State Innovation Grant  Program:  South  Carolina
                      Incorporating EMS into Permitting Decisions  (2004 Competition)
                        ie mnovauon urani rrogram 10 support
efforts led by state environmental agencies to test innovative approaches
for achieving better environmental results and improved efficiency in
permitting programs. Between 2002 and 2007, the State Innovation Grant
program competition awarded over six million dollars to support 35 state
projects that test permitting innovation for a variety of regulated entities
including several small business sectors. Asummary of the awards by year
appears in the table below.
    State Innovation Grant Program Statistics, 2002-2007
 Competition   Proposals  Proposals     Total Program
    Year      Submitted   Selected       Funding ($)
  2002/2003
                                         $618,000
                                        $1.425 Million
                                        $1.479 Million
 Cumulative
                                        $1.243 Million
                                        $1.611 Million
                                        $6.376 Million
"Innovation in Permitting" has been the theme of the State Innovation Grant
competition since its inception. In the last three competition cycles states
received awards for projects in the following three categories:
• The Environmental Results Program (ERP) is an innovative
  approach to improving environmental performance based on a system
  of the interlocking tools of compliance assistance, self-certification
  (sometimes, where permissible, in lieu of permitting), and
  statistically-based measurement to gauge the performance of an entire
  business sector. The program utilizes a multimedia approach to
  encourage small sources to achieve environmental compliance and
  pollution prevention. (See: http://www.epa.gov/permits/erp/)
• Environmental Management System (EMS) is a system involving a
  continual cycle of planning, implementing, reviewing and improving the
  processes and actions that an organization undertakes to meet its
  business and environmental goals. EMSs provide organizations of all
  types with a structured system and approach for managing
  environmental and regulatory responsibilities to improve overall
  environmental performance and stewardship.
  (See: www.epa.gov/ems/info/index.htm)
• Performance Track is a partnership that recognizes top
  environmental performance among participating US facilities of all types,
  sizes, and complexity, both public and private.
  (See: http://www.epa.gov/performancetrack/)
NCEI has provided awards also for projects testing watershed-based
permitting, and for permit process streamlining in past competitions. For
more information on the history of the programs, including information on
solicitations, state proposals, and project awards, please see the EPA State
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Project  Background:

 In South Carolina, the Department of Health and
 Environmental Control (DHEC) recognizes facilities
 with Environmental Management Systems (EMSs)
 through a voluntary environmental  leadership
 program (South Carolina Environmental Excellence
 Program, or SCEEP), however there are no
 regulatory benefits offered to these facilities.
 Facilities have encouraged DHEC  to integrate EMSs
 into its regulatory activities, and to  offer incentives for
 facilities to develop EMSs.  To investigate this
 potential,  DHEC applied for a State Innovations Grant
 to explore the relationship between EMS and
 environmental permitting.   Specifically, the state
 conducted a comparative analysis  of four facilities'
 EMSs and permits to:

 •  Study how an  EMS can improve the overall
    performance of a facility;

 •  Explore ways permit requirements can be
    integrated and streamlined based on an  EMS;

 •  Determine how an EMS can ensure  consistency in
    the development, implementation, and
    enforcement of a permit; and

 •  Evaluate the possible benefits of offering
    permitting incentives to facilities  that have an EMS.

Project  Description

 DHEC first formed a  cross-media project advisory
 team consisting of permitting, compliance and
 enforcement staff representing the  major
 environmental media programs (air, land, water and
                          NCEI
                          NATIONAL CENTER FOR
                          ENVIRONMENTAL INNOVATION

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  laboratory resources).  With the help of this team,
  DHEC reviewed the permit activities and EMSs for four
  facilities - a U.S. Air Force  Base and three types of
  manufacturing facilities (cement, chemical, and
  automotive belts).1  These  facilities were chosen
  because they were members of SCEEP and/or EPA's
  Performance Track program;  had a fully implemented
  EMS; had a good compliance record; held certain
  types of permits; and were willing to participate in
  DHEC training.  DHEC undertook the following
  activities to better understand the potential for
  incorporating EMS into the permitting system.  More
  specifically,  DHEC:

  •  Provided  EMS training to Agency staff and the
    project advisory team to increase awareness and
    understanding of the purpose and mechanics of an
    EMS;

  •  Studied each facility's existing permits and  its  EMS
    to ascertain the influence an EMS could have in
    addressing permitting requirements such as:

    -  Streamlining administrative and/or other permit
       requirements;
    -  Improving consistency  in how permits are
       written, monitored and  enforced; and
    -  Improving environmental performance and
       results to meet or even exceed  compliance;

  •  Determined ways to address, alter, or consolidate
    certain  permit requirements through an EMS; and

  •  Evaluated the potential to incorporate EMSs into
    facility permits.
      the assistance of an EMS consultant, the project
 team conducted initial permit reviews. The team
 assessed the participating facilities' permits in light of
 the ISO 14001  EMS standard, and made general
 comparisons between the permit requirements and the
 EMS standards. Then the team conducted site visits to
 assess the potential for each facility to use its EMS to
 meet permit requirements.
Results

 South Carolina's EMS/permitting study demonstrated
 that, each participating facility was compliance-
 oriented, and that using EMSs helped facilities stay in
 compliance. DHEC found the facilities' EMSs and
 permits were compatible, with the EMS providing a
 "road map" for verifying permit management through
 the "plan-do-check-act" cycle. The permit drove the
 regulatory obligations of each facility; while the EMS
 ensured compliance  with those obligations.  Other
 findings from DHEC's EMS/permitting study include:

 .  There may be an opportunity to allow facilities to
    provide self-certification for certain aspects  of
    permits, where it can be demonstrated that  an EMS
    provides sufficient details/safeguards for meeting the
    regulatory requirement.

 .  To include incentives, such as reduced frequency of
    inspections, a commitment from the U.S. EPA is
    needed to provide flexibility to state regulatory
    programs. This would allow the state's annual
    grants/work plan commitments to consider  EMSs
    when determining  the frequency of facility
    inspections.

 .  Regardless of the  type of EMS, it is critical for a
    facility to  have its  EMS independently audited and
    certified before receiving state recognition.

 Although not a substitute for permits, EMSs serve as
 the basis for streamlining certain permit requirements.
 For example, since some permitting information
 typically identified through a pre-inspection interview
 may instead be gathered by reviewing a facility's EMS,
 inspectors can use EMSs as a tool to evaluate facility
 compliance, minimizing the level of effort required for
 traditional facility inspections.  However, its unclear
 whether this will translate into administrative cost
 savings for  permitting agencies, because EMSs
 contain components  that could require extra
 verification,  adding to the permitting timeline.
11nvolvement of one of these facilities (the cement manufacturer) was later discontinued because it was determined that the facility did not have the types of permits that
were initially targeted for study.

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  In reviewing DHEC's project, the EPA also found a
  number of lessons. First, management support is
  crucial to exploring the use of EMSs in the regulatory
  framework.  In addition, program staff must receive
  upfront and ongoing training. While EMSs play a
  prominent role in the national dialogue on
  environmental performance - both for industry and
  for the EPA - program staff (e.g. permit inspectors
  and enforcement staff who interact with a facility on a
  day-to-day basis),  are generally unfamiliar with EMSs
  and their potential  to promote compliance and
  environmental performance.   EPA also found that
  having an EMS  does  not guarantee compliance.
  Facilities still had some instances of non-compliance
  that were neither prevented nor identified through
  their EMSs. The relationship between the presence
  of an EMS and environmental performance and
  compliance merits additional review and analysis
  through future EMS projects.

  DHEC's  study provided valuable information about
  the relationship of EMSs to the permitting process
  and, more importantly, the value of EMSs to facilities
  in managing compliance obligations and enhancing
  environmental performance.  DHEC would like to
  continue its research  by conducting a cross-media
  pilot study in 2008  to gather information on the
  universe of facilities with EMSs (i.e. which facilities
  have an  EMS, what type, and is it certified by an
  independent third-party auditor).  This study would
  provide valuable information as DHEC further
  considers incorporating EMS into the regulatory
  framework.

Connection  to  EPA's  Goals
  DHEC's  project  directly supports EPA's Strategic
  Goal #5, focused on compliance and environmental
  stewardship, by  promoting an innovative approach to
  improve  compliance and pollution prevention.   It also
  supports EPA's Cross-Goal Strategy of promoting
  innovation and collaboration with states.
               Project  Contacts:

                For more specific information on the South
                Carolina State Innovation Grant, please
                contact one of the individuals below:

                Claire Prince
                South Carolina Department of Health and Environmental
                Control
                Environmental Quality Control Administration
                Columbia, SC
                803.896.1132
                princech@dhec.sc.goc
                Denise Roy
                U.S. Environmental Protection Agency
                Office of Solid Waste and Environmental Response
                Washington, DC
                703-308-8458
                roy.denise@epa.gov


                Lisa Comer
                U.S. Environmental Protection Agency
                EPA Headquarters
                Washington, DC
                202.566.2206
                comer.lisa@epa.gov
              Program Contact:
                Sherri Walker
                State Innovation Grant Program
                U.S. Environmental Protection Agency
                Washington, DC 20460 (MC1807T)
                (202)-566-2186; FAX (202) 566-2220
                walker.sherri@epa.gov
United States
Environmental Protection
Agency
Office of Policy,
Economics and Innovation
(1807T)
   February 2008
EPA-100-F-08-017

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