An Environmentalist's Perspective
Chairman of the Sierra Club
Roundtable Meeting (EPA Region III):
"Exploring the Uses and Potential Benefits of ISO 14,000"
April 26, l996
I am pleased that you have gotten us together to explore this cutting edge issue. Most environmental activists probably have not yet discovered what ISO 14,000 is. It is an emerging issue; we are still trying to evaluate its implications for us.
But few issues have more potential significance. It is at the crossroads where major concerns meet--concerns over:
- globalization of the economy;
- voluntary efforts to improve environmental performance;
- the interface of trade and the environment;
- and the way the government should approach environmental regulation in the future.
Hardly any environmental groups have been involved in negotiating ISO l4,000. Invitations to them were extended late in the process, but the die had been cast. Moreover, few had the resources to really participate effectively (only Green Seal was active in the process).
Thus, they have not "bought into" the product. They are now trying to understand what it may portend with respect to their vital interests. This forum is especially valuable in helping them to do this. I am going to take back what I learn to my organization to help them sort out a firm position.
Our Understanding of It
Let me begin by summarizing what I understand the key provisions of ISO 14,000 to be. Admittedly any summary is in the eye of the beholder, but here is what strikes me as salient:
- All certified firms must have "environmental management systems" (EMS) which are appropriate for their circumstances, but which have certain specified characteristics.
- Such systems involve having competent staff who are assigned responsibility to deal with the impacts of their operations on the environment; the operation of these systems must be properly documented.
- They must set policies to govern their environmental impacts, which must be available to the public (but this is the only thing that must be made public).
These systems entail identifying significant environmental impacts and measuring and monitoring them. Certified firms must also review their performance and undertake periodic audits of their performance. However, they have the option of doing the audits themselves or using third parties to do it. These firms must also fully integrate their EMS systems into their overall management systems. The firms with these systems must commit themselves to achieving certain standard goals, which include:
- They must also set goals they want to achieve in terms of limiting such impacts.
- Their systems must be designed to achieve these goals and to take corrective action when needed.
- Resources needed to achieve these goals must be provided.
- Plans must also be made to deal with emergencies.
- continuous improvement in their EMS systems, which involves requirements that corrective and preventive action be taken;
- pollution prevention--as an open-ended concept; and
- compliance with regulatory requirements set by law, as well as with Codes of Conduct they have agreed to abide by. They must also commit to stay in compliance.
These detailed requirements are keyed generally to the threshold obligation of utilizing a qualified Environmental Management System (EMS). They are not oriented toward outcomes or results. They are not performance based. They involve requiring that the right approach be used--under the supposition that it will generally lead a firm toward doing the right thing. But they stop short of inquiring about whether the right thing in any given case actually gets done.
The language in ISO 14,000 involves calculated variations in choices of wording between "shalls" and "musts" and "cans" and other softer terms. The construction generally involves framing a requirement in terms of having to follow a process, with subordinate phrases often having a stronger, mandatory tone. However, these stronger sounding requirements are limited by the main point, which is always cast in terms of process. Definitions can also affect the stringency of a requirement.
I should add at this point, however, that U.S. interests were fairly unified in not wanting ISO 14,000 to get involved in trying to set numerical emission limits. Most environmental groups probably shared the views of American industry that they did not want to set up confusion between EPA standards and those of ISO.
Features Which We Can Applaud
Before I discuss shortcomings of ISO 14,000, let me acknowledge that I think there are many positive things about it. If not misused, it can move us toward a better environment. As a process, ISO 14,000 is generally a good one. It articulates many valuable steps in managing environmental impacts. It creates more legitimacy for environmental quality goals by inducing more of the business community to devote time and effort to these ends.
It builds a broader constituency for this work since it was "invented" in the business community and is being promoted by it. This feature may be especially valuable in the developing world. It sets a floor for acceptable business operations on a worldwide basis.
If it is applied on a widespread basis, ISO 14,000 may actually improve the overall level of performance by business globally. This potential could be realized through requirements which major firms here and in Europe impose on their networks of suppliers. And even in this country, ISO 14,000 could very well move an increasing number of firms beyond levels required to comply with government regulations. This would be a distinct contribution and would reduce conflict over regulatory stringency.
And the public may also find that more information about business impacts on the environment is made available to it since ISO encourages more communication with the public (but little is required in the way of disclosure).
And firms may also benefit themselves in many ways: through reduced liability, reduced costs for feedstocks, improved market share, and greater good will. These economic benefits should enable more of the business community to feel a stake in environmental progress.
But ISO 14,000 also does have its drawbacks, or downsides.
ISO 14,000 certification can mislead the public. It will be used to imply that the certified firms are performing well--that they are minimizing their impacts upon the environment.
Yet, they may not be. It is quite unclear as to how much bad performance can slip through the process-oriented net of ISO 14,000. Systems could be set up with poor goals and commitments could be disregarded. Audits could reflect this under- achievement, but would there be any ISO violation?
ISO cannot be credible if rogue companies can misuse it. Will the currency be debased, particularly in developing countries? When big money is at stake, who is going to stand firm to make sure that ISO does not become a refuge for poor performers?
So much effort has been put into avoiding requirements that go to substance--beyond process itself, that this limitation has to look like a huge loophole.
There are other weaknesses too.
- Firms can become certified simply by self-declaration; they do not have to go through a third party registrar. How can consumers place any faith in claims which are not independently verified?
- The same problem also applies to auditing. Firms are not obliged to use qualified third parties to audit their operations. They can audit themselves. How much credibility will these have?
- Moreover, firms are not required to make the results of their audits public. Nor do they have to make most of their ISO required documents public. What kind of accountability is that?
- In fact, there is a basic question about the legitimacy of ISO 14,000 standards themselves since they have come out of a process which has not been open and inclusive.
Key stakeholders were not involved at formative stages. Basically this was a self-regulation process run by transnational corporations in the first world.
There is no semblance of democratic account-ability about it.
And one grows even more suspicious when we hear apologists for ISO 14,000 try to sell it to industry with the claim that it is designed to obivate the need for "command and control" regulations by government.
Is this really a device to displace government-set standards to protect the environment? Is there a larger game afoot? Are we on some kind of slippery slope here leading downhill for the environment?
Consider the ironies of what is being said and pursued by industry in different contexts.
Is there any danger that this scenario might actually occur? There certainly is.
- Here in the case of ISO 14,000, industry claims it is against performance standards and wants only process requirements.
- Yet in the regulatory field in the U.S., industry is dead set against technology-based standards and argues, instead, for performance standards.
- But what might happen if ISO becomes well established and begins to become incorporated into regulatory programs?
Then, performance standards in government programs will become displaced by process based ones. We will then have completed a breathtaking transition from technology-based standards to process oriented ones--under which performance data and audit data are secret.
The federal government is already starting to slide down this slippery slope. Look at what federal agencies are already doing:
- EPA uses ISO certification as a criterion for eligibility to participation in its incentive programs for excellence, such as Project XL.
- Under EPA's audit policy, ISO certified firms will gain a preference.
- The Justice Department says it will take ISO certification into consideration in its sentencing guidelines.
- EPA's Office of Water is encouraging NPDES permittees to become ISO certified.
- The Department of Energy is proposing to require that its procurement suppliers be ISO certified.
- And various agencies are reported to be considering meshing their requirements with ISO 14,000 specifications.
These include: the Defense Department, the Food and Drug Administration, and the Federal Aviation Administration.
And other jurisdictions are also moving in the same direction.
- It is likely that the European Union will require ISO 14,000 certification to gain gain access to its markets under its Eco-Management and Audit Scheme (EMAS);
- More than 15 countries, in both the developed and developing worlds, are reported to be in the process of implementing ISO 14,00 "as the basis for their own environmental policy regimes."
Mexico is reported to be thinking of replacing its General Ecology Law of l988 with less rigorous approaches, including ISO 14,000.
- And we learn here that leaders in states such as Wisconsin and Pennsylvania are considering integrating ISO 14,000 into their environmental programs. Some have talked of reducing enforcement efforts with regard to ISO certified firms.
Our Concerns Over These Trends
Why should we be concerned over these trends?
Some of the steps that EPA has taken may be innocent enough, but there are fundamental reasons why government should keep its distance from ISO 14,000.
The government should not allow ISO 14,000 to displace its decisions.
- UNDERMINING DEMOCRACY
ISO 14,000 is basically the product of private, not public, processes. There is no public accountability.
Confounding public and private business basically privatizes the whole process and excludes the public from the process.
Standards embraced by government must reflect processes open to the public and be democratically accountable.
- DISPLACEMENT OF PERFORMANCE STANDARDS
Government should not abandon performance standards, nor hurry to abandon technology- based standards.
By embracing ISO 14,000, government is being led into a chain of logic that argues that firms do not have to be publicly accountable for what they actually do to the environment.
ISO logic is that a firm is vindicated by touching the right bases and saying the right words, not by treating the environment right. This is simply not acceptable.
- MISLEADING THE PUBLIC
Moreover, there is no assurance yet that ISO 14,000 certification will be a mark of excellence.
By ignoring performance, keeping audits secret, and allowing self-certification, ISO 14,000 is inviting firms to slip through a huge, gaping loophole.
It is too early for governments to be embracing an unproven product which could provide a haven for poor performers.
Furthermore, industry may find itself penalized if it permits governments to incorporate ISO 14,000 standards into its codes.
Prevailing interpretations of rules under GATT and the World Trade Organization only allow decisions on trade restrictions (governing imports and exports) to be made on the characteristics of products themselves. They do not allow decisions to consider the processes by which they were produced; these are the so-called "Production Process Methods" or PPM's.
Use of PPM's to restrict trade can be found to constitute a Non-Tarrif Trade Barrier (or TBT) and trigger sanctions.
Yet ISO 14,000 itself operates in the fashion of a PPM; it deals with the management process under which a product is produced, not with the characteristics of the product itself.
Thus, if, for instance, a foreign bidder on a government procurement contract is turned down because it is not ISO certified, that decision might run afoul of GATT as a a TBT because it is rooted in a PPM. The same thing could happen with a foreign-owned firm, which is not ISO certified, if it competes with a domestic firm which wins preferences because it is ISO certified.
Firms that meet, but do not exceed, ISO 9000 standards have been assured by GATT/WTO that their efforts will not be regarded as a TBT, but it will be harder to do this for ISO 14,000 since it is all about process, not product content. Governments should not assume that embracing ISO 14,000 will get a green light from GATT/WTO. If GATT approves ISO 14,000, how then can it continue to enforce its strictures against PPM's? How can it continue to disapprove of U.S. Tuna/ Dolphin laws?
At this time, the environmental community in the United States is still trying to sort all of this out. Very few have official positions yet.
However, in Europe opinion in the environmental community is crystalizing against it. The European Environmental Bureau, which represents the bulk of the environmental community there, has come out against ISO 14,000. It sees it as an industry dominated effort to displace stricter EU regulations.
Groups here like the National Wildlife Federation are trying to faciliate communication between ISO and the environmental community. The Sierra Club has obtained Category A Liaison Status with ISO TC 207 in Geneva. It sought this particularly to be able to monitor its possible extension to the issue of sustainable forest management.
It is likely that the center left portion of the mainstream movement in the United States will join its European colleagues in being critical of the larger uses of ISO 14,000. Time will tell just how controversial this issue will become. It may come to resemble a second round of the NAFTA and GATT disputes.
In those debates, we warned against the danger of turning over standard-setting processes to the world's transnational corporations. Now it would appear that those standard setting organizations are casting a cloud on the proper role of government here.
In conclusion, we have no quarrel with business trying to get its house in order. Voluntary guidelines are a good idea, and in general private certification efforts make sense.
However, ISO 14,000 is still a work in progress. We need to see the guidelines in final form, and then see how they are actually used in practice. We need to see whether ISO 14,000 is credible and useful.
Government should be even more wary. Its responsibilities are different. It should stear clear of getting entangled in ISO 14,000.