Report to
230385001 u-s- Environmental
Protection Agency
December 1984
Benefits of
Environmental Auditing
Case Examples
Arthur D. Little, Inc.
Center for Environmental Assurance
EPA No. EPA-230-03-85-001
Protcction
2oO South Dr-^.n n-f-^t
Ciiicago, Illinois 66604"""
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NOTICE
This report has been prepared by Arthur D. Little, Inc., under contract
No. 68-01-6715 for the Regulatory Reform Staff, Office of Policy, Planning,
and Evaluation, U.S. Environmental Protection Agency. The report reflects
the findings and conclusions of the author and not necessarily those of EPA
or any other government entity.
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TABLE OF CONTENTS
Page
I. INTRODUCTION 1
Background 1
Approach 2
Context for Environmental Auditing Benefits 3
II. EXAMPLE BENEFITS 6
Current Compliance Status 6
Nonprocess Water Discharge 7
Unregistered Treatment, Storage, and Disposal Facility 7
Correction of Deficiencies Prior to RCRA State Inspection 7
Exceedances in POTW Requirements 8
Unpermitted Air Source 8
Environmental Awareness and Training 8
NPDES Permit Deficiency 9
Deficiencies in Spill Prevention and Control Equipment 9
Unidentified Process Stream 10
Improvements in Groundwater Monitoring Equipment 10
Training of a Pool of Auditors 10
"Boning Up" on Regulations 11
Risk Assessment 11
Relocation of a PCB Transformer 12
Relocation of a Hazardous Waste Storage Area 12
Inadequate Management of Hazardous Material 13
Leachate Collection and Treatment Practices 13
Discovery of Leaking Underground Storage Tanks 13
Identification of an Inactive Disposal Area 14
Operations and Maintenance 15
Audit of a Facility that is Frequently Inspected by the State 15
Improper Operation of Control Equipment 15
Maintenance of Dikes Around Bulk Oil Storage Tanks 16
Leaks in Containment 16
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TABLE OF CONTENTS (Continued)
Monitoring, Data Collection, and Recordkeeping 17
Inadequate Monitoring Equipment 17
Documentation of Water Discharges 17
Preparation of Discharge Monitoring Reports 18
Undetected Discharge to a Sewer 18
Identification of Exemplary Practices 19
Responsibility for Hazardous Wastes Reporting 19
Environmental Management Systems 19
Increased Formality of Plant-Level Procedures 19
Adding Plant Environmental Staff as a Result of an Audit 20
Plant Managers Audit Other Facilities 20
Improved Credibility of the Audit Program 20
Acquisition Audit 21
Audit Program Improvements 21
Information Sharing and Communications 21
Audits Communicate Corporate Environmental Commitment 22
Communicating Information to Senior Management 22
Sharing Audit Results with Other Plants 22
Groundwater Monitoring Data 23
Informing Management of Good Practices 23
Other Types of Benefits 24
Cost Savings from Waste Segregation 24
Reclaiming Waste Oil 24
Emergency Response Preparedness 25
III. CONCLUSIONS 26
The Bottom Line: Auditing Works 26
The Level of Benefits Varies 27
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I. INTRODUCTION
BACKGROUND
In recent years, as more and more environmental audit programs have
been established, a growing body of literature on the subject has emerged.
However, little has been written describing the benefits of environmental
auditing except studies to identify, in general terms, the benefits to indus-
try, to the environment, and to regulatory agencies.
One of these studies examined the benefits to industry of environ-
mental auditing and concluded that the benefits to industry fall into two
broad categories: increased environmental management effectiveness and a
feeling of increased comfort or security. Auditing increases management
effectiveness by identifying deficiencies and weaknesses that are corrected,
providing assistance to facility management, increasing the level of envi-
ronmental awareness, and accelerating the development of environmental
management systems. Auditing provides increased comfort because it identi-
fies and documents compliance status, improves overall environmental per-
formance, improves the environmental risk management system, and provides
protection from potential liabilities.
2
A second study examined the benefits of environmental auditing to the
environment and to the government. That study concluded that the benefits
to the environment are that environmental audits identify pollution problems,
provide a mechanism for problem control or elimination, and allow for antici-
pation and mitigation of environmental risks. It also identified the benefits
of environmental auditing to regulatory agencies as better assurance of com-
panies' compliance, more efficient use of government resources, improved
cooperation with companies, more realistic definitions of compliance, and
useful information about audit systems and compliance status.
Benefits to Industry of Environmental Auditing, Center for Environmental Assurance, Arthur D,
Little, Inc., August 1983 (EPA Report No. 230-08-83-005)
2
Environmental Auditing Programs; Benefits to the Environment and Government, Edwin H. Clark
for Sterling Kobe Corporation, June 1983 (Report to l).S. Environmental Protection Agency's
Regulatory Reform Staff)
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Together, these earlier studies provided an assessment of the potential
benefits of environmental auditing. They describe the aspects and kinds of
outputs of environmental audit programs that contribute significantly to the
achievement of corporate, environmental, and regulatory objectives. They
did not, however, provide specific examples of actual benefits or beneficial
outcomes of environmental auditing. The purpose of this report is to fill
that gap by describing concrete examples of benefits actually resulting from
individual audits and audit systems. This report does not, however, attempt
to quantify the benefits from an individual audit or the benefits achieved
over the long run from established audit programs. Nor has the environ-
mental performance of organizations with auditing programs been compared
with the environmental performance of organizations that have not established
environmental auditing programs.
This report documents the benefits of environmental auditing as
reported by managers responsible for their organization's environmental audit
program. In some cases, the examples illustrate actual benefits derived from
individual audits, while in other cases the benefits result from having con-
ducted a number of audits over a period of time. The example benefits
described in this report also provide insight into how environmental auditors
conduct their field work, what type of situations they are likely to uncover,
and how facility-level environmental management can improve as a result of
an audit.
APPROACH
To carry out this study, representatives of 23 organizations were
interviewed. Most of these organizations have established internal environ-
mental audit programs; however, some of the organizations contacted have
used third-party environmental auditors to either conduct their audits or to
supplement their in-house auditing efforts. The organizations contacted
comprise a diverse cross-section of industry, including the aerospace, auto-
motive, chemicals, electric utilities, electronics, forest products, glass,
measuring and scientific equipment, metals, medical products, office equip-
ment and computers, petroleum, and Pharmaceuticals segments of industry.
In addition, several public-sector organizations that have implemented an
environmental audit program were contacted. Virtually all of the individuals
contacted indicated that they felt their environmental auditing program had
resulted in significant benefits to their organization.
Most representatives of the companies contacted regarding their partici-
pation in this study were pleased to participate. Many audit managers
indicated they were in favor of studies that would further a better under-
standing of environmental auditing. However, several of the audit managers
contacted expressed some concern about the study. One common fear was
that any series of case examples of inappropriate practices identified during
environmental audits could mislead the reader into believing that noncompli-
ance is widespread in many industrial settings while, in fact, most environ-
mental audits confirm that plant activities are in compliance. In a few cases,
companies refused to participate in the study because they feared that a
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study of this nature would somehow be used to further efforts to establish a
mandatory auditing requirement. Most organizations, however, believed that
they had benefited significantly from their environmental auditing efforts and
were happy to share examples of those benefits.
In examining the benefits of environmental auditing, the word "benefit"
was interpreted broadly to include those aspects or outcomes of environ-
mental auditing viewed as beneficial by the audit program managers con-
tacted. This study did not attempt to quantify or verify the extent of the
benefit(s) received. Rather, the goal was to develop descriptive examples of
the range and variety of benefits accruing as a result of environmental
auditing. Thus, for purposes of this study, benefits were assumed to be in
the eye of the beneficiary.
Because this survey focused on individuals responsible for their organi-
zation's environmental audit program, most of the benefits were reported
from the perspective of the organization that has undertaken the audit.
These case studies are presented from that perspective and, where appropri-
ate, the case examples are augmented with a brief discussion of potential
benefits to other parties, based on an analysis of the outcomes or aspects of
the audit situation.
Each example in this report is presented as a brief case study that
describes the situation, identifies the beneflt(s) as seen by the respondents,
and describes the role that the environmental auditing program played in
achieving the benefits.
CONTEXT FOR ENVIRONMENTAL AUDITING BENEFITS
The benefits of environmental auditing can be as wide and varied as the
nature, organization, and objectives of existing audit programs. Benefits
can range from the negative task of uncovering specific problems to the
positive feeling of increased comfort; from situations that benefit many
parties (e.g., company, environment, regulatory agencies, public) to those
that benefit only one; from actions resulting from an individual audit to
overall program results; and from those things influenced solely by the audit
program to those things for which the audit program is one of several con-
tributing factors. These issues are sufficiently complex to warrant a brief
discussion before describing the case examples.
• Negative Nature of Auditing
Environmental auditing, indeed any type of auditing, is by its very
nature somewhat negative. The basic purpose of most audits is to determine
or confirm that systems are in place and functioning properly. To accom-
plish this objective, auditors in many of the more advanced audit programs
examine in detail selected aspects of the management and control systems.
While the audit effort involves considerable time spent determining com-
pliance, the audit report often focuses on deficiencies. The presumption is
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that line management has instituted systems and procedures to achieve
compliance and, while the auditors spend a significant amount of their ener-
gies confirming this, their job is to find and report deficiencies where they
exist rather than to evaluate day-to-day management.
This concept has major implications in understanding the benefits that
result from environmental auditing. Because the audit is aimed at uncov-
ering deficiencies where they exist, the best possible outcome of an indi-
vidual audit is frequently a report stating "no exceptions noted." If a plant
is 99% in compliance and the audit team finds one minor recordkeeping dis-
crepancy, it is commonly the discrepancy that gets reported, not glowing
comments about the plant's superior environmental performance.
As a result, many specific examples of "benefits" of environmental
auditing provided for this study were stated in the context of finding prob-
lems. While these examples are important aspects of the benefits of audit-
ing, they must be balanced with an understanding that in the vast majority
of cases the problems identified are far outweighed by the good environ-
mental practices observed. This point was emphasized time and again by the
audit program managers contacted during this study.
• Parties Affected by Audits
The outcome of an environmental audit can potentially benefit a variety
of parties, including the company, regulatory agencies, the public, and the
environment. While different parties may be affected by an audit, it is not
always clear which party benefits from a specific situation. Even within
these groups, what is seen as a benefit by one individual is not necessarily
seen as a benefit by another. For example, if an audit results in a decision
to formalize certain plant-level procedures, this may be seen as a benefit to
the corporate environmental manager, while the plant manager may think the
current procedure works just fine and the new one only requires more time
and paperwork.
Many of the case examples identified during this study were potentially
beneficial to several parties. For example, any situation where an audit
identifies a compliance discrepancy which is subsequently corrected may, in
the context of the previous benefit studies mentioned above, be viewed as a
benefit to industry (improved compliance performance), to the environment
(problem identification and control or elimination), and to regulatory agencies
(better assurance of company's compliance). As a result of this overlap, no
effort was made to categorize the case examples by the benefiting party.
Instead, this study attempts to note where one party in particular benefited.
• Link to the Environmental Management System
Environmental auditing is widely recognized as one component of an
organization's overall environmental management system. There is an
inherent difficulty in trying to describe the benefits of one component of a
system, since audit objectives are also objectives of other environmental
management activities.
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This difficulty is magnified by the fact that a number of environmental
audit programs do not routinely include problem solving or recommend solu-
tions as part of their work scope. The responsibility for corrective action is
most commonly assigned to line management and outside the scope of the
audit program. In such situations, the auditor's task is done when the facts
are reported. Here again, there is a tendency to describe the benefits of
auditing in terms of the problems identified.
The case examples described in this report are ones for which an
environmental audit, or series of audits, is either the principal source of, or
a significant contributor toward, the beneficial aspect or outcome. In some
cases the audit is the sole contributor—such as when an audit team finds an
unknown problem which is immediately corrected. In other cases, the rela-
tionship is less direct, such as when an audit provides added incentive to
accomplish a previously planned action (e.g., installation of a new piece of
equipment or implementation of a new procedure). Between these two
extremes, the audit can contribute to environmental benefits in a wide
variety of ways.
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II. EXAMPLE BENEFITS
This section of the report presents 41 examples of specific benefits,
which are grouped under the following categories:
Current compliance status
Environmental awareness and training
Risk assessment
Operations and maintenance
Monitoring, data collection, and recordkeeping
Environmental management systems
Information sharing and communications
Other types of benefits
It is important to note that a particular situation might fit more than
one category. To illustrate this, consider an audit that causes a plant
operator to correct a compliance deficiency where the operator was unaware
of the regulatory requirement. This situation could be an example of "iden-
tification of compliance status" or "awareness of environmental considera-
tions." In situations such as this, the example has been included in the
category that best reflects the manner in which the audit program manager
described it.
CURRENT COMPLIANCE STATUS
Because the principal focus of most environmental auditing programs is
to determine the compliance of operating facilities, virtually all audits result
in a statement of compliance status. This statement is based upon a review
of the current practices and procedures in place at the facility vis-a-vis
federal, state, and local regulatory requirements. This section presents five
case examples that illustrate the range of compliance related benefits that are
derived from environmental audits. (Note: Subsequent sections also include
compliance related audit findings that lead to benefits in other categories.)
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Nonprocess Water
Discharge
Unregistered Treat-
ment, Storage, and
Disposal Facility
Correction of
Deficiencies Prior to
RCRA State Inspection
At a scientific instruments plant in Maryland, the
environmental audit team found that nonprocess
water was being discharged to the storm sewer
instead of the sanitary discharge. This was dis-
covered by reviewing the plant's sewer diagrams
and physically observing the discharge points.
As a result of the audit, efforts were initiated
immediately to obtain approval from the local pub-
licly owned treatment works (POTW) to include
this waste stream in the plant's sanitary dis-
charge. Within two months, all of the necessary
changes were made to discharge the nonprocess
water to the POTW. The audit benefited the com-
pany by identifying a noncompliance situation that
was corrected and benefited the environment by
causing the discharge to be rerouted to the
POTW.
A chemical manufacturing plant in the Northeast
operates a waste disposal facility that handles the
company's out-of-date material. Out-of-date
material from several other plants owned by the
company is also sent to this facility for disposal.
Materials treated at the facility include mercury
compounds and other hazardous wastes. An envi-
ronmental audit conducted by the company
reviewed the hazardous waste management activi-
ties of the plant and determined the plant was not
registered as a treatment facility. The plant
subsequently applied for registration as a hazard-
ous waste treatment, storage, and disposal facil-
ity. Not only did the company benefit by cor-
recting a noncompliance situation, but the regu-
lators also benefited through the registration of a
facility which otherwise might have continued to
operate without the regulatory scrutiny resulting
from compliance monitoring activities.
During a 1983 audit of a coatings and resins
facility, the audit team, following the company's
standard audit checklist, found a number of rela-
tively minor discrepancies in the area of hazard-
ous waste management. (For example, training
program documentation was incomplete.) Two
weeks later, the facility was visited by the state
RCRA inspector, who spent twice as long as usual
(about four to six hours) and, unlike previous
visits, did not come up with any findings.
During the two-week period after the internal
audit, the plant had corrected all of the deficien-
cies identified by the audit team. Following the
state inspection, the audit team leader received a
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Exceedances in POTW
Requirements
Unpermitted Air
Source
telephone call and then a letter from the plant
manager thanking him for the efforts of the team.
The audit benefited the company by helping bring
about more favorable results in the state inspec-
tion and benefited the environment by bringing
about faster correction of regulatory deficiencies.
The audit program manager of a large conglomer-
ate reported that internal environmental audit
teams have found several cases where facilities
have exceeded local POTW sewer ordinance
requirements. Because local authorities were not
enforcing the local sewer ordinances, the facilities
were exceeding several of the ordinances' para-
meters. The audit team identified these excep-
tions through an in-depth review of sampling and
analysis records, pH strip charts, and reports to
the local agencies. The exceedances were
reported to company management. Reports to
local authorities now identify all excursions
beyond the ordinance parameters and, in some
cases, the facility has been granted in writing a
deviation from a specific parameter.
At a chemical plant in Ohio, the audit team, fol-
lowing its formal audit protocol for air pollution
control, found one air emission source that did
not have a permit to operate. This source was
found by reviewing the plant's emission inventory
and visually observing the actual air sources both
in the plant and on the roof. Within several
weeks of receiving the final audit report, the
plant submitted a permit application to the state
agency. Several months later, the plant received
a permit. This benefited the company by elimi-
nating the potential legal and public relations
liabilities that the unpermitted air source posed.
It also benefited the environment and regulators
by bringing this air source explicitly under regu-
latory and compliance monitoring scrutiny.
ENVIRONMENTAL AWARENESS AND TRAINING
Virtually all the audit program managers contacted mentioned improved
awareness as one of the major benefits of their program. Frequently,
improved awareness resulted from informing plant management of regulatory
requirements of which they were previously unaware. In other cases,
audits resulted in improvements in plant environmental programs which went
beyond specific regulatory requirements. In yet other cases, audits
heightened the awareness of staff temporarily assigned to the audit team.
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While not a principal focus of most audit programs, opportunities for training
occasionally occur which are viewed by the audit program as beneficial.
Program managers reported that other benefits accrued both from formally
training auditors in advance and from "on-the-job" audit training.
The following examples illustrate situations where a principal benefit of
the environmental audit was improved environmental awareness or training.
NPDES Permit
Deficiency
Deficiencies in Spill
Prevention and Control
Equipment
At a chemical plant in Pennsylvania, the audit
team, following the company's formal water pollu-
tion control protocol, examined the facility's
NPDES permit to ensure that all permit require-
ments were being complied with. The auditors
first developed a schedule of all permit require-
ments applicable to the facility and then
thoroughly reviewed the piping and sewer dia-
grams available at the plant. Next, they
inspected each of the drains and outfalls during
several tours with the plant environmental coordi-
nator. As part of their review, the auditors
found that the cooling tower blowdown and deion-
ized water regenerant were being discharged
through an outfall that was permitted for storm
water only. Facility management were aware that
this practice was occurring but did not realize
that it was improper. Shortly following the
audit, the facility contacted the state regulatory
agency requesting that the permit be revised to
include the two additional wastewater streams.
Within several months, the state issued a revised
permit. This situation benefited the company by
identifying and correcting a compliance deficiency
and raising the awareness of plant management.
The regulators and environment also benefited
from the submission of a revised permit applica-
tion that more accurately describes the facility's
discharges.
During an environmental audit of an oil pipeline
in Texas, an auditor was reviewing the oil
storage facilities at one of the pumping stations.
As prescribed by the company's environmental
audit protocol, the auditor physically inspected
the oil storage locations to confirm compliance
with spill prevention and control requirements.
As a result of this inspection, the auditor found
that several of the drainage valves in the earthen
dikes were defective or broken. Additional
inquiry revealed that the station operator was
unaware of formal requirements for draining pro-
cedures. Within several days, the defective
valves were replaced and all of the operators at
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Unidentified Process
Stream
Improvements in
Groundwater
Monitoring
Equipment
Training of a Pool
of Auditors
the facility were informed of the regulatory
requirements. The benefit to the company of this
action was, in addition to correction of a com-
pliance discrepancy, improved awareness and
understanding of environmental considerations on
the part of the station operator. This situation
benefited the environment and regulatory agencies
in that a compliance deficiency and potential envi-
ronmental hazard were corrected.
At a medium-sized saw mill, an environmental
audit team went through a careful examination of
all water discharges from the facility. As a
result of both a document review (looking at
sewer diagrams, etc.) and physical inspection of
the piping and equipment, the auditors found that
the discharges from the large sawing equipment
were properly managed. However, at one point
during the audit, they found that the water used
for cooling and guiding one of the smaller saws
flowed into a pipe located in the basement of the
building and was then discharged directly into
the storm sewer. The audit team leader brought
this to the attention of the mill manager, who was
unaware that saw guide water was not being
handled as a process stream. Within two weeks,
the necessary changes were made to divert this
stream into the facility's process discharge. Not
only was a noncompliance situation corrected, but
a "blind spot" was identified.
During an audit of a hazardous waste landfill in
the East, the audit team physically examined each
of the facility's groundwater monitoring wells.
The audit team leader found that the plastic cap
of one groundwater monitoring well had been
sheared off. Further investigation, through both
inquiry and observation of tire marks near the
well, revealed that this situation resulted from a
tractor operator who did not understand the pur-
pose of the plastic tube. As a result of the
audit, a new cap was placed on the monitoring
well, a concrete containment area was built
around the well, and a program was put in place
to educate operators on the nature and importance
of the groundwater monitoring equipment.
An electronic components company initiated a cor-
porate environmental audit program several years
ago. Because the program involved selecting
individual audit team members from a pool of
plant-level environmental coordinators, formal
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"Boning Up" on
Regulations
training in auditing methodology and techniques
was conducted for nearly 50 potential auditors.
In addition to preparing each participant to con-
duct an audit, the training has resulted in
several other benefits, according to the audit
program manager. For example, as a result of
auditing other facilities, each auditor is better
able to see and correct deficiencies at his or her
own plant. In addition, several of the trained
auditors have since been transferred to other
departments within the corporation (e.g., pur-
chasing, manufacturing, etc.). This has resulted
in spreading a sensitivity for environmental con-
cerns to other parts of the company.
A senior environmental auditor at a large petro-
leum company indicated that one benefit of an
environmental auditing program is that it forces
auditors to "bone up" on regulatory requirements
in advance of an audit. In particular, the
auditor noted that in preparing for several recent
audits, a careful review of state regulations
revealed subtle requirements that the auditors
were not aware of. These requirements were
added to the audit protocol used by the team in
conducting each audit. This provided a benefit
to the company in two ways: It provided
increased assurance that the plant was reviewed
for conformance with all applicable regulatory
requirements, and it increased the skills and
knowledge of the corporate environmental staff
members who were serving as auditors.
RISK ASSESSMENT
While most of the participants in this study described the principal
focus of their audits as regulatory compliance, several described examples
where environmental hazards were identified during the course of the audit.
In some cases, these hazards represented situations where the auditor antici-
pated future regulatory requirements to apply, while in other cases, situa-
tions, in the auditor's professional opinion, posed a potential risk to the
company and/or the environment, even though they were not directly related
to a specific regulatory compliance requirement. Six case examples of risk
assessment benefits of environmental audits are presented:
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Relocation of a PCB
Transformer
Relocation of a
Hazardous Waste
Storage Area
During an environmental audit of a medium-sized
forest products facility, one of the team members
was assigned to cover the plant's control program
for PCBs. Following a formal checklist, the
auditor reviewed documentation relating to PCB
control and then physically inspected each of the
transformers on-site. During this inspection, the
auditor noticed that one large PCB transformer
was located in an area of the plant where fork lift
trucks and other vehicles frequently passed.
While the transformer appeared to be controlled in
accordance with regulatory requirements (label-
ing, inspection, spill containment, etc.), the
auditor realized that the location of the transfor-
mer posed a potential hazard because of the pos-
sibility of a vehicle collision. The mill manager
agreed with the auditor's observation. As a
result, a program was initiated immediately to
move the transformer to a more secure area.
Within three months, the transformer was moved
to a new location, secured inside a newly built
shed, and enclosed in a diked area. The prin-
cipal benefit of this action to the company was an
increased feeling of comfort that a potential haz-
ard was reduced. The environment also benefited
from the resulting reduction of risks of a PCB
spill.
A team of company auditors spent several days
reviewing the air, water, and hazardous waste
activities at a Texas paint and coatings plant.
Following their standard protocol for hazardous
waste management, the auditors developed an
understanding of the plant's practices for collec-
tion and storage of wastes and then closely
inspected the facility's hazardous waste storage
area. During this inspection, they noted that the
storage area location was such that a spill could
possibly reach a storm water runoff ditch. While
there was no regulatory requirement under the
facility's RCRA Part A permit to put secondary
containment around the storage area, the audit
team felt that the situation posed a potential
hazard to the company and the environment.
They recommended that the facility relocate the
hazardous waste storage area to a more secure
area. Immediately following the conclusion of the
audit, facility management initiated steps to move
the waste storage area to a vacant building on
the plant site which had a curbed concrete floor
and a roof. The move, which involved not only
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Inadequate Management
of Hazardous Material
Leachate Collection
and Treatment
Practices
Discovery of Leaking
Underground Storage
Tanks
relocating the storage area but also revising the
RCRA Part A permit, was completed within sev-
eral months. The move provided facility and
company management with assurance that they
were exceeding current regulatory requirements
and reducing potential hazards to the environment
and the company.
During an environmental audit of an electronic
chemicals facility, the auditors discovered sub-
stantial quantities of material held for rework at
various locations throughout the facility. The
material—in itself hazardous—was not considered
waste by the facility and, therefore, was not
being stored, managed, or inspected in accor-
dance with RCRA requirements as were the
facility's designated hazardous wastes. The
auditors considered this situation to be a potential
environmental and loss prevention risk to the cor-
poration, and notified appropriate levels of man-
agement. Management's attention was immediately
directed to the situation and the situation was
corrected. The audit led to increased inspection
management and storage procedures for the mate-
rials, thereby reducing the risks of an inadver-
tent spill or similar environmental accident.
The environmental audit program manager at a
large forest products company reported that in
several instances, audits have identified activities
which are not regulated in one state but are reg-
ulated in another. As the result of an audit of a
pulp mill in the South, the facility instituted a
procedure to collect leachate from a solid waste
landfill located on-site and pump it into the
facility's waste water treatment facility. This
action was not required in the state in which the
facility is located; however, because it is
required in other states, the audit team leader
recognized this situation as a potential risk to the
company and recommended that the change be
made. The revised practice provides greater
environmental protection as a result of treating
the leachate.
After revising their audit protocol to explicitly
investigate underground storage tanks and the
availability of data to provide assurance that the
tanks are not leaking, a chemical company's envi-
ronmental auditors identified an underground gas-
oline storage tank during a routine facility audit.
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Identification of an
Inactive Disposal Area
Because no data existed, the auditors included a
comment that they were unable to confirm the
integrity of the tank. This led to the plant's
scheduling a leak test and subsequent determina-
tion that the tank was leaking. The tank was
removed and replaced and a clean-up was con-
ducted. Moreover, as news of the situation
traveled across the corporation, several other
plants scheduled leak testing on their own and at
least one other plant discovered that it, too, had
a leaking underground gas tank which it cor-
rected. The audit program manager reports that
their environmental audit program has provided
benefits to the environment and, in addition, has
given them a head start on the regulatory pro-
grams addressing leaking underground storage
tanks.
During their plant tour, environmental auditors
conducting an internal audit of a chemical plant
located in an Appalachian state observed a small
brick wall located in a portion of the property no
longer used for plant operations. Their concern
and curiosity heightened when, upon closer
investigation, they noticed that the vegetation
near the brick wall was discolored. The auditors
reported their observation in the audit report
with a recommendation that more information be
developed. Through discussions with former
employees, plant management learned that the
area had contained an open, brick-lined pit that
had been used to contain process waste. How-
ever, the operation had long since been shut
down by the company and the waste tanks forgot-
ten. In fact, the plant had done its own investi-
gations both in preparation for the corporation's
audit and in response to inquiries regarding past
waste disposal practices without identifying the
tank. The materials in the pit were analyzed and
appropriate off-site disposal was arranged. The
materials were then excavated and transferred to
a disposal site. The company benefited from
identifying and addressing a potential environ-
mental liability. The environment benefited from
transfer of the wastes to an appropriate disposal
activity.
Arthur D. Little, Inc.
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OPERATIONS AND MAINTENANCE
Many of the audit program managers contacted during the course of this
study noted that in some circumstances, environmental audits have led to
improved facility-level operating and maintenance practices. In some cases,
the changes resulting from the audit involved installation of new engineered
controls, while in other cases the changes were procedural in nature. For
example:
Audit of a Facility
that is Frequently
Inspected by the
State
Improper Operation of
Control Equipment
An environmental audit of a chemical plant located
in a Northeastern state found that the audit team
was unable to confirm that several pieces of
installed air pollution control equipment were
working properly. While the plant had undergone
several inspections conducted by the local air
quality agency, which had been delegated compli-
ance monitoring authority by the state agency,
without notation of any problems, the auditors
viewed these inspections as largely "cursory" in
nature. As a result, they carefully reviewed the
air pollution control programs in spite of the
frequent inspections with favorable results. In a
review of maintenance records, they determined
that one piece of equipment had been in operation
with a work order to repair it that had been
pending for more than 12 months. As a result of
the audit's findings, the plant developed opera-
tional procedures to better demonstrate and con-
firm that pollution control equipment was perform-
ing as intended. This included development of
additional monitoring and recordkeeping pro-
cedures and installation of a formal, documented,
preventive maintenance procedure.
At a lead battery plant, an environmental audit
team leader assigned one team member the task of
completing the section of the air pollution control
protocol that involved a review of the air permits
and related control equipment. After examining
the permits and developing a schedule of all per-
mit requirements, the auditor physically inspected
the air pollution control equipment. He then
interviewed facility personnel about operating and
maintenance practices. The auditor learned that
the facility's wet scrubbers were being operated
dry during the winter months, in violation of the
air pollution control permit. The facility had
experienced problems with the lines freezing in
the winter which resulted in high maintenance
costs. The situation was included in the audit
report to management. As a result of the audit,
/Ifci Arthur D. Little, Inc.
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Maintenance of Dikes
Around Bulk Oil
Storage Tanks
Leaks in Containment
the scrubbers were winterized so that they oper-
ate year-round in accordance with the permit.
This benefited the corporation by correcting a
noncompliance situation and benefited the environ-
ment by the proper operation of the air pollution
control equipment.
An environmental team comprised of company
environmental staff and an environmental manager
from another facility found several instances in a
large, Southwestern chemical plant where the
diking that had been installed around bulk oil and
chemical storage tanks was being defeated by
drain pipes and open valves. Present day corpo-
rate engineering standards prohibit the use of
drain valves in dikes. However, the plant had a
number of older storage tanks that had been
diked with a provision for draining accumulated
rain water. These situations were identified by
the auditors following an audit protocol that spe-
cifically calls for examination of the integrity of
dikes around bulk storage tanks. The situation
was reported to company management, and local
management instituted a number of procedures to
insure that the integrity of the dikes was being
continuously maintained. The new procedures
included a program of regular inspections and
installation of large indicators visible from the
plant roads to clearly indicate whether the drains
are open or shut.
An environmental audit of a sulfuric acid plant
found that the integrity of secondary containment
at a tank farm was inadequate because the con-
tainment was built from alkaline waste material.
This finding resulted from a rigorous examination
of spin prevention control facilities and pro-
cedures following a formal audit protocol. After
careful review of the plant's oil and hazardous
materials spill prevention plan, the auditors
visually inspected the storage locations. During
their inspection, they noted holes in the secon-
dary containment resulting from acid storage. In
addition, the audit team found that the tank farm
was located near a waterway. The findings were
reported to management and a more acid-proof
secondary containment was installed. Both the
company and the environment should benefit by a
reduction of risk.
/&. Arthur D. Little, Inc.
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MONITORING, DATA COLLECTION, AND RECORDKEEPING
Environmental audits frequently identify opportunities for improvements
in monitoring and data collection activities at operating facilities. In some
cases, this results from finding out-of-compliance situations, while in other
cases, improvements result from recommending new practices not required by
regulations. For example:
Inadequate Monitoring
Equipment
Documentation of
Water Discharges
During an audit of an industrial chemical plant
located in the Midwest, one of the team members
had primary responsibility for reviewing the
plant's water pollution control activities. After a
careful review of the NPDES permit requirements
and the facility's documentation for discharge
monitoring and analysis, the auditor concluded
that facility personnel were monitoring and
recording the effluent flow as required by the
NPDES permit. Further investigation and obser-
vation revealed, however, that the normal volume
of effluent substantially exceeded the capacity of
the weir to measure the flow. This resulted in
grossly inaccurate reporting of the volume of the
discharge. This finding was included in the
audit report to company management. As a result
of the audit, a proper weir was installed. The
situation had not been detected by regulatory
inspectors. As a result of the audit, the equip-
ment was corrected and more accurate information
was reported on the plant's discharge monitoring
reports.
During an environmental audit of a chemical solu-
tion mixing plant, the audit team reviewed all of
the plant's water discharges in accordance with a
formal audit checklist. Upon questioning the
plant environmental coordinator, reviewing the
sewer diagrams, and inspecting the outfalls, the
auditors learned that the plant discharges its
process effluent to a local publicly owned treat-
ment works (POTW) and the "clean" waste water—
such as noncontact cooling water—through a per-
mitted outfall to a nearby river. Further investi-
gation revealed that both discharges converge in
a common pipe and, at the end of that pipe, a
diversion valve is used to direct the waste stream
to either the POTW or the river. Previously, the
plant had discharged all of its water to the
POTW; however, when the POTW became volumet-
rically limited several years ago, the plant
obtained an NPDES permit and began discharging
its noncontact cooling water to the river when
contaminated wastewater was not being dis-
A Arthur D. Little, Inc.
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Preparation of
Discharge
Monitoring Reports
Undetected Discharge
to a Sewer
charged. While the plant appeared to be opera-
ting in full compliance with regulatory require-
ments, the auditors were concerned that the plant
had no formal records documenting that they were
in compliance. As a result of the audit, facility
management immediately instituted a new operating
procedure whereby all discharges were logged in
a book which also recorded any changes in the
diversion valve. Less than six months later, a
regulatory inspection resulted in inquiries about
past operating practices, and the facility was able
to demonstrate that they were, in fact, operating
in compliance. Thus, the audit not only bene-
fited the company but also benefited the regu-
lators by causing additional information to be
available for review. The audit also resulted in
benefits to the environment by providing greater
assurance that the facility's effluent was being
appropriately discharged. Since that time, the
two sewers have been segregated so that there is
no longer a need for the diversion valve.
At a small forest products plant in the South, the
audit team found that the operator responsible for
preparing the quarterly discharge monitoring
reports was not physically measuring the effluent
pH. This situation was uncovered as a result of
reviewing past DMRs and talking with the opera-
tor. The operator was unaware that this was
required, and informed the auditor that nobody
had ever before told him that his current practice
was incorrect. As a result of the audit, a pro-
cedure was implemented to ensure proper analysis
and reporting of effluent data.
During an environmental audit of a sulfuric acid
plant, the audit team found that the plant's efflu-
ent monitoring station had been installed at a
point in the sewer system where it was not pro-
viding representative information on the dis-
charges. An acid waste stream going to the
sewer was located downstream of the plant's
effluent monitoring station. This was found by
touring the plant several times and carefully
reviewing the sewer diagrams provided by the
plant engineering department. The situation was
reported to management as part of the audit
report and steps to correct the situation have
been taken.
A Arthur D. Little, Inc.
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Identification of During an environmental audit of a power plant in
Exemplary Practices the South, one of the auditors noted that the
maintenance and calibration procedures for the
facilities' continuous emission monitoring equip-
ment were leading to a higher level of reliability
(about 96%) than that required by regulations.
One of the auditors conducting this audit had
previously audited a number of other power
plants owned by the company, and recognized
this situation as particularly noteworthy. As a
result of the audit, those procedures were imple-
mented in other sister plants.
Responsibility for At a chemical plant in California, an environ-
Hazardous Wastes mental audit team found that the facility's internal
Reporting practices for managing hazardous wastes did not
assure that required monthly reports to the state
were accurate and timely. Through a review of
the monthly reports and the facility's manifest
file, the audit team noted that a number of
reports were not submitted and several shipments
of hazardous wastes were not recorded in those
reports that were submitted. This was due in
large measure to the fact that the responsibility
for completing the monthly reports rested with
three people. As a result of the audit, respon-
sibility for completing the monthly report was
clearly delegated to one individual.
ENVIRONMENTAL MANAGEMENT SYSTEMS
Environmental audits frequently result in, or contribute to, changes
and improvements in corporate or facility environmental management systems.
These changes can include organization and staffing changes as well as
improvements in such things as reporting practices, policies and procedures,
or even improvements in the audit program itself. For example:
Increased Formality of The environmental audit program manager of a
Plant-Level Procedures large diversified corporation noted that since its
initiation several years ago, the environmental
audit program has been the major influence in
increasing the formality of plant-level procedures
for managing environmental activities. A section
of the company's formal audit protocol addresses
the adequacy of such procedures at each facility
audited. In many cases, these procedures are
not required by regulations. As a result of the
environmental audits, specific procedures have
been developed which identify regulatory require-
ments, define individuals responsible for specific
tasks, and describe the reporting and documenta-
tion required.
/Hi Arthur D. Little, Inc. 19
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Adding Plant Environ-
mental Staff as a
Result of an Audit
Plant Managers Audit
Other Facilities
Improved Productivity
and Credibility
During an April 1984 environmental audit of a
sanitary landfill in Colorado, the auditors noted a
permit condition about which the plant manager
was unaware. The operating permit stated that
the facility would comply with the engineering
report prepared by an outside firm prior to sub-
mittal of the permit application. After reading
this statement, the auditors carefully reviewed
the engineering report. The report stated that
the facility would employ a full-time individual to
collect litter and also install a windscreen around
the perimeter of the facility. However, current
practice was to hire temporary help through Man-
power to perform the task of litter collection. As
a result of the audit, the facility hired a full-time
"litter picker" (before the final audit report was
issued) and has budgeted for a litter fence in
1985.
A company that includes on the audit team an
environmental manager from a plant other than
the facility being audited has found that a num-
ber of benefits result from the other manager's
participation. Not only does the participation
help in making the audit a "peer review" but also
provides a vehicle for learning about other facili-
ties' environmental programs and procedures. As
a result of participating on an audit team, plant
environmental managers have a chance to see dif-
ferences in state requirements, local procedures,
and managerial style. In one audit, the environ-
mental manager who served as a team member was
so impressed with the spill control procedures he
was auditing that he went back to his own plant
after the audit and instituted similar measures.
The program manager reports that environmental
staff from other plants are often the toughest
critics. He believes that participation of other
plant's environmental staff has hastened the
development of more formal environmental control
systems within his company.
An environmental auditor at a large petroleum
company reported that one of the most important
benefits derived from the program is the improved
effectiveness in reviewing environmental perfor-
mance that results as follow-up audits are con-
ducted. Not only does it become easier to con-
duct an effective audit the second time around,
but also the facility management and staff often
Arthur D. Little, Inc.
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Acquisition Audit
Audit Program
Improvements
have greater confidence in the auditor's technical
ability and in the value of an internal review of
the facility's compliance status. This benefits the
company's environmental management system in
that audit results are more quickly developed and
accepted.
As a result of an environmental audit of a
recently acquired foreign subsidiary, the auditors
of a U.S. based multinational company determined
that the newly acquired plant included a former
landfill located at the plant site. However, no
one at headquarters was aware, at the time of
acquisition, that the situation existed. To avoid
this kind of future surprise, the company has
implemented a corporate procedure that requires
on-site environmental assessments of all new
acquisitions prior to purchase. The objective of
the on-site review is to ensure that the company
knows what it is buying before it buys it.
The audit program manager at an electronics com-
pany reported that they have made numerous
improvements in their audit program since it was
initiated several years ago. After several audits,
they attempted to shorten the length of time in
the field, and learned that this detracted from
the audit. They now provide for about 20 person
days of field work for an average-sized plant.
Also, the experience of audits continues to result
in changes in their formal audit protocols.
Finally, to ensure audit quality, the team leader—
who formerly had responsibility for a major sec-
tion of the audit (e.g., air pollution control)—
now functions primarily as a leader, supervising
the team, reviewing the work of the audit team
members, monitoring progress, and helping out
where needed.
INFORMATION SHARING AND COMMUNICATIONS
Many of the audit program managers contacted mentioned that audits
frequently result in improved communication. The improved communication
can be between company management and facility management, among differ-
ent facilities, or between the company or facility and an outside party, such
as a local regulatory agency. For example:
/Hi Arthur D. Little, Inc.
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Audits Communicate
Corporate Environ-
mental Commitment
Communicating
Information to Senior
Management
Sharing Audit Results
with Other Plants
The audit program manager of a large chemicals
company reports that his company's three and
one-half year old environmental audit program has
served to reinforce the company's environmental
policy. The audit teams, comprised of high-level
personnel, provided tangible evidence at the
working levels of the corporation's commitment to
comply with environmental regulations and to con-
duct all of its affairs in an environmentally
responsible manner. The audit manager feels that
the program was introduced at an especially
appropriate time in that several employees were
beginning to get the impression that the country's
environmental priorities were being relaxed while
company environmental management had consis-
tently stated that this was not the case (and have
received assurances from senior management).
The cost containment procedures prompted by the
recession created mixed signals, especially where
environmental performance was concerned. The
audit program clearly reinforced the company's
long established commitment to environmental
assurance.
At a large diversified corporation which has had
an environmental auditing program for more than
five years, the results of individual audits are
routinely reported to senior management, and
summary reports are provided to a committee of
the Board of Directors. The audit program man-
ager indicated that significant benefits have
resulted from this reporting arrangement. Board
members have gained comfort and assurance that
systems are in place and functioning to manage
compliance and that deficiencies are identified and
brought to the attention of appropriate managers
within the corporation. Similarly, senior manage-
ment with overall line responsibility has benefited
by knowing that their operations are receiving an
independent review, that people responsible for
environmental performance are aware of their
responsibilities and accountabilities, and that pro-
cedures have been established to ensure con-
tinued compliance.
The audit program manager of a large petroleum
company reported that significant benefits had
been gained from sharing audit reports with plant
managers from other plants. Following each
audit, the final audit report is sent to the pres-
ident of the operating company. The operating
Arthur D. Little, Inc.
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Groundwater Moni-
toring Data
Informing Management
of Good Practices
company president is encouraged to share the
audit report with representatives of other facil-
ities within the company. In one recent audit of
a refinery, the audit team noted several discrep-
ancies relating to the spill prevention control and
countermeasures (SPCC) plan. Procedures for con-
trol and maintenance of valves in dikes were
inadequately implemented, and several dikes which
were originally secure had recently been partially
opened to facilitate access by plant personnel.
Several months following the audit, the audit pro-
gram manager received feedback that, as a result
of distributing the audit report, similar problems
had been found and corrected at other refineries
within the operating company.
An audit of a solid waste landfill in Ohio recently
resulted in improved communication with the state
regulatory agency. During the five-day site
visit, the two-person audit team thoroughly
reviewed the facility's permits, correspondence
with regulatory agencies, and internal documents.
Before arriving on-site, the auditors conducted
an in-depth review of applicable federal, state,
and local regulatory requirements. During this
review, they noted that each groundwater moni-
toring well that the director of the agency deems
necessary will be sampled semi-annually. Because
no such requirement was stated in the permits,
the auditors recommended that the facility contact
the Ohio EPA to determine whether they should
be reporting groundwater monitoring data, at
what frequency, for what parameters, etc. (Fol-
lowing an internal company policy, the facility
was currently collecting groundwater data.) Sev-
eral months after the final audit report was
issued, OEPA responded by saying that they
would appreciate receiving groundwater monitoring
data, but that there was no formal regulatory
requirement. The facility is now sending data to
OEPA and reports that improved communication
has resulted.
The audit program manager of a petroleum com-
pany reported that one benefit of an environ-
mental audit program is the opportunity to
visually observe the company's facilities compared
with neighboring facilities. In a review of the
company's pipeline operations in Oklahoma and
Texas, the auditor had an opportunity to observe
the tanks, pumps, and pipelines of three or four
other companies. The auditor found that in most
Arthur D. Little, Inc.
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cases his company's facilities had less oil on the
ground, better maintained equipment, and better
overall housekeeping. The auditor was able to
provide positive feedback to company management
regarding the environmental performance of com-
pany operators in the field.
OTHER TYPES OF BENEFITS
From time to time, environmental audits result in beneficial outcomes
that do not easily fit into the categories described above. For example,
while not generally a major objective or focus of most environmental audit
programs, opportunities for cost savings or recycling are periodically un-
covered during an audit. Several examples are:
Cost Savings from
Waste Segregation
Reclaiming Waste Oil
During an audit of a Maryland plant that polishes
and grinds glass lenses, the audit team, following
a standard audit procedure, found that the plant
was disposing all of its glass sludge as hazardous
waste because it contained residue from leaded
glass. Further investigation revealed that less
than 30% of the residue came from leaded glass
waste streams and that the balance did not clas-
sify as hazardous waste. As a result of the
audit, the plant segregated the residue into sepa-
rate waste streams, batch tested and analyzed
each waste stream to verify that lead existed in
only those waste streams originating from the
leaded glass grinding operations, and instituted a
procedure to dispose of the nonhazardous waste
in a sanitary landfill. This change saved the
company substantial money each year.
During a 1981 audit of an electric utility service
center, the audit team took several tours to phy-
sically inspect the facility. On one of these
tours, a team member noticed an oil-stained area
down an embankment. Upon further inquiry of
an operator, the auditor learned that it was the
facility's practice to dispose of waste oil from the
trucks down the embankment—which was not
located near a stream or waterway. As a result
of the audit, this practice was immediately termi-
nated, the site was cleaned up, and the contam-
inated dirt was removed. In addition, a new pro-
cedure was implemented to collect waste oil and
send it to a certified reclaimer. This situation
further benefited the environment in that not only
was the contaminated soil cleaned up, but also a
scarce resource is now reclaimed rather than sent
for disposal.
Arthur D. Little, Inc.
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Emergency Response
Preparedness
At a utility located in the Western United States,
an audit team recently discovered a potential
weakness in the facility's emergency response
procedures. Following a formal audit checklist,
one of the auditors reviewed the spill prevention
control and countermeasures (SPCC) plan. Part
of this review involved asking facility personnel
to walk through the procedures outlined in the
plan for a mock spill. This exercise revealed
that some of the spill response materials and
resources were not as readily available as the
auditor thought they should be. In addition, it
became apparent that, should a spill occur after
dark, it would be particularly difficult to
respond. As a result of the audit, facility per-
sonnel are rethinking how the current system
should be modified to maximize emergency
response preparedness. Following this analysis,
which they expect to take less than one month,
the SPCC and other emergency plans will be
revised as appropriate, strengthening the facility
level emergency response system.
/Ill Arthur D. Little, Inc.
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III. CONCLUSIONS
The case examples presented in this study clearly illustrate that envi-
ronmental auditing can produce a wide variety of benefits.
THE BOTTOM LINE: AUDITING WORKS
Environmental auditing can bring about a wide variety of outcomes that
not only benefit the organization that has established the audit program, but
that may also benefit the environment and/or the regulatory agencies respon-
sible for overseeing environmental performance. The audit program man-
agers who provided input to this study are convinced that environmental
auditing works. Environmental audits provide assurance that an organization
has appropriate systems in place and functioning to manage its environmental
affairs. Audits also identify compliance problems and control system weak-
nesses. In addition, audit programs serve to reinforce management's commit-
ment to achieving and maintaining compliance with environmental regulations.
Thus, environmental auditing provides a vehicle for reviewing environmental
performance, identifying shortcomings, and initiating improvements or cor-
rective actions.
Despite the lack of quantitative data, most of the organizations that
participated in this study are convinced their programs are worth the
required effort and resources. Nearly all the organizations that participated
in this study have established and continue their audit programs on their
own initiative. The others have headquarters-level directives to establish an
audit program and are proceeding to do so.
Although there is consensus about the usefulness of environmental
auditing among practitioners, it is often difficult to isolate or clearly dis-
tinguish the benefits of environmental auditing from the benefits of other
environmental programs. Many of the outcomes of an audit that benefit the
environment are merely initiated by conducting the audit. The actual benefit
is fully realized only after other elements of an organization's environmental
management system, such as action planning or capital budgeting, are
brought to bear on a particular audit finding. Thus, just as auditing is
only one component of an organization's overall environmental management
system, it is also only one of several factors contributing to a beneficial
outcome.
Similarly, it can be difficult to identify the beneficiaries of environ-
mental auditing. Certainly, an organization that establishes an audit pro-
gram (and its own objectives for the program) is a principal beneficiary.
A Arthur D. Little, Inc. 26
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The extent to which an organization benefits from the audit program is
directly related to the proficiency of its auditors and the congruence
between its audit objectives and methods. However, there are likely to be
other beneficiaries as well. The public benefits whenever adverse environ-
mental situations are identified and corrected. The public also benefits when
the effectiveness of emission controls is improved, whether by meeting an
existing compliance requirement or achieving an incremental gain over and
above regulatory requirements. Regulatory agencies also benefit from envi-
ronmental auditing when, for example, situations with an environmental
impact are brought to their attention or when errors or omissions in the
information required by regulations or permits are corrected.
THE LEVEL OF BENEFITS VARIES...
With Sophistication of the Auditing Effort
The nature and intensity of the auditing effort also impact the benefits
that result from environmental auditing. The audit programs included in
this study feature a wide variety of audit approaches and methodologies. In
general, the programs can be thought of as falling into one of three cate-
gories:
Assessment Orientation: Some of the programs included in this study
are "assessment driven." That is, the review or fact-finding process is
based largely on the auditor's experience and judgment. Here, benefits
can result from the added expertise and fresh perspective of the audit
team that are brought to bear on the facility's environmental status.
Verification Orientation: Other audit programs include a substantial
amount of compliance verification. That is, the review process includes
specific audit steps or procedures designed to determine or verify first
hand the extent that compliance is consistently being achieved. Many
benefits of these programs result from in-depth examination of records
and equipment. In addition to bringing additional expertise and a fresh
perspective to assess the facility's environmental status, selected facil-
ity records and equipment receive a rigorous review to identify incon-
sistencies or departures from the standard practices. Thus, these
audits are more likely to identify situations involving an occasional
compliance exception.
Systems Focus: Yet other audit programs included in this study place
a significant emphasis on in-depth examination of a facility's systems
and procedures for managing the full range of environmental hazards
(not just those covered by various compliance requirements). This
audit not only brings the added expertise and fresh perspective
achieved in the first audit category and the rigorous examination to
identify occasional departures and exceptions achieved in the second
Arthur D. Little, Inc. 27
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category, but also a systems perspective that seeks to identify weak-
nesses and vulnerabilities in the facility's approach to environmental
management. Such an audit seeks also to identify weaknesses that may
not yet have led to an identified compliance problem or environmental or
tort risk, but could lead to such a problem in the future.
X
There can be significant differences in the nature and extent of bene-
ficial outcomes from these three types of audit approaches. Regardless of
the type of approach, an audit program can be valuable to an organization -j
and result in benefits to the environment and the regulators. However, as •
more and more of a facility's "more obvious shortcomings" are identified and
corrected (whether as a result of an audit, other internal review or manage-
ment oversight activity, a regulatory inspection, or enforcement action),
assessment driven audits will identify fewer exceptions and, therefore,
produce fewer benefits. As organizations find and fix problems, assess-
ment-oriented audit programs will need to shift their emphasis to confirming
that compliance is being achieved (and perhaps also to determining whether
appropriate compliance management systems are in place and functioning).
More rigorous and in-depth review approaches and techniques will be
required to find the occasional or infrequent deficiencies that may be
occurring.
With Auditor Skills and Organizational Commitment
Another key factor in realizing the benefits presented in this study is
the internal motivation and commitment to the auditing concept of the organi-
zations with effective auditing programs. In these programs, structured,
well-developed techniques and approaches are augmented not only by the
ingenuity and resourcefulness of the auditors but also by the knowledge that
the program has organizational support. Environmental auditing is far too
young and ill-defined a discipline to expect that a structured approach alone
will produce the desired results. While questionnaires and audit protocols
can provide general structure and guidance, an "internal engine" must move
an environmental audit program toward the achievement of its objectives. To
a very great extent, the beneficial outcomes of environmental auditing occur
because of the competence and skills of the audit staff, the commitment made
to the program, and the organizational climate in which the program oper-
ates.
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