How should facilities organize their environmental, health, and safety (EHS) functions? I have written extensively on corporate EHS organizational design, but very little on structuring EHS functions at the facility level.1 This issue’s column was prompted by a call from an environmental manager at a mid-sized manufacturing plant who wanted to know the basics of forming an effective EHS group. Here is the essence of what I told him.
Keys to Successful Facility EHS Organization
The keys to successful facility EHS organization are twofold: Fill the top EHS position with a competent professional, and have that person report directly to the plant manager.
Why are these steps so critical? Because EHS involves technically complex, legally abstruse, and politically sensitive matters. Regulatory agencies, unions, media, politicians, and the community at large can go on a feeding frenzy if they discover that EHS has been blatantly mismanaged at a facility. Witness the aftermath of the 2005 BP oil refinery explosion in Texas City, Texas, which killed 15 people and injured over 100. At many plants, the EHS function reports several layers down within the organization. EHS personnel may also be responsible for additional, non-EHS activities that consume considerable time and attention. And, in some cases, EHS is staffed by individuals without the proper credentials or sufficient training. If these conditions exist, it is typically because EHS is considered an ancillary support function and not core to the site’s business success—in spite of management’s assurances to the contrary.
Understanding the Significance of EHS
Fortunately, a growing number of plant managers recognize that much more is at stake than just regulatory compliance. EHS is becoming a business concern extending far beyond the fence line.
To put the issue into perspective, think of it this way: If the BP refinery’s information technology (IT) systems had crashed or its product quality had declined precipitously, few people outside the company would have heard about it—or, more significantly, cared one iota. But the process safety issue was different. As reporters say, it had “legs.” As the Securities and Exchange Commission says, it had “material impact.”
Consolidating EHS Resources
Generally, the most cost-effective way to organize EHS functions is to consolidate EHS resources into a single department, since there is overlap in skills and competencies among environmental, health, and safety professionals.