Responsible CARE at 15 Years
T E R R Y F. Y O S I E AMERICAN CHEMISTRY COUNCIL
The chemical industry has upgraded its largest voluntary environmental health and public safety program.
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© 2003 American Chemical Society
try’s response to the December 1984 industrial accident in Bhopal, India. Examples of the program’s success include reductions in releases to air, land, and water; major improvements in workplace and community safety; expanded programs to research and test chemicals for potential health and environmental impacts; and improved community relationships. Last year, a strategic review of Responsible Care examined options to further strengthen the program’s commitments and enhance the chemical industry’s public credibility. On the basis of that review, ACC has adopted new program enhancements as a condition of membership, which include implementing a modern management system consistent with internationally accepted best practices; requiring independent, third-party certification of the management system to ensure appropriate actions are taken to improve performance; tracking of performance based on economic, EHS, and product metrics along with public reporting of these metrics on an individual company and industry-wide basis; and creating new performance requirements for site, product chain, and cyber security.
PHOTODISC & CINEMA 4D
overnment regulation has played an indispensable role in improving public health, safety, and environmental quality over the past generation and is the foundation on which industry has built nonregulatory alternatives for furthering protection in these areas. However, as government-mandated programs mature and budgets become more constrained, new thinking and skills to address emerging problems rise in importance. The role of private-sector voluntary initiatives to improve environmental, health, safety (EHS), and—in the wake of September 11, 2001—security performance becomes even more critical. In the past 15 years, the American Chemistry Council (ACC; formerly the Chemical Manufacturers Association or CMA)—a member organization representing 90% of the chemical manufacturing capacity in the United States—has helped the chemical industry implement Responsible Care, a voluntary program to improve EHS performance beyond levels required by the U.S. government. Responsible Care (1) was established as the chemical indus-
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In recent years, several major developments have caused the U.S. chemical industry to examine ways to further improve its EHS and security performance. They include expanded regulation of industry processes and products, which increased the number of public right-to-know initiatives and public reporting of EHS performance; greater external stakeholder participation in government and corporate decision making; the continuing trend of restructuring, merger and acquisition, and globalization of business activities and responsibilities; the emerging development of global management systems and standards for EHS practices; and the recognition that better performance is a key element for improving the reputation of a company as well as the industry. Finally, we all re-examined security practices in the wake of September 11, 2001 (2, 3). Other salient facts emerged to convince company executives that significant change was needed if Responsible Care was to retain its role as the industry’s signature performance initiative. For example, in the early years following the adoption of Responsible Care, laws and regulations already mandated approximately 13% of the program’s content. By 2000, government requirements covered about 75% of the program’s codes and practices. Thus, a program originally designed to demonstrate leadership beyond compliance could no longer credibly claim that it was pushing the performance envelope. It became clear that it was time for a fresh look at the principal goals and structure of Responsible Care in order to continue improving industry performance. Faced with pressure from stakeholders, individual chemical companies began to differentiate themselves from Responsible Care in the mid-1990s. The program was based on a set of practices defined in the late 1980s and early 1990s and provided few means to propel performance forward once those practices were achieved. Chief executive officers (CEOs) and other industry executives who had provided the leadership in establishing Responsible Care became further removed from the program. Responsibilities were often delegated into the line operations of their companies. However, as performance expectations for the industry continued to mount, many CEOs were convinced that they needed to re-assert leadership and renew Responsible Care.
Building the case for change In recent years, “change management” has emerged as a leading concept for evaluating how organizations achieve success in the midst of greatly accelerating marketplace changes and escalating expectations among stakeholders (4). Five specific elements of change management can be used to examine the strategic review of Responsible Care. 402 A ■ ENVIRONMENTAL SCIENCE & TECHNOLOGY / NOVEMBER 1, 2003
Establishing a sense of urgency. The ACC Board of Directors mandated that the strategic review of Responsible Care be completed in just six months, by June 2002. By traditional trade association decision cycles, this was an extraordinarily ambitious time frame, but one that forced the review committee to focus on the most important issues. Creating a guiding coalition. Only CEOs had the authority to fundamentally improve Responsible Care and thus led the strategic review process. Discussion of options for changing the program became part of a broader peer-to-peer exchange, which ultimately involved the Board of Directors and all ACC members. Developing a new focus and strategy. Although Responsible Care was initially shaped by the tragedy in Bhopal, the program confronted other issues in the mid-1990s. For example, Responsible Care was challenged by both industry and external stakeholders to embody more contemporary management concepts and practices, to be open to an independent review of performance, to adopt more specific measures to evaluate the industry’s performance, to embrace greater public transparency, and to more explicitly provide value to business operations. Generating short-term wins. The U.S. chemical industry participates in a global marketplace, and individual companies must constantly adapt to changing regulatory and policy requirements. As a result, they are continually searching for opportunities to manage issues and operations through more comprehensive, yet flexible, management systems. The strategic review of Responsible Care created major opportunities for ACC members to update their commitment to the program with changes they were already examining to modify their global operating structure or their participation in the global marketplace. In addition, by upgrading their commitments, they were in a better position to meet performance expectations in various parts of the world. Anchoring new approaches. At its origin, Responsible Care was an initiative aimed primarily at improving the performance of chemical manufacturing operations. During the 1990s, however, various external stakeholders, including community leaders, environmental groups, government agencies, and customers, increasingly scrutinized chemical products and their use in commerce. The strategic review of Responsible Care became an opportunity to further extend the program downstream throughout the “value chain”—the network of suppliers, distributors, and customers who are at the very core of the chemical business. Repositioning Responsible Care thus began to transform a program principally focused on EHS site-based performance into a broader businessdriven initiative that extended well beyond the boundaries of traditional EHS concerns. This inteDIGITAL VISION
Why enhance Responsible Care?
gration into a business-oriented management system will lead to a more comprehensive examination of EHS issues and greater documentation and accountability of performance.
riodically recommended steps to improve chemical industry performance and link the program to broader initiatives for organizational change, public involvement, external evaluation, and responsible advocacy (9).
External evaluations of Responsible Care
Because of increased regulations over the past three Responsible Care enhancements decades, all major industries have improved their EHS In June 2002, the ACC Board of Directors endorsed sigperformance. By adopting Responsible Care, the chemnificant changes to the program that are now mandaical industry as a whole embraced processes to further tory for all ACC members. At subsequent meetings in improve performance prior to October 2002 and January 2003, government-initiated actions, the board adopted a number of Responsible Care such as process safety improvespecific implementation meaments that the U.S. Occupational sures. Among these are a new Management System Safety and Health Administration statement on obligations of ACC The American Chemistry Council (OSHA) employed as a basis for membership and a revised govrecommends its own version of a its process safety regulations, as ernance process that defines accommon management strategy. well as numerous local fire and countability for Responsible Care Policy and leadership safety codes and regulations. performance and the conseLeadership responsibility On some specific measures, quences of nonperformance, inManagement commitment the performance of ACC memcluding expulsion from the trade Planning (Plan) bers exceeds that of the broader association. These board deciDefine risks/hazards chemical industry as defined in sions are described below. Set objectives and targets the Standard Industrial ClassiAdopting a progressive ReCommunications fication Code 28 list of companies sponsible Care Management SysProcess/program development in the chemical sector. For examtem (RCMS) that incorporates Resource allocation ple, OSHA reported that between appropriate business elements Implementation, operation, and 1993 and 2002, ACC members and yields operational reliabilaccountability (Do) had half the recordable injury and ity and performance improveTraining illness of the rest of the chemical ments. A management system is Communications industry and approximately onea set of organized policies, proProcess/management of change fourth of all manufacturing incedures, and practices that exDocumented procedures dustries combined. press commitments to a set of Employee empowerment However, other analyses point core objectives and values. U.S. Performance measurement and to the difficulty of demonstrating chemical industry leaders becorrective action (Check) improved chemical industry perlieved that both better EHS perSelf-assessment formance if a significant number formance and more business Internal audits of poor performers are able to invalue could be obtained by Record management clude their results in the context adopting a modernized manCorrective/preventative action agement system for Responsible of broader industry reporting. For Incident investigations example, academics King and Care. This system replaced the Measurements Lenox analyzed Toxic Release existing practice of applying six Management review (Act) Inventory (TRI) data and found codes—community awareness Management review and evaluation that between 1987 and 1996, and emergency response, distriContinuous improvement loop companies implementing Rebution, employee health and sponsible Care improved their relsafety, pollution prevention, ative TRI performance at a slower rate than chemical process safety, and product stewardship—with 106 companies not in the program. They recommended management practices to achieve better performance. strengthening Responsible Care by including more In the 1980s, the codes served as an initial framework sanctions for nonperformance and giving outsiders for chemical companies organizing their internal more opportunities to audit improvements (5). processes to improve performance. Overall, perforNash and Rees, also academics, have separately mance did improve because of a commitment to the evaluated the dynamics within trade associations that codes and expanding regulatory requirements. influence industry performance, including codes of Because the codes were process-oriented rather than practice, the need for greater transparency, and the results-driven, however, measuring actual perforrole of associations in promoting the development of mance was difficult. Moreover, the practice of docunetworks of industry peers to exchange information menting actual implementation of the codes varied and best practices (6, 7). Coglianese and Nash argued widely across ACC member companies. that the private sector should adopt formal manageIn addition, industry executives concluded that ment systems to address concerns not effectively met the six codes represented a method of thinking that by more conventional governmental regulatory was insufficient to address newer challenges and constrategies (8). In addition, a public advisory panel to cepts, such as sustainable development. To move forthe Responsible Care program, which included repward, relevant aspects of the existing codes will be resentatives of nongovernmental organizations, pesubsumed into an RCMS that is based on benchNOVEMBER 1, 2003 / ENVIRONMENTAL SCIENCE & TECHNOLOGY ■ 403 A
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In contrast, the third-party certification measures adopted by the ACC Board in June 2002 require thirdparty auditors to certify that the U.S. headquarters and chemical facilities of all ACC members have an RCMS in place and provide documentation to demonstrate that the RCMS framework and substantive elements have been implemented. Independent third-party certification is critical for demonstrating improved performance and meeting stakeholders’ expectations. Companies want a good reputation, and they know they must earn it. Under RCMS, member companies would choose auditors on the basis of certain criteria developed by ACC to ensure their competence and independence. Auditors who are experienced in implementing EHS management systems or have direct experience in the chemical industry and knowledge of Responsible Care will add value to the review and, therefore, the business. For example, employing experienced EHS management system auditors who operate independently of any consulting activities with the same company will enhance the credibility of the process. To properly manage the certification process and provide external oversight, ACC is creating a partnership with established independent auditors that accredit and train auditors. Their responsibilities will include oversight of procedures, documents, and auditors; program implementation decision making; and dispute resolution. All member companies with U.S. headquarters must be certified by December 2005, and the first cycle of required facility audits must be completed by December 2007. At that time, a new three-year cycle will begin. Within three cycles (the first being four years, and the second and third being three years each), it is expected (with only a few exceptions from very large companies) that all ACC member facilities will complete their certification requirements for the U.S. portion of their organization. Failure to successfully complete third-party certification within these time frames will be grounds for a company’s removal from ACC. Including ISO 14001. Both the RCMS and independent third-party certification requirements are designed to be compatible with the ISO 14001 process, an accreditation that measures the rigor of a company’s environmental management system. Although ISO certification is not an ACC requirement, many ACC members plan to pursue ISO 14001 status to meet customer expectations or to further enhance their reputations with other key stakeholders. To reconcile Responsible Care with the ISO program, ACC established in 2002 a hybrid option known as RC14001 that integrates the commitments of ISO 14001 and Responsible Care. The value of this combined option is that chemical companies can successfully attain the full status of each program in one process. Such integration achieves numerous process DIGITAL VISION
marked best practices of leading private-sector companies; initiatives developed through the Global Environmental Management Initiative, the International Standards Organization (ISO), and other bodies; and requirements of national regulatory authorities in various regions of the world. RCMS documentation requirements have also been substantially upgraded. See the box called “Responsible Care Management System” on the previous page for a description of RCMS. Implementing the RCMS will provide direct business value in the form of improved EHS performance, greater product yield due to reduction of feedstock and other losses, enhanced operating efficiencies, improved customer relations, and better community and other stakeholder relationships. The organizing concept of a contemporary management system centers on interdependent steps known as “Plan, Do, Check, and Act,” or PDCA. In turn, PDCA consists of numerous sub-elements that enable managers to develop consistent procedures to ensure that performance meets top-down leadership expectations while at the same time reflecting the reality of day-to-day operations. Properly designed and managed, PDCA yields an ongoing stream of data that suggest areas for continuous improvement, as defined by both internal managers and external auditors and stakeholders. Many decision tools and guidance materials are available to help ACC members achieve a smooth transition to RCMS from the existing Responsible Care codes. ACC member companies began transitioning to RCMS and expect completion by December 2004. Instituting a new independent third-party certification system for all member companies. Historically, a major limiting factor in the external credibility of the Responsible Care program has been the absence of a third-party mechanism to review individual company performance. In 1996, ACC (as CMA) adopted an initiative called Management Systems Verification (MSV). Although not required as a condition of membership in the trade association, MSV gave industry colleagues, government representatives, community participants, and other stakeholders a chance to peer review code implementation and other practices. From 1996 through 2001, individual facilities from 108 ACC member companies, or approximately 60% of the membership at that time, participated in the MSV process. More than 250 chemical facilities, 8000 employees, 300 community participants, and approximately 90 industry peers from other companies were involved. Many practical suggestions emerged from the MSV process to improve operating practices at individual companies. However, because many of the verifiers were not true third parties, the external credibility of MSV was limited. ACC retained a single contractor to manage MSV, who reviewed implementation only once.
efficiencies and saves considerable TA B L E 1 management and staff time in preparing for certification. Responsible Care performance metrics RC14001 follows auditing procedures In 2004, American Chemistry Council members will begin publicly reporting their for ISO 14001 as administered through performance based on the following series of expanded metrics. the U.S. Registration Accreditation Board (RAB), which oversees and acCollection Information credits registrars to conduct ISO audits. of informa- to be reported BASF Corp.’s Elastocell unit in Wyandtion by on company Public company or industry reporting otte, Mich., has successfully completed Performance metric or ACC basis begins a significant test case of the RC14001 option. The facility received certificaMetrics reflecting responsible care environment, health, safety, and security tion through a RAB/ACC witnessing performance process in July 2002. Whether through 1. Pounds of TRI—air, land, and waCompany Company 2004 third-party certification of the RCMS or ter releases (reported separately) the RC14001 hybrid option, ACC mem2. Number of reportable distribution Company Company 2004 ber companies have committed to a sigincidents nificant expansion of rigor and 3. Number of process safety Company Company 2004 transparency in managing their busiincidents nesses. They expect that these decisions 4.a. OSHA recordable incident rate— Company Company 2004 will improve performance, add business employees value, and enhance the credibility of 4.b OSHA recordable incident rate— Company Company 2005 their decision making. contractors Expanding performance metrics to 5.a. Percentage of facilities completing Company Industry 2004 security assessments based on measure individual company and insecurity code schedule dustry performance. “What gets mea5.b. Percentage of facilities completing Company Industry 2005 sured, gets managed” is a well-known security enhancements/verificamanagement refrain. ACC members tion based on security code also have significantly expanded their schedule commitment to track and report their 6. Certification of Responsible Care Company Company 2004* performance. Historically, Responsible Management System (“yes”/”no”) Care collected performance data on four Metrics reflecting reputation, sustainable development, products, and other indicators—aggregated releases under initiatives TRI, number of reportable distribution 7. Greenhouse gas emissions Company Industry 2005 incidents, number of process safety in(pounds of CO2-equivalent net cidents, and the OSHA recordable rate emissions per pound of producfor employees—and publicly reported tion) indexed to base year this information on an industry-wide 8. Energy efficiency (BTUs consumed Company Industry 2005 basis. per pound of production) indexed to In 2004, ACC members will begin to base year publicly report their performance based 9. Industry economic performance: ACC Industry 2004 on a series of expanded metrics. Most a. Total industry R&D investment metrics will be communicated on ACC’s b. Total number of industry public website on an individual comemployees c. Total value of industry payroll pany basis, while the remainder will be d. Total value of U.S. industry net expressed as an industry aggregate. This exports commitment to transparency is de10. Company has in place a documenCompany Company 2005 signed to enable chemical companies ted process for characterizing and to compare their performance against managing product risk, and a sumthat of their industry peers; provide mary of the process is available to companies with better information on the public. (“yes”/ “no”) the performance of their suppliers and 11. Company has in place a process to Company Company 2005 business partners; and enable employcommunicate results of the risk ees, governmental agencies, nongoverncharacterization and management process in an effort to facilitate mental organizations, and the general public knowledge. (“yes”/ “no”) public to gain access to consistent highquality information. Access to such data * Companies will have from 2004 to 2007 to complete certification. will generate an ongoing incentive to continuously improve performance. Table 1 presents the metrics adopted by the ACC Enhancing security. The events of September 11, Board of Directors. These metrics incorporate a range 2001, led all major American institutions to re-exof economic, EHS, and security issues and represent amine and redefine their security practices. a means for chemical companies to contribute to susChemical companies were better prepared than tainable development. most organizations to respond to the new security NOVEMBER 1, 2003 / ENVIRONMENTAL SCIENCE & TECHNOLOGY ■ 405 A
concerns because of their extensive culture of and commitment to safety, business process modifications, and technological innovation over the years. Even before September 11, ACC members had begun developing upgraded security guidelines for plant sites and the transportation sector. These guidelines were widely adopted by the chemical and other U.S. industries; federal, state, and local governments; and many foreign nations in the aftermath of the terrorist attacks. TA B L E 2
Responsible Care security code timetables The American Chemistry Council established an aggressive timetable for action and verification of the code for plant sites. Tier
1
Complete facility 12/31/02 security vulnerability assessment Complete implementa12/31/03 tion of facility security enhancements Complete verification 3/31/04 of enhancements
2
3
4
6/30/03
12/31/03 12/31/03
6/30/04
12/31/04 12/31/04
9/30/04
3/31/05
—
Building on these accomplishments, the ACC Board of Directors established a mandatory new security code for its members as part of the Responsible Care program in June 2002. The security code encompasses plant site, suppliers and other service providers, and cyber security. The code consists of 13 separate management practices within the context of several additional required actions for ACC members. Completed actions include prioritizing the U.S. chemical industry facilities by tiers, which all ACC members finished by June 20, 2002, and assessing site-specific security vulnerabilities through a four-tier system that evaluates the risks of a terrorist attack. All ACC members with Tier 1 facilities—the highest potential level of impact—completed their required evaluations by December 31, 2002. In addition, corrective actions to address site vulnerabilities and third-party verification of these actions will be required for Tiers 1–3. Because Tier 4 facilities do not have potential offsite consequences, they are assessed by using a modified methodology and do not require third-party verification. ACC also approved an aggressive timetable for action and verification at plant sites, which is shown in Table 2. The remainder of the security requirements will be integrated within the RCMS by 2005. As a result of these commitments, business organizations, chemical-related trade associations, and many other groups engaged in preventing and responding to potential terrorist incidents have adopted the security code as a model for evaluation and action. Legislation based upon the security code has been enacted in Baltimore, Md., and is shaping the regulatory and legislative debates in many states, the federal executive branch, and the U.S. Congress. ACC 406 A ■ ENVIRONMENTAL SCIENCE & TECHNOLOGY / NOVEMBER 1, 2003
is actively supporting the development of federal security legislation to apply to chemical manufacturers and users but has not endorsed any specific bills.
Complementary actions Private-sector performance initiatives such as Responsible Care are not a substitute for government regulation. Given the limitations in agency resources and expertise, however, there is a natural and complementary relationship between the two actions. Adopting RCMS, independent third-party certification, expanded performance metrics, a commitment to transparency and enhanced security requirements, and other changes represents a necessary evolution for the chemical industry’s most ambitious and successful private sector EHS and security performance initiative. These changes are key drivers to improve U.S. chemical industry performance. As needs evolve, industry executives and external stakeholders will periodically re-evaluate the relevance of the Responsible Care program.
Acknowledgments The author wishes to acknowledge the valuable comments submitted by the following individuals during the preparation of this article: David Clarke, James Conrad, Don Evans, David Gleason, Lisa Grepps, Dell Perelman, Debra Phillips, Heather Rhoderick, and Dan Roczniak. Terry F. Yosie is vice president for the Responsible Care program at the American Chemistry Council. He previously served as director of EPA’s Science Advisory Board and was a member of the National Research Council’s Board on Environmental Studies and Toxicology from 1995 to 2001. Address correspondence regarding this article to him at American Chemistry Council, 1300 Wilson Blvd., Arlington, Va. 22203.
References (1) Responsible Care at the American Chemistry Council; www. americanchemistry.com. (2) For two evaluations of factors stimulating the evolution of corporate environmental management practices during the past decade, see Yosie, T. F.; Herbst, T. D. Corporate Environmental Health and Safety Practices: Management System Response to Changing Public Expectations, Regulatory Requirements and Incentives; Global Environmental Management Initiative: Washington, DC, 1996, www.gemi. org. (3) Yosie, T. F.; Herbst, T. D. Using Stakeholder Processes in Environmental Decisionmaking: An Evaluation of Lessons Learned, Key Issues and Future Challenges; September 1998, www.riskworld.com. (4) Kotter, J. P. Leading Change; Harvard Business School Press: Boston, MA, 1996, p 21. (5) King, A.; Lenox, M. The Academy of Management Journal 2000, 43, 698–716. (6) Nash, J. New Tools for Environmental Protection; Dietz, T., Stern, P. C., Eds.; National Academy Press: Washington, DC, 2002; pp 235–252. (7) Rees, J. Law and Policy 1997, 19, 477–552. (8) Coglianese, C.; Nash, J. Environment 2003, 44, 11–23. (9) American Chemistry Council Public Advisory Panel Open Letter, July 2001, www.americanchemistry.com. The Public Advisory Panel no longer exists; it has been succeeded by the ACC Leadership Dialogue, an external stakeholder panel that advises the ACC president and CEOs on major issues before the industry.
