Take a break and watch this short video of forklift mishaps. The music makes it sounds as if these accidents are supposed to be funny, but we all know how tragic they could have been.

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Does it feel like your corporate world is on “pause,” waiting for something beyond your control to be resolved? Many companies seem to be waiting for something, unwilling to expand or contract, go forward or backward.  Which raises the question — how do you lead your EHS/Sustainability (EHS/S) program if you don’t really know what the company is doing or going to look like?

Strategic Limbo

The macro-economic factors are wreaking havoc on business strategy.  If you sit in the C-suite and look at the macro dashboard, all the lights are amber.  Maybe even a few flashing red now and then.  Certainly no solid green lights.

The United States? The recovery is shaky. Consumers are hesitant and businesses even more so with public policy spanning the range from doing nothing to doing something embarrassing and frustrating.  China? Concerns with new leadership, inflation, and slowing growth. Even worse, when China hiccups, every mining economy from Australia to Argentina has angina.  Europe?  The only question here is how many more crises-du-jour will it take to turn the amber light red. Brazil?  Hesitation.  India?  Not so fast.  The “next 11” never quite caught on like the BRICs, and many seem to be caught in geopolitical disputes and uncertainties.  Economically, the daily range seems to run from no news to bad news with little cause for optimism.

So what are companies doing in this strategic limbo? Simple: they’re trying to keep flexibility up and costs down.  They’re not stopping all investment, because after all, those dashboards are amber, not red.  Businesses still need to grow.  There are still opportunities, and companies need to be ready.  A huge amount of equity remains in the global marketplace.  That money is looking for investments that will provide attractive returns, whether flowing through record-setting stock exchange levels or through the private equity markets.  The odds are your company is going to grow (or be bought) — you just don’t know what, where, how, and when.  Other than that, it’s all clear.

In some companies the limbo is masked by success.  As Yves Doz and Mikko Kosonen wrote in their 2008 book Fast Strategy:

Companies naturally become victims of their own success: as they grow and become successful they lose some of their adaptive capacity.  The search for efficiency drives flexibility out.  Success dulls strategic sensitivity.  The legitimate short-term challenges of scaling up, and of managing fast, profitable growth from quarter to quarter, reaping economies of scale in the process, lead to a narrow focus on core growth businesses, a mix of tunnel vision and strategic myopia. [page 6]

In these companies, there’s a high “limbo denial” factor.  On the surface, people want to keep everyone focused and hope that the limbo passes.  Underneath, the cost cutting continues, and it’s considered disloyal to talk about rethinking or just refreshing the strategy.

Breaking out of Limbo

So how do you manage your EHS/S strategy at a time like this?  Do you base your actions solely on those amber signals:  be ready to stop, cut costs, and don’t rock the boat?  (And hope that you don’t look like a tempting cost to cut?)  Do you hold your breath, figuring that this can’t last too long and then everything will be clear?

Or do you use this as an opportunity to take a deep breath and prepare for the future — including a future in which limbo may be a very common state?

EHS/S leaders are realizing that this is an opportunity — maybe the first one since the recession — to take stock and prepare for the future while taking care of the present.  They are using this “pause” as an opportunity to refresh their programs and teams.  They’re calibrating this carefully, not making too big a deal of it.  But without drawing too much attention to themselves, they are quietly following a process that cleans up the recent past and prepares for possible futures.

This “refreshing” has five steps:

• Regroup from your transactions.  Look backward: catch up with the changes that came at you too quickly. Coming out of the recession, an extraordinary number of companies bought, sold, spun off, merged, etc.  Few took the time to regroup on the EHS/S side — to really look at the best practices and best people from each side and determine how a dramatic change in scale, geographic focus or core business could transform the EHS/S landscape. This is the time for EHS/S leaders to set common expectations, standardize programs, and integrate teams.(Note: regrouping is NOT a euphemism for reorganizing, although that may be one outcome.  It has a lot more to do with rethinking what you do and who does what, rather than which box goes where on the org chart!)

• Rethink your scenarios. Look forward: think about what’s coming. None of us have guaranteed insight into the future, but we can all build scenarios of alternative possible futures and see how we might prepare for those.  Some of the best strategies have come from looking at alternative scenarios and realizing that one or two are substantially “less unlikely” than the others and are worth preparing for.  In this market, post-recession but without a robust recovery, many people find that the possible, unlikely, and less unlikely scenarios look different than they did five or even three years ago.What scenarios are you really preparing for?  After years of assuming that all growth is in Asia and Latin America, are you prepared for a world where growth may be in the United States and Africa? Do you have a scenario for “reshoring” or “inshoring” and for developing the EHS/S skills and capacity that you may need back home or in challenging new geographies, for example? This is the chance for EHS/S leaders to develop two or three specific scenarios for internal planning.  It’s the time to develop Plans A, B and C: what would you do if your boss came in right now and said, “Give me your plan if we grow 15%”; or “Give me your plan to cut 10%”; or “How would you fit in three new programs without adding costs?”

• Refine your growth support.  Look to the bottom line: think about how you help the company make money. Regardless of past transactions or future uncertainties, one thing is certain: your company will have to generate more revenue.  To do that, your company will have to launch new products or services, get existing products and services into new markets, or invest capital to create new capacity. These actions all face growing risks that can increase costs, reduce revenue, or just take more time.This is painfully evident in the sectors that are still making major capital investments during this strategic pause. Capital discipline is replacing capital recklessness, and investments are being made with greater caution.  To get needed return on capital, companies must make smarter decisions that consider a wider range of risks. Getting permits reactively is no longer good enough for your business.  Your company needs to understand “license to operate” requirements (includingpermits) well in advance and prepare for them.Helping your company understand and manage these risks to revenue growth probably wasn’t the basis for building your EHS/S program.  It may be time to consider how your program helps your company make smarter investment decisions and get better returns on its investments. EHS/S leaders should review and update their programs for product stewardship and major capital support to ensure they are sufficient to meet their company’s current and future needs.

• Retool your processes. Look inside your program: in light of the past transactions, future scenarios, and bottom-line impacts, what does your program need to do? Does your assurance program drive performance or just document conformance?  Does it tell you whether people are complying with legal requirements and corporate commitments, or does it just tell you that they are taking required compliance steps (checking boxes and completing forms)?  Does your data management system actually provide the information that you need in the form you require?  None of these are strategic or exciting, but they do provide the foundation for all of your future activities. EHS/S leaders should seek to improve the effectiveness of their audit programs and management systems.  They should also update information management systems to meet current and future needs. Take a hard look at the EHS/S culture of your company and the supporting management systems and tools; streamline, prune, standardize, and improve these systems where possible.

• Retool your team. Look at your people: all of these actions may give you new insight into what your group needs to do and, therefore, what you need out of your team.  You may have a new sense of purpose — but with that in mind, is your team still fit-for-purpose?  Limbo makes this even more of an issue.  Some of us have tried not to disrupt our teams in the post-recession limbo; you didn’t know if you could replace people or would just lose jobs, and you hated to put people on the street without knowing if that’s the right thing to do.  Others have had few options — we lead teams we inherited, not teams we created.  With all the uncertainties of limbo, it hardly seemed worth the effort to rock the boat.  But at this point, does your current team and its limitations just lock you into limbo more by limiting your options?  Now is the time to begin the lengthy process of retooling your team: review and change assignments, change processes, change people if there are no alternatives, enhance skills or collaboration.  Act now to create a team that is better able to support your function and company.

And that’s the bottom line.  As an EHS/Sustainability leader, you can’t end the limbo.  But you can help your company, your function, and yourself by facing the realities of strategic limbo and using it as an opportunity to refresh your program, refresh your career, and prepare for the future.

About the Author

Scott Nadler is a Partner in the Chicago, U.S.A. office of Environmental Resources Management (ERM). He helps companies integrate environmental and sustainability issues with business strategy. Mr. Nadler speaks on a number of EHS, sustainability, and strategy topics, and his writing has appeared in The Wall Street Journal, Sloan Management, and Safety and Health Practitioner, as well as in the EHS Journal and The Palladium Group Executing Strategy sites online.  He teaches at Northwestern University in the undergraduate program in Environmental Policy and Culture, and currently serves on the Executive Committee of the U.S. Business Council for Sustainable Development.

Other Articles by Scott Nadler in the EHS Journal

• VP EHS: Endangered Species or Emerging Hybrid?
• Geographic Mismatch: Coping with Dislocation in the Global Economy
• Agility: The New Core Competency for EHS and Sustainability
• Managing Product Risks and Opportunities (with Salvatore Giolando)

Photograph: Chess 2 by Patrick Hajzler, Seine et Marne, France.

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[Opinions in this article are solely those of Scott Nadler and do not necessarily represent views of ERM, its partners or clients.]

The prospect of your facility undergoing a compliance audit is unlikely to evoke excited anticipation. There are certain things we do – such as going to the dentist or conducting compliance audits – because they benefit us in the long term. Despite often being viewed with dread, an audit is a valuable tool in a compliance management toolbox. An impartial evaluation of compliance programs is critical for a company to ensure it is meeting regulatory requirements. Perhaps more importantly, an effective audit will determine potential underlying, or root causes, for deficiencies, which is a necessary step to prevent reoccurrence of issues.

Therefore, once the decision has been made to conduct an audit, proper planning, preparation, and execution are essential to maximizing its benefits. While this article focuses on environmental compliance audits, the concepts discussed also apply to health and safety, management system, or other audits. In addition, the suggestions outlined are in the context of voluntary, internal audits and may not apply to audits conducted by regulatory agencies. The different goals and potential consequences of a regulatory agency audit may alter the approach and response of the entity being audited.

Defining the Scope

Planning and preparation are integral to conducting an effective audit. Time spent up front in these efforts can result in a more comprehensive audit and yield more meaningful results.

Regulatory Scope

The first place to start is to define the regulatory scope. Will you conduct a multi-media environmental compliance audit, or will you focus on a particular program? The answer will likely depend on what your motivation is for conducting the audit. Are you attempting to identify compliance obligations and establish a baseline, or do you suspect you have a problem program that needs attention? Whatever the answer, define the programs (e.g., solid and hazardous waste, pesticides, or air) and the related regulatory citations. This will eliminate any confusion over terminology or vague references and will help maintain focus toward the audit objective.

While most environmental compliance audit scopes will focus on U.S. Environmental Protection Agency and state environmental agency regulations, you may want to consider including related program areas that can be overlooked. For example, U.S. Department of Transportation hazardous materials regulations or U.S. Drug Enforcement Administration controlled substance regulations can align closely with environmental requirements at some facilities, so including them in the audit may be beneficial.

Physical Facilities

Once the regulatory scope of the audit is established, the physical scope of operations and facilities must be defined. If your company has multiple locations, should they all be audited? If you have not previously performed audits or several years have passed, consider auditing more than one location to identify potential systemic issues and avoid audit reports for multiple facilities that largely read the same. Then, initiate a full audit program once you have implemented any necessary programs across the company. Alternatively, if you are unsure of where to begin to understand your facilities’ compliance requirements, individual comprehensive evaluations may be more helpful.

Another potential consideration is whether to include all departments or business divisions in the audit. Large corporations or universities sometimes have distinct internal divisions with relatively independent management systems. It also is important to consider contracted operations, such as custodial, grounds-keeping, or food service, that may take place on site. It is becoming increasingly common for facilities to contract routine operations that have environmental compliance implications for which the facility remains responsible.

Extent of Review

With the regulatory scope of the audit established and the facilities to be included in the audit identified, a final scoping consideration is to determine the extent of locations and records to be reviewed. This will largely depend on the audit goals and the size and scope of the subject operations. For example, if this is the first audit of a newly acquired facility, you will likely want to conduct a thorough audit of the entire facility to identify all regulated activities and the associated level of compliance. If the facility has numerous similar operations, it may not be necessary to evaluate every space. While an auditor should inspect all unique operations, representative sampling may be appropriate for other areas. For instance, a large university may have 30 biochemistry research labs. An auditor should be able to effectively evaluate hazardous waste management practices and program implementation by inspecting 25 to 30 percent of labs with similar operations. While inspecting all of the labs may provide more examples of non-compliance, it is less likely to identify additional issues.

In addition, it may be appropriate to apply a similar representative sampling strategy for records review. A location with 50 aboveground storage tanks, each undergoing monthly inspections, the records of which must be maintained for three years, generates 1,800 inspection forms. It is probably not the best use of an auditor’s time to review all 1,800 tank inspection records. In these situations, applying a representative sampling strategy (e.g., random, block, or systematic) can be useful. When doing so, however, it is important to understand the facility’s system for conducting inspections. If different personnel or departments are responsible for conducting and documenting the inspections, it is important to review some records from each entity to identify potential procedural and program implementation differences.

It is well-known that good communication is integral to the success of any program requiring coordination, input, or involvement of multiple people. Audits are no exception. Beginning with planning and continuing through implementation and reporting results, effective communication can dramatically improve the value and usefulness of audit results.

As “inspections” can unnerve employees, inform staff in advance that an audit will take place and explain the purpose and goals of the audit. Employees will be more likely to buy into the process if they understand it and feel a part of it. It may be helpful to frame the audit as an evaluation of how well environmental programs are being implemented, as opposed to a search for non-compliance. This may allow staff to feel less threatened, increasing the level of cooperation and candor with the auditor. In addition, let staff know what is expected of them. Do they need to prepare in advance, gather documents, or be available at a certain time? Let them know that an auditor may inspect their work area or interview them.

Finally, provide feedback to staff on the audit results. Of course, any areas with non-compliant situations will need to be notified so the issues can be addressed, but let everyone know how the facility faired. Even if you cannot share details, provide a high level summary of what the facility is doing well, as well as the opportunities for improvement.

At the completion of the audit process, a report will be generated that outlines findings and opportunities for improvement. While everyone wants to receive a good report card, some of the actions that you may be tempted to take prior to or during an audit to limit the number of issues identified can be counterproductive to audit goals. While the ostensible goal of an audit is to identify instances of non-compliance, the more meaningful goal should be to discover the causes of non-compliance. An improper label on a container can easily be corrected, but if the lack of training that caused it is not identified, the issue is likely to occur again. An ineffective audit that fails to identify issues is simply a lost opportunity to improve programs.

Further, it is important to note that the discovery of non-compliance during an audit does not necessarily mean that someone is not doing their job. Non-compliance may be indicative of insufficient resources, staffing, equipment, training, or other site-specific factors. An audit can be an effective means of highlighting these needs.

With the goal of maximizing the benefits achieved through an audit, following are five actions to avoid:

1. Don’t set unrealistic expectations for management. While we certainly want to strive for total compliance, it is unlikely that an environmental compliance audit will result in no findings. A manager expecting a clean report may not react well to one with even a few findings.
2. Don’t “clean house” prior to the audit. For example, an auditor cannot learn much about hazardous waste management practices from a storage area that contains no waste. Eliminating a routine regulated activity from the site prior to the audit eliminates the opportunity to review it.
3. Don’t conduct a pre-audit in advance of the scheduled audit and “fix” the issues identified. Allow the issues to come to light during the audit so the root causes can be ascertained and necessary resources obtained to implement sustainable corrective actions.
4. Don’t avoid known problem areas and steer the auditor to solely compliant areas. To accurately assess the compliance status of a program, an auditor must see the bad along with the good.
5. Don’t fail to prepare. A little preparation will allow you to make the most of an auditor’s time on site. As discussed above, share details of the audit program with employees so they know what to expect. Gather and organize records for review, set a tentative schedule, and ensure the auditor will have access to all necessary locations.

Conducting an audit in this very open and comprehensive manner may result in a report identifying more instances of non-compliance than desired. However, by initially identifying and addressing as many issues as possible, succeeding audits should yield significantly fewer findings. More importantly, you will feel more confident in the compliance status of your environmental programs.

Rebecca A. Corbin, CHMM, CPEA is a project manager in the environmental, health, & safety (EHS) compliance group at O’Brien & Gere. She has an extensive background leading and conducting multi-media environmental, health and safety compliance audits for a variety of clients, including industrial facilities, municipalities, higher education institutions, and hospitals. She has participated in more than 90 audits with responsibility for auditing compliance with numerous federal, state, and local laws and regulations.

Photograph: Clematis by Claudia Meyer, Paris, France.

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Welcome to the EHS Journal. This international online magazine was designed for and by environmental, health and safety professionals for the purpose of sharing knowledge and facilitating discussion within our profession. Since our launch in January 2010, we have published articles and images from more than 100 contributors in 30 countries.

We are actively seeking new articles! See the Submission Guidelines for more information and submit your articles and comments to the EHS Journal today.

Photograph:  Splash by Reggio Emilia, Emilia Romagna, Italy.

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On December 27, 2012 the EHS Journal published an article of mine entitled “Lessons Learned on International Assignments”.  The feedback has been extremely positive, especially from young professionals who anticipate the eventual need to travel internationally during their careers.  As a consequence I have racked my brain to come up with a few more experiences that have taught me different, but equally important, work and life lessons.  After a nearly 40-year career and coming up on retirement it’s rather fun to reflect on my experiences, both good and bad.  I encourage others to do the same.

1.         The Mexico Respirator

Some years ago I was working at a chemical plant in the outskirts of Mexico City.  We were auditing the plant from top to bottom.  One task was to enter a major process building and climb internal stairs to the roof.  This seemed pretty straightforward until the site staff issued us half-face respirators as we stood at the building entrance.  They told us that the respirators were required for building entry.  So each of the visitors climbed the five flights of stairs donned with a respirator.  I don’t mind telling you that I was pretty winded when we reached the roof.  It then occurred to me that I had just used personal protective equipment in an unsafe manner (e.g., no training, no fit testing, etc.).  What was I thinking?  I guess I wasn’t.

Lesson Learned:  Safety first, always!

2.         The Singapore Culture

In my travels I have been to Singapore at least a half-dozen times.  It is one of the prettiest and cleanest places I have ever been.  For those who don’t know, Singapore is a city-state located off the southern tip of the Malay Peninsula, about 90 miles north of the equator.  English is one of four official languages and is the language used in business, unusual for Asia.  I was told on one of my trips that Singapore is about the same size as Los Angeles but has more McDonalds.  It is a very westernized environment, which can be very comforting to Americans.  On one of my trips, there was some controversy over the “caning” of young men for what most would view as minor transgressions.  For example, one of the local laws prohibited spitting on the sidewalk and if one was caught this was considered a canable offense.  Now, I’m not normally a spitter but as I walked along the main sidewalks in the business district one day all I could think to myself was “don’t spit, don’t spit, please don’t spit!”

Lesson Learned: Be aware of and obey the local laws and customs.

3.         Masks in South Africa

Today’s economy is truly global.  You can find expensive Italian shoes in the local mall; you don’t have to travel to Rome.  So what type of souvenir can you bring back that is truly unique to the country you visited and can’t be found easily in the States?  Well I learned that there are at least two: Hard Rock Café tee shirts and tribal masks.  When my two sons were growing up they had enough HRC shirts to fill a closet; and indeed, because of that their mother finally put a halt to that practice.  But collecting masks proved very fulfilling.  I have some twenty masks on my office walls from pretty much everywhere.  Each one is a special memory; one in particular.  That one came from a street vendor in Johannesburg.  I was there with a local colleague and decided on a particular mask that I really liked.  My friend then began negotiations with the vendor in Swahili.  Things got pretty heated and I felt the need to step in.  I asked my friend what the issue was and he told me that the vendor wanted the South African equivalent of a dollar for the mask and, on principle, he wasn’t going above 50 cents.  I quickly gave the vendor the dollar-equivalent and we went on our way.

Lesson Learned:  Perspective is everything.

4.         Lost Luggage at Charles de Gaulle Airport

I was working in Anzio, Italy for a consumer goods company.  Anzio is a coastal city about 35 miles south of Rome and was a city of great significance to the Allies during World War II.  During the visit the team was staying in Rome and commuting daily to Anzio.  Having never been to Rome, I decided at the last minute to change my plans and stay an extra couple of days to visit the sites, and I’m glad I did, sort of.  My new plan was to return home to Philadelphia via Paris’ Charles de Gaulle Airport.  All was going smoothly until I reached the departure gate at Charles de Gaulle.  There was my plane, all set to go.  And then the agent proceeded to tell me that my revised ticket had not been properly processed and I could not board even though there were seats available.  Sadly, I sat down and watched my ride home depart.  I spent the next 12 hours in the airport and took a flight that evening not to Philadelphia but to New York’s JFK airport.  My luggage followed me home, 12 days later!

Lesson Learned: Be careful about making last minute travel adjustments when travelling internationally.

5.         Returning from Australia

I was returning to the United States via San Francisco from a two-week long trip to Australia.  The flight from Sydney to San Francisco is about 16 hours non-stop.  That’s two full work days sitting on a plane.  I can assure you that there is nothing glamorous about that even if you’re sitting in business class as I was.  As I recall, we landed early in the morning and I was prepared for the typical customs re-entry hassle.  But this time the hassle was like none other.  As I handed the customs agent my passport he screams out at the top of his lungs – “YOU’RE THE ONE WE’VE BEEN LOOKING FOR!!”  If I weren’t so exhausted from the trip I probably would have run for my life.  But thankfully I did not; I just stood there with a blank expression on my face.  The agent then simply stamped my passport and told me to move along.  To this day I’m not exactly sure what happened and why.

Lesson Learned: Keep your wits about you at all times.  You never know.

6.         Being Safe in South Korea

We were evaluating a chemical plant in South Korea.  Our preparation was flawless or so I thought.  We had all the appropriate personal protective equipment to be safe in the plant; hard hats, safety glasses, hearing protection, safety shoes, and so on.  However, there was one process area of the plant that required fire-retardant clothing, or Nomex®.  Not to worry as the site had plenty of spare uniforms for visitors.  There was one problem however.  There were no uniforms large enough for one person on the team, namely me.  As a consequence, I was not allowed to enter that portion of the plant.  So embarrassing in so many ways.

Lesson Learned: Preparation down to the very last detail is paramount.

7.         Ordering Train Tickets in Paris

I had three years of French in high school.  Mind you it was far from conversational French.  It was more about learning vocabulary and syntax.  So I figured that buying a train ticket by myself to Rouen at Paris’ Gare du Nord, the busiest railway station in Europe, would be a challenge but not impossible.  I was instructed by my French colleagues that I should go to the ticket window and say “première classe billet pour Rouen, s’il vous plaît?” or in English “first class ticket for Rouen, please?”

The agent behind the window just shrugged his shoulders, implying he had no idea what I was requesting.  I must have said the same phrase ten times with different pronunciations, with no success.  There was now a long line building up behind me, with many becoming quite impatient, though none offered to help.  Finally I wrote down the statement on a piece of paper and gave it to the agent who now immediately understood what I needed.  I was done in about a minute.  Was it really my lousy pronunciation or was I being “punk’d”?  Who knew?

Lesson Learned: Be ready to communicate your needs in more than one way.

8.         A Difference of Opinion in Thailand

Our team was conducting an evaluation of a chemical plant in Bangkok, one of my favorite cities in the world.  Part of the review was to evaluate the performance of the on-site wastewater treatment plant.  We discovered that the average daily biochemical oxygen demand (BOD) discharge concentration from the wastewater treatment plant was about 40 mg/l.  The effluent standard listed in the permit was 30 mg/l.  They were out of compliance and revising the permit was not an option.  The site manager told us that the plant is considered a model for the region and they have never been cited by the City of Bangkok.  We also discovered that other companies up and down that stretch of the river, which is basically an open sewer, are discharging without treatment and BOD effluent concentrations were as much as several hundred mg/l.  The local environmental agency had issued an environmental citizenship award to the site (a plaque was mounted in the lobby) and the agency director routinely brought other companies’ management to the site to show them “how it should be done.”  It was going to cost about $250,000 to upgrade the plant to meet the 30 mg/l limit.  As auditors we had a dilemma.  Do we report this as a finding to corporate management and recommend that the capital be spent to upgrade the facility?  The plant manager was definitely opposed to spending the money on what he believes to already be a “best in class” operation for his City.  It was not a comfortable situation but we did record the issue in the report.  Like most U.S. companies this one had a corporate policy that they would operate in compliance with all environmental regulations wherever they operate in the world.  Needless to say, the plant manager did not become my best friend.

Lesson Learned: Tell it like it is, regardless of the consequences.  You will sleep better at night.

About the Author

Lawrence B. Cahill, CPEA (Master Certification) is a Technical Director at Environmental Resources Management in Exton, Pennsylvania, U.S.A.  He has over 30 years of professional EHS experience with industry and consulting.  He is the editor and principal author of the widely used text, Environmental, Health and Safety Audits, published by Government Institutes, Inc., and now in its 9th Edition.  He has published more than 60 articles and has been quoted in numerous publications including the New York Times and the Wall Street Journal.  Mr. Cahill has worked in over 25 countries during his career.  He holds a B.S. in Mechanical Engineering from Northeastern University, an M.S. in Environmental Health Engineering from Northwestern University, and an MBA from the Wharton School of the University of Pennsylvania.

Images:Evening at Trieste by Michaela Kobyakov, Leonding, Upper Austria, Austria; Tribal Mask by J. T. Johnson, U.S.A.; Eifel Tower, Paris by Gregory Runyan, Olathe, Kansas, U.S.A.

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Welcome to the EHS Journal. This international online magazine was designed for and by environmental, health and safety professionals for the purpose of sharing knowledge and facilitating discussion within our profession. Since our launch in January 2010, we have published articles and images from more than 100 contributors in 30 countries.

We are actively seeking new articles! See the Submission Guidelines for more information and submit your articles and comments to the EHS Journal today.

Photograph: Right Touch by Asif Akbar, Mumbai, India.

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On July 11, 2010, an article was published in the EHS Journal titled “EHS Audits – Have We Lost Our Way?”  That article was followed a year later by a sequel that explored the topic more fully.  The articles elicited numerous thoughtful comments and a lot of general discussion.  The premise of the original articles was that perhaps environmental, health, and safety (EHS) audit programs have evolved, particularly in the United States, into mere checks of administrative requirements and not evaluations of risk.  As a consequence, some people are coming to believe that EHS audits are not as value-added as they could be.

In the second article, we proposed a methodology that could determine if a given EHS audit was focused on the right things.  In essence, each audit finding would be given a score ranging from one to ten based on two different factors: the potential consequences of the non-compliance and the potential overall risks posed by the finding. The scores of the individual findings would then be plotted on a two-by-two grid, much like the one presented in Figure 1.  A more detailed discussion of the methodology and examples of typical findings that might be placed in each of the quadrants can be found in the 2011 article.

In 2011 and 2012, we tested this methodology on more than a dozen audits, both in the U.S. and in other countries.  The results were quite interesting if not conclusive.  This article discusses some of the more interesting outcomes.

Creating a Theory for the Expected Outcome

We thought long and hard about what might be an ideal distribution of audit findings and came up with the “leaf” distribution shown in Figure 2.  This distribution would apply mainly to a mature audit program where sites have been through one or more audit cycles.  Described below is the rationale for the theory.  It might be an over-simplification, but our view is that simple is better.

First, we didn’t think that there should be a concentration of findings in the truly low/low category.  A large number of findings in this area (the lower left corner of Quadrant I) would imply that the audit team identified a significant number of minor, administrative deficiencies.  Although they might indeed exist at a given site, an audit report is usually not the best place to record them.  Many companies classify these as “local attention only” findings and do not include them in the audit report because they can create unnecessary “noise” when management reviews and acts upon the report findings.  For this reason, the leaf is not positioned at the low/low intersection but moved up and to the right.

Second, as one moves up both axes we would expect to see a fanning out of the distribution in both directions.  This would indicate the auditors are focusing on both regulatory compliance and relative risks.

Third, the distribution would hopefully taper off in Quadrant IV (particularly for more mature audit programs) because it is unlikely that there would be many high risk, high compliance consequence findings.  At least, one would hope not.

Using the Excel® “Bubble Chart” Application

We found that simply plotting the points on a simple scattergram might obscure the fact that there were numerous findings with the same score.  A better solution was to use the “bubble chart” application found in Excel®, which better shows the findings distribution.

The following guidance applies to data portrayed on a bubble chart:

• Each audit finding has been given a compliance score of 1 to 10 and a risk score of 1 to 10.
• The size of the bubble represents the number of findings with that particular score (e.g., 4,3).  The larger the bubble, the greater the number of findings.
• The white star represents the average score for all the findings.
• The varying colors are only for visual effect.
• Scores ranging from 1 to 5 are considered to be in the lower quadrant; those ranging from 6 to 10 are considered to be in the higher quadrant.

Four case studies are presented below.

Case 1: A Safety and Health Audit in the U.S.

This audit of a major chemical manufacturing facility had 49 findings (Figure 3).

The largest circle represents 6 findings with the same score and the smallest circles represent 1 finding with the same score.  The average score was 4.2 for risk and 3.2 for compliance with 14% of the findings in the low/low classification (1,1 to 2,2).

The resultant distribution is much like the leaf model.  There are not too many low/low findings (14%) and the team appears to have focused on both regulatory compliance as well as risk, with the average risk score slightly higher than the average compliance score.

All in all, an audit well done.

Case 2: A DOT Audit in Asia

This audit of a distribution center in Asia had 10 findings (Figure 4).

The largest circle represents 3 findings with the same score, and the smallest circles represent 1 finding with the same score.  The average score was 3.8 for risk and 1.4 for compliance with 20% of the findings in the low/low classification (1,1 to 2,2).

There was only one finding with a compliance score above two, and 20% of the ten findings were in the low/low classification.  It was not that surprising that there was only one finding in an upper quadrant given that it was a distribution center, but the lack of compliance findings was a bit surprising.  The feedback given by the audit team was that there are very few if any distribution or transportation regulations in the country although this could not be confirmed.  At least the analysis made us ask the question.

Case 3: An EH&S Audit in Europe

This audit of a major agricultural operation had 49 findings (Figure 5).

The largest circles represent 9 findings with the same score and the smallest circles represent 1 finding with the same score.  The average score was 3.1 for risk and 1.4 for compliance with 31% of the findings in the low/low classification (1,1 to 2,2).

These audit results were very interesting.  Note the very low average score for compliance (1.4) and the fact that 31% of the findings were in the low/low classification.  It turned out that the audit team members could neither speak nor read the local language and did not research the country’s EHS regulations before the audit. Therefore, they focused on company standards and good management practices.  The chart results made that approach pretty obvious. As a result, an action plan was put together for future audits to assure that audit teams had at least one team member who was fluent in the local language. The action plan also required that research on applicable local regulations (e.g., purchase of a country-specific audit protocol) be conducted in advance of each audit.

Case 4: An EH&S Audit in the U.S.

This audit of a seasonal manufacturing facility had 16 findings (Figure 6).

The largest circles represent 2 findings with the same score and the smallest circles represent 1 finding with the same score.  The average score was 3.0 for risk and 2.2 for compliance with 38% of the findings in the low/low classification (1,1 to 2,2).

This audit resulted in a low compliance score (2.2.) and 38% of the findings in the low/low classification (1,1 to 2,2).  Here, it turned out that the processing area was not operating at the time of the audit; the plant was essentially shut down.  Thus, the vast majority of findings were in Quadrant I.  Historically, in this company, seasonal operations were mostly audited in the off-season; the rationale being that “we’re just too busy to handle an EHS audit during our busy season.”  That begs the question, of course, wouldn’t you want to audit the site when activity is at its peak?  In this case, the corrective action included modifying the audit schedule so that these types of operations were not always audited at the same time of year in each audit cycle.

Conclusion

Using a methodology similar to the one described in this article can help to improve the value of an EHS audit program.  For the cases discussed in this article, the analysis got to the root of some very important questions:

Are we too heavily focused on minor administrative requirements?

• Do our auditors have the compliance tools and language skills to conduct audits in a variety of different countries?
• Are we visiting the sites at the best time of year to assure operations are active?

There are numerous other audit program issues that a findings risk analysis can uncover.  Take a good, long, hard look at your audit program.  Are you getting both what you want and what you need?

Related Articles by Lawrence Cahill and Robert Costello

• Classic Auditor Failures (Cahill and Costello)
• Repeat Versus Recurring Findings in EHS Audits (Cahill and Costello)
• Lessons Learned on International Assignments  (Cahill)
• Environmental Audits Versus Health and Safety Audits (Cahill and Costello)
• Using Risk Factors to Determine EHS Audit Frequency (Cahill)
• Measuring the Success of an EHS Audit Program (Cahill)
• Statistically Representative Sampling on EH&S Audits: Expectations Established by Third Parties (Cahill)
• Outsourcing EHS Audits: Does it Make Sense? (Cahill)
• EHS Audits – Have We Lost Our Way? (Cahill)
• EHS Audits – Have We Lost Our Way? A Sequel (Cahill and Costello)

About the Authors

Lawrence B. Cahill, CPEA (Master Certification) is a Technical Director at Environmental Resources Management in Exton, Pennsylvania, U.S.A.  He has over 30 years of professional EHS experience with industry and consulting.  He is the editor and principal author of the widely used text, Environmental, Health and Safety Audits, published by Government Institutes, Inc., and now in its 9^th Edition.  He has published over 60 articles and has been quoted in numerous publications including the New York Times and the Wall Street Journal.  Mr. Cahill has worked in over 25 countries during his career.  He holds a B.S. in Mechanical Engineering fromNortheasternUniversity, an M.S. in Environmental Health Engineering fromNorthwesternUniversity, and an MBA from theWhartonSchool of theUniversity ofPennsylvania.

Robert J. Costello, PE, Esq., CPEA is a Partner with Environmental Resources Management in Exton, Pennsylvania, U.S.A.  He has over 17 years of professional environmental resource management and consulting experience.  Mr. Costello manages global regulatory compliance, management system, and sustainability assurance programs and participates personally on-site in typically 30+ audits and assessments per year.  He holds a B.S. in Environmental Engineering fromWilkesUniversity, an M.S. in Environmental Engineering fromSyracuseUniversity, and a J.D. fromSyracuseUniversity.  Mr. Costello is admitted to the bar inPennsylvania, is a licensed professional engineer inPennsylvania andDelaware, and is a Certified Professional Environmental Auditor.

Photograph: Day Window by Ilco, Izmir, Turkey.

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Health and safety trainers who are seeking to improve the effectiveness of their training program should review the following summary of adult learning principles published by the U.S. Occupational, Safety & Health Administration (OSHA) in its 2010 guide, Best Practices for Development, Delivery, and Evaluation of Susan Harwood Training Grants.

Overview

The vast majority of students who attend safety and health training sessions are adults who already possess the knowledge, skills, and abilities to work in their current occupations. The objective of safety and health training is to provide additional knowledge, skills, and attitudes to assist workers in recognizing and taking action to correct hazards in their current work environments.

Principles of Adult Learning

The following are the basic principles of how adults learn, which is directly applicable to safety and health training programs:

• Adults are voluntary learners: Most adults learn because they want to. They learn best when they have decided they need to learn for a particular reason.
• Adults learn needed information quickly: Adults need to see that the subject matter and the methods are relevant to their lives and to what they want to learn. They have a right to know why the information is important to them.
• Adults come with a good deal of life experience that needs to be acknowledged: They should be encouraged to share their experiences and knowledge.
• Adults need to be treated with respect: They resent an instructor who talks down to them or ignores their ideas and concerns.
• Adults learn more when they participate in the learning process: Adults need to be involved and actively participating in class.
• Adults learn best by doing: Adults need to “try-on” and practice what they are learning. They will retain more information when they use and practice their knowledge and skills in class.
• Adults need to know where they are heading: Learners need “route maps” with clear objectives. Each new piece of information needs to build logically on the last.
• Adults learn best when new information is reinforced and repeated: Adults need to hear things more than once. They need time to master new knowledge, skills, and attitudes. They need to have this mastery reinforced at every opportunity.
• Adults learn better when information is presented in different ways: They will learn better when an instructor uses a variety of teaching techniques.

Learning Exchanges

Three kinds of “learning exchanges” should be used during training:

• Participant-to-Participant: “Participant-to-participant” learning exchange recognizes that participants can learn from one another’s experiences. Participant-to-participant exchanges should be a key feature of the training.
• Participant-to-Facilitator: Facilitators can learn as much from training sessions as participants do. On many subjects, a group of participants may have more extensive knowledge and experience in certain areas than a facilitator.
• Facilitator-to-Participant: Classroom learning needs structure. A facilitator’s role is to guide discussions, encourage participation, draw out and/or add information as needed, and highlight key issues and points.

About the Susan Harwood Training Grant Program

The United States Occupational, Safety & Health Administration (OSHA) awards grants to nonprofit organizations on a competitive basis through the Susan Harwood Training Grant Program. Awards are issued annually based on Congressional appropriation.

The focus of the program is to provide training and education for workers and employers on the recognition, avoidance, and prevention of safety and health hazards in their workplaces, and to inform workers of their rights and employers of their responsibilities under the OSH Act. Target audiences include underserved, low-literacy, and workers in high-hazard industries. Since 1978, over 1.8 million workers have been trained through this program.

Photograph: Matryoshka Dolls by Michaela Kobyakov, Leonding, Upper Austria, Austria.

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The ISO 14001 Environmental Management Systems standard has been adopted by more than 250,000 organizations globally since it was originally issued in 1996 and then revised in 2004.  General perception amongst adopters has been that it is a well written standard with enough flexibility to apply to any organization.  In fact, ISO reviewed the standard in 2010 and determined that no change was required. 

That was before ISO issued Guide 83 “High level structure and identical text for management system standards and common core management system terms and definitions.”  Guide 83 is intended to provide a single high-level structure and common text that will apply to all ISO management system standards (MSS).  ISO developed Guide 83 in response to complaints from organizations that have implemented multiple standards only to find that each has a different structure and slightly different requirements. And, when integrating management systems, it is a challenge to understand how the different standards fit together with minimum redundancy.

Guide 83 is certainly an interesting concept — a common format, structure and core requirements for ISO 14001, ISO 9001, ISO 27001 and ISO 50001 — this should make it less confusing for an organization to implement a fully integrated management system.  ISO has requested that standards be revised to conform to Guide 83; the ISO Technical Committee (TC) 207 has started the process to revise ISO 14001, with a target of issuing a Final Version in 2015.

The Revision Process

ISO standards are referred to as “consensus standards” because they are developed with the consensus of all participating countries.  For example, the 2004 revision was issued with active input from more than 70 countries and approval vote from more than 130 countries.  Each participating country forms a Technical Advisory Group (TAG) that reviews the standard, proposes wording and revisions, and provides a single vote of approval or disapproval regarding the standard.  The United States is represented by the US TAG to TC 207 regarding ISO 14001.  Working Group (WG) 5 is responsible for revising the standard. 

Imagine the challenge to develop a single document that more than 130 countries agree is suitable to the situations organizations in their country face.  When developing consensus standards there is extensive discussion amongst countries to agree on the specific final wording used in the standard.  For those of us used to a bit of action, it can be a bit like watching paint dry. 

WG 5 is currently developing initial drafts of the ISO 14001 standard to reflect the Higher Level Structure defined in Guide 83.  The revised version of ISO 14001 is presently at the Working Draft stage; expect that there will be numerous changes between now and the Draft International Standard version that should be issued later this year.  But, even though we can expect changes, it is not premature to start discussing the current Working Draft (WD) version of this document. 

The Changes

The primary changes to the ISO 14001 standard are structural in nature.  All ISO standards will now adopt a common format, with requirements included in seven sections; the ISO 14001 Plan-Do-Check-Act structure, with 17 elements in section four, will no longer apply.  The fundamental question becomes: “Is the revision just a reorganization of the current requirements?  Or are there new requirements contained in the proposed changes?”  The answer is complicated because the text is subject to significant review and potential change (we are currently at Working Draft 3), but the current text does contain new requirements.    

So, let’s talk about some of the new requirements in Working Draft 3 (we will refer to this version as 201X for the rest of this article). 

Section 4

Section 4 “Context of the Organization” is similar to the 4.1 General Requirements where the organization needed to define the boundaries of the EMS.  The proposed 201X version expands this requirement to require the organization to evaluate and understand the external and internal context of the organization related to the environmental interactions, and to evaluate and identify the needs and expectations of interested parties.  The wording is such that an organization may need to expend some effort to conduct these evaluations.

Section 5

Section 5 “Leadership” places greater emphasis on top management’s responsibility than in ISO 14001:2004, and is similar in structure and content to Section 5 in ISO 9001:2008.  This version adopts a philosophy that many of us endorse when implementing an EMS:  incorporate the EMS requirements into business processes.  Top management must ensure that

• objectives and targets are consistent with the strategic direction,
• EMS requirements are incorporated into business processes, and
• the importance of conformance to EMS requirements is internally communicated. 

Section 5 also includes the requirements associated with the environmental policy, and there are changes associated with the environmental policy requirements.  While the requirements are very similar to the current version of ISO 14001, the commitment associated with preventing pollution is expanded such that the organization shall “…mitigate its risks and manage opportunities associated with prevention of pollution, sustainable resource use, climate change mitigation and adaptation, and protection of the environment, biodiversity and restoration of natural habitat.”  Is this a big change?  It certainly is a more explicit listing of the items that need to be addressed in the EMS, and many registrar auditors may view this as a list of opportunities an organization needs to address.

Section 6

In Version 201X, Section 6 “Planning” is similar in scope to the Planning section of ISO 14001:2004.  It includes requirements associated with identifying environmental aspects, legal requirements and objectives and targets.  There are some new requirements associated with these elements:

Environmental Aspects – environmental aspects need to consider a life cycle perspective, and consider environmental conditions originating outside the organization.

Environmental Objectives – identify key performance indicators for each environmental objective against which performance can be evaluated.

Section 7

In Version 201X, Section 7 “Support” includes sections entitled Resources, Competence, Awareness, Communication and Documented Information.  While the requirements are generally the same as found in ISO 14001:2004, there are some proposed additional requirements in Communication.  First, the organization is required to develop a communication strategy.  Second, there is a new section External Communication and Reporting that requires a procedure associated with external reporting.  Some wording in the Working Draft 3 version is a bit concerning, as “data and information communicated externally shall be truthful and not misleading” and external communication regarding environmental performance shall be “complete, accurate, transparent and reliable…”  The concern is not with the intent of the selected wording, but with the evidence that auditors may request to demonstrate conformance to the standard.

Section 8

In Version 201X, Section 8 “Operations” includes two sections similar to those in ISO 14001:2004: operational planning and control, and emergency preparedness and response.  Section 8 adds two new sections to the requirements:  design and procurement.  These new sections expand the requirements associated with integrating EMS into the design and procurement processes.

Section 9

In Version 201X, Section 9 “Monitoring, Measurement, Analysis and Evaluation” includes requirements similar to ISO 14001:2004 contained in the following elements:  monitoring and measurement, evaluation of compliance, internal audit and management review.  There do not appear to be any significant new requirements included in these sections.

Section 10

In Version 201X, Section 10 “Continual Improvement” includes nonconformity and corrective action and a new section entitled “continual improvement.”  This new section brings added support to demonstrating continual improvement in environmental performance.

There is considerable fear among US TAG members regarding the specific words used in the standard and the objective evidence required by a registrar auditor when performing a registration audit.  The wording used in the Working Draft 3 version of the standard supports this fear.  While the intent of the revisions can be supported by most environmental professionals, the specific wording may be interpreted differently by auditors seeking objective evidence to demonstrate conformance to the standard.   

Next Steps

The standard is still some distance from being in final form, and there are numerous changes that can be expected.  A public draft version is planned for later this year (2013), and the planned date to issue the final standard is early 2015.  Once the final version is published, ISO will announce a transition schedule for those organizations registered to ISO 14001:2004.  Past major revisions have allowed for up to 24 months for the transition to the new standard; plan some time and effort to transition your environmental management system to the revised standard.

One other action that any organization can take is to volunteer your time to support the US TAG to revise the ISO 14001 standard.  The US TAG is always seeking the perspective of industry, consulting and public organizations, and your involvement can help shape the future ISO standard. 

About the Author

Terry A. Mors, QEP, is a Senior Consultant in the Holland, Michigan office of Environmental Resources Management (ERM). He has more than 32 years of experience providing EHS support for clients in the automotive, chemical, electronics, metals, mining, and service industries. Mr. Mors is Qualified Environmental Professional, RABQSA Lead ISO14001 Auditor, RABQSA Lead Responsible Care Auditor, RABQSA Lead ISO9001 Auditor, and a member of the US Technical Advisory Group to TC 207. He conducts management system audits, works with senior management to improve company performance, and provides training, including implementation training, internal auditor training, problem solving training, and other organization-specific training.  Mr. Mors’ management systems experience includes EHS and quality standards (e.g., ISO 14001, RCMS and RC14001, ISO 9001, ISO/TS 16949, and OHSAS 18001).

Photograph: Fern by Piotr Menducki, Ostrowiec Świętokrzyski, Świętokrzyski, Poland.

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About Compliance and Safety LLC

Established in 2005 and based out of Middletown, Delaware, U.S.A., Compliance and Safety LLC (CandS) has quickly grown to one of the top suppliers for safety training videos on the market today.

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