International Environmental Risk Management

A Systems Approach

Robert A. Woellner, John Voorhees, Christopher L. Bell

• Publisher: CRC Press
• Year: 2020
• ISBN:
  9781351680714
• Edition: 2
• Topic: Law
• Subtopic: Environmental Law
• Index: Law

Based on the first edition with extensive analysis of practical applications of environmental risk management and compliance management systems, this second edition of International Environmental Risk Management reflects updates made in the understanding and application of risk management best practices and makes available a frame of reference and systematic approach to environmental and social governance (ESG). It provides a pathway for readers to implement environmental management strategies that can be integrated with core operations and other risk management efforts, including supporting sustainability and corporate social responsibility initiatives associated with climate change, the circular economy or supply chain conditions, as well as enterprise risk management; anti-bribery, and other compliance management systems. This book provides in-depth discussions of ways to use global environmental management standards.

New features in this edition:

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• Combines EMS standards with discussion of specific principles, other authors' research, and guidelines on management practices.

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• Provides guidelines on how to prepare for, anticipate, and resolve environmental issues.

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• Includes easily understandable information for all readers and is not simply aimed toward individuals who are knowledgeable about this topic.

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• Provides in-depth discussions on using global environmental management standards to manage risk and promote resilience, as well as legal strategies and voluntary initiatives that companies can utilize to minimize risk.

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• Accounts for the substantive revisions in ISO 14001: 2015.

As a growing and rapidly changing field, it is necessary to address new issues, guidelines, and regulations to assist businesses, academia, students, consultants, lawyers, and environmental managers with a pragmatic resolution to environmental risk management issues. This second edition gives a broad and detailed analysis of the changes made to international standards and practices and serves as an excellent guide to managing environmental risk.

1
The Context for Managing Environmental Risk

Robert A. Woellner

It is no coincidence that over 100 countries have joined together to create international standards for their industries and businesses to effectively manage their environmental impacts. The trend reflects a desire for systematic solutions to environmental problems. Global environmental management standards are addressed in the first five chapters, in which we provide the context for minimizing environmental liabilities by proactively managing environmental activities. The next three chapters are devoted to a more specific discussion on environmental risk management systems, and compliance and ethics programs, which have been developed to reduce environmental risks. The last four chapters focus on reducing litigation risks and costs and solving environmental problems without litigation. The development of global standards is the appropriate place to begin to explore how responsible solutions are created to address environmental concerns worldwide.

In 1946, the International Organization for Standardization (ISO) was founded as a worldwide federation to promote the development of international manufacturing, trade, and communication standards, thereby facilitating the international exchange of goods and services (Hall, 1996, and Murphy & Yates, 2009). ISO is a private sector, international standards body based in Geneva, Switzerland. It reviews input from government, industry, and other interested parties before it develops a standard. Understanding ISO and its mission and techniques allows for an appreciation of why the 9000 series for total quality management has been so popular and why the 14000 series portends even greater acceptance throughout the world.

1.1 ISO’s Role and Mission

ISO’s mission to develop manufacturing, trade, and communications standards assisted in the rebuilding of Europe after the Second World War. As ISO grew rapidly, its purview became global and quickly involved nations outside Europe. The members of ISO are the standards organizations of different nations, and current membership stands at more than 160 countries. The U.S. is a full voting member of ISO, officially represented by the American National Standards Institute (ANSI). ISO strives to systematically develop globally accepted standards that are voluntarily adopted by the international business community. Specific application methods and techniques are not specified but left to the discretion of industry and government experts from around the globe.

The mission of ISO has two parts:

• To promote the development of standardization and related activities in the world to facilitate the international exchange of goods and services
• To develop cooperation in the sphere of intellectual, scientific, technological, and economic activity

Initially, this mission focused on technical performance specifications for products and standardized test methods. Currently, more than 320 technical committees are dedicated to the continual development of these types of standards. In 1979, however, a number of worldwide market trends led to a change in focus for ISO. These included the growth of industry throughout the world led by the post-Second World War boom in the U.S.; the development of trade agreements and the growth of international trade; and the proliferation of different quality standards throughout the world, including both product specifications and quality management systems.

The world markets grew rapidly during the 1970s and the 1980s but were characterized by products and services that varied widely in their performance, characteristics, styling, materials, and interchangeability of parts. Since a key aspect of the ISO mission is to facilitate trade and remove trade barriers, ISO formed the Technical Committee (TC) 176 in 1979 to address these issues under the general topic of quality management. “The goal was to make it possible for purchasers in the international marketplace to ensure that products they bought were manufactured in accordance with known, verifiable, and accepted methods of controlling the manufacture and distribution of products” (Bell 1995).

TC 176 was confronted by a bewildering array of quality standards for both product characteristics and quality management programs that had been institutionalized by various industrialized nations throughout the world. Such diverse standards constituted a set of technical barriers to trade. A wide variety of interpretations of the same standards, both within an industry and between industries, caused problems with products manufactured and traded worldwide. Industries generally agreed, however, that product specifications were not enough. Quality management had to address the processes used for purchasing, producing, and servicing to ensure attainment of uniform quality levels.

TC 176 set about the task of harmonizing the various standards related to quality management systems throughout the world and issued its quality management and quality assurance standards, the ISO 9000 series, in 1987. Since its original publication, the ISO 9000 series has undergone three significant revisions in 2000, 2008, and 2015. This series addresses the processes used by a business to ensure that it meets customer requirements for its products and services. The 9000 series does not define specific product performance levels or physical characteristics but describes how to manage a business with a quality focus, thus attaining consistent results and providing confidence to the customer.

The 9000 series, as the forerunner of the 14000 series, has proved to be extremely popular throughout the world. Currently, more than 1 million businesses in more than 170 countries worldwide have achieved ISO 9001 certification. Worldwide, achievement of ISO 9000 registration has become a prerequisite for doing business in dozens of countries. Some governments have even made the ISO 9000 series mandatory for businesses in their countries. Those businesses wishing to enter the European markets need to consider an investment in an ISO 9000 quality management system as an essential component of their business. ISO 9000 is a legal requirement in the medical devices market in the European Union (EU). It is also required in many other markets where product risk is a factor, for example, high-pressure valves and public transportation. Competitive pressure is the primary reason for adopting ISO 9000, as thousands of firms are placing themselves on preferred supplier lists and demonstrating their global commitment to quality.

As not only quality management but also risk management increased in significance, in 2011 ISO responded to market needs by establishing TC 262 to address standardization of risk management practices. This wide-ranging body currently includes 55 participating countries and 18 observing countries and is responsible for the following family of standards:

• ISO 31000—Risk management—Guidelines
• ISO 31010—Risk management—Risk assessment techniques
• ISO 31022—Risk management—Guidelines for the management of legal risk
• ISO 31030—Managing travel risks—Guidance for organizations
• ISO 31050—Guidance for managing risks to enhance resilience
• ISO Guide 73—Risk management—Vocabulary

The goal of these standards, as stated on the ISO/TC 262 web page, is “to support organizations in all their activities including making decisions to manage and minimize the effects of accidents, disasters and faults in technical systems as well as response and recovery from major disruptive risks.” TC 262 also continues to explore new areas in which to provide support.

1.2 ISO 14000 Series of Standards for Environmental Management Systems

Many of the trends that resulted in the emergence of the 9000 series also played a part in the development of the 14000 series. These trends include the growth of international markets, the proliferation of environmental management standards and regulations in various countries, and the adoption of environmental management programs by businesses in response to complex environmental regulations.

Several issues related to the formation of the ISO 14000 series were different from those of ISO 9000. Any attempt to standardize environmental performance worldwide involves considerable social and political controversy. Implementing environmental management systems in countries with social democracies, such as Norway, has been relatively easy. In countries such as the U.S., the often antagonistic and litigious relationship between the government and the regulated community has in the past caused environmental issues to be approached by business people with extreme caution, if not fear (Begley 1996).

Two trends in environmental management have emerged as the driving forces for ISO 14000. In 1972 the United Nations held a conference on the environment in Stockholm, Sweden. Later environmental conferences were held in Rio de Janeiro in 1992 and 2012, and in Paris in 2015, as well as summits in Johannesburg in 2002 and New York in 1997 and 2015. The global community came together at each gathering to meld the views of diverse and sometimes opposing groups into a firm commitment to responsible environmental management and global sustainability. At the end of 2015, the Paris Agreement was negotiated by 196 parties of the United Nations Framework Convention on Climate Change (UNFCCC) and was adopted by consensus. For the first time, the world established the environment as a priority in national and international affairs.

A seemingly opposing force, exemplified by U.S. President Donald Trump’s 2019 withdrawal of the U.S. from the Paris Agreement, had already coalesced by 1986 in the Uruguay Round of the General Agreement on Trade and Tariffs (GATT). These negotiations resulted in a commitment to foster international trade. The Agreement on Technical Barriers to Trade section of the GATT does, however, encourage the use of international standards and conformity to assessment systems in order to improve the efficiency of production and facilitate trade. This treaty requires that these international standards not be prepared, adopted, or applied with a view to, or with the effect of, creating unnecessary obstacles to international trade. Indeed, the technical regulations cannot be more trade restrictive than necessary to fulfill a legitimate objective such as national security requirements; the prevention of deceptive practices; or the protection of human health or safety, animal or plant life or health, or the environment. This treaty establishes what could be perceived as an anti-environmental force by positioning international trade as a competing priority with environmental protection.

As a response to these emerging trends in environmental management, and cognizant of the resounding success and worldwide adoption of the ISO 9000 standards on quality management systems, in August 1991 ISO established a Strategic Advisory Group for the Environment (SAGE). This advisory group’s purpose was to assess the need for environmental management standards and to recommend an overall strategic plan to develop these standards. ISO requested SAGE to consider the following issues:

• Promote a common approach to environmental management similar to total quality management standards (ISO 9000)
• Enhance businesses’ abilities to attain and measure improvements in environmental performance
• Utilize international standards to facilitate trade and remove trade barriers

SAGE was specifically instructed not to consider environmental criteria, such as levels of pollutants, health as...