George D. Greenly Jr., CCM, QEP
Battelle-Pantex
Amarillo, Texas
ABSTRACT
On September 2, 1996 the International Organization for Standardization (ISO) published the international standard for environmental management systems (EMS), ISO 14001 (Environmental Management Systems--Specification with Guidance for Use) and an accompanying document ISO 14004 (Environmental Management Systems--General Guidelines and Principles, Systems and Supporting Techniques), which is the conformity guideline document for ISO 14001. This was the culmination of about five years of effort which started in August 1991, when the International Organization for Standards and the International Electrotechnical Commission (IEC) established the Strategic Advisory Group on the Environment (SAGE). SAGE's charge was to make recommendations regarding international standards for the environment. The result of that work was a series of recommendations on environmental management including one that ISO create a new technical committee to develop standards in environmental management. In January of 1993, ISO created Technical Committee (TC) 207 and asked TC 207 to develop a uniform international EMS standard and other "guideline" documents for use as environmental management tools. The committee met for the first time in Toronto in June 1993. The resulting standards and guideline documents are a testimony to the dedication of thousands of environmental professionals in 50 countries, an example of unprecedented international cooperation, and testament to a rather widely accepted perception of the viability of an EMS as an effective set of environmental protection tools vice the standard command and control modus operandi. Shortly after the first meeting of TC 207, President Clinton signed Executive Order No. 12856 which pledges our Federal Government to implement pollution prevention measures, and publicly report and reduce the generation of toxic and hazardous chemicals and associated emissions. On September 12, 1995, senior Federal agency representatives signed the Charter for the Interagency Pollution Prevention Task Force (IPPTF). This committed the Federal Government, among other things, to participate in the establishment of an agency Code of Environmental Management Principles (CEMP). The U.S. Environmental Protection Agency (EPA) has been working to develop the CEMP through the IPPTF and published the final version of the CEMP in the Federal Register on Wednesday October 16, 1996. EPA is seeking the endorsement of the CEMP principles from all Federal Agencies; however, it is doing so with flexibility as to how agencies implement the principles at the facility level. It is allowing agencies the choice of directly implementing the CEMP at the facility level or the use of another alternative EMS like ISO 14001. This approach by EPA recognizes the fact that individual Federal facilities and installations may already have embarked on an EMS course via ISO 14001 or are considering adoption of the International Standard. These events, in the international and the U.S. national arenas, have presented Federal agencies with an unprecedented opportunity to improve their modus operandi, i.e., "to work smarter" and perhaps cheaper in the decades to come. The U.S. Department of Energy's (DOE) Energy Facility Contractors Group (EFCOG) has recognized this and has authorized the formation of an ISO 14000 Working Group. The primary purpose of this working group is to promote excellence in DOE EMSs by sharing information and lessons learned, and by facilitating the exchange of information and experiences, in implementing the ISO 14000 series of standards, and their implications for integrating strategic environment, safety, and health (ES&H) management programs into the daily operations at DOE sites. Working group participation will provide EFCOG member companies the opportunity to exchange information and to discuss the benefits of ISO 14000. There is, however, a very real question lurking somewhere in the shadows of the EMS standards. That question is "What's in it for the Energy Facility Contractor?" An ancillary question is, What's in it for the U.S. Taxpayer?
BACKGROUND
The Energy Facility Contractors Group (EFCOG) member companies are the M&O, ERMC, and M&I contractor companies that carry out the mission of the U.S. Department of Energy within the DOE Energy Complex. They are the companies/organizations that operate DOE facilities like the Pantex, Rocky Flats, and Savannah River Plants, the Nevada Test site, the Hanford site, and the Lawrence Livermore, Los Alamos, and Sandia National Laboratories. They are DOE's environmental stewards, with a charge to protect and enhance the human environment by full compliance with both State and Federal environmental laws.
In the first two decades following promulgation of the National Environmental Policy Act (NEPA), the Clean Air Act, and the Clean Water Act the U.S. made great strides towards cleaning up its environment and in educating the general public on the need for protection of the environment. The progress made and the education accompanying it have not been cheap, yet there is no question that value has been received for the resources expended. What is questioned, however, is the future path. Can we, as a nation, continue the present command and control regime of environmental protection, in a cost effective manner, in light of growing demands to decrease the size and cost of government? Probably not; the yearly tab for environmental protection in the United States alone is estimated to be somewhere between $120 and $140 billion and rising. Federal and State regulatory agencies rely upon "command and control" enforcement tools for achieving environmental protection objectives, yet environmental performance in industry today spans the spectrum from bad to excellent. The growing focus on pollution prevention by both governments and industry world wide is an indication of the growing awareness that mankind is rapidly reaching the point of diminishing returns with its reliance on a command and control modus operandi for environmental protection.
On September 2, 1996 the International Organization for Standards (ISO) published (1) the final version of the international standard for environmental management systems (EMS), ISO 14001 (Environmental Management Systems--Specification with Guidance for Use) and an accompanying document ISO 14004 (Environmental Management Systems--General Guidelines and Principles, Systems and Supporting Techniques), which is the conformity guideline document for ISO 14001. The publication of these final versions was the result of the voting of 50 nations which included the United States and led to the adoption of the ISO 14001 and 14004 as U.S. National standards.
The ISO 14000 series of voluntary environmental management system (EMS) standards and guideline documents, commonly referred to as just "ISO 14000", present a unique approach to environmental protection. ISO 14000, using performance based environmental objectives, validation via certification audits, a flexible approach to implementation, and systems constantly looking for new opportunities to prevent pollution and reduce the cost of environmental compliance, is a viable alternative to the "command and control" modus operandi. Today's environment of dwindling resources, manifest by both corporate and governmental "down-sizing" (or in the more politically correct term "right-sizing") and demands to do more with less, makes yet another but more sensible demand on corporate management find a better way! The President attested to this in his "State of the Union" speech on January 23, 1996. He said:
"We must challenge businesses and communities to take more initiative in protecting the environment, and we have to make it easier for them to do it.
To businesses this administration is saying: If you can find a cheaper, more efficient way than government regulations require to meet tough pollution standards, do it -- as long as you do it right"
The argument for acceptance and implementation of the ISO 14000 series of standards and guideline documents appears, at the outset, intuitively obvious and rather compelling. However, the big questions for the EFCOG company is: Does the customer (DOE) want it? Is anyone in the Federal sector "buying it."
U.S. Federal Acceptance of the ISO 14000 Series of Standards
On August 3, 1993 the stage was being set, albeit unknowingly, for U.S. Federal acceptance of the ISO 14000 series of Environmental Management Systems standards. This was about the same time that the International Organization for Standards was forming the international committee to develop those standards. It was on this date that the President signed Executive Order No. 12856 (2), pledging the Federal Government to implement pollution prevention measures and publicly report and reduce the generation of toxic and hazardous chemicals and associated emissions. Two years later on September 12, 1995, senior level Federal officials signed the Charter for the Interagency Executive Order 12856 Pollution Prevention Task Force. In November 1995 EPA (2) unveiled the draft Code of Environmental Management Principles (CEMP) and requested formal review and comment by the Charter signers and other members of the task force. In early September of 1996 (2), Steven A. Herman, EPA Assistant Administrator sent the final CEMP to the Charter signers and requested endorsement of the principles on an agency wide basis with flexibility as to how the principles are implemented. Agencies were told that they could choose to implement the CEMP directly, at the facility level, or use the ISO 14001 standard. In a Federal Register Notice on October 16, 19962 EPA requested Federal agencies to provide a written statement declaring the agency's support for the CEMP and a concise explanation of how the agency plans to implement the CEMP at the facility level. Agencies were told that to implement the CEMP they may choose to employ voluntary environmental management standards developed by national or international consensus groups or by industry trade associations as long as the spirit of the CEMP is evidenced by those chosen standards. This apparently magnanimous concession is, in reality, an acknowledgment of the National Technology Transfer and Advancement Act of 1995 [Public Law (PL) 104-113] which was signed into law by the President on March 7, 1996 (3).
PL 104-113, cited as the "National Technology Transfer and Advancement Act of 1995, among other things, amends the National Institute of Standards and Technology Act and requires the National Institute of Standards (NIST) to "...coordinate the use, by Federal agencies, of private sector standards, emphasizing where possible the use of standards developed by private, consensus organizations. ...all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities ..." The law also required NIST to transmit to Congress, within 90 days after the date of enactment of the Act, an implementation plan for the provisions of the Act. By June 7, 1996 NIST had transmitted, to Congress its plan for implementation of PL 104-113 (4), and two months later the President added what can be characterized as additional emphasis on Federal acceptance of the new paradigm of environmental protection via environmental management systems. He said, in his article "Looking to the Future" written for the National Association of Environmental Professionals (NAEP) publication NAEP News (5):
" ... Since our laws were put into place 25 years ago, toxic emissions from factories have been cut in half. Lead levels in children's blood have dropped 70 percent. Once, because it was so polluted, a river of ours caught on fire--but no more. And Lake Erie, which was once declared dead, is now teeming with fish. But there is more to do. ... Just as important as what we have done is how we're doing it. The laws and regulations that brought our environment back from the brink worked well for their time, but what worked yesterday may not work today or tomorrow. My Administration is committed to reaching higher environmental standards, but we also believe in more partnership between environmentalists and people working in the private sector. We believe in more flexibility and more focus on results instead of rule making. We know that going through Washington may not be the only road to a safer and cleaner world"
Less than 90 day later the International Organization for Standardization published ISO 14001 and 14004 as final standards and they then became U.S. National Standards.
The Vice-Chair of the U.S. Technical Assistance Group (TAG) to the ISO 14000 Technical Committee (TC 207) is Mary C. McKiel, Director of EPA's Standards Network. Ms. McKiel's long involvement with the U.S. TAG is a strong indication of EPA's interest in ISO 14000. Ms. McKiel said, in a statement for the CEEM Information Services and ASQC Press book "The ISO 14000 Handbook (6)":
"Systematic management of environmental responsibilities can help organizations, government, and communities move from cleaning up the environment to creating prevention opportunities. With that comes sustainable development and new environmental technologies. The ISO 14001 environmental management system standard may be the key."
EPA is not the only government agency looking at ISO 14001. In 1991 the Department of Justice (DOJ) published prosecutorial guidelines for environmental cases giving DOJ lawyers guidelines stating that companies with an environmental compliance assurance system in place were less likely to be prosecuted. An environmental audit program with regularly scheduled audits was a requirement that needed to be satisfied before prosecution would be waived. The U.S. Sentencing Commission also established its Organizational Sentencing Guidelines in 1991 which call for implementing monitoring and auditing systems as a way to significantly mitigate criminal penalties. The U.S. EPA's 1986 auditing policy7 strongly encouraged organizations to use environmental auditing to help achieve and maintain regulatory compliance. At that time EPA encouraged all "federal agencies subject to environmental laws and regulations to institute environmental auditing systems to help ensure the adequacy of internal systems to achieve, maintain and monitor compliance." Interestingly enough it took EPA almost ten years to arrive at a final policy statement regarding incentives for "Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations" (issued December 22, 1995). That policy also restated EPA's long-standing practice of not requesting voluntary audit reports to trigger enforcement investigations while stating its firm opposition to the establishment of a statutory evidentiary privilege for environmental audits. It is also interesting to note that EPA's latest policy was issued ten months after Congressman Joel Hefley (R-CO) introduced House Resolution (H.R.) 1047 on to the floor of the U.S. House of Representatives (introduced 02/24/95 and referred to committees that same day). H.R. 1047 is a form of voluntary environmental audit privilege act. Nine months prior to EPA's December 1995 action, Senator Mark Hatfield (R-OR) introduced, in the Senate of the United States on March 21 (legislative day, March 16), 1995, Senate Bill S 582 IS "To amend title 28, United States Code, to provide that certain voluntary disclosures of violations of Federal laws made pursuant to an environmental audit shall not be subject to discovery or admitted into evidence during a Federal judicial or administrative proceeding, and for other purposes." The bill was read twice and referred to the Committee on the Judiciary. The concept of "Audit Privilege" for voluntary environmental audits has a growing acceptance as evidenced by the fact that at least 17 states have passed such legislation. Those states are: Arkansas, Colorado, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Mississippi, New Hampshire, Oregon, South Dakota, Texas, Utah, Virginia, and Wyoming.
It can be argued that State audit privilege legislation as well as H.R. 1047, S 582 IS, the 1986 EPA environmental auditing policy and its 1995 "Self Policing" guidance are all tacit recognition of the need for a new approach to environmental protection. Enforcing this argument is the speedy, world-wide acceptance of the ISO 14000 series of standards. Additionally, even though bureaucratic inertia usually takes over when it comes to inovative ideas, the states acceptance of ISO 14000 and its attendant emerging new environmentalism is occurring at a remarkable rate.
States Acceptance of ISO 14000
Perhaps the most far-reaching of state administration efforts embracing the ISO 14000 EMS concept are found in Pennsylvania. This is witnessed by statements such as that by James M. Seif, Secretary, Pennsylvania Department of Environmental Protection. In testimony, on March 20, 1996 before the Pennsylvania Senate Environmental Resources & Energy Committee (8), Mr. Seif said of the ISO 14000 series of environmental management system standards:
"... These new tools approach environmental protection in an entirely new way using performance-based environmental objectives, positive incentives to comply, external validation, a flexible approach to implementation and systems which constantly look for new opportunities to prevent pollution and reduce environmental costs ... ISO 14000 represents a market-driven approach to environmental protection that is potentially many times more effective in achieving significant environmental improvements than traditional "command and control" regulatory methods have become ...The old "command and control" method of environmental regulation, so important in the first 25 years of the environmental movement, will occupy less time and fewer resources as companies start to use ISO 14000 and the next generation of environmental protection tools ... We see ISO 14000 and our new tools as a way to improve the competitiveness of our business in the global market place and to lower environmental compliance costs."
The state of Texas is yet another state that is looking at EMSs as alternatives to their current way of ensuring compliance with environmental regulations. They are looking at ways to include the EMS concept into a program they call "Clean Industries 2000."
Perhaps one of the strongest signals of "official" acceptance of the ISO 14001 environmental management system standard and the entire ISO 14000 series is coming from within the EPA's Region I, New England Office of Environmental Stewardship. The Office of Environmental Stewardship in EPA Region I has developed, under the EPA's environmental leadership program, a sub program called "StarTrack." StarTrack (9) is a "Third-party Certification of Environmental Performance" program for companies in EPA Region I. The program's goal is "to expand the use of environmental compliance and management systems audits to improve environmental quality, public understanding of a company's environmental performance and deployment of taxpayer resources." There will be joint development by key stakeholders of approved guidelines for compliance and EMS audits. The guidelines will draw upon existing international standards such as ISO 14000. The third-party certification, by qualified third-party auditors, will be that the participating company has adhered to an acceptable environmental management program, including implementation of an appropriate EMS, auditing programs, corrective plans, and follow-up actions. The expected benefits to the participants, according to EPA Region I, are: "Limited penalty amnesty for most violations uncovered and voluntarily corrected, no routine inspections and simplified reporting for companies with certified performance, and expanded flexibility for companies certified to have exceeded regulatory requirements by implementing pollution prevention and other innovative techniques."
Potential Benefits of ISO 14000
The President's 1996 "State of the Union" admonishment to "do it -- as long as you do it right" is a challenge that is being met by the EFCOG companies of the DOE complex and the EFCOG ISO 14000 Working Group. But what's in it for the Energy Facility Contractor? The purpose of the EFCOG ISO 14000 Working Group, as stated in its charter10 is to facilitate the exchange of information on the standards and their implications for integrating strategic environment, safety, and health (ES&H) management programs into the daily operations at DOE sites. Through participation in the working group, the EFCOG companies are taking advantage of the opportunity to exchange information and discuss the benefits of ISO 14000 as well as implementation issues. The M&O contractors who are already working towards implementation of ISO 14000 at their site are providing valuable lessons learned to other sites. For example, Allied Signal at Kansas City Plant is planning for ISO 14000 certification in the near future. Westinghouse, the M&O contractor for the Savannah River Plant, has just recently self certified its full conformance to ISO 14001. The Hanford site under a new operating contractor, Flour Daniel, is required under their new contract with DOE to implement an ISO 14001 EMS. They are currently conducting an analysis to determine gaps, in existing programs, that will require filling in order to be certified as conforming to the standard. Kaiser-Hill is also conducting a similar gap analysis at Rocky Flats Plant as part of their contractural requirements to DOE. Mason & Hanger Corporation and the DOE Amarillo Area Office are in the process of conducting an initial review of their environmental management practices for the purpose of determining the correct next steps in relation to ISO 14001. DOE contract reform and the potential benefits of ISO 14000 are motivating the M&O, ERMC, and M&I contractors to implement ISO 14000, regardless of the fact that there are no actual requirements, yet for conforming to the standard.
One major benefit may be waiting in the wings for DOE sites, as some Federal and State regulators are considering ISO 14001 certification as a possible alternative to the typical environment, safety and health (ES&H) "command and control" regulatory approach. There is also a strong basis for opining that, if Federal and State regulatory relief materializes for facilities certified to be in conformance with ISO 14001, then DOE Headquarters might also consider some relief, from certain auditing and reporting functions, for its ISO 14001 certified contractors. There is another potential connection and benefit of ISO 14001 implementation with day-to-day DOE operations and that has to do with the Defense Nuclear Facilities Safety Board (DNFSB) Recommendation 95-211 implementation. The emphasis on management systems for ES&H protection contained in ISO 14001 is echoed in DNFSB "Recommendation 95-2, Integrated Safety Management," which encompasses environment and health, as well as safety. Another benefit, of ISO 14001, to Federal contractors faced with fixed price contracting, exists in dealing with liabilities. Major international insurance brokers are developing programs whereby they will underwrite fixed price environmental restoration contracts, provided the contractor has ISO 14001 3rd party certification (12). A presentation on this idea was made by a representative of the insurance industry at a conference held in Washington, D.C. on May 1-3, 1996. The title of the conference was "The Future of the Federal Facility Cleanup and Redevelopment Market in Washington, D.C." The presentation, made by one of the insurance industry attendees, was in response to many complaints made about how compliance with DOE orders and the current move by DOE toward contract reform, via fixed-price contracts, drives up the costs of projects. The representative explained how fixed-price contracts can be insured. He gave the example that for a $1 million dollar fixed-price contract, insurance with a deductible of $200,000 could be obtained, and any costs over $1.2 million would be covered by insurance. He pointed out that the insurance companies will require that the contractor company be certified for conformance to the ISO 14001 environmental management system standard. It appears that insurance may be a major driver for companies to conform to ISO 14000. With that in mind, it is not "a stretch" to envision the financial industry, led by the World Bank, incorporating ISO 14000 EMS certification into their business decisions. These types of potential financial incentives are just a few more answers to the question "What's in it for the EFCOG company?" Other potential benefits of implementing the ISO 14001 EMS, for the EFCOG member company, include:
Other benefits "lurk" in the culture of Environmental Management. Stephen A. Watson in an article for the publication Environmental Quality Management (13) provides the comparison of the current culture to that of post ISO 14000 as follows: We consider environmental factors for siting issues, waste streams, and environmental consequences of operations because we are required to do it and currently Environmental management is handled as a staff function.. It is something that has been "added" to our required mission accomplishment. Post ISO 14000 acceptance and implementation, environmental management requires top level management commitment and is everyone's responsibility. Environmental factors are considered for all business decisions. ISO 14000 encourages a culture of sound environmental management and a truly integrated management system.
Additional benefits await those EFCOG companies that are involved in or are contemplating the international market place or who may have that market "dropped onto them". In the latter case, if that company has already launched an ISO 14000 implementation effort, it is ahead of the "power curve" at the start, and in the business world, that is a desired position. While ISO 14000 is not supposed to erect trade barriers, the reality of the situation is that ignoring ISO 14001 environmental management system conformance may leave a company with its "face pressed against the window" looking inward at business opportunities lost. Some of the Nations who have backed the meteoric acceptance of ISO 14000 series of standards around the world are declaring that 'if you want to do business with us, we strongly suggest that you conform to ISO 14001.'
The answer to the question "What's in it for the Energy Facility Contractor" is like the answer to the infamous question about - Is this or that in the Prego spaghetti sauce.
Hold ISO 14000 up to the light - "it's in there."
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