SPECIAL SECTION/BUSINESS GUIDE: Environmental Compliance in a Down Economy

December 1, 2009
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Even in a time of ever-tightening budgets and the need to do more with less money and fewer staff members, the necessity for compliance with environmental regulations never eases. In some instances, the requirements for compliance have even increased in the form of new regulations, despite the reduced resources to deal with environmental issues.

Environmental managers are faced with this stark reality every day. For many, this means putting non-compliance-related environmental initiatives on hold as resources are focused on maintaining compliance. Across the U.S. and the world, construction/expansion activities have all but halted, as have the related environmental permitting and compliance challenges.

While this results in a workload reduction, hiring freezes and restrictions on the use of outside resources-combined with the increasing regulations facilities must comply with-often result in an over-worked environmental staff. What can manufacturers and environmental managers do to bridge the gap between budget constraints and environmental stewardship?

Make Compliance a Part of the Business Model

Environmental regulations can make or break a project. If business planners don’t take into account the timing required for permitting and the cost of potential pollution control devices, the unanticipated costs associated with regulatory compliance could kill a project. It is imperative to involve the environmental staff in the planning phases of all projects.

Some environmental permits can take years to obtain and are often required before construction can commence on a project. In addition, regulations can drive a proposed project in a different direction once the costs of environmental regulatory compliance are taken into account.

For example, the use of a less-expensive fuel in a proposed boiler may look advantageous until it becomes evident that the pollution control equipment capital and operating costs required by environmental regulations would more than offset any cost savings. Making compliance analysis part of the up-front consideration in a business or project allows analysis of options to maximize operational flexibility and minimize environmental regulatory compliance costs.

Focus on Compliance

With all the “green” initiatives and buzzwords propagating through trade organizations, conferences, the media and society in general, it’s easy to get caught up in the green tidal wave. If environmental compliance slips, however, the cost savings and positive public relations associated with green initiatives will quickly disappear. In fact, the less-touted aspect of environmental compliance is included as a cornerstone to most green initiative programs such as sustainability and environmental management systems. Green initiatives cannot succeed where compliance is allowed to slip.

Stay Current with Environmental Regulations

Keeping up to date on regulations can be done in-house or with outside assistance. Trade organizations often include environmental outreach programs that help members stay current on existing environmental regulations, as well as proposed or upcoming regulations that may affect the industry. Larger companies may maintain a staff that follows environmental regulatory changes as they apply to the business.

However, in a down economy and at a time when regulations are changing with increasing frequency and scope, it can be difficult to adequately staff an environmental department. A relationship with a good environmental consultant can therefore often prove invaluable.

A good consultant provides expert advice on an as-needed basis without the expense of a larger full-time environmental staff. These consultants can be a source of information and advice that can save manufacturers and projects money in the long run. Not having the latest information or understanding regarding proposed or upcoming regulations can lead manufacturers down a costly path of misappropriated funds, poor business plans, and wasted staffing and economic resources.

Maintain a Good Relationship with the Environmental Agency

Agency personnel respect and trust in the relationships that they build with regulated entities, which can often result in counseling vs. penalties in a compliance situation. Manufacturers can arrange meetings with agency personnel prior to a permit application process to learn of the most up-to-date agency policies and procedures and the preferences of the key agency staff members.

In addition to building the relationship between the manufacturer and agency, these meetings can reduce the time and costs associated with the rigorous process of developing an application by specifically focusing on the items discussed during the session and ensuring that all of the necessary information that would be requested is included in the application. By maintaining a good working relationship with the environmental agency and viewing compliance as a shared goal, manufacturers can protect themselves from or minimize compliance enforcement actions.

Environmental Management Systems

Companies and organizations are being scrutinized for their environmental practices, and “going green” has become more than the politically correct thing to do-it’s good business. Not only do customers demand good environmental practices, but company directors want to avoid negative environmental publicity and employees prefer working for green companies. In addition, good environmental plans and practices reassure investors and insurers alike.

An environmental management system (EMS) program helps a manufacturer evaluate its specific requirements. Once the proper level is identified, a program can provide a plan for compliance success and reinforce commitment. Environmental assessments and audits are critical measurement tools of any EMS, but the development of an EMS program does not have to be a daunting task. The EMS program should be viewed as a series of levels or steps, ranging from the most basic to a full ISO 14001 program. In addition, many states sponsor environmental excellence programs that may offer greater flexibility in permitting, more leniency in compliance situations and a measure of goodwill in the community.

Auditing

Audits are the critical measurement tools of any environmental management program. Audits conducted by an outside entity are useful tools for gauging the effectiveness of the organizational structure and management’s involvement in facility environmental affairs. A thorough audit will assess compliance with specific permitting and regulatory requirements, as well as “best management practices” currently utilized or that could be used to improve the overall environmental program.

Audits allow a company to prioritize or triage its environmental efforts so that resources can be efficiently allocated. In addition, the U.S. Environmental Protection Agency (EPA) not only encourages audit programs, but provides enforcement discretion for self-reporting infractions that are noted during audits.

Training

One of the most important things manufacturers can do for their employees is to educate them. Proper training can mean the difference between low company insurance costs or high premiums, a competitive EMR rate or a loss of potential work, or-at worst- the life or death of an employee. It is important that manufacturers know which regulations require training (including frequency and trainer credential details) and which training records must be maintained.

A comprehensive training assessment allows a company to determine training needs. Manufacturers can save money and time while increasing employee morale by providing effective and function- and audience-specific regulatory training. Appropriate training, including environmental compliance training, can greatly improve employee efficiency and effectiveness, and reduce the costs of lost work time and compliance enforcement fees due to material mishandling or lack of proper documentation.

Sustainability

As with EMS, sustainability efforts should focus on identifying and implementing measures that provide the greatest benefit with the least cost, particularly in a tough economic climate. These efforts offer an opportunity for environmental personnel to identify projects that will save resources and operating expenses through the elimination of waste.

In some instances, sustainability programs using analysis tools like life cycle assessment (LCA) have even driven product development. For example, a laundry detergent manufacturer conducted an LCA that showed that the company’s largest environmental impact was in laundry detergent, due to the energy used for heating the water during the wash cycle. This analysis led the manufacturer to develop a cold-water detergent line, which is environmentally responsible and offers consumers cost-reduction opportunities from energy (an indirect cost savings that notably does not affect the company’s bottom line). Sustainability is increasingly important in balancing environmental budgets by allowing for cost savings in risk reduction, as well as lowered operating expenses associated with asset management.

Prioritize Efforts

Manufacturers and environmental managers faced with tight budget constraints, smaller staffs and an ever-growing and ever-changing list of environmental regulations are forced to prioritize environmental efforts. Following a few simple recommendations can provide enhanced environmental compliance, even in the toughest of economic times.

For additional information, contact Aegis Environmental, Inc. in Virginia at 211 Ruthers Rd., Suite 202, Richmond, VA 23235; or in Florida at 731 Duval Station Rd., Suite 107-315, Jacksonville, FL 32218; call (800) 675-1220; fax (804) 675-1240; e-mail kbonds@aegisenv.com; or visit www.aegisenv.com.

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