SUMMARY OF PROCEEDINGS
ENVIRONMENTAL AUDITING CONFERENCE
FOR FEDERAL FACILITIES
IN WESTERN STATES
Sponsored by the U.S. Environmental Protection Agency
February 16-17, 1984
Sheraton Denver Tech Center
Prepared by:
JRB Associates
A Company of Science. Applications, Incorporated
8400 Westpark Drive
McLean, Virginia 22102
May 1984
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TABLE OF CONTENTS
Conference Proceedings
ENVIRONMENTAL AUDITING CONFERENCE
FOR FEDERAL FACILITIES IN WESTERN STATES
1.0 INTRODUCTION 1-1
2.0 EXECUTIVE SUMMARY 2—1
2.1 Major Federal Facility Compliance Concerns 2—1
2.2 Major Environmental Auditing Concerns 2—3
2.3 Major Questions for Future Resolution 2—4
3.0 SYNOPSES OF CONFERENCE PRESENTATIONS 3—1
WELCOMING ADDRESS 3—1
John Welles, Regional Administrator, U.S. EPA Region VIII
EPA’S FEDERAL FACILITY PROGRAM 3—2
Josephine Cooper, Assistant Administrator for External Affairs,
U.S. EPA
OVERVIEW OF ENVIRONMENTAL AUDITING 3—4
John T. Funkhouser, Director of Center for Environmental Assurance,
Arthur D. Little, Inc.
PANEL: PLANNING, STAFFING, AND PREPARING FOR ENVIRONMENTAL AUDITS 3—6
OVERVIEW
Doris Sanders, Manager, Environmental Audit Program, JRB Associates,
A Company of Science Applications, Incorporated
ALLIED CORPORATION’S ENVIRONMENTAL AUDIT PROGRAM 3-8
Ralph L. Rhodes, -Director, Environmental Surveillance, Allied Corp-
oration
QUESTION AND ANSWER SESSION 3—10
AN EPA PERSPECTIVE ON ENVIRONMENTAL AUDITING 3-13
C. Ronald Smith, Director, Office of Standards and Regulations,
U.S. EPA
EPA’S ENFORCEMENT PROGRAM, FEDERAL FACILITY COMPLIANCE, AND 3—14
ENVIRONMENTAL AUDITING
Courtney Price, Assistant Administrator for Enforcement and Compliance
Monitoring, U.S. EPA
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PANEL: CONDUCTING AN ENVIRONMENTAL AUDIT — THE SITE VISIT 3—16
OVERVIEW
Raymond W. Kane, Manager, Program Development, Roy F. Weston, Inc.
ARCO’S APPROACH TO CONDUCTING AN ENVIRONMENTAL AUDIT 3—18
William C. Kelly, Manager, Environmental Services, Atlantic
Richfield Company
OLIN’S APPROACH TO CONDUCTING AN ENVIRONMENTAL AUDIT 3-19
Robert W. Cutler, Manager, Regulatory Audits, Olin Corporation
PANEL; THE AUDIT REPORT AND FOLLOW—UP 3—20
.OVER VIEW
F. Paul Pizzi, Vice President, Pilko & Associates
ENVIRONMENTAL AND ENERGY AUDITS OF AIR FORCE GOVERNMENT 3—22
OWNED—CONTRACTOR OPERATED INSTALLATIONS
Barry Hatfield, Chief, Facilities Management Division, U.S. Air
Force Aeronautical Systems Division
QUESTION AND ANSWER SESSION 3—24
PANEL: DISCLOSURE AND CONFIDENTIALITY OF ENVIRONMENTAL AUDIT FINDINGS 3—26
OVERVIEW: DISCLOSURE AND CONFIDENTIALITY 3—27
Douglas Costle, Counsel to Wald, Harkrader and Ross and
Updike, Kelley, and Spellacy, and Chairman of Executive Committee
of Environmental Testing and Certification Corporation
DISCLOSURE AND CONFIDENTIALITY AND THE PRESS 3—29
Darby Junkin, Reporter, Newsweek
DISCLOSURE AND CONFIDENTIALITY: OBLIGATIONS AND OPPORTUNITIES 3—30
Barry Breen, Assistant to the General Counsel, Department of the
Army
DISCLOSURE AND CONFIDENTIALITY: CORPORATE PERSPECTIVE 3—31
Frank B. Friedman, Vice President, Health Environment and Safety,
Occidental Petroleum Corporation
QUESTION AND ANSWER SESSION 3—32
PANEL: ENVIRONMENTAL AUDITING AT FEDERAL FACILITIES 3-34
ENVIRONMENTAL AUDITING WITHIN THE DEPARTMENT OF DEFENSE 3—35
Peter S. Daley, Director, Environmental Policy, Department of Defense
ENVIRONMENTAL AUDITING AT THE DEPARTMENT OF THE ARMY 3—37
William Hasselkus, Chief, Environmental Quality Division, Depart-
ment of the Army
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ENVIRONMENTAL AUDITING AT THE DEPARTMENT OF ENERGY 3-38
Thomas G. Frangos, Acting Director, Public Safety Division, Depart-
ment of Energy
ENVIRONMENTAL AUDITING AT THE NATIONAL INSTITUTES OF HEALTH 3—40
Donald Mantay, Chief, Environmental Protection Branch,
National Institutes of Health
ENVIRONMENTAL AUDITING AT THE TENNESSEE VALLEY AUTHORITY 3-41
M. Paul Schmierbach, Chief, Environmental Compliance Branch, Ten-
nessee Valley Authority
QUESTION AND ANSWER SESSION 3—42
ENVIRONMENTAL AUDIT PLANNING EXERCISE REPORTS 3—44
PERSPECTIVES ON ENVIRONMENTAL AUDITING: CURRENT STATUS AND FUTURE 3-49
DIRECTIONS
THE OFFICE OF FEDERAL ACTIVITIES AND ENVIRONMENTAL AUDITING 3—50
Moderator: Allen Hirsch, Director, Office of Federal Activities,
U.S. EPA
ENVIRONMENTAL AUDITING WITHIN COLORADO’S COMPLIANCE PROGRAM 3-51
Robert Arnott, Assistant Director, Colorado Department of Health
NEW MEXICO’S ENVIRONMENTAL AUDIT LEGISLATION 3—52
Don Silva, State Legislator, New Mexico
ENVIRONMENTAL AUDITING FROM THE ENVIRONMENTALIST’S PERSPECTIVE 3—53
Robert W. Golten, Counsel, National Wildlife Federation
THE ROLE OF ENVIRONMENTAL AUDITING IN THE FUTURE 3-54
Robert W. Cutler, Manager, Regulatory Audits, Olin Corporation
QUESTION AND ANSWER SESSION 3—55
CONFERENCE WRAP—UP: 3—57
Michael H. Levin, Chief, Regulatory Reform Staff, U.S. EPA
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1.0 INTRODUCTION
On February 16—17, 1984, the United States Environmental Protection
Agency (U.S. EPA) Headquarters and EPA Region VIII co—sponsored an
Environmental Auditing Conference in Denver, Colorado for Federal Facilities
in Western States. The purpose of the conference was to demonstrate how
audits operate and what they can do, indicate ways Federal agencies can
establish or up—grade audit systems, and begin to transfer audit experience
from companies and agencies with established audit programs to Federal
facility managers.
The conference was coordinated by JRB Associates of McLean, Virginia
and attended by 134 conferees. Speakers were selected for their
Environmental Audit (EA) expertise, their role in Federal facility
compliance, or both. They included representatives from Federal facilities,
industry, Federal and State government, consulting firms, the press, and
public interest groups. Attendees came primarily from Federal facility
field and headquarters offices but also included State and Federal
government representatives. Formal and informal conferee reactions indicate
that the conference more than met its objectives. Approximately 967 of
attendees who returned formal evaluation forms thought it would help them do
their jobs better.
The following sections review the conference proceedings. Section 2.0
is an executive summary of the major concerns, issues, and questions that
arose with respect to EA at Federal facilities. Section 3.0 summarizes
major speaker presentations. -
Such summaries inevitably fail to do justice to the humor, energy and
nuances of the kind of give—and—take which characterized much of this
workshop. Just as inevitably, a full transcript is too bulky and expensive
to provide. We have attempted to capture the essence of participants’
remarks and conclusions, giving due weight to how views appeared to evolve
and modify each other over the course of the conference. We apologize in
advance for any errors, omissions or misplaced emphases.
For additional information contact:
Leonard Fleckenstein
Environmental Auditing Project Manager
U.S. EPA, Regulatory Reform Staff (PM—223)
401 M Street, S.W.
Washington, D.C. 20460
(202) 382—2726
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2.0 EXECUTIVE SUMMARY
This section reviews proceedings of the Conference on Environmental
Auditing for Federal Facilities in Western States, co—sponsored by U.S. EPA
Headquarters and Region VIII offices on February 16—17, 1984 in Denver,
Colorado. It focuses on major issues, concerns, and questions that arose
during the conference that should be considered when formulating policies
and strategies relative to Federal facility compliance and Environmental
Auditing (EA).
2.1 MAJOR FEDERAL FACILITY COMPLIANCE CONCERNS
Major Federal facility concerns focused on general enforcement
strategies and the possible impact EA programs may have on enforcement
actions. These items included:
1. Lack of a coherent, consistent EPA Federal facility policy .
Representatives of Federal facilities noted that prior to the
conference, they were not aware of a coherent enforcement policy
used by EPA in dealing with Federal facilities. Some also noted
that enforcement policies discussed during the conference were
unclear, conflicting, and inconsistent with their past experience.
This is an issue of concern because it: 1) removes the predict-
ability that the regulated community relies upon to justify
expenditures for pollution abatement projects; and 2) results in
poorly—targeted resources.
2. Lack of enforcement at Federal facilities . While there were
notable exceptions, representatives from Federal facilities as well
as State and Federal regulatory bodies noted that there has been a
general lack of enforcement at Federal facilities across the board.
Enforcement has been lacking in all media. This issue is of
concern because Federal facility environmental managers have
problems justifying expenditures for pollution abatement and EA
projects because of an implicit “clean bill of health” suggested by
no enforcement actions, despite the existence of inadequate
environmental management programs.
3. Uncertainty as to EPA’s use of internal reports generated through
EA programs . Federal facility representatives stated they received
conflicting information during the conference with respect to
exactly how EPA will use reports generated from EA programs. The
major concern is that EPA will use the reports in enforcement
actions addressing problems noted in the audit report to the
detriment of the facility, despite good faith efforts to self—
audit. There is heightened concern following recent “get tough on
Federal facility” statements from the Administrator and his staff.
This issue is of concern because it may: 1) discourage the adoption
of EA; 2) encourage the production of uncritical or less detailed
EA reports; or 3) encourage the keeping of double books (one “real”
and the other for EPA consumption).
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4. Concern over EPA’s understanding of and reaction to Federal
facility budget cycles . A significant number of attendees were
concerned about possible EPA actions where problems discovered
through an EA may only be addressed over 5 years under the Federal
facility budget cycle. The concern is that EPA will not understand
and tailor possible enforcement actions to this “reality”. Without
this appreciation on the part of EPA, EA programs are less likely
to be adopted.
However, it should be noted that some Federal facility representa-
tives felt that information provided by EA can actually help reduce
budget delays through problem documentation and prioritization.
5. Potential for EPA to require EA . Federal facility representatives
variably supported or were critical of potential regulations
requiring Federal facility implementation of EA programs. Those
who supported the idea thought that it would ease their selling job
to management. Those who were critical suggested that it could
force inappropriate standardization and mandate what should be a
voluntary, flexible management tool.
2.2 MAJOR ENVIRONMENTAL AUDITING CONCERNS
Major environmental auditing concerns focused on program initiation and
report follow—up. These items included:
1. Difficulty in securing initial management support, funds, exper-
tise, and personnel . Federal facility representatives contemplat-
ing the implementation of EA programs were concerned that securing
support and resources could be difficult. These concerns elicited
several suggestions but could remain as serious obstacles to EA
program implementation.
2. Uncertainty about funding to address discovered problems . Existing
budgetary discretion led many Federal facility representatives to
conclude that problems discovered by EA would either not be
addressed or be addressed only as funds become available through
the normal budget cycle. This is of concern because documentation
of unresolved problems over a long period of time would constitute
knowing violations of applicable regulations. This problem would be
aggravated with more effective EA programs and decreased funds.
3. Concern about addressing unknown and uncertain risks . Representa-
tives expressed concern about how to evaluate or audit the efficacy
of environmental management systems directed at unquantified or
unregulated hazards.
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4. Lack of a tie between personnel and environmental performance .
Federal facility representatives stated that top management would
be more receptive to EA and environmental management in general if
they had a “personal stake” in environmental performance. They
suggested that environmental performance be made a regular part of
management’s personnel performance reviews.
2.3 MAJOR QUESTIONS FOR FUTURE RESOLUTION
Resolution of several questions relating to EPA policy will have an
important impact on existing or potential EA activities at Federal
facilities. These questions included:
1. How will EPA ask for and/or use the EA results ? Federal facility
representatives voiced a general desire not to have EPA mandate the
turn—over of raw audit data or audit reports. They also expressed
serious misgivings about the potential use of EA report results in
subsequent enforcement actions. Federal facilities seem to want to
use the EA process as an internal management tool while preserving
the option to involve EPA in problem resolution.
2. What will be the reporting obligations for EA programs ? Represen-
tatives were concerned about when and whether audit report results,
especially those concerning regulatory violations, must be reported
to regulatory authorities.
3. Are there alternatives to enforcement for firms with EA programs ?
Federal facility and regulatory agency representatives suggested
that a significant incentive to EA program adoption would be
alternative, less burdensome enforcement actions if the facility
had an EA program. This was felt to be especially relevant when
enforcement actions result from notification of violation(s)
through an EA program. Additionally, inspections could be targeted
at facilities without EA programs.
4. What are EPA’s enforcement procedures ? There was a great deal of
concern regarding EPA’s new enforcement procedures. Specifically,
Federal facility representatives were unclear as to what circum-
stances would trigger each step up the “enforcement ladder”. There
was also concern regarding the status of efforts to identify a
Federal facility representative parallel to the “responsible
corporate officer.” This latter issue relates to general environ-
mental management (e.g., who signs the RCRA permits) as well as the
prospect for securing upper management approval for EA.
5. How will EPA view long—term problems ? Several Federal facility
representatives were concerned about EPA’s new enforcement strategy
as it applies to problems whose solutions will take several years
to fund or implement. This was of specific concern to those with
potentially serious problems requiring capital—intensive or unknown
solutions (e.g., groundwater contamination) and/or inflexible
budget cycles.
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6. Will EPA embark on a more vigorous enforcement program ? A major
obstacle to justifying an EA program is the apparent lack of
enforcement efforts directed at noncomplying facilities that could
most benefit from EA. More diligent efforts in this area would
foster development of EA at Federal facilities.
7. Is a major policy statement on EA forthcoming ? Throughout the
conference EPA indicated that it was currently unsure of how
it might structure future activities around EA and that efforts
were underway to develop a coherent policy statement. Depending on
the components of such a statement, it would likely have a major
impact on those developing EA programs as well as on Federal and
State regulatory bodies.
8. How can funds be better secured for EA programs and problem
resolution? Federal facility representatives reported that one of
the major obstacles in implementing an EA program is securing funds
to finance EA or fix problems discovered through an EA. Further
gui dance on this issue was desired.
9. How can line and top management support be secured ? The importance
of line and top management support was often cited as critical to
the success of an EA program. It was recommended that future
follow—up efforts be directed at this group.
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3.0 SYNOPSES OF MAJOR CONFERENCE PRESENTATIONS
This section summarizes presentations of major conference speeches arid
panel discussions, in the order of conference presentation. A more complete
transcript is available for review upon request.
Mr. James Lehr, Deputy Director, Office of Air and Waste Management,
U.S. EPA Region VIII, arranged for EPA Region VIII/Headquarters conference
co—sponsorship and served as overall conference moderator.
WELCOMING ADDRESS
JOHN WELLES
Regional Administrator
U.S. EPA Region VIII
o One reason we are convening this conference is because Executive
Order 12088 directs EPA “to provide technical advice and assistance
to executive agencies in order to insure cost effective and timely
compliance with pollution control standards.”
o The purpose of this conference is to learn the “what, why, and how’
of environmental auditing (EA) from the world’s experts in industry,
government, and consulting firms.
o EA is a method of self—assessment and self—monitoring which has been
used by private and Federal facilities. It is a “do— it—yourself”
concept to enhance the performance of your environmental management
system.
o Some agencies in the Federal government have done a good job of
environmental protection; others have not. This conference should
help all of us do a better job. Use of EA by Federal facilities
will not only set a good example for private facilities and State
and local governments, but can play a substantial part in putting
our own environmental house in order.
o EPA is encouraging the development of EA systems without dictating
what you must do or when you must do it. We hope you will leave the
conference with the motivation and know—how to put environmental
auditing into practice.
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EPA’S FEDERAL FACILITY PROGRAM
JOSEPHINE COOPER
Assistant Administrator for
External Affairs, U.S. EPA
o Participation in this conference hopefully begins a new era in our
relationship at EPA with Federal facilities. There is a new
willingness to cooperate as an alternative to confrontation through
non—compliance and enforcement actions. I think that is true on
both sides.
o Environmental results are one of the goals of EPA’s new agenda——
not merely enforcement. The emphasis is on compliance as an
ultimate measure of our success. EO 12088 requires Federal
facilities to achieve and maintain compliance with Federal, State,
and local environmental regulations.
o EPA prefers to provide technical assistance and cooperate in
compliance efforts but has the requisite will to enforce where good
faith efforts and cooperation are lacking.
o There are problems in Federal facilities’ demonstrated ability!
desire to achieve and maintain compliance. Congressional and
public perceptions of Federal facility compliance are often
negative. There is a perceptj.on that Federal facilities are not
sensitive enough about their environmental effects.
o Progress has been made but much remains to be done to achieve full
compliance. The emphasis has changed from pollution control
equipment installation to assuring compliance over time. EA is a
currently available and effective tool for use in assuring
day—to—day compliance and addressing existing and forthcoming
regulations.
o EPA inspection results and especially lack of notices of violations
should not be relied upon as a measure of compliance. EPA resource
limitations and inspection strategies make it impossible for EPA to
inspect even all the major Federal facilities during a given year.
For example, fewer than 77. of the total Federal facilities were
inspected for Water Act compliance last year.
o EPA’s new Federal facilities compliance program will center around
cooperation to promote compliance and includes:
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1. Technical advice and assistance on regulations, pollution
control requirements, management initiatives, etc.
2. Compliance monitoring through on—site inspections (1/year for
major facilities and where violations are suspected for
others) and review of self—monitoring reports (as they are
received for major and significant minor facilities and when
violations are suspected for other facilities).
3. Fiscal planning assistance through advice on needed pollution
control measures, evaluation of overall fiscal plans submitted
to EPA in accordance with 0MB Circular A106, and participation
in project design and construction.
4. Resolution of non—compliance disputes by escalating problems
when necessary, by sending NOV’s, or filing administrative
orders. Actions are initiated by the Regional offices. If the
dispute is not resolved, headquarters will become involved and
will try to resolve it with the parent agency. 0MB is the
final arbitrator.
o Regional Federal facility coordinators are the focal point for
EPA ’s Federal facility program. Regional coordinators will play a
more active role than in the past and will have a large
responsibility for carrying out a wide range of activities.
o EPA is interested in joint pursuit of new Federal facility
compliance tools such as EA. EA is one way triat we can work
together to find new solutions to our remaining pollution problems
and demonstrate to the nation that the Federal government is
committed to environmental goals.
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OVERVIEW OF ENVIRONMENTAL AUDITING
JOHN T. FIJNKHOUSER
Director, Center for Environmental Assurance
Arthur D. Little, Inc.
o Since EA can mean many different things, it is important to define
what your EA program will be before you begin. It usually is a
defined mix of assessment (e.g., expert judgement) arid verification
(e.g., comparing the current status against a template, standards,
etc.).
o EA is only one part of and cannot substitute for your
environmental management program. The more external functions your
EA program encompasses, the less effective it will be at auditing.
o EA is far less rigorous than financial auditing but is continuing
to evolve. The trend is to make it more rigorous and include more
verification. In many companies EA has become a review program
meant to assure the hazard identification and response system is
working.
o Since the early 1970’s EA has been incorporated into the environ—
mental management programs of hundreds and hundreds of companies.
o EA is being used to manage risks which Consist of hazards. The type
of environmental management method applied to hazards must be
tailored to how much is known about them. Well known hazards can
be managed using standard methods and regulations. Lesser known
hazards must be managed using best practice and judgement. Hazards
which are not understood by the institution are managed using the
expertise of outsiders and alternative hazard identification
methods. There are also hazards which nobody knows about.
o Management expectations may dicate the type of environmental
auditing approach selected. Management may want to 1) solve
problems as they arise; 2) maintain constant compliance; or 3)
manage all risks or all problems.
o The degree of emphasis on risk management in the environmental
management program may dictate the role of environmental auditing.
Risk management involves hazard identification, risk assessment,
and risk acceptance determinations, as well as risk reduction
tactics.
o Environmental auditing programs can have several goals. The two
most important goals cited are compliance assessment and enhance—
ment or accelerated development of environmental control systems.
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o Benefits of EA programs can include overall improvement of
environmental management, hazard identification, risk reduction,
and enhanced assurance that management systems are working
correctly.
o The degree of independence desired in your EA program will
determine whether you use internal or third party teams.
o Objectives and scope, organization and staffing, audit methodology,
audit technologies, audit tools, and audit report are the basic
components of an audit program. The objectives influence every
other aspect of your EA program. Scope details what it will cover.
Organization and staffing refer to who will do it and where in the
organization the EA program will be located. Methodology,
technology, and tools refer to how it will be done. The audit
report refers to what will be reported and who will be informed of
the audit findings.
o The audit methodology includes five basic steps: 1) understanding
internal controls; 2) evaluation of their strengths and weaknesses;
3) gathering of audit evidence; 4) evaluation and integration of
findings; and 5) reporting of findings.
o Auditing can be done in different ways to suit individual needs and
constraints. There is no right or wrong way to audit.
o Limitations of auditing include: 1) the diversity of methodologies
used prevents strict comparisons; 2) the complexities of environ-
mental risk are not well known; and 3) it may be difficult to judge
which problems are important and which are not.
o EA will continue to be more widely adopted and its benefits will
become more widely accepted. Its future development will likely
feature more corinonality as both the idea and experience with it
mature.
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PANEL: PLANNING, STAFFING, AND PREPARING FOR ENVIRONMENTAL AUDITS
OVERVIEW
DORIS E. SANDERS
Manager, Environmental Audit Program
JRB Associates
A Company of Science Applications, Inc.
o EA is an important and flexible management tool for insuring
environmental compliance and protecting human health and the
environment.
o Initial planning for EA programs requires:
— Goal definition (e.g., “What do I want to accomplish?) . Goals,
which may be partially defined by events and/or management
directives, should be written down.
— Definition of resource needs and availability . Resources
include funds (How much will it cost?) and people (Who will
conduct the audit program). You must also determine where
resources will come from. Goals may be influenced by resource
assessments. Be creative in trying to answer resource related
questions. Think about where extra resources are and how you
can access them.
— Identifying who will approve and support the program, and
securing their backing . It also involves defining when is the
best time to get your potential allies involved with the program
(e.g., at EA program scoping or later on), anticipating possible
objections and constraints (e.g., budgetary constraints) and
developing response(s) to overcome problems.
— Defining the type of audit desired . Possible audit types
include facility profile (detailing a baseline of the situ-
ation), compliance (assessing compliance with respect to
applicable regulations), hazard management (assessing the
cost—effectiveness of some aspect of the environmental manage-
ment program), and special purpose (assessing special high
priority problems). Most audit programs include some combina-
tion of these types.
— Determining the scope of audit program desired . Possible audit
scopes include media/operation, environmental management, pro-
gram organization and management, current operations, historical
operations, future activities, and categorical (e.g., by region,
facility type, facility activity, etc.). Most audit programs
include some combination of scopes.
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— Determination of confidentiality procedures, equipment (e.g.,
bar—locked files, etc), and oversight needed for in—house and/or
third party audit teams .
o Staffing and organization considerations focus on who will manage
the program and where the program will be located in the organi-
zation. The EA program should be permanently aligned so it gets due
consideration in budgetary decisions. It is important to specifi-
cally define r sponsibilities (e.g., general management, signature
authority, etc.) to ensure a smooth running program.
o Staffing and organization should define if the program will be
staffed with internal and/or consultant personnel. The advantages
and disadvantages of the selected staffing and organization approach
should be recognized and dealt with.
o Advantages of an internal team can include: familiarity with company
and facility; greater flexibility in case of focus change; less
up—front costs; and greater control over confidentiality. Disad-
vantages can include: lack of objectivity; already corizuitted duties;
greater management time; and lack of training in EA.
o Advantages of a consultant team include: more objectivity; greater
team stability; less internal management; minimal training needed on
EA and established confidentiality procedures. Disadvantages
include: lack of facility familiarity; less immediate flexibility in
case of focus change; greater upfronc funding need; confidentiality
oversight removed from facility; suspicion of consultant by staff.
o A combination of internal and external EA staff may also be used.
o The expertise of the audit staff, especially the team leader and
other team members, is critical to staffing and organizing an audit
program. Team members should be selected based on their under-
standing of audit methodologies, regulatory compliance, process
operations, organizational analysis, and environmental impact
assessment.
o Pre—audit preparation is critical to the audit process. It involves
scheduling and setting milestones, training of staff, setting the
stage within the facility (e.g., convincing the facility that EA is
good for them and that they should cooperate), preliminary
information gathering (from the facility staff, files, etc.),
facility profile development, planning for report writing, and
planning for a response to environmental audit results.
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PANEL: PLANNING, STAFFING, AND PREPARING FOR ENVIRONMENTAL AUDITS
ALLIED CORPORATIONS ENVIRONMENTAL AUDIT PROGRAM
RALPH E. RHODES
Director, Environmental Surveillance
Allied Corporation
o Pre—planning is critical to the success of an EA program. The
auditor is expected to do what management tells him to do ——
complete the audit and make no mistakes. Mistakes undercut
credibility within the organization and make the job more difficult
the next time around.
o Allied is a big diversified company with about 450 domestic and
foreign locations. This has important implications on how we
structure and staff our audit program.
o The first step in developing an EA program is to clearly define the
program’s objective. The objective of Allied’s EA program is to
verify that operations are in compliance with laws and internal
policies and procedures. In so doing, other objectives are also
met. The objectives should be formally stated so that they can be
used as a reference point thr9ughout the program.
o Identifying the client for whom the EA program is being performed is
the next step. At Allied, the primary client is the Board of
Directors and the top management of the corporation. However, all
who are affected by EA are involved in it.
o A clear formal or informal delegation of authority is important to
the success of an EA program. At Allied, authority has been
delegated informally. Authority must be supported by management.
Management must also allow the auditor a place in the organization
from which he/she can audit effectively and report effectively
without obstruction.
o Independence is critical to an audit program. “Practical” independ-
ence can be achieved with an internal staff. Allied’s program is
internal and is comprised of a corporate surveillance group,
representatives from corporate environmental offices, and a third
party auditor.
o Program boundaries must be defined from the beginning. Allied’s EA
program boundaries are defined by organizational characteristics
(e.g., new acquisitions, high risk facility components), geographi—
cal characteristics (e.g., U.S. versus foreign facilities), and
functional characteristics (e.g., disciplines to be reviewed and
origin of the criteria).
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o The EA program must also define the frequency of review/site
selection and review procedures. At Allied, site/frequency
selection is developed to provide a representative example of
business areas, companies, functional areas, etc. Review proce-
dures are similarly designed to provide a representative sample
of activities within a specific facility.
o Important auditor qualifications include objectivity, technical
competency, determination, tact, etc. Good communication between
the auditor and those being audited is critical. It is important
that communication problems between the auditor and the facility
be resolved early on. The auditors should also provide feedback
about what they are learning during the course of the review,
to the persons responsible for the program at the facility.
o At Allied periodic progress reports, a formal close—out conference,
draft reports, and special issue meetings are also used to enhance
communications.
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PANEL: PLANNING, STAFFING, AND PREPARING FOR ENVIRONMENTAL AUDITS
QUESTION AND ANSWER SESSION
Question — (Directed to Jo Cooper, EPA). Has your program and agenda been
brought to the attention of the Secretarial level in Washington?
Answer — Jo Cooper, EPA: Bill Ruckeishaus has spoken with Secretary Hodel
(DOE), Secretary Marsh, Bill Gianelli (Corps) and others to
ensure that our program gets attention across agencies and within
the Executive Branch. Agreements between EPA and other agencies
are also being worked out on an agency—by—agency basis for RCRA
and Superfund programs.
Question — How often would an agency have to update the E.A reports? The cost
of up—dating appears significant.
Answer — Lee Herwig and Jo Cooper, EPA: There is no federal requirement
for frequency.
Ralph Rhodes, Allied: The frequency is organization and/or
facility specific. You should not audit if you are not willing
to fix discovered problems. Addressing recommendations rather
than the actual audit will likely require the most financial
commitment.
Jo Cooper, EPA: EPA would like the audits conducted on a routine
and frequent basis to be used as a compliance assurance tool.
Doris Sanders, JRE: The initial audit will be the most costly.
Follow—up audits will mainly involve check—ups on responses to
noted problems and be less expensive.
Question — (Directed to Ralph Rhodes) Are your audits directed at individual
plants and do you have a full complement of audit types to cover
diverse activities at Allied?
Answer — Ralph Rhodes, Allied: Yes. However reviews are directed at
certain subjects rather than at multiple subjects. Allied does
not review every single subject at each location simultaneously.
Question — Please provide a supporting rationale for auditing facilities on
a repeated basis. Can I design an EA program to provide me with
up—dated information on a facility.
John Funkhouser, ADL: A single audit is only a snapshot. To
assess the facility’s on—going performance, repeated regular
audits must be performed.
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Question — (Directed to Ralph Rhodes) How do you respond to non—compliance
problems discovered during an audit that take long term capital
investments to solve?
Answer — Ralph Rhodes, Allied: The report only identifies problems.
Management is responsible for implementing corrective actions.
Question — How are relationships handled with regulatory authorities once
such problems are discovered?
Answer — John Funkhouser, ADL: Following notification of problems to
operational people, the auditors are removed from the situation.
All discussions/negotiations with regulatory agencies are handled
by the facility itself.
Question — (Directed to Jo Cooper) Please expand on EPA’s willingness to
assist in the satisfaction of States when there is a difference
between State/Federal hazardous waste regulations.
Answer — Jo Cooper, EPA: As there are few full RCRA delegated states,
this issue has not been fully worked out yet.
Question — (Directed to Jo Cooper US EPA) Will not EPA’s intention to review
the results of audit reports discourage Federal agencies from
setting up EA programs?
Answer — Jo Cooper, EPA: EPA wants to be aware of the problems before
they get out of the facility. Reports generated by Federal
facilities are also not as sensitive in terms of confidentiality
as those of the private sector. EPA wants to use the reports to
get better compliance and to cooperate with agencies in problem
resolution.
Question — The attitude of today’s regulatory officials indicates an
increased adversarial rather than cooperative relationship when
dealing with compliance problems. How do we know that you will
not use the audit results to cite us for violations, etc.?
Answer — Jo Cooper, EPA: The EPA has run into some situations where
cooperation was lacking and therefore elevated the issue.
However, cooperation and dialogue have been and will continue to
be emphasized over conflict. The Agency views EA as a tool which
can be used to achieve Federal facility compliance without
resorting to higher conflict resolution/enforcement avenues. EPA
needs a better basis for assessing Federal facility compliance.
EA is a tool that helps in this area.
Courtney Price, EPA: EPA will cooperate and negotiate to get
results. However, where results are not forthcoming other
enforcement tools will be used (e.g., triggering the dispute
resolution mechanism and the issuance of administrative orders).
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Mike Levin, US EPA: If the purpose of the new Federal facility
program is to get better assurance of and Statistics on compli-
ance, these statistics can be gotten from other sources than
directly from the audit reports. Many measurements of compliance
(NOV’s, size of penalties, etc.) are artifacts of the system —
they do not necessarily represent the performance of a particular
facility. The EPA should not be interested in how you do your
audit internally; EPA only needs to look at what the reported
compliance results are. The presence of an EA system gives more
confidence that what should be reported, is being reported. That
is all we need to do our job.
Question — (Directed to Ralph Rhodes) Because audited facilities may be
encouraged to present a false/altered picture of their environ-
mental management system to make it look better than it is, how
do you as an auditor ensure that you really know what the
situation is?
Answer — Ralph Rhodes, Allied: The Allied audit system is sufficiently
detailed and cross—checked to ensure the true picture is
presented. The audit must use several sources to derive
conclusions, including review of basic data sources. One of the
reasons for our audit program’s existence is to confirm what the
situation really is.
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AN EPA PERSPECTIVE ON ENVIRONMENTAL AUDITING
C. RONALD SMITH
Director, Office of Standards and Regulations
U.S. EPA
o A unique aspect of EA is that benefits gained through its use as a
management tool translate into benefits to the environment. EA may
also encourage better targeting of resources in the future; more
rational definitions of compliance; and development of improved data
bases. The value of RA will depend upon: senior management commitment;
the technical quality of audit activities; appropriate procedures;
timing; and numbers and types of audit systems.
o EPA is encouraging the development and implementation of EA for several
reasons including:
1. Improved environmental management through a shift away from
reactive to affirmative management of pollution problems.
2. Better cooperation through improved EPA confidence in facilities
with EA programs and a lessening of confrontational relationships
between EPA and the regulated community.
3. Better use of limited EPA resources through enforcement
targeting towards those, who cannot adequately manage their
environmental activities, and away from those who can.
4. The need to assure compliance over time with environmental
requirements, after required equipment has been installed.
o Over the last several years, EPA’s thinking on EA has shifted from
mandated programs, to voluntary incentive—based approaches to a
three—pronged approach of endorsement, analysis, and assistance.
o EPA is now trying to address disincentives to EA, especially issues
relating to confidentiality of internal audit reports. EPA is also
trying to evaluate the efficacy of different types of EA programs,
helping states and firms interested in EA to structure individual
programs, and developing software that will let smaller companies
easily find what regulations apply to them and use EA approaches to
meet these requirements.
o EPA is considering the development of a policy statement on EA with
respect to:
— Use of EA in consent decrees.
— EPA use of EA data and/or reports.
— Inspection targeting toward firms without audit systems.
— Variable enforcement responses to firms with in—place EA
systems.
— Confidentiality of EA results.
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EPA’S ENFORCEMENT PROGRAM, FEDERAL FACILITY COMPLIANCE,
AND ENVIRONMENTAL AUDITING
COURTNEY PRICE
Assistant Administrator
Office of Enforcement and Compliance Monitoring
U.S. EPA
o The Office of Enforcement and Compliance Monitoring (OECM) serves
four functions:
1. Legal counsel to EPA’s enforcement function, responsible for
ensuring compliance.
2. Source of technical and legal support for compliance monitoring
and enforcement.
3. Manage criminal enforcement program.
4. Primary liason to DOJ, coordinate national cases, focus
priorities, and oversee a more decentralized system of case
referrals.
o OECM will take EPA lead in national enforcement and compliance
efforts.
o The fundamental objective of EPA’s national compliance/enforcement
program is the protection of public health and the environment
through fostering compliance at the Regional level. New approaches
to compliance such as EA will be initiated and evaluated to achieve
compliance.
o Compliance is EPA’s highest priority. Initiatives are designed to:
1. Promote better compliance.
2. Monitor compliance to detect violations.
3. Respond quickly and appropriately to violations.
4. Build public confidence in EPA’s compliance and enforcement
capabilities.
o Federal facility managers through the chain of coriunand are morally
and legally obligated to maintain compliance, and should be examples
for private sector facilities with respect to compliance.
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o Maintenance of compliance and sound environmental management will:
1. Reduce potential long term clean—up costs.
2. Enhance public perceptions of Federal facility performance and
commitment.
o EPA will focus on results by:
1. Measuring real compliance rather than simple violation/excur—
sionfNOV’ s.
2. Examining compliance performance against these real measures.
3. Bringing significant violators into compliance.
4. Encouraging better compliance through the results produced by
these tools.
o EPA wil also promote compliance by ensuring that the regulated
community has the best information, tools, and techniques to achieve
it. (EA is one such management tool.) EPA will:
— Develop protocols to assure better quality and reliability of
compliance monitoring data.
— Help provide other tools to enhance, voluntary compliance, which
will still have to be primarily relied upon.
— Rely more heavily on self—monitoring as a tool to screen and
identify potential violations. Data sources include water,
groundwater, and air monitoring records. However, this reliance
also means that deliberate falsification of self—monitoring data
will result in prosecution.
o EPA’s interest is your facility’s environmental performance rather
than how you manage uyour facility to achieve compliance.
o EPA does not have all the answers with respect to environmental
management and/or EA.But EA is available now and EPA’s NEIC
Multi—Media Compliance Audit Inspection Procedures manual is a good
place to start in thinking about how to structure your EA program.
o EPA is calling o you, as talented people of conscience, to
establish sound environmental management systems that produce better
compliance, reduced environmental risk, and a safer, healthier place
in which to live.
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PANEL: CONDUCTING THE ENVIRONMENTAL AUDIT — THE SITE VISIT
OVERVIEW
RAYMOND W. KANE
Manager, Program Development
Roy F. Weston, Inc.
o Prior to conducting an audit you must know what your goals are. You
should have completed pre—site visit activities to familiarize
yourself and the audited site manager with the critical areas the
audit will cover. Go over objectives, schedules, and audit team
responsibilities, prior to the actual site visit.
o Reveiw all regulations for their applicability, especially those on
State and local levels. Get up—dated versions through Computerized
Environmental Legislative Data System (CELDS), developed and
maintained by the Army, and discussions with regulatory authorities.
Match regulations with facility activities to define compliance
areas.
o Audits can be conducted by substance by tracking its use (e.g.,
PCB’s), unit processes by following a process, by disposal methods
such as wastewater discharge, or by legal requirements, looking at
the regulations. A good audit will include all these techniques.
o There are four basic audit approaches which include record and
document reviews, interviews, physical inspections, and sampling
a ialyses and testing.
— Record and document reviews should focus on major compliance
areas and should be carried out first.
— Interviews should be conducted with understanding and directed
to allow maximum information flow from the auditee to the
auditor. For example, encourage the facility person to describe
operations and methods. Follow—up on his descriptions with
further related questions to keep him talking about his
operations.
— Physical inspections , walking through the facility, should
include process, waste material, and hazardous substance areas.
Inspections should be timed to see critical areas and may be
done in association with interviews. Inspections should look
beyond the facility line to neighboring areas (the back 40
acres) and contractors with whom the facility does business
(e.g., off—site TSD facilities). Conunon law nuisances for which
the company may be liable (e.g., noise, odor, etc.) should also
be evaluated.
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— Evaluations of sampling, analysis , and QA/QC procedures are more
important then actually taking samples while on the audit and
the audit team should include people with the expertise needed
to evaluate these procedures.
o Audits can extend beyond regulatory compliance and evaluate
emergency response capabilities, possibly through mock drills which
may highlight discrepancies between paper plans and real capabili-
ties.
o Audit protocols should be developed to ensure proper pre—audit
preparation. Regulations should be integrated into protocols and
they should direct auditors examination/inspections and require
written comments or fill in the blanks, yes/no, answers.
o The audit should end with a de—briefing to clear misinterpretations,
gather additional information and provide preliminary audit results
to facility personnel, especially the site manager.
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PANEL: CONDUCTING THE ENVIRONMENTAL AUDIT — THE SITE VISIT
ARCO’S APPROACH TO CONDUCTING AN ENVIRONMENTAL AUDIT
WILLIAM C. KELLY
Manager, Environmental Services
Atlantic Richfield Company
o ARCO’s corporate policy is to comply with environmental legislation
and maintain a corporate environmental protection group. The
program works by making line managers responsible for meeting
environmental standards.
o The Environmental Protection Systems Review Program assesses and
improves total environmental protection performance through effec-
tive management systems. The Reveiw Panel consists of 125 middle
management types. Review teams are selected from this group and
these teams actually perform the reviews of ARCO’s facilities.
o Pre—review activities prepare the review team for the on—site
review. The team has six months notice prior to the on—site visit.
o Comprehensive on—site reviews take about ten days to two weeks and
involve records reviews, assessing who is involved with environ-
mental management, completing checklists developed for specific
facility types, orientation meetings, facility personnel interviews,
drills, and demonstrations.
o Facility interviews are confidential and include 5 to 10 percent of
all the facility people from the manager down the line; half— hour
interviews per employee. Facility people are generally willing to
talk candidly.
o Nightly audit team briefings are conducted at a separate operations
center to discuss interviewee comments, on—site observations, and to
identify problems and assess opportunities.
o Prior to departure, the team drafts findings (good and bad) and
recommendations and presents them to the facility manager with whom
every item is discussed in detail. Upon completing the de—briefing
meeting, the facility has 45 days to resond to the findings.
o Usually the review team will Consist of managers whose plant will
soon be audited. This encourages reviewers to clean up their
facilities since they know they will soon be audited.
o Attention given the review program by facility top management
encourages line managers to actually request reviews of their
facilities because recommendations weigh heavily in allocating
limited funds.
o Finally, even though the first review is comprehensive and time
consuming, the second audit is always simpler than the first —— all
the requisite documentation has been collected and must simply be
kept updated.
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PANEL: CONDUCTING THE ENVIRONMENTAL AUDIT — THE SITE VISIT
OLIN’S APPROACH TO CONDUCTING AN ENVIRONMENTAL AUDIT
ROBERT W. CUTLER
Manager, Regulatory Audits
Olin Corporation
o Olin’s audit program was developed in the mid—seventies in response
to the proliferation of complex regulations, and report submissions
(25,000/year).
o The Audit Department was formed in 1978 at the request of the CEO
with top management support which is critical to its success. The
audit program reports to the chief internal auditor who reports to
the chairman. This insures independence of the EA function from the
operations. Olin’s audit protocols and methodologies were developed
from the experience of financial auditors and cover all applicable
regulations, compliance method testing and verification, and
facility specific organizational considerations.
o Compliance auditing activities at Olin involve representatives from
product manufacturing, technical (know regulations and assist in
assessing their application and implementation), legal (interpre—
tating laws and regulations), and auditing groups. The audit group
reviews, observes, and reports independently from the other three
groups.
o The mandate of the Audit Department is to ensure that every Olin
operation is conforming to all regulatory requirements. This
includes ensuring compliance as well as ensuring the adequacy of
compliance systems, procedures, and organizations.
o The Audit Department consists of 5 full time independent auditors.
Every facility is visited once a year covering up to 40 subject
areas in each audit.
o Field work is directed at: documents, regulations and facility
variables, and on—site activities. The audit usually only extends
to the facility property line. Reporting mechanisms are checked for
accuracy. 0ff—site shipments are checked for handling, identifi-
cation and conformity to regulations.
o A major purpose of th audit is to ensure that required information
and reports are competently prepared and accurate in content. This
includes detailed analyses of methodologies and control systems
generating the data which is the basis for a report.
o The results of Olin’s audit program have been very positive to date:
communication throughout the corporation that Olin will comply with
regulations; assurance that compliance efforts are correct; and a
10% reduction in emission rate over the past 5 years.
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PANEL: THE AUDIT REPORT AND FOLLOW—UP
OVERVIEW
F. PAUL PIZZI
Vice President
Pilko & Associates
o Audits can be a powerful mechanism to establish on—going communica-
tions between facilities and upper management. A successful site
visit plus report contents, problem-solving and format considera—
tions, and the right skills will result in a successful environ-
mental audit. The report, should be reviewed and followed—up to
fully realize its benefits as a management tool.
o To be an effective management tool the audit report should: be a
flexible working document; look at environmental programs to verify
their effectiveness; identity areas of concern; and present a
management action plan for identified action items.
o The report also should be tailored to your EA program goals, provide
recommendations, and be written with action verbs in a positive tone
to get a better response. The report can provide a picture of the
compliance status, an assessment of risks and liabilities of
concern, or somewhere in between.
o All audit results should be brought to the facility manager’s
attention prior to inclusion in the actual report to avoid
“surprises” in the final report.
o Recommendations for solving problems must be addressed in the
report. They can involve conceptual solutions but only to the
extent they draw on auditors’ knowledge and experience.
o Report format should be tailored to meet EA program goals with
details and descriptions of operations, problems, and solutions or
at least brief statements of problems and solutions. The format may
be partially dictated by report distribution; which management level
will use the reports and for what?
o Critical skills necessary for report writers include operating
background such as hands—on manufacturing industrial background,
diverse experience such as ability to ask the right questions and
get accurate answers, auditing experience, verbal communication
skills, and written communication skills (e.g., ability to report
factually and to “sell” recommendations).
o Report review and follow—up procedures are critical. Get the report
reviewed to make sure it is factually correct. Follow—up the
results in management’s addressing identified problems.
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o A set procedure can be used for follow—up activities and involves:
— Establishing an action plan and schedule;
— Assigning follow—up responsibilities to individual staff;
— Implementing environmental status reports which detail facili-
ties’ environmental compliance status and document budget
requirements.
o An annual audit program summary addressed to executive management
should detail audit program accomplishments.
o Report distribution should be restricted to a need to know basis,
but must include those who can implement recommendations in the
action plan to make it an effective management tool.
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PANEL: THE AUDIT REPORT AND FOLLOW—UP
ENVIRONMENTAL AND ENERGY AUDITS OF AiR FORCE
GOVERNMENT OWNED—CONTRACTOR OPERATED
INSTALLATIONS
BARRY HATFIELD
Chief, Facilities Management Division
U.S. Air Force/Aeronautical
Systems Division
o The Air force audit program is directed at a myriad of Government
Owned—Contractor Operated (GOCO) facilities located across the
country, engaged in manufacturing a variety of defense related
equipment. We had 19 GOCO facilities on 15 bases audited in one
year.
o The purpose of the audit primarily was to comply with in—house
regulations. A standing regulation exists which calls for assess-
ment of compliance with all applicable regulations. The audits were
Air Force sponsored.
o This audit program was unique in that it covered environmental
compliance and risks, materials recovery, and energy conservation.
A major underlying emphasis was on cost—avoidance because if you can
spend money up—front to correct a problem, are saving a larger
expenditure down the road.
o Common facility problems were discovered: compliance problems and
hazards; penalty potential; unidientified hazardous waste generating
operations; and poor performance despite having passed regulatory
agency inspections.
o The nature of the GOCO facilities allowed problems to be grouped
separately: a) regulatory that required contractor action/funding;
b) regulatory that required AF action/funding; c) hazard areas that
required contractor action/funding; and d) hazard areas at required
AF action/funding.
o The audit was action—oriented. The audit results helped identify
who was responsible for addressing each item (e.g., the Air Force or
the contractor). The contractor evaluates the audit and the
proposal to address uncovered problems, money is secured and the
problem is addressed. One of the major end results was an improved
relationship with EPA since they were involved in the process and
consulted about appropriate actions.
o The audit results have helped overcome funding obstacles associated
with addressing noted problems because audit results act to justify
budget requests.
o Checklists included in each audit report allowed contractors to
self—audit and evaluate their operations after the formal audit.
Checklists were extremely helpful in fulfilling personnel
training needs.
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o It is critical to act upon the results of your audit, failure to do
so may invite EPA action. You must work hard to secure funding and
establish a milestone plan for correcting problems.
o The audit program has allowed AF/ASD (Aeronautical Systems Division)
to: re—direct budget thrusts; re—direct subsequent audit thrusts;
establish a baseline for out—year activity; and provide support for
reallocating resources from other mandate areas to environmental
needs.
o In running an audit program you must have a lot of resources and be
able to direct them quickly. In this context, never audit a problem
that you already know about——use your resources in addressing the
problem.
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PANEL: THE AUDIT REPORT AND FOLLOW—UP
QUESTION AND ANSWER SESSION
Question — How can Federal facilities benefit from the work and experience
done to date to keep from reinventing the EA wheel?
Answer — Ray Kane Weston: Develop generic protocols and checklists for
common regulations that would be applicable to operations at many
federal facilities.
Doris Sanders, JRB Associates: People in the auditing field can
network with each others. Simply talking about common problems
and similar solutions can go a long way for sharing information.
Question — If you anticipate that major problems will be discovered through
your audit and the funds to fix these problems will nearly be
impossible to secure because agencies have missions other than
cleaning up the environment, what is wrong with management
deciding not to audit?
Answer — Courtney Price, EPA: It is against the law not to address
environmental problems and protecting the environment is not just
EPA ’s mission. Ensuring compliance is a joint responsibility held
by the facility as well as EPA. It is like fire regulation
compliance — its not optional. Additionally, it usually costs
less to look for and address a problem early on rather than to
wait until the problem surfaces and it gets much worse. EPA has a
public obligation to take action where problems exist and are not
being addressed.
Robert Cutler, Olin: In undertaking a program like EA, manage-
ment, whether in the private or public sector, must make a
philosophical commitment to do what is necessary to comply with
the laws.
Barry Hatfield, IJSAF/ASD: Securing funds to address problems will
be eased through documentation of their existence and severity
because, for example, no commander wants bad publicity. But, there
should be the realization that the solutions may take time to
implement and as some problems are remedied new ones may appear.
Bill Hasselkus, DARCOM: To secure management support for an EA
program, tie it to the mission of the facility. For example,
present the argument that EPA will react to unaddressed problems
by shutting down a facility and preventing the manager from
accomplishing his mission.
Charles Alford, USAF/ASD: Today, the largest aerospace facility in
the U.S. does not accumulate wastes for more than 90 days, it used
to keep wastes on—site for over a year. The audit changed that.
We have discovered opportunities for saving money by streamlining
environmental management.
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Question — At what level in the management/command chain will EPA enforcement
action be directed? Facility manager? Conimendant? Group Com-
mander?
Answer — Courtney Price, US EPA: The compliance strategy starts at the
facility level and escalates up the chain of command/management to
the agency headquarters if it is not resolved. Ultimately,
unresolved disputes are submitted to 0MB for resolution.
Mike Levin, U.S. EPA: This process allows the facility/base
commander to make the Agency commander responsible for committing
funds to fix the problem.
Francis Muihern, U.S. EPA: As Region III Federal Facility
Coordinator, I am here to assist you in addressing compliance
problems. Money can be targeted through the A106 review process.
Cooperation, rather than conflict, between the Agency and EPA will
assist in problem resolution. If you start an EA program and
identify skeletons, are not going to be heavy handed.
Bill Kelly, ARCO: On the industry side we suffer similar problems.
However, we commit all environmental managers to the underlying
ARCO policy of compliance with environmental regulations. The
uold bull of the woods manager” who does not follow corporate
policys is no longer with ARCO.
Ralph Rhodes, Allied: One truism is you are better off knowing
what your problems are than remaining ignorant. EA will make you
better off in that it will array your concerns, opportunities, and
priorities.
Comment — With respect to getting an EA program established, the presence of
middle management (not merely base level or pentagon level people)
at conferences such as this would help. Middle management support
is crucial.
Comment — The military will respond effectively to problems that are brought
to our attention. We will deal with the 5—6 year funding cycle,
and we will respond. When we tell EPA that we are going to
address our problems, they will be on our side.
Question — When should you not write down the results of an audit and what
are the drawbacks of not writing them down?
Answer — Paul Pizzi, Pilko and Associates: You should always write down the
audit results. The drawbacks of not writing down the results is
that your creditibility is destroyed.
Robert Cutler, Olin: Initially our lawyers were concerned about
writing things down and we reported only in outline form. A
problem with this approach was that as time passed, the meaning of
the outline was forgotten and the value of the audit report was
reduced. Certain serious problems will get acted upon immediately
while others will only be noted in the audit report and not acted
on.
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PANEI$ DISCLOSURE AND CONFIDENTIALITY
OF
ENVIRONMENTAL AUDIT FINDINGS
Moderated by
C. RONALD SMITH
Director
Office of Standards and Regulations, U.S. EPA
o Douglas Costle, Wald, Harkrader, and Ross; Updike, Kelley, and
Spellacy; and Environmental Testing and Certification Laboratory
o Darby Junkin, Reporter, Newsweek Magazine
o Barry Breen, Department of the Army
o Frank B. Friedman, Occidental Petroleum Company
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OVERViEW:
DISCLOSURE AND CONFIDENTIALITY
DOUGLAS COSTLE
Counsel to
Wald, Harkrader, and Ross
and
Updike, Kelley, and Spellacy
and
Chairman of the Executive Committee of the
Environmental Testing and Certification Laboratory
Edison, New Jersey
o For centuries we have been cognizant of the obvious acute hazards of
chemicals. Recently, however, there has been a proliferation of
diverse chemicals and we are now aware of chemical hazards in parts
per million/billion concentrations.
o Our insufficient knowledge of the health effects of small concentra-
tions of chemicals requires us to set standards based on imperfect
data or epidemiological information.
o EPA is in a risk management mode to protect public health. Cost
effectiveness principles are part of the equation used to address
these hazards but, we also have tough laws controlling toxic
materials. EA is a tool for risk management, ensuring that adequate
information exists to address known and unknown hazards.
o EA has been as useful as the financial audit in the private sector
because it: assists in achieving and maintaining compliance with
environmental regulations; prepares companies to anticipate, avoid,
and manage crises and to respond to enforcement actions; helps
protect responsible corporate officers against civil and criminal
liabilities; meet Securities and Exchange Commission requirements;
assists in insurance and financial planning (e.g., mergers,
spin—offs, acquisitions, etc.); assists in personnel training, and
enhances management/employee and corporation/community relations.
o Similar and even greater benefits can be realized by Federal
agencies since they are more open to public scrutiny and Congres-
sional oversight. Federal facilities must do business in public and
be held publicly accountable because the claim of national security
under FOIA will rarely apply. But, public sector facilities as
opposed to private—sector facilities do not have competitive
business concerns either.
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o Legal defenses against unwanted disclosure of EA—generated infor-
mation include: a the attorney—client privilege; b) The work product
privilege; and c) the self—evaluations privilege. I’ve recently met
with corporate executives whose stock has dropped more than 30% as a
result of press disclosures of hazardous wastes problems. There is
nothing inherently privileged about the facts in the audit. The
audit only organizes facts.
o The issue of confidentiality typically is greatly reduced as EA
programs mature and as the importance of dissemination of EA
information throughout the company is realized. You audit because
you intend to correct the problem based on a voluntary compliance
ethic.
o We, as a nation, are approaching the point where a reasonable
manager would assume he’s creating risks and courts will impose a
legal obligation to discover them.
o Federal facilities have some distinguishing concerns: securing funds
to address EA discovered problems; the body of law governing whether
the government can be sued by the government or private parties;
being “tried” by public opinion; and dealing with the activities of
contractors operating Federal facilities. However, the bottom line
is that compliance is required and EA is a valuable risk management
tool. Additionally, you take oath’s of office to uphold the laws of
the U.S.
o The 1984 edition of Litigation Under the Freedom of Information Act
and Privacy Act , 9th edition, edited by Allen Adler and Morton
Halpern is a very good summary of FOIA written in lay language and
is recommended reading.
o The Freedom of Information Act (FOIA) should be read and understood
by the Federal facility manager. Few things in the Act prevent
discovery of EA derived information, especially for evidence
pertaining to environmental violations. Generally, FOIA is a
“release” statute allowing access to public agency information
unless specifically exempted. The underlying theory is that in a
democracy a vigilant public is the best protection against
government abuse. Exemptions within FOIA include information
pertaining to: national security; personnel files and rules;
specific exemptions under environmental statutes; trade secrets;
agency memorandum including attorney work—product exemption, attor-
ney—client exemption, and executive privilege. In general, the
public’s interest is given much weight when balanced against your
perceived need for confidentiality.
o The benefits of EA outweigh its disadvantages. The courts say you
have an obligation to find out and address your problems. Manage
your problems before they manage you. They will be cheaper and
easier to address now because you may be liable in negligence later.
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DISCLOSURE AND CONFIDENTIALITY AND THE PRESS
DARBY JUNKIN
Reporter, Newsweek Magazine
o There is a common misperception that the press is a surrogate
enforcer of EPA laws — that if the press finds an environmental
problem at a Federal facility a four—inch headline will read,
“Government Refuses to Comply with EPA Regulations.” But the media
can work a very positive effect and managers can work with the
media.
o it is the public’s business that a reporter finds out how you
conduct government business since you represent the public and use
or misuse public monies.
o A tenent that seems to hold true is the more you down play a
“little” problem the more interested the press will be because it
becomes a “who done it job.” The press loves to dig for the answers
and uncovered results make great print.
o The goal of the media in informing the public is to get action and
results. Jawing about a problem may sell papers, but getting the
problem solved will make big news also.
o If you have committed a crime somebody will find out about it.
Reluctance to talk to the press and claims of confidentiality will
spur the press on and it is the person with something to hide who is
really concerned with confidentiality.
o My advice relating to confidentiality concerns is to be open about
it and discuss resolution approaches even though this may not be
easy to do. Convince the press that you are acting responsibly and
the press will act responsibly. Tell the public that you are no
longer using their tax dollars to pollute and create pollution
health risks; you should use our tax dollars to keep us safe.
o Another piece of advice is to practice for interviews to effectively
and quickly state both that a problem exists and what you are doing
to correct it so it fits into a 20—second time spot.
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DISCLOSURE AND CONFIDENTIALITY:
OBLIGATIONS AND OPPORTUNITIES
BARRY BREEN
Assistant to the General Counsel
Department of the Army
o There are three pathways through which disclosure may be required if
information is requested:
— Litigation is one context where disclosure of EA information can
be required. Disclosure can be resisted and somewhat prevented
through: attorney—client privilege; attorney work—product; and
the privilege of self—evaluation. No case law to date has
applied these principles to EA. They are based on public policy
and to the extent we want to foster non—disclosure, we need to
make sure EA is in the public’s interest;
— FOIA information requests may be withheld through classififying
documents. But practically speaking, classifying an EA document
for national security reasons is very unlikely to prevent
disclosure. The deliberative process privilege may apply to
interagency memorandum to withhold information. Facts must be
released, but opinions can be withheld, therefore, you should
segregate facts from opinions in your audit reports. Privileged
interagency deliberations enable freer exchange of ideas.
— Congressional information requests can only be denied through
Presidential decision. If Congress wants EA generated infortna—
tion they will get it.
o There are certain instances where you must disclose information once
you have knowledge of a situation even if you are not directly
asked:
— Under section 103c of CERCLA, the responsible person must notify
the National Response Center of significant releases; Section
luG requires notification of potentially injured parties;
Coninon law also includes a duty to warn potentially injured
parties; Federal facilities are subject to state disclosure
laws, though there are certain exemptions in the Federal Tort
Claims Act. Finally, as a public servant you should notify
anybody you’re activities may harm.
o EA can be used to assess not only your potential impacts but also
those problems that are being inflicted upon your property by a
lessee, neighbor, midnight dumper, etc. This affirmation use of EA
may assist your bring enforcement actions against others.
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DISCLOSURE AND CONFIDENTIALITY:
CORPORATE PERSPECTIVE
FRANK B. FRIEDMAN
Vice President, Health, Environment and Safety
Occidental Petroleum Corporation
o I think it is interesting that man” of us from industry are now
talking to the Federal government about the importance of environ-
mental compliance.
o Environmental managers have a need to know what their potential new
problems are. So you implement an EA program to discover problems
and a follow—up program to address noted problems and deal with the
associated legal issues separately. Environmental management is a
policy decision.
o EA information is probably discoverable, especially that which is
required to be reported to EPA (e.g., DMR’s, excursions, exced—
iences, spills, etc.).
o As a responsible corporate officer you are liable for the activities
of your facility. Recent legal trends may in fact hold corporations t
liable for not having an EA program. So despite the confidentiality
concerns you must discover and address problems —— the discourse on
confidentiality may be irrelevant.
o Only when you are in litigation can the attorney—client or attorney
work—product privilege apply.The Self—Evaluation Privilege is
limited, especially where there is a potential danger to the public
and TSCA applies.
o Agencies have to worry about public and Congressional oversight. In
light of public trust considerations you are committed to addressing
uncovered problems and now is the time.
o In industry and in government one must take the view that we will
develop and adhere to a strong compliance program because we are in
business for the long—run.
o Regardless of whether information is discoverable, you must operate
your environmental management program from the perspective that what
you do not know will hurt you. The issue of confidentiality is a
red herring in terms of management and corporate philosophy and in
terms of cost—effectiveness of environmental management.
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DISCLOSURE AND CONFIDENTIALITY
QUESTION AND ANSWER SESSION
Question — From the EPA enforcement side, is EPA willing to live with the
Federal agency 5—year budget cycle in resolving environmental
problems if items are properly documentated and identified and
corrective action is being taken?
Answer — Courtney Price, EPA: As in the private sector, there are
situations where EPA enters into agreements, consent decrees,
etc. where people are put on compliance schedules The Agency is
not able to say at this time that we can wait 5—6 years for
compliance. But, there are precedents where regulated entities
have entered into agreements with the government and some sort of
compliance schedule is given.
Question — How do I deal with the press when the last time that I was open
and cooperative but did not have necessary scientific certainity
to resolve the problem I got “zapped” publicly by the press?
Answer — Darby Junkin, Newsweek: Granted, the people who are affected by
the situation are not going to be happy. However, the final
analysis is not whether you get good press, but whether you have
done your public trust duty.
Douglas Costle, WH&R: There is no escaping the press. Also, the
press is generally not an expert on these issues. They respond
to your apparent intentions or body language as much as the
facts. The rule that I followed as the Administrator of EPA when
dealing with controversial issues was to be honest and sincere
about what is and is not known. The reporters that are the good
ones, those that people pay most attention to, will be
conscientious about what they write.
Question — Once I document my problems in an EA report what are my reporting
obligations?
Answer — Douglas Costle, WH&R: There are a variety of obligations,
especially with respect to spills. Reporting spills exculpates
you of liability because you are fulfilling an obligation under
CERCLA. But otherwise act on the report. Disseminate it
throughout the agency. Segregate opinion from fact and release
it and explain what you did, why you did it, and what you intend
to do about it.
Darby Junkin, Newsweek: If you have a problem, immediately act on
it. Tell the press what you think the problem is and what you
are doing about it. If you delay, your credibility decreases.
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Frank Friedman, Occidental: Identify the solution along with the
problem for management to respond to. Work with the press and
tell them what you know and what you are doing.
Question — What do I do when preliminary investigations reveal high levels
of contaminants but not high enough to pose a significant health
hazard? Do I report this information?
Answer — Frank Friedman, Occidental: It is a question of judgement. Do
some confirmation studies. If further studies suggest that the
problem exists, act on it and report it. Do not hesitate in
reporting it to acknowledge uncertainity in the possible problem
or solution.
Douglas Costle, WH&R: It is a notion of due diligence; do
confirmation studies immediately.
Comment — Peter Daley, DOD: Get the facts out from the start and tell the
regulators what you know and what you are doing about the
situation. Mobilize resources to address the issue, especially
where there is a potential health risk.
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PANEL: ENVIRONMENTAL AUDITING AT FEDERAL FACILITIES
Moderated by
LEONARD FLECKENSTEIN
Environmental Auditing Project Manager
Regulatory Reform Staff
U.S. EPA
o Peter S. Daley, Department of Defense
o Thomas C. Frangos, Department of Energy
o Donald Mantay, National Institutes of Health
o William Hasselkus, Department of the Army
o Paul Schmierbach, Tennessee Valley Authority
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ENVIRONMENTAL AUDITING
WITHIN THE DEPARTMENT OF DEFENSE
PETER S. DALEY
Director, Environmental Policy
Department of Defense
o The key question is: “How do I convince my boss to fund/support
environmental programs in general and environmental auditing in
particular?” Tell your commander that “compliance is the law and
you are going to get caught if you do not comply; if not by EPA, by
somebody higher up, the press, the public, or Congress.” Tell him
that “getting caught has had these consequences on others and could
have the same or worse for you.” Make your Commander realize that
environmental compliance is part of the agency’s overall mission.
Failure to comply will hinder your ability to achieve the agency’s
mission.
o The EA project headed by Barry Hatfield and Charles Alford at AF/ASD
is a dramatic example of how the right people at the right time can
turn around an environmental management program. They have got
studies, reports, and a plan of action to follow—up.
o Good audits will discover previously unknown problems, and once the
audit report is done it is public information. So, if you cannot
stand the answer do not ask the question. But do not hide things
because they will come to light anyway and probably at the worst
possible time.
o Support all the way up and down the line is critical to the
successful implementation of an EA program. You cannot implement an
EA system without that organizational support, because people have a
way of subverting things they do not want to succeed.
o The DOD ’s approach to solving environmental problems has been
piecemeal. A piecemeal approach to environmental management is not
adequate to replace the comprehensive coverage supplied by an EA,
especially in light of the size of DOD and its installations and of
the expanded scope of regulations. Until five years ago you could
run an environmental program without a comprehensive audit system.
But now you need EA, i.e., a thorough and detailed accounting system
to keep track of all the requirements and how you are meeting them.
o A third party EA is critical to getting a real assessment of your
performance and is more effective than a self—audit. You cannot
audit yourself and get the unbaised, unshaded truth.
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o We live at the margin and must compete for support. Competing for
and securing funds for environmental programs will be far easier if
requests are accompanied by documentation developed through an EA
program. Additionally, how much money you get in the budget depends
on how good a job we do in environmental protection. Satisfying
environmental requirements helped determine funding availability
for: the MX missile, Federal facility waste site clean—up, and the
Clinch River Breeder Reactor.
o Employee morale and community relations are affected by your
facilities’ environmental performance. In order to maintain good
community relations and worker morale, and to attract quality people
to your organization, you must maintain a good image. In the long
run, this will positively affect your productivity and assist in
better achieving your mission.
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ENVIRONMENT AUDITING
AT THE
DEPARTMENT OF THE ARMY
WILLIA 1 HAS SELKUS
Chief, Environmental Quality Division
Department of the Army
o The Defense and Readiness Command (DARCOM) is the Army’s materiel
support, or industrial base, with ammunition plants, depos, arsenals
and test grounds. DARCOM makes the environmental policy for the
command and manages the budget. We do not yet have an EA program.
One is under development.
o One of the reasons for going after an EA program is the lack of a
comprehensive, coordinated picture of environmental activities,
problems, and resource needs. Currently installations are inspected
by various entities (e.g., IC, GAO, etc.) for various special
purposes. Each one giving us only a part of the whole picture.
o DARCOM has a legacy of activity beginning before World War II that
has caused on and off—installation environmental contamination
problems. Confirmed groundwater contamination is at 38 of 67
installations. These problems have to be discovered, assessed, and
remediated. The emphasis is now on discovery and assessment,
especially of hazardous wastes and materials: DARCOM is working with
the EPA to address these problems.
o Dealing with pollution problems is not cheap. Forty—one percent of
our construction dollars have been going for pollution abatement.
o Why have EA? In order to deal a subset of Murphy’s Law that says
“materials will be disposed in such a way as to cause maximum
environmental harm, get you in maximum regulatory trouble, peak
congressional interest, and get you roasted in the press.”
o DARCOM will develop a systematic approach for an EA program. We
intend to first assess where possible problems are. The EA process
will: identify the environmental laws and regulations specific to a
given installation, review records and data, develop site visit
plans, execute the site visits, collect data, evaluate the data, and
prepare a report. Then we will prioritize installations for
follow—up activity.
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ENVIRONMENTAL AUDITING
AT THE
DEPARTMENT OF ENERGY
THOMAS C. FRANCOS
Acting Director, Public Safety Division
U.S. Department of Energy
o DOE’s structure (for R&D, nuclear defense production and manu-
facturing support, power marketing authorities, and the Strategic
Petroleum Reserve) is highly decentralized. Most facilities are
government owned—contractor operated (GOCO), with both contractor
and Federal employees involved.
o DOE has an EA or “appraisal” program. The appraisal program is one
component of the environmental protection, industrial hygiene, and
occupational safety and health (ES&H) programs, which employ about
600 people. There are also other DOE vehicles for providing
assurance.
o DOE’s highly decentralized structure creates some problems with
respect to its environmental assurance program, since environmental
performance is a line management responsibility.
o An independent assurance program is maintained, removed from the
mission responsibilities, and ES&H appraisals are done in a tiered
approach. Headquarters appraise Field Offices; Field Offices
appraise contractors and site organizations; GOCO organizations must
appraise themselves.
o DOE is in a unique position in that a significant degree of
self—regulation must be adherred to in dealing with environmental,
health (OSHA), and radioactive material (NRC) regulations.
“Comparable” procedures must be developed as a substitute to
regulation. The ES&H program helps assure program efficacy.
o When the appraisals began with the Manhattan project and AEC, they
were aimed at radiation protection. Appraisals now integrate 14
functional areas into comprehensive reviews rather than single
appraisals. A team of 20—25 people do an appraisal of a facility.
Appraisals are aimed at two areas: in—place management systems
adequacy, and performance at the plant level with respect to
technical and regulatory criteria.
o All appraisals include:
— pre—appraisal preparation: scheduling, pre—appraisal meeting at
the Field Office, agenda, subject matter, homework.
— draft appraisal reports produced and provided to the facility
manager for review prior to the departure of the team.
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— follow—up procedures designating action plans by the Field
Office and reporting to Headquarters.
o Ensure that you have individuals specifically trained in auditing on
your staff. There are techniques and methods that are critical that
your auditor should be trained in.
o Do not expect your EA program to replace your environmental
management program or to find all past existing, and potential
problems. Target your audit to make it more effective.
o Through Argonne National Laboratory we are looking at ways to draw
on industry EA experience and improve our audits, especially to make
them more compliance oriented. Argonne has already prepared a
checklist for use in doing environmental audits.
o Unique regulatory reform opportunities exist with Federal facili-
ties, especially with respect to setting up a pilot EA/multi—media
inspection program.
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ENVIRONMENTAL AUDITING
AT THE
NATIONAL INSTITUTES OF HEALTH
DONALD MANTAY
Chief, Environmental Protection Branch
National Institutes of Health
o NIH does not yet have a working EA program, but is developing one.
o NIH is an agency within the US Public Health Service and is involved
in biomedical research, with 15,000 employees at facilities in nine
states. The NIH experience in developing an audit program may be
particularly applicable to smaller agencies.
o NIH has a reputation for scientific excellence, and is located in a
county where people are very interested in environmental protection.
This reputation and interest enhance our ability to have a strong
environmental program and get management’s attention.
o Our EA system objective is to help our program, research, management
and operations people understand our environmental obligations and
ensure compliance with regulations. We look at EA as a quality
assurance tool that is part of an overall environmental management
program. LA will be used as a basis of reference for our internal
environmental regulatory program and will provide a tool for
determining how well the program is performing.
o We initiated the LA program using a contractor because of a need to
get the job done within a certain time frame and a lack of in—house
personnel.
o We selected a contractor having a team with staff expertise, depth,
continuity, and a demonstrated track record in EA.
o Development of our LA program involved: first, understanding NIH
operations through file information and assessing the regulatory
environment that applies to those operations; second, site interviews
to confirm preliminary findings; and third, developing a guidance
protocol detailing how the LA should be done.
o In the long run the LA program should be a valuable tool for
educating people about environmental concerns and their obligations
and how we as agencies interact with our environment.
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ENVIRONMENTAL AUDITING
AT THE
TENNESSEE VALLEY AUTHORITY
M. PAUL SCHMIERBACH
Chief, Environmental Compliance Branch
Tennessee Valley Authority
o TVA is a Federal agency that acts much as a private corporation. Our
activities include coal gassification, chemical operations and
development, power generation, and natural resources/recreation area
management.
o TVA is an example of the Department of Justice’s resolve and ability
to sue a Federal agency. As a result of this action, TVA entered
into a consent decree that caused us to spend $800 million for air
pollution equipment for our coal—fired generation equipment.
o Our EA program is only 3 years old. While all the bugs have yet to
be worked out, we feel it has been a success in evaluating
environmental compliance and identifying deficiencies at TVA facili-
ties.
o The EA program looks both at multi—media activities at the facility
level and at single media activities across the agency. Corporate
level people comprise most of the EA teams, providing a level of
objectivity.
o Environmental data, permit conditions, permit renewal dates, and
related information for each facility are computerized to facilitate
audits.
o Continuity, uniformity, and technical quality are emphasized in EA
reports, which are used internally as a management tool. Annual
reports are prepared on findings and responses and go to the Board of
Directors.
o Our EA program covers a variety of items including legislation,
regulations, TVA policy, organizational procedures, permits, docu—
merits, commitment to regulations, etc. Two types of audits are
conducted: (1) facility audits which review compliance status,
management activities, and quality assurance programs; and (2)
non—routine audits which address specific concerns or new regulatory
requirements.
o EA findings are designated based on their severity and need for
corrective actions and are also computerized for tracking purposes.
o Our audits also look for situations where the economic viability and
technical responses to environmental management needs may be
enhanced.
o As a result of our EA program we are better informed about our
environmental compliance status, and our facility managers are more
sensitive to environmental compliance problems.
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PANEL: ENVIRONMENTAL AUDITING AT FEDERAL FACILITIES
QUESTION AND ANSWER SESSION
Question — 1-low do you deal with unregulated pollutants or regulations
that are coming down the line?
Answer — William Hasselkus, DARCOM: We read the Federal Register, environ-
mental newsletters, and maintain contact with EPA people in
the know.
Donald Mantay, NIH: Agreed. We also use best practices for
unregulated areas which prepares us to react quickly to new
regulatory developments in that area.
Question — How do you deal with contract operations at Government—Owned—
Contractor—Operated facilities?
Answer — Tom Wash, Army/ANC Command: We have included clauses in contracts
that adjust the award fee based on environmental performance.
Adding a fee to the contract if the contractor accomplishes
a certain level of environmental performance has also been
a valuable tool.
Question — Saying to my boss that “you must comply becuase it is the
law” does not work anymore. There are competing laws. Addition-
ally our primary concern is not the federal EPA, but rather the.state.
Answer — Peter Daley, DOD: The law is not the only reason for environ-
mental compliance. In addition to EPA inspections, there
are environmental action groups, reporters, and the general
public —— all of whom are watching your environmental performance.
Toni Frangos, DOE: We are seeing more three party agreements
between ourselves, EPA, and the State. Despite our good efforts
and intentions, sometimes enforc uient action is the only
way the system gets the message.
Donald Mantay, NIH: You can respond to outside forces, other
than regulatory agencies, through a couple of avenues. First,
by looking ahead towards sensitive projects so you get the
jump on the regulators and other entities when mandatory controls
are imposed. You also show management how forward—looking
rather than reactive your program is. Second, our EA protocols
are heavily weighted to State regulations.
Question — How can we get smart quick and make the climb up the EA learning
curve less painful?
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Answer — Peter Daley, DOD: Convince the line managers that EA is import—
ant. Get them to learn from other experienced line managers
who have EA programs. Talk to people who have successful
EA programs.
Paul Schmierbach, TVA: Line managers are important but you
also have to have full support from the top, which is where
our program began.
Tom Frangos, US DOE: Agreed. The line managers may be reluctant
during the learning process but will probably come around.
Still, if you lack top management commitment, an EA program
is not going to go very far.
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ENVIRONMENTAL AUDIT PLANNING EXERCISE
REPORTS
This section provides the results of the Environmental Audit Planning
Session. This session was held to allow conferees to: (1) assess the
applicability of EA to their organizations; and (2) begin to think about the
mechanics of developing and implementing an EA program within their
organization. Conferees broke into seven groups to facilitate better
discussion and analysis, with each group headed by an individual experienced
in LA. Each group also had a reporter assigned to record the principal
discussions points. What follows are the summaries of the reporter’s notes
as they were presented to the full session.
Group 1
Reported by
MALCOLM WEISS
Regulatory Reform Staff
U.S. EPA
o Management support is critical to the implementation and success of
an LA program. Management support should include setting priorities
for long and short—term planning.
o Facility managers may have to get out and market LA programs to
superiors or top managers. One way is to document important benefits
of EA including: cost avoidance, worker health and safety, and
community relations.
o Managers should not rely on regulatory inspections to judge perform-
ance due to constrained Federal/State agency resources. EA programs
should instead be relied upon to produce information which can be
used in positive ways.
o Where funds are available but staff positions and/or staff expertise
are not, outside consultants can be relied on to implement LA
programs.
o There is a perceived need for an LA checklist or cookbook such as
NEIC’s Multi—Media Compliance Audit Inspection Procedures manual to
avoid reinventing of the wheel”.
o The LA program must be integrated into the management structure
(e.g., coordinating up and down the lines, defining lines of
authority, who needs to be brought into the process).
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o Those in Federal government management positions may not understand
the best ways to manage projects and budgets. Management training
may alleviate this problem.
o The EA program should be flexible to allow for quick response to
regulatory changes, and should oversee facilities’ compliance
assurance programs.
o Some corn.ern was expressed that Federal agencies who act in good
faith to address problems should get the understanding of and easier
treatment from EPA.
Group 2
Reported by
THOMAS BARTHOLOMEW
National Institutes of Health
o Group 2 agreed that EA is good and needs to be done.
o There is a real lack of knowledge among managers and operating
personnel about environmental programs and the need for compliance.
So determining environmental compliance status and training staff are
popular objectives for EA programs.
o Prior to developing an EA program, you need to scope out resource
needs and potential problems. EPA could help by developing a model
EA program, perhaps with its own facilities.
o A problem with EA implementation in the government and military is
the “short—term” outlook held by top managers. Since they are not
going to be there for long they are less inclined to commit to an EA
program which generates long—term benefits. Additionally, the budget
cycle and administration turn—over every 4 years may cause managers
to resist EA program development. Even with management’s support
there may not be sufficient personnel resources and funding support.
o Suggestions for overcoming problems include: emphasize positive
career development aspects of EA programs, identify and deal with
disadvantages up—front; sell the whole organization on the program,
not just the top; institutionalize the EA program; secure funds from
other operating programs to get the EA program started; attach the EA
program to another program (health, safety, energy) to get it
started; justify the BA program by tying it to the agency’s mission.
o More regulatory agency enforcement would enhance EA program pros-
pects.
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Group 3
Reported by
LEWIS ANDREWS
NASA
o Current environmental management programs are not adequate and could
benefit from an EA component.
o Popular EA types and scopes would include: baseline, compliance,
future compliance, and hazard management audits. The most critical
- need now is for environmental baseline audits.
o Top management is a major hurdle to the establishment of an EA
program, but management approval can be more easily gotten with
outside help (e.g., IC, EPA, State) to demonstrate need. Mid—level
managers must comuicace their EA program needs to top managers.
o Top management support will be more easily gotten if they are
personally named in compliance and enforcement orders, and if their
own performance standards are tied to environmental performance of
their facility.
Group 4
Reported by
FRANCIS MIJLHERN
U.S. EPA Region III
o The group agreed that EA should be a part of every environmental
management programs. It is already part of many environmental
management programs.
o Popular audit types would include: compliance, hazard management,
special purpose, cost identification, risk assessment, facility
profile, and future operations. The emphasis should be placed on
consolidation of audit areas, rather than single media audits.
o There was some discussion of who in upper management would approve an
EA program. EA approval must come from the Department level in
Washington, DC.
o “Audit” has a negative connotation and should not be used when
selling the program to upper management.
o Advantages of an EA program from management’s perspective include
saving money, keeping EPA off your back, detailing previously unknown
or unquantified problems, and avoiding bad press. A disadvantage is
potential difficulty in securing funds to address noted problems.
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Group 5
Reported by
DONALD KNAPP
Bureau of Indian Affairs
o Existing environmental management programs are adequate given the
limited resources available. But ewironniental management programs
are often unstructured, and we all felt that there is a need for an
EA program.
o Concerns with implementing an EA program include: pushing paper
rather than dealing with problems; who should implement the program
(agency or installation); and lack of a specific person to take the
lead to get the program going.
o Popular EA program goals would include: risk assessment, compliance,
involvement of line managers and technical people.
o Problems in securing management approval include: relating EA to the
agency’s mission and arguing the need for a base line audit.
o Possible solutions include: make EA program money a dedicated line
item; have EPA mandate EA through regulations; get a Presidential and
0MB supporting statement; and put on a training program for line
managers.
Group 6
Reported By
CARL KNEELING
U.S. Navy
o We all agreed an EA program is essential.
o Popular goals of group members would include assuring compliance and
maintenance of a comprehensive management system. An EA program
would be useful in building an overall environmental management
system or verifying that it is functioning correctly.
o Securing management approval is difficult given EPA’s lack of
enforcement md the low visibility of some Federal agencies.
o EPA —— Bill RuckeishauS —— should put pressure on other agency heads
to estabish EA programs.
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Group 7
Reported by
BARRY HATFIELD
U.S. Air Force/ASD
o Most group members had EA programs already in place or in the making.
Those who did not have an EA program felt that one was needed. Most
group members’ EA programs emphasized compliance, although some
merely identified problems and others were more thorough.
o We saw obstacles to EA programs as including: organization, agency
mission, and the bureaucracy. Confidentiality concerns should not be
an issue for LA in Federal agencies.
o While funding should not be a real problem in the long run, the
timing of budget requests is a major problem.
o Generally, skills for an EA program already exist within the
organization but require realignment and redirection.
o To promote EA, train upper level people on EA: what it is, and what
its benefits are. Show them how EA saves money and reduces
publicity.
o EPA and DOD should sign a general conceptual agreement that EA is
needed. This would ensure top management support within DOD.
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PERSPECTIVES ON ENVIRONMENTAL AUDITING: CURRENT STATUS AND FUTURE DIRECTIONS
Moderated by
Allen Hirsch
Director, Office of Federal Activities
U.S. EPA
o Robert Arnott, Colorado Department of Health
o Don Silva, New Mexico State Legislature
o Robert W. Golten, National Wildlife Federation
o Robert Cutler, Olin Corporation
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TUE OFFICE OF FEDERAL ACTIVITIES AND ENVIRONMENTAL AUDITING
ALLEN HIRSCH
Director, Office of Federal Activities
U.S. EPA
o OFA is charged with working with other Federal agencies to minimize
the environmental impact of governmental activities and managing
Executive Order 12088 which governs Federal facility compliance with
environmental standards and requirements.
o EPA has not in the past done a good job in providing leadership to
Federal pollution control efforts.
o This situation will be changing. More EPA attention will be focused
on control of pollution at Federal facilities. The reasons why
include: evidence of serious pollution problems; the government
should set an example for others; press attention; congressional
committee attention; and public concern.
o OFA objectives include strengthing of: compliance information base;
technical assistance and communications; efforts to achieve compli-
ance through whatever vehicles are necessary.
o EA will assist in meeting these objectives, especially in strengthen-
ing the information base.
o In the next year OFA will: more actively consult with you; inspect
your facilities more often; “bug you” and take enforcement action as
necessary. We will also heighten Federal agency awareness about EA
objectives; push for EA at national level; and cooperate with Federal
agency efforts to establish EA systems.
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ENVIRONMENTAL AUDITING WITHIN COLORADO’S COMPLIANCE PROGRAM
ROBERT ARNOTT
Assistant Director
Colorado Department of Health
o EA parameters should include internal management and preventative
maintenance, compliance measurement, permit tracking, and technical
support. It is especially appropriate to make compliance programs
more cohesive and reduce the burdens on the facility from single
media inspections.
o From the State perspective EA will assist in reducing multiple
inspections, providing more coordinated compliance assistance, and
improve environmental performance. It will allow the regulatory
agency to better focus its resources on facilities rather than media
within facilities. Compliance determinations will also be easier if
a facility has an EA program.
o Organizational considerations are an impediment to the adoption of
EA programs on the State/local levels. State/local organizations
are generally organized by media rather than common functions (e.g.,
permits).
o I think EA has grossly different applicability to a smaller facility
than to a larger facility.
o Colorado has pulled its media programs together more cohesively. The
State currently uses an integrated task force approch to some
problems (e.g., Lowry landfill, groundwater, etc.). A joint review
process is also used to focus on environmental issues.
o Colorado deals with Federal facilities through an “umbrella”
approach, integrating activities of media divisions within the
regulatory agency. A Memorandum of Understanding recently signed
with DOD provides a cohesive approach with respect to compliance and
permitting at DOD facilities in Colorado.
o The future of BA is a function of federal EPA support/assistance. To
formalize EA on the state level, much more technical assistance will
be necessary. Promotion through cooperative efforts with other
entities (e.g., National Governors Association) will also help.
o The EA concept is a good one, and it would serve to ease the
public’s mind about compliance over the long term.
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NEW MEXiCO’S ENVIRONMENTAL AUDIT LEGISLATiON
DON SILVA
State Legislator
New Mexico
o New Mexico’s Environmental Compliance Act was at first not supported
by industry, the governor, nor the public. They all thought that it
would be used to the others’ advantage and to their own detriment.
o The legislative intent behind the Environmental Compliance Act of
1983 was to improve industry compliance, implement a systematic
procedure for compliance, and enhance communication between industry
and regulatory agencies.
o EA is defined in the Act as “a systematic assessment, analysis, and
evaluation by a regulated entity of its compliance with environ-
mental laws and regulations administered by the Board and the
Division.” Regulated entity includes private and public regulated
facilities.
o The Act directs the State agency, if it should adopt EA regulations,
to consider: protection of public health and welfare; technical
practicability and economic reasonableness; protection of corporate
proprietary processes; and established procedures for correcting any
audit findings of non—compliance.
o The Act stipulates that regulated entities shall cooperate with the
Environmental Improvement Division (EID) in developing EA programs
and EA programs shall be certified by EID. Penalities are possible
but problems are encouraged to be addressed and incentives are to
be developed.
o New Mexico wants industry to take the intiative in developing EA
procedures and programs tailored to each situation. EPA should
encourage but not dictate EA. And I commend EPA for not making it a
requirement.
o From the programmatic perspective, EA will be better accepted if
directed from the top down in the Federal agencies.
o New Mexico is considering developing a pilot EA program as well as
establishing regulations.
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ENVIRONMENTAL AUDITING FROM THE ENVIRONMENTALIST’S PERSPECTIVE
ROBERT W. GOLTEN
Counsel
National Wildlife Federation
o Environmentalists probably do not know much about the EA concept,
but would likely support it as having significant potential and
perhaps significant achievements. Enforcement alone cannot be
relied upon to ensure environmental performance. Self—auditing
within corporate or government facilities can ensure compliance
better then reliance on external “police.”
o Some cynics might feel that because of EA programs, EPA might back
off of enforcement or compliance assurance responsibilities. So,
there is a need to ensure EA program credibility. However,
disclosure of EA results would not be productive. The audit reports
should be used as an internal management tool to improve perform-
ance.
o To assuage public concern you should interest the community in the
audit process, perhaps on an advisory committee. Provide the
community with an opportunity to select members of the audit team,
participate in the audit, or assess how follow—up actions are
implemented. Or you can simply hold periodic public meetings to
explain the EA process, talk about what you are doing to implement
the process, and how you are following up after the audit results
come back.
o Perhaps EA can be used to ensure that facilities (e.g., highways and
dams) that get federal funds operate responsibly and in compliance
with applicable environmental regulations or risk loosing their
Federal funds. I wonder whether the EA concept can be applied to
this realm of activities.
o With EA we have embarked on a new non—confrontational way of dealing
with issues. EA is an avenue that can be used to bring people with
differing viewpoints together to deal with issues. EA may be useful
in harmonizing and reconciling interests rather than fighting it out
on the environmental battlefield.
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THE ROLE OF ENVIRONMENTAL AUDITING IN THE FUTURE
ROBERT CUTLER
Manager, Regulatory Audits
Olin Corporation
o I have been asked to be philosophical about EA and the history and
future of environmental management and regulation.
o A major factor in the development of our country is the concept of
unlimited natural resources. However, 30 years ago we began to
realize that resources were not unlimited.
o The reaction to the environmental problems which came to a head in
the 1960’s—1970’s may have been too quick and antagonistic.
o By 1980 we thought we had a mechanism in place to protect the
environment. Realizing that this mechanism is not going to work,
the EA concept was developed. This concept was linked to a change
away from the American philosophy of unlimited resources.
o As growth continues and natural resources dwindle, we all will have
to assume a greater responsibility toward our environment’s safe
keeping. The resonsibility is not just EPA’s or the government’s,
but it is all of ours. EA may be the start of this recognition that
American concepts developed over 300 years ago may have to change.
o As the EA concept matures, it will probably become more standard—
ized, institutionalized and fundamental.
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PERSPECTIVES ON ENVIRONMENTAL AUDITING:
CURRENT STATUS AND FUTURE DIRECTIONS
QUESTION AND ANSWER SESSION
Question — (Directed to Donald Silva) What would be the Federal facility’s
incentive to participate in New Mexico’s EA program?
Answer — Donald Sil-ra, New Mexico: Perhaps cost reduction of waste
treatment due to better monitoring or expedited permitting or
better community relations. Lets work together to develop
incentives.
Question — (Directed to Donald Silva) }Ias New Mexico promulgated regula.-
tions yet?
Answer — Donald Silva, NM: Not yet. We have asked the Environmental
Improvement Board (EIB) to develop regulations and we are
soliciting industry input. The likely result will be minimum EA
program criteria. No deadlines for EA programs have been set.
Question — (Directed to Robert Golten) As many environmentalists have other
full—time jobs, their participation in EA would be limited.
Would full or part—time environmentalists by involved?
Answer — Robert Golten, NWF: Perhaps neither. Perhaps use representa-
tives from academia who are specialists in some auditing area.
Environmentalists by and large could not committ the resources
needed to get involved. Environmentalists should pay more
attention to using resources within educational institutions.
Comment — Donald Silva, NM: DOE’s New Mexico Waste Insolation Pilot
Project includes a Federally funded “Environmental Evaluation
Group” which is basically an independent EA Group.
Comment — Dick Newton, FAA: In an area with several pollution problems we
have developed community advisory councils to talk about and
hopefully solve problems. The councils consist of industry,
public, and academia. Most everybody wants to avoid legal
problems and confrontations. The advisory councils have allowed
us to avoid these things.
Comment — John Sammons, USCG: We used the University to help us deal with
a litigation situation involving groundwater. As a result
requests were made by the University to allow students to get
involved. This gave them practical experience, we learn from
their involvement, and it is gratifying to help them out. I
would encourage you to try this.
Question — (Directed to Robert Arnott) Are you willing to accept a Federal
facility’s 5 to 6 year funding cycle in addressing problems?
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Answer — Robert Arnott, Colorado: There are some situations where
solutions to problems can be expedited through State interaction
with approval and funding bodies. Some problems cannot wait for
5 years. it depends upon the problem, the solution, and your
demonstrated diligence.
Comment — Gary Fray, DOE WAPA: Direction/regulation by EPA on EA is not
appropriate. It is easier to sell management if the concept is
not forced down their throat.
Comment — Donald Silva, NIH: An evolving voluntary approach to EA is
better because mandatory programs combined with costly regula-
tions will raise the voice of taxpayers and cause a back—lash
resulting in their legislation out of existence.
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CONFERENCE WRAP—UP
MICHAEL H. LEVIN
Chief, Regulatory Reform Staff
U.S. EPA
o This wrap—up tries to focus on underlying themes that tie the prior
presentations together, rather than on th details of what people
said.
o EPA does not and cannot have all the answers. We’re not the experts
on facility compliance. You are; and if we can’t work together to
make the Federal facility program work better, nothing will change.
o That’s why we’re here today to explore what EA is and how it works.
You don’t have to reinvent the wheel. There are many people here
‘who have leapt the same hurdles you’ll have to leap to put EA in
place. You can learn from their experience, and from the networking
that will occur after this conference.
— For example, EPA has taken and will take the 5—year budget cycle
into account where identified problems can’t be fixed with
current funds, but the 5—year cycle is not divine either. EA can
document problems and accelerate the budget cycles. So can
compliance plans and administrative orders, where EA has
established a problem and the solution.
— That’s why EPA is par: of the budget cycle, and why EA can help
you use the outside levers in the Executive Order (12088).
o Compliance assurance systems are horizontal plant—level procedures
to assure facilities meet environmental obligations. But EA comes
down vertically—--—it is a way of testing that plant—level compliance
procedures are in place and working. If you don’t have compliance
assurance, there is nothing to audit; just as if you don’t have
ledgers and cash accounts, there’s nothing to audit in a financial
sense.
o You’ve already got compliance assurance activities; the question is
whether to take the next step , not whether to start from scratch.
o The reasons EPA became interested in EA are still valid. But
they’ve been overtaken by three new ones:
— EA forces us to rethink our whole notion of standards, “compli-
ance” and enforcement
+ need to acknowledge that better compliance is reduction in
exceedance trends, not meeting each limit every minute
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+ need to reward superior performance, not hit good actors
harder because we know more about them
+ need to acknowledge that plant operators define compliance
now because standards and permits aren’t definite; make these
determinations rationally, not under—the—table
+ need for better measures of what “compliance” and “superior
performance” are, so we can focus on those who don’t clean up
by themselves, while helping those who do.
— EA can change the whole firm and Federal facility culture
environmental responsibilities and their importance . EA means: a
commitment to fix what is found; accelerated development of
environmental management systems; increased importance of
environmental professionals, within and to the organization.
— An EA system, no matter how limited initially, will soon do more
than assure compliance with applicable regulations . As numerous
speakers and comments noted, it will produce better environ-
mental results than plant—level compliance activities because it
forces a focus on:
+ common problems and common solutions, leading to “considered
change”;
+ recent development, plain English translation, and precise
definitions of compliance;
÷ integrated compliance assessment, multi—media coverage, and
state or common—law requirements going far beyond Federal
law;
+ protocols and checklists that become tools for facilities to
start policing themselves better too.
o In shortqEA doesn’t restrict top management discretion; it expands
discretion, by letting agencies manage for compliance instead of
react to crises.
o Confidentiality concerns should not bar EA. You can try to invoke
privileges, but you’ll defeat EA’s purpose as a management tool if
you push them very far. The problems will come out anyway later or,
the best defense is to plan to fix what you find.
o Follow—up . This conference is the start of a process, not a
one—shot deal. So we’ll be looking at several steps to stay in
touch and help you implement EA, including: a follow—up workshop on
implementation issues; assistance through the new network of
Regional Federal Facilities Coordinators; and pursuit of numerous
suggestions made today —— for example, development of more detailed
audit checklists, exploration of possible changes in E.O. 12088
procedures to make EA easier for you to implement, and potential
pilot projects with DOD and DOE.
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