Pollution Prevention:




The Environmental Side of Total Quality

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&ollution Prevention: The Environmental Side 01 Total Quality
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Remarks by EPA
F. Henry Habicht II 1,1~ '
Deputy Administrator, ~~, ~
U.S. Environmental Protection Agency 0 J~
, [As Delivered] ~O'I ;,: :r::'c' :'~. ' "
Communications, Education, And Public Affairs !~r1,Q:~+ yr:'i'(." ;\.i, l' P:/" '. '

EPA's commitment to pollution prevention is so well- h (2l)lpe:J"::;<: /
established in mid-1992 that it is difficult to believe that . We, ave success u y put the word out that industry
works better when it stays ahead of the environmental
just two years ago the Agency was still in the first stages curve instead of behind it. It is far cheaper to plan
of introducing the concept into its culture. ahead than to react to problems and merely comply
At that time, some critics complained that EP A was no with the minimum requirements.
longer satisfied with control of the "end of the pipe"-;-it . And, we have provided carrots as well as
now wanted to use "pollution prevention" to go up the sticks-real incentives for pro-environment action.
pipe, into the boardroom decision-making process. One Total quality and pollution prevention provide their
syndicated writer even called pollution prevention own monetary rewards-but government can offer
"industrial abortion." '
even more than that, from markets for tradable
emissions allowances, to EP A's soon-to-be-initiated
"Environmental Excellence" program.

But let's take a step back in time for a moment.
Around the time that it celebrated its 20th birthday in
1990, EPA began to see clearly what had and had not
worked over those two decades of environmental
protection. The most fundamental lesson was that our
traditional method of environmental protection-
traditional command and control, end-of-the-pipe
regulation-could not solve current problems, for all of its
impressive successes. The costs of compliance with strict
regulations were high and getting higher. Pollution
control efforts in one medium, such as water or air,
sometimes pushed pollution into other media. And as we
reiJ.ched higher numbers in pollution reduction, we were
getting diminishing environmental returns.

We also saw that this purely regulatory regime
reflected a basic shortcoming in our management
structure. We had a fragmented, balkanized culture-
really a series of cultures-that serviced each of the
medium-specific statutes for which EP A is responsible.
We had fallen into the habit of writing regulations one at
a time, without thinking about who our customers were.

Many issues which cut across some or all of the
media-such as lead, groundwater, nitrogen, anrl impact
on small communities-were being addressed in a series
of vacuums. '

Bill Reilly and I came to view these two pro~ms-an
over-reliance on regulation, and a fragmented
management culture-as opportunities for change. We
believed there were comprehensive ways in which the
problems could be addressed. We viewed pollution
prevention as the favored method of environmental
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August 10, 1992
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Now we can see that this kind of criticism entirely
missed the point of what EP A was doing.

Our goal in this new era has been to make environ-
atal progress by harnessing powerful marketplace tools
approaches like total quality to encourage break-
ughs in the technology of prevention-oriented
production.

Past misunderstandings between government and
industry over pro-environmental action have clouded the
real issues. Government and business both face serious
challenges in their work. Business has the bottom-line
goal of monetary viability-profits, growth, economic
~ health. And an agency like EP A faces the challenge of
'0 finding the best way to work with business-with
~c.business, not against it or in spite of it-in protecting the
E:) environment.

J We now believe that the way to work together is to
speak a common language. As I'll explain today, we have
&1 strived over the last couple of years to develop the ability
Q2 on all levels of our agency to do just that:

(J) . We have provided goals for businesses to achieve
through our voluntary programs.

ED . We have established performance measures, such as
U? the Toxics Release Inventory, which go beyond
bureaucratic doublespeak and show how industry truly
effects the environment.

. We have melted down the iron flowcharts which
tUSed to enslave us and are speaking to industries as
dustries, individually, in a series of dialogues in
:{hich we achieve consensus through the civilized
process of negotiation.
1992 Summer National Meeting Of The
American Institute Of Chemical Engineers
Session: "A Total Quality Management Approach
, _I~ ,J~e Environment"
Minneapolis, MN
EPA 175-K.92-012
@ Printed on Recycled Paper

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protection. And we moved quickly to address th~
fragmentary condition of management by preparmg a
~l.at' inr plantingLlfe principles of total quality
managem,ent deep within EP A.

Our efforts at that time were backed up by the
Pollution Prevention Act of 1990, in which Congress
established a national policy that pollution should be
prevented or reduced at the source whenever feasible.

Our problems were systemic-rooted in deeply held
cultural beliefs. We had to have a comprehensive plan,
but change wasn't going to come easy:

. Pollution prevention required a cultural change
because letting businesses come up with their own
voluntary standards is quite different from cracking
the whip of prescriptive regulations.

. And total quality management required a cultural
change because, up until two or three years ago, EP A
was not overly concerned with cross-program staff '
teamwork, relationships with citizens and regulated
communities, or long-term efficiency and cont~uous
improvement.

Therefore; EP A designed a strategic planning process,
linked to our budgetary apparatus and other central'
systems. Crucial to this process is combining science and
policy to set long-range priorities, based on the
assessment of where society can achieve the greatest
return of reducing environmental risk. Over $120 billion
will be spent this year by American businesses and
citizens in the name of environmental protection-and
given the massive weight of this expenditure, we can not
afford to treat all environmental problems as equally
serious.

Once we have identified a priority problem and
budgeted for it, prevention is the preferred approach, and
total quality principles provide the management tools to
achieve our goals.

Pollution prevention and total quality management are
flip sides of the coin. Total quality is to management what
pollution prevention is to the environment. In an
industrial company with environmental impacts, there is a
natural tendency for pollution prevention to emerge as the
policy of choice when total quality principles are applied
to environmental management. Pollution is basically a
proxy for waste in the production process. Changing the
process with a commitment to quality can prevent the
"defect" of pollution.

Pollution prevention and total quality management
share the belief that if an institution breaks down its inner
walls and gives its employees authority and
accountability, they will bring back the best possible ideas.
On the other hand, setting prescriptive command and
control quotas is a sure-fire way to stifle creativity and
produce a short-term, low-horizon, small-picture respoj
to challenges. It is like flipping a light switch off. ""

We did not invent the idea that total quality and
pollution prevention are linked-long before we embraced
these ideas, Philip Crosby named as one of his "Absolutes
of Quality Management" the principle that "the system for
quality is prevention, not appraisa1." I've even seen an
article in the journal Total Quality Environmental
Management that speaks of the "Zen vision" of
environmental quality. The chant goes like this: "ma quest
to eliminate every ounce of toxic chemical, waste,
pollution, and threat to public health and nature...Creating
new technology to make it so... Pollution
prevention... Becoming more profitable...Smart business."

Our desire to inspire a corporate and grass-roots
movement toward pollution prevention on a nationwide
basis made our efforts to effect a cultural change within
our own agency even more important. And any change,
cultural or otherwise, ultimately boils down to concrete
actions. These were some of ours:

. We restructured the institutional organization of our
pollution prevention efforts-we designated prevention
as a primary responsibility of our Assistant
Administrator for Prevention, Pesticides, and Toxic
Substances, whose office administers the 33/S0 e
voluntary toxic reduction program and the operati1
the Toxics Release Inventory.

. We erected the framework of multi-media action
within the agency. Pollution prevention is by its nature
multi-media-it cuts across the activities of all program
offices. This is more efficient, because multiple media
impacts can be addressed with one effort rather than
several, and dispersed sources of pollution such as
farm and street runoff and vehicles can be at least,
partially addressed.

. By November of 1991, nearly all EP A senior
managers-SOO of. them-had completed a three-day
course on understanding and implementing total
quality management. We've provided TQM training to
almost all of our management corps and a significant
portion of our other employees more than 6000 people.
Hundreds of Quality Action Teams have been formed -
in our headquarters, Regions, and labs, many to
develop plans for pollution prevention.

. We created a Pollution Prevention Policy Staff that
reports directly to Bill Reilly and me on strategic
matters. The Policy Staff is currently working with me
on the development of our Environmental Excellence
Program, which I'll discuss in a moment.

Only by bringing all of our employees into the
loop-educating them on prevention, encouraging the!ll
apply its principles and constantly improve their wor.K;O-
listening to their ideas-did we truly make total quahty
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~ pollution prevention fundamental elements of EP A's
'-to-day activity.

Armed with these internal resources, we are now well-
positioned to work with the industrial community-which
in the past expected only regulation from us-to help
them find ways to adapt total quality to the cause of
pollution prevention. We view it as our responsibility, as
America's environmental agency, to give these linked
concepts the widest exposure possible. Of course, there
have been several dramatic corporate examples of
pollution prevention activities over the last 20 years-
certainly, the efforts of 3M in Minnesota come to mind,
with its well-known "Pollution Prevention Pays" program.

Many companies out there may not have 20 years of
pollution prevention experience, but still don't need much
help from EP A or anyone else in moving toward a
prevention-oriented system of production. All they may
need is encouragement-something, to make it easier to
see the benefits. And we strongly believe that the benefits
are many.

A study released in June by the nonprofit
environmental research group INFORM (developed with
EPA help), examined pollution prevention activities at 29
organic chemical plants from 1978 through 1990. Eighty
prevention activities reduced 128.7 million lbs. of waste a
I~ , and 1/4 of the activities achieved total elimination of
e, while more than half achieved 90 percent
uctions. Some plants saved over $1 million annually,
while only one activity resulted in a net cost increase.
Total quality activities-such as employee training and
cross-plant involvement-were documented as crucial in
each case. .

As U.S. News and World Report noted last year,
companies are "discovering that they can save money by
preventing pollution early rather than trying to cope with
it later." There are many real-world examples:

. Monsanto saved itself $75 million dollars in raw
materials and untold potential costs in waste treatment
facilities and Superfund liability just by finding a way
to reduce the waste left over from making its herbicide
"Roundup."

. Northern Telecom eliminated all use of ozone-
depleting CFC-113 solvent in its worldwide operations
by developing other means for cleaning electronic
circuitry. It spent $1 million to develop these means,
but by the end of 1991 it had saved about $4 million by
not buying the solvent, not paying the CFC taxes, and
avoiding waste.

. At a California plant of Dow Chemical, a project
Eam developed a method of recycling and improving
e control of a reactant used to make agriculture
. roducts. It had been incinerated after one use; now,
consumption was cut by 80 percent through reuse,
which eliminated 2.5 million pounds of waste a year
and saved Dow $8 million in raw materials and other
costs. (This and previous example are from
Schmidheiney book, Changing Course.)

Our voluntary pollution prevention programs have
shown many companies the tangible benefits of choosing
prevention. The Green Lights p~ogram encourages the use
of energy-efficient lighting by both companies and
governments. Use of this kind of lighting will save
participants billions of dollars a year in electric bills while
cutting down on power-plant emissions. At present, well
over 500 corporations, states, city and county
governments, and non-profit organizations have signed
up, giving commitments of space greater than the total
office space in New York, Los Angeles, Chicago, Houston,
Dallas, and Detroit. This represents about $1 billion in
annual savings and pollution prevention equivalent to
taking 1.6 million cars off the road! We recently
announced a similar program involving personal
computers, called the "Energy Star Computers Program,"
and are continuing to look at other applications for
voluntary "green" initiatives. And as of today over 750
companies have committed to meet the challenge of our
33/50 project, which is the reduction of the release and
transfer of 17 highly toxic chemicals-such as cadmium,
mercury, lead, benzene, and others-50 percent by the
end of 1995 (measured against the baseline of the 1988
TRI). But the 50 percent/700 million lb. goal is just that-a
goal. The underlying goal is continuous improvement, the
continual effort to both save money and reduce
environmental waste by better and better business
practices.

When the Chemical Manufacturers Association
instituted its Responsible Care Program, requiring its
members to exceed EP A requirements, it embraced
compe~itiveness just as much as it acted to improve the
environment. EPAregulations and enforcement actions do
lurk in the minds of all companies involved in the use of
materials which have an environmental impact, rod it is
proper for EP A to police the edges of what is allowable.
But there are rewards for achieving more than what is merely
legal. It may be that rigorous environmental standards
have a pro-competitive effect-an effect of pure economic
benefit. Harvard's Michael Porter wrote in the New York
Times last year that "Nations with the most rigorous
(environmental standards) often lead in exports of affected
products"-he said that the economic performance of
nations with the strictest laws is "strong proof" that
environmental protection does not hamper
competitiveness. One of the industries he cites as support
for this position is the chemical industry.

How do companies get these rewards? Total ql -tlity
principles provide companies with a roadmap to
successful pollution prevention. Since prevention can
involve a culture change-what one writer has called a
"sea change"-in corporate thinking, total quality
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management demands that the effort to find methods of
prevention involve everyone, from top management to the
line worker. Over and over I hear stories where the blue
collar employee figured out the solution that cut waste
dramatically at its source. As one consultant has said, "All
the people up and down the line have to believe in the
environmental program. Freeing up minds is the lowest-
cost way to do it." As I'm sure most of you have heard, a
basic tenet of total quality management is that empowered
employees are usually right. Eighty-five percent of the
problems in an organization arise from systems-the way
management sets up the way work is done. Only about 15
percent comes from employee mistakes. This doesn't leave
managers like us with much room to hide, but it's the
truth! The way breakthroughs are made, it seems to me, is
when employees of a company "think outside of the
box"-when they set their minds free from the restrictions
of the status quo and just "go with it." Employees need to
be empowered by their managers to think this way. There
was an article in the Total Quality Newsletter which
commented on how the American worker, unlike the
Japanese or anyone else, likes the tough challenge!; and
the impossible dreams. As Frank Pipp, a former executive
with Xerox, has said, "You have to set seemingly
ridiculous goals to force people to think outside of the
box." And sometimes, creative thinking comes without the
incentive of specific goals. Recently, dry cleaners studied
their consumers' life-cycle use of their products and
services and came to realize that they could provide the
same level of service without having to use the chemical
known as PERC (Percholoroethylene)-the use of which
they had, because of "inside the box" thinking, taken as a
given.

This is a time of fast change in environmental
protection. Twenty years ago, who would have thought
that industry would be buying and selling sulfur dioxide
credits at the Chicago Board of Trade? Or that a utility
would be trading acid rain "allowances" with an indu~trial
manufacturer in order to find cheaper ways to reduce
pollution? And who would have thought that this would
occur with the approval of both industry and
environmentalists?

We have learned that environmental protection must
turn to the market for solutions-a healthy environment
and an healthy economy are symbiotic, one unable to exist
without the other.
Pollution prevention is as market-friendly as it is
environmentally attractive. It is within the power of every
company to lower its environmental costs. So, EP A is
changing the way it operates-even when we regulate, we
will set only goals or performance standards and leave
industry maximum flexibility to innovate, as long as we
get back from industry the kind of reliable data that can
assure the public that progress is being made. And total
quality principles are essential in developing accurate
data.

EPA's new role-I'll call it "enlightened flexibility"-is
embodied in a voluntary program that we plan to
introduce soon. The "Environmental Excellence Program"
will be our most ambitious voluntary program, building
directly upon Green Lights, 33/50, and other initiatives to
allow manufacturers, utility companies, and other
businesses to achieve certain benefits by using pollution
prevention technology to far exceed applicable
environmental requirements and attain the most
environmentally sound processes possible in terms of
pollution prevention, energy efficiency, and product life-
cycle analysis.

Benefits of successful participation will range from
limitations on penalties for violations to speedier pesticide
registration to corporate advertising and public
recognition. The ultimate goal of participants will be to
earn the status of "Environmental Excellence," a
prestigious achievement that would qualify the company
for further significant benefits. These benefits and levels of
status will be tangible and significant-but the greatest
reward for companies in this all-encompassing program
will flow naturally from successfully internalizing the
principles of total quality and the processes of pollution
prevention.

National and international environmental policies al~
show us that the time has come for government to step
back and let industry use the best tools it has to provide
environmental breakthroughs:

. The Clean Air Act of 1990 has spawned technological
research and innovation in alternate sources of energy
and in ways of delivering the energy services we need.
I have a list of technological innovations inspired by
the Act; it fills up 29 single-spaced pages.

. President Bush's National Energy Strategy would
stimulate technological innovation in coal-burning
technology, natural gas, and such alternate-sources of
energy as solar power.

. EP A is now researching ways to translate the Rio
summit's policy against climate change into new
voluntary programs, such as Green Computers, to limit
the emissions of greenhouse gases and other pollutants.

. The Intermodal Surface Transportation Efficiency Act
of 1991, with its flexible and nonprescriptive approach
to rebuild.ing the nation's infrastructure, will spur
voluntary technological innovation.

A recent article in the Wall Street Journal mentioned one
small North Carolina company whose manufacturing
process resulted in many dirty rags, soiled with materi.
that is categorized as hazardous waste. This triggered
regulatory attention-and a good number of governmeil!
forms. So many forms, in fact, that an employee posed for
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.hotograph standing next to the stack of forms his
~pany was required to file. The employee was six feet
two inches-and the pile was slightly taller than he was!
Believe it or not, EP A dislikes that image even more than
the company does!

Pollution prevention and total quality management
allowed EP A to transform itself and its mission in the
direction of flexibility. They can have a similar effect
within manufacturing companies. Empowered
employees-free to think and be creative, free to help
develop preventive methods and continually improve on
them-can lead us all in taking a joyous leap off the
treadmill of prescriptive regulations. And maybe those
stacks of forms will shrink away, leaving American
business free to focus on the sorts of innovative
breakthroughs that can make us cleaner and more
competitive at the same time.
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