Enhesa - Global EHS & Product Compliance Assurance

ENHESA 2002 Global Forecast of Environmental Health and Safety Policy and Regulatory Developments Impacting Industry


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Executive Summary

Emergency Planning, Greater Corporate Transparency and Climate Change Likely to Top List of Global EHS Priorities for 2002

Global EHS Priorities for 2002

On the basis of the issues monitored and analyzed by ENHESA-Environmental Policy Centre during the course of 2001, it is likely that companies will be confronted in several countries with new policies and regulation in the following ten areas during the coming 12 to 24 months:

  1. Emergency Planning and Control of Major Accident Hazards
  2. Transparency in Corporate Dealings Affecting the Environment and Corporate Social Responsibility (CSR)
  3. Climate Change
  4. Extended Producer Responsibility/Product Stewardship
  5. Elimination of “Problem” Chemicals
  6. Integrated Pollution Prevention and Control (IPPC)
  7. Emissions and other Reporting Obligations
  8. Workplace Exposures to Chemicals and Noise
  9. Transport of Dangerous Goods
  10. Stress, Bullying at Work, Ergonomics

The shocking events of the latter half of 2001 are likely to give added impetus in 2002 and beyond to numerous global environmental, health and safety policy initiatives that have seen growing importance in the last few years. The September 11 terrorist attacks in New York and Washington highlighted the need for additional security precautions at industrial installations presenting major accident hazard risks, while the Enron debacle gives new voice to arguments in favour of increasing the transparency of business and commercial activities in companies worldwide. Meanwhile, the Bush administration's announcement of America's global climate change programme will likely result in growing divergence of opinion between the United States, on the one hand, and most other industrialized nations on the other.

Even before September 11, US authorities sought to prevent chemical accident worst-case data from falling into the hands of terrorists by limiting access to specially established and controlled reading rooms. An explosion in a chemical plant near Toulouse (France) shortly after September 11 raised fears of more terrorist attacks. Although this proved not to be the case, pressure did increase for further strengthening the European Union's “Seveso” directive aimed at controlling major industrial accident hazards. This, and other accidents (cyanide spill in Romania, fireworks plant explosion in the Netherlands), will almost certainly speed work in 2002 on completing a new EU directive amending and broadening the scope of the Seveso II directive.

The Enron case will likely strengthen calls for greater senior management accountability and transparency in corporate affairs, including those that could have significant implications for the environment and human health and welfare. Corporate social responsibility (CSR) initiatives, such as those being actively promoted by the UK's Department of Trade and Industry (DTI), will take on even greater importance in light of these developments. Other initiatives in various parts of the world aim to force companies to be more forthcoming with information about the environmental impacts of their activities. The UK government in particular, has taken the lead in proposing to hold company directors responsible for the environmental and health and safety performance of their companies. In July 2001 the UK Health and Safety Executive published guidance for members of the Board on their duties and responsibilities, and in November, DTI published “Environmental Reporting General Guidelines” aimed at getting all the top FTSE 350 to publish reports on their environmental performance. The UK industry minister even threatened to make such reporting compulsory if voluntary measures failed to produce adequate results. Japan is also pushing for voluntary environmental performance reporting from companies.

Honest reporting on how environmental issues and liabilities will affect company performance is the subject of a new Recommendation issued by the European Commission in 2001 on the recognition, measurement and disclosure of environmental issues in company annual accounts and annual reports (2001/453/EC). The aim is to oblige companies to report on environmental expenditures, risks and liabilities that are likely to affect the company's financial position and results. Such transparency is also a key feature of the EU's Eco-Management and Audit Scheme (EMAS) and pressure continues on companies to adopt this approach or its international counterpart, ISO 14001.

Company reporting on environmental releases is also growing in importance. Such data is collected in dozens of countries in Europe, Asia and the Americas for the express purpose of making it publicly available, in order to harness public opinion in pressuring firms to improve their performance. Most such information will continue to be made available via the world-wide web by environmentalist NGOs as soon as it is released, often with their own particular slant on the interpretation of the data. Widespread sharing of information is also improving coordination among national and regional permitting and enforcement authorities, particularly in the area of integrated pollution control. This approach to issuing a single environmental permit to industrial facilities covering emissions to air and water and for waste management originated in Europe over the past decade. Now, environmental authorities in other countries, including the US, are assessing how they might apply it in their countries.

The 14 February 2002 announcement of the US plan for slowing the growth in greenhouse gas (GHG) emissions has been met by a lukewarm reception from most other industrialized countries, including the EU and its member states and Japan. Dubbed “Kyoto lite” by the European news media, it proposes to make voluntary many measures that will be mandatory in other countries. The aim of most concerned governments over the coming 3-4 years is to achieve greater energy efficiency (in products, buildings, transport and industrial production), expand the use of certifiable “green energy” (including renewable energy sources), and establish workable schemes for the trading of GHG emissions to meet their Kyoto protocol commitment to reduce GHG emissions below 1990 levels by 2010. Still, at least one US initiative - the Energy Star label - is quickly spreading to new countries (the EU, Japan and Taiwan have formally adopted the logo and its criteria) and to new products (including office equipment and household electrical appliances, and eventually, even to homes and buildings).

Producer responsibility for product environmental impacts is also spreading around the globe, even to the United States. Whilst these initiatives are most advanced in Europe, many Asian nations, including Japan, Taiwan and South Korea have implemented extensive product life-cycle and end-of-life take-back requirements. Over two dozen other countries in Europe, Asia and North and South America presently require manufacturers to take back or assure the recovery and recycling of post-consumer packaging and products, such as waste electrical and electronic equipment, batteries, white goods, – even automobiles. The producers' responsibility arises at all stages in a product's life, from design and manufacturing (including the chemicals that may or may not be used to make it) to distribution and sales to the product's use (energy efficiency) to end-of-life recovery and reuse or recycling.

Linked to this are initiatives aimed at restricting or even banning many chemical compounds deemed “not wanted in the environment” by many governments. Particularly strident in this regard are the Scandinavian countries, where the “substitution principle” (i.e., substitute toxic chemicals with less harmful alternatives wherever feasible) is increasingly enshrined in national law. Other countries are likely to emulate this example.

One clear indicator of the growing importance of EHS issues around the world is the extensive regulatory resources that are dedicated to them, with a growing trend towards sharing among policymakers of ideas and initiatives. Recent discussions by US EPA on strategies to recover and recycle end-of-life cathode ray tubes build on at least a decade of experience gained in Europe. The spread of carcinogen control legislation in Europe follows directly from two decades of experience in California (here the “timebomb” is ticking: workers contracting cancers in 5-10 years' time will likely allege this is due to exposures to substances in the workplace today). Europe's caution in harmonizing liability regimes for environmental contamination stems from fears of the same debacle Superfund was perceived to create in the USA. Policymakers in other parts of the world are also likely to adopt strategies and initiatives currently being implemented in Europe and America. That's why it is imperative that international companies adopt globally the EHS policies and practices they have already implemented in the more advanced countries.

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