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ISO 14001

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Title: ISO 14001


1

Trade , Environment and Development
ISO 14001 Standards for Environmental Management
Systems

Module 6
2
Background
  • Environmental Management Systems (EMS) are a
    potential useful instrument for companies to
    reduce the environmental impacts of their
    operations and to gain competitiveness
  • There is considerable interest in ISO 14000
    standards, developed by the International
    Organization for Standardization (ISO), including
    in devloping countries
  • There is little empirical evidence of the trade
    effects of ISO 14001
  • The private sector and Governments need objective
    information and analysis

TrainforTrade Trade, Environment and Development
3
Objectives
  • To raise awareness and enhance understanding of
    the possibilities and challenges that ISO 14001
    poses for developing country companies and their
    governments
  • This should assist government policy-makers and
    industry associations
  • To inform themselves about ISO 14001 issues and
    stimulate a dialogue at the national level
  • To set priorities and shape policies and
    strategies concerning implementation issues at
    the national level

TrainforTrade Trade, Environment and Development
4
Objectives
  • TrainforTrade 2000 workshops may result in
    recommendations for follow-up actions in the area
    of EMS
  • It should be noted, however, that this module and
    related UNCTAD or CBTF projects are not intended
    to assist companies in installing environmental
    management systems and/or achieving their
    certification against an international standard.
    Neither are they intended to develop pilot schemes

TrainforTrade Trade, Environment and Development
5
Structure of this presentation 1
  • How do environmental management systems operate?
  • What are the costs and benefits of using EMS and
    ISO 14001?
  • How could ISO 14001 affect trade?
  • What are the key certification and accreditation
    issues for developing countries?
  • Do small and medium sized enterprises (SMEs)
    have similar chances as large companies to obtain
    ISO 14001 certification?

TrainforTrade Trade, Environment and Development
6
Structure of this presentation 2
  • How can governments in developing countries
    promote the effective use of EMS?
  • To what extent do transnational corporations
    (TNCs) use ISO 14001 and to what extent do they
    encourage their affiliates/or and suppliers in
    developing countries to implement an EMS?

TrainforTrade Trade, Environment and Development
7
  • How do environmental management systems operate?

TrainforTrade Trade, Environment and Development
8
ISO 14000 series of international standards for
environmental management systems
  • Environmental management systems
  • ISO 14001 Specification with guidance for use
  • ISO 14004 General guidelines on principles,
    systems and supporting techniques
  • Guidelines for environmental auditing
  • ISO 14010 General principles
  • ISO 14011 Audit procedures - Auditing of
    environmental management systems
  • ISO 14012 Qualification criteria for
    environmental auditors

TrainforTrade Trade, Environment and Development
9
ISO 9000 and 14001 certified companiessource
ISO

TrainforTrade Trade, Environment and Development
10
What is an Environmental Management System
(EMS)?
  • A tool to manage environmental aspects of a
    companys operations
  • Based on guidelines that a company can adhere to
    on a voluntary basis, in order to control its
    environmental impacts on the basis of
    self-determined environmental policy and
    objectives
  • British BS 7750, 1992
  • European Union Eco-Management and Audit Scheme
    (EMAS), 1993
  • ISO 14001 has been developed as an international
    standard to avoid the proliferation of different
    EMS standards

TrainforTrade Trade, Environment and Development
11
Core Elements
  • Five core elements should be implemented
  • an environmental policy
  • environmental planning
  • implementation and operation
  • regular checking and corrective action
  • a management review

TrainforTrade Trade, Environment and Development
12
Environmental policy
  • Statement by the organization of its intentions
    and principles in relation to its overall
    environmental performance.
  • The environmental policy must commit the
    organization to
  • regulatory compliance
  • pollution prevention
  • continual improvement
  • It must also be appropriate to the nature and
    scale of the organizations operations

TrainforTrade Trade, Environment and Development
13
Why do companies want to use EMS/ISO 14001?
  • Environmental performance
  • Economic benefits
  • Trade considerations
  • Corporate image

TrainforTrade Trade, Environment and Development
14
ISO certified companies in the Republic of Korea
  • Environmentally sensitive industries (e.g.
    chemicals) seeking to improve their environmental
    image
  • Export-oriented industries (e.g. electronics)
    preparing to deal with potential trade barriers
  • Large firms committed to maintaining high
    environmental standards and meeting shareholders
    expectations

TrainforTrade Trade, Environment and Development
15
To what extent does ISO 14001 contribute to
environmental improvement at the company level?
  • The ISO 14001 standard does not state specific
    environmental performance criteria
  • An effective EMS assists an company in
    formulating an environmental policy and setting
    corresponding objectives, taking into account
    legislative requirements and information about
    significant environmental aspects of its
    activities

TrainforTrade Trade, Environment and Development
16
What is the role of ISO 14001 in environmental
policy making?
  • Complementarity between voluntary standards on
    EMS and regulatory measures
  • Potential to improve regulatory compliance
  • ISO 14001 has been criticised by some NGOs
  • compliance
  • measurable improvement in environmental
    performance
  • third party verification of the audit
  • public reporting
  • public participation

TrainforTrade Trade, Environment and Development
17
  • What are the costs and benefits of using EMS and
    ISO 14001?

TrainforTrade Trade, Environment and Development
18
Costs of implementing EMS and ISO 14001
certification
  • The costs of installing an EMS or upgrading an
    existing management system to the requirements of
    ISO 14001
  • e.g. setting up and maintaining an EMS, hiring
    consultants, meeting company-determined
    performance goals
  • The costs of certification of the EMS against the
    ISO 14001 standard

TrainforTrade Trade, Environment and Development
19
Costs of implementing EMS
  • costs of installing an EMS vary considerably
    from case to case, depending on
  • The initial conditions within an organization
  • Conditions external to the organization

TrainforTrade Trade, Environment and Development
20
Volvo claims that EMSs
  • Provide a basis for effective environmental
    programmes
  • Reduce costs in the longer term
  • Encourage continuous improvement and reduce
    environmental impact
  • Bring order to environmental activities
  • Reduce the risk of legal contraventions
  • Improve credibility through third-party
    inspection
  • Are essential for securing certain orders,
    thereby generating revenue
  • Reinforce corporate image  

Source VOLVO homepage
TrainforTrade Trade, Environment and Development
21
More empirical evidence is needed
  • As yet, not much empirical evidence exists about
    the actual costs and benefits of EMS, especially
    not in developing countries
  • There is a need for more empirical studies on
    costs and benefits of installing and maintaining
    an EMS in the case of developing countries

TrainforTrade Trade, Environment and Development
22
  • How could ISO 14001 affect trade?

TrainforTrade Trade, Environment and Development
23
Trade implications of ISO 14001
  • Presence in the market place
  • Market pressure
  • Market opportunities
  • Can ISO 14001 be a barrier to trade?

TrainforTrade Trade, Environment and Development
24
Presence in the market place
  • Some 23,000 companies
  • ISO 14001 certification is growing quickly
  • There is also considerable interest in developing
    countries
  • Many companies appear to have adopted a wait and
    see attitude, in particular with regard to
    certification

TrainforTrade Trade, Environment and Development
25
Market pressure
  • Supplier requirements
  • Although some large companies encourage their
    suppliers to certify against ISO 14001, there is
    scant evidence that ISO certification will become
    a supplier condition
  • Suppliers and subcontractors may prefer to seek
    ISO 14001 certification to avoid plant visits or
    complex questionnaires
  • Supply chain management of TNCs could have some
    effect
  • Public procurement

TrainforTrade Trade, Environment and Development
TrainforTrade Trade, Environment and Development
26
Market pressure
  • UNCTAD Expert Group Meeting
  • Pressures on developing country suppliers to
    demonstrate ISO 14001 certification could result
    in barriers to trade and/or detract from the
    environmental objectives of setting up an EMS
  • Companies in developed countries should establish
    a supportive cooperation with their suppliers in
    developing countries in the area of EMS
    implementation.
  • TNCs could play an important role in this regard

TrainforTrade Trade, Environment and Development
27
Market opportunities
  • Seeking ISO 14001 certification in the
    expectation that certification by itself may be a
    ticket to market access and increased market
    shares is not necessarily a good idea
  • Do what extent ISO 14001 certification will
    assist developing country companies to strengthen
    market positions, even if customers do not
    require certification, is difficult to predict

TrainforTrade Trade, Environment and Development
28
Can ISO 14001 constitute a barrier to trade?
  • Despite being voluntary nature, ISO 14001
    certification may become a de facto condition for
    doing business, at least in certain sectors
  • This may then result in a de facto barrier to
    trade if companies have difficulties in obtaining
    certification
  • Associated costs?
  • Do small and medium-sized enterprises (SMEs) face
    particular difficulties?

TrainforTrade Trade, Environment and Development
29
  • What are the key certification and accreditation
    issues for developing countries?

30
Certification issues 1
  • Costs of certification
  • Acceptance of ISO 14001 certificates
  • Mutual recognition
  • Accreditation

TrainforTrade Trade, Environment and Development
31
Certification issues 2
  • Certification can be relatively expensive,
    particularly if national certification and
    accreditation bodies are non-existent, or if
    self-certification or certification by national
    bodies is not accepted in overseas markets
  • The costs of certification carried out by local
    ISO registrars in developing countries tend to be
    much lower.
  • Several developing countries have already
    established conformity assessment systems to
    enable certification by local bodies.

TrainforTrade Trade, Environment and Development
32
Certification issues 3
  • Pilot projects have played a useful role in this
    regard
  • The international value of ISO 14001
    certification, however, depends on the confidence
    that others have in the body that performs the
    certification, and in the process it uses
  • Non-acceptance is relatively small, but most of
    the reported cases affect developing countries

TrainforTrade Trade, Environment and Development
33
Mutual recognition and harmonization
  • Mutual recognition of certification systems could
    be promoted at the bilateral and regional level
  • Initiatives are being undertaken to develop an
    internationally recognized certification system
  • This would support universal recognition of ISO
    certifications.

TrainforTrade Trade, Environment and Development
34
  • Do SMEs have similar chances as large companies
    to obtain ISO 14001 certification?

35
Small and Medium Sized Enterprises (SMEs)
  • SMEs may face specific problems with EMS
  • Lack of financial resources and qualified
    personnel
  • Difficult access to information
  • Resistance to change
  • Costs of setting up the system and certification
  • Few SMEs have an environmental policy in place
  • Identification of environmental legislation
  • Identification of environmental impacts of
    activities
  • ISO has not recognized need for special EMS
    standard for SMEs

TrainforTrade Trade, Environment and Development
36
SMEs and ISO 14001 2
  • In the short run, the implementation of EMS will
    depend largely on demands by large organisations,
    e.g. TNC subsidiaries imposing requirements on
    local suppliers
  • Large organisations, however, can also assist
    SMEs in complying with the requirements of ISO
    14001
  • In addition, cooperation among SMEs may assist in
    resolving certain problems and in reducing costs.
    For example SMEs in specific sectors and
    geographical areas could cooperate in identifying
    the environmental aspects and impacts of their
    activities and information on legal requirements.
    Cooperation in staff training could also be
    explored

TrainforTrade Trade, Environment and Development
37
  • How can governments in developing countries
    promote the effective use of EMS?

TrainforTrade Trade, Environment and Development
38
Promoting the implementation of EMS
  • UNCTAD Expert Meeting recommended
  • Awareness raising among stakeholders
  • Identification of sources and dissemination of
    information
  • Creation of infrastructure, training auditors and
    consultants
  • Access to and transfer of environmentally sound
    technology
  • Assistance in developing and implementing related
    legislation
  • Support for participation in relevant forums and
    for sharing experiences with implementation of
    EMS

TrainforTrade Trade, Environment and Development
39
Pilot schemes
  • Pilot schemes may be an effective means to
    improve understanding of EMS and to gain
    practical experience
  • They provide opportunities for mutual learning by
    certification bodies and the business community
  • In several developing countries pilot, schemes
    were put in place prior to the official
    publication of ISO 14001 to prepare the national
    certification bodies and industry

TrainforTrade Trade, Environment and Development
40
  • To what extent do TNCs use ISO 14001 and to what
    extent do they encourage their affiliates/or and
    suppliers in developing countries to implement an
    EMS?

TrainforTrade Trade, Environment and Development
41
Disclaimer
  • This section examines, by way of example, the
    stated policies of some large TNCs regarding the
    use of EMS by their subsidiaries and suppliers in
    developing countries, based on a quick
    examination of their environmental reports
  • Clearly, this annex does not result of empirical
    analysis and therefore it does not draw any
    conclusion on the extent to which TNCs in general
    contribute to the wider use of EMS and their
    continuous improvement in developing countries
  • Rather it seeks to stimulate debate and research

TrainforTrade Trade, Environment and Development
42
STRATEGIES OF TRANSNATIONAL CORPORATIONS (TNCs)
  • Approaches towards the use of EMS by subsidiaries
    in developing countries
  • Standardization
  • Differentiation
  • Approaches towards suppliers

TrainforTrade Trade, Environment and Development
43
Management Systems of TNCs
  • Many companies have added environmental
    considerations to existing management systems
    aimed at promoting health and safety they have
    developed integrated Health, Safety and
    Environmental (HSE) management system
  • Several TNCs report that their internal EMS
    standards are largely compatible with ISO 14001
    or more stringent in the sense that they also
    include performance requirements

TrainforTrade Trade, Environment and Development
44
Dow Chemical
  • It is Dow Chemicals sated policy that all global
    operations meet Dows Environmental Management
    Standard or their countrys laws and regulations,
    whichever is more stringent

TrainforTrade Trade, Environment and Development
45
Hoechst Marion Roussel
  • Hoechst Marion Roussel (HMR) encourages all
    production facilities to develop an integrated
    EHS system
  • It will be up to the local management to choose
    between EMAS, ISO 14001 certification or an
    internal EMS

TrainforTrade Trade, Environment and Development
46
SHELL
  • Shell has developed a Health, Safety and
    Environmental Management System (HSE-MS)
  • Each year all Shell companies must submit a
    letter confirming the status and effectiveness of
    their systems
  • Shell will make its HSE-MS compatible with ISO
    14001, enabling Shell companies to seek ISO 14001
    certification if they wish

TrainforTrade Trade, Environment and Development
47
HENKEL
  • Henkel developed an integrated, process-oriented
    management system for safety, health, environment
    and quality (SHEQ). According to Henkel, this
    system covers all requirements of
  • The Responsible Care initiative
  • EMAS
  • ISO 14001
  • ISO 9001
  • An important follow-up step is the development
    of quantitative SHEQ performance indicators, as
    well as their group-wide application and
    harmonization

TrainforTrade Trade, Environment and Development
48
Hoechst Group
  • According to the Principles and
    Responsibilities, the Group companies will
    implement effective EHS management systems and
    develop EHS targets to work towards best practice
    in their industry group
  • Hoechst AG will periodically audit the EHS
    management systems of the Group companies
  • The operating companies are obliged to report
    externally and internally on their EHS performance

TrainforTrade Trade, Environment and Development
49
ABB (Asea Brown Boveri)
  • Its environmental report argues that
  • the process of certifying companies to this
    standard is an important aspect of technology
    sharing in ABB today, particularly for companies
    in emerging markets which often have little
    experience with international certification
    procedures

TrainforTrade Trade, Environment and Development
50
Supplier requirements
  • Anecdotal evidence suggests that while most TNCs
    may not require there suppliers to be ISO 14001
    certified, several TNCs encourage their suppliers
    to seek ISO 14001 certification or to apply
    environmental management practices which are
    similar to their own

TrainforTrade Trade, Environment and Development
51
IBM
  • IBM has encouraged its suppliers to align
    their EMS with the requirements of ISO 14001 and
    to pursue registration under this international
    standard.

TrainforTrade Trade, Environment and Development
52
Shell
  • Shell has adopted a number of general business
    practices, including on Responsibilities to
    business partners Health, safety, environment
    and human rights
  • We do not work with suppliers and contractors
    who are not able to meet Shell standards. In more
    than 100 countries, Shell companies screen
    suppliers for their ability to meet HSE standards
    and the human rights of their employees.
  • In 1997, at least 95 contracts were canceled
    because contractors failed to adhere to our
    specified standards on HSE, or employee human
    rights.

TrainforTrade Trade, Environment and Development
53
ABB
  • ABBs Environmental Report, in a section on
    supply management, states that
  • An increasing number of companies and other
    organizations are now requiring their suppliers
    to have ISO 14001 in place. This requirement
    will, of course, accelerate the implementation of
    ISO 14001 on a large scale
  • Environmental performance is included within the
    formal process used to qualify suppliers within
    our computer-based cost evaluation models and in
    our training for supply managers.

TrainforTrade Trade, Environment and Development
54
  • Issues for discussion

TrainforTrade Trade, Environment and Development
55
Conclusions
  • Environmental management systems (EMS) are a
    potentially useful tool to assist companies in
    identifying and reducing the environmental impact
    of their operations as well as in achieving
    economic benefits
  • Certification against the ISO 14001 may help
    companies to improve corporate image, gain
    customer recognition, increase export
    competitiveness and strengthen market positions

TrainforTrade Trade, Environment and Development
56
Conclusions
  • Would you agree with the following common
  • places
  • The Use of ISO 14001 is increasing rapidly?
  • The use is heavily concentrated in particular
    sectors, such as electronics and chemicals?
  • Other important sectors, in particular for
    developing countries, are forestry and mining?
  • In most sectors ISO 14001 certification is of
    relatively little importance in the market place?

TrainforTrade Trade, Environment and Development
57
Recommendations 1
  • Do you agree with the following recommendations?
  • Pro-active approach towards ISO 14001
  • Companies should seek to implement EMS/ISO 14001
    for good reasons
  • reduce the environmental impact of their
    operations
  • obtain economic benefits
  • EMS/ISO 14001 should not be implemented for the
    wrong reason, such as unjustified fear to lose
    business operations if certification cannot be
    shown

TrainforTrade Trade, Environment and Development
58
Recommendations 2
  • Do you agree with the following recommendations?
  • Thus, decisions should be based on objective
    assessments of costs and benefits
  • Governments can play a key role in promoting the
    wider use of EMS and in helping to reduce costs
  • Business co-operation, including between large
    and small companies, can also play an important
    role
  • Priority may be given to particular sectors

TrainforTrade Trade, Environment and Development
59
Other issues for discussion
  • What are the opportunities and risks for
    companies in developing countries
  • Can ISO 14001 be a tool for environmental
    management
  • At the company level?
  • In environmental policy making?
  • What are the trade implications of ISO 14001,
    particularly for developing countries?
  • What are the needs of developing countries,
    particularly with regard to national
    implementation issues?

TrainforTrade Trade, Environment and Development
60
  • Thank you

TrainforTrade Trade, Environment and Development
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