To achieve due diligence, environmental considerations must be thoroughly integrated throughout an organization's management and operations. Implementing an environmental management system (EMS) is one way to achieve this integration. However, having an EMS does not guarantee regulatory compliance or a successful due diligence defence to a prosecution. Moreover, a poorly designed or maintained EMS has significant downside potential. In this article, Ian Huntly, chief executive officer of Rifle-Shot Performance Holdings describes the benefits and limitations of EMS, and debunks some common misconceptions.

Properly executed EMS

An EMS should provide (if executed appropriately and rigorously)

• a clear message to everyone in the organization, to stakeholders (investors and lenders), and to the outside world (regulatory agencies, customers, competitors, suppliers, and the general public) that the organization is committed to the environment, at least to the extent of the stated policy objectives and targets;
• an encouragement to everyone in the organization to dedicate effort and resources to the stated environmental objectives and targets; and 
• a prompt to measure performance, self-assess and re-evaluate goals and priorities, and to train employees for environmental awareness.

Potential downside

An EMS has significant downside potential that should not be underestimated or dismissed as a remote possibility to be

• a sham commitment to the environment for immediate and short-term public relations and trade gains. Stakeholders, regulators, and the courts will hold the organization to this commitment, and failure to meet it may sabotage a due diligence defence;
• documentation of environmental shortcomings obliging upper management to confront and correct them, and evidence of failure to exercise reasonable care if ignored; and
• shorthand for the regulators to assume satisfactory environmental controls are in place, waiving the usual scrutiny of mandatory filings or routine inspections that might ordinarily lead to the discovery of a problem.

EMS benefits

Some minimum benefits to an EMS may prevail no matter how insincere the effort. These include:

• gathering together in one place, a new manual called the EMS Manual, or virtually, by creating a brief guidebook to identify the location of all of the elements, the policy, programs, and documentation on environmental issues;
• forcing managers to consider environmental issues, in the formulation of the policy, objectives, and targets with deadlines and measurable indicators, in the assignment of responsibilities and accountability throughout the hierarchy, and in the mandatory "management review" phase; and
• EMS-driven activities such as pollution controls, pollution prevention/waste avoidance and reduction initiatives, and environmental auditing can germinate an environmental awareness that may become ingrained in the corporate culture.

Ten Points to Ponder

Many organizations have not achieved compliance with environmental laws. Most must still learn how to crawl (get into compliance) before they walk (address the issues preventatively or proactively). The following points will likely strike a chord with many:

1. Sophisticated systems are for those who already have a high degree of confidence that they are in compliance with the law or know their areas of non-compliance and are actively implementing a workable and reasonable plan to get into compliance.
2. Actively implementing a reasonable compliance plan can constitute due diligence despite non-compliance, long before an EMS process can have any significant effect. 
3. When dealing with unknowns (eg, the extent of non-compliance or the limits of environmental performance), an ambitious environmental policy may prove difficult to honour. One will be judged against that policy.
4. In dealing with unknowns, consider structuring complex self-assessments so that you can assert solicitor/client privilege. 
5. By exercising caution in the pre-EMS assessment and design phase and mitigating problems before implementing the EMS, you can avoid embedding potentially damaging documentation in the EMS record.
6. No warranty of good environmental performance comes with an EMS owner's manual. Guard against a false confidence that your EMS will translate into due diligence or reasonable care in a court of law in a particular fact situation.
7. Be discerning when establishing targets and performance indicators.Carelessly chosen criteria can provide regulators with ready-made evidence of environmental offences. 
8. What does not go outdoors remains indoors, and what is exhausted from the indoors goes to the natural environment. This is another way of saying that environmental and occupational health management must be coordinated. The solution to a natural environment problem must not create a workplace health problem, and vice versa. This integration is easy to accomplish in a system.
9. ISO 14001 may become standard practice, and so far as that goes, having an ISO 14001-certified EMS will be the public's and the regulator's shorthand for thinking that you are implementing a duly diligent program. 
10. Like all ISO standards, the ISO 14001 series is intended to facilitate international trade. In so doing, it raises the bar and imposes economic pressures on smaller organisations competing in local markets.

Conclusion

Like all tools, the EMS must be properly designed and handled - carelessness or lack of attention can backfire and damage the very thing the system was designed to fix. It is not rocket science, however. Mostly, it is the practical application of good management practices, coupled with a healthy obsession for documenting one's efforts. Many organizations already have integrated the elements of EMS, although they do not ‘package' it as such. It remains to be seen whether trade advantages or regulatory bonuses are sufficient incentive to prompt small- and medium-size companies to formalize their EMS through ISO 14001 certification.

For further information contact: Ian Huntly on +27 (0)82 650 0618; or email: Ian.huntly@rifle-shot.com.