United States PoliW, Planning. EPA 230-R-94-008
Environmental Protection And Evaluation June 1994
Agency (2125)
v>EPA : Sustainable Industry:
Promoting Strategic
Environmental Protection
In The Industrial Sector
Phase 1 Report
Metal Finishing Industry
(IS EPA Headquarters Library
401MSt.,S\V (3404)
Washington, DC 20460
Printed on Recycled Paper
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SUSTAINABLE INDUSTRY PROJECT TEAM
ILS. Environmental Protection Agency
Pollution Prevention and Toxics Branch
Office of Policy, Planning and Evaluation
401 M Street, SW (2125)
Washington, D.C 20460
(202-260-8661 • Fax 202-260-0174)
Robert S. Benson
James E. Casey
Julie B. Frieder
Jerry L. Newsome
Lucille Preston
Chief, Pollution Prevention and Toxics Branch
Overall Project Manager
Metal Finishing Industry Team Leader
Thermoset Plastics Industry Team
Administrative Coordinator
Photoimaging Industry Team Leader
Thermoset Plastics Industry Team Leader
Administrative Assistant
The EPA Project Team gratefully acknowledges the valuable contributions
of the following ^an-EPA project team members:
James Cummings-Saxton
Mary E. Compton
Nancy H. Hammett
David H. Haury
Margaret C.H. Kelly
Farron W. Levy
Patrick B. Marshall
Andrew M. Schwarz
Stuart W. Staley
Non-EPA Project Manager
Thermoset Plastics Industry Team
Photoimaging Industry Team
General Issues Analysis
Photoimaging Industry Team
Metal Finishing Industry Team
Thermoset Plastics Industry Team
Research Analyst
Research Analyst
Metal Finishing Industry Team
Associate
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TABLE OF CONTENTS
EXECUTIVE SUMMARY SEE SEPARATE BOOKLET
1.0 INTRODUCTION CHAPTER 1
1.1 Historical Context 1-1
1.2 Project Goal 1-3
1.3 Report Organization 14
2.0 PROJECT METHODOLOGY CHAPTER 2
2.1 Introduction 2-1
2.2 Initial Research on Industry Decision-making 2-1
23 Taking an Industry-Specific Approach 2-4
2.4 Using a Backward Mapping Analytical Method 2-5
2.5 Selecting Three Industries for Study 2-6
2.6 Identifying Drivers, Barriers, and Policy Options 2-10
2.7 Building Peer Review and Stakeholder Networks 2-11
2.8 Next Steps 2-12
4.0 METAL FINISHING INDUSTRY CHAPTER 4
4.1 Introduction 4-1
4.2 Approach to Analysis 4-1
4.2.1 Scope 4-1
4.2.2 Overview of Industry 4-2
4.2.3 Information Gathering and Panel Meetings 4-2
4.3 Major Findings 4-5
4.3.1 Industry Characteristics 4-5
4.3.2 Drivers and Barriers 4-16
4.3.3 Possible Policy Options 4-19
Chapter Appendices:
4.A Bibliography 4-A-l
4.B All Suggested Policy Options 4-B-l
4.C Metal Finishing Industry Contacts 4-C-l
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INTRODUCTION CHAPTER 1
1.1 HISTORICAL CONTEXT
EPA's traditional programs have focused on end-of-pipe pollution controls
implemented largely through command-and-control regulations. These programs were
effective in addressing many industrial sector pollution problems of the 1970's and l9Sffs.
However, these approaches may not work as well in the 1990's and beyond, as environ-
mental problems become difficult to identify and prioritize and environmental priorities shift
toward pollution prevention and waste minimization.
In addition, current and future pollution problems will have to be addressed within
an economic climate that demands cost-effective policies and business practices, a focus on
sustainable growth, and long-term technological development
Given the environmental and economic challenges of the 1990's, the Agency believes
it is increasingly important to achieve broad private sector commitment and investment in
strategic, economically-based approaches to environmental management ~ approaches that
will move individual firms beyond baseline compliance. For these firms, strategic
environmental management will require the permanent integration of environmental
management functions into the basic, profit-oriented activities of the organization.
Firms taking this approach will seek cost-effective pollution prevention and waste
minimization opportunities as part of their overall commitment to develop innovative new
products, improve product and process quality, and achieve economic growth. For many
firms, this sort of commitment to a more strategic approach to environmental management
represents a difficult adjustment in corporate culture, particularly within the current
economic and regulatory climate.
In order to effectively promote industrial culture change of this nature, EPA is
rethinking its traditional approach to regulation of the industrial sector, with the goal of
harmonizing, to the extent possible, the Agency's future environmental programs with the
economic goals of society. EPA's Administrator, Carol Browner, has emphasized this
objective:
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President Clinton and Vice President Gore [want to achieve] real and
meaningful environmental protection, and to prove once and for all that such
protection can exist harmoniously with a growing economy .... We have
an opportunity ... to firmly establish a productive relationship between
environmental and economic policies.
At present, the strategies and policies to establish that linkage between
environmental and economic priorities have not been fully developed. However, the
Administrator has taken the lead in promoting innovative approaches to deal with
environmental issues facing the industrial sector, both within EPA and under the auspices
of the President's Council on Sustainable Development (PCSD). Administrator Browner
is committed to the development of EPA policies that promote "cleaner, cheaper, smarter"
environmental performance by industrial firms of all types and sizes.
The Sustainable Industry Project is one of the Agency's new industrial sector eco-
efficiency initiatives, focusing specifically on corporate decision-making issues that are
crucial to long-term sustainable development policies for the industrial sector. In developing
this project, EPA's Office of Policy, Planning and Evaluation (OPPE) is seeking to
complement the Agency's traditional emphasis on media-specific regulatory/enforcement
programs and recent emphasis on voluntary programs and technology transfer.
For example, pollution prevention is a critical component of any strategic
environmental management program, and thus should be a major component of EPA's
policy agenda for the 1990's. However, the principal focus of pollution prevention programs
at EPA has been on technical and outreach issues relating to the implementation of
pollution prevention in the industrial sector. While such work is of considerable value,
relatively little has been done to evaluate the economic basis upon which firms may choose
to pursue pollution prevention options, or to identify and assess incentive approaches to
promote cost-effective pollution prevention by industry sub-sectors or individual firms.
Analysis of these types of issues is crucial to the development of effective environmental
policies and programs for the industrial sector.
OPPE initiated the Sustainable Industry Project with the intent of establishing a
strong information and analytic base on which to build an industrial sector environmental
program for the 1990's. In order to accomplish the widespread adoption of strategic
environmental protection throughout U.S. industry, companies will have to permanently
integrate environmental management functions into the basic, profit-oriented activities of
their organizations. These innovative new approaches will be embodied in industrial sector
policies and programs that recognize the need for U.S. industry to remain competitive, while
also fostering a move toward sustainable production strategies through continual and
systematic improvements in environmental performance.
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12 PROJECT GOAL
The primary goal of the Sustainable Industry Project Is to develop, test, and
implement industry-specific policy recommendations that will remove barriers to
innovation and promote strategic environmental protection in the selected
industries. The recommended policies and programs should promote a culture
change throughout the industrial sector, among firms of all types and sizes, in the
form of long-term corporate commitment to achieve cleaner, cheaper, and
smarter environmental performance. The Agency's sustainable industry policies
and programs should be achieved with a reduced reliance by EPA on command
and control regulations. The recommended policies and programs should be
widely implementable and acceptable to all relevant stakeholders (e.g., EPA,
states, industry, and NGOs).
This goal statement is in keeping with the Clinton Administration's commitment to
the concept of sustainable development, which has been defined by the Bruntland
Commission and the PCSD as "meeting the needs of the present without compromising the
ability of future generations to meet their own needs." In the context of wealthy nations,
sustainable development involves "maintaining economic growth while producing the
absolute minimum of new pollution, repairing the environmental damages of the past, using
far fewer non-renewable resources, producing much less waste, and extending the
opportunity to live in a pleasant and healthy environment to the whole population".
Achieving sustainable development in developed economies requires promoting "eco-
efficiency" — becoming more efficient, using less energy and material, producing less waste
and pollution, and destroying less natural habitat per unit of economic growth — in all
economic sectors, including industry.
Achieving eco-efficiency in U.S. industry will require companies to build strategic
environmental protection into their business decisions. By strategic environmental
protection we mean long-term planning and investment by companies to develop the most
cost-effective and innovative environmental management approaches, starting with pollution
prevention. We want to encourage and enable companies to link those approaches to
ongoing efforts to improve product quality, process efficiency, financial performance, and
overall competitiveness. Over the long term, we seek to enhance their environmental and
economic performance and reduce unnecessary conflicts between these two priorities. In
so doing, we will demonstrate how sustainable economic growth can be compatible with
innovative environmental protection in the industrial sector.
President's Council on Sustainable Development, Task Force on Principles, Goals
and Definitions, Discussion Paper (final draft), October 1, 1993, p. 2.
2 Ibid., p. 3.
3 Ibid-, pp. 2-3.
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13 REPORT ORGANIZATION
This version of the report focuses on the metal finishing industry, one of the three
industries studied during the first phase of the Sustainable Industry Project The remainder
of this report is organized in two chapters. Chapter 2 presents the methodology employed
in the first phase of the study. The last chapter is listed as Chapter 4, retaining its
designation from the complete Phase 1 report Chapter 4 presents the first phase results
for the metal finishing industry; it describes the approach used in the initial analysis of that
industry, and the major findings with regard to industry characteristics, key drivers and
barriers affecting environmental performance, and possible policy options for EPA to
explore further.
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PROJECT METHODOLOGY
CHAPTER2
2.1 INTRODUCTION
Chapter 2 provides an in-depth discussion of the methodology and approach. The chapter
covers issues that are general to the entire study. Information on the methodology used that is
specific to the three selected industries is provided in the chapters that follow.
23. INITIAL RESEARCH ON INDUSTRY DECISION-MAKING
A key early task in the project was to gather economic and environmental data on the full
range of manufacturing industries, as a basis for selecting three industries for detailed study. This
in turn required that we first identify characteristics of industries that we thought would be relevant
to factors that drive environmental performance. Once we had selected the three industries for
initial study, this framework was also important in guiding our industry-specific research and the
topics we addressed in interviews with industry contacts.
We conducted an initial literature search to review what other studies had said about factors
that influence environmental performance. This literature review used a broad brush, including all
factors (economic, cultural, regulatory, and other) that might drive environmental practices. While
there is a large and growing literature on this topic, there does not yet exist a predictive model of
firms' environmental decision-making that is in any sense rigorous or quantifiable. In part, this is
because of two factors:
o It is difficult to develop quantifiable decision-making models that provide
valid comparisons across firms and facilities.4
4 OPPE and other EPA offices have been conducting research into ways of measuring
environmental performance, that may yield more quantifiable measures in the future. See, for
example, Industrial Economics, Inc., Pollution Prevention Frontiers fPPF> and Other Approaches
to Pollution Prevention Assessment: Comparison Based on New Jersey Materials Accounting Data.
prepared for the U.S. EPA, Office of Policy, Planning and Evaluation, Pollution Prevention and
Toxics Branch, June 1994.
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Many of the factors that are believed to influence environmental decision-
making are "fuzzy" and not readily measured - such as various aspects of
firm culture and internal structure.
In addition, much of the information on sustainable performance in industry and on
industrial environmental performance is anecdotal in nature and incomplete. The literature
describes exemplary practices and programs, but does not provide clear evidence on why some firms
are taking these proactive measures and others in the same industry are not.
While we did not find an explicit model of industrial environmental decision-making, we
were able to compile a list of variables influencing firms' environmental decisions. Exhibit 2-1 lists
the factors we identified from the literature and that we used as a checklist of characteristics for
evaluation.
Business decisions of industry are often analyzed using a profit-maximization model. While
many factors influence business decisions, it is useful as a starting point to assume that businesses
will act in ways that maximize profits (by reducing costs and/or increasing revenues) and will choose
their least-cost option, other things being equal. Of course, other things are not always equal, and
different businesses choose different business strategies in the same markets.1
For example, one firm may take a high-quality strategy to product design or customer service
that results in both higher revenues and higher costs than another competitor that chooses a low-cost
approach to allow competing on price. Any market may offer room for different competitive
strategies. However, assuming initially that businesses will act to minimize costs provides a useful
first approximation of industry responses to policies that affect costs. A major task in analyzing
industry responses is therefore to understand how environmental policies affect their costs, revenues,
and profits.
More broadly, a number of factors affect industry environmental and economic decision-
making. These factors include federal and state regulation, changes in production technologies, and
foreign competition. Industry structure (e.g., is the industry highly-competitive or characterized by
concentrated market power?) may reflect barriers to entry such as patent ownership, economies of
scale, and substantial customer brand loyalty. These characteristics are relevant to predicting
environmental performance, both because they affect the resources available to invest in
environmental improvements (profits) and the ability to recover the costs of environmental
improvements from customers.
Other factors that are likely to affect both environmental and economic performance include
the nature and capital intensity of production technologies, the size of firms, the availability of in-
house technical expertise, the baseline rate of innovation in products and production processes, the
availability of substitutes for manufacturing inputs, and the price sensitivity of demand for the
industry's products. Identifying a list of factors that might influence environmental decision-making
was only a preliminary step in our analysis, providing some overarching information to support our
industry-specific analysis.
5 Michael Porter's work provides a framework for understanding the strategies of different firms
as the matching of firm competencies to the demands of the target market. See Michael E. Porter,
Competitive Strategy: Techniques for Analyzing Industries and Competitors. 1980, and Competitive
Advantage: Creating and Sustaining Superior Performance. 1985.
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Exhibit 2-1
EXAMPLES OF CORPORATE VARIABLES INFLUENCING
FIRMS' ENVIRONMENTAL DECISIONS
1. Social Variables
Employee Recruitment
Employment Morale
Media Treatment
Corporate Reputation
Community Relations
Plant Siting
2. Market Variables
Growth Markets
Product Image
Customer Loyalty
Product Certification
Competitive Advantage
Industry Standards
Liability Exposure
Insurance Coverage
Damage Compensation
Credit Quality
Capital Access
Investor Relations
Regulatory Variables
Government Relations
Raw Materials Costs
Operating Costs
Litigation Costs
Disclosure/Reporting
International Competitiveness
Source: National Wildlife Federation Corporate Conservation
Council "SYNERGY '92" Conference, January, 1992.
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23 TAKING AN INDUSTRY-SPECIFIC APPROACH
As stated previously, the overall goal of the Sustainable Industry Project is to develop
policies that foster the permanent integration of environmental protection functions into the basic
profit-oriented activities of industrial firms. To accomplish this goal, EPA needs to understand the
factors that motivate or impede a firm's behavior with respect to investment in projects that result
in improved environmental performance. We believe that the best way to understand these factors
is to study the behavior of firms within the context of the industry of which they are a pan.
EPA's traditional one-size-fits-all approach to policy-making, often dictated by statute,
establishes requirements and programs that are applicable to many industries. This approach does
not take into account differences among industries, such as available resources, prevailing corporate
culture, market trends, and corporate decision-making factors in different industries. A one-size-fits-
all approach for the industrial sector therefore may result in programs that effectively achieve
environmental goals in some industries, but fail to do so (or even impose barriers to effective
environmental performance) in others.
On the other hand, an industry-specific approach to policy-making offers opportunities to
design policies that fit the particular characteristics of the industry of interest An understanding
can be gained of industry-specific decision factors and behavior that can then be used to identify
incentive (driver) factors or barriers to improved environmental performance. Since operating
environments and processes vary a great deal across the industrial sector as a whole, policies that
are tailored to unique characteristics of specific industries are likely to be more effective in
promoting cleaner, cheaper, smarter environmental performance by individual firms in those
industries.
Additional factors support an industry-specific approach. Although a wide range of firm
sizes, types and scales of production processes, and levels of technical and environmental
sophistication may coexist within an industry, the participating firms frequently face similar
environmental issues with respect to types of emissions. Development and implementation of EPA
policy options at an industry level is thereby simplified because attention can be focused on
promoting improved environmental performance through management of a limited number of
processes.
Firms within industries classified at the 4-digit SIC level generally utilize similar technologies
and production processes, purchase raw materials from the same types of suppliers, and compete
with each other in many of the same markets on the basis of product design and performance, price,
quality, and service. These upstream and downstream relationships can be very important with
respect to environmental decision-making within an industry.
Because a relatively limited number of markets are served by a given industry, competitive
imbalances that may be caused by a specific policy option can be more accurately assessed prior to
implementation of the policy because EPA can more easily understand the competitive dynamic
occurring among the various firms within an industry than it can assess the effects of controlling a
specific pollutant across many industries. The Agency can use this knowledge of the competitive
dynamic of an industry to identify points within the industry's structure and culture where policies
can have the broadest, long-term impact.
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While it has many advantages, an industry-based approach is not the only method that can
be used to assess policy options. Historically, EPA's efforts to address environmental problems have
employed geographic, industry, and/or chemical-based approaches. While all three approaches have
their place, the industry-based approach has received less attention in recent years. The Sustainable
Industry Project is founded on the premise that the increased tension between economic and
environmental objectives in recent years demands a more sophisticated understanding of the
interrelationship between these objectives, and that this understanding can be best achieved via an
industry focus.
2.4 USING A BACKWARD MAPPING ANALYTICAL METHOD
"Backward mapping" is an approach to policy implementation described by Richard Elmore.6
He distinguishes two approaches to implementation analysis:
o "Forward-mapping" begins by defining a policy objective, elaborates
increasingly specific steps for achieving that objective (starting with the top
of the implementation hierarchy and working down), and identifies outcomes
by which success or failure will be measured. It relies on the implicit
assumption that policymakers can control the organizational, political, and
technological processes that determine outcomes.
o "Backward-mapping" begins not with a statement of policy objectives, but
with a description of the behaviors that the policy seeks to influence. Only
when the behavior creating the need for a policy is fully understood is a
policy objective defined and desired outcomes identified. The policy is
developed by working backward from the most directly involved parties, and
asking at each level of the system what would encourage a desired change in
behavior. This analysis focuses on what incentives and resources each stage
would need to make the desired changes.
As applied to environmental policy, a forward-mapping approach would yield hierarchical,
"command-and-control" policy solutions, with a distrust of discretion at lower levels in the system
and an emphasis on compliance with inflexible standards. A backward-mapping approach seeks to
capitalize on knowledge and skill at the point of impact to achieve environmental policy objectives,
by creating incentives or removing barriers to the desired behavior. In Elmore's words, backward
mapping emphasizes "that it is not the policy of the policymaker that solves the problem, but
someone with immediate proximity.... Rather than reasoning from top to bottom, trying to discover
how each layer can control the next, one begins at the point of the problem and tries to find the
most parsimonious way of reaching it."7
6 Richard F. Elmore, "Backward Mapping: Implementation Research and Policy Decisions,"
Political Science Quarterly. Vol. 94, No. 4, Winter 1979-80, pp. 601 ff.
7 Ibid., p. 612.
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Based on the backward mapping approach, the sustainable industry project emphasizes
understanding the factors that influence the behavior of different players in each industry, before
recommending any policy prescriptions. We use the concepts of "drivers" and "barriers" to
distinguish factors that encourage or hinder, respectively, improved environmental performance in
industry. Drivers and barriers include any variables that influence decision-making with respect to
environmental performance. For example, if a firm has to undertake an investment in pollution
controls to comply with a specific regulation, then the regulation acts as a driver of environmental
improvements. If the firm is contemplating an environmental investment but cannot obtain the
necessary financing, then financial constraints act as a barrier to environmental improvements.
Understanding the factors that influence environmental performance provides the basis for
designing policies to encourage improved performance. Starting with a thorough understanding of
the factors that influence the key industrial actors gives EPA the opportunity to align policy
objectives with their business objectives. With this insight into the dynamics of the industry, EPA
has the opportunity to use a broader and potentially more effective set of policy levers, rather than
being limited to traditional command-and-control options.
25 SELECTING THREE INDUSTRIES FOR STUDY
Our intended scope for this project was to work with a set of two to four industries. We
started with a preliminary list of about ten industries, identified by 4-digit Standard Industrial
Classification (SIC). We collected economic, environmental, regulatory, and other data on the
original list of industries, and selected three for the first phase of this project: photographic
manufacturing and processing (photoimaging), metal finishing, and plastics and resins. (We
subsequently focused on the thermosets subset of the plastics industry.) The types of data and the
selection criteria are summarized below. A more extensive discussion of the "candidate" industries
is provided in the Appendix of this report.
We conducted the industry selection process using Standard Industrial Classifications (SICs),
because most data sources that provide comparable data across industries report data aggregated
by SIC.* The following measures of economic and financial characteristics were collected for all
manufacturing SICs:
8 SICs are two- and four-digit codes that group similar establishments by industry. An
establishment is a single location: a manufacturing facility, a headquarters location, a retail outlet,
and the like. Most establishments in the manufacturing SICs (SIC 20 through 39) are manufacturing
facilities. The basis for defining SICs varies, and the categories are often not ideally defined for the
purposes of a particular analysis. Some SICs combine industry subsectors that have very different
characteristics, and in other cases a single "industry" (as defined by the markets served or the type
of processes used) includes several SICs. In addition, establishments report data based on their
primary product, but may produce products associated with other SICs as well. Therefore, some of
the products or services which define the primary SIC may be produced as secondary products by
establishments in other SICs. While the SICs provide a useful standardized reporting system for
data, it is important to realize that there may be a discrepancy between an "industry" and the most
closely related SIC.
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o Number of establishments;
o Size distribution of establishments;
o Production characteristics (capital versus labor intensive);
o Market concentration (based on share of value of shipments);
o Geographical concentration; and
o Economic performance (using capital utilization as a proxy).9
We also collected data on various environmental outcomes as a measure of environmental
performance. The available data give only a general picture of the environmental characteristics of
an industry, however, and do not reveal the extent to which industry participants have taken full
advantage of all existing methods for improving performance - that is, how many industry players
are operating with state-of-the-art production processes and pollution controls. We used two sources
of environmental data in the industry selection process: Toxics Release Inventory (TRI) releases
and transfers of toxic chemicals (total and by media), and energy consumption (a proxy for emissions
from fuel combustion and potential for energy efficiency improvements).
Finally, we investigated the current regulatory status of the candidate industries. For each
industry, we considered the size of current and historical pollution abatement and control
expenditures, and the extent of current and future EPA regulation (particularly under the Qean Air
Act, the Qean Water Act, and the Resource Conservation and Recovery Act).
The selection of the industry sectors for detailed investigation in the first phase of the
Sustainable Industry Project was guided by the following criteria:
o We wanted to select industry sectors that present significant opportunities for
EPA to encourage movement toward sustainable practices. This criterion
suggested that we pick industries with substantial releases to the
environment, as reported in the Toxics Releases Inventory.
o In addition, we wanted to select industries that might benefit from use of
innovative policy approaches that go beyond the traditional command-and-
control paradigm. This goal encouraged selection of industries (1) with
multi-media rather than single-medium releases, (2) with significant historical
expenditures on pollution abatement and control, and (3) facing significant
current and future regulatory requirements.
9 Later research on the three selected industries also included other important economic
variables, such as extent of foreign competition, growth rates, and financial characteristics.
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Similarly, we were interested in picking industries that would particularly
benefit from an industry-wide, life-cycle focus. Therefore, we picked
industries that appeared to present life-cycle issues, and to present interesting
relationships among suppliers, manufacturers, downstream businesses, and
end-users.
We also wanted to select a set of industries that appeared to have different
characteristics from one another, so that we could learn as much as possible
about the applicability of our analytical approach to different types of
industries. A more diverse set of industries, in terms of company size, scope
of environmental issues, and market and product trends will provide us with
a broader range of experience as we seek to implement the policy options
developed through this project.
Finally, we wanted the results of the sector studies to provide insights into
influences on environmental performance and the effects of different policy
strategies for other industries as well. This goal of generalizing results
required that we pick industries that presented common rather than unique
environmental issues, and that we pick a set of industries that together would
cover a range of economic and environmental characteristics.
The selection of three industries for detailed study was necessarily judgmental. Other
industry sectors could easily have been chosen, applying the same decision criteria. Exhibit 2-2
summarizes some of the key data for the three selected industries.
As a group, these three industries provide us with a variety of economic characteristics which
we expect to influence environmental performance, including establishment size, difference in capital
versus labor intensive production, and more and less concentrated markets. All present multi-media
pollution problems, when viewed from a life-cycle perspective, and are subject to current and
forthcoming regulations at the federal level.
As for the desired diversity of characteristics, the three selected industries clearly reflect
different types of companies and issues. The metal finishing industry includes a large number of
relatively small operations, often with limited resources and a large set of regulatory requirements
with which to comply. The photoimaging industry is highly concentrated on the manufacturing side
and widely diffuse on the processor side, with fewer environmental issues but significant
opportunities for cleaner, cheaper, smarter initiatives nonetheless - particularly in view of the highly
technical, innovative nature of the industry. The plastics and resins industry was selected to
represent a typical huge, widely diverse industry, with many different types of companies, products,
and issues. Even with the subsequent change in focus to the thermoset plastics subsector, these
characteristics remain valid.
As discussed in the industry-specific chapters, further work led us to refine our focus in each
of the three sector studies; we narrowed the scope of our analysis enough to allow us to understand
technical, economic, management, and environmental issues in detail, and to identify the key
leverage points for each industry. Despite these adjustments in focus, the desired variety in issues
and industry characteristics has been retained from the initial selection process.
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Exhibit 2-2
KEY CHARACTERISTICS OP SELECTED INDUSTRIES
Total Number of
Establishments*
Number of Establishments by
Employee Size Category:*
1-19 employees
20-249 employees
250+ employees
Concentration Ratios - Share of Value
of Shipments by:*
4 largest companies
8 largest companies
20 largest companies
Ratio of Capital to Labor
Expenditures**
Capacity Utilization Rate (1990)***
[TRI Releases (1990):
Air
Water & POTWs
Land & Underground
Offsite Transfers
Total
Pollution Abatement and Control
Expenditures (&
percent of total expenditures)**, ***,*
Purchased Fuels and Electricity as
Percent of Total Expenditures***
Future Federal Rule-Makings
Photographk
Equipment &
Supplies
(SIC 3861)
787
508 (65%)
242 (31%)
37 (4%)
77%
84%
90%
30.3
77%
29,968,807
1,153,916
115,244
6,156,799
37394,766
$157 mill
(1.4%)
1.7%
CA: VOC
limits
RCRA:
Solvents
listings
& Polishing
(SIC 3471)
3,451
2,408 (70%)
1,032 (30%)
11 (<1%)
7%
10%
16%
10.0
82%
11,830449
3,963,623
45,252
16,480,193
32419,617
$236 mill
(7.0%)
6.2%
CArMACT
for surface
coating,
degreasing/
metal
cleaning
RCRA:
Solvents
listing
1'lflStKS Ibfat^riaW
A Resins
(SIC 2821)
480
160 (33%)
266 (55%)
54 (11%)
20%
33%
61%
722
96%
102,874,467
16,27,877
4,452326
39,730,186
163,284,856
$929 mill
(3.9%)
4.4%
CA: MACT for
numerous
individual plastics
& resins
RCRA: solid
waste legislation
affecting end-uses
of plastics
CA: Effluent
guidelines
Photographic
lf«-»-i regain « /CT/"*
iTocesung (MC
7384 & 7819)"
580,000
522,000 (>90%)
58,000 (< 10%)
0
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$45 mill
NA
CWA: Effluent
Guidelines
RCRA: Silver
listing
1987 Census of Manufactures
1991 Annual Survey of Manufactures
Current Industrial Reports, Survey of Plant Capacity 1990
Total expenditures includes capital equipment, labor and materials.
Values for this industry were obtained from the National Association of Photographic Manufacturers
(personal communications) and The Silver Coalition (An Economic Assessment of the Impact Resulting
from Silver Pretreatment Standards. June 26, 1992).
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2.6 IDENTIFYING DRIVERS, BARRIERS, AND POSSIBLE POLICY OPTIONS
Once the three industiy sectors were selected, our goal was to gather extensive information
on each industry, including corporate decision-making factors in the industries, in order to create
the knowledge base necessary to support policy recommendations that would meet the goal of the
project. A team of OPPE and contractor staff from Industrial Economics, Inc, (EEc) was formed
for each of the industries. The Phase 1 work for each industiy followed the same major steps, but
each industry study differed somewhat in the topics emphasized and the results achieved to date.
The first step of the data-gathering process was to develop a thorough understanding of the
relevant characteristics of the industries - the industry-specific economic, institutional, cultural,
technical, life-cycle, and regulatory factors - that may promote or hinder environmental
improvements. A key aspect of this characterization of the selected industries was the identification
of the driver factors and barriers that influence corporate decision-making and environmental
performance. The drivers and barriers represent the key leverage points for the industries - the
regulatory, informational, economic, or other factors — that provide the greatest incentives or impose
the most significant obstacles to improved environmental performance. Our emphasis here was on
the identification and prioritization of corporate decision factors, rather than on EPA's traditional
role of assessing and managing environmental risks. The driver factors and barriers provided the
basis for subsequent policy development.
The next crucial step in the analytical approach of this project was the development of a
menu of policy options and recommendations that we would anticipate having the greatest long-term
impact on the selected industries in terms of achieving the overall goal of the project - to promote
strategic environmental protection in the industries. The identification of these policy options is
based on our knowledge of the industries, their characteristics, unique driver factors, and barriers
to innovation. The recommended actions are both regulatory and non-regulatory in nature.10 The
actions may be taken by EPA headquarters or regions, states and localities, the industries themselves
or their suppliers or customers, or other entities.11 Some actions might require statutory changes,
while many are achievable within existing statutory mandates.12 Our approach was to link the
10 The description of policy options as regulatory or non-regulatory is somewhat arbitrary, and
the line between the two categories is blurred. Strict use of the term "non-regulatory" would include
only those options that rely solely on incentives to influence behavior, without any mandatory
provisions. In practice, a very wide range of incentives, quasi-regulatory, and regulatory policies are
typically discussed in studies of "non-regulatory" options. For example, deposit-refund systems used
to encourage the return of materials to a central location include both incentives (for the ultimate
customer to return the materials) and regulations (requiring intermediaries to accept the materials
and return them to a central location). Similarly, marketable rights are typically used within the
context of a regulatory program, e.g., trading of rights to emit criteria air pollutants in a given area,
subject to a regulatory maximum on total emissions or minimum standard for ambient air quality.
In this case, the creation of markets promotes compliance with the regulatory standard at the lowest
aggregate cost to the regulated facilities.
11 In all cases, we will identify steps that EPA could take to promote adoption of the best
policies, even if EPA would not be the lead agency implementing tlie policy.
12 However, when evaluating potential difficulties in implementing the options, we will clearly
distinguish options requiring statutory changes from those that do not.
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policy options to the key leverage factors for the industries, so as to promote cleaner, cheaper,
smarter environmental outcomes over the long-term future, preferably with less Agency involvement
over time.
An important aspect of our policy development process was to look at each industry and at
policy options with a broad, holistic perspective. Often, policy strategies are considered only in the
context of a single rulemaking. Many regulatory decisions are highly constrained by specific
legislative mandates and by the precedents set by earlier nilemakings. This narrow focus may miss
opportunities to take positive, non-regulatory actions or to coordinate and rationalize regulations
and enforcement across programs. Also, the general applicability of regulations to many industries
may fail to reflect unique factors that affect environmental performance in specific industrial sectors
or sub-sectors.
By contrast, the approach used in the Sustainable Industry Project involves looking at
environmental issues in a comprehensive life-cycle context, considering all the environmental
dimensions of industrial products and processes (all media and all important end-points) and a full
range of policy options. The broad perspective is necessary to ensure that policies promote true
movement toward sustainability, not just shifting of problems from one medium, source or type of
adverse outcome to another.
2.7 BUILDING PEER REVIEW AND STAKEHOLDER NETWORKS
Our initial outreach efforts for this project focused on peer review of our overall concepts,
goal, and intended approach. Since early 1993, we have discussed the project with close to 100
individuals in EPA and other federal departments and agencies, industry, state governments,
academia, the media, and other non-governmental organizations (NGOs). We have actively solicited
suggestions for improving our methodology, and have attempted to be responsive to all comments
about the project as a whole. This peer review effort will continue throughout the life of the project.
As we moved into the data-gathering phase of the project in mid-1993, we began the
essential process of developing stakeholder networks for each of the three selected industries. In
view of our intent to focus first on characteristics of the three industries, we made a significant effort
early in Phase 1 to identify and connect with the key individuals and organizations in each industry,
in order to begin to understand the issues as industry perceives them. These interviews with industry
contacts provided an important initial source of information on drivers and barriers. These early
rounds of interviews generated a wider range of hypotheses about drivers and barriers of
environmental performance, which we were able to test in discussions with an expanding set of
stakeholders in later stages of the Phase 1 work. Major trade associations for each industry were
important sources of contacts in individual companies. In addition, we had the help of consultants
with expertise in the particular industries.
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In addition to interviews with trade associations and company contacts, we conducted site
visits to manufacturing facilities to enhance our understanding of the manufacturing technologies
and plant-level environmental issues. We also conducted a review of the trade literature and the
pollution prevention and control literature for each industry.
During the course of our research and interviews, we began identifying industry and other
contacts who might participate in an expert panel for each industry. The first set of expert panel
meetings was held in January, 1994. The primary purpose of these meetings was to verify our
understanding of the economic and environmental characteristics of each industry, and to determine
the key drivers and barriers affecting performance. The initial expert panel discussions of drivers
and barriers provided a preliminary list of policy options that might enhance incentives or reduce
barriers to more sustainable industry practices.
After the first round of industry expert panel meetings, we began to expand our stakeholder
networks to include other important, non-industry participants. These non-industry stakeholders
include members of EPA offices that are responsible for programs of particular significance to the
industries; NGO representatives from environmental organizations and other groups with interest
in the industries (e.g., the Association of Metropolitan Sewage Agencies, representing POTWs); and
representatives of relevant federal, regional, state, and small business interests.
A second round of expert panel meetings, involving more diverse groups of participants,
occurred in February and March of 1994. The goals of these meetings were to verify our
understanding of key industry characteristics, drivers, and barriers - this time through a dialogue
with a wider set of stakeholders - and to select key policy areas for focus in Phase 2 of the project.
As with our peer review efforts, the development of industry-specific stakeholder networks
is an ongoing process. We want all interested viewpoints to be represented in our data-gathering
and analytical processes, to ensure the accuracy of our substantive findings, to elicit innovative ideas
to the maximum extent possible, and to enable stakeholders with divergent points of view to engage
in constructive dialogue. Over the long-term future, these networks will help to provide a solid
substantive basis for our policy recommendations and a broad participant base for future
public/private partnerships to implement those policies.
2.8 NEXT STEPS
This report reflects work completed through the second round of expert panel meetings for
each of the three industries, the last of which occurred on March 15,1994. The remaining chapters
of the report provide in-depth discussions of the three industries that were the subject of this study,
including the top policy options identified for each industry.
The Sustainable Industry Project remains a work in progress. Each of the industry sectors
will need additional investigation to clarify the issues that have been raised. More work is also
needed to continue broadening the stakeholder network, and involve some groups whose views have
not yet been adequately represented.
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During Phase 2 of this project we will further develop and characterize potential
implementation projects for each industry that will test the environmental and economic impacts of
the industry-specific policy options identified in Phase 1. The implementation projects, which are
the logical next step of our backward mapping analytical approach, will be undertaken in Phase 3.
The projects may include implementation and testing of policies on a pilot basis, cooperative efforts
to develop definitions or information needed to implement new policies, tests of innovative
compliance and enforcement approaches, and further research on key scientific or technical issues.
We will use the implementation projects to assess whether the specific policy options effectively
address the key drivers and barriers that affect long-term environmental performance in each
industry.
We believe that the following tasks will likely be a part of Phase 2, subject to change as we
continue to be responsive to new information, input from stakeholders, and the views of EPA
management:
o Holding additional meetings with industry/stakeholder expert panels, and
interviews with parties involved in each of the policy areas selected for focus,
to clarify the issues involved and understand what specific actions would be
required to implement a new policy to address the issues. The project team
will continue to contact stakeholders whose views have not yet been fully
represented in the expert panel discussions and interviews. In particular,
more involvement by environmental groups, state regulators, EPA regional
representatives, and groups with practical experience with various non-
regulatoiy policies will be solicited.
o Developing EPA cross-office teams to work with OPPE project managers -
in particular, to review, assess and revise the findings for each industry and
to comment on the design of useful implementation projects. These teams
will include regulatory, compliance, and permitting representatives whose
selection will be based on the specific issues and options identified for each
industry.
o Preparing strategic plans for individual implementation projects, along with
background materials on the issues motivating consideration of each project,
fdr review by all major stakeholders, including EPA program offices and
senior management. The plans will define the purpose of the projects and
success measures by which the results can be evaluated. Dear definition of
"success" and concrete ways of determining success will be critical to making
the project results a valid basis for broader policy decisions.
We anticipate that the implementation stage of the Sustainable Industry Project will require
broad stakeholder participation, with OPPE playing a coordinating and facilitating role, but not
necessarily a leadership role in every implementation project. The strategic plans, participants,
resource requirements, timeframe, and success measures of each project will differ based on the
industry-specific driver factors and barriers that are being addressed.
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Once implementation projects are developed and underway, OPPE will assess environmental
and economic results of policy options, to test whether the anticipated payoffs of the recommended
policies are in fact being achieved. On this basis, we can with greater confidence make broad policy
and programmatic recommendations to the Administrator.
2-14
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THE METAL FINISHING INDUSTRY
CHAPTER 4
4.1 INTRODUCTION
This chapter discusses the background information and preliminary findings of the
Sustainable Industry Project's analysis of metal finishing industry. This introduction outlines the
contents of this chapter. The approach to our analysis, including the scope of the project, an
industry profile, and our information sources are addressed hi Section 4.2. Section 4.3 presents our
findings to date, including:
(1) Information on the economic characteristics of the industry;
(2) Descriptions of key factors that influence environmental performance in this
industry (drivers and barriers); and
(3) A list of policy options that might enhance the drivers and reduce the
barriers to improved, more cost-effective environmental performance by the
metal finishing industry.
42 APPROACH TO ANALYSIS
4.Z1 Scope
The Electroplating, Plating, Polishing, Anodizing, and Coloring industry1 is classified under
Standard Industrial Code (SIC) 3471 and includes establishments primarily engaged in all types of
electroplating, plating, anodizing, coloring, and finishing of metals and formed products for the
trade. This industry also includes establishments that perform these types of activities on purchased
metals or formed products. Establishments that both manufacture and finish products are classified
according to their products, but nonetheless are considered a part of the metal finishing industry.2
1 Hereinafter referred to as the metal finishing industry.
2 Although much of the industry data collected for this study applies to establishments classified
under SIC 3471, establishments classified under SIC codes other than 3471 that have metal finishing
operations are also considered in this analysis.
4-1
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4.2J2 Overview of Industry
In general, establishments engaged primarily in metal finishing tend to be small,
independently owned "job shops." In this report, we often refer to these establishments as
independent metal finishers. Establishments that conduct metal finishing operations as part of a
larger manufacturing operation are referred to as "captive" metal finishers. While most of the data
analyzed in this report have been collected from independent metal finishers, we believe the analysis
is applicable to the captive metal finishers as well. Enough similarities exist between the
independent and captive facilities that they can essentially be considered part of one industry. In
addition, the two segments have parallel ties with suppliers and customers. Differences that do exist
between the two segments can be used to understand more fully the drivers of the decision-making
processes and the barriers to improved environmental performance in each segment.
The independent and captive metal finishers use the same types of processes and fail within
the same regulatory framework. Captive operations may be more specialized, or focused, in their
operations because they often work only on a limited number of products and/or employ a limited
number of processes. Independent metal finishers, on the other hand, tend to be less focused in
their operations because they may have many customers, often with different requirements. In
general, captive metal finishers tend to have greater access to financial and organizational resources
and, as a result, tend to be more proactive in their approach to environmental management;
however, this isn't always the case. Independent and captive metal finishers do not ordinarily
compete against each other since captive finishers seldom look for outside contract work. However,
captive facilities may use independent facilities as subcontractors to perform tasks that their own
captive operations are unable or choose not to do. In addition, some captive facilities have been
recently shut down in cases where management has decided that metal finishing is not of strategic
importance to the firm's long-term success. In these cases, the firm's plating activities are shifted
to independent shops.
The metal finishing industry has developed close relationships over the years with both its
upstream material and equipment suppliers and its downstream customer base. Metal finishers have
come to rely upon their suppliers to help them understand new developments in plating technology
and upon their customers to define product requirements. Excellent plating quality and responsive
service are the two defining competitive variables within the metal finishing industry.
4JL3 Information Gathering an j
Our goal in this study was to characterize the metal finishing industry to understand the
products and processes used in the industry; supplier/industry/customer relations; industry and firm-
level structure and organization; financial and economic histories and trends; and the drivers toward
and barriers against environmental improvement that affect the industry now and/or are likely to
affect the industry in the future. As discussed in Chapter 2, we define drivers and barriers as those
leverage points that directly affect corporate decisions in areas such as environmental compliance
and improvement. In order to obtain this information, we collected and reviewed numerous
documents and data sources which describe the metal finishing industry. In addition, we contacted
numerous agencies, organizations and individuals who had knowledge of the metal finishing industry.
A list of the information sources used in this analysis can be found in Exhibit 4.2-1.
4-2
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Following this initial data collection, we compiled a preliminary list of what we felt were
some of the key industry characteristics and trends, as well as lists of the drivers of decision-making;
barriers to improved environmental performance; and possible incentives to improved environmental
performance. These preliminary findings provided the framework for discussion at an industry
expert panel meeting held on January 14,1994, that consisted only of industry members and experts.
At this meeting panel participants assisted us in clarifying the major issues, drivers, and barriers, and
in identifying potential policy options that EPA could consider to remove some of these barriers.
Hie organizations that were represented at this expert panel meeting are listed in Exhibit 4.2-2. For
a complete list of the individuals who attended this meeting see Appendix 4-C
bit 4.2-2
PANEL MEETING PARTICIPANTS
Pud Meeting *1 - January 14,1994
American Electroplaters and Surface Finishers Society
(AESF)
Connecticut Resource Group, Inc.
Enthone-OMI Corporation
Frederick Gumm Chemical Company
Howard Corporation
Integrated Technologies, Inc.
Metal Finishers Suppliers Asaodatkta (MFSA)
Mid-Atlantic Finishing, Inc.
National Association of Metal Finishers (NAMF)
Simmonds Precision Aircraft Systems
(BF Goodrich Aerospace)
Universal Fasteners, Inc.
ing J2 - Man* 11,1994
American Electraplaten and Surface Finishers Society
(AESF)
Association of Municipal Sewage Agencies (AMSA)
Connecticut Resource Group, Inc.
Environmental Defense Fund
EPA. Definition of Solid Waste Task Force, Office of
Solid Wa
EPA, Engineering and Analysis Division,
Office of Water
EPA, Office of Compliance, Office of Enforcement
«nrl fnf^pliatwn Assurance
EPA, Risk Reduction Engineering Laboratory, Office
of Research and Development
Frederick Gumm <"h""»«i Company
Haward Corporation
HopewcU Regional Wastewater Facility
Integrated Technologies, Inc.
Metal Finishers Suppliers Association (MFSA)
Mid-Atlantic Finishing, Inc.
National Association of Metal Finishers (NAMF)
Pollution Prevention International
Simmonds Precision Aircraft Systems
(BF Goodrich Aerospace)
4-4
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Based on the discussion at the panel meeting, we made changes to the initial list of drivers,
barriers, and possible policy options that we had identified.
On March 11,1994, we convened a second panel meeting for the purpose of involving other
stakeholders to the metal finishing industry who are not industry or trade association members. The
goal of this second meeting was to reaffirm our characterization of the industry and to identify and
prioritize some of the more acceptable and feasible policy options that EPA could consider for this
industry. The participants in the second panel meeting included regulators, publicly owned
treatment works (POTW) representatives, environmental organizations, as well as industry members
and trade association representatives. The participating organizations and agencies also are listed
in Exhibit 4.2-2. A discussion of the findings of the second panel meeting is included in Section
4.3.3 below.
43 MAJOR FINDINGS
43.1 Industry Characteristics
Definition of Metal Finishing
Electroplating, plating, polishing, anodizing, and coloring are industrial processes that either
coat or finish metal or other formed products. Finishing, or more broadly speaking surface finishing,
is the process of coating a metallic or plastic object with one or more layers of another metal, paint,
or plastic to enhance, alter, or finish its surface.1 Firms that apply these coating processes to a
metallic base material can be grouped together in what is referred to as the metal finishing industry.
Surface finishing/metal finishing provides protection for the base material and/or changes the surface
of the base material to create any one or some of the following desirable characteristics:
Improved appearance
Corrosion resistance
Abrasion resistance
Wear resistance
Improved lubricity
Improved decorative appearance
Improved solderability
Light reflectivity
Improved electrical properties
(e.g., insulation, conductivity)
Temperature resistance
Non-toxicity
Markets
The metal finishing industry is a highly diverse and flexible industry catering to many
applications. Products that have undergone surface finishing can be found almost anywhere. Some
examples of the major industries that depend upon metal finishing in the manufacturing of their
products are:
"•" This definition is taken from the brochure "Understanding Surface Finishing," published by the
National Association of Metal Finishers (NAMF), Chicago, Illinois.
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Automotive
Aerospace
Commercial Aviation
Communication
Computer Equipment
Construction Hardware
Defense
Electric Hardware
Furniture
Household Appliances and Accessories
Jewelry
Motorcycles/Bicycles
Oil Drilling Equipment
Steel Mill Products
Tools and Dyes
Processes
In general, objects to be finished (workpieces) undergo three stages of processing, each of
which involves moving through a series of baths containing reagents designed to complete a certain
step in the process.4 These three stages are listed below, and Exhibit 43-1 illustrates each of the
three basic stages and the steps typically associated with them.
1. Surface Preparation. The surface of the workpiece is cleaned in preparation
for treatment; detergents, solvents, caustics, and other media are commonly
used in this stage, and the workpiece is then rinsed.
2. Surface Treatment. This stage involves the actual modification of the
workpiece surface, such as plating.
3. Post Treatment. The workpiece, having been treated, is rinsed and subject
to further finishing operations, such as coloring or anti-corrosion treatment.
Exhibit 4 3-1
OVERVIEW OF METAL FINISHING PROCESS
Alkaline
Cleaner
«*•
-
AcfcJDip
^^
ROM
|
Plating or
Hardening
|
Rinw
*
FmtoNng
TrMkTMfrt
RhiM
Surface Preparation
Surface
Treatment
Post
Treatment
4 Note thai these steps will vary according to the specific process type (e.g., electroplating,
plating, etc.)
4-6
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Facilities
Exhibit 4.3-2 shows the distribution and value of sales in each size category of SIC 3471
establishments for the years 1982 and 1987. As noted earlier, there are two main types of metal
finishing establishments, independent metal finishers and captive metal finishers. Approximately
3,500 independent metal finishing establishments operate hi the United States. These establishments
receive their workpieces from outside their company. A typical job shop is a small single
establishment that employs 15 to 20 people and generates $800 thousand to $1 million in annual
gross revenues.5
Greater than two-thirds of independent metal finishers employ less than twenty employees,
and less than one-half of one percent of the establishment have 250 or more employees. Between
1982 and 1987 the total number of independent metal finishers employing less than 20 employees
declined slightly, while those employing 20 employees or more increased by a corresponding amount.
Exhibit 43-2
ESTABLISHMENT SIZE DISTRIBUTION IN SIC 3471
Number of
Employees
1-4
5-9
10-19
20-49
50-99
100-249
250-499
500-999
Totals
1982
Number of
PjttahK«linw>nt(
1,006
745
801
638
191
61
7
1
3,450
Vahw of $i»«p«peii*»
(minions of doOan)
$ 92.2
$ 206.6
$ 396.0
$ 815.8
$ 605.6
$ 481.1
$ 134.0
(D)
$2,7313
1987
Number of
FjrtflMMimciitf
943
706
759
719
233
80
8
3
3,451
Value of Shipments
(motions of doOan)
$ 100.6
$ 228.1
$ 500.6
$1,100.2
$ 924.6
$ 732.0
$ 280.7
(D)
$3,866.8
Source: Census of Manufacturers: 1982, 1987.
(D) - withheld to avoid disclosing data for individual companies; data are included in higher level totals.
5 Taken fioin the biochiue "Undemanding Surface Finishing," published by the National
Association of Metal Finishers (NAMF), Chicago, Illinois.
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Captive metal finishers are integrated into a larger manufacturing operation. These
establishments, which both manufacture and finish products, are classified according to their end
products and, therefore, are not listed under SIC 3471. Estimates indicate that there are
approximately 10,000 captive finishing operations in the United States.
Although the metal finishing industry is geographically diverse (in 1987, 35 states employed
ISO or more people in SIC 3471; total employment was 71,100 persons), the industry is heavily
concentrated in what are usually considered the most heavily industrialized regions in the United
States. This geographic concentration occurs in part because small metal finishing facilities often
find it cost-effective to be located near their customer base.
Waste Streams
Air emissions, wastewater effluent, and solid waste are all produced during the metal
finishing process. These wastes predominantly result from (1) the use of organic halogenated
solvents, ketones, aromatic hydrocarbons, and acids during the surface preparation stage; and (2)
the use of metals (primarily present in the form of dissolved salts in the plating baths) in the surface
treatment stage of the process. Cyanide, used widely in copper plating baths, is also a pollutant of
concern.
The top 25 chemicals in the TRI database for SIC 3471 from 1987-1990 (ranked in order of
decreasing release quantities) constitute the following categories, with the TRI rankings given in
parentheses.6
o Acids: Sulfuric acid (1)
Hydrochloric acid (2)
Nitric acid (7)
Phosphoric acid (17)
o Solvents: 1,1,1-Trichloroethane (3)
Trichlorethylene (6)
Dichloromethane (methylene chloride) (9)
Tetrachloroethylene (13)
Methyl ethyl ketone (15)
Toluene (19)
Xylene (21)
Acetone (25)
6 The list contains only 22 chemicals. Sodium sulfate (5) and aluminum oxide (18) were deiisted
from EPCRA Section 313 in 1988 and are no longer reported to TRI; sodium hydroxide (4) was
deiisted in 1989.
4-8
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o
o
Metals: Nickel compounds (8)
Zinc compounds (11)
Chromium compounds (12)
Zinc (14)
Nickel (16)
Copper (20)
Chromium (22)
Copper compounds (23)
Cyanide: Cyanide compounds (24)
Other: Freon 113 (10)
This TRI database ranking is by total release and transfer, without regard to risk to human
health. In addition to the chemicals noted above, several SIC 3471 substances listed in the TRI
database have National Fire Protection Association Health ratings of 3 or 4, which indicate a high
level of risk to human health.
Metal finishers are required to control, treat, and reduce their wastes. Firms in SIC 3471
had annual capital expenditures of approximately $40 million for pollution abatement for the years
1989 through 1991. This amounts to greater than 20% of the total capital expenditures for the
industry. Exhibit 4.3-3 breaks down the pollution abatement costs by media.
Exhibit 43-3
POLLUTION ABATEMENT CAPITAL EXPENDITURES
(millions of doDars)
Year
1989
1990
1991
Total
Expenditures
$44.9
$34,7
$42.1
Air
End of
Une
$2.9
$2.7
$83
Change* in
Production
Processes
$1.0
$0.7
$3.1
Water
End of
Line
$18.7
$19.2
$19.7
Ounces in
Production
FfdCf t§Ct
$63
$5.0
$7.9
Solid Waste
H*ardou*
$8.5
$5.4
$2.9
Nan-
Hazardous
$7.5
$1.7
$0.2
Source: Census of Manufacturers: 1989, 1990, and 1991.
Regulatory Framework
Three major pieces of federal legislation regulate releases and transfers from the metal
finishing industry: (1) the Clean Air Act as amended in 1990 (CAAA); (2) the Clean Water Act
(CWA); and (3) the Resource Conservation and Recovery Act (RCRA).
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Clean Air Act
The Gean Air Act, as amended in 1990, established a list of 189 hazardous air pollutants
(HAPs). Of the 56 SIC 3471 substances reported in the TRI database for 1990,33 are included on
the list of HAPs. Under the CAAA, Congress required EPA to identify major and area source
categories associated with the emission of one or more listed HAPs. To date, EPA has identified
174 categories of sources. Congress also required EPA to promulgate emission standards for listed
source categories within 10 years of the enactment of the CAA amendments (by November 15,
2000). These standards are known as National Emission Standards for Hazardous Air Pollutants
(NESHAPS).
EPA is currently working on two NESHAPs that will directly affect the metal finishing
industry. A summary of these two activities follows.
1. NESHAP: Chromium Electroplating
The chromium electroplating process emits a chromic acid mist in the form of hexavalent
chromium (CR*6) and smaller amounts of trivalent chromium (Cr*J). Human health studies suggest
that various adverse effects result from acute, intermediate, and chronic exposure to hexavalent
chromium. As a result, EPA has proposed a NESHAP (58 FR 65768, 12/16/93) for chromium
emissions from hard and decorative chromium electroplating and chromium anodizing tanks.
These standards propose to limit the air emissions of chromium compounds in an effort to
protect public health. The proposed regulation will be a Maximum Achievable Control Technology
(MACT) based performance standard that will set limits on chromium and chromium compounds
emissions based upon concentrations in the waste stream (e.g., mg of chromium/m3 of air).
EPA holds that these proposed performance standards allow a degree of flexibility since
facilities may choose their own technology as long as the emissions standards (established by the
MACT) are achieved. The proposed standards differ according to the sources (e.g., old sources of
chromium emissions will have different standards than new ones), thereby reducing the standards'
rigidity also through the recognition of diverse sources.
2. NESHAP: Organic Solvent Degreasing/aeaning
EPA has also proposed a NESHAP (58 FR 62566, 11/29/93) for the source category of
halogenated solvent degreasing/cleaning that will directly affect the metal finishing industry. This
proposed standard aims at reducing halogenated solvent emissions to a MACT-equivalent level, and
will apply to new and existing organic halogenated solvent cleaners (degreasers) using any of the
HAPs listed in the CAAA. EPA is specifically targeting vapor degreasers that use the following
HAPs: methylene chloride, perchloroethylene, trichloroethylene, 1,1,1-trichloroethane7, carbon
tetrachloride, and chloroform.
7 Under the Montreal Protocol, a ban on the production and importation of 1,1,1-trichloroethane
will go into effect on January 1,1996.
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This NESHAP proposes to implement a MACT-based equipment and work practice
compliance standard. This would require that a facility use a designated type of pollution prevention
technology along with proper operating procedures. However, EPA has also provided an alternative
compliance standard. Existing operations, which utilize performance-based standards, can continue
in place if they can be shown to reach the same limit as the equipment and work practice
compliance standard.
The dean Water Act regulates the amount of chemicals/toxics released by industries via
direct and indirect wastewater/effluent discharges. Regulations developed to implement this Act
establish effluent guidelines and standards for different industries. These standards usually set
concentration-based limits on the discharge of a given chemical by any one facility. If a facility is
discharging directly into a body of water, then it must obtain a National Pollution Discharge
Elimination System (NPDES) Permit. However, if a facility is discharging to a POTW, then it must
adhere to the specified Pretreatment Standards. In addition, specific state or local conditions may
require more stringent treatment or pre-treatment requirements than those provided by the effluent
guidelines.
Currently, congress is considering a bill to reauthorize the Dean Water Act.' In addition
to the reauthorization, the effluent guidelines and standards for Electroplaters (40 CFR Part 413)
and Metal Finishers (40 CFR Part 433) are currently under review. These guidelines were
promulgated in the 1970s and amended in the 1980s. EPA is scheduled to present an options paper
reporting the findings of this review sometime in the Spring of 1994.
EPA is also currently developing effluent guidelines and standards for a related industry, the
Metal Products and Machinery Industry (40 CFR Part 438), which are due by May 1996. Although
this industry contains only cleaning and finishing operations as captive processes, it appears that
EPA will integrate new regulatory options for metal finishing industry processes (SIC 3471) into this
guideline.9 Under this sccnwo, any effluent guidelines for Electroplaters and Metal Finishers
would most likely reference appropriate sections of the guideline for the Metal Products and
Machinery industry. It is unclear, however, how "job shop" operations, which are not part of the
Metal Products and Machinery industry, would be covered under this scenario.
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A material is classified under RCRA as a hazardous waste if the material meets the
definition of solid waste (40 CFR 261.2), and that solid waste material exhibits one of the
characteristics of a hazardous waste (40 CFR 261.20-24) or is specifically listed as a hazardous waste
(40 CFR 261.31-33). A material defined as a hazardous waste is then subject to Subtitle C generator
(40 CFR 262), transporter (40 CFR 263), and Treatment, Storage, and Disposal Facility (TSDF) (40
CFR 254 and 265) requirements.
Within RCRA Subtitle C, EPA has subcategorized hazardous wastes from non-specific
sources in a series of "P listings. F-listed hazardous wastes which may be relevant to the
electroplating industry are identified in Exhibit 4.3-4. In November of 1992, EPA promulgated
revisions to the treatment standards for spent solvents (F001-F005) and electroplating wastewater
treatment sludges (F006). The new revisions concerning F006 encourage recycling the metals in the
sludge by allowing chromium and/or nickel-bearing electroplating F006 sludges in high-temperature
metal recovery units to meet land ban requirements.
There are two reform initiatives being proposed for RCRA which will have an effect on the
metal finishing industry:
(1) The Hazardous Waste Identification Rule (HWIR)
As of April, 1992, there were two proposals for hazardous waste
identification. The first proposal, CBEC, contained approaches that were
health-based, technology-based, and based upon contingent management
The second proposal, ECHO, consisted of expanding the use of hazardous
characteristics.
Under this proposed rule, those units that managed wastes prior to
implementation will escape Subtitle C requirements only if there is no on- or
off-site contamination. TSDFs would not be subject to Subtitle C if all of
their units and wastes met the CBEC or ECHO levels. This will ensure
significant cost savings for those individual waste streams that will no longer
have to be managed as hazardous wastes.
Currently, an EPA working group is trying to develop a series of delisting
standards for RCRA hazardous waste streams that can be universally applied.
In other words, if certain requirements (i.e., concentration-based standards)
were achieved for a given waste, then it could be removed from the RCRA
hazardous waste management system.
(2) The Definition of Solid Waste
The EPA and industry representatives are currently negotiating over the
definition of solid waste (specifically hazardous waste). This definition will
affect how wastes are classified, which in turn determines how that waste can
be handled. Industry is urging EPA to reduce regulatory requirements of
solid waste if specified waste management and recycling standards are
achieved.
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Exhibit 43-«
HAZARDOUS WASTES FROM NONSPECIFIC (F LIST) SOURCES
RELEVANT TO THE METAL FINISHING INDUSTRY
EPA
Hazardous
Waste No. Hazardous Watte
F001 Halogenated solvents used in degreasing: tetrachloroethykne, trichloroethyJene, methylene chloride,
1,1,1-trichtoroethane, carbon tetrachloride, and chlorinated fluorocarbons; all spent solvent
mixtures/blends used in degreasing containing, before use, a total of 10% or more (by volume) of one or
more of the above halogenated solvents or those solvents listed in F002, F004, and FOOS; and still
bottoms from the recovery of these spent solvents and spent solvent mixtures.
F002 Spent halogenated solvents: tetrachloroethylene, methylene chloride, trichloroethykne, 1,1,1-
tricMoroethane, chlorobenzene, l,l^-trichk>ro-1^2-trifhioroetnane, ortho-dichlorobenzene,
trichorofluoromethanc, and 1,1,2-trichloroethane; all spent solvent mixtures/blends containing, before use,
one or more of the above halogenated solvents or those listed in F001, F004, FOOS; and still bottoms
from the recovery of these spent solvents and spent solvent mixtures.
F003 Spent non-hak>genated solvents: xylene, acetone, ethyl acetate, ethyl benzene, ethyl ether, methyl isobutyl
ketone, n-butyl alcohol, cyclohexanone, and methanol; all spent solvent mixtures/blends containing,
before use, only the above spent non-halogenated solvents; and all spent solvent mixtures/blends
containing, before use, one or more of the above non-halogenated solvents, and, a total of 10% or more
(by volume) of one of those solvents listed in F001, F002, F004, FOOS; and still bottoms from the
recovery of these spent solvents and spent solvent mixtures.
F004 Spent non-halogenated solvents: cresols and cresyiic acid, and nitrobenzene; all spent solvent
mixtures/blends containing, before use, a total of 10% or more (by volume) of one or more of the above
non-halogenated solvents or those solvents listed in F001, F002, and FOOS; and still bottoms from the
recovery of these spent solvents and spent solvent mixtures.
FOOS Spent non-halogenated solvents: toluene, methyl ethyl ketone, carbon disulfide, isobutanol, pyridine,
benzene, 2-ethoxyethanol, and 2-nkropropane; all spent solvent mixtures/blends containing, before use, a
total of 10% or more (by volume) of one or more of the above non-halogenated solvents or those
solvents listed in F001, F002, or F004; and still bottoms from the recovery of these spent solvents and
spent solvents mixtures.
F006 Wastewater treatment sludges from eiectropUtiitg operations except from the following processes: (1)
sulfunc acid anodizing of aluminum; (2) tin plating on carbon steel; (3) zinc plating (segregated basis) on
carbon steel; (4) aluminum or zinc-aluminum plating on carbon steel; (5) cleaning/stripping associated
with tin, zinc, and aluminum plating on carbon steel; and (6) chemical etching and milling of aluminum.
F007 Spent cyanide plating bath solutions form electroplating operations.
FOOS Plating bath residues from the bottom of plating baths from electroplating operations where cyanides are
used in the process.
F009 Spent stripping and cleaning bath solutions from electroplating operations where cyanides are used in the
process.
F010 Quenching bath residues from oil baths from metal heat treating operations where cyanides are used in
the process.
FOH Spent cyanide solutions from salt bath pot cleaning from metal heat treating operations.
F012 Quenching waste water treatment sludges from metal heat treating operations where cyanides are used in
the process.
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Key Industry Characteristics and Trends
During the course of our discussions with industry members, trade association
representatives, and industry experts, we began to focus on a set of key industry and firm
characteristics and trends that may influence a company's decision-making process with regard to
environmental activities.
The balance of this section focuses on these key industry and firm characteristics and trends
that influence the decision-making processes within the metal finishing industry. Understanding the
role that these key characteristics and trends play in decision-making is a necessary step in the
process of developing or revising current and future environmental policies.
We assume that metal finishers will act in ways that maximize profits (by reducing costs
and/or increasing revenues) and will choose the least-cost methods of operation, other things being
equal. Depending upon firm competencies and market demands, however, different firms within
the metal finishing industry may choose different business strategies (and different environmental
strategies).
For example, one firm may adopt a high quality strategy in process design or customer
service that results in higher revenues and higher costs, while a competitor chooses a low-cost
approach that supports price-based competition. Any market may offer room for different
competitive strategies and, as we will document, the metal finishing industry has a distinct multi-
layer structure that reflects not only a firm's overall business strategy, but also the environmental
compliance strategy that is consistent with that business strategy.
This multi-tiered structure is perhaps the single most important industry characteristic that
we should understand and research to help develop any new strategy to address environmental
improvements in the metal finishing industry. This structural characteristic influences firm behavior
and the way firms in the metal finishing industry define their market niche; it results from and
influences the firm's commitment to environmental management; it results from and affects a firm's
ability to secure financing; and it affects regulatory and enforcement policy-making strategy at the
federal, state, and local level.
Although this multi-tiered structure defines the metal finishing industry as a whole, many
other factors, bbth economic and environmental, affect the performance of each individual metal
finishing operation. These factors include federal and state regulations and enforcement policies;
changes in production technologies; the overall industry structure; barriers to entry and/or exit; and
customer requirements. These factors affect environmental performance because they determine
how much capital can be invested in environmental improvements and a firm's ability to recover this
invested capital from its customers. For the metal finishing industry, the nature and capital intensity
of production and environmental technologies, the size of firms, the availability of substitutes for
manufacturing inputs, and the price sensitivity of demand for the industry's product are all factors
that are likely to affect both environmental and economic performance.
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The key metal finishing industiy characteristics and trends identified during the course of
our analysis are as follows:
o There are approximately 3,500 independently owned metal finishing job
shops, mostly small operations with limited capital and personnel; there are
also about 10,000 metal finishing operations that are captive within larger
manufacturing facilities, often with greater information and other resources
than job shops. Based on discussions with industry members, we have
grouped metal finishing firms into four distinct tiers, based on their
environmental performance, as described below:
1. Environmentally proactive firms that are in compliance with
environmental rules and regulations and are actively pursuing and
investing capital in continuous improvement environmental
management projects that go beyond compliance.
2A. Firms that are consistently in compliance, but do not or cannot look
for opportunities to improve environmental performance beyond that
level (i.e., they do not or cannot move up to Tier 1).
2B. Firms that would like to consistently be in compliance but are not
able to do so (i.e., they want to be at least a Tier 2A firm but cannot
achieve that level of performance).
3. Older firms that want to close operations, but stay in business
because they fear the legal consequences of shutting down (i.e., "good
people, bad managers").
4. Out of compliance "outlaw" firms that are not substantial competitors
but pull down the reputation of the industry, the panel members
agreed that regulatory and enforcement policies are designed for
firms in this tier but are applied to upper-tier firms.
The larger manufacturing units in which captive facilities are contained also
can be grouped into some form of a quality-based tiered structure. It seems
logical to conclude that the quality of the metal finishing operations within
these manufacturing operations will tend to mirror the quality of their parent
facilities.
o Chemical suppliers play a key role in the product life-cycle and influence the
environmental performance of platers (especially job shops). Supply firms
mirror the four tiers discussed above with respect to their own efforts at
developing products that are "safer" environmentally. Upper-tier suppliers
recognize the need to sell "know-how" in addition to product, realizing that
upper-tier metal finishers are aggressively looking for substitute products and
processes that are less toxic and create less waste.
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Some upper-tier suppliers appear to be moving away from their historical
sales commission incentive systems and toward a system that rewards sales
of new, proprietary, and environmentally safer products. These same
suppliers are also investigating profit-sharing relationships with more
progressive metal finishers that want new products and/or are willing to try
new products. This form of risk-sharing can provide benefits to both users
and suppliers.
Several trade associations play key roles in this industry, although
membership is generally limited to Tier 1 and 2 firms. These firms take
pride in their environmental record, arguing that major environmental
benefits have been achieved and that lower-tier firms give the entire industry
a bad name.
Metal finishers view themselves as a service industry, responding to customer
specifications and demands for quality products which, in some instances,
limit their environmental options. The industry is geographically
concentrated in regions that are highly industrialized. Competition tends to
be focused within regions; high transportation costs and customer service
requirements make it necessary, in general, for metal finishers to be located
close to their customers.
The job shop segment of the metal finishing industry seems to be relatively
stable. The effect of the decline in overall U.S. manufacturing on the
independent job shops appears to have been balanced by cutbacks among
some of the remaining manufacturers who are eliminating their captive metal
finishing operations. The service formerly provided by these captives is being
subcontracted out to the independents. In addition, the decline in what were
historically strong markets for the metal finishing industry (e.g., defense and
aerospace), has been offset by growth in such industries as electronics and
communication.
Oeaner technologies and products already exist as the result of extensive
EPA/trade association cooperation on product and process technology
development and technology transfer.
Waste streams are spread relatively evenly across three media (air, water, and
solid waste). Accordingly, permitting and reporting requirements are broader
and more complicated than if waste streams were concentrated in one media.
Uncertainty about future regulatory actions for all three media further
complicates the situation.
4-3.2 Drivers aj j
As discussed in Chapter 2, our goal is to understand the factors that motivate an
behavioi with respect to investments that result in improved environmental
performance. To that end, the following list contains the most significant drivers and barriers to
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improved environmental performance at each of the four tier levels which have been discussed
during the course of our work with industry representatives and others familiar with the metal
finishing industry:
1. Top firms are driven by recognition and pride in industry performance. They
see the economic payoffs of strategic environmental investments and contend
that flexibility in compliance would promote innovative approaches and
increase their willingness to help other firms.
2. Regulatory compliance is a strong driver for firms in this large middle tier.
Barriers to proactive performance include a lack of capital and information,
a lack of positive reinforcement, and a "non-level" enforcement playing field.
Some job shops at this level are dependent on suppliers for ingredients and
process recipes that restrict their willingness and/or ability to undertake
environmental improvement activities.
3. The old, outdated shops have a strong fear of liability, and have little interest
in improving since they lack capital, information, and even space to do so.
The firms in Tiers 1 and 2 have an incentive to help close these firms down
rather than work to raise them to a higher tier.
4. The renegade shops have no incentive to improve; they do not fear
enforcement because they are difficult to track down. These firms profit by
undercutting top tier firms.
Some metal finishers (Tier 3 and some Tier 4 firms) may have a perverse incentive to remain
operational, even in the face of disappearing profitability, due to potentially high environmental
clean-up costs associated with shutting down and liquidating a business. These facilities, though
operational, are not making any additional capital investments to improve environmental
performance. Since they lack internal capital and cannot secure external financing to fund cleanups,
these firms continue to pollute and represent a significant barrier to entry for cleaner, more efficient
firms that may have higher costs in the short term.
Drivers and barriers that are more generally applicable to some or all of the tiers are as
follows:
o Regulatory compliance and/or enforcement actions are the primary drivers
of environmental decision-making in the metal finishing industry, particularly
for the independent firms. However, many job shops lack the personnel and
capital resources to look beyond baseline compliance. Liability concerns
often are a barrier to obtaining loans for capital improvements.
o New, more environmentally safe product development by suppliers is driven
both by the metal finishing industry (in search of lower operating costs) and
the suppliers (in search of product niches and avenues to sell know-how).
There continues to be, however, a lack of understanding of the metal
finishing process on the part of many metal finishers and a reliance on their
suppliers to provide the right recipe. Suppliers, for their part, may be
reluctant to suggest environmentally proactive process or product changes
because it may mean lower product sales, at least in the short term.
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Any resistance on the part of customers (e.g., military purchasers) to change
product quality specifications to allow for the use of environmentally safer
products by metal finishers can provide a barrier to the adoption of these
products. Given the right set of regulatory and/or market-based incentives
(e.g., user/discharge fees on toxics use/disposal, tax incentives for investment
in waste minimization, source reduction, and product substitution
equipment), however, this barrier can be removed.
Uncertainty about future regulatory activity and the effect this activity may
have on plant operations inhibits long-term planning/investment and
beneficial risk-taking. In addition, inconsistency in existing regulatory
requirements and enforcement actions at the federal, state, and local level
creates uncertainty at the very least and, at worst, competitive imbalances
throughout the industry. All of this creates distrust of EPA and the states,
and inhibits meaningful communication.
For example, the proposed effluent guidelines and standards for the metal
finishing industry could leave little flexibility to accommodate the differences
between the two types of metal finishing operations (captive and
independent). It has been indicated that the effluent guidelines and
standards for electroplaters and metal finishers will be incorporated into the
effluent guidelines and standards of the metal products and machinery. The
unique characteristics of independent "job shop" operators could be
overlooked if focus is put upon the captive operations that are part of the
metal products and machinery industry.
Some industry representatives indicated that regulations are not based on
good science. Rather, they reflect a compromise among all the stakeholders,
often resulting from a lack of a comprehensive understanding of the true
risks involved with the use of many processes and substances. This lack of
understanding may create interest in banning the use of a potentially harmful
substance, and replacing it with what is thought to be a more benign
substance. Substituting one type of plating process, chemical, and/or cleaning
process with what are apparently better processes or chemicals may merely
shift the environmental control problems from one media to another.
Existing chemicals and processes, if understood and controlled, can in fact
result in less environmental effects than a substitute.
From the industry's perspective, the regulatory burdens to environmental
improvement result from (1) RCRA permitting standards and hazardous
waste definition (barriers to recycling and recovery); (2) Superfund de
minimus standards (barrier to obtaining loans and to old shops shutting
down); and (3) interpretations of CWA §§ 413 and 433 effluent guidelines.
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Military specifications continue to require the use, at least indirectly, of
environmentally harmful products and processes, even though
environmentally safer substitute products and processes are available. The
apparent high cost of making such changes is cited as a reason that changes
are implemented slowly.
A large number of metal finishing firms face significant environmental
liabilities and clean-up costs if they discontinue operations and attempt to
liquidate their business. This potential liability, in addition to creating a
barrier to exit for these firms, effectively eliminates any access to outside
capital sources for these firms.
Lower-tier firms are not active in trade association activities and are not
aware of changes in product/process technology. They are also unaware of
inexpensive, cost-effective changes that can be made to improve
environmental and financial performance. Moreover, these firms often lack
any incentive to change because any existing environmental liabilities may
continue to overwhelm their ability to pay for remediation.
There are significant research and development activities underway by
industry (e.g., AESF), EPA, and other federal departments and agencies.
These efforts to develop new metal finishing processes to achieve source
reduction can serve as a driver to some firms to improve performance.
However, the lack of information or capital to implement improvements can,
as noted above, impose a barrier to improvements by other firms.
433 Possible Policy Options
EPA can consider a number of possible policy options to promote desired changes within
the metal finishing industry. These options range from increased regulatory and enforcement
activities concentrated on certain segments of the industry, to regulatory reform, to market-based
approaches such as fees, taxes, and tax incentives. EPA will continue to keep two objectives in mind
as it evaluates the different available options: (1) EPA must consider the characteristics, needs, and
problems specific to each of the four tiers identified in the metal finishing industry and must
consider the interactions between tiers; and (2) the agency will continue and expand its initial efforts
to get its regional offices, the states, NGOs, and local POTW authorities involved in the process.
Second Expert Panel Meeting
Representatives at the second panel meeting on March 11,1994 discussed and evaluated the
many possible policy options that had been suggested during the course of this project and identified
a few options with the greatest potential for removing the most significant barriers or providing the
greatest incentive to sustained environmental improvement in the metal finishing industry. These
selected options provide the focus for ongoing work ui the next phase of this project. A complete
list of the many policy options identified during the project is included as Appendix 4-B to this
chapter.
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Hie panel recognized the importance of the tiered structure of firms in the metal finishing
industry and identified general policies that should be pursued within specific tiers. For example,
some panelists noted that many regulations were written with the problems of Tier 4 firms in mind,
but were applied almost exclusively to Tier 1 and 2 firms. The panel also concluded that there were
a number of general issues relevant for all tiers within the industry that also should be pursued
during the next phase of the project. The panel evaluated the list of options using the following
selection criteria. Options should:
o Promote "cleaner" environmental performance — have a significant
environmental payoff;
o Identify "cheaper" solutions to environmental problems - promote cost-
effectiveness;
o Promote innovative and more effective ("smarter") actions by EPA, states,
and the industry;
o Have the capacity to affect long-term thinking and action toward
sustainability,
o Be feasible, considering the length of time required for completion, the
method of implementation, the size of the relevant audience, impact and
importance, and the effectiveness of EPA as a player; and
o Encourage cooperative involvement in the project among a variety of
stakeholders.
The panel also noted that the metal finishing industry, largely through its trade associations,
was currently working cooperatively with several offices at EPA, providing technical support on
proposed policies and programs. Among these cooperative projects are the following:
o Development of the RCRA Hazardous Waste Identification Rule: Industry
representatives (especially NAMF) are involved in ongoing dialogue with
EPA's Office of Solid Waste to expedite delisting of F-006 waste and thereby
promote greater recycling/reclamation of waste treatment residuals.
o Development of the Metal Products Effluent Guidelines (MP&M): Industry
representatives (including NAMF) are providing comments on the proposed
Phase 1 guidelines; industry also will participate in Phase 2 development and
in CWA reconsideration of §§ 413 and 433 effluent guideline standards.
o Development of Clean Air Act MALTl' Standards for Chromium
Electroplating and Anodizing: Industry representatives are participating in
the MACT development and review process; productive dialogue to date; key
comments seem to be focused on associated monitoring requirements.
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The panel endorsed these efforts along with the cooperative research activities being
conducted by the federal government and the industry.
A majority of the meeting was spent discussing the tiered structure of the industry and
increasing our level of understanding of the types of firms that are found within each of the four
tiers and the drivers and barriers that are unique to each tier. We also discussed more general
drivers and barriers that are relevant to all four tiers. The panel evaluated various policy options
using the selection criteria listed above, but also devoted considerable discussion to understanding
the differences between firms in the four industry tiers and the existing drivers and barriers to
movement up the hierarchy from lower to upper tiers. We believe therefore that part of the Phase
2 work should initially focus on defining the criteria for placement into a tier and on identifying
incentives that EPA and the states could provide to encourage movement from tier to tier. This
effort could then progress to a further development of specific action steps for each tier. The
remainder of the Phase 2 work should focus on studies that are important to all firms in the metal
finishing industry.
The following sections describe each of the tier-specific and industry-wide issues that will
provide the basis for ongoing work in Phase 2 of this project We have included some suggestions
in each section to provide some initial focus in Phase 2 work. We believe that these suggestions
address the priorities of all the various stakeholders in the metal finishing industry. The tiered
structure is a new way to look at the metal finishing industry and the various stakeholders are still
trying to understand the basic dynamics of such a structure. Phase 2 work should contribute to this
understanding as well as help remove some of the barriers to environmental improvement for this
industry.
Metal Finishing Industry Policy Options for Tien 1-4
One panel member described the regulatory and enforcement programs for the metal
finishing industry as policies that were implemented to control Tier 4 firms but have instead been
used to control Her 1 and Tier 2 firms. This, in conjunction with the need to encourage firms to
move up the tiered hierarchy, constitute important conclusions and observations from the first phase
of this study. Attempts to regulate the activities of the worst polluting facilities that have slipped
out of the regulatory/enforcement net have instead resulted in the over-regulation of the firms in
Tiers 1 and 2. This over-regulation has resulted in higher compliance costs for upper-tier firms and
an increased fear of enforcement activities, coupled with a high level of uncertainty about the nature
and effect of future regulatory actions. Regulators, the panelists contend, tend to place unnecessary
burdens on large point sources since they cannot deal adequately with nonpoint sources of pollution.
The tier-specific discussion at the panel meeting focused on lowering the regulatory burden
placed on upper-tier firms and on eliminating both the short-term and long-term problems
associated with the lower tier firms. A key goal of proposed policies would be to help Tier 1 firms
move to higher levels of environmental protection and encourage 2A firms to move up to tier 1, and
Tier 2B to Tier 2A. The discussion was complicated, however, by a lack of explicit understanding
of the criteria for inclusion in Tiers 1 or 2. As discussed later in the section on more general issues,
a commitment to and implementation of Best Management Practices (BMP) for the metal finishing
industry can ue used &* a ciiteik for movement from a lower to an upper tier. The following sub-
sections describe the issues specific to each of the four tiers in the metal finishing industry.
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Tier 1 and Tier 2
Tier 1 metal finishing firms are characterized as environmentally proactive firms that are
actively pursuing and investing capital in strategic environmental management projects. They are
driven by recognition and pride in industry performance and see the economic payoffs of strategic
environmental investments. Tier 2 (A and B) firms are characterized as environmentally conscious
but less proactive firms that are limited in their ability or desire to actively pursue strategic
environmental management practices due to lack of capital or other factors. Uncertainty about the
nature and timing of future regulatory activity also contributes to the conservative strategy pursued
by these firms. Regulatory compliance and fear of enforcement are the primary drivers for firms
in Tier 2; barriers to improvement include lack of capital and information, and inconsistent
enforcement activities that create a non-level playing field.
A major problem, however, at least for the panel members, is the lack of criteria for
identifying membership in Tier 1. Most panel members believe that the Tier 1 firms are most likely
small, high-tech firms. This would include captive plating operations that are relatively small, both
in terms of throughput volume and value-added. The one captive metal finishing representative at
the panel meeting characterized his firm as a Tier 1 facility. He had been able to implement
environmental projects with a longer payback than specified in company guidelines because of the
longer-term view held by management. The two independent metal finishing representatives at the
meeting characterized their firms as being in Tier 2. Although both felt that their facilities were in
compliance and they had invested in pollution prevention and end-of-pipe technologies, they were
driven by a fear of enforcement rather than by some other sustainable philosophy.
The problem of defining Tier 1 and Tier 2 membership requirements can be resolved two
ways. First, the development of industry Best Management Practices should focus on the criteria
for inclusion in the top tier, as well as the criteria for continued membership. Eligibility for
continued membership in Tier 1 should require a commitment to the full set of Best Management
Practices and a commitment to and demonstrated success in continuous environmental improvement.
The minimum requirements for Tier ">. membership should be complete regulatory compliance and
a commitment to some appropriate subset of the industry Best Management Practices. Second,
continued involvement by the stakeholders in an ongoing dialogue sponsored by EPA should lead
to an additional understanding of the metal finishing industry with respect to the differences
between Tier 1 and 2 firms and the requirements for membership in Tier 1.
What incentives are there or can be put in place to induce Tier 2 firms to move up to Tier
1? Tier 2A firms are technically in compliance and EPA can drive continued environmental
improvement through regulatory actions designed to reduce the level of discharges from the metal
finishing industry beyond current levels. The objective of the Sustainable Industry Project, however,
is to facilitate continued voluntary environmental improvement on the part of the metal finishing
industry because it makes good business sense to do so. EPA must try to remove the barriers that
currently inhibit the movement from lower tiers to upper tiers, and provide incentives for firms to
move up the hierarchy.
One method for removing barriers would be to lower the compliance costs for Tier 1 firms
from what is estimated to be 7 to 10 percent of total costs to 2 to 5 percent of costs. Tier 1 firms
would also need to make a commitment to provide a certain amount of technical assistance to lower-
tier firms. Obviously, penalties for Tier 1 firms that are found to have not met their commitments
should be severe.
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EPA can lower the compliance costs for Tier 1 firms in a number of ways, including: using
electronic reporting; requiring less frequent sampling of waste streams; eliminating some reporting
requirements; implementing longer permit periods with fewer inspections; and implementing an
even-handed enforcement policy that focuses on the environmental renegades and places more
importance on discharge violations rather than paperwork violations. In effect, EPA will be trading
a greater level of trust for continued environmental excellence. The states and the POTWs will be
very important stakeholders in this program and should be involved in every step of its development
process.
EPA can create additional incentives to attain Tier 1 status by linking Tier 1 status with
membership in some form of an environmental leadership program. EPA should examine the
applicability of ideas used in OSHA STAR and other "incentive" programs to this effort. This
leadership program could attempt to reward environmentally progressive firms by helping the best
firms gain access to financial resources; either through outside lending institutions or through
financial assistance made available by EPA in the form of loans and/or grants. It may also be
possible to link membership in this environmental leadership program with access to U.S.
government agency metal finishing contract work (e.g., DOD). One additional incentive that EPA
could consider is access by Tier 1 firms to an expedited delisting process for any RCRA listed waste
streams that are eligible for delisting.
It will be important to determine whether the investments required to upgrade to Tier 1
status are disproportionate to the rewards associated with Tier 1 status. To help avoid this, EPA
could consider assisting Tier 2 firms with their capital requirements through access to zero or low-
interest loans or grants. Qualification for these funds would require passing an environmental audit,
making a commitment to follow the set of industry Best Management Practices required for Tier
1 status, and developing a business plan that would commit the money to specific projects focused
on doing what is necessary to attain Tier 1 status. EPA can improve the willingness of Tier 2 firms
to invest their own capital in environmental improvements by reducing the uncertainty associated
with future regulatory requirements. One way to accomplish this is to create a credit system for
improvements made independent of regulatory requirements; this would eliminate the fear that
technology improvements may be rendered obsolete by future regulatory requirements.
The second panel concluded that economic benefits would accrue to Tier 1 and Tier 2 firms
as well from the implementation of policies and programs specific to Tier 3 and Tier 4 firms. The
development of any tier-specific overall policy strategy should take into consideration the importance
of linking tier-specific policies within a coherent framework to maximize benefit transfer from tier
to tier. The following subsections discuss the possible policy options for Tier 3 and Tier 4 firms that
the panel felt would, on balance, strengthen the metal finishing industry.
Tier 3
Tier 3 metal finishing firms are characterized as companies that are not environmentally
proactive firms and which face severe financial limitations. These firms may want to go out of
business but won't because of liability concerns from wastes generated by past (and in some cases,
current) operations. These old, outdated shops have a strong fear of liability; they cannot improve
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their environmental performance due to a lack of capital, information, and frequently, space. There
was a strong consensus among the second panel industry members that a significant number of firms
in Tier 3 exist.
The panel essentially concluded that while exit for these firms may be viewed as a short-term
negative because of the loss of jobs and the costs associated with site cleanups, in fact the loss of
these Tier 3 firms is a long-term positive because the jobs should be transferred to Tier 1 and Tier
2 firms that capture the business and because site remediation that is started now will prevent worse,
more costly problems in the future (i.e., a pollution prevention benefit). In addition, the firms
higher in the hierarchy operate in a more environmental sensitive manner, producing less pollution.
What is the best way to facilitate exit for those Tier 3 firms? The fear of disclosure and
subsequent reprisal must be eliminated so that Tier 3 firms will come forward. It should not be
difficult to find these firms; most are visited regularly by enforcement officials keeping tabs on their
operations. The danger from EPA's and the states' perspective in following such a strategy is that
the number of firms that come forward may far outweigh the agency's ability to either commit funds
to initiate facility closure and cleanup or to provide investment capital to make process
improvements. A necessary first step is to compile information on the population of metal finishers
within the particular geographic area under consideration to provide a first cut assessment of the
scope of the problem. Enforcement offices, trade associations, POTWs, and NPDES permit
monitoring offices should be able to provide a wealth of information.
For those Tier 3 firms that choose an exit strategy under this proposed amnesty program,
EPA and the states need to commit the necessary resources to conduct a site evaluation to
determine the nature and extent of any environmental problems, to evaluate the risks associated with
those problems in order to prioritize remediation alternatives, and to determine the level of cleanup
required commensurate with future use alternatives for the site. One possible approach might
include, in exchange for some degree of amnesty granted under this program, a commitment from
a facility to take an active leadership role in shutting down the facility and in completing any
remediation work at the site before it could be sold. However, this amnesty must not completely
remove a firm from liability nor remove its responsibility for cleanup. In addition, deed restrictions
on the use of the site appropriate for the level of remediation completed should be put in place for
the facility prior to sale and/or alternative use.
There are a number of unresolved issues with such a program. First, the regulatory agencies
must be willing to commit financial resources to facilitate any site remediation work that is required.
Second, these same agencies must attempt to answer the question of "how clean is clean" for each
site based on the projected future use of the site. Finally, the owner of the facility must be actively
involved in site remediation that may include on-site treatment. The owner has a detailed
understanding of the processes used at his/her facility, this individual should be able to make a
valuable contribution to site cleanup.
Tier 4
Tier 4 metal finishing firms have been characterized as not environmentally proactive firms
that are likely not in compliance with environmental regulations. These firms price their services
below Tier 1 and Tier 2 firms, creating a competitive disincentive for more proactive firms to
4-24
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continue to invest in proactive environmental strategies. These renegade shops are difficult to find
- they are probably operating without permits and do not report discharges. They have no incentive
to improve and do not fear enforcement because they are difficult to track down. They profit by
having a lower cost structure which undercuts upper-tier firms.
The second panel concluded that the major issue with Her 4 firms is not that they represent
a significant competitive force within the metal finishing industry, but that they give the overall
industry a bad name and create additional pressure on upper-tier firms with respect to enforcement
actions and regulatory/reporting requirements. There is an over-regulation of upper tier firms to
compensate for the inability of regulatory agencies to alleviate the problems caused by Tier 4 firms
and because of a possible misunderstanding of the industry as a whole. There was a recognition by
the panel members that the extent of the environmental problems associated with the Tier 4 firms
is largely unknown. They felt, however, that this should not be a deterrent to an increased focus
on this sector of the industry.
The panel concluded that finding and eliminating Tier 4 firms should be a priority. To help
accomplish this, it may be necessary to redirect agency and state resources currently focused on
monitoring and enforcement of upper-tier firms to identifying Tier 4 firms. Some suggested that
enforcement policies could be directed away from targeting upper-tier firms. Finally, POTWs should
be granted increased flexibility, the panel noted, in inspection, sampling, and enforcement
requirements. Presently, POTWs must inspect and sample every facility at least once per year and
are required to enforce paperwork violations with the same vigor as discharge violations. POTWs
can improve their monitoring capabilities and identify more Tier 4 firms if they have the flexibility
to use their monitoring equipment to find these firms rather than sampling the effluent of the known
Tier 1 and Tier 2 firms.
A significant unresolved issue concerns the environmental liabilities and cleanup costs
associated with shutting down Tier 4 firms. The feasibility of designing programs for Tier 4 firms
that are similar to those proposed for Tier 3 firms was not pursued by the panel and should be a
topic for further consideration.
General Metal Finishing Industry Policy Options
The second panel also discussed three possible non-tier-specific policy options that were felt
to be important with respect to drivers and barriers in the metal finishing industry. The issues
addressed by these policy options are (1) the need to develop Best Management Practices for metal
finishing facilities; (2) the inconsistencies in standard setting, permit review, administration, and
enforcement activities at the state level; and (3) the extent to which suppliers and customers are the
primary drivers of toxics use in the metal finishing industry.
Development of Best Management Practices
ior The nishin industry
The second panel endorsed the idea of an industry-managed effort to develop and implement
Best Management Practices for the metal finishing industry. This BMP would be used to develop
pollution prevention strategies for the industry and could also be used to provide a ro»dmap for Tier
2 firms to move up, within the second tier and to Tier 1 status. The panel felt that EPA's role
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should be limited to providing financial and administrative assistance to the effort, believing that
while it was appropriate for the government to regulate discharges and emissions, it was not
necessary or appropriate for government to dictate specific pollution prevention strategies.
In addition to providing a roadmap for lower tier firms to use to progress to the upper tiers,
the BMP would also be designed to ensure compliance for any firm that has implemented the BMP
at their facility. A commitment to follow the complete set or a subset of the BMP would be
required for membership in Her 1 or Tier 2 respectively. In these respects, a BMP would differ
from Good Operating Practices because the latter does not necessarily guarantee success, only that
accepted practices are being followed. The BMP would also be designed to drive continuous
improvement/waste minimization strategies that Tier 1 firms would be required to commit to as a
requisite for continued membership in Tier 1.
The panel also concluded that the BMP, as envisioned, could be used to help the metal
finishing industry gain increased access to outside capital for investment in environmental
technologies and process changes required for a company to move to a higher tier. The BMP could
be used not only to educate lending institutions about the effectiveness of a given technology, but
also to alleviate any fear on the part of lenders that a particular technology would have no market
value. If it is dear that hundreds, if not thousands, of metal finishing facilities use this technology,
then there is a ready market for resale if necessary. Educating lending institutions in this way should
be linked to any ongoing efforts to weed out the bad firms in the industry and to reduce the fear
factor that inhibits Tier 2 firms from applying for loans.
iinjtinr RcEulatoiY **"^ Enfi
Inconsistencies a
Existing inconsistencies in standard setting, permit review, administration, and enforcement
activities at the state level result in higher compliance costs and unnecessary uncertainty about the
regulatory process for metal finishing firms. The second panel discussed some of these issues in
detail and proposed a number of possible solutions to these problems. Perhaps the most important
issue discussed by the panel in this area concerned the non-uniformity of discharge standards at the
state and local levels.
In theory, it would be a relatively straightforward task to set uniform national discharge
standards and require states (and localities) to justify more stringent standards on a scientific basis.
In practice, this task seems difficult if not impossible. States and localities set standards based upon
site specific conditions that depend on the number and type of other dischargers and the physical,
chemical, and biological characteristics of the environment to which the pollutant is being
discharged. The relative contribution to the pollutant loading by non-point sources is an important
variable in this equation. If the discharge is to a POTW, the way in which the POTW disposes of
their sludge is an important variable the control authority considers in setting standards. The
chances that EPA could impinge upon the state's authority in this process are extremely low.
One way in which EPA can help to ensure that the process is scientifically based is through
its audit of state programs. EPA must ensure that the states are reviewing technology-based POTW
local limits, as well as making a concerted effort to set NPDES discharge levels, in a fair and
equitable fashion. One way in which metal finishers may be granted some consideration for having
4-26
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to meet regulations, more stringent than federal standards, would be to recognize their contribution
to reducing the pollutant in complying with the more stringent standards. This compensation could
take the form of adjustable water/sewer rates, for example, for discharges to POTWs.
Other issues discussed by the panel included the difficulty associated with obtaining permits
and complying with reporting requirements for multi-media discharges from state agencies that are
historically organized by media; the disincentive that arises from the requirement that permits must
be modified or reissued when process changes are implemented; the lack of enforcement policies
that are designed so that penalties reflect the seriousness of the infraction; and the lack of consistent
cross-media technical assistance and facility inspection programs. The panel felt that the simplest
and most effective solution to these problems is for the states and EPA to develop a multi-media
industry-focused perspective, where multi-media service teams trained to provide permit, reporting,
and technical assistance to a limited number of industries could assist individual firms with any
problems.
In effect, these service teams would become a one-stop shopping resource for all firms within
a particular industry. At the very least, these teams would help to ensure consistency throughout
a particular industry within a given state, would facilitate technology transfer, and would minimize
issues that arise when misapplied pollution prevention programs do not reduce emissions but merely
transfer them from one media to another.
Analysis of Customers and Suppliers as Drivers
of Toxics Use in the a^ s^"n Industr
The second panel agreed that life-cycle issues related to the use of toxic substances in the
metal finishing industry were important with respect to any discussion of drivers and barriers to
environmental improvement for this industry. In addition, an assessment of pollution prevention
and waste minimization opportunities in the metal finishing industry necessarily requires an analysis
of the effects of eliminating the use of toxic substances, either by banning their use outright or by
instituting taxes or user fees that would result in a drop in usage.
There are several potentially important issues related to eliminating the use of a particular
toxic substance, including the availability and suitability of substitute products; the overall life-cycle,
multi-media environmental effects of the substitute compared to the original substance; the effect
on the quality of the customer's product; the acceptance of any change by the ultimate consumer
of the customer's product; and the ability and motivation of the suppliers to the metal finishing
industry to develop and market a substitute product and process. On the other hand, suppliers also
need to be concerned about Superfund de minimis liabilities that may arise from the continued use
of toxic materials.
The panel agreed that the best way to begin to evaluate the issues related to product
substitution might be to initiate a pilot project that brings the suppliers, metal finishers, and
customers together to assess life-cycle issues related to the continued use of a toxic substance. The
panel thought that cadmium might constitute a good candidate for this study since the U.S.
Department of Defense was a significant user of cadmium-plated products and the agency moves
slowly in approving any changes in product specifications. Another potential pilot project might
focus more on a consumer product wheie it would be useful to analyze the public's reaction to
changes in appearance (and perhaps performance) of plated products.
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The panel wondered whether EPA was currently funding life-cycle analysis studies and, if
so, whether these funds could be redirected. Currently EPA's Design for the Environment program
and the President's Council on Sustainable Development are considering life-cycle issues as part of
their efforts.
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Appendix 4-A
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
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Appendix 4-A
BIBLIOGRAPHY OF TOE METAL FINISHING INDUSTRY
Altmayer, Frank, "Significant Violators," Plating and Surface Finishing. August 1993.
Altmayer, Frank, The Great Lakes Initiative - Part 1," Plating and Surface Finishing. September
1993.
Bishop, Craig V., Loar, Gary W., "Practical Pollution Abatement Methods for Metal Finishing,"
Plating and Surface Finishing. February 1993.
Booz-Allen & Hamilton Inc. Economic Analysis of Proposed Effluent Standards and Limitations for
the Metal Finishing Industry. May 1982.
California Department of Health Services, Toxic Substances Control Division, Alternative
Technology Section, Waste Audit Study: Metal Finishing Industry. Prepared by PRC
Environmental Management, Inc. May 1988.
"Case Study: Moving Toward Zero," Pollution Prevention News. Spring 1993.
Dini, J.W., Steffani, C.P., "Electroplating Waste Minimization at Lawrence Livermore National
Laboratory," Lawrence Livermore National Laboratory. April 1992.
Finishing Line. NAMF Newsletter, Volume 15, Issue VI. September/October 1993.
Fransaer, J., Celis, J.P., and Roos, J.R., "Mechanisms of Composite Electroplating," Metal Finishing.
June 1993.
Gallerani, Peter, Drake, David B, "Wastewater Management for the Metal Finishing Industry in the
21st Century," Plating and Surface Finishing. October 1993.
Hinton, Bruce R., "Corrosion Prevention and Chromates: The End of an Era," Metal Finishing.
October 1991.
Karrs, Stanley R., McMonagle, Michael, "An Examination of Paybacks For an Aqueous Cleaner
Recovery Unit," Plating and Surface Finishing. September 1993.
Kraft, Gerald G., The Future of Cadmium Electroplating," Metal Finishing. July 1990.
Lakshmanan, T.R., Source Reduction in the Electroplating Industry in Southeast Massachusetts: An
Economic Overview. Center for Energy and Environmental Studies, Boston University.
Massachusetts Department of Environmental Management, Office of Safe Waste Management,
Source Reduction Recommendations for Precious Metal Platers. April 1988.
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Appendix 4~A
(continued)
BIBUOGRAPHY OF THE METAL FINISHING INDUSTRY
Mounts, Michael L-, "Converting from Vapor Degreasing to the Optimum Alternative," Metal
Finishing, August 1993.
Naziruddin, M., Patrick, G.C., and McCune, L, "Treatment of an Anodizing Waste to Water-
Quality-Based Effluent Limits," Metal Finishing. February 1992.
Oregon Department of Environmental Quality, Hazardous Waste Reduction Program, Guidelines
for Waste Reduction and Recycling: Metal Finishing, Electroplating, Printed Circuit Board
Manufacturing. July 1989.
Oregon Department of Environmental Quality, Hazardous Waste Reduction Program, Guidelines
for Waste Reduction and Recycling: Solvents. August 1989.
Proactive Environmental Strategies for Industries: Symposium Summary Booklet. Held at MIT,
Wednesday November 17,1993.
Taivarides, Lawrence L., Industrial Waste Management Series: Process Modifications for Industrial
Pollution Source Reduction. Lewis Publishers, Michigan, 1985.
U.S. Department of Commerce, "Geographic Area Statistics," ASM 1991 Annual Survey of
Manufactures, Bureau of the Census, February, 1993.
U.S. Department of Commerce, "Pollution Abatement Costs and Expenditures, 1989," Current
Industrial Reports, Economics and Statistics Administration, Bureau of the Census, November
1991.
U.S. Department of Commerce, "Pollution Abatement Costs and Expenditures, 1990," Current
Industrial Reports, Economics and Statistics Administration, Bureau of the Census, April
1992.
U.S. Department of Commerce, "Pollution Abatement Costs and Expenditures, 1991," Current
Industrial Reports, Economics and Statistics Administration, Bureau of the Census, January
1993.
U.S. Department of Commerce, "Screw Machine Products, Fasteners and Washers; Metal Forgings
and Stampings, and Metal Services," 1982 Census of Manufactures, Bureau of the Census,
March 1985.
U.S. Department of Commerce, "Screw Machine Products, Fasteners and Washers; Metal Forgings
and Stampings, and Metal Services," 1987 Census of Manufactures, Bureau of the Census,
April 1990.
4-A-2
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Appendix 4-A
(continued)
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
U.S. Department of Commerce, "Statistics for Industry Groups and Industries," ASM 1989 Annual
Swvey of Manufactures, Bureau of the Census, June, 1991.
U.S. Department of Commerce, "Statistics for Industry Groups and Industries," ASM 1991 Annual
Survey of Manufactures, Bureau of the Census, December, 1992.
U.S. Department of Commerce, "Survey of Plant Capacity, 1990," Current Industrial Reports,
Economics and Statistics Administration, Bureau of the Census, March 1992.
U.S. Department of Commerce, "Value of Product Shipments," ASM 1991 Annual Survey of
Manufactures, Bureau of the Census, November, 1992.
U.S. Environmental Protection Agency, An Investigation of Techniques for Removal of Chromium
U.S. Environmental Protection Agency. Assessment of Industrial Hazardous Waste Practices -
Electroplating and Metal Finishing Industries • Job Shops. Final Report SW-136C. 1977.
U.S. Environmental Protection Agency. Economic Impact Analysis of a Landfill Ban and a Waste-
end Tax for the Electroplating Industry. Prepared by Pope-Reid Associates, Inc., Minnesota.
February, 1984.
U.S. Environmental Protection Agency, Effluent Guidelines Division. Development Document for
Effluent Limitations Guidelines and Standards for the Metal Finishing Point Source Category.
June 1983.
U.S. Environmental Protection Agency, Effluent Guidelines Division and Permits Division, Guidance
Manual for Electroplating and Metal Finishing Pretreatment Standards. Washington, D.C.,
February 1984.
U.S. Environmental Protection Agency, Environmental Pollution Control Alternatives: Centralized
Waste Treatment Alternatives for the Electroplating Industry. EPA 625/5-81-017, Industrial
Environmental Research Laboratory, Cincinnati, Ohio, June 1981.
U.S. Environmental Protection Agency, Industrial Environmental Research Laboratory.
Environmental Pollution Control Alternatives: Economics of Wastewater Treatment Alternatives
for the Electroplating Industry. June 1979.
U.S. Environmental Protection Agency, Industrial Environmental Research Laboratory. Fourth
Conference on Advanced Pollution Control for the Metal Finishing Industry. December 1982.
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Appendix 4-A
(continued)
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
U.S. Environmental Protection Agency, Industrial Environmental Research Laboratory. Second
Conference on Advanced Pollution Control for the Metal Finishing Industry. June 1979.
U.S. Environmental Protection Agency, Industrial Environmental Research Laboratory. Third
Conference on Advanced Pollution Control for the Metal Finishing Industry, April 1980.
U.S. Environmental Protection Agency, Integrated Environmental Management Program. Draft
Analysis of State Regulations Affecting the Metal Finishing, Organic Chemicals, and Foundry
Industries: Implications for Industrial Policy Model, First Edition. Prepared by John Freshman
Associates, Inc. April 1983.
U.S. Environmental Protection Agency, Office of Environmental Engineering and Technology
Demonstration and the Office of Pollution Prevention, Case Studies from the Pollution
Prevention Information Clearinghouse (PPIC): Solvent Recovery. November 1989.
U.S. Environmental Protection Agency, Office of Environmental Engineering and Technology
Demonstration and the Office of Pollution Prevention, Case Studies from the Pollution
Prevention Information Clearinghouse (PPIC): Electroplating. November 1989.
U.S. Environmental Protection Agency, Office of Research and Development. Guides to Pollution
Prevention: The Fabricated Metal Finishing Industry. October 1992.
U.S. Environmental Protection Agency, Office of Research and Development. Industrial Pollution
Prevention Opportunities for the 1990s. August 1991.
U.S. Environmental Protection Agency, Office of Research and Development. The Environmental
Challenge of the 1990's, Proceedings, International Conference on Pollution Prevention: Clean
Technologies and Clean Products, June 10-13, 1990. September 1990.
U.S. Environmental Protection Agency, Office of Solid Waste, Analysis of the Combined Impact of
Various EPA Regulatory Initiatives on Generators of 100-1000 kg/mo. Prepared by ICF,
January 6,1986.
U.S. Environmental Protection Agency, Office of Solid Waste, Waste Minimization in Metal Parts
Cleaning. August 1989.
U.S. Environmental Protection Agency, Office of Water Planning and Standards, Environmental
Regulations and Technology: The Electroplating Industry. EPA 625/10-80-001, Washington,
D.C, August 1980.
4-A-4
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Appendix 4-A
{continued)
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
U.S. Environmental Protection Agency, TRW Environmental Engineering Division, Technical
Environmental Impacts of Various Approaches for Regulating Small Volume Hazardous Waste
Generators, December 10,1979.
4-A-5
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Appendix 4-B
ALL SUGGESTED POLICY OPTIONS
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Appendix 4-B
ALL SUGGESTED POLICY OPTIONS
The following is a broader list of all the policy options that were discussed throughout the
course of this project.
o Consider policies and programs that meet the unique needs of the four tiers of metal
finishing firms. Specifically:
(a) Allow for more flexibility in compliance for Tier 1 companies in exchange for
measurable commitments to work toward zero discharge, and to establish and
adhere to Best Management Practices for the industry;
(b) Reduce the uncertainty about future regulations for Tier 2 companies by
creating a credit system for improvements made independently of regulatory
requirements, and assist these firms in obtaining outside capital through grant
and/or loan programs (qualification for these funds would require an
environmental audit and a commitment to follow Best Management
practices);
(c) Provide the assistance necessary for tier 3 firms to go out of business without
fear of litigation and bankruptcy due to environmental liabilities; and
(d) Target enforcement activities and more rigid requirements at Tier 4 firms.
The following policies and programs should be considered for all metal finishing industry
members.
o Set uniform national standards, and require states and localities to justify
more stringent standards, to avoid "cleaner-than-thou" competition that leads
to unachievable and unnecessary limits; and require POTWs to target all
sources of contaminants, rather than concentrating only on industrial sources
that have already been reduced. It is important to recognize, however, that
states and localities develop standards based upon the unique set of
circumstances that are found within the jurisdiction of a particular POTW.
The creation of a level playing field for the industry must take this into
consideration. Total costs should be the criteria, not just compliance costs.
o Promote toxics regulations based on sound scientific risk-based approaches;
send dear signals to all the stakeholders about relative risks; and avoid bias
against existing chemicals while ignoring the potential risks of unknown
substitutes. EPA can play a role in educating the general public about the
environmental impact of electroplating that will help to eliminate the fear
factor that influences the regulatory process. Above all, strive to make the
regulations simple to reduce the. compliance burden on small companies.
4-B-l
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o
o
Appendix 4-B
(continued)
All, SUGGESTED POLICY OPTIONS
Expedite the permitting process and create consistency among the states in
the permit review process.
Facilitate the cooperative development of BMP for electroplaters, and trade
flexibility in compliance for commitment to these practices for companies
with good environmental records.
Develop an enforcement strategy that is fair and reasonable. Rate
companies based upon their performance relative to some defined baseline
or benchmark and treat them accordingly. Target initial efforts at Tier 4
firms whose lack of compliance creates a competitive imbalance throughout
the industry.
Recognize positive environmental performance as a good first step toward
the creation of a spirit of cooperation and open communication between
EPA and the electroplating industry. Any recognition program, however,
must be structured in such a way as to accrue the right lands of benefits to
environmentally proactive firms (e.g., improved credit rating and access to
capital, and higher sales). EPA must also develop such a program within the
context of changing perceptions of the industry.
Support technology transfer initiatives and environmental audit programs.
Support tax incentives for investment in waste minimization and source
reduction equipment, and support the capitalization of clean-up costs.
Support use/discharge fees to promote pollution prevention in the
electroplating industry (in lieu of environmental audits).
Strongly encourage changes in the mil specs to require the use, where
possible, of environmentally safer products and processes in the
electroplating industry.
Modify RCRA to provide incentives for greater reclamation/recycling of
waste treatment residuals and facilitate a move toward zero discharge
facilities.
Investigate further uses of information-based options, such as reporting and
public disclosure requirements. Currently, the Toxic Release Inventory is a
good example. Using this inventory effectively, specific waste stream trends
can be highlighted in a media-specific and/or facility-specific format. Publicly
disclosing facilities with poor release practices and trends could serve to
motivate faculties to improve environmental performance. Enhanced
reporting requirement in the TRI beginning in 1991 (e.g., recycling and
4-B-2
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Appends 4-B
(continued)
ALL SUGGESTED POUCY OPTIONS
energy recovery) could potentially make this option even more useful.
Another example would be if hazardous waset generators were required to
disclose their waste minimzation plan to the public. Fear of bad publicity
could propel many of the individual generators to improve their waste
minimization practice. The EPA is currently considering this requirement.
4-B-3
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Appendix 4-C
METAL FINISHING INDUSTRY CONTACTS
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APPENDIX 4-C
Metal Finishing Industry Contacts
Mr. Frank Altmayer
Scientific Control Laboratories
Mr. Todd Baldwin
Universal Fasteners, Inc. (YKK Corporation)
Environmental Engineer
Mr. Jim Berlow
EPA, Office of Solid Waste, Solid Waste Task Force
Director
Mr. Bill Cleary
EPA, Office of Water, Engineering & Analysis Div.
Mr. James DeWitt
Connecticut Resource Group, Inc.
President
Mr. Dan Fiorino
EPA, Waste and Chemical Policy Division, OPPE
Director
Mr. Richard Fleet
Light Metals Coloring Company, Inc.
President
Mr. Peter Gallerani
Integrated Technologies, Inc.
President (also Environ. Chair of AESF)
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APPENDIX 4-C
Metal Finishing Industry Contacts
Ms. Teresa Harten
EPA, Risk Reduction Engineering Laboratory (Cinn.)
Mr. James Jacobs
Northwestern Plating Works, Inc.
President
Mr. Robert Kaliszewski
Connecticut Department of Environmental Protection
Permits Assistance Ombudsman
Mr. Ken Kirk
Association of Metropolitan Sewage Agencies (AMSA)
Washington Director
Mr. Mark LaVine
Whyco Chromium Company, Inc.
Environmental Manager
Mr. Jeffrey Lord
Simmonds Precision Aircraft Sytems (BF Goodrich)
Environmenta1 Manager
Mr. David Marsh
Marsh Plating Corporation
President (also President NAMF)
Ms. Melissa Marshall
EPA, Office of Compliance
4-C-2
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sSME=s
APPENDIX 4-C
Metal Finishing Industry Contacts
Mr. B.J. Mason
Mid-Atlantic Finishing, Inc.
President (also President of AESF)
Mr. Richard McCarvill
Pratt & Whitney, United Technologies Corp.
Environmental Project Engineer
Mr. Kevin Mills
Environmental Defense Fund
Mr. Thomas Morgan
Universal Fasteners, Inc. (YKK Corporation)
Finishing Engineer
Mr. David Norwine
Kaward Corporation
(also Environmental Chair, NAMF)
Mr. Timothy Oppelt
EPA, Risk Reduction Engineering Laboratory (Cinn.)
Director
Mr. Manik Roy
Environmental Defense Fund
Pollution Prevention Specialist
202-387-3500
Mr. Eric Schaeffer
EPA, Office of Enforcement & Compliance Assurance
Deputy Director, Office of Compliance
202-260-8636
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APPENDIX 4-C
Metal Finishing Industry Contacts
Mr. Paul Shapiro
EPA, Office of Research and Development
Mr. Robert Sizelove
Frederick Gunun Chemical Company
Mr. William Sonntag
National Association of Metal Finishers
Director, Government Relations
Mr. Phillip Stapleton
Stapleton Technologies
President
Mr. Robert Steidel
Hopewell Regional Wastewater Facility
Manager
Mr. David Stephan
EPA, Risk Reduction Engineering Laboratory (Cinn.)
Ms. Sue Troup-Packman
Hughes Research Labs
Ms. Lynn Vendinello
EPA, Office of Compliance
4-C-4
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APPENDIX 4-C
Metal Finishing Industry Contacts
Ms. Ernestine Wagner
Artistic Plating Company, Inc.
Environmental Manager
Mr. Michael Warner
Mid-Atlantic Finishing, Inc.
Environmental Technician
Ms. Brenda Whalen
Enthone-OMI Corporation
Azita Yazdani
Pollution Prevention International
President
Mr. John Zavodjancik
Pratt & Whitney, United Technologies Corp.
Manager, Waste Minimization Programs
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