not at the end of the process. This ISO section calls for no public disclosure, she adds. "I'm not criticizing it for not having more meat. It's very important to have a strong skeleton, but the meat has to come from somewhere." Suspicions about certification One area of concern is the certification provision: Companies can simply declare to regulators and customers that they conform to the ISO 14000 standards without undergoing external review. A second option is to have a third party or outside consultant audit a facility for ISO conformance and grant a formal certificate. The trustworthiness of thirdparty firms that inspect and certify facilities is a major issue in the United States. EPA is particularly concerned about the certification audit. "The criteria for certification and auditing still have to be put in place in the United States. We have to see how credible it looks and whether it involves stakeholders" such as EPA, local communities, and nongovernmental organizations, s3VS Wasserman. Two U.S. groups—ANSI and the Registrar Accreditation Board—have been developing competing sets of criteria for accrediting certifiers. But businesses are troubled by this competition and say they are hesitant to seek certification if they are going to be part of a new certifier's learning curve. Environmental groups have worries of their own. "We're concerned about giving important regulatory functions to private sector companies that may not be qualified and that don't have visibility to the public," says Annie Petsonk, international counsel with the Environmental Defense Fund. "What are the procedures for decertifying unscrupulous companies? [ISO is] at a very rudimentary stage of working this out." Allowing less regulatory scrutiny for ISOcertified companies also might result in companies being rewarded for developing an EMS rather than cutting pollution levels, adds Petsonk. "There are companies that have made substantial steps in reducing 'greenhouse gas' emissions, for instance. Those companies have an interest in seeing their good works not go to naught." Petsonk said pollution improvements like this might be overlooked, "because a lower performing company can say its environmental managers are performing well." Still, EPA and industry are moving forward with experiments that incorporate the standards into regulatory activity. EPA's Environmental Leadership Program, designed to reward facilities that devise innovative ways to meet and exceed environmental goals, is eyeing ISO 14000 for clues on how parts of it might be assimilated into the program. "Our efforts are focusing on evaluating 14001 specifications for an EMS and ISO auditor criteria," says Tai-Ming Chang, director of the EPA program. A pilot project at mree plants owned by Gillette Co. is testing the suitability of having third-party auditors verify a company's EMS against ISO standards in exchange for enforcement benefits such as fewer inspections and lowered penalties for self-disclosed and corrected violations. But Chang is bumping up against EPA's concern over the credibility of private companies that cer-
tify businesses as conforming to ISO 14000 standards. Just as important, the team is trying to establish the difference between auditing for conformance with ISO standards versus auditing to track regulatory compliance. According to ISO documents, ISO audits serve only to "determine whether the system conforms to planned arrangements" (2). The issue raises industry's concerns about regulators using the results of compliance self-audits as a basis for punitive action. Many states have legislation pending to provide more protection for businesses that voluntarily uncover regulatory violations during a compliance audit. EPA's audit policy, released last December (3), while promising incentives to reveal results of voluntary audits, has done little to allay industry's concerns. "We want to see what it will take for the regulator to feel warm and fuzzy about third-party certification," Chang says. "We''e trying to be a little more prescriptive in what we would look for in an EMS audit." With ISO 14000, he says, "There are a lot of opportunities here. The question is, is it enough?" The pilot projects will be completed this August. EPA's Project XL is a set of pilot projects to allow greater flexibility in how sites achieve existing pollution control requirements. The goal is to reduce by 25% the reporting and monitoring steps required by EPA for plants demonstrating strong performance. "For companies registered to ISO 14000 standards, there may be even less reporting," says Brian Riedel, counsel for OECA's Office of Planning and Policy Analysis. OECA will soon establish a task force to examine ISO 14000 in greater depth, he says. Lucent Technologies, formerly a part of AT&T, is involved in a Project XL venture to provide regulatory flexibility in air and water permitting, water monitoring, record keeping, and reporting for ISOregistered facilities. Ten of Lucent's microelectronics division's facilities worldwide will be certified to ISO 14000 by mid-1997, a "massive undertaking," according to Barry Dambach, member of the technical staff of Lucent's environmental, health, and safety center. Lucent is currently going beyond ISO requirements by asking external stakeholders what their concerns are and incorporating those concerns into their EMS. Dambach explains, "You review the facility's operations, looking at air, water, solid waste discharges, spills, transportation, all the things that interact with the community. EPA, the community, and nongovernmental organizations can all help with input on their concerns. All their issues are taken into account." Reselling outside the plant fence for comment on an EMS addresses a major gap in ISO 14000. The ISO 14010 audit standards require no disclosure to the public or regulatory bodies (4). Anheuser-Busch Co. is in a Project XL effort to develop environmental permitting using a multimedia bubble approach. John V Stier, director of environmental assurance with the company, says, "We're still groping with what we can do with ISO 14000. We're looking at our existing EMS as equal to or better than" the standardized formula laid out by the international standard setters. One innovation the company has implemented is an "electronic manual" to transfer data from self-assessments to reg-
Environmental management systems: A continuous cycle An environmental management system is part of a company's overall management system and strategic business planning. As illustrated in the classic management cycle of planning, doing, checking/correcting, and acting/improving, environmental management includes several steps in a continuous process designed to improve a company's environmental conditions.
Source: United Nations Environment Programme.
ulatory agencies, with the hope of reducing the frequency of on-site visits from city, state, and federal inspectors. Anheuser-Busch was in the process of developing and implementing its EMS, benchmarked against the International Chamber of Commerce's Business Charter for Sustainable Development. Then, Stier says, "along comes ISO 14000 and we have to ask what it offers that we didn't have in our existing EMS," a question that is especially relevant in deciding whether to go for the added expense of third-party certification. "The key to whether we go forward is, 'will there be some flexibility in regulatory guidance and permitting?' We're real interested in EPA's comments." Similarly, Arco Chemical is likely to certify its Pennsylvania facility with ISO 14000 but is awaiting firmer word on whether it might receive increased flexibility from regulators in Texas before moving ahead there
Pennsylvania's bold approach James M. Seif, secretary of Pennsylvania's Department of Environmental Protection (DEP), is probably the government official making the boldest case for using ISO 14000 as a regulatory tool. "ISO 14000 is a system that will essentially privatize environmental regulation," he says. He envisions easing inspection and permitting policies for companies that adopt a formal EMS. He has also proposed waiving fines and penalties for companies that conform to the ISO standard and that promptly report violations they uncover themselves. "If states work in partVOL. 30, NO. 7, 1996/ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS • 3 0 1 A
The ISO 14000 series: What lies ahead Standards for environmental management systems and for auditing are only the first wave of ISO 14000 environmental management standards. Here's a look at the standards that are expected in the next two years. Environmental Management Systems (ISO 14001). Due to be published by ISO this October, this is the only specification standard of the series. The others are guideline standards and do not have an option for registration. The EMS standard describes a business management system that includes a formal environmental policy, objectives and targets, programs for implementation, monitoring and measurement, and corrective action. Environmental Auditing (ISO 14010, 14011, 14012). These auditing standards cover general principles, procedures for auditing an EMS, and qualification criteria for auditors. They focus not on measuring environmental performance but on verifying that the EMS incorporates the specifications laid out in 14001. Expected to be published by this October. Environmental Labeling (ISO 14024). This standard outlines three kinds of labels: a general label for products that meet specified requirements, one for specific claims such as energy efficiency or recycled content, and one that summarizes a life cycle inventory so consumers can compare products on the basis of environmental impacts in manufacturing and use. To be completed by the end of 1996. Environmental Performance Evaluation (ISO 14031). This evaluation standard will provide guidelines for continuously measuring, analyzing, and assessing a company's environmental performance relative to established objectives and targets. It will also include procedures for communicating performance results internally to help companies track performance over time. To be completed in 1998. Life-Cycle Assessment (ISO 14040). This measurement system will assess the environmental attributes and effects of products, processes, and services throughout their lifetime and examine all relevant inputs and outputs from raw material acquisition to final disposition. To be completed in 1997 or 1998.
nership with companies complying with ISO 14000, the old command-and-control method of environmental regulation will occupy less time and fewer resources." Last fall, two of Seif's deputy directors asked the state's business community to brainstorm EMSbased approaches to streamlining regulation. The result was the formation of the Pennsylvania Business EMS Group, comprising more than 20 Pennsylvania companies in such industries as oil, chemicals, pharmaceuticals, steel, and waste management. Along with three DEP officials, they are trying to develop several specific regulatory reforms. In 6X3.ro.ining monitoring and reporting obligations, the goal is to find a focused monitoring system that will provide the most relevant data about performance and to find an efficient reporting system using the EMS framework. The group is also trying to devise ways to ease up on inspection and enforcement at facilities that have a validated EMS. Part of the goal is to help DEP shift limited resources to the companies that need ei-
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ther more help or more enforcement. Another target is the permitting process for compliance with state and federal programs, which Arco's Harris says is "burdensome and cumbersome for both industry and the agency." Facility-wide permitting is one approach the group is considering. Sun Co.'s Philadelphia plant is part of a state pilot project examining the feasibility of a facility-wide multimedia permit, which will allow a plant to have one permit for air, water, and waste pollution; Arco Chemical's Beaver Valley (Pa.) site is another one. Harris says a gap analysis comparing the Arco site's EMS with the ISO 14001 standard found that the facility already has most of ISO 14001 elements in place. "We're developing a plan on how to review the environmental aspects of our emissions as defined in the standard." Harris adds, "We're obviously going to be in compliance with regulations, but we want to think outside the box and look at areas that may be overlooked in regulations. With ISO 14001, we can look at our operations on a more holistic basis. It makes you look at your facility as a total system, not just as a collection of separate sources of emissions." Robert Barkanic, special assistant to the deputy secretary of DEP's Office of Air, Recycling, and Radiation Protection, lays out his vision. "Long-term, the good companies will never see us again. Getting there is the tough part. If they are demonstrating superior environmental performance, it allows us to concentrate on the bad actors. It's a net environmental gain." Business and regulators are scrutinizing the state's environmental statutes to determine how much flexibility they allow and whether new laws must be written to accommodate the EMSbased changes they are discussing. It remains to be seen whether Pennsylvania's bold experiment catches on in other states and at the federal level, or whether caution prevails among the regulators. But no matter how ISO 14000 is ultimately regarded by regulators, it seems certain that it will not change basic existing environmental standards. "This doesn't replace regulation," says Arco's Harris. "What we're looking at is the method of achieving those standards." References (1) International Organization for Standardization. ISO 14001 Environmental Management Systems—Specifications with Guidance for Use, draft international standard; ISO: Geneva, Switzerland, August 1995. (2) International Organization for Standardization. ISO 14000 Committee Draft for Ballot and Commen,, ISO: Geneva, Switzerland, August 1995. (3) U. S. Environmental Protection Agency. Fed. Regist. 1995, 60, 246. (4) International Organization for Standardization. ISO/DIS 14010 Guidelines for Environmental Auditing General Principles, draft international standard; ISO: Geneva, Switzerland, September 1995.
Ronald Begley ii a freelance journalist based in Richmond, Va. He is former Washington Bureau Chief at Chemical Week magazine.
