ISO 14001: A Discussion of Implications

For Pollution Prevention

NPPR Staff Liaison to the ISO 14000 Workgroup

Krista Johnsen Leuteritz

NIST Office of Standards Services

Marianne Fitzgerald

Oregon Department of Environmental Quality

Scott Butner

Battelle

Ravila Gupta

North Carolina Office of Waste Reduction

Barbara Kelley

Director, Massachusetts Office of Technical Assistance

Natalie Roy

Executive Director, NPPR

Introduction

Background

Figure 1: Critical Characteristics of an ISO 14001 EMS

Discussion

Positive Features of the ISO 14001 Standard

Negative Features of the Current Standard

Recommendations

Conclusion

National Pollution Prevention Roundtable (NPPR)

APPENDIX

ISO 14001 Requirements

Figure 2: Major Elements of ISO 14001 EMS Standard

NOTES

The new international voluntary standard for environmental management systems (EMS) known as ISO 14001 is currently the subject of heated debate. Proponents of ISO 14001 argue that the new standard will be an effective tool for improving industrial environmental performance and help to ease burdens on environmental regulators. At the same time, many in the environmental community worry that compliance with ISO 14000 does not guarantee environmental improvements.

Many pilot projects at both the state and federal level seek to evaluate the ISO 14001 EMS as a tool to encourage improved environmental performance. This may involve granting ISO certified companies some type of regulatory flexibility or reduced public disclosure requirements. Because the thoroughness of an EMS is left to the discretion of each firm, this is a source of concern to many in the environmental community, who are hesitant to rely upon the volunteerism of the private sector. In addition, some fear that the ISO 14000 series could be used by certified firms as "proof" of commitment to environmental protection, without requiring concrete improvements in environmental performance.

On the other hand, there is currently no government mandate that requires firms to have a comprehensive environmental management system. Although some companies have comprehensive EMSs that systematically track environmentally relevant activities, many do not. This can often result in reliance on reactive, end-of-pipe strategies, which tend to be costly and inefficient. The systematic approach of ISO 14001 may prove effective in encouraging organizations to take a proactive, preventative, and holistic approach to managing their environmental impacts. This is especially true in countries where meaningful environmental regulation, monitoring, and enforcement are lacking.

In response to these considerations, the National Pollution Prevention Roundtable formed an ISO 14000 Workgroup to evaluate the implications of the ISO 14000 series for pollution prevention. This white paper, which examines both sides of the debate on ISO 14001 and makes recommendations to further the implementation of pollution prevention through an ISO 14001 EMS, is the result of this effort. The workgroup feels that it is important to avoid jumping to conclusions about the utility of ISO 14001 without more information about its effectiveness in promoting improved environmental performance. A better understanding of how ISO 14001 influences firms' behavior is necessary in order to judge how to incorporate the standard into existing environmental regulatory regimes, or whether to incorporate it at all. In addition, NPPR recommends that certain changes be made in the standard in order for it to become a more effective tool for promoting pollution prevention and improved environmental performance. NPPR also supports the use of pilot projects to study the value of ISO 14001 in furthering the concepts and techniques of pollution prevention.

The International Organization for Standardization (ISO), a non-governmental organization established in 1947, comprises a worldwide federation of national standards bodies from each of 100 countries. The organization aims to facilitate the international exchange of goods and services by establishing international standards and reconciling regulatory differences between countries.

The ISO 14000 series is a voluntary set of standards intended to encourage organizations to systematically address the environmental impacts of their activities. The goal is to establish a common approach to environmental management systems that is internationally recognized, leading to improved environmental protection and reducing barriers to international trade.

ISO 14000 is a management system standard, not a performance standard. It is intended to be applicable to firms of all shapes and sizes around the world. The standard does not require specific environmental goals. Instead, it provides a general framework for organizing the tasks necessary for effective environmental management. The series of documents that encompass ISO 14000 includes components such as environmental management systems, environmental auditing, environmental labeling, and product life cycle assessment. The ISO 14001 standard, which lays out requirements for establishing an EMS, is the centerpiece of the series. In order to qualify for ISO certification, firms must meet the requirements laid out in the ISO 14001. All of the other standards in the ISO 14000 series provide supporting guidance.

Clearly, a better understanding of how ISO 14001 affects firms' environmental performance is necessary before any decisions can be made about its use within the existing regulatory regime.

This section assesses both the positive and negative features of the standard in order to shed some light on how the standard could be used to improve environmental performance and complement existing environmental regulations.

Proponents of the standard are touting ISO 14001 as an important new policy tool for encouraging proactive environmental management and fostering cooperation between industry and the regulatory community. ISO 14001, the environmental management system (EMS) standard, institutes a systematic framework for incorporating environmental protection into overall management strategy. Several elements of the ISO 14001 standard have positive implications for fostering pollution prevention.

First, it is likely that top-level management will view ISO 14000 certification as a competitiveness issue rather than as a cost of compliance issue. Second, the ISO 14001 standard encourages a holistic approach to improving environmental performance, and establishes a framework for continual improvement. Third, the standard may foster innovative strategies for improving environmental performance by encouraging all the employees of a given firm to look for ways to reduce environmental impacts. Lastly, the standard is prompting firms all over the world to consider their environmental performance where they otherwise might have little incentive to do so.

One characteristic of ISO 14001 that is generating considerable enthusiasm among environmental regulators is its potential to involve top-level management, a difficult audience to reach. This results from two features of the standard. First of all, it requires that top management define an overall environmental policy for their firm. Second, it is expected that ISO certification will be viewed as a competitiveness issue, rather than a compliance issue. Given that ISO 14001 is a system built for business by business, it's crafted in a language that management understands and is therefore more likely to capture and retain upper management's attention.

With regard to the competitiveness issue the business community recognizes that the ISO 9000 quality management system standards have emerged as an important business factor around the world, and many observers predict that certification to the ISO 14000 series will be similar. ISO certification may become a prerequisite for customer/supplier transactions both internationally and domestically. In addition, for companies not involved in international trade, certification may facilitate qualifying for business loans, and ISO certified companies might also qualify for lower insurance premiums. Also, conformity with the standards could open the door for reduced regulatory burdens. Lastly, ISO certification could be used as a public relations tool to boost a firm's image in the eyes of consumers. In response to these incentives, some multinational corporations such as IBM that have sought and received ISO certification, are considering insisting that their suppliers be ISO certified.

Furthermore, ISO 14001 differs from many traditional environmental regulatory systems in that certification offers the potential for delivering substantial gains in production efficiency and reduced costs in environmental compliance. This may further enhance the attractiveness of seeking ISO certification.

ISO 14001 establishes a framework for a systematic approach to environmental management, in which companies are encouraged to view their environmental performance holistically. Currently, no government mandate exists that requires firms to do so. Although some companies have independently instituted comprehensive environmental management systems, most have not. Typically, organizations compartmentalize their strategies for addressing their environmental impacts and complying with various environmental regulations. This tends to foster dependence on reactive, single media, end-of-pipe strategies that are costly and inefficient.

A well-designed EMS can go well beyond this traditional process-driven view. In evaluating all of its environmental aspects, an organization can take activities such as landscaping, commuting, sound, and other impacts into consideration. Using life cycle analysis and life cycle assessment and other tools for comparing environmental impacts, an organization can examine the cradle to grave impacts of its products. It can question suppliers about contents of materials and even methods of delivery. This holistic approach can help foster preventative solutions by encouraging an organization to identify opportunities for doing things in new ways, for finding new products from "waste", and for going beyond the traditional view of environmental problems as being the sole domain of the environmental health and safety manager. Many companies that have instituted a thorough EMS have benefited by becoming aware of inefficiencies that were not apparent beforehand; generating cost savings and reduced environmental liabilities.

Another important feature of ISO 14001 is its provisions for continual improvement in a firm's environmental management system. The standard requires firms to create specific time-lines for designating responsibilities and implementing strategies to reduce environmental impacts. Also, periodic compliance and EMS audits are required to assess procedural improvements and identify needed system improvements. Such a mechanism for improvement is completely absent in command and control regulations such as BAT (best available technology) standards and emission standards. Standards such as these give firms no incentive to go beyond what's necessary for compliance. It should be noted, however, that the requirement for continual improvement applies to the management system, not environmental performance.

The potential for synergy between ISO 14001 and state facility planning requirements is generating much interest among environmental regulators. For a thorough discussion of this topic please see NPPR's Facility Planning Workgroup White Paper: Facility Planning Pollution Prevention Planning Requirements: An Overview of State Program Evaluations.

ISO 14001 promises to foster innovative solutions to pollution problems at the facility level. The standard requires that all employees be made aware of their environmental responsibilities and trained to exercise care when performing duties with environmental consequences. By instilling environmental awareness in all employees, firms can harness the technical know-how of employees on the production floor to help find creative strategies to minimize or reduce their environmental impacts. Often, it is these employees, the ones most familiar with a given firm's production processes, who are in the best position to identify creative strategies for improving environmental performance.

In contrast, command and control regulations such as BAT standards require firms to use specific technologies to control emissions. Such systems remove all incentive for a firm to innovate and can even punish firms for developing new technologies. Removing such disincentives and encouraging innovation is critical for finding cost-effective strategies for environmental protection.

Although it is unclear at present how large global firms will respond to pressures for seeking ISO 14001 certification, the introduction of the standard is prompting firms around the world to consider their environmental performance. According to a report prepared for the U.S. Asia Environmental Partnership, many firms already have sophisticated EMS's in place, and perceive little customer demand or regulatory advantage to seek certification at this point. However, many are adopting the "smart parts" of the standard, and are aware that certification may become necessary in the future.

Also, ISO 14000 certification may become a prerequisite for many customer/supplier business transactions. Currently, some global companies already practice some form of supply chain environmental management. That is, they impose conditions on the products and production processes of their suppliers in order to influence their environmental performance. These systems have proven to be an effective means of fostering enhanced environmental performance by suppliers around the world. The ISO 14000 series may increase pressure to influence the behavior of suppliers. This would boost incentives for firms around the world to consider their environmental impacts where they may otherwise have little incentive to do so. This is especially important in countries where effective environmental regulation, monitoring, and enforcement are lacking.

In its present form, ISO 14001 has several potential shortcomings that may reduce its effectiveness in encouraging pollution prevention and limit its ability to spur improvements in environmental performance. To begin with, the standard is a management systems standard, not a performance standard. A firm, therefore, is not actually required to improve its environmental performance, and may be able to point to ISO certification as "proof" of its commitment to protecting the environment. Also, the ISO 14001 definition of "prevention of pollution" fails to distinguish between pollution prevention and pollution control. The standard should not promote inefficient "end-of-pipe" strategies as pollution prevention. Lastly, the standards have been developed without sufficient input from the environmental community and public interest organizations, and the standard does not require sufficient public disclosure of a firm's environmental impacts.

ISO 14001 defines "prevention of pollution" as the "use of processes, practices, materials or products that avoid, reduce or control pollution, which may include recycling, treatment, process changes, control mechanisms, efficient use of resources and materials substitution." This is too broad in scope. ISO standards do not distinguish between pollution prevention and pollution control.

The definition recognized by the National Pollution Prevention Roundtable and U.S. EPA (under the Pollution Prevention Act of 1990) is source reduction, or any process that reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment (including fugitive emissions) prior to recycling, treatment or disposal. The act also lays out a strict hierarchy for dealing with pollution-- prevent, recycle, treat, release, in that order.

Because pollution prevention (as defined by the Pollution Prevention Act of 1990) is an approach that promotes efficient utilization of resources and innovative and holistic solutions, it should be a key component of ISO Standards. Including traditional pollution control mechanisms with source reduction in one all-inclusive definition of prevention of pollution weakens the potential of the standard to promote meaningful environmental benefits. It is unclear whether, through the procedure of aspect identification and ranking, pollution prevention emerges as part of the environmental management plan without an explicit requirement.

ISO 14000 is a management standard, and does not mandate any specific requirements for improved environmental performance. Instead, the requirement is more obliquely stated, requiring firms to identify their environmental impacts; prioritize those impacts; set targets and objectives for reducing those impacts; select activities to achieve the identified targets and then to use a continuous improvement cycle to evaluate and re-approach the system. There is nothing in the standard that tells organizations what goals to set, which means that improved environmental performance is not guaranteed. Hence, there is cause for concern that ISO 14000 certification will be used by some as a public relations tool, as "proof" of commitment to environmental protection, without any assurances of environmental benefits. This should be taken into consideration before exempting ISO certified firms from any environmental regulations.

A third area of concern is in the standard's language relating to a company's compliance with environmental regulations. ISO certification in no way absolves an organization from compliance with existing environmental regulations. However, since regulators are looking at the possibility of granting regulatory flexibility to ISO certified firms, this issue is critical.

The standard requires that organizations have a "commitment to comply with relevant environmental legislation and regulations, and with other requirements to which the organization subscribes." Unfortunately, the word "commitment" is left undefined. This raises the question over whether objectives that a company chooses for itself are entirely at the discretion of the firm, or whether some of the objectives must be explicitly related to the organization's commitment to compliance which is required as part of the policy statement. In short, a firm can be out of compliance with existing environmental regulation and still become certified, but it has to prove that its EMS will lead to compliance over time.

Although an organization has discretion with regard to its objectives and targets, section 4.3.3 of the standard requires the organization to take legal requirements into consideration when setting its objectives and targets. These must be consistent with the organization's environmental policy that is required to include, among other things, a commitment to compliance.

Stakeholder involvement is another issue worth exploring within ISO 14001. Section 4.4.3 is the only section that mentions stakeholders and that is in the context of external communications. The standard states that an organization must develop a process or processes for dealing with external communication (i.e. if an external party request information about the EMS, the organization must have a set procedure for handling this request).

The level of stakeholder involvement is left to the discretion of the firm. An organization must have a plan for public disclosure, which could include active stakeholder participation. On the other hand, the plan can be virtually meaningless. It should be noted, however, that ISO 14000 certification does not lessen statutory requirements for public disclosure of environmentally relevant information except through state and federal pilot programs.

The issue of audit privilege is another source of contention and is too large for us to do it justice here. Without confidentiality, firms have a clear disincentive to conduct environmental audits in creating an EMS. The dilemma for regulators is how to reduce such disincentives to conducting environmental audits without absolving managers of all accountability.

In the past, NPPR has produced position papers supporting the protection of confidentiality when regulatory and non-regulatory technical assistance providers conduct site visits. This would not apply in cases of imminent threat to public health or environment. Numerous states also have policies in place to protect firms and preserve the confidentiality of site visits by technical assistance providers.

Finally, it must be recognized that there is a cadre of ISO 14000 consultants wishing to sell their wares who are touting ISO 14001 as the future of environmental regulation. They tend to exaggerate the utility of the standard and downplay its limitations. The ISO 14001 standard is not a panacea and should not be promoted as a replacement for existing environmental regulations.

1. Adopt the U.S. EPA definition of pollution prevention

    

   The current ISO 14000 series definition of "prevention of pollution", (there is no ISO definition of pollution prevention) is too broad in scope and may foster limited reliance on pollution prevention by companies adopting the standard. The Roundtable believes that source reduction and other true preventative measures, as defined by the Pollution Prevention Act of 1990, should be promoted as the number one strategy for improving environmental performance.

    

2. State that improved environmental performance is a goal

    

   Since improved environmental performance is the desired end result of all of those undertaking ISO 14001 EMSs, the NPPR would like for the standard to state this. To encourage going beyond current environmental requirements, NPPR recommends the standard include that companies look at unregulated impacts such as energy consumption, solid waste generation, water use, transportation methods, habitat restoration, materials use and unregulated toxic releases.

    

   In addition, a system for evaluating differences in ISO certified firms and non-certified firms is necessary. Until the data exists that shows the implementation of an ISO 14001 EMS leads to enhanced environmental performance, certification should not be relied upon as the tool for achieving it.

    

3. Strengthen standard's regulatory compliance requirement

    

   Before ISO certified firms are granted regulatory flexibility, the requirement for a commitment to regulatory compliance must be strengthened.

    

4. Ensure adequate stakeholder involvement

    

   Adequate provisions for preserving stakeholder involvement and public disclosure requirements must be incorporated into the standard. This should involve early, open and inclusive stakeholder involvement in EMS design, implementation and evaluation. For example, ISO 14000 should recommend that firms allow stakeholders to be involved in the process of identifying significant environmental aspects, setting objectives and targets and evaluating performance. It should also recommend that firms seek out broad community and employee representation in stakeholder groups. This will ensure that community and workplace concerns are addressed up-front and early in the planning process.

    

5. Target ISO 14000 certification community for pollution prevention training

    

   It is likely that management consultants, accounting firms, and ISO 9000 registrars, firms, which have not typically been actors in the environmental management arena, will carry out ISO certification. It is important to ensure that ISO 14000 certifiers and auditors are familiar with pollution prevention strategies.

    

6. Expand technical assistance programs to include ISO 14000 considerations

Pollution prevention programs can serve a valuable role as catalysts to help smaller companies that are interested in adopting some form of an EMS. Pollution prevention programs should insure that assistance providers are familiar with ISO 14000 in order for them to assist companies in determining how to structure an EMS, and if ISO certification should be pursued.

Voluntary representatives from standards organizations and industry from around the world developed the ISO 14000 standards. Not surprisingly, this has evoked skepticism from public advocacy groups and the environmental community, which to date have been largely excluded from participation in the development of the standard. Many fear that the standards will be used by industry as proof of commitment to improved environmental performance, without any guarantees that such improvements will actually occur.

On the other hand, one of the most attractive features of the series is its flexibility, and its potential for capturing the attention and backing of top-level management. Reducing this element of flexibility will tend to decrease the likelihood that firms will adopt the standards. It is important, therefore, to recognize this trade-off when recommending changes to the standard, in order to preserve its appeal to the private sector, while at the same time ensuring its effectiveness at promoting improved environmental quality.

At present, there is a clear need for careful evaluation of how certification to ISO 14001 will influence a firm's environmental performance. This will facilitate more informed decision-making about how to best incorporate ISO 14001 into existing environmental regulatory regimes.

The NPPR is the largest membership organization in the United States devoted solely to the support of efforts to eliminate or reduce pollution at the source. The Roundtable provides a national forum for promoting the development, implementation, and evaluation of pollution prevention (P2) efforts.

The Roundtable's voting membership includes state, local, and tribal government pollution prevention programs. Affiliate members include representatives from federal agencies, non-profit groups, industry, and academic institutions. Public sector members located in every state and internationally, operate programs that provide pollution prevention regulatory and technical assistance to thousands of industrial, commercial, and agricultural facilities each year. This information helps many of these facilities reduce the cost of both production and environmental compliance. The results are improved efficiency, competitiveness and a better environment.

The Roundtable, located in Washington DC, serves many functions, including:

• Preparing and distributing timely information on P2 technologies, technical assistance practices, and legislative and regulatory P2 developments;
• Serving as a national P2 information clearinghouse containing publications of state, local and other related programs;
• Sponsoring semi-annual national meetings that attract the largest gathering of P2 experts from across the country;
• Influencing policy development by garnering concrete support for pollution prevention by sponsoring workshops and publishing position papers to educate policy-makers about P2; and
• Forming strategic partnerships with national and international agencies, private sector groups, and regional organizations to promote P2

In order to be applicable to many different types organizations, the ISO 14001 EMS standard establishes a general framework for guiding environmental management, but does not specify what the content of that framework must be. The standard, therefore, is a procedural standard, not a performance standard. It avoids prescribing environmental strategies that should be implemented, but instead organizes the tasks that are necessary for effective environmental management.

Under section 4.1 of the ISO 14001 standard, top management must establish a company-wide policy on environmental issues. This policy must take into account all activities with environmental implications such as working conditions, emissions, waste disposal, product life cycles, noise, and employee commutes. The flexibility of the standard will allow different firms to adapt their EMS to fit their needs. For example, a mail order firm may focus its EMS on the behavior of its suppliers, while a tire manufacturer may be more concerned with environmental effects of its manufacturing activities and with product recovery and recycling.

An EMS must be commensurate with the size of the facility and compliance with existing regulation and continual improvement of environmental performance must be stated as explicit goals. Additionally, objectives and targets must be stated, and a system for periodic review must be established. Lastly, all employees must be made aware of their firm's policy, which also must be made available to the public.

Section 4.2 of the standard, which addresses planning requirements, stipulates the following: first, a company must define what aspects of its activities with environmental implications can be controlled or influenced; second, a list of all environmental regulations and requirements relevant to these activities must be compiled; and third, objectives and goals should be derived according to this information. At this point, deadlines for executing various aspects of the plan should be laid out and specific responsibilities for meeting these objectives should be delegated. This section also includes a provision for updating the EMS as the activities of a firm change.

This section addresses implementation and operation of the EMS. To begin with, all employees must be made aware of the environmental impacts of the firm's activities, the importance of conforming to the firm's EMS, and how responsibilities for conformance are delegated. Additionally top management must designate an official coordinator for the EMS, who is responsible for overseeing implementation of the EMS. The coordinator must also conduct regular reviews of the EMS and report findings to top management.

Section 4.3 also requires the implementation of a formal system for documenting internal communications regarding environmental issues, a system for handling external communications, and procedures for handling emergencies.

This section requires the establishment of a system to monitor and measure activities with environmental impacts. Additionally, the system must designate responsibility and establish protocol for corrective actions. Lastly, Section 4.4 requires annual internal audits.

Section 4.5 requires that top management review the effectiveness of the EMS at least once a year. Management should evaluate internal audits and regulatory developments and decide whether or not to modify the existing EMS.