January/February 1997
Hot on the heels of the ISO 9000 quality control standards comes ISO 14000,
a new set of standards that focuses on environmental management systems. Here’s an introduction to these new standards, with a look at their pros and cons for scrap recyclers.
By Kristina Rundquist
Kristina Rundquist is an associate editor of Scrap.
Just when scrap recyclers were beginning to get comfortable with ISO 9000, the international quality assurance standards developed by the International Organization for Standardization (Geneva), here comes ISO 14000, a new set of standards from the group that could have important consequences for the scrap recycling industry.
In a nutshell, ISO 14000 is a series of standards that certify that a company has made a commitment to abide by environmental management standards. (For a description of the standards in the series, see “The Many Parts of ISO 14000” on page 66.) It’s essential to note, however, that the standards do not guarantee that a company is in compliance with all environmental regulations.
Should scrap recyclers know about ISO 14000? Absolutely. As with ISO 9000, these new standards could have far-reaching implications for processors in their relationships with their consumers, international trade, interactions with government environmental regulatory agencies, and more.
Will recyclers have to achieve ISO 14000 registration? Maybe, maybe not. As with ISO 9000, there are pros and cons to seeking certification, and it may not be necessary for all operations.
With the recently released final version of ISO 14001—the principal standard in the series—just now beginning to filter through industry, it’s a perfect time for recyclers to get a heads-up introduction to these standards and learn what they could mean in the long run.
Birth of a Standard
The momentum and call for the ISO 14000 standards began to build in the early 1990s when several countries in Europe began formulating their own environmental policy standards, such as the European Eco-Management and Auditing Scheme and the United Kingdom’s BS 7750. Other countries asked the ISO to formulate standards for them.
The result was ISO 14000.
ISO 14000 takes a market-driven approach to environmental compliance in that those companies meeting the requirements who are in strong standing in the marketplace can exert influence on others to conform. Compliance could offer standards against which companies measure likely business partners. And when countries come looking for monetary assistance, international organizations such as the World Bank can examine compliance data as something akin to a letter of credit on the subject of environmental management effectiveness.
In essence, ISO 14000 promotes corporate stewardship, encouraging companies to take responsibility for the environmental impact of their processes and products. This stands in direct opposition to the prevalent command-and-control regulatory approach—in the United States anyway—whereby companies wait for direction and/or punishment from government regulatory agencies.
Under ISO 14000, participating companies are expected to take charge of their environmental destinies, sans step-by-step direction from regulatory agencies such as the EPA, in effect freeing these agencies to concentrate on pursuing companies that fail to comply with environmental regulations. No wonder some environmental compliance experts view ISO 14000 as a cutting-edge change in the regulatory arena.
A Wave of Support?
Though ISO 14001 was just released Sept. 1, 1996, support for it has been building for the past couple of years.
Already, for example, several European and Asian countries are requiring companies doing business within their borders to be registered under ISO 14000. Germany, for one, has mandated that any company seeking a government contract must be ISO 14000-certified. Japan, too, is pushing for ISO standards, and countries comprising the Pacific Rim nations have been operating under draft forms of the guidelines. In the United States, the Department of Defense and Department of Energy are reportedly considering whether to require their vendors, suppliers, and contractors to be ISO 14000-registered.
In the business community, more than a third of ISO 9000-registered companies are planning to go ahead with ISO 14000, according to a survey conducted by Dun & Bradstreet Corp. International companies such as Alcoa, Kodak, IBM, DuPont, and Lucent Technologies, in fact, are already implementing ISO 14001 as a first step.
There has even been some talk that sometime in the future ISO 9000 and ISO 14000 will be linked, says Scott Horne, ReMA director of state and local programs. In one potential scenario, he notes, ISO 9000 could incorporate ISO 14000 by reference, which would mean that companies seeking ISO 9000 certification would have to become certified under both. Companies seeking only ISO 14000 certification, however, would most likely be allowed to do so under this scenario.
ISO 14000 Basics
Put forth as a general set of standards to guide companies in managing their environmental impact, ISO 14000 covers a variety of topics, including basic environmental management criteria, checklists for both internal and external company audits, and yardsticks by which to measure performance reviews, environmental labeling, and product life-cycle assessment methodologies.
What ISO 14000 does not establish, however, is exactly what standards each company must meet. That job is left to the government of each participating country. As Horne notes, “ISO 14000 doesn’t assure compliance with environmental laws. Rather, it looks at a company’s overall environmental management system to make sure it’s working and capable of complying with those laws.”
ISO 14000 aims to make a companywide environmental management system (EMS) a top priority for all participants by building in systems for accountability and reporting. The EMS itself is divided into several parts, encompassing an environmental policy defined by top management, a plan that identifies objectives, targets, and legal requirements, the implementation and operation of requirements that establish its startup and maintenance, guidelines for auditing and taking corrective actions, and a declaration of management responsibility to review compliance and make continued improvements.
Since achieving registration is neither easy nor quick—six to 18 months to develop the program, plus ongoing upkeep—a show of commitment from top management on down is required. Employees are encouraged to take responsibility for meeting their company’s environmental goals. By getting workers involved on the ground floor, it’s more likely that compliance efforts will succeed, especially if the upper ranks demonstrate their support.
Commitment from the boss does not an effective EMS make, however. Companies interested in registering under ISO 14000 must prepare a detailed plan for continued improvement of their environmental performance, including the prevention of pollution through improved design and processes. This involves a detailed breakdown of every department and its actions all the way down to tracking the use of raw material and the eventual generation, output, and disposal of waste.
It’s best to sit down and analyze each department, looking to see what environmental programs are already in place and where any gaps might exist. From there, the next step is to devise a plan for filling the gaps and put it into action for a few months to test its efficacy.
Then it’s on to the auditing phase, beginning with a series of internal audits that lead up to the registration audit by a third-party registrar. This is hardly the end of the auditing cycle, however. In addition to conducting regularly scheduled internal audits, registered companies must submit to spot-check audits by their registrar every six months and undergo a complete registration audit every three years.
When the time comes to select a third-party registrar, it’s important to remember that the registrar is typically hired for at least a three-year cycle, so it’s crucial to select one that’s compatible with your company and familiar with the scrap business.
The Pros and the Cons
So much for the nuts and bolts of the ISO 14000 standards.
The question at this point is whether it’s prudent for scrap recyclers to seek registration under these standards. Will such registration offer a competitive edge or prove to be a competitive liability? Does your company conduct business in countries where registration might be mandated? Does the cost-benefit analysis stack up in your favor? Has your firm suffered negative publicity lately? (A show of good faith toward the environment can help companies do an about-face on the heels of an environmental disaster.)
First, a review of the advantages of registration. On the home front, companies could gain market share by using their new-found environmental plans to achieve a competitive edge. Conventional wisdom has it that today’s suppliers and consumers are attracted to companies with green policies, as are talented young graduates looking to enter the job market. Additionally, companies that have an effective environmental management plan stand to not only earn more money from increased business, but also save money through improved efficiency, fewer environmental accidents, and avoided cleanup costs.
In the international arena, since ISO 14000 is expected to ease the conflicts between various international regulations, registered companies could gain improved access to businesses abroad as the result of relaxed trade barriers. (There have already been some rumblings, however, that compliance could be used unfairly by some countries to gain a competitive edge. In countries with weak environmental laws, for instance, a company could achieve certification for considerably less money than a company in the United States.)
ISO 14000 certification could also lead to an improved working relationship with the U.S. EPA—which has played a role on the U.S. advisory group to ISO—as well as state environmental regulatory authorities.
The EPA, however, does not view ISO 14000 as a panacea, Horne is quick to point out, noting that some in the agency “think it’s the greatest thing since sliced bread, while others think it’s the worst thing that can happen. It breaks down to those who firmly believe in command-and-control and those who believe in regulatory reform. You can be certain that before the EPA offers regulatory flexibility, there will be a lot of dialog within the agency as to what its position should be.”
As for the states, some are touting the advantages of implementing ISO 14000. “They are excited about the potential to reallocate their resources away from enforcement and over to aiding businesses in complying with environmental laws,” says Horne.
Now for the disadvantages. For starters, seeking registration can require extra resources in the way of equipment, materials, and funding allocations, and it can add to personnel costs, both by requiring additional employees to handle the necessary documentation and requiring existing staff to dedicate considerable time to maintain the system.
There’s also the contentious issue that ISO 14000 certification doesn’t necessarily equate with environmental excellence, a fact that may be overlooked by companies looking to profit from an eco-friendly policy. “Life-cycle analysis, eco-labeling, and environmental performance evaluation are really contentious issues,” acknowledges Horne. “Businesses are worried about what one can say about another’s product when comparing them on an environmental basis. When is it fair to say that one company’s product is environmentally better than another’s?”
Then there’s the thorny issue of audits. Given that regular audits are mandatory if a company wants to retain its ISO 14000 registration, there’s the possibility that these audits could uncover violations of state and/or federal environmental laws. “Absent audit privilege bills at the state and federal levels that would provide adequate protection to the business sector, internal and external audits of a company’s environmental management system can present real problems, and that may make companies reticent to implement ISO 14000,” Horne notes.
And last but certainly not least, there’s the issue of cost. Though the cost of registration will vary based on the size of the company and the state of its EMS, one report projects that ISO 14000 registration can cost from $15,000 to $100,000 or more, including labor, documentation, and management expenses. At the very least, recyclers should expect registration costs for ISO 14000 to be comparable to those for ISO 9000 certification.
For companies that have achieved ISO 9000 certification, the costs will likely be less because they are already familiar with the documentation requirements of such standards. When figuring the total expense of seeking registration, be sure to include the cost of documenting current operating practices, internal audits, facility improvements, employee awareness training, and registration itself.
In Search of Answers
To register, or not to register? That decision must be made by each company, taking into account what benefits registration could have in the short and long terms, as well as the costs in every sense of the word.
Given that only about five of the ISO 14000 standards had been published in final form as of last fall, it’s too early to tell precisely how they will be received in the United States, as well as internationally. In all likelihood, companies and government agencies will initially adopt a wait-and-see attitude rather than rush out to register or advocate the standards.
Horne, for one, agrees with this wait-and-see approach. “At this time, it’s premature to recommend that scrap companies go out and register. And I’m not yet convinced that ISO 14000 registration will spread quickly. A lot of companies out there are on the fence and unless they’re forced to do something, they probably won’t for the next couple of years.”
The Many Parts of ISI 14000
Far from being a single standard, ISO 14000—like ISO 9000—encompasses a series of standards, each targeting a specific portion of environmental management. For ease, this series has been broken down into two parts, one dealing with organization and process-oriented standards, the other with product standards. Of all the ISO 14000 standards, only ISO 14001 is required for registration, while the rest are offered as guidance.
Part I: Organization and Process-Oriented Standards
- ISO 14001 is the only specification standard in the series. It is the core management systems specification document and contains the required elements and criteria to be satisfied by an organization seeking certification.
- ISO 14004 provides guidelines for either a company trying to improve its existing environmental management system (EMS) or one in the initial throes. Specifically, it’s a how-to guide with examples, descriptions, and options to aid in the implementation and integration of an EMS.
- ISO 14010 provides guidelines to organizations, auditors, and their clients on the general principles involved in carrying out an EMS audit. It contains general audit terminology and elements typically included in an audit process.
- ISO 14011 establishes procedures for planning and performing an EMS audit.
- ISO 14012 defines the qualifications necessary for auditors.
- ISO 14031 defines the environmental performance evaluation of the management and product operations. It refers to an ongoing review that is conducted by each individual responsible for environmental performance.
Part II: Product Standards
- ISO 14020-14024 refer to product labeling, outlining what you can say about your product and how it can be presented. Individually, 14021 deals with product terms and definitions, 14022 standardizes symbols, and 14024 coordinates more than 25 international labeling programs.
- ISO 14040-14043 cover life-cycle assessment, with guidelines for determining a product’s environmental impact. Though not currently linked to 14001, some believe that’s in the works.
- ISO 14060 covers the environmental aspects in product standards.
Only ISO 14001, 14004, 14010, 14011, and 14012 had been published as final standards as of November 1996. —K.R.
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Hot on the heels of the ISO 9000 quality control standards comes ISO 14000, a new set of standards that focuses on environmental management systems. Here’s an introduction to these new standards, with a look at their pros and cons for scrap recyclers.