Role of Environmental Management System in Promoting Industrial Development - Essay Example

8394 Environmental Management Systems and Auditing February 27, 2008 Role of Environmental Management System in Promoting and Sustaining Industrial Development Introduction Unbridled industrialization today is creating agonizing imbalance in the earth's environment. Mother earth is sending alarm signals of distress that are felt through climate change, polluted atmosphere and contaminated water sources. Environmental Management System Enterprises are flush with challenges in their fields of operations, marketing, finance, labour, raw material etc. Of late a new dimension has been added to their woes in the form of sustainable integration with environment. Being a nascent discipline organisations are engrossed in finding out what impact their business activities have on the environment. Universal tools to assess these impacts are still in a dynamic stage. To understand its ramifications a company has to systematically consider all the factors driving the complex relationships between its business model and the environment and how it affects the company's competitiveness and the balance sheet. Effective environmental policies and programmes need to be worked out and put in place. Environment Management System (EMS) is an operational tool for managing these impacts on an organisation's activities on the environment (Australia 2007)1. It provides a platform for a structured approach to planning and implementing environment protection measures. An EMS integrates environmental management into the company's daily operations, long-term planning, quality control systems and finally end up in the Annual Report. Today computers have pervaded and revolutionised all sorts of office work. Paper and white-collar offices are becoming things of the past and have been replaced with network infrastructures and functionality has shifted to the Internet, automation and e-business solutions. Computers bring efficiency and allow reduction in staff and office space at the same time copiously enhances volumetric capacity of data storage and simplifies retrieval of information. Clearly, this transformation has environmental and social benefits such as reduced consumption of paper has revitalized forest resources. Video conferencing has reduced travel, saving both money and time. All such repositioning forms part of EMS. An effective EMS can assist an organisation to: Minimise environmental liabilities and demonstrate good corporate practices and ethics. Maximize efficiency in utilising resources and reduce waste. Inculcate environmental concern among its employees to gain a better understanding of the environmental impacts of the work they are involved in. Stay on course with efficient operations to achieve corporate motive of increasing profits without compromising environmental concerns. Organisations can use EMS to ensure that their performance is within regulatory requirements, and prepare ahead of more stringent regulations that might be necessitated in the future. Case Studies It will be appropriate to study implementation of some successful EMS by big and small organisations. In some case studies analysed below we find how some corporate giants and local government bodies have effectively introduced EMS standards and are successfully evolving them. We also see how brutalities on nature by some big players are brought to justice through community movements and without management commitment EMS is not always a win-win situation. Konica Minolta Model Konica Minolta, the Japanese multinational giant involved in imaging and office solutions business, is successfully implementing environment friendly policies in their large network of establishments around the world (Report, 2005 p.18) 2. Some of the measures they have beneficially introduced are: By minimising product size and weight the company not only conserved in-put resources but also scaled down requirement of transport. They further improved upon it with design cameras and digital multi functional devices and came out with new greener models frequently. They were able to cut down on energy use by improving production efficiency, adopting energy saving designs and processes and cogeneration of energy wherever possible. Bulk clearance of freight was changed over from expensive road transport to rail and ship mode, to that extent reducing their contribution of CO2 emission. Kyoto Protocol requires drastic control on emission of green house gases and the company aims to reduce CO2 emissions by 7% by fiscal 2010 compared to fiscal 1990 levels. Innovating further the company introduced electric vehicles at their Kyushu facility. Service engineers use them to visit customers for maintenance of equipment. In the year 2004 each service engineer's territory was enlarged so that they can visit more customers per outing in the most efficient manner. Such innovation is calculated to reduce CO2 emissions by 433 tons a year, not a mean achievement. By recycling and re-use of most of their wastes the company could promote 'zero waste' concepts without compromising the bottom line or risk managements. This has chipped in an estimated annual savings of approximately 1.6 billion in 2004. The company has been awarded Certificates for products whose emissions are recognized by the Japan environmental Association as 'causing low environmental impact'. Energy City, Qatar (UAE) Energy City Qatar, the Gulf's first hydrocarbon industry business cluster, is living up to its 'inspired by nature' axiom by incorporating a myriad of 'green building' practices and architecture into its design concepts, benefiting both developers and residents (AME 2008) 3. As claimed by its CEO, Hesham Al Emadi, considerable economic benefits motivate developers to integrate 'green' solutions into their projects. Solutions provided by Energy Management Services (consultants to the project) will ensure Energy City Qatar benefit from lower operational costs, less capital investment, scaled down maintenance and water costs. The completed project will have an ostentatious impact on the environment, human health, and the economy. They are confident of achieving these landmark solutions as both attainable and measurable. Energy Management Services projects accomplish a twenty to forty per cent reduction in electrical bills and enable a payback within a period of around two years. By implementing such environmental standards, Energy City Qatar, commendably lives up to its 'inspired by nature' axiom in a high pollution industry like oil and gas. The real estate space is becoming increasingly congested and unliveable. For sustenance and growth of industry, intensive development of vast tracts of land is needed for cost-effective provision of necessary infrastructure. Such large congregation of humans and industrial units is a big challenge to the environmental scientists and builders. Innovative concepts followed by the Energy City Qatar would be a good model to replicate in this field. Australian Capital Territory Electricity and Water Authority After discussing two large commercial ventures let us focus our attention on the role of EMS in a government run public utility service facility. Australian Capital Territory Electricity and Water Authority (ACTEW) provides electricity, water and sewage treatment to the capital territory and is required by legislation to conduct its operations in compliance with the principles of ecologically sustainable development (ATC 2000) 4. The legislation gives equal importance to environment protection, operating efficiency and maximising returns on investment. So for ACTEW, environmental management is integral to all its operations. Headquartered in Canberra, ACTEW has about 880 employees and was corporatised in 1995 and operates electricity and water distribution systems, a major sewage treatment plant, water supply dams and reservoirs. It is also developing a telecommunications network, household photovoltaic systems and projects for reuse of treated wastewater. Being a Government owned utility it is accountable to the community. Its day-to-day processes have both real and potential environmental impacts in the area and are visible to the public. It works hard to maintain its reputation as a responsible corporate entity. These imperatives motivated ACTEW to develop an effective EMS. The greatest initial impediment to develop and implement an EMS was lack of understanding of the subject and the benefits of the system to the employees themselves. Concerted efforts by the management convinced them to become involved. The resistance faded away as the staff became aware that the quality and environmental systems could result in improved productivity and better working conditions. Now every Division has its own EMS and is actively involved in its implementation. They realise that they could bring about positive changes only by involving themselves in the management and administration of the systems. ACTEW considers that good environmental management makes good business sense. Because of its reputation for having an excellent EMS it has gained considerable overseas projects, particularly in the Pacific Islands. Receipt of several awards can be attributed to the successful implementation of the EMS. It won a 'Banksia Award', one of the most prestigious of corporate environmental awards, which recognised ACTEW's work on extracting re-useable water from sewage. ACTEW's 1995-96 Annual Report won first prize for environmental reporting in the competition held by Annual Report Awards Inc. Though no large-scale financial savings are directly attributable to the EMS, ACTEW considers that the EMS is a worthwhile investment in economic terms because it attracts new business and allows operations to be conducted more efficiently, with significantly reduced levels of risk. EMS now covers all operational areas and is gradually expanding to the administrative areas, which has not been touched yet. Gene's Plating Company Another area where misunderstanding prevails is the human resource management side. The indifference can be noticed from the beginning with the selection of the Management Representative (MR) to implement the EMS (Kemp 2001, p.1-5) 5. Routinely the job is entrusted to the MR. or Environmental Manager (EM) disregarding his/her qualifications and suitability for it. Implementation requires a manager first and then only an environmentalist. The person must be highly organized and possess the leadership and management skills necessary to build teams, manage projects, influence opinion, and implement decisions and report to top management. It has been noticed that in an environmentally conducive atmosphere employee output is enhanced leading to improved profit. Every employee must feel that they are working in an environment-friendly work place. Disregarding such basic HRM criteria will become a drag to any EMS sooner than later. Management must have a clear perception of the advantages an EMS can usher in and the investments needed to be made. Just stating their objectives and goals without strong management commitment an EMS is doomed to fail. In this context a case study of the Gene Plating Company fiasco would be pertinent. Environmental Protection Agency, California (Cal/EPA) along with U.S. EPA and the Metal Finishing Association of Southern California (MFASC) selected 'Gene's Plating', a medium-sized metal finishing company with about 400 employees, in Los Angeles, California to test a template that small-to medium-sized metal finishing companies can use in developing and implementing a successful EMS model (Cal EPA, 2005) 6. The template is intended to provide a simplified and industry-specific template that can form the basis for a company's EMS. Gene's Plating had volunteered to test the EMS to develop and promote pollution prevention practices and technologies to protect the environment and contribute to economic growth. Towards this end Gene's Plating began participating in a series of workshops to implement the EMS. After some initial efforts, the company failed to follow up the implementation process and also did not complete the workshop series. It got embroiled in litigation by the Los Angeles County Fire Department for illegal disposal of hazardous waste into the street, failure to minimize release of hazardous waste that could threaten human health and the environment and mismanagement of hazardous waste container/labelling. Since the charges were of serious nature and the lack of enthusiasm in implementation of EMS, Gene's Plating was removed from the Cal/EPA EMS Project. A review of the case suggests that although Gene's Plating expressed initial interest in developing an EMS, the company did not allocate sufficient staff time, resources and responsibilities to the project suggesting it was not committed to EMS implementation process. The three main targets Gene's Plating initiated were (i) Reduce nitric purchases by 15%, (ii) Reduce non-Resource Conservation and Recovery Act waste to the landfill by 10%, and (iii) Reduce chromium usage by 40%. These goals were not met. Just setting initial objectives and targets without follow-ups do not yield desired results. EMS tools can only work if there is a commitment from the management side to sincerely implement them. Pacific Gas & Electric Company Explicit concern for the environment is of recent origin. In earlier days environment was abused with impunity and consequences laid at the doors of Gods and evil spirits. The most common and brazen example of this is large-scale discharge of spent polluted water into the ground and rivers by industries. A lesson can be learnt from the callous disposal of polluted water by a giant power generating company in the United States. Pacific Gas & Electric Company (PG&E) was one of the companies that introduced natural gas for electricity generation in the California region. It involved carrying gas through pipelines from Texas to California. These pipelines required re-pressurization stations approximately every three hundred miles. One such station was located in a town called Hinkley (Appendix 'A') in California. Till it was exposed by Erin Brockovich, a law firm clerk, this mega utility company has been for decades discharging millions of gallons of spent water containing carcinogenic 'hexavalent chromium' (a corrosion inhibitor), into unlined water catchments. Brockovich, who was curious to know what medical records had to do with real estate files, exposed the company's nefarious activity (Carole 1994) 7. She found that PG&E is responsible for the extensive illnesses caused to residents of Hinkley. Many illnesses were linked to hexavalent chromium, including cancers, birth defects, and organ failures. In 1993, PG&E was accused of contamination of drinking water in Hinkley. The company was in serious trouble and after many hearings the case finally led to arbitration with a settlement amount of $400 million, which was later scaled down to $333 million, the largest settlement ever paid in a direct-action lawsuit in U.S. history. This was a milestone case as far as a desperate local community fighting against pollution of land and water by an arrogant giant conglomerate is concerned. Later in 2000 the story was dramatised through a highly acclaimed movie -"Erin Brockovich"- in which actress Julia Roberts, in the lead role of Erin Brokovich, won the Best Actress Academy Award. This case highlights the need to have proper EMS in place and no organisation can be insensitive to the local community's health concerns. It is difficult to believe that the management of a billion dollar corporate giant was unaware of what they were doing. Failure to provide a ceramic lining to the discharge collection tanks to prevent seepage of affluence that get mixed up with drinking water was an inexcusable failure. Secondly not treating the waste water and recycle it for non-domestic purpose reflects environment apathy. What were the considerations for not making these investments are not clear; whatever it may be it would have cost only a fraction of the lawsuit award. Also during the period 1950 - 70 environment consciousnesses was not as it was in the later decades. Finally the local community had to be organised to fight for their unalienable right for safe drinking water. This is a good lesson for the assailants on nature. It may not be a coincidence that this mega company later went into bankruptcy since it became commercially unviable and had to be restructured with state support. The Transformation. PG&E emerged from bankruptcy in April 2004 and became one of the most profitable companies. The company earned a coveted place in the Fortune 500 list for 2005 with a profit of $4.5 billion on a turnover of $11 billion. This shows the resilience of an organisation that accepts the reality and lives in harmony with nature. There is always an opening for an underdog to rebound with more vigour and resolution. Present Status. Regulatory and political developments in the mid-1970 forced utility companies in California to adopt a more environment friendly approach. PG&E was fined $50 million by the California Public Utilities Commission for failing to adequately implement energy efficiency programs. Since 2004, the new look management of PG&E has been aggressively promoting its green image. In San Francisco it has launched a campaign called "Let's Green This City". By 2006 the company was in the forefront to cap greenhouse gas emissions and has undertaken a target of 25% reduction by 2020. It's a commendable attempt by the company to atone for its predecessor's invasion on the land that left a deep cut on the people and land in Hinkley. Conclusion Environmental Management Systems and Standards have a vital role to play in manufacture, agriculture, trade and commerce or for that matter any organised activity. Today green house gas emissions are the worst enemy of mankind. The single most polluting unit is the automobiles. Transportation has to shift from petroleum to electric and other eco friendly means. As far as possible Mass Transportation Systems like railways and ships can reduce CO2 generation to a large extent. Environmental managers can play a crucial role in this as Konica Minolta did. The success stories of Konica Minolta, Energy City Qatar and achievements of Erin Brokovich are required to be replicated the world over for a safer and cleaner earth definitely our obligation to future generations. Management systems must be in place at all levels to prevent environmental pillage. Conservation, preservation and regeneration should be the slogans of the day. Serious transformations in fields of eating and living habits, social outlook, customs and traditions are necessary. This calls for cultural change the world over. Environment degradation by over consumption of resources has to cease forthwith. Some drastic measures are needed to bring down the number count of population, which is bursting at its seams. Lesser the mouths to feed better for mother earth. History has shown us that social transformation takes a long time to come through. Big Multi National Corporations who have been successfully reaching their wares to all sundry through high voltage marketing and advertisements can play a catalytic role in these human endeavours. "There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things." - Machiavelli Appendix 'A' LOCATION MAP THE TOWN OF HINKLEY LIST OF REFERENCES 1. ACTEW (Australian Capital Territory Electricity and Water Authority), May 2000 "EMS - Environmental Management Integrated into all Operational Areas" available at: website:http://www.environment.gov.au/settlements/industry/corporate/eecp/case-studies/actew-ems.html accessed on February 27, 2008. 2. AME Info, 2008 Web site "Green solutions for Qatar's Energy City Development" available at: http://www.ameinfo.com/115574.html accessed on February 27, 2008. 3. Australian Government, Dec 2007 The Department of the Environment, Water, Heritage and Arts. Official website available at: http://www.environment.gov.au/settlements/industry/corporate/ems.html Accessed on February 27, 2008. 4. Cal/EPA (Environmental Protection Agency, California), April 2005 "EMS Project Report to the Legislature: Quarterly Updates", October - December 2000, Chapter: "Gene's Plating Removed From Cal/EPA Pilot EMS Pilot Project". Available at: http://www.calepa.ca.gov/EMS/Archives/5thQrt.htm#top Accessed on February 27,2008. 5. Carole D. Bos, 1994 LAW BUZZ, Famous Trials, "Erin Brockovich" (ANDERSON v PACIFIC GAS & ELECTRIC) available at: http://www.lawbuzz.com/famous_trials/erin_brockovich/erin_brockovich_ch1.htm Accessed on February 27, 2008 6. Kemp, Harry S and Phil Wood, May 2001 CHMM "The Key to EMS Implementation: Management Support is Not Just Money", Pages 1 to 5 available at: http://www.achmmchicago.org/Conference/Protected/EHS%20Management%20Systems%20Track/Kemp_Harry.pdf last accessed on February 27, 2008. 7. Report, Konica Minolta CSR, 2005 "Fulfilling Our Social Responsibility" P.18 - 28 at company website http://www.konicaminolta.com/about/csr/download/2005/pdf/all.pdf Accessed on February 27, 2008. Read More