SPE 30436 A Smith, SPE, McDermott Marine Construction Ltd. 0??th 1995, Society of Petroleum Engineers, inc. paper was prepared for presentation at the Offshore Europe 1995 Conference held in Aberdeen. U.K., 543 September. 1995. m. p.pgr was selected for presentation by an SPE Program Committee following review automation contained In an abstract submitted by the author. Contents of the paper, as ?mind have not been reviewed by the Society of Petroleum Engineers and are sub- Abstract Environmental Management Systems are becoming increas- ingly important for continued exploration and ?eld devel? opment worldwide. The new ISO 14000 EMS series will have a major impact on the competitiveness of the interna~ oil and gas exploration and production industry, in? the whole associated service sector. In clarifying ?ts origins of the comparative strategies this paper will Wide an understanding of existing national EMS. This sill create an international perspective on the management Witch needed to ensure that partnership with ISO 14000 itill facilitate environmentally sustainable development. introduction environmental standards are currently being fim?k?l?cd that will direct companies how to manage, meas? . Eganpmve and communicate the environmental aspects "Wpcrations in a systematic way. The standards will my mat . .manufacture of products, selection jg ?nals, marketing, the type of envrronmental data . .3, 5? gathered and how those data are communicated in? and the public. Failure to conform 7 5 adopted in this area could severely restrict m?Dames who do business internationally will be a to manage their operations in an envrronmentally Wan able fashion. Era hed event was the United Nations Stockholm Upogtil?he HUman Environment in June 1972. This ?ing of aWELkened global conscience and marked a ham?? truly ecological era. The conference pro? 10? OfIWCth-four principles,1 and an ac? 639 {spa . international] . .. . Society of Petroleum Engineers Securing the Future - in Partnership with the Environment tion plan. The Declaration has had a' major in?uence, being the ?rst general text of international environmental law. Since that time, international organisations and the Euro? pean Community have developed environmental pro? . grammes and authoritative standard enactments based on the notably creative work at Stockholm. During the past decade, international legal involvement has intensi?ed with deepening awareness and knowledge of environmental problems. Some of the most signi?cant con- cems, such as climate change, depletion of the ozone layer, and diminishment of biological diversity, have been recog? nised as planetary issues. In 1983, the United Nations took the initiative with regard to global problems by establishing the Brundtland Commission and then publishing its report on critical environmental and development issues.2 Subsequently, for the twentieth anniversary of the Stockholm Conference, the United Nations convened a global Conference on Environment and Development, held in Rio de Janeiro, from 3 to 14 June 1992. The "Earth Summit" This Conference brought together representatives from 179 governments to focus on the issue of environmentally 'sus- tainable development'.2 At the completion of the Confer? ence, ?ve major texts were issued (1) Agenda 213, (2) Rio Declaration on Environment and Development?, (3) Framework Convention on Climate Changes, (4) Conven- tion on Biological Diversity?, and (5) Non?binding State? ment of Principles on Forests. The treaties and other documents of the Earth Summit primarily constituted an encouragement for further action, re?ecting a global solidarity in the face of planetary envi? ronmental problems. This meeting marked a de?nitive fu~ sion between environmental protection and the sustainable development of countries. The above texts emphasised the essential role and participation of non?governmental or? ganisations in environmental protection. Agenda 21 - a call for action. Two key messages from the Earth Summit were (1) the interdependence between devel? opment and the environment, and (2) the need for partner? ship between different nations and sectors of society to tackle these complex issues. Implicit in these activities, was that a fundamental shift will be required in the way we do business. New partnerships and new approaches to solving 2 SECURING THE FUTURE IN PARTNERSHIP WITH THE ENVIRONMENT SPE 30436 the integrated challenges of environment and development must be forgai if we are to encourage people and organisa- tions in the importance of working together. Agenda 21 has 40 chapters which are divided into four sections: (1) social and economic dimensions, (2) conser- vation and management of resources for development, (3) strengthening the role of major groups, and (4) means of implementation. Although Agenda 21 breaks most of them into speci?c programmes, outlining the basis for action, objectives, activities and means of implementation for each programme area, it is still not a legally binding document. Business and Industry, has a critical role to play in the process of partnership building for sustainable develop- ment. The combined social, economic and environmental impact of private enterprise - large and small, formal and informal, transnational and meal - is powerful and far reaching. The business sector creates wealth and employ? ment. It generates livelihood opportunities, new markets, products, services and technologies. It assumes risk, en- courages competition and initiates change and innovation. It is also a major user of natural resources and a heavy pro- ducer of waste. Private enterprise can forge partnerships in four main areas of activity: (1) in the workplace and mar- ketplace, (2) in the research and training ?eld, (3) in host communities, (4) in the public policy realm. The Value Of Partnership, between business and other sectors is especially important in the interdependent areas of: (1) promoting cleaner production, aimed at reducing environmental impacts along the entire life cycle of a prod- uct, from raw material extraction, through purchasing, manufacturing and marketing, to ultimate disposal, (2) im- proving natural resource management, in the local, national and international contexts. This includes reaching agree- ment on ef?cient and equitable resource allocation, coordi- nating resource management practices, educating for better resource usage, ?nding markets for sustainable managed resources etc., and (3) promoting broader socio?economic development and self-reliance, aimed at alleviating poverty in poorer communities and countries. Rio Declaration on Environment and Development. The preamble reaf?rmed the 1972 Stockholm Declaration and that the goal of the UNCED was to build upon it by estab? lishing a new and equitable global partnership through the creation of new levels of cooperation among States, key sectors of societies and people. This also meant the UNCED working towards international agreements which respected the interests of all and protected the integrity of the global environmental and developmental system, while recognis- ing the integral and interdependent nature of the Earth, our home. The Rio Declaration proclaimed twenty-seven princi- ples, combining new elements together with some from the 1972 Stockholm Declaration. 640 Framework Convention On Climate Change. The ulti- mate objective of this convention, contained in thirteen ar- ticles, is to stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthro- pogenic interference with the climate system. Such a level should be achieved within a timeframe suf?cient to allow ecosystems to adapt naturally to climate change, to ensure food production is not threatened, and to enable economic development to proceed in a sustainable manner. Convention on Biological Diversity. At the Earth Summit, 160 states signed 3 Convention on Biological Diversity, making for the ?rst time in history, the conservation of biological diversity, a political objective. The main points of the convention are (1) a clear preference for in situ conser- vation over ex situ conservation, (2) the sovereign right of states over their own biological resources, with the stipula- tion that they are responsible for its conservation and sus- tainable use, (3) the bene?ts of biotechnological use of spe? cies to be shared on a fair and equitable basis. The principle reasons for conserving biological diversity range from the utilitarian to the aesthetic t0 the ethical.7 In practice this requires consideration of (1) overall populations and natural ranges of native species, and the quality and range of wildlife habitats and ecosystems, (2) locally and internationally important species and habitats, including wild areas and 'semi~natural' or managed ecosys- tems, (3) the diversity of natural and semi-natural habitats in the relevant area. Forest Principles. Implementation of the statement of principles for the management, conservation and sustain- able development of all the world's forests, will be moni? tored by the new UN. Commission on Sustainable Devel? opment set up to monitor progress on Agenda 21. The For? est Stewardship Council (FSC) was founded in Canada, in October 1993 with representatives from 25 countries. The FSC seeks to promote good forest management throughout the world, based on a set of nine principles designed to en- sure that forests of all types are managed in ways that are environmentally appropriate, socially bene?cial and eco? nomically viable.3 Sustainable Development The Brundtland Commission2 in 1987 de?ned sustainable development as "meeting the needs of the present genera? tion without compromising the ability of future generations to meet their own needs". This concept was clearly highlighted during the closing keynote speech from the November 1991 SPE International Conference on held in The HagueB. The initial envi- ronmental recommendation was a requirement to de?ne sustainable development for operations and the im- plementation of necessary programmes, through seeking to understand the effect of operations on the ecosystem 2% SPE 30436 SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT 3 and to minimise impacts in a scienti?cally based, cost? effective manner. The concluding comments noted that the oil and gas industry must understand public expectations about issues. The industry must work effectively with governments, the public and engineering and scienti?c disciplines to be responsible world citizens. The subsequent developments and growth of environ? mental management systems which have occurred through- out the world as a result of the Earth Summit in Rio in June 1992, should not be any surprise to the worldwide industry, as they are the logical consequence of applying proactive management system principles to the issue of environmentally sustainable development.9 Economic growth provides the conditions 1n which pro- tection of the environment can best be achieved and envi? ronmental protection, in balance with other human goals, is icessary to achieve growth that is sustainable. In turn, 5satile, dynamic, responsive and pro?table businesses are refluired as the driving force for sustainable economic de- velopment and for providing managerial, technical and ?nancial resources to contribute to the resolution of envi? ronmental challenges. Market economics, characterised by entrepreneurial initiatives are essential to achieving this. The industry must acknowledge the view that there should be a common goal, not a con?ict, between economic development and environmental protection, both now and for future generations.10 One of the greatest challenges that the industry world?wide faces, as it heads towards the new millennium, is to make market forces work in such a way so as to protect and improve the quality of the environment. They are doing this with the help of performance based standards and the judicious use of economic instruments (GATTU) in a bar- monious regulatory framework. . The initial challenge of sustainable development is that we do not have time to wait until disaster overwhelms us fore we make the radical changes necessary to protect our --world for future generations. 2A sense of urgency as well as a realisation of the need for global involvement is essen? tial, otherwise all the oil and gas industries best efforts will be undermined by those who refuse to shoulder their proper burdens. Fifth Action Programme. Sustainable development is now a Speci?c European Community task within Article 2 of the EC Treaty.13 In 1993, the Council of the European Com? munities adopted a Resolution on a Fifth Action Pro- gramme on the Environment entitled "Towards Sustain? ability", covering the period 1993 to 2000. These Action Programmes are non?binding guidelines and de?ne the objectives and principles of the Communities environmental policy, providing a list of the measures that should be taken, together with a detailed description and a timetable for adoption. The Community has developed a distinct environmental policy, and has adopted in excess of 641 200 Directives, Regulations and Decisions in the environ? ment ?eld, under these programmes. Before the Single European Act 1987 and the 1992 Maastn'cht Treaty, the environmental legal basis relied upon Articles 100 and 235; either individually or together. The Fifth Action Pro? gramme was prepared in the run-up to the Earth Summit in June 1992 in Rio, at a time when environmental issues en? joyed considerable international attention. The major review of the Fifth Action Programme during 1995 is as a direct consequence of the need to take into ac? count the undertakings made in Rio and issued as Agenda 21. At the heart of the implementation of environmental policy will be a particular emphasis on the integration of environmental consideration into other policy areas, raising the awareness of environmental issues, sharing responsibil- ity and the development of cost internationalisation ap? proaches.14 At an international level the objective of the EC is to take a lead on global environmental and sustainable development issues in the follow-up to the Earth Summit in Rio, and to champion progress on global issues such as biodiversity and climate change. Environmental Ethics for Engineers. Originally drafted by the World Federation of Engineering Organisations (WFEO), this international code has been approved by the European Federation of National Engineering Associations (FEANI) and the United Nations Education, Scienti?c and Cultural Organisation (UNESCO). This code is a crucial step forward as it aims to establish the basic ethical rules which will enable engineers to discharge their special re- sponsibility to the future as they provide the technological growth essential to social, economic and cultural advance and, at the same time, ensure sustainability of development by conserving and enhancing the environment.7 Fundamental Environmental Concepts In attempting to ensure continuity of the biosphere and its components through sustainable development, the basic environmental principles for environmental protection are now common to national, regional and international law 7,13,15 Conservation Principle. One of the earliest terms used in environmental protection, conservation aims to maintain sustainable quantitative levels of environmental resources. It requires management of renewable resources and avoid- ance of waste in regard to non?renewable natural resources. Conservation does not fully address environmental quality, being based upon the status quo and demanding only maintenance of the conditions necessary for continued re? source existence. The World Conservation Strategy of the IUCN, an action plan recommended to governments, dem- onstrates the conservation principle in establishing as its objectives: (1) maintaining essential ecological processes and systems supporting life, (2) preserving genetic diversity 4 SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT SPE 30433 and, (3) achieving sustainable utilisation of species and ecosystems. Amelioration Principle. Improvement of environmental qualities is one of the European Communities principles, added by the Single European Act 1986, Article 130(r). Setting a more ambitious goal than conservation, ameliora- tion requires positive action to improve the environment. The ?rst EC Action Programme in 1973 devoted an entire chapter to improvement of the environment and quality pf life, cited,as a fundamental task of the community. Prevention Principle. According to the European Com? munity, the best environment policy consists of preventing the creation of pollution or nuisances at their source, rather than subsequently trying to counteract their effects. Preven? tion implies assessment of risks to avoid harm and action based upon existing knowledge. As the consequences of decisions and actions are not always fully known in ad? vance, there is a signi?cant problem of action in the face of uncertainty about economic and scienti?c conditions asso? ciated with environmental protection. Thus in the 1980's, a more stringent "precautionary" principle developed in envi- ronmental policy to suggest that certain measures should be taken in the face of scienti?c uncertainty about the likeli- hood of harm or before the threshold of environmental risk is reached. Precautionary Principle. In order to achieve sustainable development, policies must be based on the precautionary principle. Environmental measures must anticipate, pre- vent, and attack the causes of environmental degradation. Where there are threats of serious or irreversible damage, lack of full scienti?c certainty should not be used as a rea? son for postponing measures to prevent environmental deg? radation.16 I Uncertainty poses a problem because those drafting en- vironmental protection laws, standards etc. try to base their proposals on knowledge of the environment, its state, the causes and degree of its deterioration and the remedies likely to prove effective. However, knowledge in all these areas is incomplete and subject to frequent revision. Instead of decisions based upon an objective evaluation of scienti?c facts, it is sometimes necessary to address problems more subjectively or intuitively and assess solutions based on partial knowledge and uncertainty about certain aspects, including the extent to which there is uncertainty and who are the knowledgeable experts. Causality is an area of particular uncertainty, and to avoid harm, causality is assumed in some cases of scienti?c uncertainty. Thus a strong version of the precautionary principle reverses the normal burden of proof and requires advance proof that a proposed action will "not" cause harm to the environment. Some states declare that measures must be taken, 'even when there exists no scienti?c proof in evi? 642 dence of a causal link between the emissions and the effects. or 'if there is inadequate or inconclusive scienti?c evidence to prove the existence of a causal link between emissions and effects'. The precautionary principle thus signi?es that measures of environmental protection should be taken in advance of any known harm. The precautionary principle was ?rst enunciated inter- nationally by the OECD in a Ministerial Declaration of the 2nd International Conference on the Protection of the North Sea, held in London 1987. Since then it has been cited quently in the context of marine pollution, climate change, dangerous wastes and hazardous products, including Arti- cle 130(r) of the 1992 Maastricht Treaty on European Un- I ion and Principle 15 of the Rio Declaration. While not fully de?ned, scienti?c uncertainty provides the basis for determining policy in the face of uncertainty about whether preventative measures are necessary. Policy decisions will therefore partly depend on the potential gravity of harm and the degree of risk that the harm will actually occur. The precautionary principle assumes that prevention is required until activities or products are proven safe, based on the knowledge that many environmental processes and changes are inevitable. The problem in applying the pre- cautionary principle is to balance the risk or probability of harm against the economic costs of the measures proposed and the likelihood that the measures will be effective in avoiding harm. The greater the risk, particularly of irre- versible or serious harm to the environment, the more strict the precautionary measures that must be taken.7'l7'18 This concept should be very familiar to those skilled in the ap? plication of the ALARP principle, and the reshaping of corporate cultures from being reactive to being proac? tiv e.13'19 Protection Principle. Protection can be seen as a general principle which includes, but goes further than the concepts described earlier. Protection includes both abstaining from harmful activities and taking af?rmative measures to en- sure that environmental deterioration does not occur. Al- though protection has a wider scope than conservation, which is generally limited in application to the ?eld of natural resources, it does not necessarily encompass the concept of amelioration. The concept of protection results in comprehensive ecological planning and management, including de?nitive regulations, standards, procedures on a national scale. Con? servation of resources within industrial sectors, is giving way to integrated system - oriented ecological policies that take into account the interdependence of environmental elements within ecosystems. Polluter-Pays Principle. This is an economic principle developed into a means of allocating the costs of pollution control. At an international level, the OECD member 30436 SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT 5 countries agreed in 1972 that subsidies should not be pro? vided to cover pollution control costs in that they should be borne by the polluters. The objectives are (1) to require that the generators of ollution bear the costs of measures taken to ensure that the environment is in an acceptable state and (2) to avoid dis? tortion of international trade or unfair competitive advan- tag6 for the industry in one country over that of another. The tension between legal and economic perspectives to environmental continuing regulation has resulted in a gradual evolution of the interpretation of this principle, as well as initiating other principles to correct perceived in? adequacies. Subsidiary Principles. These are principles necessary to ?implement those discussed previously. In taking precau- ionary or preventative measures, reliance is often made on 7 best available technology (BAT), (2) best available technology not entailing excessive costs (BATNEEC), (3) best environmental practices (BEP), or (4) best practicable environmental option (BPEO). BAT is de?ned by the UNECE as the latest stage of de~ velopment of processes, facilities or methods of operation concerning the practical suitability of a particular measure for limiting discharges, emissions and waste. It therefore follows that what is BAT for a particular process will change with time in the light of technological advances, economic and social factors, as well as in the light of changes in scienti?c knowledge and understanding. BATNEEC adds an explicit cost/bene?t analysis to the notion of BAT. The 'Not entailing excessive cost' implies costs should not be excessive in relation to the environ? mental protection to be achieved. BEP and BPEO require integrated, multi-factor analysis. The UNECE requirements necessitate consideration of the L'gnvironmental hazard of the product throughout its life 3 7 tycle (production, use, disposal), substitution of less pollut? ing processes or substances, scale of use, potential envi- ronmental bene?t or penalty of substitute materials or ac? tivities; advances and changes in scienti?c knowledge and understanding, time limits for implementation, and social and economic implications. Since some environmental harm cannot be avoided, additional subsidiary principles seek to limit and reduce adverse consequences as fully as possible and to avoid side effects. These principles also require that those who cause damage to ecosystems and ecological processes, rehabilitate and restore them as fully as practicable. State Responsibility.1 As a result of the evolution of inter? national law a new basic legal principle can be identi?ed: the acceptance in state practice of responsibility for envi? ronmental damage. This means that there is now a legal obligation not to degrade the environment. 16 643 A number of new conciliatory obligations have been attached to this principle (1) the duty to notify and consult, (2) the need to obtain prior consent of other states for given activities, (3) state responsibility for given activities of pri? vate operators and (4) development of earlywarning mechanisms and environmental impact assessments. New conceptual approaches which attend speci?cally to the needs of environmental protection have been developed from the above (1) due diligence is no longer equated with fault, (2) strict liability may encompass responsibility in spite of due diligence having been observed, (3) responsi? bility is delinked from the traditional requirement that the ,act be unlawful in nature and (4) the environment is a pro? tected value on its own merits and eventual damage will not need to be proved. The net result is that the operation of responsibility or liability becomes very ef?cient. International Standards Organisation (ISO). Historically, ISO addressed itself primarily to technical product or manufacturing standards.11 Recently 180 has ventured into the arena of setting standards in more policy? driven areas. This trend began with the establishment of ISO quality control system standards which resulted from the inauguration of Technical Committee 176 (TC176) in 1979 on Quality Management and Quality Assurance. The work of TC176 resulted in the 1809000 Standard Series on Quality Management and Assurance. TC176 also released 18010011, which established basic auditing principles as well as general guidelines for establishing, planning, im- plementing and documenting audits of quality systems. Conformity to ISO 9000/ 10011 standards has quickly be? come a condition of doing business in many parts of the world. During the development of the 1809000 series, TC176 began to consider the appropriateness and feasibility of in- corporating environmental management systems into the. overall quality management criteria. Many interested par? ties or stakeholders began to recognise that, given the in? creasing complexity of environmental factors acting on companies, management systems focused on "end of pipe" processes were not adequate to protect the environment or to comply effectively and ef?ciently with applicable legal requirements. As modern managers have come to under? stand that product quality can be achieved only if quality objectives and systems are fully integrated into all aspects of a company's operations, there is a growing consensus that environmental protection and compliance can best be achieved if environmental factors are integrated into indus? trial operations in a systematic way: from design, to raw materials selection, to manufacture, to the ultimate disposi- tion of the product. Strategic Advisory Group on the Environment (SAGE). 180 formed SAGE in 1991 to examine the need for stan- dardisation of environmental management practices. SAGE 6 SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT SPE 30436 consisted of interested representatives from business, Euro? pean governments, various national standards?setting or? ganisations and other environmental professionals. After generating a considerable record and developing draft documents outlining the potential substantive content of environmental standards, SAGE ultimately recommended that an ISO technical committee formally consider and pro- duce ?nal "consensus" standards on the subject. The Earth Summit occurred in June 1992, and subsequently ISO formed TC207 in 1993, directing it to establish environ- mental standards in ?ve areas: (1) environmental manage- ment systems (EMS), (2) audits, (3) labelling assessment, (4) environmental performance evaluation, (5) life cycle. British Standards Institution were one of the original constituent members of SAGE, and headed the environmental management group. Due to the strength and breadth of demand from members and others for a systematic approach to the improvement of en- vironmental performance, established a cross? functional task force which generated three draft standards for consultation in May, June and October 1991. Subse- quently the ?rst environmental management system in the world BS7750 came into effect on 16 March 1992.20 Fol? lowing a pilot scheme BS7750 was reviewed and the cur- rent revised edition publishedin February 1994.21 The review brought the standard in line with EC Regu? lation 1836/93 which sets up a voluntary scheme for eco? management and audit The new standard is designed to enable any organisation to establish an effective management system, as a foundation for both sound envi? ronmental performance and participation in "environmental auditing? schemes. Changes to BS7750 include the design of systems to enable an organisation to maximise its bene- ?cial effects and minimise its adverse effects. An environ? mental policy should now show commitment to working towards achieving ?sustainable development". Improve? ments in performance mustnow be "year?on?year" in line with the company's environmental policy. This standard shares common management system principles with B85750 (EN29000, 1809000), the Euro? pean and internationally recognised quality systems stan- dard. It has been produced with the express intention that its requirements should be compatible with those of the environmental management system speci?ed in the Euro? pean Community's Eco?Management and Audit (EMA) Regulation,23 and if BS7750 1994 is recognised as such by the Commission of the European Communities, any in- dustrial site certi?ed as complying with the standard by a certi?cation body whose accreditation is recognised in the Member State where the site is located will be considered to have met the corresponding requirements of the EC Scheme. In order to be eligible for registration to the scheme, such sites would then have only to ful?l any addi? tional requirements which that scheme imposes, principally the publication of an independently veri?ed environmental statement. This new standard does not establish absolute require- ments for environmental performance, beyond compliance with applicable legislation and regulations, and a commit- ment to continual improvement. However, the standard does require that an organisation's environmental policy and objectives be made publicly available. Guidance on environmental effects and/or performance of particular industrial sectors may be provided in comple- mentary sector application guidance documents. These - would be produced to explain the requirements in certain situ'ationswhere industrial sectors for example, the oil and gas exploration and production sector and its associated service sectors have: (1) complex environmental effects, (2) large number of constituent companies, (3) widely differ- ing, loosely related, operations and diSCiplines, (4) tempo- - rary and/or off-site activities, (5) substantial use of subcon? tracting. International Chamber of Commerce (ICC). When the Brundtland Commission in 19872 emphasised the importance of environmental protection in the pursuit of ,9 sustainable development, the ICC established a task force of business representatives to create a Business Charter for Sustainable Development. The Charter's sixteen principles: for environmental management will enable business around- the world to improve its environmental performance, which is an initially important aspect of sustainable development. The ICC Business Charter for Sustainable Development: was launched at the 2nd World Industry Conference on Environmental Management in April 1991, and to date} over 1000 companies worldwide have signed the Charter.24 Global Initiative. (GEMI). GEMI is a group of leading US companies dedicated to; fostering environmental excellence by business worldwide; that was founded in 1992 after Rio. Through the COllabOI'a'f? tive efforts of its members, GEMI, (an early supporter 0? the ICC principles), promotes a worldwide business ethid for environmental management and sustainable develop-3 ment and aimed to improve the environmental performanch of business through example and leadership, and to em hance the dialogue between business and its interested pub-g lic. As of December 1994 only one of the twenty?eight Environmental Management members was an oil major.25 World Industry Council for the Environmenl (WICE). WICE is a global coalition of enterprises initiated in 199?: by the ICC. In 1994 its membership included over 90 er; terprises representing a wide diversity of sectors from 2- countries inside and outside the OECD, including eight 0; majors.10 The work programme of WICE includes 644 - Coalition For 2: Economies (CERES). Founded in 1989, CERES is a non?pro?t partnership be? SPE 30436 and policy recommendations re?ecting concern for high standards of environmental management and commitment to the principles of sustainable development. Public Environmental Reporting Initiative (PERI). In recognition of the growing demand for comprehensive and credible information, coupled with a lack of cross? industry reporting guidelines, a number of companies in 19.92 convened to develop a more speci?c framework for environmental reporting. The objectives were to create a balanced and credible framework for environmental report- ing and to encourage environmental reporting itself.24?26 The PERI Guidelines were initially developed in North America during 1992 and 1993 by companies from differ- ent industry sectors, that has now expanded internationally to include two oil majors. The fundamental objective in issuing these voluntary Guidelines is to provide a tool for ?organisations to produce a balanced perspective of their environmental policies, practices and performance. The intent is to help organisations better meet their stakeholders evolving expectations, while recognising the unique charac- teristics of an organisation's culture, management system, industry and scope of business activities. The PERI Guidelines identify ten components for com- prehensive reporting on environmental performance. The PERI Guidelines acknowledge two underlying realitiesz? (1) the merits of continuous improvement, and (2) the principle of what gets measured gets managed. The PERI Guidelines have also been written to accommodate the reporting re? quirements of industry associations and government regu- lations for example:? (1) Responsible Care (US), (2) API's STEP (US), (3) TRI (US), (4) EMAS (Europe), (5) BS7750 (U.K.), (6) ARET, NPRI (Canada), (7) MITI (Japan), (8) SEDESOL (Mexico). Environmentally Responsible tween environmental groups and investor organisations. CERES focuses its efforts on the various ways investors can help implement environmentally and ?nancially sound in- vestment policies, and assist the transition in corporate America to environmentally safe and sustainable practices. In 1994, the 70 signatory member organisations including at least one oil major, together represented over 10 million people and over $150billion in invested assets.3 CERES promotes responsible economic activity for a safe, just and sustainable future throughout the world. By bringing together the corporate, environmental and invest? ment communities, CERES is working to create mecha- nisms for corporate self-governance that will maintain business practices consistent with the idea that economic vitality and environmental responsibility go hand in hand. Critical to the success of this effort is a well informed pub- SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT lie that chooses where to invest its capital based on envi? ronmental, as well as ?nancial performance. First released in 1989 as the Valdez Principles, the CERES Principles represent a comprehensive, ten-point environmental ethic devised to encourage the development of positive programmes to prevent environmental degrada? tion, assist corporations in setting policy, and enable inves? tors to make informed decisions regarding environmental issues. Companies that endorse these Principles pledge to go voluntarily beyond the requirements of the Law. These Principles are not intended to create new legal liabilities, expand existing rights or obligations, waive legal defences or otherwise affect the legal position. of any endorsing com- pany. By adopting these ten CERES Principles, business pub- licly affirms its belief that companies have a responsibility for the environment, and must conduct all aspects of their business as responsible stewards of the environment by op- erating in a manner that protects the Earth. Companies must not compromise the ability of future generations to sustain themselves. Companies will update their practices constantly in light of advances in technology and new un? derstandings in health and environmental science. In col- laboration with CERES, businesses will promote a dynamic process to ensure that these Principles are interpreted in a way that accommodates changing technologies and envi? ronmental realities. Companies should intend to make con? sistent, measurable progress in implementing these Princi- ples and to apply them to all aspects of their operations throughout the world.27 Due to the innovative and interactive nature of this en- deavour, CERES is continuously looking to its endorsing companies for feedback through their completion of the annual CERES Report. Consequently these reports aid companies in their evaluation of environmental perform- ance, by strengthening the importance of environmental impact as an internal and external measure of corporate performance. Confederation Of British Industry (CBI). The CBI Environment Business Forum, was formed in 1992,28 in response to a call from the Secretary of State for the Environment, for industry to create some form of "green club" which would create a proactive front on environ- mental issues. The Forum is the U.K.'s major cross-sectoral voluntary business initiative on the environment. The Fo? rum demonstrates a commitment by organisations to envi? ronmental best practice. It reinforces the importance that government and the European Community are giving to such voluntary action. Currently 230 organisations includ? ing three oil majors are signatories to the Forum and are working towards a programme of environmental excel? lence. The CBI Forum is a ?rst step for organisations which 545 have decided that they wish to set up a programme of envi- 8 SECURING THE FUTURE - lN PARTNERSHIP WITH THE ENVIRONMENT SPE 30436 ronmental best practice and an environmental management system. This is a two-way commitment (1) by the CBI to help businesses improve their environmental performance, (2) by business, to demonstrate the action which they are taking. At the heart of the Forum is an eight step Agenda for Voluntary Action, which is backed up by guidelines on each of the steps with regular updates and events.29 Chemical Industry Association (CIA) The CIA Responsible Care Programme is unique to the Chemical Industry, originated in Canada in 1984 and was launched in the UK in March 1989.30 It?s adoption hasbeen spreading worldwide, and although detailed implementa? tion of ResPonsible Care varies according to national cul- tures and circumstances, its objectives are universal. The CIA represents the interests of over 200 chemical compa- nies in the UK and adherence to the principles and objec? tives of Responsible Care has been a condition of member? ship of the Association since July 1992. Responsible Care deals with performance, which is shown by the chemical industry?s commitment to continu9 ous improvement in all aspects of health, safety and envi- ronmental protection. Responsible Care is a voluntary pro? gramme of action, fundamental to the industry?s present and future performance and the key to regaining public con?dence and maintaining acceptability. The cornerstone of commitment to Responsible Care is an undertaking signed by company chief executives, to a set of six Guiding Principles. Guidance developed by the CIA is designed to enable companies to have their management systems certi?ed to the 1809000 series of Quality Stan- dards. Companies which follow the guidance will ful?l requirements equivalent to those of BS7750, and be well placed to comply with the European Commission re- quirements on environmental auditing. This approach has been designed as a major step towards the integration of Responsible Care into Total Quality Management.31 The CIA's ultimate goal is a set of harmonised man? agement system standards, internationally recognised, which are applicable to all aspects of business and deliver? ing accredited certi?cation in a single assessment visit.32 As a means of achieving this approach the CIA are applying and building upon the Forum Guidelines.33 However, the health and safety standard (BS8750) currently in draft for public comment,34 will not be a speci?cation, so certi?cation to it will not be possible.35 A similar Respon- sible Care initiative is also being promoted by the European Chemical Industries Association Chemical Manufacturers Association (CMA) The US CMA have also created a Responsible Care Pro? gramme comprising a set of principles and Codes of Man- agement Practice. These principles and practices cover (1) community awareness and emergency response (CAER), (2) waste and release reduction and management (WARRM), (3) process safety, (4) distribution, (5) health and safety. The CMA Responsible Care Programme goes beyond the ICC Charterg?10 in requiring (1) a quantitative inventory for releases to air, water and land, (2) formal in- vestigation and corrective action for 'near miss? emergen- cies such as chemical spills or explosions. 'Keidanren' Global Environment Charter This is a charter providing guidelines on Japanese corpo? rate activity and organisations which goes beyond the ICC Charter in outlining requirements speci?cally for Japanese companies operating overseas. 1 Dutch 'Care Systems' This is an approach to internal company environmental management being developed in the Netherlands by the - Ministry of Environment9 to enable implementation of the sustainability principles and policies laid down in the Na? tional Environmental Policy Plan (NEPP). The objective is 1 for up to 12,000 companies with an 'average to serious? im? pact on the environment to have a fully integrated envi? ronmental management system in place by 1995 provided the pilot programmes are successfully evaluated. U.K. Environmental Protection Act 1990 (EPA-90) Part II, Section 34 of EPA-9O36 enforces a 'Duty of Care' on. all those involved in the waste management chain. Those who produce, carry, import, keep, treat or dispose of waste have a shared duty to ensure that controlled waste is not managed illegally, does not escape from control, is trans? ferred only to an authorised person, and is adequately de-_ scribed to enable proper handling and treatment. De?nitive: Regulations have since been issued in December 1991 that came into force in April 1992.37 Breach of the 'duty of care' i or of these Regulations is now a criminal offence. In order to bring into force the waste management li-j censing system under Part II of and for the purpose of implementing the 1975 European Council rWaste: Framework Directive', the Waste Management Licensing? Regulations 1994 were issued in April 1994.38 In order t0? implement the Framework Directive, amended in 1991 and, 1992, Schedule 438 requires the preparation of an offshore- Waste management plan. This has necessitated an appIOj priate mandatory control mechanism for the disposal 01? waste without causing harm to the environment to be ini'_ tially developed by the relevant authorities. Oslo and Paris Convention for the Prevention O'i Marine Pollution (OSPAR), Working Group Sea-Based Activities (SEBA) At the Third International Conference on the Protection 0: the North Sea (March 1990) Ministers agreed ?to devcloli and adopt a harmonised mandatory control system for th?? use and discharge of offshore chemicals". The Pan}: 646 Commission was requested to develop such a system. SPE 30436 SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT 9 In 1993 the Dutch and Norwegian authorities, together with the offshore industry, initiated the development of a decision supporting the Chemical Hazard Assessment and Risk Management (CHARM) model.39 The objective was to provide a transparent and simple calculation of hazard and risk levels for the marine environment on the basis of all relevant hazardous properties of chemicals. OSPAR 1994 concluded that a combination of the CHARM model and the updated PARCOM Harmonised Offshore Chemical Noti?cation format was a good basis for establishing the harmonised mandatory control system as "requested by North Sea Ministers. In January 1994, the authorities from the UK, Denmark and Germany joined the second phase of' the CHARM project, whilst France became an observer. The present model is suitable for ranking chemicals, there- fore the implementation of it in national regulations be- comes feasible, especially in relation to enabling compli- ance with the EC Waste Framework Directive promulgated 4 within EPA-90. CHARM is based on the application of the so called approach which results in a comparison of the intensity of environmental exposure of released chemicals (PEC) and the concurrent sensitivity of the marine biota Eco-Management and Audit Scheme European Communities. The overall objective of the European Community, as de?ned by the Maastricht Treaty, is to promote a harmonious and balanced development of economic activities, "sustainable" and non?in?ationary growth respecting the environment - the raising of stan- dards of living and "quality" of life. In spite of all the Directives and Regulations adopted by the EC, and the international and national action in this ?eld, environmental quality is still deteriorating in the 3; Community and world wide. The 5th Community Envi- ronmental Action Plan recognised this and clearly indicated that to be effective, environmental concerns must be inte- grated into all policies. Companies need to integrate the environment into their own policy, strategy and systems over and above the minimum regulatory requirements. On 29th of June 1993 the European council adopted a proposal from the European Commission allowing volun? tary participation, by companies in the industrial sector, in a community Eco-management and audit scheme. This RBgulation23 established a voluntary environmental man? agement scheme, based on harmonised lines and principles IIlrough the European Union, open to companies in the in? sector operating in the European Union. The RCgulation is now in force and consists of 21 Articles and 5 Annexes. However, the scheme has only been open for par- thipation by companies since 10th April 1995 when the Environment Secretary, John Gummer of?cially launched EMAS in Middlesborough. Speaking at the UK launch of the Scheme in Middles- borough, Mr Gummer stressed that EMAS, through the development of "green" management systems, will enable ?rms to cut costs and improve environmental performance. The Secretary of State said: "The introduction of EMAS will allow UK businesses to reduce costs and gain competi- tive advantage over their international competitors. Imple? mentation of the Scheme will lead to. improved manage- ment of resources and help companies save money by re- ducing raw material requirements and energy inputs. The UK is in the forefront within Europe in establishing arrangements to allow companies to seize a business lead and register for EMAS. Registration under EMAS will promote corporate reputation, enhance customer relations and improve pro?tability. Businesses cannot afford to ig? nore this opportunity. EMAS allows companies to demonstrate their proactive approach to the environment and respond to environmental pressures in a positive and pro?table way. By establishing environmental management systems, environmental im? pacts can be minimised leading to more sustainable devel? opment." Mr Gummer continued that there was no room for complacency on environmental issues and urged British business to steal a march in Europe and respond to the Eco? Management and Audit Scheme. He welcomed the support of the CBI and other industrial organisations. "Environmental management is a powerful force in the drive to improve products and processes and to expand in the market. EMAS is an important catalyst." Objectives. The overall objective of the scheme is to prcy mote continuous environmental performance improvements of industrial activities by committing sites to evaluate and improve their environmental performance and provide rele? vant information to the public. The scheme does not replace existing Community or national environmental legislation or technical standards nor does it, in any way, remove a company's responsibility to ful?l all its legal obligations under such legislation or standards. Participation. Participation in the scheme is site based and open to companies operating industrial activities, including in Division 11: the extraction of crude petroleum and natu? ral gas, and service activities incidental to oil and gas ex- traction excluding surveying.?2 Registration requires a company to adopt a company environmental policy contain? ing commitments both to comply with all relevant envi- ronmental legislation and also to achieving continuous im- provements in environmental performance. At the site, an initial environmental review is under? taken. In the light of this review an environmental pro- gramme and environmental management system is estab- lished for the site. Site environmental audits in which all 647 activities are audited must be conducted within an audit 10 SECURING THE FUTURE lN PA RTNERSHIP WITH THE ENVIRONMENT SPE 30436 cycle of no longer than 3 years and, based on the audit ?ndings, environmental objectives set and the environ? mental programme revised to achieve the set objectives. On completion of the initial environmental review and subse- quent audits or audit cycles a public environmental state- ment is produced. Environmental Statement. Fundamental to the Eco? management and audit scheme is the public environmental statement and its validation by accredited environmental veri?ers. A site's environmental statement will include a description of the site's activities: an assessment of_ all the signi?cant environmental issues; a summary of ?gures on pollution emissions, waste production, consumption of raw material, energy and water, and noise; a presentation of the company's environmental policy and site's programme and management system; the deadline for the next statement; and, the name of the accredited environmental veri?er. Participating sites will have to produce simpli?ed an- nual statements in intervening years; except where there have been few signi?cant changes since the last statement or where the veri?er considers the nature and scale of the activities at the site are such that no statement is necessary until the next audit. There is no requirement for the simpli- ?ed statements to be validated annually but they will be validated when the full environmental statement is vali- dated by the accredited environmental veri?er. If, in prac? tice, this retrospective validation of simpli?ed statements proves dif?cult to implement this provision will be re- viewed by the Council and the Commission. Registration. Site registration occurs once the competent body, designated by the Member State, (which in the UK is the Department of the Environment) ,43 receives a validated environmental statement, any applicable registration fee levied, and is satis?ed the site meets the Regulation's re- quirements, including complying with all relevant envi- ronmental legalisation. De?registration can occur in three ways: (1) if a com- pany fails to submit a validated environmental statement and registration fee within 3 months of the deadline speci- ?ed in its previous statement, (2) if a competent body be- comes aware that the site is no longer in compliance with the requirements of the Regulations, (3) if an enforcement authority informs a competent body that the site is no longer in compliance with relevant environmental legisla? tion. Suspension or refusal of registration will only be re- versed once the competent body has been assured by the enforcement authority that the site has recti?ed the breach and has procedures in place to ensure it does not re?occur. Each year the lists of registered sites from the 15 Mem- ber States will be communicated to the Commission and a complete list published in the Of?cial Journal of the Euro- pean Union. 648 ognise the developments at ISO leve Statement Of Participation. A graphic symbol linked to statements of participation listing which sites, within a company, are registered to the scheme; can be used by companies to publicise and promote their involvement in the scheme. Accreditation And Competent Bodies. Currently sixteen countries are in the process of designating an independent and neutral competent bOdy~ within 12 months of the Regu- lation entering into force and also for informing companies of the contents of the Regulation and the public of the ob? jectives and principles of the scheme. By March 1995 nine states had already identi?ed that additional national regu~ lations would be required. Standardisation. Companies implementing and being certi?ed to national, European or international standards to meet certain aspects of the scheme, such as its requirement for an environmental management system, will be deemed to have met those parts of the Regulation as long as the standards used ful?l two conditions. the standards must be recognised by the Commission, and secondly, the standards must be certi?ed by a body whose accreditation is recognised by the Member State where the site is located. The current position is that, in this ?eld, there are in place four national standards within the European Union as fol- lows: (1) UK BS7750, (2) Netherlands BS7750, (3) Denmark - BS7750, (4) France X30-200 1,2,3, (5) Spain - and (6) Ireland 13310.44 The Commission has requested European standardisa? tion bodies to develop and adopt a standard for environ- mental management system for the scheme and the Euro? pean certi?cation bodies to develop and adopt a standard for certi?cation. Now that the mandate of the Commission 1 has been accepted it is expected that CEN will produce draft standards within 18 months45?46 we can realistically expect therefore that we will have a single European stan- dard by the summer of 1997. There is also the work of ISO to In Sep- tember 1994 ISO produced a draft environmental manage- ment systems standard which is being considered within ISO now.47 Whether or not the ISO standard meets the re? quirements of the Regulation is still to be determined. 8 CEN, as part of their activities under the mandate men- tioned above are carefully considering the ISO standard and will, wherever possible use the work of ISO as a basis for the European standard. Regardless of any CEN assessment of the ISO document it remains a duty of the Commission, assisted by the article 19 Committee, to establish the degree to which the ISO or indeed the CEN standard satisfy the requirements of the mandate or correspond to the require? ments of the Regulation.49 The European industry body UNICE is seriously concerned by the current lack Of a unique international standard and is urging the EC to ICC- 1.50 SPE 30436 The EMAS Veri?er. Within the Regulation it is foreseen that the veri?er can either be an organisation or, with lim? ited accreditation scope, an individual. The veri?er does not in any way replace the Member States? environmental regulatory authorities. Veri?ers can operate in any Member State but they must notify, and are supervised by, the Mem- ber State system in which they perform their validation activities. Details on the accreditation of environmental veri?ers and their function are outlined in Annex 111.23 Member States are required to establish a system, ensuring appropriate consultation with interested. parties, for the ac? creditation and supervision of veri?ers within 21 months of the Regulation entering into force.51?52 ISO 14000 Series The new international environmental standards can be separated into two categories. One of the categories con? cems systems and will result in three standards covering environmental management systems, environmental audit- ing and environmental performance evaluation. These standards will address a wide range of issues, including top management commitment to continual improvement, creat- ing and implementing environmental policies, setting tar- gets, measuring environmental performance and conduct? ing audits. The second category is more operational and will result in standards of life cycle assessment (LCA) and environ? mental labels and claims. These two standards arguably will have more direct and signi?cant impact on how com- panies operate because they address core business issues such as how companies should take into account the envi? ronmental attributes of their products from "cradle to . grave" including raw materials acquisition and ultimate disposal, as well as the constraints that should be placed on ?9 a company's ability to market or provide information about its products or services by making environmental claims. These standards go to the heart of companies productive activity. The scope of C207 speci?cally excludes (1) test methods for pollutants, (2) setting limit values for pollut? ants, (3) setting environmental performance levels and (4) product standardisation. The work of negotiating and drafting the speci?c standards for each subject area is car? ried out by a formally designated subcommittee. ISO The United Kingdom heads SCI on En? vironmental Management Systems. The British Standards Institute (BSI), has already published an EMS standard, BS7750. Approximately 15 countries have produced draft EMS standards and many are modelled after BS7750. Rather than lay down speci?c environmental performance Criteria, the standard provides a management system framework and guidelines for implementing and addressing Criteria set by law or as a matter of corporate policy. SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT 11 While much of BS7750 and EMAS are not controver? sial, some stakeholders are concerned that the rather de? tailed programmes set out in these documents are not ?exible enough for global application to different types of business of varying sizes. Participants also have voiced ap- prehension concerning the prospect of mandatory public disclosure of detailed corporate plans and objectives. Such disclosure might create a disincentive to setting ambitious, more meaningful environmental objectives that may be dif- ?cult to meet and, instead, encourage companies to estab? lish objectives that are relatively easy to meet. ISO's adoption of a detailed man? agement standard could have far-reaching consequences should it become an "industry standard" that could be used by governmental authorities in determining legal require? ments. The debate over the content of the EMS standard, its level of prescriptiveness, and issues of disclosure stems in part from the fact that countries currently have different approaches to implementing environmental policy. The international negotiations appear to be headed in the direc? tion of greater ?exibility that generally would encompass, but not mimic, the BS7750?type model. is developing two primary documents: (1) a "speci?cations" document and (2) a "guidance" document. A third document intended to address the issues unique to small and medium-size enterprises is being drafted by Ire- land and Denmark. The speci?cations document, 14001, is perhaps the core document of the work of TC207, as it will be the standard against which companies will be certi?ed by third parties. To obtain ISO approved status, a company will have to design and implement the core ele? ments that the standard will set for environmental man- agement systems. The guidance document is also very signi?cant as it will provide practical, detailed guidance on designing and implementing a satisfactory EMS. Consensus has been reached that the speci?cations document should not be overly prescriptive or detailed, should contain only the core elements of an EMS, and should re?ect common international concerns rather than any particular regional needs, such as those re?ected in BS7750 or EMAS. However, there is some concern that if the ISO EMS document does not correspond suf?ciently with EMAS, the EU will feel compelled to develop its own standard, which might have non?tariff trade barrier conse- quences. The delegations from the EU have expressed their commitment to avoid this outcome. The issue has been worked out in an "informative annex" that will accompany the EMS speci?- cations standard. Although this annex is not part of the auditable speci?cation, as a practical matter it will be used by third parties or individual companies primarily as a guide for certifying conformance with the EMS speci?ca- tions document. The annex will address collateral matters such as relationships with sub-contractors, the level of de- 649 tail require in determining the environmental impacts of 12 SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT operations, products and services, and the role of best avail- able technology. The guidance document 14000 is virtually complete. This document is intended as a practical guide for the design and implementation of environmental man- agement systems. It is much more detailed and has a broader scope than either the speci?cations document or the annex. Perhaps the most delicate issue is the relationship between the guidance and speci?cations document. The current weight of opinion appearsto be to keep the two documents clearly separated so that the guidance document does not become the de facto EMS standard and recreate the concerns that the parties have sought to avoid on the EMS speci?cations document. The anticipated schedule projects a ?nal ISO EMS standard in mid or late 1996. ISO The Netherlands leads SC2 on Environ- mental Auditing. Three documents are in advanced stages of development: (1) general principles of auditing, 14010, (2) procedures for auditing environmental manage? ment systems, l4011/1.2 and (3) a document es? tablishing minimum auditor quali?cations, 1401212. These documents are on a similar schedule as the EMS documents, and may become formal standards in 1996. Additional work items that will be addressed are due diligence audits, audits of environmental statements and environmental site assessment. The documents re?ect the commonly accepted elements of audits; they should be independent, objective and accu- rate, and the results should be communicated to the party that commissioned the audit. Signi?cantly, there is no re- uirement that audit results be communicated to third par? ties.53?5" Third party audits are not explicitly favoured over internally conducted audits: both are considered equally legitimate. The draft auditing documents are primarily ori- ented towards addressing the concerns of auditors rather than "clients". Another important issue in the EMS audit- ing document is whether auditors should determine the "effectiveness" of the EMS system. ISO Australia cha'rs SC3 on Labelling. This sub-committee had a daunting task, the results of which could signi?cantly affect how companies design and market their products. It is very important at the outset to under- stand the breadth of the scope of SC3's work. SC3 is work- ing on environmental claims of any sort, not just labelling. For example, a company's print or television advertise? ments, or other forms of media communication, would fall within the scope of SC3. Therefore, this sub?committee is working on standards that could signi?cantly influence how companies market and sell their products. Though these standards are formally voluntary, they could become stan? dard industry practice or be adopted by government regula? tors such as the US Federal Trade Commission (FTC), which already has "green marketing" guidelines. SPE 30436 8C3 is addressing three types of environmental label- ling. The ?rst, known as ?Type labelling, attempts to analyse all or some of a product's environmental attributes and communicate a judgement through the use of a single label that a product is "environmentally preferable" within a given product sector (like Germany?s "Blue Angel" pro? gramme). "Type labelling involves self-assertions by manufacturers, using labels to address speci?c aspects of a product, such as whether it is recyclable, its energy use or fuel ef?ciency, and also covers any self-declared environ- mental claims, not just labels. "Type labelling is an environmental version of nutritional labelling, whereby products would carry labels that list the environmental ef? fects associated with the product. Both the Type I and Type approaches involve some form of a life cycle assessment of the environmental attrib? utes of a product, from design, raw materials and produc- tion to use and ultimate disposition. These programmes raise serious questions about the feasibility of making a scienti?c assessment and then accurately communicating a complicated judgement to the public on product labels that do not include any speci?c data, without generating misun- derstanding or misinterpretation. The most dif?cult initial debate in this sub-committee has been over what the objective of environmental labelling should be. A possible outcome of a labelling standard, al- though not an objective, may be the improvement of envi? ronmental performance. The objective of all environmental labelling is the accurate and effective communication of the environmental aspects or implications of products, (ISO 14025). Type I labels, which communicate a judgement about a product's environmental attributes rather than speci?c envi? ronmental information, are intended to directly improve environmental performance, 14024. Type II labels, which address speci?c environmental attributes, such as recyclability, simply communicate information. SC3 is also compiling the practices used in Type I labelling pro- grammes, drafting terms, de?nitions and guidelines appli- cable to self-declared environmental claims 180/ CD 14021. ISO The United States leads SC4 on Envi- ronmental Performance Evaluation (EPE). In simple termS, EPE is intended to answer the "how am I doing" question. The goal of SC4 is to develop Objective measurement tools with which an entity's environmental performance can be measured. These criteria will not address speci?c lega1 limitations, such as facility-speci?c permit limits, but will focus on more general criteria. Differences of opinion exist as to who should estainSh speci?c EPE criteria (individual companies, ISO, 0616! third parties) and for whose bene?t. One view is that EPE should be used primarily as an internal measurement tool, with the ISO standard establishing the criteria and m?th? 650 odology by which companies could set their own objectiVES- SPE 30436 SECURING THE FUTURE IN PARTNERSHIP WITH THE ENVIRONMENT I3 However, some countries want EPE to be a public measur- ing tool, with the results of EPE publicly available for com? parison purposes. Such a standard could become another avenue whereby companies are require to collect and dis- close potentially sensitive environmental information. Thus far, the view that EPE is an internal management View has prevailed (ISO 14031). SC4 has approved a concept and principles paper that will be used in developing performance indicators covering environmental management systems, operational systems (physical plant, processes, etc.) and the environment. A "menu" of indicators and associated methodologies will be developed. Management will be able to choose from this menu the indicators that are appropriate to the organisa? tion's activities and policies. Indicators may have a variety of uses, ranging from measuring facility performance for purposes of evaluating the performance of individuals to external communication to interested parties. The overall function of the indicators is to provide management with tools other than simply compliance with which to evaluate their environmental performance. ISO France and Germany share the leader? ship position in SCS on Life Cycle Assessment (LCA). Along with environmental labelling, this is an area where ISO's environmental standard setting initiative could have the most impact on business. The basic concept of LCA is that companies should take the environmental attn'butes of the entire life cycle of a product into account, from raw materials acquisition to ultimate disposal. LCA theoreti- cally involves taking an inventory of all of the environ? mental effects associated with the raw materials acquisition, manufacture, use, and disposition of a product and eve?uat? ing the relative signi?cance of those impacts. LCA is al- ready being used in some regulatory contexts in the EU and i the US. Though based upon scienti?c methods, LCA also entails "important policy considerations when judgements are being made as to the relative impact of toxic releases into the air, water or soil, particularly when evaluated against the use of the product and where it is being used. LCA raises many controversial issues, including the uses to which it will be put (such as labelling, measuring environmental perform- ance or public policy decisions), the level of scope and level of details required, whether third?party critical review of LCA's is necessary and whether and to whom the results of LCA will be disclosed. Lurking behind the technical issues are time and cost. Detailed LCA's take time, sometimes years, and can be very expensive. A major challenge will be to develop LCA methodologies that are technically correct, environmentally relevant, yet can be practically applied in today's business environment (CRINE). There should be no doubt that the ISO LCA standard will be in?uential in the integration of environmental issues into operational decision making at 651 an unprecedented level, and will result in the creation of vast quantities of detailed environmental impact informa- tion about industrial operations. The most immediate work of SCS is being conducted by a work group developing general principles and procedures for LCA, 14040. The development of this docu- ment will require the evaluation of a wide range of issues, including the appropriate uses of LCA areas of potential abuse of LCA, goals, types of LCA, data quality issues, communication, the level of detail that will be required. of LCA's, whether different methodologies will be appropriate for different objectives, and if (or when) critical review of LCA's will be required. How these issues are resolved will have a signi?Cant impact on the cost and length of LCA's and therefore determine their practical feasibility. Another work group is working on standards for con? ducting life cycle inventories, (ISO 14041). This is an area in which there has been a fair amount of prior work and there is general agreement on some of the basic principles. Other work groups are addressing impact assessment (ISO 14042) and improvement assessment (ISO 14043). Despite the efforts to draft a document on impact assessment, many delegations erroneously believe that the science for doing impact assessments, which involves assigning priorities among different environmental effects in different media, does ISO Norway chairs SC6 on Terms and De?- nitions. The functions of SC6 are as follows: (1) create a comprehensive set of terms and de?nitions for TC207, (2) develop a guidance document on terns and de?nitions to assist in other sub?committees in creating a coherent vo- cabulary for TC207, (3) ensure that the terms and de?ni- tions developed by the other sub-committees meet the technical ISO requirements, (4) assist the other sub- committees to ensure that terms used in more than one document are consistently and appropriately de?ned, and (5) identify additional terms that need de?nitions, and de? velop de?nitions if other sub-committees will not. These roles will provide SC6 with considerable influence in the crucial area of de?ning terms. ISO G1. TC207 formed a separate Working Group under Germany's leadership to develop a guidance document for the use by standards writers on the environ- mental aspects of product standards 14060. The objectives of this work group are limited to the development of environmental criteria that other professional standards setters should consider when writing their standards. Occupational Health and Safety (OHS). There have been serious discussions at the international and national levels about the development of an ISO standard on employee safety management systems. The leadership of C176, which developed the ISO 9000 product quality series, has 14 SECURING THE FUTURE - IN PARTNERSHIP WITH THE ENVIRONMENT SPE 30436 implied that TC17 6 is the appropriate forum for creating an employee safety standard because of the relationship be- tween product quality and safety systems. Advocates in TC207 respond that safety is more closely linked with envi? ronmental systems and that many organisations have inte? grated environmental, health and safety systems. Many companies already have integrated Environmental Health and Safety (EHS) systems.? TC207 wrote to the ISO Technical Management Board (TMB) noting the importance of all management systems and stating that TC176 and TC207 should co-ordinate any effort to?investigate whether the subject of OHS should be considered for international standardisation.55 In the mean- time, TC207 will not deal with employee safety. Based on a review by France and Australia for the TMB meeting in January 1995, the TMB decided that this issue was controversial. Consequently the TMB agreed to estab? lish an ad-hoc group subsequently endorsed by ISO Coun- cil, to review the overall subject leading towards an inter- national conference in late 199S/ear1y 1996.56 Both TC176 and TC207 have requested authority to incorporate OHS within their respective scopes of work.57 A third alternative would be to create a new TC. Conclusion Through the work of TC207, ISO is moving rapidly to es- tablish international environmental systems standards that will have a profound impact on how companies worldwide manage their environmental affairs. Despite their voluntary nature, there is little doubt that for many industries confor? mance with these standards will become a condition of do- ing business, and companies that ignore new standards will do so at their peril.58 As an industry we must be dedicated to continuous efforts to improve the compatibility of our operations with the en- vironment while economically supplying the highest quality products and services to our customers (CRINE). We must recognise our responsibility to work with governing agen? cies, our customers and the public in order to conduct our business operations in an environmentally sound manner, which will provide for the health and safety of our employ- ees and the public, enhance the pro?tability of our compa? nies and prOtect the interests of our shareholders.5 Acknowledgement I thank the management of McDermott Marine Construc- tion for permission to publish this paper. References 1. "The Stockholm Declaration on the Human Environment" U.N. 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