Regulators place EMS auditors under the magnifying glass

Regulators across the EU are keen to promote wider business uptake of environmental management systems (EMSs) and forge new links with permitting which could save time and money for both. But there is widespread concern about the quality of EMSs and their assessment by certifiers and verifiers. Companies with certified EMSs are not necessarily showing better environmental performance than those without. Things are now coming to a head in the UK, where the environmental management community is losing patience with the UK Accreditation Service - which many accuse of failing to take effective action.

Regulators have never been more interested in EMSs. Pulled by a modernising regulation agenda handed to them by policy-makers and pushed by budget constraints, they are on the hunt for "better, faster and smarter ways of working", as Baroness Young, chief executive of the Environment Agency, put it earlier this year.

In theory, EMSs offer a potential bridge between the goals of regulation and the desire to cut red tape. They offer regulators the opportunity to target scarce resources towards companies with inadequate management systems which are perceived as posing a higher risk.

EU agenda
In June, regulators from across Europe met in London at a workshop organised jointly by English and Dutch agencies to examine the case for establishing firmer links between EMSs, environmental permitting and wider policy goals. They concluded that there are good reasons to foster such links.

They called on the European Commission to draw up a framework to describe how elements of EMSs - whether ISO14001, the EU eco-management and audit scheme (EMAS) or in-house systems - might be accepted by regulators as satisfying certain requirements of EU legislation.

They noted that the EU had already started down that road in a piecemeal way. There are references to EMSs in emerging product legislation, and EMSs have also featured in guidance on the "best available techniques" to be achieved under the integrated pollution prevention and control (IPPC) Directive.

Dutch regulators have gone further down the road than most in offering companies more hands-off regulation in return for implementing EMSs. For selected companies which agree to maintain a certified EMS and abide by further performance targets, they offer a less prescriptive "framework licence" in place of traditional permits.

But Dutch officials say that the IPPC Directive limits the scope of this approach. They intend to make it an issue during the Dutch EU Presidency next year.

The Netherlands is also in the midst of a two-year "ENAP" programme on exploring new approaches to regulating industrial installations. Alongside considering the potential for links with management systems, ENAP will consider a wider role for emissions trading and the scope for issuing permits on a multi-site, sectoral or industrial estate basis.

Similarly, UK regulators want to push the notion of "risk-based regulation" during the UK Presidency in 2005. They are also in the midst of a three-year research programme - called REMAS - to investigate whether EMSs lead to better legal compliance and performance, and to assess whether certain types or elements of EMSs are more effective than others.

To date, there has been little unequivocal evidence showing any advantage in terms of legal compliance for companies with EMSs. In July, the already lengthy list of UK companies with certified EMSs which have been prosecuted for pollution offences was extended with two further convictions - both involving ISO14001-certified paper mills operated by Inveresk (see p 67 ).

Credibility at stake
So why are regulators worrying about promoting EMSs? One reason is that, if links between management systems and site licences are taken too far, there is a danger that the weaknesses evident in many existing EMSs might seriously damage regulators' credibility alongside that of certifiers, verifiers and companies.

One answer to this dilemma might be that EMSs facilitate compliance with legislation and ensure that companies have recognisable systems in place to gather data, saving time for all concerned.

Another is a belief that good environmental management brings wider benefits than regulation alone can deliver - for instance in changing corporate culture, promoting efficiency and encouraging dialogue with stakeholders. Flexible mechanisms might help in tackling issues such as climate change, resource use and product responsibility - all of which require fundamental changes in company behaviour and a degree of "thinking the unthinkable".

A more legally compelling reason is that the EMAS Regulation itself requires Member States to consider how to "avoid unnecessary duplication of effort" for themselves and for companies registered under EMAS.

Few regulators would want to see the fledgling movement towards EMSs fizzle out due to a lack of interest. Industry involvement was fostered on the back of hints of regulatory relief for companies. A failure to meet this expectation could lead to a backlash against certification or registration, and could also sour wider relations between industry and regulators.

German and Austrian firms have dominated the registration tables ever since the launch of EMAS nearly a decade ago. They currently account for almost three-quarters of the EU total. But since 2001 numbers have been declining in both countries - a trend sometimes attributed to the failure of regulators to deliver on expectations.

Low recognition for EMAS among consumers generally and among businesses internationally means that there may be few other reasons to participate.

It was envisaged that registered businesses would live in dread of losing their EMAS credentials, but in practice - in the UK at least - recognition is limited. When chemical manufacturer A H Marks was recently suspended from the UK register, few would have known or been able to find out had not the Environment Agency taken the controversial step of issuing a press release (ENDS Report 338, pp 3-4 ). The company had few qualms about abandoning the scheme in protest.

Improvement in performance?
In an ideal world, regulators would work with robust EMSs put in place by firms with the best possible motives and which have been rigorously certified or verified by third parties.

But in reality - as ENDS has reported over the past 18 months - EMSs are frequently failing to live up to expectations (ENDS Report 327, pp 31-33 ). Companies with certified EMSs are not necessarily showing better environmental performance than those without.

Those immersed in the standards world argue that they were not designed to set benchmarks of performance, and that companies cannot be accused of failing if they do not show improved performance. Indeed, the ISO14001 standard does not even require improved performance, only a commitment continually to improve the management system.

Similarly, certifiers or verifiers are also said not to be culpable because their job is simply to assess companies against the specifications.

But this mentality - inherited from experience with quality management certification - does not fit with real world expectations of environmental management. Global supply chains are being built on the basis of each link having a piece of paper saying it is ISO14001-certified, yet one does not have to travel far to find someone deriding these as meaningless.

Last May, the Environment Agency adopted a position paper on EMSs which described its hopes for them, but also made clear its concerns. In particular, it pointed to "a huge amount of variation in the approaches and practices of different EMS certification bodies" (ENDS Report 340, pp 3-4 ).

At the workshop, it became clear that the Agency's concerns are widely shared. A key conclusion of the meeting was that a wide range of stakeholders have concerns about the quality of EMS certification and verification.

Tackling accreditation
These concerns "could only be resolved through a transparent and effective accreditation process which ensures that certifiers/verifiers apply consistent standards of assessment," the meeting concluded. Regulators felt that "a review of the existing [accreditation] process is required."

They also expressed a lack of faith in EMSs to deliver compliance with environmental legislation - even after third party auditing. This has been a common complaint with the ISO14001 standard, which requires companies to adopt policies to comply with environmental legislation and to install a management system that should be capable of delivering it - but which includes no performance requirements.

Certification bodies, people have complained, all too often simply check that procedures are written down rather than conducting independent assessments of their effectiveness.

Several regulators complained that legal compliance was also an issue under EMAS. This may seem surprising given that regulators have expressed a preference for EMAS over ISO14001 precisely because it gives them the power to veto a firm's registration or recommend its suspension from the register should it fail to meet legal obligations.

In practice, however, instances of European companies being suspended or deregistered are rare. EU guidance calls for regulators to exercise "proportionality" in deciding whether an act of non-compliance constitutes a breach under the EMAS Regulation. There is room for differences of opinion depending not least on the nature of the relationship between the regulator and the company.

The workshop also highlighted a potential danger that if regulators begin to offer reduced inspection as an incentive to promote greater EMAS uptake, they may rest on an erroneous assumption that certifiers have carried out adequate compliance checks - while certifiers may assume that if the regulator has not complained there cannot be a problem.

Some participants warned that in the wake of the Enron/Arthur Anderson scandal, the dangers of relying too heavily on commercially contracted third parties to take on the duties of compliance checking are all too clear. It is in their interest to maintain a good working relationship with their clients. They are unlikely to win much work if they develop a reputation for squealing to the regulators. The idea that they have to ask clients to pay for the cost of additional investigations should they become suspicious was also said to be a non-starter.

The Netherlands appears to have forged a solution that works for regulators. It has created an extra layer of scrutiny in the shape of SCCM, an organisation for co-ordination of environmental management certification. SCCM brings stakeholders together with accredited certifiers and verifiers to agree on a common interpretation of the standards and to clarify expectations up front (ENDS Report 327, pp 31-33 ).

Regulators say they have faith in certificates awarded by SCCM-approved bodies. Indeed, they have asked SCCM to form a similar system for occupational health and safety management certification.

No performance checks
In the UK, however, no such performance checks exist. ENDS has heard allegations that several companies with ineffectual EMSs have nonetheless achieved third party certification. The phenomenon is undermining the credibility of EMSs as a whole - unfairly for those who have put in significant effort and resources.

Some certifiers and verifiers have a reputation for adopting a so-called "performance-based approach", but they hold only a small share of the EMS market. Longer audits and more highly qualified personnel mean that their charges are usually higher.

As ENDS reported earlier this year, the Environment Department, while acknowledging the concern that has been expressed about the quality of certification, feels that it is not its place "to wade in and intervene when there are already mechanisms established to provide for third party accreditation of certification bodies."

The Environment Agency feels that concerns about the quality of certification should properly be addressed by the UK Accreditation Service, whose job it is to scrutinise the quality of certifiers' and verifiers' work.

UKAS told ENDS that it "can and will play a role through its position as the national Government-recognised accreditation body and with other organisations to ensure confidence in the accredited [EMS] certification systems."

Secrecy at UKAS
But UKAS, it seems, is not sufficiently seized of the scale of the problem - and as a result, it is argued by some, is fast itself becoming part of the problem.

Last year, UKAS said it was working on monitoring indicators to demonstrate the credibility of the accreditation process. It has allowed ENDS to see four of these - the numbers of UKAS-accredited verifiers and certification bodies, and the total numbers of UKAS-accredited certificates issued in the UK and around the world.

However, these shed no light on the performance of certification bodies nor on the effectiveness of UKAS's surveillance work. Moreover, the organisation is still unsure whether to publish even these innocuous data.

UKAS has been unable to supply information regarding the average time spent by assessors on pre-assessment, initial and surveillance visits, saying this is only decided and recorded on a case-by-case basis. Its response suggests that it is not collecting aggregate data even for its own quality checking purposes.

The body says that the process of developing monitoring indicators is evolving and more will be done later this year.

The accreditation process is overseen by an EMS technical advisory committee, but the UKAS website says nothing about its work. UKAS says that the committee will decide at its next meeting whether to publish its minutes on the web.

ENDS understands that the committee agreed some time ago to publish summaries of information, but this has not happened.

In response to a written request, UKAS divulged the names and affiliations of the 18 committee members. There are four representatives from the Government and the Environment Agency and one from a professional body. The rest are from industry, certification bodies or UKAS itself.

Over the past year, ENDS has submitted questions to UKAS about its complaints procedure relating to the number of complaints, their outcome, how many warnings it had issued, and whether it had ever taken any action against a certifier or verifier.

UKAS responded that finding answers to these questions would "require extensive research of all of our case files, which is not practicable."

ENDS also asked UKAS specifically about the outcome of the complaint lodged by the Environment Agency against BSI earlier this year, following its recommendation to suspend A H Marks from the EMAS register. BSI was the verifier concerned.

However, UKAS refused to comment on the record on the grounds that it had confidentiality agreements with its "clients".

Exasperation grows
To refuse to divulge such information to the press may be one thing, but UKAS is not even advising the Agency of the outcome of investigating its complaint.

"We have given UKAS several reminders but have yet to receive a response," says Chris Howes, the Agency's policy manager for compliance assessment and enforcement. "A reply would have been nice."

Mr Howes, who sits on UKAS's EMS technical advisory committee, said he has repeatedly recommended that it needs to develop more meaningful indicators. "UKAS has to work to maintain credibility in the certification process," he says. "The indicators that it has proposed so far will do little to do that. We must aim for consistency of assessment by the certification bodies and be satisfied that minimum standards of certification are being met. We should be able to compare the performance of different certification bodies."

Exasperated at the inertia in UKAS, other players are beginning to take action themselves. The Agency is picking up the pace in developing policy options to offer incentives to companies adopting "sufficiently robust" certified EMSs. It points to precedents ranging from the Dutch system of interpreting the standards to the Agency's own MCERTS scheme, which adds performance standards to the certified monitoring of emissions, discharges and effluents.

Meanwhile, the Institute of Environmental Management and Assessment, which awards qualifications to certifiers and verifiers and is the UK's competent body for EMAS, is planning to invite representatives of all stakeholder groups - including UKAS - to a "national EMS forum" in December. The forum, co-sponsored by the Agency, will address the problems with EMSs and come forward with concrete proposals.

IEMA operations manager Martin Baxter commented: "In my job I hear hundreds of complaints from people about EMSs and their certification. We are tired of waiting for someone else to do something about it."

He feels there needs to be an airing of expectations of EMSs as well as a better understanding of what EMS standards are designed to do. He is open-minded about the solutions that may be proposed including a Dutch-style interpretation forum.

NGO opposition
Not everyone would mind if EMSs lost credibility and quietly disappeared as a failed idea. Environmental organisations are alarmed at regulators' increasing zest for linking regulation with EMSs. Some have a fundamental dislike of ISO standards which they say are negotiated by industry with at best informal input from other stakeholders including governments. Although in theory negotiating sessions are open to outside input, NGOs have struggled to muster the resources to keep tabs on the many different committees working on several standards at once.

Three years ago, the European Environmental Bureau - a Brussels-based umbrella group representing national NGOs -walked out of its involvement with the European Standards Organisation (CEN), saying it had insufficient resources to participate meaningfully and was worried about lending credibility to the process.

In a joint position paper published earlier this year, the EEB and ANEC, an organisation set up to provide a consumer voice at standard-setting fora, concluded that "all EMS standards are based on the idea that the setting of environmental performance levels is left to the discretion of industry rather than being based on a public debate and democratic decision-making."

They deride both ISO14001 and EMAS for setting no performance benchmarks, thereby providing no incentive to go for a high level of protection: "The environmental pioneer gets the same label as the polluter who is just slightly above the legal minimum," or indeed companies breaking the law.

The European Commission is caught between a rock and a hard place. At the London workshop, a Commission official warned that Environment Commissioner Margot Wallström would firmly oppose any initiatives which she perceives would impinge on the rights of citizens to be involved in decision-making.

In its recently launched review of IPPC, the Commission was very cautious in inviting views on the possibility of using new policy instruments such as creating links between IPPC requirements and EMSs.

Nevertheless, a head of steam is now building up. The modernising regulation movement is placing a magnifying glass over the world of EMSs and exposing the weaknesses. In the next few years, with open and frank dialogue, there may be a chance to stop the rot and ensure that companies making the investment in EMSs reap rewards - for themselves and for the environment.

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