Going Green With Less Red Tape

Companies are volunteering for tougher standards

Quality Chemicals Inc. in Tyrone, Pa., a maker of herbicides and other specialty chemicals, used to spend half a million dollars a year trucking 3,000 gallons of hazardous waste a day to a disposal site hundreds of miles away. Now, the company spends 1% of that to dispose of the waste right at the plant. In a test project, it injects ozone gas that breaks down contaminants so the waste can be poured into the sewer--legally.

Treating waste on-site makes good business sense. But Quality Chemicals might never have had the idea to try ozonation without the prodding of new international standards for environmental bookkeeping. The standards, which are entirely voluntary, are paving the way to a new era of environmental cleanup. Rather than replacing state and national environmental laws, they aim to make environmental management a top priority throughout the ranks of participating companies. Certified companies might win a partial respite from intrusive governmental policing at the same time they clean the environment and maybe even save money.

The so-called ISO 14000 standards require participating companies to keep track of their raw material use and their generation, treatment, and disposal of hazardous wastes. The standards don't specify exactly how much they're allowed to emit. They were devised by the Geneva-based International Organization for Standardization (ISO), whose members include business and governmental standards groups. ISO is best known for a set of quality standards called ISO 9000 that are in place at 110,000 manufacturing sites worldwide. On Sept. 3, ISO published the portion of the environmental standards governing what's called the Environmental Management System (table).

FEWER INSPECTIONS. Today, environmental agencies around the world rely on "command and control," telling companies how to stay clean and punishing those that go astray. Such regulations often have the unintended effect of encouraging companies to walk a fine line, pursuing only the bare minimum cleanup required to comply. Adopting new technologies to get extraclean can simply tie companies up in red tape. The command and control approach also requires frequent, exhaustive inspections that are costly for both regulators and the companies they target.

ISO 14000, in contrast, requires companies to prepare a plan for ongoing improvement in their environmental performance. To stay certified, companies must be inspected regularly by private outside auditors. Any company caught cheating, of course, would be liable for severe punishment by regulators. Advocates envision a distant future when Environmental Protection Agency regulators could simply drop by a company site occasionally to check the ISO 14000 paperwork.

Partially freed from policing, the EPA would be able to devote more time to things that it now ignores, such as targeting the many small polluters that currently fall below its threshold of scrutiny. Mary McKiel, director of the agency's standards network, sees regulators being transformed from punishing bosses to umpires that intervene only when something goes wrong. "This isn't a move away from regulation but away from command and control," she says.

By outperforming current EPA pollution standards and by complying with ISO 14000, Lucent Technologies Inc. hopes to persuade the EPA to stretch out the time between inspections and give quicker modifications of permits for air and water discharges. The regulatory agency is allowed to make such exemptions under Project XL, part of the Clinton Administration's "reinventing government" initiative.

Such an exemption could be a big cost-saver. Lucent's semiconductor plant in Allentown, Pa., makes as many as 50 manufacturing-process changes per year, and almost every one requires a permit modification. "Negotiating a permit can take hundreds of thousands of dollars," says Ted D. Polakowski, environment and safety officer for Lucent's microelectronics group.

Detractors worry that a company in a country with weak environmental laws could use its ISO 14000 certification to gain an edge against companies from, say, the U.S., where environmental laws are tougher and compliance with ISO 14000 is thus more expensive. "The downside is that it could become contorted," says Daniel C. Esty, director of the Yale Center for Environmental Law & Policy.

Certification under ISO 14000 isn't cheap. A manufacturing plant with about 3,000 employees might pay $200,000 up front--mainly in employees' time. Most of the companies considering certification are big global manufacturers, such as Lucent, Hewlett-Packard, and IBM. Smaller companies are less enthusiastic. Still, the need for changes in how the environment is protected is obvious. Says the EPA's McKiel: "Laws aren't enough. Companies have to believe it is a business decision to be environmentally conscious." ISO 14000 may help them embrace that belief.

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