Hazardous Waste Management

Reducing The Risk

Benjamin Goldman

• Publisher: Island Press
• Year: 2013
• Print ISBN:
  9780933280311
  9780933280304
• eBook ISBN:
  9781610912761
• Topic: Biological Sciences
• Subtopic: Ecology
• Index: Biological Sciences

Hazardous Waste Management: Reducing the Risk is the first book to study and rate toxic waste disposal sites and to provide step-by-step guidelines for evaluation, decision, and action. The innovative and practical ranking system shows how to rate facilities on the basis of site, management, and technology.

CASE STUDIES

CHAPTER SEVEN

The Big Eight: Corporate Comparisons

CEP chose eight commercial hazardous waste management companies for close review. These companies provide waste generators with off-site waste management services. They also provide transportation, consulting and laboratory analysis, field services for emergency response, and remedial cleanup. Some of them provide the most important element of all in the long term: research and development of new techniques for dealing with hazardous wastes.

The Big Eight firms are all major corporate entities; they are publicly owned with shares traded on the major stock exchanges. Their names are not household words, but they are known to the industries they serve. Their corporate structures continue to change—acquisitions and spin-offs abound. The eight companies dominate the industry and are visible to the media and to the public.

THE COMMERCIAL MARKET

The eight major commercial firms and their smaller competitors took in revenues of $1.2 billion in 1983 according to the Congressional Budget Office (CBO). Those revenues are nearly 20 percent of the total spent by generators for hazardous waste management for on-site and off-site management costs.¹ Estimates for cleanup under the Superfund program range from $10 billion to $100 billion, a substantial additional source of revenue for the commercial firms.²

In 1981 62 percent of all generators sent their wastes off site for treatment and disposal, and an additional 22 percent sent some wastes off site. U.S. EPA estimated the total number of generators at that time to be over 14,000. The 1984 RCRA amendments substantially expand the number of generators that must comply with its provisions, and U.S. EPA estimates an additional 175,000 companies will require hazardous waste management services as a result.

These newly regulated companies are potential customers for commercial hazardous waste managers (see chapter 4).

THE BIG EIGHT

CEP chose the eight companies from hundreds of commercial hazardous waste managers as the only ones that met the following criteria.

1. Each is publicly owned and has its headquarters in the United States. All must report to the United States Securities and Exchange Commission (U.S. SEC).
2. All provide commercial treatment treatment, storage, and disposal services that include incineration or land emplacement. These companies handle wastes generated on site, but more than 50 percent of the wastes they handle come from off-site generators.

In 1985 a survey compiled by Environmental Information, Ltd. listed 447 commercial TSDFs, 9 percent of the 5056 on-site and off-site TSDFs listed by U.S. EPA in May 1985.³ Directly or through subsidiaries the Big Eight own and operate 84 active facilities—nearly 20 percent of those available to generators who choose to have their wastes shipped off site.

EVALUATION OF THE BIG EIGHT

CEP gathered comparative information on several aspects of corporate performance: financial viability, regulatory compliance, exposure to hazardous waste liability, corporate and public relations, and technological capability. CEP also evaluated at least one active company-owned or operated facility (see chapter 9).

From the wide range of information gathered, CEP chose certain parameters for its overall company evaluation. The parameters were based on:

1. relevance of information to company financial, technological, and overall performance
2. reliability of available information
3. availability of information for all companies.

CEP’s evaluation, which led to company grades, is based on 21 parameters in seven categories. The information evaluated was the latest available to CEP. Chapter 10 discusses deficiencies and inconsistencies in the data. CEP submitted the data used in the evaluation to the companies for review, and the changes they made were incorporated. The companies did not receive CEP’s methodology, opinions, or conclusions; the fact that the Big Eight reviewed CEP data in no way implies company acceptance of methodology or conclusions. In fact, some of the firms strongly objected to our approach. The reader can update the evaluation by substituting newer information as it becomes available.

Tables 7-1 through 7-7 present the data that CEP used to evaluate the Big Eight and specific facilities that the companies own. The discussion in the remainder of this chapter gives CEP’s conclusions and shows how CEP used the data to arrive at its results.

Average Rankings and Grades

For each parameter CEP ranked the companies from 1 through 8 to represent poorest to best. CEP added the ranks for the parameters and divided the sum by the applicable number of parameters to obtain an average ranking.⁴ Of 168 rankings only four were not applicable. USPCI, Inc., the highest-ranking company, had no documented leaking sites and thus no rank for ground water corrective action; the total of USPCI rankings was divided by 20 rather than 21. AMEC, the company scoring seventh, had three unranked items; CEP divided AMEC’s total by 18 rather than 21.

Tables 7-1 and 7-2 show the ranking totals for each of the seven categories. The average of all rankings for each company was placed on a scale of 1 to 8. The scale was divided into 13 grades, F to A+. USPCI, Inc., the company with the highest average rank, achieves a B. It ranks at the top (rank 7 or 8) in 12 of the 21 parameters and lowest (rank 1 or 2) in only two. Low ranks in some parameters kept USPCI’s average grade below an A. IU, the company with the lowest average rank, achieves a D. IU ranks lowest (rank 1 or 2) in 12 of the 21 parameters and highest (rank 7 or 8) in only two. Most of the eight companies ranked near the top of some categories but near the bottom of others; thus, their average rank fell in the C to C + range.

The following table shows the grades of the Big Eight.

Group	Company Name	CEP Grade
1.	USPCI, Inc.	B
2.	International Technology Corp. (IT)	C+
	Environmental Systems Co. (ENSCO)	C+
	Rollins Environmental Services, Inc. (RES)	C+
3.	Browning—Ferris Industries, Inc. (BFI)	C
	Waste Management, Inc. (WMI)	C
4.	American Ecology, Inc. (AMEC)	D+
5.	IU International Corp.	D

TABLE 7-1. The Big Eight : Summary of Company Rakings^a

Current Revenues and Financial Viability

Table 7-3 presents the average annual growth rates for total revenues, pretax income, and total assets for 1980 to 1984. The growth of total revenues is used as an evaluation parameter. The other two growth rates are provided as information. Basic information about the parent corporations’ financial condition is from the annual 10-K reports submitted to U.S. SEC as of August 1985.

The other values that CEP used as evaluation parameters are annual hazardous waste revenues, net income divided by average equity and total debt divided by one year’s cash flow. Table 7-3 shows other amounts as information only. Comparative figures for total revenues, pretax income, provision for income taxes, and net income per common share are from the annual consolidated statement of income. Figures for hazardous waste revenues and hazardous waste pretax income are from the annual report or 10-K breakdown by industrial segment in notes from consolidated financial statements. For the four companies whose only business is hazardous waste management—ENSCO, IT, RES, and USPCI, Inc.—the amounts are the same.

CEP evaluated the financial viability of the eight parent...

Table of contents

• Dedication
• Title Page
• Copyright Page
• Table of Contents
• Table of Figures
• List of Tables
• Foreword
• Acknowledgments
• About CEP
• Abbreviations
• CEP FINDINGS
• PROBLEMS AND SOLUTIONS
• CASE STUDIES
• APPENDIX A - Evaluating a Hazardous Waste Facility
• APPENDIX B - Federal Hazardous Waste Databases
• Notes
• Glossary
• Index
• Also Available from Island Press