North Carolina Multi-State Working Group onEnvironmental Management Systems and the

United States Environmental Protection AgencyPilot Project Implementation Workshop

May 14-15, 1998

Conference Proceedings

MORNING SESSION, THURSDAY, MAY 14, 1998 9:00-12:30

WELCOME AND OVERVIEW OF MSWG AND ITS WORK

Opening Remarks Summary - Henry Lancaster, Deputy Secretary of the Department ofEnvironment and Natural Resource (DENR)

Deputy Secretary Lancaster praised the focus of the meeting: “Going Beyond Compliance.” Hesaid that this involves adopting the values of environmental management systems (EMS) andmaking continuous improvements integral to corporate environmental operations.

Deputy Secretary Lancaster commended the efforts of the Multi-State Working Group (MSWG)and USEPA in their joint effort to determine whether ISO 14001 actually makes a difference inenvironmental performance by assessing the benefits to company, to regulators, and to society.

He then distributed plaques from DENR to representatives of those companies participating inthe NC Pilot, including: Matt Caton - Cooper Tools, Peter Self - Motorola, Sean Bir - Konica,Julie Shambaugh - Camp Lejeune, Doug Gaylord - Honda Power Equipment, and David Rachels- Exide Electronics.

Conference organizer Ravila Gupta (from The Division of Pollution Prevention andEnvironmental Assistance, NC DENR) recognized staff members Susan Clarke, SharonGladwell, and Norma Murphy for their help in conference preparation as well as Beth Graves foroverall project management.

Jay Benforado, USEPA, Office of Reinvention

Mr. Benforado established the broad context for the meeting. “We have made progress inpollution prevention,” he said, “but we are not where we need to be.” To advance further weneed to address four key developments:

• The problems have changed. We must go beyond the categorical thinking thatoriginally informed state and federal regulatory efforts to address cross mediaand complex environmental issues.

• The institutions have changed. State capacity and interests are higher now than whenEPA was established. There is a new group of trained environmental professionalswho operate in industry, government, and the Non-Governmental Organizations(NGOs).

• Our tools have changed. We have the creation of EMS and new technologies forauditing and monitoring.

• Finally our paradigms have changed. We have gone from detection and complianceto prevention, redesign and continuous improvement. From an isolated concern onenvironmental impacts, we have come to sustainable development, economic

development and social justice as a total set of values.

Consistent with these new directions, EPA and the Office of Reinvention encourages and is a fullpartner in the project to test the impact of EMS that is led by MSWG and is the basis for thisconference.

Robert Stephens, California EPA, MSWG Chair: The Role of MSWG

MSWG is an informal association of states, NGOs, the private sector, and the federalgovernment established for evaluating and interpreting results and policy implications ofenvironmental management systems.

MSWG recognizes the leading role taken by North Carolina in its EMS pilot effort andappreciates their initiative in organizing this conference. There will be tremendous benefits inlearning from this session and others sponsored by MSWG. The partnership between states andthe EPA is absolutely essential because this is a new venture and results are uncertain.

At this point in the meeting, Bob Stephens and Jay Benforado, along with MSWGrepresentatives from six states signed the EPA-MSWG Regulatory Framework on EMS PilotProjects. Other states are expected to sign the document in the next few weeks.

Chairman Stephens recognized the members of the MSWG that includes 12 states, USEPA,representatives of industry and NGOs.

MSWG is conceived of as a state-federal partnership that encourages states in their role asimplementers and innovators of policy. MSWG is attempting to address the resource limitationsthat states face in carrying out their environmental responsibilities by taking a “work smarter notharder” approach. Both the business community and the public at large are demanding thatstates become more effective and responsive in addressing environmental concerns. MSWG is,in many ways, a research organization designed to help others understand the impact of EMSimplementation. MSWG is trying to identify key EMS policy questions that need to beaddressed and develop data relevant to those questions. These include the following sixdimensions:

• indicators of environmental performance;• indicators of environmental conditions;• indicators of environmental compliance;• indicators of pollution prevention;• indicators costs and benefits to the industry, to regulators, and to society;• indicators of interested party involvement.

The pilot studies will provide an exceptionally rich database to explore these issues. Thedatabase will be established at the University of North Carolina, and will contain informationfrom 100 pilot projects around the country.

MSWG completed the first phase of its operation from September 1996 to September 1997. This

phase included the development of the overall project guidance, the identification of initial pilotprojects, and the establishment of a framework for federal and state collaboration. The secondphase of the work is now underway. This includes increasing communication among the states,the collection and analysis of pilot project data, the promotion of research, the recognition ofpositive performance, and the development of an infrastructure for the project securing thenecessary resources to maintain MSWG activities.

Remarks of Dave Ronald, Attorney General's Office - Arizona; George Wyeth, USEPAOffice of Reinvention

Mr. Ronald reviewed the text of the agreement signed by the states and EPA. The objectives ofthe agreement are to support collaborative efforts between the state and the federal governmentand to minimize the risk of miscommunication between NGOs, the pilot facilities, the states andEPA with regard to implementation of the pilot projects. Unlike XL projects, signatories to theframework will not be held to a higher environmental standard than already required by state andfederal laws.

USEPA's Office of Reinvention is engaged in evaluating this project and other experimentsrelative to the implementation of voluntary pollution prevention/EMS efforts. The Office ofReinvention is interested in their implications for policy. This is one of several collaborativeprojects with which the Office of Reinvention is involved.

QUESTION AND ANSWER SESSION

Q) Do you expect that there will be lawsuits from environmental organizations resultingfrom the pilots?

A) Environmental groups were a party to the process of developing the agreement. The processdoes not extend regulatory discretion and is primarily a research process. Therefore there wouldseem to be little basis for litigation based on environmental harm.

Q) Why have not all twelve states signed?

A) There has not been enough time for all involved states to review and approve. Also otherstates may join later who were not in the original group.

Q) Do you see this as an evolving document?

A) The language is pretty inclusive as is, but specific circumstances could show the need foramendment.

Jim Horne, Office of Water, USEPA

The Office of Water was an early member of MSWG, is a strong believer in sustainedState/Federal partnership, and is financially supporting a number of pilots related to theimplementation of EMSs, within municipalities and counties.

This is a timely project because the ISO standard is likely to be a significant factor in the futuredevelopment of pollution prevention in industry. This effort is designed to clarify and define itsimpact and the implications for regulators, environmental organizations, industry, and thegeneral public as we develop pollution prevention programs in the future.

In addition to the 12 states that are formal members of the MSWG, Indiana, New Hampshire,and Vermont have projects supported by Office of Water and are participating in the pilot study.

Our hypothesis is that EMSs will be shown to make a positive difference and we have identifiedkey areas of research to explore this hypothesis. The protocol development is critical to the datacollection process. We have also worked to harmonize the protocol document with EPA's othermetric development projects. Our database will be shared with researchers and other interestedparties.

Summary of Remarks of John Villani, Co-Principal Investigator of UNC-CH EMSResearch Project.

A guidance document has been developed which is being implemented by the research protocols.Protocol development has been a staged process with input of various parties and is still beingimproved by the comments of the initial pilot participants. The protocol covers three generalareas:

• Baseline data; (This is essential and will probably represent the largest up-front cost);• EMS design features of various company approaches;• Data updates: performance changes

To assure standardization of data, which is of the utmost importance, we have a small coreresearch staff which reviews incoming data to make sure it is consistent with the protocol. EPAfunds the research effort. Various training sessions on the protocols have been held or arescheduled for state agencies and industry pilots: including sessions in NC, VT, NH, and on theWest Coast. The training sessions have, also, been workshops to get feedback, resulting inuseful format changes.

The project is creating a searchable database, and will produce public, factual periodic reports.The project is exploring ways to make the database useable to the research community andothers. Confidentiality of information is guaranteed to all participants. One NC firm hassubmitted baseline data, and several are ready to do so. Protocols are available athttp://sunsite.unc.edu/villani/bprot13.doc. The final version of the protocols should be readywithin several weeks. The project has a three-year duration.

SUMMARY OF PRESENTATIONS BY ISO 14001 PILOT FACILITIES

Beth Graves, Project Coordinator for the NC DENR ISO 14001 Pilot Project

All facilities selected for the NC pilots are ISO 9000 certified, and two have been past winners ofthe Governor's Award for Excellence in Waste Reduction. The Division of Pollution Preventionand Environmental Assistance has assigned a staff member to assist each facility. These staffmembers have all had ISO 14001 lead auditor training. The facilities have participated inroundtable sessions in which the companies share information about implementation and discusscommon interests. The Roundtable meets approximately every six weeks. The pilot program isgoverned by the Department's confidentiality policy.

DENR staff working with facilities were introduced: John Burke, Susan Clarke, Greg Newman,Jeff Poupart, Ron Pridgeon, Kathleen Gray, Norma Murphy, Beth Graves.

Sean Bir, Konica Manufacturing, USA, Whitsett, NC

Konica manufactures color photographic paper and photographic emulsions. The Whitsett plantis a 300,000 square foot facility that employs 360 and is in continuous operation in two 12-hourshifts. It is a subsidiary of Konica Corporation of Japan.

Konica has a Title V air permit (mostly VOCs). It is a large quantity hazardous waste generatorand is a wastewater discharger to the local POTW, has a storm water permit, is involved in silverrecovery, and is involved with TSCA, FIFRA, ATF, EPCRA (Tier II & TRI).

Konica chose to be involved in the project because it felt ISO 14001 would be a vehicle foremployee involvement in its environmental effort. ISO 14001 also helps the environmentalprogram's internal documentation so that the function is more easily passed from one staffmember to another. Participation in the program enhances Konica's already good pubic image asan environmentally concerned company.

Companies considering EMS implementation should take note of the fact that even being ISO9000 certified, and having a beginning EMS in place, the process took a full year. As part of theeffort, Konica's staff took a five-day lead auditor's course and a two-day implementation course.

A strategic decision in the process was to integrate 14001 documents with ISO 9002documentation. This only required a 5% increase in documentation. The process engaged seniormanagement in review of the final results. All Konica departments were involved in theformulation of the EMS through a task force led by Konica's environmental management group.Through this process Konica formulated aggressive environmental improvement goals whichwill enhance Konica's environmental performance and will create significant new benefits,including $300,000 per year in solvent recovery, 50,000 gallons in water reclamation daily, and30,000 a year in waste recycling. Konica's experience is that EMS development andimplementation pays for itself almost immediately.

Konica employed an ISO 14001 registrar to do a pre-assessment, and learned a great deal fromthis process. Other findings from the process include:

• Training all employees is significant• Employee ideas were a major benefit in creating savings• EMS may be costly, but could result in high gains• Requires management commitment

Peter Self, Motorola, MOS 15 Facility, Research Triangle Park, NC

MOS 15 fabricates metal oxide semiconductor devices (wafers) for communications, auto, andconsumer applications. The 50,000 square foot plant is located in Research Triangle Park, NCon a 110-acre site. It has approximately 370 employees.

Motorola has 100,000 employees worldwide and is organized into six business sectors byproduct, each sector making its own decisions about EMS implementation. The automotivedivision will be certified by 1998 and the semiconductor division by 2000. Motorola has fiveEMS pilots worldwide.

Motorola already has a commitment to go beyond compliance. It has corporate EMS standards,is a participant in the NC Air Awareness program, the EPA Green Lights program, and recyclesplastic, glass, cardboard and other materials. All employees receive a four-hour course titled“Protecting Our Environment.” Motorola has been actively involved in ISO 14001 and its EMSrepresentatives participate in the US TAG committee.

Motorola is involved in EMS development for a number of reasons. Motorola has a commitmentto be self-monitoring and takes responsibility for its environmental performance. It looksforward to a more flexible regulatory response as it demonstrates environmental responsibilityand improved performance. In particular, accelerated permit review would be important to itscontinuing competitiveness in a fast-changing industry. Motorola believes that ISO 14001certification will be important to meeting future customer requirements and gaining access toworldwide markets. Motorola has an in-place ISO 9001 program that can serve as a basis for the14001 system.

In developing its EMS, Motorola MOS 15 staff first obtained senior management approval at thesector and site levels. Next it evaluated its existing systems and assembled a cross-functionalteam including QA, facilities, state reps, and state representatives. The team met weekly for tenmeetings, and developed a policy statement, brainstormed aspects/impacts, selected a model forassessing significance, and completed written control procedures.

A unique aspect of the MOS 15 approach was the adaptation of the Failure Mode EffectsAnalysis (FMEA), a quality tool already used by manufacturing, as a way of assessing thesignificance of various environmental aspects. This helped manufacturing's acceptance of theprocess because of their familiarity with the system. FMEA assigns a priority number on anaspect, which is directly proportional to the severity and probability of an impact, and inverselyproportional to the likelihood of detection of that impact through normal processes.

MOS 15 found the process of EMS development time-consuming. It took four hours everymonth for several months to do aspects/impacts analysis, and developing this customized system

created the needed buy-in from manufacturing. Operating by means of a cross-functional teamwas critical to the success of the project as well. Finally MOS 15 views the pilot effort aswin-win for the facility and the state - a model collaborative effort. The facility benefited fromthe technical assistance and third-party review provided by the state representative and by thepeer interaction at the roundtable sessions.

QUESTIONS AND ANSWERS

Q) Did the guidance document play a role in setting up system?

A) The guidance document did emphasize stakeholder involvement more than the registrar did.Konica takes information to stakeholders, but did not involve others directly in the process.Motorola has used the document as a benchmark for the design of its own process.

Q) Did cost/benefits take into account overhead?

A) System operation does not add significant costs, though start-up costs were significant.

Q) What criteria does Konica use for showing its environmental policy?

A) We give it to everybody, but require they go through the environmental manager so we knowwho is interested.

Q) How valuable was gap analysis?

A) GEMI (Global Environmental Management Initiative) was used, but despite a high GEMIscore, we still had significant gaps after the registrar did a pre-assessment.

THURSDAY MAY 14, 1998 2:00-5:00

SUMMARY OF PRESENTATIONS BY ISO 14001 PILOT FACILITIES, CONTINUED

Matt Caton, Lufkin/Cooper Tools, Apex, NC

Cooper Industries, headquartered in Houston, Texas is one of America's oldest companies,founded in 1833. It is a diversified manufacturer of high-quality electrical products, tools andhardware, and automotive products. It employs 40,000 employees in over 30 countries in over130 manufacturing operations around the world.

Cooper has a long-standing commitment to the environment. It recognizes outstandingenvironmental programs in Cooper operations worldwide and contributes more than $500,000annually to local environmental education and conservation programs. Cooper is part of EPA's33/50, the Green Lights and Energy Star programs. Cooper posts its corporate environmentalpolicy on its web page and has third-party environmental audits every three years, and has many

other environmental programs.

The Lufkin/Cooper Tools plant in Apex, NC makes measuring tapes of various kinds includingsteel, fiberglass, and woven and wood rules. It was built in 1967 on 76 acres and covers almosthalf a million square feet. It employs 750 employees and was ISO 9001 certified in 1994.

The plant is involved in a highly chemical intensive finishing and coating processes and is alarge-quantity hazardous waste generator. It has a post-closure permit, general storm waterpermit, and is involved with SARA issues, CFR metal finishing regulations, and CFR coilcoating regulations. It has an Air Quality Permit as well as HAP/TAP permits. It has SPCC andasbestos issues and significant non-hazardous waste issues including trash, containers, pallets,and recycling.

In recent years, Cooper has made significant progress in waste reduction and pollutionprevention. For example, hazardous waste generation has been reduced by 50% and MEK usagefrom 20 tons to less than 600 pounds annually. Cooper runs a one million-pound recyclingoperation.

Cooper became involved with the program for several reasons. The availability of stateassistance was an incentive because it augmented their one-person environmental unit. Thestandard requires communication with top management and other departments. Going throughthe process would increase the department's visibility and strengthen links with the otherorganizations through which they work. It would help Cooper set targets and goals and it alsoholds out the prospect of reducing the plant's overall environmental liability.

Cooper conducted a gap analysis and made some changes to their corporate environmentalpolicy. Cooper also has identified their environmental aspects, impacts, and significanceranking. The policy has been communicated to employees via paychecks, newsletter, andtraining. Like the other companies who have reported, they have found the development of anEMS significantly more time-consuming than originally anticipated, but also have found it to beworth the effort.

Dawn Sudmeyer, Marine Corps Base, Camp Lejeune, Jacksonville, NC

Established in 1941, Marine Corps Base, Camp Lejeune is located on the southeastern coast ofNorth Carolina. The Base occupies 153,000 acres including 26,000 acres of wetlands and 14miles of beach on the Atlantic Ocean. Facility infrastructure is comprised of more than 6,800buildings and facilities serving 144,000 Marines, sailors and their families.

The State of North Carolina and Department of Defense installations in North Carolina havebeen working together over the past four years as a result of the State/Military EnvironmentalIssues Working Group. Participants identify environmental issues of concern and developsolutions in an efficient and effective manner. An outgrowth of that relationship was the August1997 selection of Camp Lejeune by the North Carolina Division of Pollution Prevention andEnvironmental Assistance to participate as a pilot site in the State's evaluation of ISO 14001.

Later, in November 1997, Camp Lejeune was nominated by Headquarters Marine Corps toparticipate in the Department of Defense (DoD) Component ISO 14001 EnvironmentalManagement System Pilot Case/Benefit Study. Camp Lejeune is the only Marine Corps Base inthe DoD study, which includes eighteen military installations at this time. Based on input fromthe participating pilot installations, DoD will issue a policy on ISO 14001 implementation thatmay range from discouraging installations to implement, encouraging implementation, or makingimplementation of ISO 14001 mandatory. The DoD pilot study is expected to conclude by thesummer of 1999.

Because this is a pilot project, Camp Lejeune is concentrating ISO 14001 evaluation effortswithin the 90-person Environmental Management Department (EMD). EMD consists of fivedivisions: Environmental Compliance, Environmental Planning, Installation Restoration,Forestry, and Fish and Wildlife. The ISO 14001 Steering Committee consists of the five divisiondirectors, the Assistant Chief of Staff for Environmental Management, and the Deputy AssistantChief of Staff.

The first objective of the pilot project was to conduct a gap analysis. The gap analysis identifiedconformance and non-conformance areas between Camp Lejeune's environmental guidancedocuments and the ISO 14001 Standard. This was accomplished through reviewing MarineCorps Orders, Base Orders, DoD Directives, DoD Instructions, Measures of Merit, StandardOperating Procedures, work instructions and records, internal and external audit reports, andmanagement reports.

The second objective of the pilot was to identify significant environmental aspects and impacts.The pollution prevention opportunity assessment and brainstorming was used to identifyapproximately forty representative processes of activities conducted at Camp Lejeune. Processdiagrams were then developed for each of the processes and over 400 potential environmentalaspects and impacts were identified.

Once the process diagrams were developed, the potential aspects and impacts were summarizedinto a spreadsheet. The next step was to evaluate significance. Significance was defined basedon three factors: degree of impact, frequency of impact, and potential for regulatory and legalexposure. In addition, the Installation Restoration Division added public health risks to theirsignificance criteria and the Planning Division added community input to better reflect divisionpriorities. The relative significance of environmental impacts was then ranked based on theevaluation criteria.

The significance criteria were then used to calculate a score for each of the 400 aspects andimpacts. The spreadsheet was sorted and the highest ranking or the most significant aspects andimpacts were identified for each division. Each division then selected one of the most significantand developed objectives, targets, and performance measures. Additional performance measuresfor baseline evaluation were developed with the assistance of our State Technical Assistanceprovider. Examples include particulate matter, volume of wastewater discharged, number ofbreeding pairs per year of red cockaded woodpeckers, and the hatch rate per year of sea turtles.

Camp Lejeune has found the state-provided technical assistance and opportunity to network with

other pilot projects to be extremely beneficial to the project. Camp Lejeune has received up-to-date information on ISO 14001 implementation and quality training opportunities.

Doug Gaylord, Honda Power Equipment, Swepsonville, NC

Honda is a worldwide corporation headquartered in Japan. It is divided into three divisions:automotive, motorcycle, and power equipment. Honda has established a goal to certify all of itsfacilities by December of 1998, Honda's fiftieth anniversary year. Honda has a strongcommitment to the environment and has developed its own environmental symbol this year.Honda's environmental concern extends beyond production impact and embraces product designas well. Honda has an open-door policy with regard to its environmental performance and otheraspects of its plant operations.

The Swepsonville facility began production in 1984. Its plant is approximately 147,000 squarefeet and is located on 87 acres. It has 300 full-time employees and 40-50 temporary associates.The plant produces walk-behind mowers, riding mowers, engines, water pumps and variousOEM components. Plant operations include die casting, machining, welding, painting, assembly,auto transmission remanufacturing, and administration.

The plant is engaged in a number of pollution prevention projects and is an applicant for the1997 Governor's Award for Excellence in Waste Reduction. Recently Honda has removed fivechemicals from its Tier II report and achieved a lower emissions category status. Its currentenvironmental efforts include: reformulating paint with xylene and toluene with a reduction of16%; changing petroleum-based solvent to water-based solvent in parts washers; establishing anultrafiltration system for oily water (saving over $35,000 per year); and working with supplierson Styrofoam and shrink-wrap recycling. The company also recycles paper, cardboard, woodand metal pallets, plastic drinking bottles, aluminum, and light bulbs. The plant is involved witha wide variety of environmental regulatory activities including CAA, CWA, DOT, EPA, NFPA,OSHA, and RCRA. Honda's implementation team includes the Wastewater Operator/Environmental specialist, the ISO 9000 Specialist, the Occupational Health Nurse, and arepresentative from the Division of Pollution Prevention and Environmental Assistance. Thegroup has reviewed ISO information, completed the ISO 14001 Lead Auditor Course, andworked with the ISO 9002 team.

At the present time, the team has received approval for its environmental policy statement andcommunicated that statement to employees. It has identified but not yet ranked aspects andimpacts. It has written, but not fully implemented its operational control procedures. It hasselected a third-party registrar, and completed a pre-assessment in December of 1997. Hondahas not chosen to merge ISO 9002 with 14001 procedures at this time.

Honda has learned that this is a time-consuming project, although it was made easier due to priorISO 9002 certification. It was important to get everyone on the team trained. The pre-assessment was valuable in determining gaps and provided a "wake-up call" to management andothers involved. They identified the importance of keeping temporary employees aware of ISO14001 through training at the point-of-hire. Honda's experience in Swepsonville suggests that

implementation of ISO 14001 supports the environmental management function of theorganization because it provides an opportunity for company-wide involvement with andvisibility of environment management. ISO 14001 emphasizes the need for results, andencourages higher environmental performance standards.

David Rachels, Exide Electronics, Raleigh, NC

Exide Electronics manufactures uninterruptable power supplies that protect computers,telecommunications, aviation, medical, military, and other sensitive equipment. Manufacturingoperations include sheet metal fabrication, painting, transformer assembly (dipping and baking),final assembly and testing.

The Exide facility is on a 12-acre site and has a 172,000 square foot plant. Exide employs 350 to400 employees at any one time. It has a full first shift, partial second, and skeletal third shift.Exide is now owned by UK's BTR group and was ISO 9000 certified in 1994. Over the last 12years, Exide has developed its own environmental focus through its "Clean, Green, & Mean"program. Exide has a municipal industrial water pretreatment permit, a prohibitory small airpermit, is a small quantity hazardous waste generator, and has county and state approvals fordisposal of used paint filters. Exide conducts an annual environmental insurance audit andparticipates in EPA's 35/50 program and its Energy Star Buildings program.

Exide opted for ISO 14001 certification because it hopes to reduce environmental auditing bycustomers and assist its entry into rapidly expanding European and Asian markets. Theopportunity to collaborate with the state was an inducement to join the pilot effort. Exide hopesto use its EMS to increase control over environmental compliance and pollution prevention withvendors, to further evaluate process changes to powder coating, and to target more difficult wasteand emissions reductions.

Since 1986, Exide has reduced its hazardous waste from over 100,000 pounds annually to lessthan one thousand pounds. In 1996, Exide diverted 216 tons of solid waste and 945 tons of scrapmetal from landfills. It has launched a major recycling program and eliminated 3.7 tons ofVOC/glycol ethyl emissions to allow it to have a Status 5 permit. It has converted towater-based paint that greatly reduced regulatory requirements. It has also reduced the fivetargeted chemicals in EPA's 33/50 program by an average of 93%.

Exide's EMS team began in March of 1997 and has drafted an EMS manual, listed aspects andimpacts, and has a draft policy statement. It has developed a system for significance ranking buthas not yet finalized it. It is planning on a partial integration of ISO 9000 and 14000 systems.Exide's process was interrupted by a friendly buy-out in the summer of 1997 that resulted in achange of budget year and a turnover in corporate and site quality staff. The process is back ontrack now. Exide has found, like other presenters here today, that the EMS process is moredetailed than Exide had originally thought and therefore more consuming of limited staff time.

QUESTIONS AND ANSWERS

Q) Were all policies developed for the facility or based on corporate policies?

A) Honda - We modified the corporate policy.Cooper - We have corporate division and plant policies; they are similar.Konica -Is very site-specific.

Q) Employee training - what were employee economic incentives?

A) Exide - Hourly variable pay program - bonus will include ISO 14001 measurements alongwith health, safety, quality, etc.Konica - Two sets of training: one hour long for everybody and job specific training up 1/2 daybased on duties.

Q) What influence has being a Japanese company had on Honda's American subsidiaries?

A) We respond to their directors, but develop our own. There is little contact.

Q) Please comment on environmental auditing suppliers' aspect of your program?

A) This started out as a quality program for Exide and has expanded. ISO will make it morestringent. We believe this is critical dimension. Our customers expect the same from us inenvironment and safety, especially.

Q) How do you maintain employee enthusiasm?

A) Exide - The tie to pay is a factor, also featuring employees who have made contributions inbrochures; this educates the employees of benefits from environmental management; we doannual job-specific environmental training.

Q) How important is QM to prepare you for EMS?

A) Motorola - It’s very important to be ISO 9000 certified; especially with central documents; itwould have taken months longer without ISO 9000 certification.Exide - Ditto. ISO 9000 expedited the program a great deal.Camp Lejeune - Military culture helped us with documentation even though we are not ISO 9000certified.

Q) What is the impact of ISO 9000/14000 on market share?

A) Honda - Our auto facility is a pioneer in quality. We are very popular for that reason.Exide - We believe that without ISO 9000 certification, we would not be able to sell in Europe.We will be looking at this for ISO 14000 before disseminating to the other facilities.Cooper - We have not seen an increase in market share, but we have seen a positive impact onoperations control.

Q) How will we measure the impact of 14000 on companies that already have good EMS?

A) Konica - 14000 got us involved in recycling in a big way --- it moved us beyond theregulations.Camp Lejeune - ISO 14000 goals were specifically focused on new rather than existinginitiatives.Exide - It trained us to look at other than chemical processes.

Q) How long did it take to answer baseline protocols?

A) Konica - One and a half days and then approximately an hour for the EMS design data.Exide - One to one and a half days for baseline, less for design process -- one hour.

Q) How many are using third party assistance?

A) Camp Lejeune - Yes, we are using a contractor.Cooper - Yes, we had a consultant we worked with before.Motorola - No, but it would help if you were on a tight time schedule, though doing it yourselfhas the advantages of increasing the sense of ownership and has a training benefit.

Q) Will you integrate 9000 and 14000?

A) Honda - We did require considerable documentation and will adapt ISO 9000, but put in aseparate document for 14000.

Q) Please talk about external stakeholder involvement in your processes.

A) Konica - We made a presentation to a local county group and involved DENRrepresentatives.Camp Lejeune - We were already involved with the local community, so it wasn’t newinvolvement.Motorola - We have not spread the word - not in a residential community. We do participate inNorth Carolina and Research Triangle awareness programs.Exide - We have a process for responding to neighborhood complaints.

Q) Will ISO 14000 meet your company's compliance needs and environmental objectives?

A) Motorola - We already have a compliance commitment. ISO will help us formalize our EMSand continually improve it.Konica - We already have a compliance commitment.

Q) Did you look for different qualifications for ISO 9000, 14000 auditors?

A) Konica - Environmental experience is critical.Cooper - We went with the same auditors for 14000, but they had environmental experience.

Q) Has Honda considered emissions of its mowers as part of its EMS?

A) Honda does look at aspects of product design as well as production impact.

Q) How are you positioning against competitors who have not done an EMS?

A) Konica - All competitors are going that way.Honda - We’re not sure.Motorola - Many of our competitors ( Lucent, IBM) are going for ISO 14000 certification. Weuse this as an argument with top management. Also, our customers, like Ford, are beingcertified. It is good to have 1 1/2 years lead-time.

Q) How has the State helped you?

Camp Lejeune - Our TA provider was auditor-trained and kept us focused on actual ISO 14000wording.Exide - Technical expertise, willingness to get us answers to questions.Konica - It assisted in general training for policy roll-out; made employees sit up and take noticebecause the State was involved; made detailed auditing and was willing to tell it like it is morethan the internal auditor.

Q) How did you get top management involved?

A) Honda - We identified benefits, talked about competition, marketing advantage to being in apilot, including State assistance. We went directly to the President and talked about the materialadvantages of working with the State.

Q) How many FTE has North Carolina devoted?

A) 2 FT, 4-5 staff working one day a week.

Q) Are most companies in pilots involved large?

A) Vermont and New Hampshire are specifically targeting small companies.

Q) Have you used existing information systems (e.g., work management systems) as therepository of ISO information?

A) Konica - You can use the 9000 system and HR documents.

Also on Thursday, industries from other states were introduced by their state representative andencouraged to network.

Friday May 15, 1998, 9:00-12:00noon

OTHER STATE PERSPECTIVES ON EMS PILOT PROJECTS AND EMS PROGRAMS

Stacy Richards, MSWG, Pennsylvania Department of Environmental Protection

PA DEP is interested in providing data to the national study because it believes that moresystematic EMS data collection will generate more business-relevant data for companiesinterested in improving their environmental performance. PA DEP's participation in the MSWGstudy process is part of its Strategic Environmental Management Initiative (SEM). SEMchallenges and supports companies to work toward zero emissions on a voluntary basis and toinclude pollution prevention and community involvement in their emerging EMS approach. PADEP sees ISO 14001 as an important tool in this process. PA DEP has developed a pyramidsystem to work with companies where they are. This approach has the Governor's strongsupport. The Department provides companies with tools to develop EMSs - environmental costaccounting, life cycle analysis, P2 training - but believes that EMSs will be market-driven, anddo not necessarily require regulatory changes to encourage implementation. However, theDepartment does wish to move away from reliance on the command and control paradigm toassure environmental compliance to encourage a voluntary ethic of compliance and continuousenvironmental improvement.

PA DEP is developing its own pilots. Pennsylvania has some leading companies who alreadyhave developed EMSs and a commitment to zero emissions that would be prime candidates. Wealso want to work with small businesses, but they will probably need some additional assistance.We believe we have a tremendous opportunity to make a difference through this project.

Marianne Fitzgerald, MSWG, Pollution Prevention Coordinator, Oregon Department ofEnvironmental Quality

Oregon is interested in encouraging businesses to pursue superior environmental performance.In talking with businesses, Oregon found that they were most concerned about two issues: 1)permit delays were problematic in getting their product to market quickly, and 2) assistance withcommunity opposition to plant expansions. The EMS incentive project was a pilot designed tohelp address these and other business concerns.

Green permitting is the legislative umbrella under which Oregon's initiative operates. Theprogram is tiered and develops entry-level, middle, and upper-level categories. The programdeveloped with input from over 50 businesses and community input. The state permittingresponse is geared to the level of EMS development and environmental performance.

Oregon's program is ISO plus. At the highest level, it requires compliance, stakeholderinvolvement, and EMS implementation. Oregon DEQ will act as a mediator between businessand public at the highest level to address public concerns. Oregon also has a Natural StepNetwork that involves 70 companies. Design for the environment, the Natural Step,sustainability, and life cycle analysis are the kinds of frameworks Oregon would expect fromsuperior performers within our framework.

Superior performers will be allowed to demonstrate effectiveness by being in the higherpercentage of their industry in pollution categories, along with absolute reduction goals. TheState will provide incentives such as technical assistance in working with EMS committees,

streamlined reporting and monitoring. The final form these incentives will take are underdiscussion. Customized incentives will be developed for participating companies. Currentlythere are four pilot facilities selected including two semi-conductor companies, one electronicsmanufacturer and a wood products company. Oregon is also considering including one newplant and two companies that have good environmental reputations, and one company that hadenvironmental violations in another state but is trying to improve its performance and its image.DEQ has established three "Green Teams" in the field to work with selected companies. APOTW has been invited to join in the project. DEQ is currently in the process of developing thelegal framework and formal agreement that will govern relationships with pilot sites.

Lynda Wiese, MSWG, Director, Bureau of Cooperative Environmental Assistance,Wisconsin Department of Natural Resources.

As a background, Wisconsin Department of Natural Resources (WDNR) began working with agroup of academic, industry, government and environmental group representatives on theirreactions to ISO 14000. Out of this came several themes:

• Government should not create barriers to companies developing ISO 14001 EMSs.

• Government is not able to "offer" enough incentives under the current system to make itworthwhile for a company to develop an ISO 14001 EMS if they are not doing it foranother reason. ISO 14000 should not be used for "back sliding" on currentenvironmental regulations

WDNR Secretary George Meyer's position is an interest in seeing how the market system canimprove environmental performance.

WDNR currently has eight companies and one association that have agreed to collect data tosupport the national ISO database. The types of companies include:

• Metropolitan Sewage District• Steel Mini Mill• Foundry• Small Business Tied to Auto• Medical Equipment Manufacturer• Generator Manufacturer• Electroplater• Electric Utility• Wisconsin Potato and Vegetable Growers

We have a kick-off meeting for the data collection set for May 26, 1998. The type of projectsinclude: six companies are in the ISO pilot only where state and companies gather data with noincentives being offered, two companies have indicated an interest in Wisconsin's CooperativeAgreement program which builds whole facility regulation off an EMS. One association is usingISO 14001 on unregulated aspects and impacts. The data from all these projects will funnel into

the national database.

What assistance does Wisconsin give companies? WDNR will assign a "point person" to eachcompany in the pilot project to:

• assist in data collection and reporting on the UNC Data Protocol• assist in stakeholder involvement if needed• publicize the program• help companies determine aspects and impacts and significance• retrieve data WDNR has in our files on a company

The Wisconsin Department of Commerce will assist companies that certify their ISO 14001EMSs with worker training funds from the Customized Labor Training Grant Fund to meet therequirements of Sec. 4.4.2 of the standard. This program is being developed and moreinformation can be obtained from Cliff Fleener of the Wisconsin Department of Commerce.

In regards to the Cooperative Environmental Agreement Pilot Program, some companies havechosen to enter this pilot program where they will get regulatory innovation and enforcementdiscretion for "detect and correct" violations in exchange for superior environmentalperformance, enhanced stakeholder involvement and whole-facility regulation. This programwill run ten pilot projects over the next four years. The first applications are due to the WDNRon June 1, 1998.

Jennifer Smith, MSWG, California EPA

Cal EPA is planning for about ten pilot projects. The Department has established a team madeup of air, water, and solid/hazardous waste staff to work with projects. We are looking to createregulatory efficiencies with four major functions including audits and inspections; monitoringand reporting; permitting; and enforcement policy. Formal interest has been expressed by:Anheuser Busch; the Central Marin Sanitation Agency; the City of San Diego, MetropolitanWastewater Division; and Lawrence Berkeley Lab, Hazardous Waste Division. Cal EPA is alsodiscussing a project with Quantum Corporation that will focus on supply chain developmentEMS, and a project with the Metal Finishers Association of Southern California. This is a jointproject with USEPA using an EMS template for metal finishers. Finally, Cal EPA anticipatesparticipation by Flex Products, Inc., IBM, and Lockheed Martin Skunkworks. They will create astatewide stakeholder group for the project including state and local regulators, industries, andNGOs as well as focussed project specific working groups.

Peter Wise, MSWG, Illinois EPA

Illinois EPA enters the national pilot effort as it celebrates its 25th year anniversary. IllinoisEPA is responding to a dramatic shift in federal/state relationships and oversight with anemphasis on “beyond compliance” and “compliance assistance programs.” It also is focusing onpollution prevention strategies that include the integration of pollution prevention into mediabureaus, improvement of delivery systems, and development of environmental leadership

programs to encourage companies to go beyond compliance.

“Beyond Compliance” legislation has the following principal features:

• Amends the Environmental Protection Act to allow a voluntary pilot program enabling theagency and companies to enter into environmental management system agreements.

• Provides a five-year period during which the Agency may enter into these agreements withcompanies that have developed worthy proposals for regulatory innovation.

• Provides for public notice and opportunities for hearings regarding these agreements.• Allows the executed agreements to become the controlling regulatory mechanism and replace

typical permits and related regulatory provisions.• Provides for innovative performance guarantees.• Retains appropriate criminal sanctions in event of unexpected serious violations.

“Beyond Compliance” legislation is expected to accomplish the following:

• Produce 15 to 25 regulatory innovation projects over the next five years.• Enable all interested parties to help design the next-generation regulatory system for

environmental protection in Illinois.• Allow participants to benefit from enhanced regulatory flexibility while achieving cost

savings compared to current regulatory practices.• Ensures continued environmental progress for participating companies.

In a separate initiative, the Illinois ISO 14001 effort will focus on auto industries and theirsuppliers including American NTN Bearing Manufacturing Corporation, Bridgestone/Firestone,The Dexter Corporation, Motorola, Navistar International Transportation, S & C Electric, andZexel USA. The separate involvement of Chrysler and Caterpillar Corporations are currentlyunder discussion. IL EPA will offer participating companies technical assistance for pollutionprevention programs, and stakeholder involvement efforts. Participating companies will haveaccess to the nationwide database, benefit from Illinois research on ISO 14001, participate intraining on the guidance, and may qualify for regulatory flexibility at some future point.

Participating companies will collect and submit data to the national study within the agreed upontime frames. IL EPA will provide some assistance to companies in data collection.

Question and Answers

Q) Do you screen participants?

A) Oregon - Yes, we also limit the number and follow EPA requirements and review within statecompliance requirements; cooperation was important, but we did not expect a squeaky cleanrecord.Wisconsin - We were not looking at compliance history per se, since we are not offeringparticular incentives or feasibility.California - We are screening for compliance issues.

Illinois - Compliance is not an issue for the pilot, but it is for regulatory flexibility.

Q) How much interest is there in companies in regulatory streamlining as an incentive?

A) Wisconsin - Not that much. Companies seem to be more interested in a positive workingrelationship with the state and recognition. Companies seem to have particular interests that arerelevant to them.Oregon - Some companies have had trouble identifying incentives that would interest them.Illinois - The more sophisticated companies, particularly those who change products frequently,often want fast turn-around permitting.

Q) What has the external stakeholder involvement process involved so far?

A) Illinois - In the regulatory flexibility program, stakeholder involvement is required, but not inpilots. IL EPA is working with Wisconsin to develop training for NGOs on how to get involvedin projects.California - We’re bringing in local organizations in overall governance of the project.Oregon - NGOs are concerned about environmental performance and access to data, butvolunteers need training in understanding the data.Wisconsin - We are trying to find ways to make the process more accessible to those who are notso well connected.

EPA PERSPECTIVE

Jim Horne - USEPA, Office of Water, EPA representative to the US Working Group forISO 14001

A five-year review is part of the ISO process. The 1996 standard review begins in the fall of1998. The US TAG will develop a set of activities for discussing ISO US experience in 1999and turn to international discussions for three years. EPA has formed an internal work group toclarify its position. EPA will consult with NGOs (e.g., Community Nutrition Institute), industrygroups, states, and will discuss the relationship of standards to such issues as: compliance,external communication, and improved performance. However, the revision of ISO 14001 is 3to 4 years away and should not affect existing pilot projects.

Mary McKiel - Office of Pollution Prevention and Toxics, USEPA, Co-chair of US TAG

USEPA supports ISO 14001, especially those EMSs that go beyond compliance, focus onpollution prevention, include stakeholders, and encourage transparency, but is not basing anyincentives or regulatory flexibility on 14001. EPA is in an evaluation mode and need statisticaldata based on pilot projects to inform any subsequent policy decisions. The current focus in theresearch is on environmental performance, compliance, pollution prevention, environmentalconditions, and costs/benefits to implementing facilities. These factors and maybe others mustbe studied before making any changes to existing policy.

QUESTIONS AND ANSWERS

Q) What are the EPA pilots?

A)• EPA has funded MSWG in part and its data gathering efforts• EPA Water also provides training and TA to municipal water authorities, cities and counties• EPA project XL with innovative technologies• Environmental leadership program

Q) Since states are picking the best performing firms, how will that affect the ability of thedata to be generalized?

A) We don't know for sure, but Massachusetts is including at least one company that isparticipating as part of a consent decree.

NGO PERSPECTIVE

Jason Morrison, Pacific Institute, Oakland, CA

We are moving from a narrow focused command and control to trust/multi-media approaches toenvironmental protection. NGOs traditionally have had adversarial relationships with bothindustry and government over environmental regulations. The ISO movement presents achallenge/opportunity to all three sectors in terms of rethinking more constructive roles forpublic interest groups. The beyond compliance/continual improvement aspects of ISO 14000intrigue NGOs. ISO also addresses important unregulated aspects such as resource use and solidwaste disposal. Certification has potential to allow the market to recognize, reward, and provideincentives for good actors.

Mostly NGOs are concerned about improvements in environmental performance. They are notnecessarily concerned with how those results are achieved. They are amenable to innovativesolutions. The pilots represent an opportunity for NGOs to learn about what companies have todo to improve environmental performance and can make them more informed educators of thepublic at large.

Jerry Speir, Tulane Institute for Environmental Law and Policy, Tulane University, NewOrleans, LA

Many NGOs are not so sure ISO 14000 is a good thing. The NGO community is not monolithic.There are large organizations with headquarters in Washington, DC, but also organizations withsmall paid staff at the state level and many volunteers at the local level. NGO distrust ofgovernment and business comes from many negative local experiences.

In Louisiana, for example, there are many polluting industries in close proximity to where peoplelive. These people look to government to protect them from these industries. Yet at thelegislative and executive levels of government, we see industry lobbyists trying to dismantlebasic protections. We see revolving doors in which regulators go into industry and back again.This makes NGOs question the government's neutrality and objectivity. Furthermore, there is ahistory of NGOs being invited to a meeting and then having government and industry say theirpresence represented an endorsement of a pre-crafted deal to which NGOs were not a party in thenegotiations. Many such experiences have left a residue of distrust.

Solutions to the problem of mistrust of ISO 14001 may involve:

• making more information easily available on environmental results (e.g., putting publicinformation on the web);

• EMSs should be made publicly available, not held confidential (this could be a problem withthe pilot projects if they hold their specific EMSs confidential in a database);

• improving accounting formulas so that investments in the environment do not have tocompete with other investments on a strictly return-on-investment basis.

Nancy Evans Stuckwisch, TECHNE Environmental Consulting. Working with CNI andECOLOGICA on ISO Project 14000

Our efforts are focused on helping NGOs participate in ISO 14000. This includes internationaltechnical committee work and the US TAG, but also includes labeling, auditing, performanceevaluation, life cycle assessment, sustainable forestry initiative, which are all parts of the ISOprocess. These are activities in which NGOs should be involved, but NGOs are spread very thin.But there is a vast network of NGOs to be involved including national-level groups with statechapters, state-level groups, and local-level groups.

The Networking NGO Working Group on MSWG is trying to inform NGOs about the ISOprocess and their opportunities for involvement, link organizations with their primary interest inISO, help them report to each other and share information, monitor implementation and inputinto development review and revision process. There are about 12 active organizations involved;others are in an observer status. See our website (www.ecologica.org/ISO14000).

QUESTIONS AND ANSWERS

Q) There are many barriers to getting NGOs involved. How should states involve them intheir pilots?

A) Speir - Identify the individuals who are the leaders of various environmental organizationsand be persistent in efforts to provide them with information. Link them with MSWG/NGOrepresentatives so we can talk to them about the importance of their being involved.

Q) What's in it for industry and the state to get NGOs involved?

A) Stuckwisch - Participation of NGOs can build trust and help bring about an honest evaluationof ISO 14000 without it being rejected out of hand by NGOs and the broad segment of the publicthat they represent. NGOs can add to the credibility, integrity, and effectiveness of a company'sEMS.

Q) What can industry do to build trust? Often bean counting does not give a true picture.

A) Morrison - The answer may lie in more dialogue about what the numbers mean, and what cangive a true picture.

We are soon going to have the science we need to better understand environmental significance,so perhaps that science that will give us a better basis for describing firm’s true environmentalimpact.

INDUSTRY PERSPECTIVE

John A Harris, Ashland Chemical Co.; Chair, Chemical Manufacturers Association, EMSTask Group

There are a number of important issues associated with the Multi-State Working Group initiativeincluding:

• Can management systems effectively identify outstanding environmental issues and providea process for their management?

• Can the public gain a more effective understanding of environmental issues and the optionsfor their management?

• Can the use of management systems assist in depolarizing the parties involved inenvironmental protection?

• The need to evaluate where existing regulatory requirements impede effective environmentalprotection.

The Chemical Manufacturers Association perspective on the Multi-State Working GroupInitiative is related to its long-time commitment to environmental management under theframework of “Responsible Care.” The Responsible Care Framework draws upon theexperience with the Canadian Chemical Industry Association. The CMA, in the late 80's,undertook an initiative to establish minimum standards of EH&S performance for membercompanies including Codes of Practice for Pollution Prevention, Employee Health & Safety,Process Safety, Product Stewardship, Community Awareness and Emergency Response (CAER),and Distribution. After 10 years in practice, Responsible Care is being evaluated as to how it canfurther its objectives. The CMA Board of Directors, establishing working groups on policy,process, and performance, has initiated this effort, called “Beyond Practice in Place.” An EMSTask Group is analyzing ISO 14001 to determine how it can supplement Responsible Care.

An example of how industry and government have worked together in the use of environmentalmanagement systems can be referenced to the Netherlands, through their implementation ofEnvironmental Management Plans. These Plans use EMSs as a basis for developing multimediapermits. An environmental impact analysis is conducted for identifying major outstandingenvironmental issues and a four-year permit with specified milestones is issued with annualreports to government and the public. These programs resolve site-specific issues for realenvironmental improvement.

It is clear that MSWG has common objectives and principles with CMA including:

• to improve EH&S performance;• to define new approaches for performance measurement;• to explore new approaches for stakeholder involvement;• a joint recognition of the importance of evaluating innovative ways for improving the

regulatory process;• the recognition that states have been the traditional forum for new environmental

processes and initiatives; and• the recognition that both government and business have limited resources which we

must allocate in achieving environmental protection.

CMA will work to assess the compatibility and equivalence of Responsible Care to ISO 14001.Responsible Care has some things to recommend to ISO 14001, notably the combining ofenvironment, health and safety standards, the emphasis on results, and the potential for moreflexible permitting as in the Netherlands, combined with greater public access to environmentalperformance information.

QUESTIONS AND ANSWERS

Comment from the floor - Organizations are not monolithic. For example, environmentalmanagers in industry must be pro-environment, but lobbyists are fighting to dismantle neededprotections.

Harris - The market will help achieve a convergence. Customer/supplier extensions will leadpeople to more EMS-based instead of compliance approaches.

Comment from the floor - Many people are very suspicious of EMSs, but we need to generatevalid information from the pilots and we need to reassure people in our own organizations thatwe are not abandoning regulation.