guidebook for ems-philippines
DESCRIPTION
Ecological Management System HandbookTRANSCRIPT
G U I D E B O O Kon ENVIRONMENTAL MANAGEMENT SYSTEM,
POLLUTION PREVENTION/CLEANER PRODUCTION
and ENVIRONMENTAL COST ACCOUNTING
ENVIRONMENTAL MANAGEMENT BUREAUDepartment of Environment and Natural Resources
2003
MMMMMessageessageessageessageessage
TTTTTHE DeE DeE DeE DeE Deparparparparpartment of Entment of Entment of Entment of Entment of Envirvirvirvirvironment and Naonment and Naonment and Naonment and Naonment and Naturturturturtural Resoural Resoural Resoural Resoural Resourcescescescesces
(DENR), (DENR), (DENR), (DENR), (DENR), thr thr thr thr through the Enough the Enough the Enough the Enough the Envirvirvirvirvironmental Manaonmental Manaonmental Manaonmental Manaonmental Managggggement Burement Burement Burement Burement Bureaueaueaueaueau
(EMB),(EMB),(EMB),(EMB),(EMB), is g is g is g is g is grrrrreaeaeaeaeatltltltltly pleased to ofy pleased to ofy pleased to ofy pleased to ofy pleased to offffffer this Guideer this Guideer this Guideer this Guideer this Guidebook on Enbook on Enbook on Enbook on Enbook on Envirvirvirvirvironmental Manaonmental Manaonmental Manaonmental Manaonmental Managggggement System,ement System,ement System,ement System,ement System,
PPPPPollution Prollution Prollution Prollution Prollution Preeeeevvvvvention/Cleaner Prention/Cleaner Prention/Cleaner Prention/Cleaner Prention/Cleaner Production and Enoduction and Enoduction and Enoduction and Enoduction and Envirvirvirvirvironmental Cost onmental Cost onmental Cost onmental Cost onmental Cost AccountingAccountingAccountingAccountingAccounting. . . . . WWWWWith thisith thisith thisith thisith this
GuideGuideGuideGuideGuidebook,book,book,book,book, w w w w we hope thae hope thae hope thae hope thae hope that bt bt bt bt businesses will be encourusinesses will be encourusinesses will be encourusinesses will be encourusinesses will be encouraaaaaggggged to consider the ged to consider the ged to consider the ged to consider the ged to consider the gains of linkingains of linkingains of linkingains of linkingains of linking
up morup morup morup morup more ce ce ce ce closellosellosellosellosely with the gy with the gy with the gy with the gy with the gooooovvvvvererererernment and with the commnment and with the commnment and with the commnment and with the commnment and with the community and ciunity and ciunity and ciunity and ciunity and civil society invil society invil society invil society invil society in
ensurensurensurensurensuring sustainaing sustainaing sustainaing sustainaing sustainabbbbble dele dele dele dele devvvvvelopment.elopment.elopment.elopment.elopment.
TTTTThe philosophhe philosophhe philosophhe philosophhe philosophy of eny of eny of eny of eny of envirvirvirvirvironmental manaonmental manaonmental manaonmental manaonmental managggggement has come a long wement has come a long wement has come a long wement has come a long wement has come a long waaaaayyyyy. Muc. Muc. Muc. Muc. Muchhhhh
prprprprprooooogggggrrrrress has been ress has been ress has been ress has been ress has been realizealizealizealizealized in making bed in making bed in making bed in making bed in making businesses and other rusinesses and other rusinesses and other rusinesses and other rusinesses and other relaelaelaelaelated sectorted sectorted sectorted sectorted sectors acs acs acs acs acknoknoknoknoknowledgwledgwledgwledgwledgeeeee
the vthe vthe vthe vthe value of intealue of intealue of intealue of intealue of integggggrrrrraaaaating enting enting enting enting envirvirvirvirvironmental conceronmental conceronmental conceronmental conceronmental concerns in actins in actins in actins in actins in activities,vities,vities,vities,vities, a a a a at the onset. t the onset. t the onset. t the onset. t the onset. TTTTTherherherherhere is noe is noe is noe is noe is no
other wother wother wother wother waaaaay fy fy fy fy for bor bor bor bor businesses to gusinesses to gusinesses to gusinesses to gusinesses to go. o. o. o. o. TTTTTherherherherhere is just no ture is just no ture is just no ture is just no ture is just no turning bacning bacning bacning bacning back. Evk. Evk. Evk. Evk. Everererereryyyyyone mone mone mone mone must considerust considerust considerust considerust consider
the impact of their actithe impact of their actithe impact of their actithe impact of their actithe impact of their activities on the envities on the envities on the envities on the envities on the envirvirvirvirvironment and the commonment and the commonment and the commonment and the commonment and the communities theunities theunities theunities theunities they liy liy liy liy livvvvve and we and we and we and we and worororororkkkkk
in.in.in.in.in.
WWWWWe hae hae hae hae havvvvve high hopes thae high hopes thae high hopes thae high hopes thae high hopes that with this Guidet with this Guidet with this Guidet with this Guidet with this Guidebook,book,book,book,book, the DENR, the DENR, the DENR, the DENR, the DENR, thr thr thr thr through the EMBough the EMBough the EMBough the EMBough the EMB,,,,,
will fwill fwill fwill fwill facilitaacilitaacilitaacilitaacilitate underte underte underte underte understanding of hostanding of hostanding of hostanding of hostanding of how the enw the enw the enw the enw the envirvirvirvirvironmental impact of actionmental impact of actionmental impact of actionmental impact of actionmental impact of activities can bevities can bevities can bevities can bevities can be
anticipaanticipaanticipaanticipaanticipatedtedtedtedted,,,,, measur measur measur measur measured anded anded anded anded and,,,,, e e e e evvvvventuallentuallentuallentuallentuallyyyyy,,,,, mana mana mana mana managgggged as wed as wed as wed as wed as well as cell as cell as cell as cell as clarlarlarlarlarify the rify the rify the rify the rify the roles of boles of boles of boles of boles of business,usiness,usiness,usiness,usiness,
gggggooooovvvvvererererernment rnment rnment rnment rnment reeeeegulagulagulagulagulatortortortortors and comms and comms and comms and comms and communities in the prunities in the prunities in the prunities in the prunities in the process. Specifocess. Specifocess. Specifocess. Specifocess. Specificallicallicallicallicallyyyyy,,,,, it is hoped tha it is hoped tha it is hoped tha it is hoped tha it is hoped that thist thist thist thist this
GuideGuideGuideGuideGuidebook will prbook will prbook will prbook will prbook will prooooovide a better undervide a better undervide a better undervide a better undervide a better understanding of the rstanding of the rstanding of the rstanding of the rstanding of the releeleeleeleelevvvvvance of enance of enance of enance of enance of envirvirvirvirvironmentalonmentalonmentalonmentalonmental
manamanamanamanamanagggggement system,ement system,ement system,ement system,ement system, pollution pr pollution pr pollution pr pollution pr pollution preeeeevvvvvention and contrention and contrention and contrention and contrention and control,ol,ol,ol,ol, and en and en and en and en and envirvirvirvirvironmental manaonmental manaonmental manaonmental manaonmental managggggementementementementement
accountingaccountingaccountingaccountingaccounting. . . . . WWWWWhile documenting our while documenting our while documenting our while documenting our while documenting our wororororork,k,k,k,k, e e e e experxperxperxperxperiences and the lessons leariences and the lessons leariences and the lessons leariences and the lessons leariences and the lessons learnednednednedned,,,,, w w w w we hopee hopee hopee hopee hope
thathathathathat mort mort mort mort more people will re people will re people will re people will re people will realizealizealizealizealize thae thae thae thae that gt gt gt gt good enood enood enood enood envirvirvirvirvironmental manaonmental manaonmental manaonmental manaonmental managggggement is gement is gement is gement is gement is good food food food food for bor bor bor bor business.usiness.usiness.usiness.usiness.
WWWWWe all hae all hae all hae all hae all havvvvve one we one we one we one we one worororororld to sharld to sharld to sharld to sharld to shareeeee. Let it be our. Let it be our. Let it be our. Let it be our. Let it be ours to prs to prs to prs to prs to protect.otect.otect.otect.otect.
ELISEA G. GOZUNELISEA G. GOZUNELISEA G. GOZUNELISEA G. GOZUNELISEA G. GOZUNSecrSecrSecrSecrSecretaretaretaretaretaryyyyy,,,,, DENR DENR DENR DENR DENR
MMMMMessageessageessageessageessage
THE bHE bHE bHE bHE business commusiness commusiness commusiness commusiness community is immenselunity is immenselunity is immenselunity is immenselunity is immensely pleased to see thisy pleased to see thisy pleased to see thisy pleased to see thisy pleased to see this EMB Guide EMB Guide EMB Guide EMB Guide EMB Guidebook fbook fbook fbook fbook finallinallinallinallinally pry pry pry pry produced because it comes aoduced because it comes aoduced because it comes aoduced because it comes aoduced because it comes at a mostt a mostt a mostt a mostt a most
opporopporopporopporopportune timetune timetune timetune timetune time. F. F. F. F. Fiririririrst,st,st,st,st, it can bank on mor it can bank on mor it can bank on mor it can bank on mor it can bank on more than a decade of se than a decade of se than a decade of se than a decade of se than a decade of swwwwweeeeeeeeeepingpingpingpingpingccccchanghanghanghanghanges in the wes in the wes in the wes in the wes in the waaaaay companies ary companies ary companies ary companies ary companies are dealing with ene dealing with ene dealing with ene dealing with ene dealing with envirvirvirvirvironmental conceronmental conceronmental conceronmental conceronmental concerns as thens as thens as thens as thens as they do by do by do by do by do business.usiness.usiness.usiness.usiness.TTTTThis Guidehis Guidehis Guidehis Guidehis Guidebook also rbook also rbook also rbook also rbook also relies on the gelies on the gelies on the gelies on the gelies on the grrrrreaeaeaeaeat strt strt strt strt strides thaides thaides thaides thaides that hat hat hat hat havvvvve been made to re been made to re been made to re been made to re been made to refefefefefine the kine the kine the kine the kine the keeeeey notionsy notionsy notionsy notionsy notionsinininininvvvvvolvolvolvolvolved in ened in ened in ened in ened in envirvirvirvirvironmental manaonmental manaonmental manaonmental manaonmental managggggement,ement,ement,ement,ement, suc suc suc suc such as pollution prh as pollution prh as pollution prh as pollution prh as pollution preeeeevvvvvention,ention,ention,ention,ention, and en and en and en and en and envirvirvirvirvironmental costonmental costonmental costonmental costonmental cost
accounting, among others.accounting, among others.accounting, among others.accounting, among others.accounting, among others.
BeBeBeBeBeyyyyyond theseond theseond theseond theseond these,,,,, the Guide the Guide the Guide the Guide the Guidebook is surbook is surbook is surbook is surbook is sure to fe to fe to fe to fe to find wide rind wide rind wide rind wide rind wide readereadereadereadereadership and gship and gship and gship and gship and generenerenerenereneraaaaate kte kte kte kte keen intereen intereen intereen intereen interest inest inest inest inest in
the bthe bthe bthe bthe business commusiness commusiness commusiness commusiness community because it comes alongside a strunity because it comes alongside a strunity because it comes alongside a strunity because it comes alongside a strunity because it comes alongside a strong global moong global moong global moong global moong global movvvvvement,ement,ement,ement,ement, led b led b led b led b led by the Unitedy the Unitedy the Unitedy the Unitedy the UnitedNaNaNaNaNations no less,tions no less,tions no less,tions no less,tions no less, to inte to inte to inte to inte to integggggrrrrraaaaate ente ente ente ente envirvirvirvirvironmental conceronmental conceronmental conceronmental conceronmental concerns into all aspects of bns into all aspects of bns into all aspects of bns into all aspects of bns into all aspects of business,usiness,usiness,usiness,usiness, fr fr fr fr from the time aom the time aom the time aom the time aom the time adecision is made to set up one until it becomes fulldecision is made to set up one until it becomes fulldecision is made to set up one until it becomes fulldecision is made to set up one until it becomes fulldecision is made to set up one until it becomes fully opery opery opery opery operaaaaational. Ovtional. Ovtional. Ovtional. Ovtional. Over the past twer the past twer the past twer the past twer the past two yo yo yo yo yearearearearears,s,s,s,s, scor scor scor scor scoresesesesesof bof bof bof bof businesses wusinesses wusinesses wusinesses wusinesses worororororldldldldldwide hawide hawide hawide hawide havvvvve signed up fe signed up fe signed up fe signed up fe signed up for the UN’or the UN’or the UN’or the UN’or the UN’s Global Compact,s Global Compact,s Global Compact,s Global Compact,s Global Compact, w w w w whichichichichich binds signah binds signah binds signah binds signah binds signatortortortortories toies toies toies toies toembrembrembrembrembrace and prace and prace and prace and prace and practice in all wactice in all wactice in all wactice in all wactice in all waaaaays possibys possibys possibys possibys possible 11 kle 11 kle 11 kle 11 kle 11 keeeeey y y y y “g“g“g“g“good prood prood prood prood practice”actice”actice”actice”actice” commitments tha commitments tha commitments tha commitments tha commitments that art art art art are in ture in ture in ture in ture in turnnnnn
collacollacollacollacollapsed into thrpsed into thrpsed into thrpsed into thrpsed into three major pree major pree major pree major pree major principles,inciples,inciples,inciples,inciples, one of them being en one of them being en one of them being en one of them being en one of them being envirvirvirvirvironmental ronmental ronmental ronmental ronmental responsibilityesponsibilityesponsibilityesponsibilityesponsibility.....
As this GuideAs this GuideAs this GuideAs this GuideAs this Guidebook will shobook will shobook will shobook will shobook will showwwww,,,,, b b b b business nousiness nousiness nousiness nousiness now has all the low has all the low has all the low has all the low has all the logggggical rical rical rical rical reasons to embreasons to embreasons to embreasons to embreasons to embrace sucace sucace sucace sucace suchhhhh
prprprprprinciples,inciples,inciples,inciples,inciples, pr pr pr pr primarimarimarimarimarililililily because wy because wy because wy because wy because whahahahahat wt wt wt wt wererererere befe befe befe befe befororororore deemed to be nothing more deemed to be nothing more deemed to be nothing more deemed to be nothing more deemed to be nothing more than loe than loe than loe than loe than low-prw-prw-prw-prw-priorioriorioriorityityityityity,,,,,cacacacacapital-intensipital-intensipital-intensipital-intensipital-intensivvvvve long-tere long-tere long-tere long-tere long-term inm inm inm inm invvvvvestments in enestments in enestments in enestments in enestments in envirvirvirvirvironmental manaonmental manaonmental manaonmental manaonmental managggggement haement haement haement haement havvvvve been pre been pre been pre been pre been prooooovvvvved to be:ed to be:ed to be:ed to be:ed to be:(a) ur(a) ur(a) ur(a) ur(a) urgggggent and non-postponaent and non-postponaent and non-postponaent and non-postponaent and non-postponabbbbble; (b) inle; (b) inle; (b) inle; (b) inle; (b) invvvvvestments thaestments thaestments thaestments thaestments that yield contint yield contint yield contint yield contint yield continuinguinguinguinguing,,,,, substantial ma substantial ma substantial ma substantial ma substantial materterterterterial rial rial rial rial returetureturetureturnsnsnsnsnsin terin terin terin terin terms of rms of rms of rms of rms of recececececycycycycyclalalalalabbbbble rle rle rle rle resouresouresouresouresources and saces and saces and saces and saces and savings gvings gvings gvings gvings generenerenerenereneraaaaated bted bted bted bted by ry ry ry ry reductions in weductions in weductions in weductions in weductions in wastaastaastaastaastaggggge and re and re and re and re and resouresouresouresouresourcececececeleaks; and (c) essential ingleaks; and (c) essential ingleaks; and (c) essential ingleaks; and (c) essential ingleaks; and (c) essential ingrrrrredients to a bedients to a bedients to a bedients to a bedients to a business’usiness’usiness’usiness’usiness’ sustaina sustaina sustaina sustaina sustainabilitybilitybilitybilitybility,,,,, not to mention the enhancement not to mention the enhancement not to mention the enhancement not to mention the enhancement not to mention the enhancement
of its gof its gof its gof its gof its goodoodoodoodoodwill in the immediawill in the immediawill in the immediawill in the immediawill in the immediate and nate and nate and nate and nate and national commtional commtional commtional commtional communityunityunityunityunity.....
WWWWWe hope this Guidee hope this Guidee hope this Guidee hope this Guidee hope this Guidebook prbook prbook prbook prbook promises the staromises the staromises the staromises the staromises the start of et of et of et of et of evvvvven moren moren moren moren more intensie intensie intensie intensie intensivvvvve collae collae collae collae collaborborborborboraaaaation amongtion amongtion amongtion amongtion among
the gthe gthe gthe gthe gooooovvvvvererererernment,nment,nment,nment,nment, pr pr pr pr priiiiivvvvvaaaaate bte bte bte bte business and ciusiness and ciusiness and ciusiness and ciusiness and civil society in this cvil society in this cvil society in this cvil society in this cvil society in this challenghallenghallenghallenghallenge of ke of ke of ke of ke of keeeeeeeeeeping our wping our wping our wping our wping our worororororld and ourld and ourld and ourld and ourld and our
countrcountrcountrcountrcountry aliy aliy aliy aliy alivvvvveeeee,,,,, health health health health healthy and ay and ay and ay and ay and abbbbble to sustain lifle to sustain lifle to sustain lifle to sustain lifle to sustain lifeeeee.....
SERGIO R. ORSERGIO R. ORSERGIO R. ORSERGIO R. ORSERGIO R. ORTIZ-LUISTIZ-LUISTIZ-LUISTIZ-LUISTIZ-LUIS,,,,, JR. JR. JR. JR. JR.President, Philippine ChamberPresident, Philippine ChamberPresident, Philippine ChamberPresident, Philippine ChamberPresident, Philippine Chamberof Commerce and Industryof Commerce and Industryof Commerce and Industryof Commerce and Industryof Commerce and Industry
Its publication is indeed a fitting reminder that the principles underlying soundIts publication is indeed a fitting reminder that the principles underlying soundIts publication is indeed a fitting reminder that the principles underlying soundIts publication is indeed a fitting reminder that the principles underlying soundIts publication is indeed a fitting reminder that the principles underlying soundenenenenenvirvirvirvirvironmental manaonmental manaonmental manaonmental manaonmental managggggement in bement in bement in bement in bement in business arusiness arusiness arusiness arusiness are ideas we ideas we ideas we ideas we ideas whose time hahose time hahose time hahose time hahose time havvvvve come; nae come; nae come; nae come; nae come; nayyyyy,,,,, e e e e evvvvvenenenenenbebebebebeyyyyyond thaond thaond thaond thaond that,t,t,t,t, the the the the they ary ary ary ary are ideas long oe ideas long oe ideas long oe ideas long oe ideas long ovvvvverererererdueduedueduedue. . . . . TTTTThis Guidehis Guidehis Guidehis Guidehis Guidebook helps ebook helps ebook helps ebook helps ebook helps evvvvverererereryyyyyone rone rone rone rone realizealizealizealizealize thae thae thae thae thatttttsucsucsucsucsuch notions as enh notions as enh notions as enh notions as enh notions as envirvirvirvirvironmental manaonmental manaonmental manaonmental manaonmental managggggement systems,ement systems,ement systems,ement systems,ement systems, pollution pr pollution pr pollution pr pollution pr pollution preeeeevvvvvention/cention/cention/cention/cention/cleanerleanerleanerleanerleanerprprprprproduction,oduction,oduction,oduction,oduction, and e and e and e and e and evvvvven enen enen enen enen envirvirvirvirvironmental accounting aronmental accounting aronmental accounting aronmental accounting aronmental accounting are indispensae indispensae indispensae indispensae indispensabbbbble tools fle tools fle tools fle tools fle tools for ensuror ensuror ensuror ensuror ensuringingingingingthe sustainathe sustainathe sustainathe sustainathe sustainability of both bbility of both bbility of both bbility of both bbility of both business and the enusiness and the enusiness and the enusiness and the enusiness and the envirvirvirvirvironment. Specifonment. Specifonment. Specifonment. Specifonment. Specificallicallicallicallicallyyyyy,,,,, it successfull it successfull it successfull it successfull it successfullyyyyyararararargues thagues thagues thagues thagues that wt wt wt wt whahahahahat wt wt wt wt wererererere once deemed to be just the be once deemed to be just the be once deemed to be just the be once deemed to be just the be once deemed to be just the business of stausiness of stausiness of stausiness of stausiness of state rte rte rte rte reeeeegulagulagulagulagulatortortortortors ors ors ors ors orenenenenenvirvirvirvirvironmental actionmental actionmental actionmental actionmental activists arvists arvists arvists arvists are re re re re reallealleallealleally staky staky staky staky stakes fes fes fes fes for wor wor wor wor whichichichichich bh bh bh bh business and commerusiness and commerusiness and commerusiness and commerusiness and commerce mce mce mce mce must fust fust fust fust fightightightightightfffffor as a maor as a maor as a maor as a maor as a matter of their otter of their otter of their otter of their otter of their own surwn surwn surwn surwn survivivivivivvvvval.al.al.al.al.
It seemed an eIt seemed an eIt seemed an eIt seemed an eIt seemed an expensixpensixpensixpensixpensivvvvveeeee,,,,, postponea postponea postponea postponea postponeabbbbble vle vle vle vle venturenturenturenturenture then to oe then to oe then to oe then to oe then to ovvvvverhaul or rerhaul or rerhaul or rerhaul or rerhaul or refefefefeforororororm the wm the wm the wm the wm the waaaaayyyyyone’one’one’one’one’s bs bs bs bs business is orusiness is orusiness is orusiness is orusiness is orggggganizanizanizanizanized or opered or opered or opered or opered or operaaaaated in orted in orted in orted in orted in order to wder to wder to wder to wder to weaeaeaeaeavvvvve in suce in suce in suce in suce in such notions as wh notions as wh notions as wh notions as wh notions as wasteasteasteasteastemanamanamanamanamanagggggement,ement,ement,ement,ement, c c c c cleaner prleaner prleaner prleaner prleaner production,oduction,oduction,oduction,oduction, or pollution pr or pollution pr or pollution pr or pollution pr or pollution preeeeevvvvvention and rention and rention and rention and rention and recececececycycycycyclinglinglinglingling. . . . . TTTTTodaodaodaodaodayyyyy,,,,, it is an it is an it is an it is an it is anessential oneessential oneessential oneessential oneessential one. Not onl. Not onl. Not onl. Not onl. Not only is it essential; it also maky is it essential; it also maky is it essential; it also maky is it essential; it also maky is it essential; it also makes ges ges ges ges good bood bood bood bood business senseusiness senseusiness senseusiness senseusiness sense,,,,, as the as the as the as the as thepapapapapathbrthbrthbrthbrthbreakeakeakeakeakererererers in the fs in the fs in the fs in the fs in the field -- big and eield -- big and eield -- big and eield -- big and eield -- big and evvvvven small ben small ben small ben small ben small businesses,usinesses,usinesses,usinesses,usinesses, it m it m it m it m it must be pointed out -- haust be pointed out -- haust be pointed out -- haust be pointed out -- haust be pointed out -- havvvvveeeeeshoshoshoshoshown us. wn us. wn us. wn us. wn us. TTTTTheir storheir storheir storheir storheir stories,ies,ies,ies,ies, as told b as told b as told b as told b as told by ey ey ey ey experxperxperxperxperts in this Guidets in this Guidets in this Guidets in this Guidets in this Guidebook,book,book,book,book, w w w w would hopefullould hopefullould hopefullould hopefullould hopefully inspiry inspiry inspiry inspiry inspireeeeeeeeeevvvvverererereryyyyyone else similarone else similarone else similarone else similarone else similarllllly situay situay situay situay situated to fted to fted to fted to fted to folloolloolloolloollow suit.w suit.w suit.w suit.w suit.
TTTTThe ehe ehe ehe ehe experxperxperxperxperts wts wts wts wts who contrho contrho contrho contrho contribibibibibuted to this Guideuted to this Guideuted to this Guideuted to this Guideuted to this Guidebook habook habook habook habook havvvvve laid doe laid doe laid doe laid doe laid down their arwn their arwn their arwn their arwn their argumentsgumentsgumentsgumentsgumentsin a vin a vin a vin a vin a vererererery cy cy cy cy clearlearlearlearlear,,,,, compelling manner compelling manner compelling manner compelling manner compelling manner. . . . . YYYYYet beet beet beet beet beyyyyyond their arond their arond their arond their arond their arguments,guments,guments,guments,guments, the most compelling the most compelling the most compelling the most compelling the most compellingrrrrreason feason feason feason feason for embror embror embror embror embracing acing acing acing acing “the b“the b“the b“the b“the business of enusiness of enusiness of enusiness of enusiness of envirvirvirvirvironment”onment”onment”onment”onment” ar ar ar ar are the success store the success store the success store the success store the success stories cited heries cited heries cited heries cited heries cited hereeeee,,,,,especiallespeciallespeciallespeciallespecially the SMEs thay the SMEs thay the SMEs thay the SMEs thay the SMEs that start start start start started bted bted bted bted by thinking they thinking they thinking they thinking they thinking they wy wy wy wy wererererere spending fe spending fe spending fe spending fe spending for eor eor eor eor extrxtrxtrxtrxtras just to complas just to complas just to complas just to complas just to complyyyyywith enwith enwith enwith enwith envirvirvirvirvironmental ronmental ronmental ronmental ronmental reeeeegulagulagulagulagulations and then ended up counting the substantial sations and then ended up counting the substantial sations and then ended up counting the substantial sations and then ended up counting the substantial sations and then ended up counting the substantial savings thevings thevings thevings thevings theyyyyygggggenerenerenerenereneraaaaated fted fted fted fted for themselvor themselvor themselvor themselvor themselves.es.es.es.es.
I commend the people who, despite their tremendous responsibilities, took theI commend the people who, despite their tremendous responsibilities, took theI commend the people who, despite their tremendous responsibilities, took theI commend the people who, despite their tremendous responsibilities, took theI commend the people who, despite their tremendous responsibilities, took thetime to put this Guidetime to put this Guidetime to put this Guidetime to put this Guidetime to put this Guidebook tobook tobook tobook tobook togggggetheretheretheretherether,,,,, as w as w as w as w as well as those well as those well as those well as those well as those who assisted them. I am confho assisted them. I am confho assisted them. I am confho assisted them. I am confho assisted them. I am confidentidentidentidentidentthis Guidethis Guidethis Guidethis Guidethis Guidebook will spabook will spabook will spabook will spabook will spawn ewn ewn ewn ewn evvvvvererererer-incr-incr-incr-incr-increasing initiaeasing initiaeasing initiaeasing initiaeasing initiatititititivvvvves in enes in enes in enes in enes in envirvirvirvirvironmental manaonmental manaonmental manaonmental manaonmental managggggement fement fement fement fement forororororbbbbbusinesses,usinesses,usinesses,usinesses,usinesses, r r r r resulting in a wideningesulting in a wideningesulting in a wideningesulting in a wideningesulting in a widening,,,,, vir vir vir vir virtuous cirtuous cirtuous cirtuous cirtuous circccccle of rle of rle of rle of rle of responsibesponsibesponsibesponsibesponsible ble ble ble ble but saut saut saut saut satisftisftisftisftisfied pried pried pried pried produceroduceroduceroduceroducersssssand consumers.and consumers.and consumers.and consumers.and consumers.
JULIAN DJULIAN DJULIAN DJULIAN DJULIAN D. . . . . AMADORAMADORAMADORAMADORAMADORDirDirDirDirDirectorectorectorectorector,,,,, EMB EMB EMB EMB EMB
FOREWORD
IIIII am tr am tr am tr am tr am tremendouslemendouslemendouslemendouslemendously pleased to see this Guidey pleased to see this Guidey pleased to see this Guidey pleased to see this Guidey pleased to see this Guidebook,book,book,book,book, a timel a timel a timel a timel a timelyyyyy tool f tool f tool f tool f tool for all stakor all stakor all stakor all stakor all stakeholdereholdereholdereholdereholders in the ens in the ens in the ens in the ens in the envirvirvirvirvironment -- bonment -- bonment -- bonment -- bonment -- but prut prut prut prut primarimarimarimarimarilililililyyyyy,,,,,
bbbbbusinesses and their commusinesses and their commusinesses and their commusinesses and their commusinesses and their communities thaunities thaunities thaunities thaunities that deal with gt deal with gt deal with gt deal with gt deal with gooooovvvvvererererernmentnmentnmentnmentnmentrrrrreeeeegulagulagulagulagulatortortortortory bodies -- ay bodies -- ay bodies -- ay bodies -- ay bodies -- at a time wt a time wt a time wt a time wt a time wherherherherhere the notion of stee the notion of stee the notion of stee the notion of stee the notion of stewwwwwararararardshipdshipdshipdshipdshiphas become a pillar of corhas become a pillar of corhas become a pillar of corhas become a pillar of corhas become a pillar of corporporporporporaaaaate rte rte rte rte responsibilityesponsibilityesponsibilityesponsibilityesponsibility.....
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ACKNOWLEDGEMENTS
For the completion of this Guidebook, the invaluable assistance of the following, who providedthe write-ups, data, photographs and/or reviewed the manuscripts, is gratefully acknowledged:
CHAPTER TECHNICAL WRITERS
Dr. Alvin Culaba – De La Salle University-ManilaEngr. Reynaldo Esguerra – Industrial Technology Development Institute,
Department of Science and TechnologyMs. Fatima Reyes – Environmental Management Accounting
Network for Asia Pacific (EMAN-AP)Mr. Manuel Sabater – Environmental Management Bureau,
Department of Environment and Natural Resources
EDITORIAL BOARD MEMBERS
Environmental Management Bureau (EMB) - DENREMB Director Julian Amador
EMB Assistant Director Fernandino Concepcion
Industrial Initiatives for a Sustainable Environment (IISE) Project - EMBMr. Manuel Sabater
Ms. Ritchie Anne Guzman
Environmental Education and Information Division (EEID) - EMBMs. Elenida BasugMr. Harry Quiaoit
Ms. Carmelita Passe
Department of Environment and Natural Resources (DENR)Ms. Vizminda Osorio
Natural Resources Management Program (NRMP)Mr. Gaudencio de la Cruz
Philippine Association of Tertiary Level Educational Institutionsin Environmental Protection and Management (PATLEPAM)
Dr. Ruth GuzmanDr. Lilia Rabago
Philippine Chamber of Commerce and Industry (PCCI)Engr. Jesus Reyes - Nestle Philippines
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SUPPORT STAFF TO THE EDITORIAL BOARD MEMBERS
Administrative and Finance Division - EMBMs. Enrica Tumbagahan
Ms. Charilou Liad
EEID - EMBMs. Cristina Francisco
Ms. Gerarda MeriloMr. Virgilio Santos
Ms. Bernadita BondocMs. Alicia Laplana-Sabater
IISE - EMBMr. Marlon Genovia
CREATIVE AND SUPPORT SERVICES
Media Communications Group, Technology and LivelihoodResource Center (MCG, TLRC)
Ms. Felisa L. FranciscoMr. Gerardo PascualMs. Escarlita AlarazMs. Ester SabijonMs. Arlene Guilas
Mr. Joel Paredes - Editor
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CONTENTS
Messages ............................................................................................................... iiiForeword ................................................................................................................ viiAcknowledgements .............................................................................................. ix
Chapter I Introduction1.1 The Philippine Environmental Situationer .................................... 3
1.2 Approaches to Address Environmental Problems ....................... 6
1.2.1 Government Regulations ................................................. 6
1.2.2 Use of Market Forces ....................................................... 8
Chapter II Understanding Environmental Management System,Pollution Prevention/Cleaner Productionand Environmental Cost Accounting2.1 Environmental Management System........................................... 15
2.1.1 The Concept ..................................................................... 15
2.1.2 The Framework ................................................................ 17
2.1.3 Who Needs an EMS?....................................................... 17
2.1.4 The Benefits ..................................................................... 18
2.1.5 The Costs ......................................................................... 19
2.1.6 Synergy of EMS with Other Management Systems ......... 19
2.1.7 ISO14001: An EMS International Standard ...................... 20
2.2 Pollution Prevention ..................................................................... 21
2.2.1 The Concept ..................................................................... 21
2.2.2 The Framework ................................................................ 24
2.2.3 The Benefits of P2/CP ...................................................... 28
2.2.4 Other Important Considerations ....................................... 29
2.3 Environmental Cost Accounting .................................................. 31
2.3.1 The Concept ..................................................................... 31
2.3.2 The Benefits of ECA ......................................................... 32
2.4 Success Stories ........................................................................... 34
2.4.1 EMS Success Story ......................................................... 34
2.4.2 P2/CP and ECA Success Stories ..................................... 38
Chapter III Initiating and Sustaining an EMS3.1 Introduction .............................................................................. 43
3.2 Setting Up an EMS ...................................................................... 43
3.2.1 Commitment..................................................................... 44
3.2.2 Initial Environmental Review (IER) .................................. 45
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3.3 Planning .............................................................................. 47
3.3.1 Environmental Aspects .................................................... 47
3.3.2 Legal and Other Requirements ........................................ 50
3.3.3 Environmental Policy ........................................................ 51
3.3.4 Objectives and Targets..................................................... 51
3.3.5 Environmental Management Program(s) ......................... 52
3.4 Implementation and Operation .................................................... 54
3.4.1 Structure and Responsibility ............................................ 54
3.4.2 Training, Awareness and Competence ............................ 55
3.4.3 Communication ................................................................ 56
3.4.4 EMS Documentation ........................................................ 57
3.4.5 Operational Control .......................................................... 59
3.4.6 Emergency Preparedness and Response ....................... 60
3.5 Checking and Corrective Action .................................................. 62
3.5.1 Monitoring and Measurement .......................................... 62
3.5.2 Non-Conformance, Corrective and
Preventive Action ............................................................. 63
3.5.3 Records ............................................................................ 64
3.5.4 EMS Audit ........................................................................ 65
3.6 Management Review ................................................................... 66
Chapter IV Establishing a Pollution Prevention/Cleaner Production Program4.1 P2/CP Program Overview ........................................................... 71
4.1.1 Planning and Organizing Phase ....................................... 71
4.1.2 Assessment Phase .......................................................... 75
4.1.3 Feasibility Analysis Phase ................................................ 79
4.1.4 Implementation Phase ..................................................... 81
4.1.5 Monitoring and Evaluation ................................................ 82
4.2 Elements of an Effective P2/CP Program ................................... 83
4.2.1 Top Management Commitment ........................................ 83
4.2.2 Strong Motivation on the Part of
Operating Personnel ........................................................ 83
4.2.3 Technologies are Simple and
Easy to Implement ........................................................... 83
4.2.4 Immediate Realization of Benefits ................................... 83
4.2.5 Waste Assessment by Trained and
Unbiased Personnel to Identify Waste
Sources and P2/CP Options ............................................ 83
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4.3 Options for P2/CP ........................................................................ 84
4.4 What are not P2/CP ..................................................................... 85
4.5 P2/CP Program and EMS ............................................................ 85
Chapter V Assessing the Profitability of Pollution Prevention/Cleaner Production Investments throughEnvironmental Cost Accounting5.1 Steps in Environmental Cost Accounting .................................... 89
5.1.1 Get Management Support ................................................ 90
5.1.2 Organize ECA Team ........................................................ 90
5.1.3 Draw Process Maps ......................................................... 90
5.1.4 Do Material and Energy Balances .................................... 91
5.1.5 Use Cost Checklist ........................................................... 91
5.1.6 Apply Activity-based Costing (ABC) ................................ 93
5.1.7 Determine Internal Source Documents ............................ 93
5.1.8 Seek External Sources of Information
and Expertise ................................................................... 94
5.2 P2/CP Quantitative Analysis ........................................................ 94
5.2.1 P2/CP Profitability Assessment ....................................... 94
5.2.2 Other Financing Issues that Could Affect
Project Analysis .......................................................... 100
5.2.3 P2/CP Profitability Assessment Software ........................ 101
5.3 Qualitative Factors in P2/CP........................................................ 102
5.4 Financing for P2/CP Implementation ........................................... 103
5.4.1 Internal Sources of Funds ................................................ 103
5.4.2 Funds from Outside Sources ........................................... 103
5.5 Sources of More Information on ECA .......................................... 104
Chapter VI Illustrating EMS, P2/CP and ECA6.1 EMS Case Study: The Millennium Designs EMS .......................... 112
6.2 P2/CP Program Case Study: Developing a P2/CP
Program for Millennium Designs ................................................... 119
6.3 ECA Case Study: Applying ECA to the Financial
Assessment of the P2/CP Proposal of Millennium Designs .......... 125
Annexes ................................................................................................................. 133
Sources of Information on EMS, P2/CP and ECA .............................................. 151
Additional ISO14001 and Pollution Prevention Sources ................................... 153
Glossary ................................................................................................................. 157
Acronyms ............................................................................................................... 161
Selected Bibliography .......................................................................................... 163
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IIntroduction
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Sustainability, or more specifically, the adoption of sustainable strategies, hasnow become a byword in doing business. For some, it implies the ability of a
company to survive in a world that has become competitive especially with the
emergence of free trade and the global market economies. For others, it impliesthe need to nurture highly efficient and productive world-class industries that are totally
committed to pursuing business in an environmentally sustainable and efficient manner.
The Philippine Government has a huge stake in making local industry competitive
and sustainable. Poverty, unemployment, social inequities and their consequences, such
as peace and order problems, among others, are persistent issues which have to beaddressed. The important role of industry in helping resolve the country’s economic and
social problems should be acknowledged; and, thus, be strengthened with appropriate
support from all sectors of society. This Guidebook is a contribution to this effort. It promotesa proactive environmental management tool that has been proved to likewise improve
business efficiency, cost savings and provide competitive advantage. It is basically about
Environmental Management System (EMS) based on ISO14001, an international standardthat can transform local industry into world-class status while enabling it to address at the
facility level the poor quality of urban air that everyone has to breathe, and the other growing
environmental problems of the country.
1.1 THE PHILIPPINE ENVIRONMENTAL SITUATIONER
Various reports indicate that the environmental situation in the Philippines is,
generally, poor, especially in urban areas. The World Bank, for example, reported that inManila and other cities, certain pollutants like ozone and nitrogen oxides, are on the rise
while particulate matter levels still exceed standards. In its Philippine Environment Monitor
2002 report, the World Bank added financial cost estimates of air pollution in the country’sfour major cities of Metro Manila, Davao, Cebu and Baguio at more than US$400 million or
PhP21.6 Billion (US$1 = PhP54) per year, affecting more than one fourth of the urban
population in the country.
“ We need to believe that we do hold the future in our hands and thatwe have the power within us to make the changes to put us on asustainable path.”
— Philippine Business for the Environment
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A closer look at the country’s waterways reveals that about 15% of the water bodies
being monitored by the DENR are in a disturbing state of organic pollution - having failed the
national criteria on water quality, particularly on dissolved oxygen and biochemical oxygendemand. As such, majority of the country’s water bodies cannot be used for household
purposes. This situation is continually being aggravated by various activities of all sectors
of the community - from small households up to big factories - that contribute to thedegradation of the quality of the country’s water resources.
In addition, the country’s natural resource stock, a major source of raw materials, is
being depleted at a fast rate with continued utilization, especially by industry. For instance,
the country’s dipterocarp forests, the source of the economically and ecologically importantPhilippine mahogany group species like red lauan (Shorea negrosensis), white lauan (Shoreacontorta) and apitong (Dipterocarp grandifflorus) have already decreased by 6.84 million
hectares from 1977 at 9,380,055 hectares to 1997 at 3,536,017 hectares or an averageof 342,201 hectares a year. For industries, depletion of local resources essential as
production inputs will mean higher procurement costs or, in case of unavailability, delays on
or shutdown of operations.
Business activity isone of the major sources
of significant impacts on
the environment – from theextraction of raw materials to
the generation and disposal of
waste. In fact, industries arethe major sources of toxic
pollutants. For the year 2000,
about 188,000 tons of toxic and
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hazardous substances are generated by industries registered at EMB. For engineers, the
generation of high waste volume indicates inefficiencies in a production system.
Aside from fear of the inability of local business to compete globally, inadequate
attention to environmental protection and resources management has three other threats.
These are: 1) human health risks which increase the social costs to society in terms ofmedical and health care; 2) decline in foreign capital investment in the country due to its
inadequate environmental management capacity and performance, and; 3) loss of
opportunities for industries to introduce innovative production technologies to increase theirproductivity and environmental performance.
It is not surprising that, in recent years, concern over the business viability oflocal industry has risen aside from public concern over industrial impact on people, the
national patrimony and sustainable development. The first question is: Can we sustain our
national development and ensure the health and well-being of our population? The answeris a big YES. But, only if we begin and continue to take care of our environment and resources.
The second question is: Can industry gain business competitive advantage while protecting
the environment and conserving resources? Again, the answer is a big YES. But, onlyif companies understand and apply the available and appropriate tools that they can
use.... NOW.
And, there is no other time!
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1.2 APPROACHES TO ADDRESS ENVIRONMENTAL PROBLEMS
1.2.1 Government Regulations
Before pollution control regulations were implemented, most industries in the 1950s
and 1960s simply ignored the environment. Contaminated wastewater, polluted air and
solid waste (whether hazardous or not) were simply discharged into the environment. Lateron, the concept of “dilution is the solution to pollution” became the norm.
When people started to realize that the environment could not simply absorbpollutants without serious consequences, environmental laws were enacted. To comply
with these regulations, industries, among others,
have to set up their own anti-pollution controldevices or treatment facilities. And hazardous
waste had to find their way to secured land.
As of year 2002, EMB implements five
national environment laws, namely the
Pollution Control Law (PD 984), the PhilippineEnvironmental Impact Assessment System
(PD 1586), the Toxic Substances and Hazardous
and Nuclear Wastes Control Act (RA 6969), theClean Air Act (RA 8749) and the Ecological Solid
Waste Management Act (RA 9003).
Multimedia Transfer of Pollution as a Pollution Control Issue
In controlling pollution through end-of-pipe technologies, the risk of pollutants re-
entering an ecosystem persists. Then U.S. Environmental Protection Agency (USEPA)
Administrator William Reilly put this point succinctly in 1990 when he said, “We have learnedthe inherent limitations of treating and burying waste. A problem solved in one part of the
environment may become another problem in another part. We must curtail pollution closer
to its point of origin so that it is not transferred from place to place.” This statement is bestdemonstrated by the multimedia transfer of pollution of a hypothetical industrial facility
illustrated below:
A facility generates air emissions from its operation. Emissions arecontaminants that may be detrimental to human health and the environment.To remove these contaminants, the facility installed a wet-type air pollutioncontrol device, i.e., water was made to flow countercurrent to the air emissionsto scrub off the contaminants. Cleaner air then left the smoke stack of thefacility.
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However, the contaminants simply transferred to the water. Thecontaminated water, then, had to be treated in a wastewater treatment plantusing chemicals to remove the contaminants from the wastewater. The facilitythen had a cleaner wastewater that could be discharged to a nearby river.
But the contaminants were now in the form of sludge that would haveto be sent off to a secured landfill. With the coming in of rain, the contaminantmay leach out of the secured landfill. Note that rain, even thoughuncontaminated with pollutants that may cause it to be acidic, is still acidic(pH 5.6) because of carbon dioxide in the atmosphere. Note too, that anacidic medium is a very good leaching agent, i.e., it can cause the transferof the contaminant from the sludge to groundwater. Thus, contamination ofgroundwater is not a remote possibility. Groundwater is the usual source ofdrinking water in the Philippines. The risk of contaminated drinking watergetting into the human body is high because of the situation described above.
This illustration shows the potential environmental and health risks of pollutants re-
entering the ecosystem even with end-of-pipe technologies. It also shows that investing in
pollution-control technologies can be costly.
Aside from the above situation, the air and waterways of the country continue to be
polluted. Worse, pollution incidents like those in Marcopper Mining in Marinduque and in the
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regulating emissions rather than their causes. Another disadvantage is “over-regulationand under-enforcement” which may bring the law and the regulators into disrepute.
There has to be a way to complement pollution control. New laws such as the CleanAir Act (Republic Act or RA 8749) and the Ecological Solid Waste Management Act
(RA 9003) have realized this need as they espoused new state policies that put more
emphasis on pollution prevention.
1.2.2 Use of Market Forces
1.2.2.1 Use of Market-Based Instruments
Market-based tools are designed to internalize environmental costs, to demonstrate
to producers and consumers the need to use natural resources responsibly, and to minimize
pollution and waste.
1.2.2.2 Environmental Users’ Fee and Other Market-Based Instruments(MBIs)
The Philippine Clean Air Act provides for the use of Market-based Instruments (MBIs)
as tools to promote cooperation between government and industry. Commonly known MBIsstudied under the Industrial Environmental Management Project (IEMP) of the DENR include
the following: pollution charge, refund-deposit systems, risk and liability schemes, user feeon raw materials, creating a market for waste and financial incentives/subsidies. These arebriefly discussed below.
The pollution charge, called the environmental users’ fee by the Laguna Lake
Development Authority (LLDA), refers to a fee per unit of pollutant discharged to air, water,
small-scale gold mining and processing areas
of Davao del Norte have to happen, as if to
highlight the fact that end-of-pipe control ofpollution is not the only insurance for protecting
the environment.
It should be underscored, however, that
pollution-control legislations have an important
role in pollution management. Among others,they set the bar for acceptable environmental
quality. Their disadvantage is that they allow
little flexibility and mainly concentrate on
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and soil. With pollution charge, a firm under the jurisdiction of
LLDA is expected to reduce emissions up to the point
where the marginal cost of additional abatement isjust equal to the charge. An example is the peso
charge per ton of Biochemical Oxygen Demand
(BOD) discharged or sulfur dioxide or carbondioxide emitted.
The refund-deposit system is a
surcharge on recyclable or reusable products.It promotes changes in consumer behavior. An
example is when refund of deposit is made for
turning over a container like bottles to a storeor an approved recycling center.
Risk and liability schemes refer to an insurance
mechanism to cover the cost of environmental remediation oreconomic and health damages resulting from a company’s
activities. It shifts the burden from society to the firm for potential
damage to the environment. An example is insurance mechanismto cover the cost of habitat rehabilitation.
User fee on raw material is a fee or levy
affecting input costs. It promotes recycling orenhanced resource efficiency in a process. An
example is a tax on water to encourage firms to
reduce water use and/or recycle water.
Creating a market for waste simply means providing for the purchase, sale, and
transfer of waste products. It promotes waste separation and use of waste products as a
raw material. An example is industrial waste exchange where organic waste is used forfertilizer.
Financial incentives/subsidies refer to investment programs such as grants,
subsidized loans, loan guarantees, or tax incentives. It promotes investment in qualifyingpollution management equipment and/or services. An example is accelerated depreciation
of the cost of pollution control equipment.
Generally, MBIs provoke a range of responses from targeted firms and industries.Because each firm operates within a unique set of parameters, different firms may select
different types of investments to achieve the same overall objective.
1010101010
1.2.2.3 Environmental Management System (EMS), Pollution Prevention/Cleaner Production (P2/CP) and Environmental Cost Accounting(ECA)
With the Geneva-based International Organization for Standardization (ISO) playing
a catalytic role in the development and promotion of ISO14000, EMS adoption by businessis basically an initiative of the private sector to promote international trade. In this context,
and in view of such internal drivers as cost savings, improved production efficiency and, in
general, business competitive advantage, voluntary implementation of EMS and P2/CP byindustry is essentially a market influence. It is assumed that, in general, the market will
reward organizations implementing an EMS with greater market share and, as a
consequence, market pressure will encourageothers to adopt the same. For example, suppliers of
automotive parts with EMS will have competitive
advantage in supplying automotive manufacturersdemanding a certified EMS from its suppliers. This
is also known as Greening the Supply Chain, a
practice now common in Western Europe and otheradvanced nations. Moreover, EMS implementation
in a process of continual improvement will prepare
organizations to meet present and future stringentregulatory requirements and avoid potential costly
environmental litigations, fines and penalties. The
overall outcome should be that more organizationswill become more proactive in environmental
management, improving their environmental
performance and gaining business competitiveadvantage.
With an EMS, an organization’s primary focus will be given to prevention andconservation strategies with provision for a comprehensive pollution and resource
management program rather than mere compliance with waste disposal or government-
set environmental quality standards and requirements.
Cognizant of the usefulness of EMS and P2/CP in improving industry’s environmental
management and performance, P2/CP is now made a state policy in the Philippine CleanAir Act and the Ecological Solid Waste Management Act. The Clean Air Act puts emphasis
on pollution prevention rather than pollution control. Its Implementing Rules and Regulations
(IRR) provide certain regulatory privileges, such as phased compliance and discount in
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fines or reduction in penalties to an establishment which will establish and maintain an
EMS, subject to certain conditions, including the submission of acceptable proofs of
implementation.
In brief, an effective EMS with P2/CP Program will help reduce waste at source,
improve environmental performance, enable an organization to comply with present andfuture stringent environmental regulations, enhance overall productivity and, thus, save money
and increase profits. In this context, an ENVIRONMENTAL MANAGEMENT SYSTEM with
P2/CP can make GOOD BUSINESS SENSE.
From the perspective of industry, good businesssense is better understood in money figures. To convince
decision-makers that an environmental investment like an
EMS with a P2/CP Program is not a mere cost center,there is a need to incorporate environmental costs and
benefits in an organization’s cash flow estimation.
Environmental cost accounting is an innovative accountingpractice that seeks to help business identify and estimate
environmental cost information for a host of business
reporting and management decision-making functions.
This guidebook aims to provide the readera guide on how to install, implement and maintain
an EMS with P2/CP and ECA. Its principal targets
are the Small and Medium Enterprises (SMEs).SMEs can make a big difference in the
environment because they comprise over 90% of
the total business establishments in the country.Local Government Units (LGUs), academic
institutions and hospitals, among others, may also
find this guidebook a useful reference.
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IIUnderstandingUnderstandingUnderstandingUnderstandingEnEnEnEnvirvirvirvironmentalonmentalonmentalonmentalManagement System,Management System,Management System,Management System,PPPPPollution Prollution Prollution Prollution Prollution Preeeeevvvvvention/ention/ention/ention/ention/Cleaner PrCleaner PrCleaner PrCleaner Productionoductionoductionoductionand Enand Enand Enand EnvirvirvirvironmentalonmentalonmentalonmentalCost Cost Cost Cost AccountingAccountingAccountingAccounting
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2.1 ENVIRONMENTAL MANAGEMENT SYSTEM
2.1.1 The Concept
By definition, an Environmental Management System (EMS) is part of the overallmanagement system in an organization. It is a continual cycle of planning, doing
(Implementation and Operation), checking, and acting (Review) on the programs
that an organization takes to meet its obligations to the environment or thesurroundings in which it operates, including air, water, land, natural resources, flora, fauna,
humans, and their inter-relations. Simply put, an EMS follows a process of continual
improvement involving an environmental policy, planning, implementation, checking andcorrective action, and management review.
The environmental obligations of an organization are linked with its operations. Aneconomic activity and the environment are closely related. The environment is the source
of many production inputs and serves as a catch basin or receptacle for discharges or
emissions. More specifically, organizations interact with the environment when they do anyof the following:
a) Activities
Examples: Buying raw materials, supplies, equipment and others;
Disposal of waste
b) Delivery of products and servicesExamples: Transportation of products or goods by land, water or air;
Providing after-sales customer service
c) Processing of raw materials
Examples: Storage of raw materials;Production, assembly or fabrication;
Chemical treatment
When the products of any of the above interactions are released to the environment,
then an environmental aspect is generated, causing various environmental problems. When
these causes become significant, effective management may be required to deal with thesituation.
An environmental aspect is an element of an organization’s activities, products,or services that can interact with the environment. Examples are emissions to the
atmosphere, releases to land of solid or liquid substances, use or consumption of resource
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(energy, chemical, or water), human health and
generation of noise, odor or vibration. Significant
environmental aspects are those that have asignificant environmental impact. Their
significance is determined by a set of criteria
established by an organization.
Environmental impact is any change inthe environment, whether adverse or beneficial,
wholly or partially, resulting from an organization’s
activities, products or services. The significanceof environmental impacts is also determined by
the organization and these, in turn, determine the
significant environmental aspect. Examples areair pollution, water pollution, ozone depletion and
chemical burns.
Other current global and local environmental issues or concerns include the following:
the greenhouse effect that can bring about global warming, toxic chemicals and hazardous
waste storage and disposal, solid waste disposal problems, land degradation and loss ofsoil productivity, photochemical smog, aquatic and terrestrial toxicity, depletion of finite natural
resources and human health issues.
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2.1.2 The Framework
An EMS based on ISO14001 has 17 elements that can be distributed as shown in
the chart below:
2.1.3 Who Needs an EMS?
An EMS may be needed by any organization that is looking for strategies to improve
its environmental performance. An organization needs an EMS if it is ineffective in complying
with environmental laws and regulations, recognizes its environmental problems to be ofsignificant liability, lacks the time and resources to effectively manage its environmental
obligations, has no established effective environmental policy, and is seeking a competitive
edge.
An organization may be a small, medium or large enterprise in the private and/or
public sector.
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2.1.4 The Benefits
An organization considers establishing an EMS if it wants to achieve any of thefollowing benefits:
Management
• competitive advantage
• improved environmental performance
• balanced economic and environmental interests• development of good industry or organizational practice
• more incentives for the use of innovative technology
Legal
• improved legal and regulatory compliance• enhanced relations with government authorities
• access to government regulatory flexibility and permitting assistance
• avoidance of CDO (cease and desist order)
Financial
• improved market share• improved operational costs
• reduced penalty and liability costs
• better access to capital• reduced insurance premiums
Internal
• more productive and efficient work force
• more employee involvement• enhanced employee morale
• reduced training effort for employees and staff
External
• improved public image and customer trust
• enhanced public and community relations• reduced customer pressure
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2.1.6 Synergy of EMS with Other Management Systems
The basic components of an EMS will look familiar to someone experienced in
quality management systems. The management system approaches are very similar. Bothinclude provisions for management commitment; a policy; implementation that includes
assignment of responsibilities, training, documentation and document control; corrective
and preventive actions; management review; and continual improvement. Recognizing thecommonalities, many organizations consider integrating their environmental and quality
management systems (QMS).
While inherently similar and compatible, there are underlying differences between
the two systems. QMS is fundamentally customer- and market-driven; i.e., the customerdetermines quality expectations. EMS, on the other hand, is driven by a broader range of
stakeholders including government requirements and community expectations.
Essentially, EMS requires a much broader definition of “customer.” Commitment to
compliance, pollution prevention and continual improvement are the anchors of a company’senvironmental policy. Identification of environmental aspects and impacts is another key
element of EMS planning. Emergency preparedness is as critical as the process to
communicate with internal and external parties.
2.1.5 The Costs
EMS development may entail thefollowing costs: staff/manager time and
other employee time. Internal labor and
logistical costs represent the bulk of theEMS resources expended by many
organizations.
Other costs include consulting
assistance, outside training of personnel
and certification costs if an organizationpursues third-party conformity audit.
Many organizations have foundthat implementing an EMS is a vehicle
for positive change. They have seen that
the benefits of an EMS far outweigh itscosts.
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2.1.7 ISO14001: An EMS International Standard
What is ISO?
ISO stands for International Organization for Standardization. It is a non-governmentorganization founded in 1946, based in Geneva, Switzerland. It has over 130 member-
countries represented by their national standard bodies. Its main objective is to develop
product and management system standards to facilitate international trade, among others.Adoption of ISO standards is voluntary.
What is ISO14000?
ISO14000 is a series of international standards that provides guidance to
organizations wishing to develop and implement an effective environmental policy. It providesa framework for setting and measuring environmental performance. Technical Comittee
(TC) 207 is an ISO technical sub-committee tasked with the development and review of
ISO14000 series standards. It is organization- and process- oriented. ISO14004 is an EMSguidance document. ISO14001 is an EMS specification document.
What is ISO14001?
ISO14001 specifies requirements for an environmental management system in order
to enable the organization to formulate a policy and objectives, taking into account legalrequirements and information about significant environmental impacts and aspects. It is
applicable to any organization that wishes to implement, maintain and improve an EMS;
ensure compliance with its environmental policy; demonstrate such compliance to others;seek a certification of its EMS by a third-party certification body; and make a self-determination
and self-declaration of compliance with the Standard. It is a system standard and is voluntary.
It defines the minimum requirements of an EMS. It allows organizations to identify programsto help achieve established objectives and targets. It requires organizations to show a
commitment to the prevention of pollution, legal compliance and to continual improvement.
Its equivalent document in the Philippines is the Philippine National Standard (PNS) 1701.
As of the end of 2001, there are 36,765 organizations certified to ISO14001
worldwide, a 60.5% increase in new certifications compared to year 2000. Japan has thehighest number of certifications at 8,123; followed by Germany, with 3,380; the UK, with
2,722; Sweden, with 2,070; and Spain with 2,064. In Asia, China ranks second to Japan
with 1,085; Taiwan, with 999; South Korea, with 880; Thailand, with 483; Malaysia, with 367;Singapore, with 298; Indonesia, with 199; and the Philippines, with 120 or an increase of
38% from its record of 46 in 2002.
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What ISO14001 is not.
ISO14001 is not a product standard, a performance standard, a prescription of
values for environmental performance indicators and a mandate for best technologies.
Neither is it a system that includes aspects of occupational health and safety or a relianceon people.
2.2 POLLUTION PREVENTION
A Pollution Prevention/Cleaner Production (P2/CP) Program helps a company identify
waste and, more importantly, their origin and causes and the potential solutions for reducingthem. Incorporated into the overall business operation and management system of the
company, a P2/CP Program realizes improved environmental and economic performance
with the support of both management and staff.
2.2.1 The Concept
Pollution prevention and cleaner production are terms often used interchangeably.The United Nations Environment Programme (UNEP) stated, however, that the distinction
tends to be geographical – North America tends to use Pollution Prevention (P2) while the
rest of the world utilizes Cleaner Production (CP). Listed below are the official definitions ofP2 and CP as defined by the USEPA and the UNEP.
The USEPA defines pollution prevention (P2) as the use of materials, processes, or
practices that reduce or eliminate the creation of pollutants or wastes at the source. It
includes practices that reduce the use of hazardous materials, energy, water or otherresources. It seeks to protect natural resources through conservation for more efficient
use.
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On the other hand, UNEP defines cleaner production (CP) as the continuous
application of an integrated preventive environmental strategy to processes, products andservices to increase overall efficiency and reduce risks to humans and the environment.
UNEP further explains how CP can be applied to the processes used in an industry, to the
products themselves and to various services provided in society as follows:
• For processes, CP results from one or a combination of conserving raw
materials, water, energy; eliminating toxic raw materials; and reducing thequantity and toxicity of all emissions and wastes at source during the production
processes.
• For products, CP aims to reduce the environmental, health and safety impact
of products over their entire life cycles; from raw materials extraction through
the manufacturing and use, to its “ultimate” disposal of products.
• For services, CP implies incorporating environmental concerns into designing
and delivering services.
P2/CP-related Terms
Aside from P2/CP, a number of related terms have been used to depict the advantages
of addressing pollution/waste problems even before they occur. These include the following:
• Eco-efficiency is a term that the World Business Council for Sustainable
Development (WBCSD) coined in 1992. The Council defines eco-efficiency as
the delivery of competitively priced goods and services that satisfy humanneeds and bring quality of life, while progressively reducing ecological impactand resource intensity throughout the life cycle to a level at least in line with theearth’s estimated carrying capacity.
• Prior to the use of P2, USEPA used the term waste minimization. In its report
to the US Congress, USEPA defined it as the reduction, to the extent feasible,of hazardous waste that is generated or subsequently, treated, stored or disposedof. It includes any source reduction or recycling activity undertaken by agenerator that results in either (1) the reduction in total volume or quantity ofhazardous waste, or (2) the reduction of toxicity of hazardous waste, or both, solong as the reduction is consistent with the goal of minimizing present and futurethreats to human health and the environment.
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• Green Productivity, a term used by the Asian Productivity Organization (APO),
is defined as a strategy for enhancing productivity and environmentalperformance for overall socio-economic development.
• Aside from the USEPA definition of P2, Environment Canada also used the
term P2 with its definition as the use of processes, practices, materials, productsor energy that avoid or minimize the creation of pollutants and waste, and reducethe overall risk to human health or the environment.
Legal Definition of Pollution and Industrial Waste
In Presidential Decree No. 984, pollution is defined as:
“...any alteration of the physical, chemical and biologicalproperties of any water, air and/or land resources of thePhilippines or any discharge thereto of any liquid, gaseousor solid waste as will or is likely to create or to render suchwater, air and land resources harmful, detrimental or injuriousto public health, safety or welfare, or which will adverselyaffect their utilization for domestic, commercial, industrial,agricultural, recreational, or other legitimate purposes.”
Under the same decree, industrial waste means:
“ ...any liquid, gaseous or solid matter,or other waste substance or acombination thereof resultingfrom any process or industry,manufacturing, trade or business orfrom the development, processing orrecovery of any natural resourceswhich may cause or tend to causepollution, or contribute to thepollution of the water, air and landresources of the Philippines.”
The above legal terms underscore that waste causes pollution. Furthermore, waste
manifests low productivity which, in turn, leads to wasteful utilization of resources that maycause pollution, and products to become costlier in the market. With pollution and with
products not performing well in the market, economic slowdown may set in, which may be
followed by social instability.
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2.2.2 The Framework
Pollution prevention refers to both recycling and the reduction or eliminationof pollution from its source. In the waste management hierarchy shown on page 25, an
organization’s first option is source reduction. Source reduction includes the following
strategies: good housekeeping or good operatingpractices, changes in technology, changes in inputor raw material and/or changes in product design.
The second option of an organization should berecycling. Treatment and disposal at the bottom of
the waste management hierarchy should be third and
last, respectively. But, these last two options fall underpollution control. Pollution Prevention (P2) efforts are
the preferable waste management schemes. Its
advantage can be well understood in the adage, “Anounce of prevention is better than a pound of cure.”
Pollution Prevention is a proactive tool. The choice of
P2 options are considered as final stage in a PollutionPrevention Opportunity Assessment, a process that
Business Definition of Waste
From the business standpoint, waste is viewed as:
“...a production inefficiency that has to be addressed or aresource that is out of place, thus, the need to find the rightplace to utilize this waste and turn it into a resource.”
The 3M Corporation gave a more appropriate definition of waste from the point ofview of business as
“...anything other than the minimum amount of equipment,materials, parts, space and workers’ time which areabsolutely essential to add value to the product.”
As such, an equipment running without any load, raw materials that spill on the
factory floor, overstocked parts, unutilized spaces and workers left idle while waiting for thenext-in-process material to arrive -- all these may be signs of waste.
P2/CP provides not only the environment-friendly solution but, also, the more
economic way toward productivity and resource conservation.
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Source Reduction or Elimination
Source reduction is any practice that reduces the amount of any hazardoussubstance, pollutant or contaminant entering any waste stream or released to the
environment. Source reduction may be achieved through either product change or processchange.
Product change involves a change in product quality standards and product
composition. Aside from this, product change may also mean an increase in the product’sdurability or product substitution. Examples of product changes are: use of unleaded gasoline,
use of biodegradable products over non-biodegradable, use of water-based paints in wood
furniture and wooden toys or use of non-CFC containing sprays. A very good example ofproduct change that has affirmed the benefits of P2/CP is the compact fluorescent lamp,
Waste Management Hierarchy
Source Reduction or EliminationPollution
PreventionRecycling
Treatment
DisposalPollution
Control
In ISO14001, however, as well as in the United States, the
term Prevention of Pollution is being used to refer to both Pollution
Prevention (source reduction and recycling) and Pollution Control
(Treatment and Disposal).
involves a review and evaluation of the input materials and unit process being used in a
facility as well as the products, by-products and wastes it generates.
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Input material change, implemented
either through raw material substitution or useof more pure materials, reduces the potential
for generating hazardous waste because no
hazardous material is introduced into theprocess stream. For example, shifting to water-
based paints from solvent-based paints
eliminates the generation of volatile organiccompounds. Purified materials lessen the
burden of later removing impurities from theproduction system. Other examples of input
material changes are replacing solvent-based
ink with water-based ink in the printing industry,phosphate-containing chemicals with non-
phosphate chemicals in the textile industry, and
cyanide solutions with alkaline, non-cyanidesolutions in electroplating.
Technology changes may be achieved through changes in the production process.Examples of technology changes are use of automation in process and conditions, such
as temperatuture equipment/piping/layout changes; changes in operational setting; additional
automation; conventional to spray-painting; and, dry heating over wet heating. In anelectroplating shop, technology changes may include shifting from the cyanide plating
process to the non-cyanide plating process (production process); modifying rinse tanks to
effect countercurrent flow instead of co-current flow (equipment modification); use ofconductivity meters in rinse tanks to reduce water usage (automation); and, operating at
the low-end of plating solution concentration to reduce chemicals in drag-out (process
condition changes).
also called CFL. Compared to ordinary fluorescent
lamps that provide the same light intensity, CFLs not
only consume less electricity and last longer, but arealso smaller in size, thus, requiring less materials and
energy to produce.
Process changes, on the other hand, include
changes in input material or in technology, and
improved operating practices.
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Operating and maintenance procedures
ensure that the facility works at its optimum capacitywith little or no breakdown of equipment. Materials
handling and inventory practices help reduce loss
of materials from mishandling and expiration. Atypical example of this is the practice of first-in-first-out or FIFO stock inventory, which prevents a
situation where certain materials, because ofoversight, are not pulled out for use before they
expire.
Production scheduling, especially forbatch production runs, helps reduce the
frequency of equipment cleaning, thereby
reducing requirements for cleaning (such aswater and detergent) and the attendant waste
generation. Stream and waste segregation
eliminates the chances of contamination fromless hazardous and/or less pollutive waste. This
practice also helps ease recycling of materials
and/or reduces treatment costs. Themanagement practice of providing rewards and
recognition not only helps promote P2/CP but
also makes its implementation moresustainable.
Recycling
Recycling involves the return of a waste material either to the originating processas a substitute for an input material (reuse) or to another process as an input material
(use). If the waste material cannot be used within the company, it may be sent to another
Improved operating practices, also known as good manufacturing practices, include
preventive and maintenance procedures, materials handling improvement, inventory control,
stream and waste segregation, effective supervision, employee participation, productionscheduling/planning/control, cost accounting/allocation, spill containment, loss prevention
program, computerization for inventory control and materials tracking.
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Treatment involves any method,technique or process designed to change
the physical, chemical and/or biologicalproperties or composition of waste, or to
neutralize the waste to make it safe or
more stable to transport, store or disposeof. This may include wastewater
treatment process, such as activated
sludge; air pollution control devices, suchas filter bags and cyclones; and thermal
destruction of solid waste, such as
pyrolysis and incineration.
After treatment, the safer or more
stable waste is ready for disposal or discharge into receiving bodies of water, emission intothe atmosphere, or containment in a sanitary landfill.
2.2.3 The Benefits of P2/CP
To illustrate the benefits of P2/CP, consider a factory requiring 100 units of raw
materials to produce 80 units of finished products. From the law of conservation of mass,this factory also generates 20 units of waste. In this hypothetical case, assume that the
company where it becomes a resource for the
latter. The Philippine Business for theEnvironment adopted this concept, i.e., the wasteof one industry could be an input or raw materialof another, in the operation of its Industrial WasteExchange Program (IWEP). Examples of
recycling are use of cooling water for wash water
(reuse) and chromium recovery in leathertanning (reclamation).
Treatment and Disposal
Although not part of the P2/CP waste-
management strategies, treatment and disposalare presented to serve as a reminder that any
residual waste will still have to be addressed.
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practice of P2/CP reduces the generation of waste to 10 units. Through such reduction, the
factory may maintain its production capacity at 80units finished products. In this case, raw
material consumption is reduced to 90 units, thereby reducing operating costs. On theother hand, consuming 100 units of raw materials means 90 units of finished products.
Thus, productivity is increased. Furthermore, the reduction of waste from 20 to 10units
spells lower treatment costs for the factory.
Aside from the benefits of increased productivity and reduced operating waste
disposal costs, the Integrated Program on CP Technologies (IPCT) of the Department ofScience and Technology (DOST) cites the following advantages of P2/CP implementation:
• Reduced risk of liability. Undertaking P2/CP can reduce regulatory exposureand, in some cases, may eliminate the need for permits, manifesting, monitoring
and reporting. Shifting to non-toxic materials from toxic substances takes away
the need to report this to the regulatory agency. The absence of hazardouswaste reduces the likelihood of any long-term liability for the company.
• Public Health and Environmental Benefits. Less waste, especially hazardous
waste, means that the public is exposed to less danger. Furthermore, consuming
fewer raw materials helps conserve natural and mineral resources.
• Worker Health and Safety. Not only is the public exposed to reduced risks but,more importantly, workers may be assured of a healthier and safer work
environment. Leaks, spills and releases of hazardous materials decrease the
exposure of plant personnel.
• Improved Corporate Image and Global Competitiveness. The public, ingeneral, would appreciate a company practicing P2/CP. With the growing trend
of green consumerism, where people tend to buy environment-friendly products,
P2/CP would surely be a plus factor for the company. Besides the fact that themarket accepts the products because of P2/CP, production costs also decrease,
thereby making the products cost-effective.
The IPCT of DOST has adopted the slogan, Increased Productivity, DecreasedWaste, Improved Quality and Safer Work Environment in the promotion of P2/CP.
2.2.4 Other Important Considerations
Six important factors should be considered in the establishment of a P2/CP Program(see Table 2.2.4). In the traditional feasibility study of a business enterprise, factors such
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4. Organizational
Source: Adapted from http://www.uneptie.org/pc/cp/understanding_cp/cp_industries.htm
SUB-CATEGORIESFACTORS
• Cost of external capital for investments in industry
• Availability of funding mechanisms appropriate for P2/CP investments
• Perception of business due to innovative nature of P2/CP investments
• Evaluation procedures of P2/CP by credit provider for lending, equityparticipation, etc.
• Cost effectiveness of P2/CP investments given present resource prices
• Maturity of the company’s internal cost calculation and cost allocationpractices
• Maturity of the company’s internal capital budgeting and capitalallocation procedures
• Focus on environmental, technology, trade and industry development,and strategies
• Maturity of the environmental policy framework including level ofregulatory enforcement
• Leadership for environmental affairs
• Risk related to P2/CP e.g., availability of incentives
• Maturity of the environmental management function in companyoperations
• Maturity of the company’s organizational structure and its managementand information systems
• Level of employee involvement and project work
• Presence of sound operation basis with well-established productionpractices, maintenance schemes
• Need for comprehensive assessment to identify appropriate P2/CPopportunities
• Accessibility of equipment supportive of P2/CP (e.g., high-qualityengineering, small wares for process instrumentation)
• Accessibility of reliable technical information tailored to company’sneeds and assimilative capacities
• Perception regarding its contribution to environmental improvement
• Interpretation or understanding of P2/CP concept
• Need to manage change
1. Financial
2. Economic
3. Policy-related
Table 2.2.4 Other Important Considerations in P2/CP
as financial, economic, technical and organizational preparedness or presence of policy
support, may spell success or failure. These factors should, thus, be made part of the
P2/CP Planning Stage.
5. Technical
6. Conceptual
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2.3 ENVIRONMENTAL COST ACCOUNTING
2.3.1 The Concept
Environmental Cost Accounting (ECA) is also known by other names, such as
Environmental Management Accounting, Environmental Cost Assessment, TotalEnvironmental Cost Accounting or Green Accounting.
Its salient features include environmental cost information that are internal to thecompany, i.e., environment-related business costs that a company actually pays for or may
pay for considering future regulatory requirements; waste management-related costs, such
as waste treatment, pollution control and disposal costs; lost purchase values of wastedraw materials and other manufacturing inputs; and environmental cost accounting data that
is valuable for many types of management activities or decisions, but can be particularly
useful for environmental management decisions, such as investment appraisal for cleanerproduction and/or technologies.
ECA evolved due to the fact that environmental cost information needed in today’sbusiness decision-making cannot be sufficiently gathered from conventional accounting
procedures. Traditional accounting systems often fail to give accurate environmental cost
data owing to the following limitations:
a) Many environmental costs are hidden in the company’s
overhead or general accounts, thereby making environment-related costs invisible to business owners and managers;
b) Cost accounting systems that do not separate
environmental costs from non-environmental
costs often misallocate environmental costs toproducts and services;
c) Accounting records usually do not track
wasted materials and other flows, such as
energy and water; and
d) Some significant environment-related costs,such as future regulatory costs, potential
remediation or clean up and potential liabilities,
may not be found in the accounting records atall.
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There are two general types of costs that may be referred to as environmental
costs, namely:
a) External environmental costs, which refer to those paid for by society
(e.g., natural resources damage, biodiversity loss, health cost of
communities, etc.)
b) Internal environmental costs or environment-related costs that businesses
actually pay for or will pay for considering foreseeable future environmentalregulations, such as pollution fees, penalties, etc.
From the viewpoint of an environmental economist, external environmental costs(and benefits) are important in policy analysis and formulation. Policy makers can better
recognize the importance of environmental interventions when money value is attached to
environmental externalities. From the viewpoint of a business accountant, externalenvironmental costs (and benefits) are not easy to measure financially and are ordinarily
not considered in business cash flow estimation. However, such costs and benefits can be
estimated by a company through government rules and regulations. An example is theEnvironmental User’s Fee as implemented by the LLDA. Unless externalities are internalized
cost, they do not enter the capital budgeting process of business.
It is important to note that ECA focuses on the identification and estimation of internal
environmental costs for management decision-making purposes.
2.3.2 The Benefits of ECA
ECA provides business with valuable information to improve decision-making. Itenables managers to do:
• More accurately track and manage raw
materials, energy and waste;
• More accurately identify, estimate andmanage costs, particularly costs of
wasted raw materials and waste
management;• Better recognize and estimate the
financial and other core business benefits
of environmental management activities;and
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• Better measure and report environmental and financial performance, thus
improving company image with customers, investors, finance providers,
employees, communities, environmental organizations and government.
Many companies use environmental cost data for both environmental and non-
environmental management activities. Environmental cost information proves useful formanagement decisions in the following areas:
a) Process/Technology Changeb) Product/Service Design
c) Purchasing
d) Supply Chain Managemente) Budgeting and Investment Appraisal
f ) Cost Control
g) Product Mixh) Performance Evaluation and Benchmarking
The government also stands to benefit from the adoption of ECA by industry. Theimplementation of ECA practices can improve the working relationship between regulatory
agencies and enterprises due to the following benefits:
a) The more the industry is able to justify environmental programs on the basis
of financial self-interest, the lower will be the financial, political and other
burdens of environmental protection on government;
b) Implementation of ECA by the industry strengthens the effectiveness of
existing government policies/regulations by revealing to companies the trueenvironmental costs and benefits resulting from those policies/regulations;
c) Government can use industry ECA data to estimate and report financial andenvironmental performance metrics for government stakeholders, such as
regulated industries or the industry partners in voluntary programs; and
d) Industry ECA data can be used to improve government program/policy
design.
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2.4 SUCCESS STORIES
2.4.1 EMS Success Story
Mactan Rock, an SME operating in Mactan Island, Cebu, is involved in themanufacture of chemicals and equipment for wastewater treatment. This company was
certified to ISO14001 in June 1999. The company President, Mr. A. Tompar, argues that
their adoption of an EMS aims to ensure that the company will ‘walk the talk’. Here aresome excerpts of his paper presented in a Technical Conference organized by EMB in year
2001.
This is the environmental policy of the company:
“Mactan Rock is fully committed to implement its EMS which includesproviding quality products and services that will prevent pollution and promotewaste minimization. The Company is also committed to the protection of thewater aquifer and develop zero-wastewater discharge technology. The companycommits to comply with the environmental requirements of the governmentand other organizations to which MRII subscribes.
It is our strong belief that a sound environmental policy contributes tothe competitive strength and benefits of our customers, shareholders, employeesand suppliers by contributing to the overall well-being of Mother Nature, ingeneral, and the communities we serve, in particular.
We will continuously seek opportunities to improve our adherence tothese principles and will periodically report progress to our stakeholders.”
EMS enabled the company to fully comply with all regulatory requirements.
“The company also commits to comply with all environmentalrequirements of the government and other organizations to which our companysubscribes. We’re proud to say that when we started all these, we realized wehad to comply with a lot of environmental laws. Since we are a small company,we were under the impression that government agencies take us for granted sothey do not really monitor our regulatory compliance. In spite of that, we’reproud to say that we have complied now with all requirements of the government– environmental laws and others like water usage, which is very important inthe protection of our aquifer. It is on record that we submit regular reports tothe DENR on our compliance to all environmental laws.”
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ISO14001 certification enabled the company to gain business competitive advantage.
“We believe that a sound environmental policy contributes to ourcompetitive strength and benefits our clients. Our competitive strength wasdemonstrated by the fact that we continue to get business in this time of economiccrisis. Before, multinational companies shied away from buying products andservices from local companies like ours. But our ISO14001 certification hashelped us a lot in increasing our market share. And we are very proud to saythat we were able to have access to a lot of multinational companies because ofour ISO14001 certification. Our shareholders are very happy for us as wesurvive and still make some money during this period of economic downturn.Our employees are also very happy to see that, instead of being laid off in2001, we were even able to create more jobs. Our suppliers are also happysince we were able to sustain and improve our business.”
EMS drove the company to strengthen its organization.
“In pursuing our EMS, it is very important that we have a very strongorganization. It is very important that not only the people behind the company,or the workers of the company, are committed but also the owners, especiallymyself. I am fully committed, as the President, to deliver the Objectives, Targetsand Programs of our EMS. One of the most important issues or problems thatwe’re trying to tackle now is really imparting EMS in each of our employees.Filipinos like to slide back, sa umpisa lang then eventually, gusto pa rin natingbumalik sa kinagawian natin (the concept of ningas kugon). So, it’s reallyimportant that we internalize it, and we’re putting a lot of efforts into that. Infact, we give monthly recognition to those who help in this effort just to sustainour EMS initiative.
Our company is a model of participative management, meaning thereal management of our company is handled by a group of people responsiblein our departments. I am the Environmental Management Representative (EMR)of our company since we are a small company. But I’m trying to delegate itnow to my daughter, who is an SGS-certified ISO14000 Auditor. In ourcompany, our Chief Environmental Manager, Senior Operating Manager andEMS Coordinator are still striving to gain knowledge, skills and techniquesfrom other companies and training institutions in pursuit of our EMS.
When we started our EMS, we put up an EMS Steering Committee tohelp us in planning, installing, implementing, monitoring and improving of
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our system. This Committee is headed by my eldest daughter with coordinatorsfrom each department as members. We have coordinators for sales, operations,administration, engineering, materials and finance.”
EMS motivated the company to adopt green accounting and influence itsstakeholders.
“Our Finance Department is now pursuing green accounting whileour Materials Department pursues greening the supply chain. We are thusconducting orientation seminars for our suppliers on their social responsibility,environmental accountability, and advocating to them the incorporation of EMSin their business management. It’s commendable that a lot of big companiesright now are trying to pursue this worthwhile endeavor. Business will betterunderstand and appreciate an EMS if other big businesses take the lead and it’sa fact that survival of business relies on the market. If the market will respondto the pursuit of greening our environment or making our environmentsustainable for the next generation, how can local business compete or survive?”
EMS has made the company proactive, enabling it to identify and evaluate itsoperations which are significant to the environment.
“When we started our EMS, we had to identify the aspects and theimpacts of our business activities, and I think we have identified 700 of these,which we graded or ranked according to how much they will affect theenvironment. This is how we realized the significance of our operations to waterpollution, especially in our location where we sit over an aquifer. If we pollutethat aquifer, we ourselves will be poisoned. We have to give priority toaddressing our use and generation of chemicals. Ground or soil pollution is oursecond priority. In the beginning, our compliance with legal requirements wasreally an important issue. The depletion of our natural resources is another.Because of this, we began, among others, to plant trees around our facility.When we started our company, our compound didn’t have a single tree sincewe don’t have lots of irrigated water. So, it was like a desert then. But now, ourcompound looks like a forest.”
EMS has made the company better understand and implement measures for theprevention of pollution.
“We have undertaken several initiatives for the prevention of pollution.We installed new pollution control devices even if the DENR issued us aCertificate of Non-coverage under the Environmental Impact Assessment
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System. We set up containment in all our storage areas and our areas ofoperations which we feel may contaminate our ground, soil and groundwater.We put up double containment which we check regularly to address possiblecracks. We also installed a few scrubbers for our mixing area. This helps usincrease our production and protect the environment. We also put absorbents,oil booms and oil skimmers into our wastewater facilities and other areas whereemergency spills from cars and trucks may occur. We also have a simple box-type wastewater treatment facility which we use to extract water for recycling.Recycled water irrigates our trees.
We are in the middle of a subdivision — the Grand Pacific Villa, anarea previously planned to be classified as commercial/industrial. And we arevery proud to say that our neighbors have no single complaint against us. Infact, we have improved our relationship with them, helping them execute theirown solid waste management and recycling programs. We pursue a Tree-planting Program in their streets every six months. This is part of the call ofour EMS—to influence our stakeholders. Our environmental awarenesscampaign, however, has also influenced our employees. They have also realizedthe relevance of EMS in their households. They are now implementing EMSprograms in their own households, remembering our policy that, by puttinggarbage in our pocket and not throwing it recklessly somewhere else, we canhelp solve the problem of solid waste in our community.
In our manufacturing plant, analysis of the soil was bad in the beginningsince, as I have said, we used to allow batteries to lie scattered around ourcompound. The battery is one of the sources of lead and, for many years, ourwarehouse was not very diligent on that. But we solved our lead problem aftertwo years simply by cleaning out operations and making sure that batteries,both big and small, are well-handled. Small batteries are put in a plastic drumwhile the big batteries are sold to battery manufacturers.
We also pursue waste segregation under our Solid Waste ManagementProgram. We compost all our biodegradable materials. Composting helps usmake our plants healthy, especially in our land in Mactan which is not veryfertile. We also recycle a lot. We have instituted recycling of our containers. Weused to buy new drums and plastic pails each time we delivered our products.Since we started recycling, our cost in new drums and pails was greatly reduced,enabling us to keep competitive prices for our products.”
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EMS prompted the company to conserve resources.
“We saved on our water expenses because of water conservation andrecycling. As we succeeded in reducing our groundwater extraction by athousand cubic meters per day, we enabled local residents to extract the sameamount of water from Mactan Island. This enabled them to save on the highcost of truck water which is more expensive during summer. In a way, ourEMS implementation enables us to help the local economy, as we contribute inensuring the availability of local water resources for domestic consumption.”
2.4.2 P2/CP and ECA Success Stories
From 1992 to 1996, the DENR implemented the USAID-assisted project entitled,
Industrial Environmental Management Project (IEMP). IEMP provided P2/CP assistance to
about 140 industrial facilities. The Project resulted in the reduction of over 33 million cubicmeters of water annually for the industrial facilities. Aside from this, the organic pollution
load was reduced by 30 tons in the same period. On the financial side, these facilities
invested some US$20 million, but realized a total benefit equivalent to US$30 million.
Among the companies assisted by IEMP were a starch manufacturer and an
electroplating shop, both in the Visayas region.
• For the starch manufacturing facility, IEMP recommended the recycling of
untreated separator water into wash water for raw material cleaning. TheP2/CP option cost the company PhP79,000 but reduced water consumption by
60%, thus, saving PhP339,960 in pumping and maintenance costs. IEMP also
recommended the installation of a tangential screen before the wastewatertreatment plant. This P2/CP option not only recovered cassava peels and bits
of tubers, but also reduced the Biochemical Oxygen Demand (BOD) load by
67%.
• The electroplating shop invested in an electrostatic rotary atomizer, which
saved the company 45% in paints and solvents or an equivalent amount ofPhP1,800,000 by utilizing centrifugal force to atomize paint and electrostatic
charging for paint to be readily absorbed by the work piece. The P2/CP change
also reduced paint sludge by 40% or about 1.7 cubic meters per year.
Likewise, the ITDI/DOST Project funded by AusAID, entitled, Wastewater Treatment
Technology Transfer and Cleaner Production Demonstration Project, assisted a textile dyeing
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corporation and a fruit juice company. These companies implemented the following P2/CP
options:
Textile Dyeing• Waste segregation (segregate wastewater according to pollution load)
• Raw material substitution (from bleaching chemicals to enzymes; use of azo-safe dyestuff)
• Process change (use of one-bath method to eliminate some steps in the
production process)• Recycling (reused condensates from machines)
• Good operating practices (monitoring of process parameters; preventive
maintenance)
For these P2/CP options, the textile-dyeing corporation spent PhP 480,000 for process
modification and optimization and PhP1,290,000 for the reuse of condensates from dyeingmachines. It, however, realized the following benefits: reduced process chemical
consumption amounting to PhP520,000 and reduced water consumption by 15% equivalent
to PhP380,000 for the former P2/CP option and decreased energy usage by 10-15%- savingthe company, on the average, PhP1,405,000 for the latter.
Fruit Juice Canning• Technology change (installation of trigger nozzles; fail-safing)
• Good operating practice (training and supervision of workers; incentives scheme)
• Recycling (return of condensate to boiler; reuse of clean-in process rinse water)
Similarly, the fruit juice canning company spent less than PhP500,000 but was able
to save more than PhP1,250,000. More important, the company reduced its pollution load
by 54.5 kilograms of BOD (Biochemical Oxygen Demand) per day.
Other ITDI/DOST-assisted companies under IPCT experienced the same thing,
i.e., environmental and economic benefits from P2/CP.
• A marine processing company in the Visayas area implemented P2/CP
through good operating practices like waste segregation, preventivemaintenance, water recycling, retrofitting and shifting to dryer cleaning methods.
For a measly sum of PhP4,300 for these P2/CP options, the company realizedthe following benefits: reduced water consumption by 50%, thus, reducing
wastewater generation by the same amount, lower requirement for cleaning
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chemicals, and reduced plant wastewater BOD concentration from 300
milligrams/liter (mg/L) to less than 100 mg/L or about 850 kg BOD/year. Annual
savings for this company was almost PhP300,000.
Investments in clean technologies also helped companies not only reduce pollution
load, but also bring down operating and waste disposal costs.
• Another IPCT-ITDI/DOST-assisted company, a homeware exportingcompany, purchased a high-volume/low-pressure (HVLP) paint spray gun forPhP16,000. The paint spray gun increased painting efficiency, thereby, reducing
paint consumption by 650 liters or PhP60,000 per annum. This means less
paint sludge to dispose of. More significantly, the higher its painting efficiencywent, the lower its fugitive paint emissions in the workplace, thus resulting in a
safer work environment.
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IIIInitiating and Sustainingan EnvironmentalManagement System
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3.1 INTRODUCTION
T his Chapter focuses on the major activities required to successfully implement
an EMS. It starts from setting up, to performing the other major componentactivities of the EMS continual improvement cycle such as PLANNING, DOING
(Implementation and Operation), CHECKING and ACTING (Review) on the
programs that an organization carries out to meet its environmental obligations. Thesemajor activities are vital in sustaining the EMS.
The requirements of ISO14001 are discussed for each major activity, includingwhy it has to be done, tasks needed to implement them and some illustrative examples to
facilitate understanding of the requirements of the standard.
3.2 SETTING UP AN EMS
There are two very important steps to carry out in setting up an EMS. Commitment
from the top management ensures that the organization is ready to embark on a project
whatever it entails to achieve success. The basis for setting up an EMS would be theresult of an Initial Environmental Review (IER) of the organization’s activities, products or
services. This will provide a gap analysis of where the organization is at the moment
against the requirements of the EMS standard.
“An environmental program can only be successful if the commitmentto make it work comes from the top, and if employees are involvedalong the way. In the same breadth, the practice of caring for theenvironment should not be limited to big companies, but should bea shared responsibility with all, regardless of company size, businessor industry.”
JUAN B. SANTOSChairman, Philippine Business
for the Environment and Chairman, NestléPhilippines, Inc.
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3.2.1 Commitment
The success of the EMS implementation depends upon commitment from all levelsand functions of the organization, especially from top management. The on-going
commitment and leadership of top management are crucial and should be obtained at the
very beginning. When implementing an EMS, top management has to commit the following:
• Make environmental management among the highest priorities
• Provide full support to the implementation of project team• Take actions to reduce the organization’s impact on the environment by
providing the needed financial and human resources, and
• Consider and plan the impact of cultural change this process will entail.
In order to effectively plan, allocate resources and monitor the progress of your
EMS implementation, you will need to draw up an EMS implementation plan. The plan
should contain the activities and responsibilities from the start, until you have successfullyimplemented your EMS, and the timeframe in which it is expected to carry out these
activities.
Table 3.2.1 on the next page shows the objective of seeking top management
commitment, tasks you will need to undertake to achieve this, and examples to illustrate
some of the needed tasks.
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Table 3.2.1Seeking Top Management CommitmentObjective: To know why an organization wants to establish an EMS
Tasks Illustrative Examples
1. Secure commitment from topmanagement• Know what the management
wants to address in the EMS
• Identify project champion
2. Appoint an EnvironmentalManagement Representative orEMR• Understand the operations of
the organization• Has the necessary authority
3. Allocate budget and directschedule• Understand that it will
entail staff and employee time,training, materials, consultingtime, and some equipment andfacilities
• Set up implementation team• Determine the EMS timeframe
for EMS development andimplementation
4. Know from management ifcertification is to be pursued ornot
• Air pollution from fumes created by the sprayingprocess and which generates public complaint
• Disposal of contaminated empty drums• Non-compliance with Clean Air Act• Energy and Water Conservation
3.2.2 Initial Environmental Review
An Initial Environmental Review (IER) of the organization’s activities, products or
services is undertaken to establish your current status vis-a-vis meeting the requirementsof ISO14001, and identify what needs to done.
The IER process covers the following:
• Identifying your aspects and impacts to gain a more complete understanding
of how the actions of your organization and employees affect the environment
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• Identifying legal and other requirements to check any non-compliance and
the organization’s commitment to comply with a corresponding program to
achieve compliance
• Looking at your environmental management practices and procedures. This
covers checking your existing overall management system and whether or notyou have some or all of the requirements of an EMS already in place
• Getting some feedback from past accidents/incidents. This involves checkingyour records of accidents/incidents and finding out if you have emergency
response actions
The conduct of an IER is not required in ISO14001, but is very useful in establishing
a basis for your EMS. However, guidance on the conduct of IER is given in PNS 1704:1996
or ISO14004:1996 documents.
Table 3.2.2 on the next page shows the objectives of conducting an IER, tasks
required to do it and examples to illustrate some of the things you will need to know.
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3.3 PLANNING
This is the first major component activity of the EMS continual improvement cycle.It covers identifying of significant aspects and impacts, determining applicable legal and
regulatory requirements and establishing environmental objectives, targets and programs.
Planning is clause 4.3 in the ISO14001 standard.
3.3.1 Environmental Aspects
The organization begins by identifying all its activities over which it has control or
influence, its products and/or services and the environmental aspects associated with it
(Clause 4.3.1). Environmental aspects are elements of an organization’s activities, productsor services that can interact with the environment. Organizations interact with the
environment when they process or manufacture raw materials, deliver products or services
or undertake activities, such as purchasing materials, repair equipment or train staff.Examples of environmental aspects are:• Emissions to air (e.g., fumes, dust or particulate matter, oxides of sulfur or
nitrogen from burning)
• Management is concerned about the following issues:- Noncompliance with current environmental
regulations- Public complaints from pollution it generates
• Paint spraying operations which emit excessive fumesand leave pigments on the ground
• ISO9002 certification• OSHAS 18000 certification
• RA 6969 covers the use and disposal of toxic andhazardous substances used by the organization
1. Know the basic environmentalissues of the business
2. Identify the operations which affector have potential impact on theenvironment
3. Know existing environmental,safety and health and qualitymanagement practices andprocedures
4. Know the legal and regulatoryrequirements of the organization
5. Know the views of interestedparties or stakeholders
6. Know feedback from previous orpast accidents or incidents
Table 3.2.2Conducting an Initial Environmental ReviewObjectives:To determine the organization’s current position with the environment
To provide the basis for establishing an EMS
Tasks Illustrative Examples
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• Discharge to water (e.g., effluent, solid waste discharges)• Releases to land (e.g., solid wastes or liquid wastes)• Resource use (e.g., electricity, water)• Human health (e.g., exposure to chemicals, solvent fumes)
Each of these aspects (CAUSES) creates impact (EFFECTS) on the environment.Impacts are any change to the environment, whether adverse or beneficial, wholly or
partially, resulting from an organization’s activities, products or services. Examples of
impacts are:• Air pollution• Water pollution• Greenhouse effect or global warming• Acid rain• Loss of soil productivity• Loss of marine life• Depletion of natural resources• Health effects (e.g., respiratory illness, allergy, hearing impairment)
It is important that organizations identify which among the environmental impacts
are significant to them to determine the significant aspects. Significant aspects are thosewith significant impacts. These aspects shall be the focus of the organization’s
environmental policy, objectives, targets and programs. The determination of significance
is done by the organization using its own set of criteria in order to prioritize, also, theactions to be taken for environmental planning. The following criteria for determining
environmental significance may be used:
Ecological factors• Quantities of air emissions• Volume of solid waste discharges• Volume of effluent discharge• Quantities of energy or water use
Environmental risk factors• Severity or seriousness of impact• Probability of occurrence• Detection of the aspect• Duration of impact
Business concerns• Legal and regulatory compliance• Cost of disposal or clean-up• Public image
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A combination of the aforementioned factors are used to evaluate whether the
environmental impact associated with an aspect is significant or not. It is also useful to
consider the site factors, such as location of the plant (i.e., urban or rural/agricultural),geology and hydrogeology of the site, spatial (i.e., size) and temporal (i.e., weather, wind
conditions) factors to assist you in determining significant impacts. Those aspects with
significant impacts become significant aspects.
Table 3.3.1 shows the objectives of aspects and impacts identification, tasks you
will need to undertake to achieve this, and examples to illustrate some of the neededtasks.
Table. 3.3.1 Identifying Environmental Aspects and ImpactsObjectives: To determine what you are trying to manage in your facility
To determine the priorities of your organization
1. Identify all your organization’sactivities, products and/or services
2. Determine all environmentalaspects and the associatedimpacts• Consider those within your
control and influence• Consider under normal,
abnormal and emergencyconditions
3. Determine significant aspects• Establish environmental
significance criteria• Evaluate impacts to
determine which aresignificant using the criteria
• Determine significant aspectsfrom significant impactsevaluation
4. Prioritize significant aspects andmaintain aspects list
5. Update list of aspects and impactsall the time
• Finishing operations, maintenance of equipment,administrative work, chemical products
• Fumes from cleaning solvents• Spray paint pigments on the ground• Resource use from electricity and water
Tasks Illustrative Examples
See Annex 3.1 for an example of an Environmental Aspect Rating System (EARS)
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1. Check all activities that arecovered by legal and otherregulatory requirements
2. Keep an updated inventory ofapplicable laws and regulations
3. Keep track of compliance records
4. Communicate to personnelresponsible for implementation
• Disposal of contaminated wastes is covered underRepublic Act 6969
• Ecological Solid Waste Management Act (RA 9003)• DAO 2000-81
Tasks Illustrative Examples
3.3.2 Legal and other Requirements
All laws and regulations that apply to identified environmental aspects related tothe organization’s activities, products or services need to be identified. Other requirements
that the organization subscribes to, such as the building code and occupational health
and safety requirements must also be included. These information should be communicatedto all personnel whose activity or task creates environmental aspects. Access to current
and proposed legislation and related developments can be sourced through the following:
• Government agency concerned (e.g., DENR, LLDA, DOST)• Non-government organizations (e.g., Partnership for Clean
Air, Luntiang Pilipinas)
• Industry associations (e.g., PCAPI)• Internet (e.g., www.emb.gov.ph)
• News dailies and environmental magazines (e.g.,
Philippines Environment Monitor, Business andEnvironment)
• Environmental symposia/fora
Initial information related to legal compliance can be derived
from the results of an IER if it has been conducted by the organization.
Table 3.3.2 shows the objectives of determining legal and regulatory requirements,
tasks you will need to undertake to achieve this and examples to illustrate some of the
needed tasks.
Table 3.3.2Determining Legal and Other RequirementsObjectives: To determine what environmental laws and regulatory requirements apply to
your organization
To determine your environmental compliance
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3.3.3 Environmental Policy
The organization’s environmental policy is a documented statement of commitmentto environment from the top management. It establishes its environmental goals and guides
decision-making in relation to the significant aspects associated with its activities, products
or services. The policy also demonstrates its commitment to the prevention of pollution,compliance to applicable laws and regulations, and to continual improvement. The standard
requires that this policy be fully communicated to all interested parties or its stakeholders
and that this be made available to the public.
Table 3.3.3 shows the objectives of formulating an environmental policy and the
tasks you will undertake to achieve this.
Table 3.3.3Formulating an Environmental PolicyObjectives: To determine your organization’s commitment to the environment
To determine your environmental goals and objectives
• Mactan Rock’s Environmental Policy in Chapter IISec 2.4.1 i.e., Success Stories
• Recycling and reuse of used papers• Water-based paints
• Security personnel• Cleaners• Chemical suppliers
• Barangay/community• Local Government Unit (LGU)
1. Establish environmental policy• Know what your significant
aspects and impacts are• Know your legal and other
requirements
2. State commitments to:• Prevention of pollution• Legal compliance• Continual improvement
3. Communicate to all employees,contractors and suppliers
4. Make available to public
Tasks Illustrative Examples
3.3.4 Objectives and Targets
Documented objectives and targets are formulated for each of the identified
significant aspects. Environmental objectives relate to the organization’s commitment to
the prevention of pollution and continual improvement, as well as legal compliance. In
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setting up the objectives and targets, the financial, technological and business resources,
including the views of interested parties must be fully considered. These objectives must
be performance-based and specific, with corresponding measurable and quantifiabletargets. The organization must ensure that these are achievable within a period of time.
Table 3.3.4 shows the objectives of setting the environmental objectives and targets,tasks involved to achieve these and examples to illustrate some of the needed tasks.
Table 3.3.4Setting of Environmental Objectives and TargetsObjectives: To determine your progress and milestones in your EMS implementation
To determine improvements in your environmental performance
1. Set objectives and targets• Know what your organization
does and its concerns• Know the organization’s
financial resources• Know what technology exists
and are available
2. Consider significant aspects,legal requirements and views ofinterested parties
3. Specify performance-basedobjectives and measurabletargets and specify performanceindicators
4. Monitor targets
• To reduce the amount of contaminated solid wastesby 30% from the 2001 volume by end of the year
• To recycle cleaning water up to 30% by June 2003• To eliminate the use of chemical-based solvents by
end of October 2003• To reduce fume emissions in the painting process by
50% from current figures at the end of the April 2004
Tasks Illustrative Examples
3.3.5 Environmental Management Program(s)
An environmental management program (EMP) is a detailed set of action plans asa means to achieving the priority environmental objectives and targets (EOTs). It outlines
what must be implemented first, by whom, how and when for each of the set objectives
and targets. The action plan must include the following:• Designating responsibility for achieving objectives and targets at each
relevant function and level;
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• Providing the means (i.e. people, skills, technology,
financial resources etc.) for fulfilling the objectives
and targets; and
• Designating a time frame within which objectivesand targets will be achieved.
It is usual to incorporate the organization’s EMP in its
overall strategic plan, such as solid waste management, energyand water conservation, and waste minimization strategies.
Additional action plans are added when there are new projects,
new or modified activities, products or services, thus, amending the EMP in the process.EMPs are reviewed on a periodic basis, and revised accordingly to reflect changes in the
organization’s objectives and targets.
Table 3.3.5 shows the objectives of establishing an environmental management
program, the tasks involved in implementing this and examples to illustrate some of theneeded tasks.
Table 3.3.5Establishing an Environmental Management ProgramObjectives: To determine your company’s environmental activities
To determine who is doing what and by when
1. Set action plan• Know your environmental
objectives and targets• Know your company’s capability
and resources available
2. Provide resources needed for eachaction
3. Specify responsible person/s
4. Include methods or means used todeliver the action
5. Indicate time table for completion
6. Track progress
• Reduce gas emissions
• PhP75,000.00
• Engineering Manager
• Install gas scrubbers to reduce emissions to air fromspraying process
• Six months
• Establishing an environmental performance indicator
Tasks Illustrative Examples
See Annex 3.2 for an example of an EMS Program Matrix indicating objective and target.
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3.4 IMPLEMENTATION AND OPERATION
3.4.1 Structure and Responsibility
Effective management of environmental issues requires well-defined roles,
responsibility and authorities in the organization. This would also entail needed resources;that is, financial, human and technology, to ensure the effectiveness and sustainability of
the environmental management system. It is important to appoint an Environmental
Management Representative (EMR) to liaise with the top management (or managementcommittee) regarding the progress of EMS implementation and operation to generate
feedback (from the implementation committee) to facilitate the continual improvement of
the environmental management system.
Table 3.4.1 shows the objectives of establishing an EMS organization and
responsibilities, tasks required to achieve these and examples to illustrate some of the
needed tasks.
Table 3.4.1Establishing an EMS Structure and Assigning ResponsibilitiesObjectives: To determine your management system structure
To determine your key EMS personnel
1. Adopt an EMS structure andorganization• Know your existing overall
management structure• Know your current
management systems• Know key environmental
issues in the organization
2. Designate an EnvironmentalManagement Representative(EMR)
3. Appoint members of theImplementation Committee (IC)
4. Assign specific tasks to ICmembers
5. Assign environmentalresponsibilities to key personneland to all employees
Tasks Illustrative Examples
• Management appoints an EMR to head the EMSimplementation committee and participate inmanagement review
• Document control officer takes charge of updatingthe EMS records
• Pollution Control Officer (PCO) ensures that all legalcompliance is monitored in the company
• Community relations officer may handle complaintsfrom the public
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3.4.2 Training, Awareness and Competence
Various programs to disseminate information about the
EMS should be undertaken. This should be done at different
levels of the organization from the top management to the shopfloor personnel and extended to contractors and suppliers. This
is to ensure that everyone has understanding of the
environmental issues that are being addressed by theorganization as part of its EMS. It is also important that specific
information, such as the environmental aspects and impacts
associated with their activities, and the organization’s productsand services are understood so that each one will know his/
her respective role and responsibility in the achievement of
the organization’s environmental policy and their set objectivesand targets. Employees whose tasks may create environmental aspects, should be trained
to become competent in preventing or minimizing adverse impact on the environment.
Competencies of personnel could be demonstrated through their education, training, skillsand experience to deliver the task.
Table 3.4.2 shows the objectives of conducting competency trainings, the tasksrequired to achieve this and examples to illustrate some of the needed tasks.
Table 3.4.2Conducting Competency Training and EMS AwarenessObjectives: To identify your organization’s training needs
To determine your personnel competency requirements
• Top management, supervisors, security guards,suppliers
• Spraying operators, hazardous waste handlers
1. Conduct training needs analysis• Know what your significant
aspects and impacts are• Know your legal and other
requirements• Know your organization
contractors/subcontractors,suppliers
• Know emergency situations
2. Organize awareness trainings forall employees
3. Conduct competency trainings forkey personnel
Tasks Illustrative Examples
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3.4.3 Communication
Communication about the environmentalaspects and the environmental management system
(EMS) has to be disseminated across all levels (top
to bottom and vise versa) and functions of theorganization. It is also important that communication
to and from external parties are properly received,
documented and given action. These allow themanagement to generate useful feedback and to
ensure improved environmental performance and
make the status are known to all its stakeholders. Allforms of media, such as electronic mail, memoranda,
notices, minutes of meetings, postage on bulletin
boards, fora or meetings, and newsletters may beutilized to disseminate information.
Table 3.4.3 shows the objective of establishing communication procedure in theorganization, the tasks required to achieve this and examples to illustrate some of the
needed tasks.
Table 3.4.3Establishing an Internal and External Communication ProcedureObjective: To determine who talks to whom
• A Memorandum to operators
• Complaint from the neighbor about excessive fumesfrom spraying
• Minutes of departmental meetings
1. Set up an internal system ofcommunicating environmentalissues across all levels andfunctions in the organization• Know the organization’s
environmental issues• Know the key personnel or
party involved
2. Set up an external system ofcommunicating environmentalpolicy to interested party
• Know common issues raisedagainst the organization fromstakeholders or interested party
3. Provide feedback from top tobottom
Tasks Illustrative Examples
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The EMS Procedures Manual contains procedures that an organization should
establish as required in the ISO14001. These are as follows:
1. Identification of environmental aspects and evaluation of environmental
significance2. Identification and access to legal and other requirements to which the
organization subscribes
3. Establishing and maintaining Environmental Management Programs
3.4.4 Environmental Management System Documentation
Documentation, in any media, such as print or electronic, is important to ensurethe effectiveness in carrying out the tasks prescribed by the environmental management
system. It would normally be in the form of an EMS manual. This manual describes the
core elements of the management system and their interaction, as well as providesdirections to related EMS documentation. The hierarchy of EMS documentation is as
follows:
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4. Training, Awareness and Competence
5. Communication
6. Document Control7. Operational Control
8. Emergency Preparedness and Response
9. Monitoring and Measurement10. Non-conformance and corrective and preventive action
11. Records
12. EMS Audit
The Operational Control Procedures Manual
contains the operations and activities of theorganization that are associated with its identified
significant environmental aspects.
Work instructions consists of specific
steps to carry out a task, particularly in areas
where deviation from the work instructioncan create an impact on the environment.
Operational Control Procedures may
contain all the Work Instructions.
Document control is necessary to
ensure that all documents created arecorrect, complete, up to date, available
and can easily be located. The EMS
documents require regular review,revision and approval to ensure they are
updated. Normally, documents have
number and revision number, effectivitydate, person who wrote, reviewed and approved the document. To ensure against
unintended use, obsolete documents should be promptly removed from all points of issue
and points of use, while obsolete documents retained for legal and/or knowledgepreservation purposes are identified as such.
Table 3.4.4 on the next page shows the objectives of controlling EMS documents,tasks needed to achieve this and examples to illustrate some of the needed tasks.
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1. Develop an environmentalmanagement manual to containcore EMS information anddirection
• Know organization operations andscope of EMS
• Know requirements for each EMSelement
• Document procedures and workinstructions
• Know your significant aspects andimpacts
• Know existing systems andprocedures or norms
• Know your operational controls andkey personnel
2. Ensure all documents haveappropriate signature of authorities
3. Assign codes on all documents forease of use, maintenance anddisposal
• Environmental policy, organizational set up
• Policy statements required by EMS standard
• Procedure for handling public complaints should beproperly filed and contained in the manual
• Procedure to reduce the emission of toxic fumes fromthe spraying process should be available at thepainting section
• EMB-G-P-001-2002where P = Procedures
G = source of the reference code
Table 3.4.4Documenting the EMS and Controlling EMS DocumentsObjectives: To create EMS documents
To implement a system for issuance, review, approval, control, retention,
distribution and disposal of EMS documents
Tasks Illustrative Examples
See Annex 3.3 for an example of an EMS document control procedure.
3.4.5 Operational Control
Activities and operations of the organization that have identified significant impacts
would need operational procedures to ensure that the environmental policy, objectives
and target are achieved. These activities and operations are critical and, therefore, shouldbe carried out under specified operating criteria in order that they are adequately controlled
to prevent or minimize their impact on the environment. These procedures have to be
properly documented to cover situations where their absence could lead to deviationsfrom the environmental policy and the set objectives and targets. Where these procedures
are relevant to suppliers, contractors and subcontractors, they have to be fully
communicated to them as well.
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Table 3.4.5 shows the objectives of establishing operational control procedures,
the tasks needed to achieve this and examples to illustrate some of these tasks.
Table 3.4.5Establishing Operational Control ProceduresObjective: To determine your operations or activities in your work area with significant
environmental aspects as well as your technical capability
1. Identify critical activities that haveenvironmental significance• Know what your significant
aspects and impacts are• Know the key operational
parameters• Know the key parameters
monitored for legal compliance
2. Develop documented operationalcontrol procedures and workinstructions for critical activities
3. Ensure personnel involved musthave required competencies
• The excessive emission of fumes from spraying
• Proper use of the spraying gun should not dischargemore than 1 kg of pigments
Tasks Illustrative Examples
See Annex 3.4 for an example of an EMS operational control procedure.
3.4.6 Emergency Preparedness and Response
The organization must address its activities, products or
services that have environmental aspects and impacts
under emergency conditions or in accidents where theycould lead to an emergency situation. These are
unexpected events and, therefore, controls must be put
in place to ensure that further damage to theenvironment is prevented. Emergency equipment and
facilities must be available and functional at all times.
An emergency team is always helpful. It must becompetent in handling such situations. Emergency
preparedness and response procedures are
important so all employees know how torespond in emergency situations. Drills and
testing of procedures and equipment must be
done on a periodic basis.
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Table 3.4.6 shows the objectives of establishing emergency preparedness and
response (EPR) procedures, the tasks needed to achieve this and examples to illustrate
some of these tasks.
Table 3.4.6Establishing Emergency Preparedness and Response ProceduresObjectives: To determine your environmental impacts under emergency or abnormal
conditions
To determine your response capability to deal with environmental aspects during
emergency situations
To determine the status of emergency equipment, facilities and preparedness
of people
1. Develop emergency responseprocedures• Determine what aspects are
significant under emergencyconditions
• Determine existing emergencyresponse procedures
• Determine controls in place toprevent occurrence and/orrecurrence of significantaspects under emergencyconditions
2. Determine the extent of impact tophysical environment and humans
3. Identify key personnel to handleemergencies
4. Key personnel should have therequired competency trainings
5. Ensure that equipment andfacilities are always functional
6. Conduct emergency drills to testpeople and equipment
7. Document any occurrence ofemergencies and lessons toprevent future occurrence
• The total failure of the scrubbing system createsexcessive and prolonged discharge of fumes to theneighborhood
• Stop finishing operation; repaint scrubber
Tasks Illustrative Examples
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3.5 CHECKING AND CORRECTIVE ACTION
3.5.1 Monitoring and Measurement
The key characteristics of the organization’s activities and operations that can
create significant environmental impacts should be regularly monitored and measured.Performance indicators are established to track environmental performance, relevant
operational controls and conformance with the organization’s objectives and targets.
Instruments used to monitor parameters must be calibrated whenever they are utilized.Records must be kept for the various measurements as well as conformances to the
established objectives and targets. Monitoring should also include compliance to applicable
environmental laws and regulations.
Table 5.5.1 shows the objectives of establishing monitoring and measurement
procedures, tasks needed to achieve this and examples to illustrate some of these tasks.
Table 5.5.1Establishing Monitoring and Measurement ProceduresObjectives: To determine what you are actually doing
To determine how much you are actually doing
1. Develop procedures on how youmonitor and measure operationalactivities associated withsignificant aspects and impacts• Know your activities that need
to be monitored and measured• Know what you can monitor
and measure• Know legal compliance
monitoring requirements
2. Maintain records that haveinformation to trackenvironmental performance
3. Conduct regular maintenance andcalibration of equipment andfacilities
4. Keep maintenance and calibrationrecords
• Spraying operations
• Fumes at the spraying process
• Quantities of fume emissions
Tasks Illustrative Examples
See Annex 3.5 for an example of an EMS monitoring and measurement form.
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3.5.2 Non-Conformance, Corrective and Preventive Action
The organization must take corrective actions for any occurrence of environmentalaspects and non-conformance to the environmental management system. Preventive
measures are necessary to ensure that similar situations do not occur again. In addressing
non-conformance, the root cause has to be identified and investigated so that measurestaken become effective. Responsibility and authority are important to ensure who initiates
and completes the appropriate corrective and prevention action as well as the follow-up
activities.
Table 3.5.2 shows the objectives of identifying non-conformities and establishing
corrective and preventive actions, tasks needed to achieve these and examples to illustratesome of these tasks.
Table 3.5.2 Identifying Non-conformance and Establishing Corrective andPreventive Actions
Objectives: To determine your non-conformance with EMS criteria
To determine your inconsistencies with established procedures and work
instructions
• Excessive fume emissions
• Incompetent operator
• Train operator
1 Determine what yournonconformities are• Know criteria of non-
conformities• Know the cause of non-
conformities
2. Identify the actions to mitigateenvironmental impacts by the non-conformance
3. Identify corrective/preventiveactions to correct non-conformance
4. Evaluate the corrective action
5. Record reports of details of thenonconformance
Tasks Illustrative Examples
See Annex 3.6 for an example of an EMS Non-conformance Action Report (NCAR).
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3.5.3 Records
Records are necessary to show that the environmental management system isfunctional and effective. Procedures allow the identification, maintenance and the disposal
of environmental records covering operational and management activities, such as training,
audits and reviews.
Records are also evidence of the ongoing operation of EMS. In addition to the
above, records should also cover:
• legislative requirements, other regulatory
requirements and permits (register ofenvironmental regulations)
• Environmental aspects and their
associated impacts (environmental effectsregister)
• Inspection, maintenance and calibration
records• Incident reports
• Product identification, composition and
property data• Contractor and supplier information
• Emergency response records
be stored and maintained in a manner where these can be retrieved easily and protected
against damage, deterioration or loss. The organization must also establish and recordretention times for records.
Table 3.5.3 on the next page shows the objective of identifying EMS records,tasks needed to achieve this and examples to illustrate some of these tasks.
Environmental records must be legible,
identifiable and traceable to the activity,
product or service involved. The records must
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3.5.4 EMS Audit
The organization needs to monitor achievement of the environmental policy. The
audit is conducted on a regular basis to verify whether or not objectives, targets and
programs are carried out as planned; and, that nonconformance to the EMS are givenappropriate and effective corrective and preventive action. An audit plan is prepared to
ensure that scope, objectives, methodologies as well as responsibilities and competencies
are clearly identified. Results of audits should be reported to the top management for itsimmediate action.
Table 3.5.4 on the next page shows the objective of conducting an EMS audit,tasks needed to achieve this, and examples to illustrate some of these tasks.
1. Identify what your EMS records are• Know established procedures• Know operational controls• Know emergency
occurrences• Know key monitoring and
measurement parameters
2. Codify records for ease ofaccessing and utilization
3. Define a system of collecting,controlling and keeping of records
4. Ensure records are updated
Table 3.5.3Identifying EMS RecordsObjective: To determine what you have managed
Tasks Illustrative Examples
• Amount of water used for cleaning purposes• Quantity of air pollutants emitted from spraying
operations• Number of bags of collected contaminated solid
wastes per day
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3.6 MANAGEMENT REVIEW
After internal or external audit are conducted, management evaluates its results tocheck the continuing suitability, adequacy and effectiveness of the EMS. The review should
be broad enough in scope to address the environmental dimensions of all activities,
products or services of the organization, including their impact on financial performanceand, possibly, competitive position. Not all components of the EMS need to be reviewed
at the same time. But they can be reviewed collectively over a period of time. It is also
important to review policies, systems and procedures for appropriateness and efficacy.
The review process should cover:
• review of environmental objectives, targets and programmes• EMS audit report
• an evaluation of its effectiveness and
Table 3.5.4Conducting Internal EMS AuditsObjective: To determine if the organization is doing what it says
1. Prepare an audit plan• Must have implemented EMS
for at least three months• Know all EMS documents
2. Specify the following in the auditplan:• Scope and purpose• Date and location• Methodology and reporting
3. Conduct regular EMS audit basedon audit plan
4. Ensure that EMS internal auditorsare trained and competent
5. Document and present auditfindings
6. Keep audit reports
• Environmental Management Manual
• Compliance audit of finishing section
• Check procedures• Interview personnel
• Every six months
• Audit report in management review
Tasks Illustrative Examples
See Annex 3.7 for an example of an EMS audit plan.
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1. Hold periodic managementreviews
2. Consider results of EMS audits
3. Review set of environmentalobjectives and targets
4. Check progress of environmentalmanagement program
5. Record results of reviews
6. Implement any changes to EMS
• Twice in a year
• Audit findings
• A proposed installation of scrubber
• Record of minutes of meetings
Tasks Illustrative Examples
• an evaluation of the suitability of the environmental policy and the need for
changes in view of:
• changing legislation• changing expectations and requirements of interested parties
• changes in the products or activities of the organization
• advances in science and technology• lessons learned from environmental accidents
• market preferences and
• reporting and communication
Table 3.6 shows the objective of conducting management reviews, tasks required
to achieve this and examples to illustrate some of these tasks.
Table 3.6 Conducting Management ReviewObjective: To determine where you want to go next
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IVEstablishing aPollution Prevention/Cleaner ProductionProgram
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This chapter discusses the various phases involved in a P2/CP Program based
on models implemented in the country. The P2/CP Program Overview in Figure
4.1 provides a summary of these phases and their corresponding activities.
The key elements of an effective P2/CP Program from the experience of
Philippine companies are also presented. Moreover, the P2/CP options are reviewed to
distinguish what are P2/CP and what are not. Lastly, this Chapter ends with a discussion
on the relationship of P2/CP with an EMS.
4.1 P2/CP PROGRAM OVERVIEW
Since 1990, a number of foreign-funded projects provided the Philippines with
technical assistance on P2/CP for both industry and government. These included projects
of the International Development Research Centre of Canada, UNEP/UNIDO, United States
Agency for International Development (USAID), Asian Productivity Organization (APO),
Green Aid Plan of Japan and the Australian Agency for International Development
(AusAID). Each assistance program has its own assessment protocol. But, basically,
these protocols involved five major phases, namely: Planning and Organizing, Assessment,
Feasibility Analysis, Implementation, and Monitoring.
The IPCT of the ITDI/DOST put together all these protocols and developed a P2/
CP Program applicable to Philippine conditions, particularly to small and medium
enterprises. Still, the IPCT-ITDI/DOST protocol contains the five major phases enumerated
above. Figure 4.1. provides an overview of the P2/CP Program showing all the phases.
4.1.1 Planning and Organizing Phase
For management to commit itself to a P2/CP Program, it must recognize the need
for P2/CP. This can be best realized by first identifying environmental and economic
issues confronting the company, such as regulatory pressure, community complaints,
high cost of treatment and disposal of waste, etc. The environmental and economics
issues become drivers of change in a company to adopt P2/CP. It is easier to convince
management to adopt P2/CP if it is aware of its benefits and sees companies practicing
P2/CP.
A P2/CP task force, organized for the purpose of the Program, facilitates the overall
P2/CP implementation. The task force, headed preferably from the highest level, develops
the plan and directs its implementation. Ideally, task force members must have sufficient
technical, business and communication skills. In most cases, the task force members
must be oriented on P2/CP concepts and methodologies. Their respective roles,
responsibilities and authorities must also be clarified at this stage.
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Figure 4.1 P2/CP Program Overview
TOP MANAGEMENT COMMITMENT• Identify Issues – Regulatory, Complaints, Occupational Health Hazards Incidents• Recognize Need to Establish P2/CP Program• Get Management Support
PLANNING AND ORGANIZING PHASEOrganize P2/CP Task Force• Organize Task Force – IPCT and company personnel/management• Orient on P2/CP and P2/CP AssessmentSet Goals• Review Corporate Policies• Identify Driving and Restraining Forces• Set P2/CP Goal (s) / Criteria for PrioritizationIdentify Focus Area• Collect and Review Data – Process Flow Diagram (PFD), Raw Materials and Other InputsProducts, Plant Layout, Organizational Chart, Initial Environmental Examination (IEE), Pollution
Control Officer (PCO) reports, etc.• Verify or Construct PFD through Facility Walkthrough – Cover all areas from receiving/warehouseto storage/distribution, Inspect process flow, Auxiliaries, Identify raw materials, Products and
By-products• Identify Waste Streams and Current Waste Management Practices• Obtain Overall Material Balance• Identify Priority Area(s) – Focus for Detailed AssessmentPlan P2/CP Assessment• Establish Environmental Performance Indicators (EPI)• Schedule Detailed P2/CP Assessment
ASSESSMENT PHASE: FACILITY DIAGNOSIS• Organize P2/CP Assessment Team – delegate tasks and focus areas• Collect Data for EPI• Do Material and Energy Balance• Cause Diagnosis – determine root causes of waste generation• Set Objectives – should be specific, measurable, attainable, relevant, time-bound• Generate Options – integrate all possible options• Classify Options – screen options according to practicality/viability
ASSESSMENT PHASE: DOCUMENTATION• Record Findings – briefing, consultation with top management• Develop Recommendations – simplify and finalize• Prepare Schedules and Designate Tasks – for implementation, monitoring, next visit• Prepare FiRST Report – furnish brief report to top management
FEASIBILITY ANALYSIS PHASE• Identify and Fill up Data Gaps• Feasibility Analysis: Technical, Environmental, and Economic Studies
IMPLEMENTATION PHASE• Select Projects for Implementation• Obtain Funding• Install Equipment/ Implement P2/CP Option• Conduct Training/ Review and Adjust
MONITORING and EVALUATION PHASE• Acquire and Analyze Data• Evaluate Economic and Environmental Performance
SUSTAINING the P2/CP PROGRAM
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while restraining forces have to be identified early in the process so that the company can
overcome them immediately. These forces are presented in detail in Chapter II (see Sections
2.2.3 and 2.2.4).
The P2/CP Program goal, consistent with corporate policies, helps develop criteria
for prioritizing which issues/waste to address during the Assessment Phase of the Program.
Prioritization will eventually help concentrate the efforts of the task force. With the criteria,
the task force identifies the area(s) of focus. This can be achieved by collecting and
reviewing facility data; verifying or constructing a process flow diagram through a facility
walkthrough; identifying waste streams and current waste management practices; and
developing an overall material balance.
Facility data include process flow diagrams, production data (raw material
consumption, production outputs, etc.), plant layout, organizational chart, environmental
reports and permits, utility bills, equipment specifications, and others. A facility walkthrough
helps the task force verify or construct the flow materials inside the plant and identify
waste sources. The UNEP/UNIDO Technical Report Series No. 7 on Audit and ReductionManual for Industrial Emissions and Wastes provides
for a very good guide in preparing material balance for
plant operations.
After identifying the focus area(s), the P2/CP
task force develops a schedule for the next phase. In
developing the schedule, it is important to pay particular
attention to the following operations: make-up chemical
addition, start-up and shutdown, equipment cleaning
and shift changes.
Table 4.1.1. on the next page provides examples
of tasks to be undertaken under the Planning and
Organizing Phase.
After its organization, the P2/CP task force sets
the P2/CP goal by reviewing corporate policies and
identifying company-specific driving and restraining
forces. The task force may develop corporate
environment policy. If there is none, it must align the
P2/CP Program with existing corporate policies. As a
stepping-stone to the implementation of an environmental
management system, the corporate environment policy
can be formulated in accordance with the International
Organization for Standardization (ISO) 14001 standards.
Driving forces help move the Program further forward
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responsible for undertaking the Program
Table 4.1.1 Illustrative Examples of Tasks Under the Planning and OrganizingPhase
Objective: To delineate P2/CP Program goal and identify persons in the organization
P2/CP task force members may include representativesfrom production, quality control, purchasing, accountingand human resource departments and the pollutioncontrol officer.
The P2/CP program goal may be related to compliance,increased productivity, improved quality and/or reducedwaste generation.
The P2/CP program goal must be consistent with theorganization’s environmental policy and its other policiesand programs.
Driving forces could be related to regulatory, financial,environmental, public image, employee’s welfare andcompetitiveness issue. Other factors, on the otherhand, may be related to financial, economic, policy,organizational, technical and conceptual issues.
Criteria for prioritization may be based on the severityof a problem, its frequency of occurrence, costimplications of possible solutions and cost of not takingany action on the problem area.
A focus area could be that part of the production facilitythat generates the most amount of waste or anequipment that causes a lot of rejects.
The following information can assist in the identificationof the focus area(s): process flow diagram, productiondata (raw material and other inputs and product andwaste outputs), plant layout, organizational chart, initialenvironmental review, pollution control officer’s report,engineer’s report, utility bills, etc.
A company-supplied process flow diagram may not bevery accurate; e.g., what is labelled as simply packagingmay involve more than just one step.
Waste in each production step does not include onlywastewater, solid waste and air emissions, but, alsospilled raw materials, fugitive emissions, leakingpipelines, etc.
Organize and orient P2/CP task force
Set P2/CP program goal(s)
Review corporate policies
Identify driving forces and otherfactors for consideration
Set criteria for prioritization
Identify focus area(s)
Collect and review data
Verify or construct process flowdiagram through a facility walkthrough
Identify waste streams and wastemanagement practices
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Obtain overall material balance
Plan P2/CP assessment
Establish environmental performanceindicators (EPI) = basic data/reference figures
Schedule detailed P2/CP assessment
What goes into the facility must come out of it, either asa product, by-product or waste; any discrepancy is anindication of unaccounted input and/or output.
Planning the assessment includes not only schedulesand tasks, but, also the identification of what informationto collect and who to interview during the assessment.
EPI measures the performance of a company’s inputsand/or waste generation vis-à-vis its production; basicdata include material input, packaging, energy input,solid waste, wastewater, air emission, transportation,occupational accidents, training and environmental costwhile reference figures include product output, materialinput, energy input, water input, number of employees,workdays, sales and production cost.
P2/CP assessment should coincide with plant operations;of particular interest in those processes are: during themake-up of chemical addition, start-up, change shift,preparation for shut down and cleaning and maintenanceactivities.
Table 4.1.1 cont’d.
Tasks Illustrative Examples
4.1.2 Assessment Phase
Activities during the Assessment Phase include the following: organization of
focus area(s), assessment team, collection of data for environmental performance
indicators, performance of material and energy balance of focus area(s), diagnosis of
cause of waste generation, setting of objectives, and generation and classification of
options.
Note that the P2/CP assessment team is different from the P2/CP task force. The
task force provides the overall direction of the Program while the assessment team is in
charge of the tasks enumerated above. As such, the assessment team may include
operating staff directly involved in the focus area. However, the task force may still
participate in the detailed assessment, as it can provide objectivity in observing focus
area operations.
After identifying waste sources, the assessment team analyzes and identifies the
root cause(s) of waste generation. A number of engineering and management tools are
Tasks Illustrative Examples
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available for this purpose. Among these are interviewing,
check sheets, Pareto analysis, 5W2H (who, what,
where, when, why, how, how much) method, cause-
and-effect diagram, and eco-mapping. The
determination of the root cause(s) can help the
assessment team set practical objectives.
With the objectives set, the
assessment team can now identify possible
P2/CP options to help solve the waste-
generation problem. Again, engineering and
management tools are available for this work.
These are brainstorming, layout design, 5S (sort,
systematize, sweep, standardize, self-discipline), benchmarking, and failsafing or
mistake-proofing. Solutions can also be searched from literature, the Internet and best
practice guidebooks.
Figure 4.1.2 Cause Diagnosis and P2/CP Options
Recycling
Recovery & ReuseReclamationRaw Material/
Intermediate in WasteStream
Valuable Material inWaste Stream
Source Reduction
Product Changes Source Control
Input Material ChangeChoice of Raw Mate-
TechnologyChange
Good Housekeeping
Improved Equipment/Layout
Improved OperatingConditions
New Technology
Product Specifications
Operating/MaintenanceProcedures
Equipment/LayoutNeeds Improvement
rial
Process ControlOld Technology
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Figure 4.1.2 presents the possible general causes of waste stream generation
and the corresponding P2/CP options following the various techniques of applying
source reduction and recycling to reduce waste.
Once P2/CP options have been listed, especially if brainstorming methodology
was used, the options must be screened and classified as practical, low-cost/low-risk, and
for further financial and technical study. Likewise, the options can be prioritized by
considering the following factors: capability to achieve goal of reduction, benefits, existence
of technology, cost-effectiveness, effect on production run, convincing evidence, additional
requirements (labor, utilities), and effect on multimedia transfer of pollution.
Documentation of the assessment findings and recommendations is important. A
preliminary report, referred to as the FiRST (Findings, Recommendations, Schedules and
Tasks) Report by IPCT-ITDI/DOST, containing these recomendations (P2/CP options),
schedules and tasks for implementation can help guide the task force and top management
in providing the necessary resources for the next three phases of the P2/CP Program.
A detailed report of the P2/CP Assessment must be prepared. This report
incorporates, aside from the former information, technical and financial analysis of
alternatives. During the preparation of the detailed report, the assessment team may
have to return to the facility to collect any data gap.
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Organize P2/CP assessment team
Collect data for EPI
Do materials and energy balance
Perform cause diagnosis
Set objectives
Generate P2/CP options
Classify P2/CP options
Record findings
Develop recommendations
The P2/CP assessment team, not to be confused withthe P2/CP task force, is responsible for the actual P2/CP assessment; the team may include operating staffdirectly involved in the identified focus area or personnelwhose functions may have impact or have generatedimpact to the activities in the focus area.
EPI for a focus area, such as for an electroplatingprocess, may be the amount of chemicals used persurface plated; for a painting job, it may be liters of paintper number of items painted; for a cooking vat, kilogramsof gas per kilogram of product.
Actual measurements during operations may benecessary to obtain the materials and energy balance.
The cause of waste generation may be related toequipment operation and maintenance procedures,process efficiency, equipment design and layout, choiceand quality of input materials, choice of productiontechnology, presence of raw material of intermediateproducts in waste stream, presence of potentiallyvaluable components in waste stream or productspecification.
Objectives should be specific, measurable, attainable,relevant and time-bound; e.g., to reduce waterconsumption by 10% within six months.
P2/CP options may involve changes in productspecifications, changes in choice of raw materials, goodhousekeeping practices, improved equipment or facilitylayout, improved operating conditions, use of newtechnology, recovery.
Options generated, specially using brainstorming, maybe classified as practical, low-cost/low-risk and for furthertechnical and financial evaluation. Low-cost/low-riskoptions are also referred to as low-hanging fruits.
Findings include the quantification of waste and theidentification of their causes.
Recommendations include P2/CP options generatedduring the P2/CP assessment.
Table 4.1.2. on the next page provides examples of tasks to be undertaken under
the Assessment Phase.
Tasks Illustrative Examples
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Table 4.1.2Illustrative Examples of Tasks Under the Assessment PhaseObjective: To identify waste sources and causes and potential P2/CP options to reduce
waste generation
4.1.3 Feasibility Analysis Phase
The Feasibility Analysis Phase involves evaluation of P2/CP according to its
economic and technical viability. The economic or financial feasibility of a P2/CP may be
determined using the following financial indicators: payback period, net present value,
benefit/cost ratio and/or internal rate of return. The chapter on Environmental Cost
Accounting presents these items in more detail.
Prepare schedules and designatetasks
Prepare initial P2/CP assessmentreport
Implementation of P2/CP options may be short-term(within six months) or long-term (more than six months).
This report contains findings (waste quantities andsources), recommendations (P2/CP options), scheduleand task assignments.
Tasks Illustrative Examples
Table 4.1.2 cont’d.
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Identify and fill up data gaps
Perform feasibility analysis of P2/CPoptions
Technical
Environmental
Economic
Not all information may be available during the P2/CPassessment. In the course of the preparation of theP2/CP assessment report, it may be necessary to returnto the facility to collect these data. Since most PhilippineSMEs lack data on their production, it is important thatthey develop a monitoring program for their activities.
P2/CP options are evaluated according to their technical,economic and environmental viability.
Technical evaluation considers not only functionality ofthe options, but, also impact on worker health and safety,product quality, space requirements, compatibility withexisting production processes and labor requirements.
Potential environmental impact of the options includeeffect on the number and toxicity of waste streams,transfer to other media, energy consumption, etc.
Financial feasibility may be evaluated using benefit-costratio, internal rate of return, payback period, etc.
Technical evaluation considers not only functionality of the P2/CP option, but, also
its impact on worker’s health and safety, product quality, space requirements, compatibility
with existing production processes and labor requirements. It will be to the advantage of
the facility if it consults people or groups that may likely be affected by the P2/CP option;
e.g., if product quality is affected, solicit the opinion of the customer; if a new raw material
will be utilized, consult with the purchasing department. Likewise, research and
development or trial runs have to be done to prove the technical feasibility of the option.
Aside from technical and financial evaluation, the environmental impact of the
option must be considered. These may include effect on the number and toxicity of waste
streams, transfer to other media, energy consumption and other environmental impacts.
A change in process may eliminate the generation of wastewater, but, energy consumption
may increase.
Table 4.1.3 provides examples of tasks to be undertaken under the Feasibility
Analysis Phase.
Tasks Illustrative Examples
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Table 4.1.3 Illustrative Examples of TasksUnder the Feasibility AnalysisPhase
Objective: To evaluate the technical, financialand environmental viability of P2/CP options
4.1.4 Implementation Phase
Once P2/CP options are chosen forimplementation, management approval issought to fully realize the benefits of P2/CP. Thetask force convinces top management of themerits of the options. Funds for the options maybe sourced internally or from banks.Implementation of these P2/CP projects doesnot differ with an ordinary project. It requiresconceptualization, planning, execution (alsoincludes procurement, construction, installation)and termination. Likewise, training may haveto be provided to personnel affected by the changes.
Table 4.1.4 provides examples of tasks to be undertaken under the ImplementationPhase.
Select P2/CP projects for implemen-tation
Obtain funding
Install equipment/implement P2/CPoption
Conduct training
Review and adjust
Based on the technical, environmental and economicviability and the prioritization criteria of the facility, P2/CP projects are selected for implementation.
Funding for P2/CP projects may either be internally orexternally generated.
The implementation of a P2/CP project does not differfrom any regular project. It may need conceptualization,planning, execution (procurement, construction andinstallation) and termination.
Training of personnel for the implementation is criticalin the implementation of the P2/CP project. The skills,knowledge and; more importantly, the attitude of staffmay have to be changed or upgraded.
The P2/CP project may need some fine-tuning onceimplemented; thus, a review of the project is necessaryand adjustments have to be made, if needed.
Tasks Illustrative Examples
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Table 4.1.4 Illustrative Examples of Tasks Under theImplementation Phase
Objective: To implement identified P2/CP options orprojects
4.1.5 Monitoring and Evaluation
Monitoring requires the quantitative measurementof the progress of P2/CP implementation. Environmentalperformance indicators developed during the Planning andOrganizing Phase determine the environmental andeconomic impact of the options. In the gathering andclassifying of data, the following guidelines are provided:collect from the same sampling or measurement pointsusing the same collection methods, preferably by the sameperson using the same instruments; document datacollection criteria per indicator; and specify frequency ofmeasurements.
Likewise, it is important to normalize the data to adjust to external factors. Commonnormalization factors considered are: total employee hours; area, weight or volume ofraw materials purchased; and sales of products.
Finally, it is mandatory to review and, when necessary, adjust the goals andobjectives of the P2/CP Program. Reiteration of the Assessment Phase is done in thelight of further reducing waste generation and/or developments in the business, technologyand legislative field. The P2/CP Program will also have a greater chance of success if it ispart of the company’s EMS.
Table 4.1.5 shows examples of tasks to be performed under the Monitoring andEvaluation Phase.
Table 4.1.5 Illustrative Examples of Tasks Under Monitoring and EvaluationObjective: To measure the progress of P2/CP projects and institute adjustments if necessary
Acquire and analyze data
Evaluate economic andenvironmental performance
Quantitative evaluation of the impact (both in terms ofcosts and environmental) is important in the monitoringof the P2/CP program. Data on EPIs identified earliermust be collected.
The evaluation of the economic and environmentalperformance of the P2/CP program must take intoaccount external factors. It is important to correlate EPIswith inputs and outputs of the facility being assessed.
Tasks Illustrative Examples
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4.2 ELEMENTS OF AN EFFECTIVE P2/CP PROGRAM
In the course of its implementation, the IPCT-ITDI/DOST identified the following
features of an effective P2/CP Program:
4.2.1 Top Management Commitment. For the simple reason that top management
has both operation control over production and environmental policy decisions,
the commitment of top management is critical to the success of any P2/CP program.
Since changes in the manufacturing areas are usually needed in the implementation
of P2/CP programs, the approval of top management must be sought before any
of these changes can be effected.
4.2.2 Strong Motivation on the Part of Operating Personnel. The production personnel
cause much of the waste generated in an industrial facility; as such, their
participation in solving pollution problems through P2/CP is required. IPCT observed
that operating personnel are motivated to implement P2/CP not only by rewards
and recognition, but, also by their awareness of the environmental consequences
of the waste they generate.
4.2.3 Technologies Are Simple and Easy to Implement. Simple modifications to existing
equipment have provided for a number of success stories in the Philippines.
Inserting baffles to existing rinse tanks or by pipes and fittings can result in
countercurrent flow rinsing, which reduces water consumption to as high as 90%.
4.2.4 Immediate Realization of Benefits. Management commitment becomes firmer
once it sees that P2/CP implementation immediately redounds to cost savings
and increased production outputs. Safer working conditions and, at times, simpler
operating practices that reduce waste, motivate employees to cooperate in the
implementation of P2/CP. Modification of facility layout saves space and distance
for employees, thus, entailing lesser effort for them.
4.2.5 Waste Assessment by Trained and Unbiased Personnel to Identify WasteSources and P2/CP Options. Trained and unbiased personnel provide for an
objective observation of facility operations. The use of a waste assessment protocol,
such as the one that will be presented in the succeeding subsection, guided both
technical assistance providers and facility staff in identifying waste sources and
their root causes. With root causes identified, the assessors can easily come up
with appropriate P2/CP options.
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4.3 OPTIONS FOR POLLUTION PREVENTION/CLEANERPRODUCTIONThe matrix below shows the P2/CP options and examples of applications.
Table 4.3 Matrix of P2/CP Options with Examples
P2/CP Option Sub-option Applications
Source Reduction Product Change
Process Change • Input
Material
Change
• Technology
Change
• Improved
Operating
Practice
Recycling Reuse
Reclamation
• Production of Compact
Fluorescent Lamp (CFL)
instead of ordinary
fluorescent lamp
• Production of low-volume/dual-
flush water closets
• Use of water-based paints
instead of solvent-based paint
• Use of non-cyanide plating
process instead of cyanide
plating process in production
• Modifying rinse tanks to effect
countercurrent flow instead of
co-current flow
• First In-First Out or FIFO Stock
Inventory
• Improvement of Materials
Handling
• Use of cooling water for wash
water
• Chromium recovery in leather
tanning
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4.4 WHAT ARE NOT P2/CP
Pollution control measures which are applied after the generation of pollutants arenot categorized as pollution prevention. Examples are waste treatment processes, volumereduction and dilution. Treatment has been discussed on page 28. Volume reductioninvolves concentrating hazardous or toxic constituents, like drying of a heavy metal-containing sludge before disposal, which decreases the sludge water content and wastevolume, but not the amount and toxicity of heavy metals in the sludge. Dilution, on theother hand, involves diluting a waste stream with water after generation, but does notreduce the absolute amount of hazardous constituents discharged into the environment.
4.5 P2/CP PROGRAM AND ENVIRONMENTAL MANAGEMENT SYSTEM
The P2/CP Program plays an important part in the implementation of theEnvironmental Management System (EMS). Chapter III provided for a more detaileddiscussion on EMS.
The first element of an EMS, environmental policy, refers to a company’scommitment to the prevention of pollution. Although this may be achieved through propertreatment systems, a P2/CP Program is a more logical option as previously discussed,i.e., because of the environmental and economic benefits. Apart from the commitment tothe prevention of pollution, the EMS environmental policy requires the company’scommitment to continuous improvement. As such, a P2/CP Program is definitely acontinuous improvement process as the Program suggests a reiteration of the AssessmentPhase to further reduce pollution load, increase savings and productivity, and improveworking conditions.
Under the second element of EMS (Planning), a P2/CP Program can help achievean organization’s goals, objectives and targets for its environmental management program(EMP). In fact, a P2/CP Program should be an integral component of the EMP. A P2/CPProgram describes the means for achieving environmental objectives andtargets. Companies certified to ISO14001 standards usually have a P2/CP Program as part of their EMP.
Finally, as discussed in the previous chapters, pollution caneventually lead to economic slowdown and, possibly, social instability.P2/CP, on the other hand, can increase productivity, meaning, a moreefficient, economical and effective utilization of resources. Thistranslates to cost-effective products in the market that could spureconomic development and growth. A better economy means betterstandards of living and human welfare. P2/CP is not only good for theenvironment, but, also makes good economic sense.
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VAssessing the Profitabilityof Pollution Prevention/Cleaner ProductionInvestments throughEnvironmental CostAccounting
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T his Chapter discusses the guidelines on how to apply Environmental Cost
Accounting (ECA) in the profitability assessment of P2/CP investments. The
goal of this ECA guide is, thus, in the area of capital budgeting decisions,
particularly to provide information to help improve the practice of P2/CP
financial analysis. More complete and accurate recognition of cost savings and less tangible
benefits can lead companies to invest more in P2/CP projects that improve competitiveness
and long-term sustainability.
It should be emphasized, however, that
environmental cost information can be used to influence
many types of management decisions in companies.
ECA can be used for different types of management
decisions such as in purchasing, inventory control and
supply chain management. One of the most practical
applications of ECA is, as a profitability assessment
tool for investment projects that prevent wastes and
save money for the company.
Discussion in this chapter is limited to
P2/CP for simplification purposes. Section 2.1.5,
p.19, Chapter II enumerated the costs to consider in
an EMS investment.
5.1 STEPS IN ECA
Tools and approaches for identifying and estimating environmental costs and
savings for P2/CP Financial Analysis are discussed below.
An important consideration in profitability assessment is the inclusion of complete
and accurate cost and benefits information. Researches show that one of the barriers to
increased investments in P2/CP and other environmental improvements is the
underestimation of the financial and less tangible benefits resulting from such projects.
This is attributed in part to conventional accounting practices that limit the ability of
companies to identify, track and allocate environment-type costs incurred in operations.
ECA addresses this difficulty and provides a way by which environmental cost and savings
information can enter the financial decision-making process.
The application of the following ECA tools and approaches can assist companies
in comprehensively identifying costs and savings needed in P2/CP project analysis:
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compare data from the accounting records with what is actually happening in the facility to
improve cost estimates. To facilitate the identification and estimation of environment-related
costs in a facility, it is advisable to form an ECA team composed of personnel from the
departments mentioned below:
1. Accounting Department
2. Purchasing / Materials Control and Inventory
3. Maintenance and Engineering Department
4. Production Department
5. Environment, Safety and Health Department
6. Quality Control
7. Research and Development
8. Sales and Marketing
9. Legal Department
5.1.3 Draw Process Maps
Only through a good understanding of the company processes can environmental
cost data be identified, traced and estimated. Mapping is a graphical representation of a
process and is one of the most useful tools for data identification and estimation. Mapping
the current process and the new process (after P2/CP) will help in determining the relevant
costs that must be included in project analysis.
5.1.1 Get Management Support
The company’s senior management approval and
support should first be secured before undertaking ECA in
a company. Senior management provides the authority and
sets the tone for supporting cooperative efforts to identify
and gather all the relevant environment-related costs
associated with the proposed P2/CP project.
5.1.2 Organize ECA Team
Teamwork is critical since most environmental
costs and savings information can only be estimated by
an analysis of data from different departments and
through interviews of managers and personnel. Aside
from accountants, other company professionals will have to
get involved in ECA efforts. Engineers, in particular, can
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5.1.4 Do Material and Energy Balances
Material and energy balances help in the quantification of costs related to waste
generation and management. This is important in P2/CP project analysis as P2/CP has its
greatest impact on waste generation and its costs. Company engineers need to do material
balances in order to arrive at a good estimation of materials going out of the facility as
wastes. Physical unit information provided by the material balances will then be utilized to
estimate the cost savings generated by the reduction of waste under the P2/CP project.
A material balance basically says: What comes in must come out – somewhere.
So, a raw material used in a facility comes out, either in the form of product or of waste. In
the absence of chemical reactions, the general formula for a materials balance over a
given period is:
Input + Initial Inventory = Output + Final Inventory
Input includes raw materials and output includes both intended products and
unintended wastes. The inventory could include inventories of raw materials or final product
in the stockroom or inventories of waste, e.g., a pile of solid scrap waiting to be disposed.
5.1.5 Use Cost Checklist
In combination with process maps, the Cost of Waste (Environmental Costs)
Checklist can help in identifying the most relevant and significant costs related to the
generation and management of waste in companies. In P2/CP, many components of the
costs of wastes will be reduced. Cost savings provide a financial basis for investing in
P2/CP.
There are three major categories of cost of waste, namely: (1) operating inputs
(associated with lost manufacturing inputs), (2) waste management and treatment costs,
and (3) less tangible costs.
The Cost of Waste Checklist in the next page gives a classified listing of a company’s
environmental costs.
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Waste Management Labor
• equipment operation• supervision• inspection/QA/QC• environmental permitting• environmental training• sampling/monitoring• medical surveillance• waste collection and handling• waste labelling• spill clean-up• recordkeeping• regulatory reporting• inspections
Waste ManagementFloor Space
• rent• mortgage
Waste Management Fees
• permit fees• emissions fees• disposal fees• legal fees• laboratory fees• training fees
Waste Management
• Depreciation and taxes• depreciation of equipment• taxes• tax credits
Waste Management
• Cost of Capital• financing costs• investment opportunity
Waste ManagementMaterials
• raw materials• solvents• catalysts• water• gases• office supplies• protective equipment• spill response equipment• containers• labels
Waste ManagementEnergy
• electricity• natural gas• coal• oil• wood/biomass• district heating and cooling• fuel additives• coolants
Operating Inputs
Operating Input Materials
• raw materials• solvents• catalysts• water• gases• office supplies• equipment maintenance
supplies• facility maintenance
supplies
Operating Input Energy
• electricity• natural gas• coal• oil• wood/biomass• district heating and cooling• fuel additives• coolants
Operating Input Labor(Including benefits)
• equipment operation• supervision• inspection/
Quality Assurance/Quality Control (QA/QC)
• maintenance• design/engineering• laboratory• procurement• logistics• sales/marketing• financial/accounting• clerical• management
Operating Floor Space
• rent• mortgage
Operating Depreciationand Taxes
• depreciation of equipment• taxes• tax credits
Operating Cost of Capital
• financing costs• investment opportunity
Table 5.1.5Cost of Waste Checklist
Waste Management (Waste Handling, Recycling, Treatment, Disposal and RegulatoryCompliance)
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5.1.6 Apply Activity-based Costing (ABC)
Under ABC, all costs are allocated from company overhead accounts to the process,
product or projects that actually generated the costs based on activities with direct
relationships to cost generation. Through improved cost allocation, an activity-based costing
system can accurately identify products and services which have higher environmental
costs. More detailed cost information provided under ABC also assist in the process of
collecting more accurate data for project analysis purposes.
5.1.7 Determine Internal Source Documents
Costs relevant to the P2/CP project evaluation can be estimated by an analysis of
company records combined with staff interviews. Listed below are the sources of
environment-related cost information that may be relevant to a proposed P2/CP project
analysis:
a. Original source documents (e.g., purchase invoices, receipts, etc.)
b. Accounting ledger accounts and reports (e.g., cost of production reports,
factory ledgers)
c. Maintenance and engineering records and estimates (e.g., production reports,
waste management records, equipment logs)
d. Materials Control and Inventory
e. Quality Records (e.g., rejects/rework and waste records)
f. Staff Interviews
Less Tangibles
Potential Liability
• business shutdown costs• non-compliance fines• site clean-up costs• legal costs• personal injury claims• property damage claims• natural resource damage
claims
Productivity
• product quality• production throughput• production flexibility• production reliability• worker absenteeism• worker morale
Future Regulation
• stricter enforcement ofcurrent regulations
• modification of currentregulations
• new regulations
Insurance
• workers’ health insurance• workers’ compensation• general property/fire
insurance• general liability/hazard• environmental liability• unemployment
Company Image
• access to customers/markets
• access to financing• public relations
Table 5.1.5 cont’d.
Source: Tellus Institute, Boston. Environmental Cost and Savings Checklist. Massachusetts, USA, 1995.
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5.1.8 Seek External Sources of Information and Expertise
Some environmental costs important in P2/CP evaluation can only be collected
using data from outside sources. Information on regulatory costs can be provided by
environmental agencies; insurance companies can estimate potential liabilities; and
equipment/technology vendors can quote investment expenditures for treatment facilities
and technologies. Remediation and clean up costs can be estimated with the assistance
of engineering and environmental consultants. Assistance from these outside experts is
sometimes needed to quantify less tangible costs and benefits as listed in Table 5.1.5.
Table 5.1 shows examples of the tasks involved under Planning and Organizing
for ECA in your company.
Table 5.1 Illustrative Examples of Tasks Under Planning and Organizing for ECAObjective: To know the different tools and approaches for environmental cost identification
and estimation
1.1 Get Management Support
1.2 Organize ECA Team
1.3 Draw Process Maps
1.4 Do Material and Energy Balance
1.5 Use Cost of Waste Checklist
1.6 Apply ABC
1.7 Determine Internal Sources ofInformation
1.8 Seek External Information andExpertise
1.1. Management needs to see financial benefits ofP2/CP
1.2. Department Heads as members of the ECA Team
1.3. Plant Activity Flowchart
1.4. See Chapter IV on P2
1.5. Operating Inputs, Treatment Cost
1.6. Waste Disposal Costs
1.7. Accounting Ledger Accounts
1.8. Cost of fines and penalties from regulatory agencies
Tasks Illustrative Examples
5.2 P2/CP QUANTITATIVE ANALYSIS
5.2.1 P2/CP Profitability Assessment
ECA, which calls for the comprehensive assessment of project costs and savings
with particular focus on environmental cost impacts, will lead to better profitability analysis
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of proposed P2/CP Projects. Capital budgeting is the accounting term for the process of
determining profitability of projects. Capital budgeting, which is sometimes referred to as
the capital expenditure decision, consists of two main steps as outlined in the next page.
5.2.1.1 Collecting Project Costs and SavingsInformation
The most important part of performing the financial
analysis of cleaner production initiative is the identification
and collection of all costs that are relevant to current
operations and the proposed cleaner production
alternative. Research and anecdotal evidence have
revealed that companies often fail to include all costs
in the financial analysis and, therefore, do not capture
much of the potential savings from environmental
improvement projects. ECA is particularly useful in
addressing this failure.
In the profitability assessment process, the costs are estimated and analyzed based
on their impact on profitability.
5.2.1.1.1 Investment
The investment costs include the initial cost necessary to implement the cleaner
production project, e.g., equipment purchase costs plus all necessary costs to put the
equipment in operation – installation, start up materials, permits, etc.
Tellus Institute in the U.S. provides a checklist of the possible costs associated
with a capital investment project as outlined in the next page.
5.2.1.1.2 The Company’s Operating Costs Before and After the Project
The financial analysis of cleaner production investment entails gathering complete
and accurate cost in the form of relevant incremental costs calculated on an annual basis.
Incremental costs are changes or differences between the operating costs of the current
process (business as usual) and the projected costs under the new project (P2/CP). These
costs include expenses, such as raw materials, maintenance, waste disposal and utilities
which continue over the life of the project. All costs should be converted to total annual
amounts in order to perform the financial analysis. Take note that a project can increase
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Checklist of Possible Costs Associated with aCapital Investment Project
or decrease operating costs but the net effect is usually savings or a net decrease in case
of P2/CP. The savings will accrue to the company during the project’s lifetime.
The cost of waste checklist offers a list of operating costs that may be affected by
the implementation of P2/CP projects. These costs include those for operating inputs,
waste management, treatment and disposal and, in some cases, less tangible items (e.g.,
potential liability) that may be quantified for purposes of project analysis.
Purchased Equipment
EquipmentSales taxPrice for initial spare partsProcess equipmentMonitoring equipmentPreparedness/Protective equipment
Safety equipmentStorage and Materials handling equipment
Laboratory/Analytical equipmentFreight/Insurance
Utility Connections and New Systems
ElectricitySteamCooling and process waterRefrigerationFuel (gas or oil)Plant airInert gasGeneral plumbingSewerage
Installation
VendorContractorIn-house staffConstruction/installationLabor and supervisionTaxes and insurance
Equipment rental
Start Up and Training
Vendor/ContractorIn-houseTrials/Manufacturing variances
Materials
PipingElectricalInstrumentsStructuralInsulationBuilding construction materialsPainting materialsDucting materials
Site Preparation
Demolition, clearing, etc.Disposal of old equipment, rubbishWalkways, roads and fencingGrading, landscaping
Engineering/Contractor (In-House & External)
PlanningEngineeringProcurementConsultantsDesignDraftingAccountingSupervision
Contingency
Permitting - Fees and In-house staff
Initial Charge for Catalysts & Chemicals
Working Capital (funds for raw materials,inventory, materials/supplies)
Salvage Value of replaced equipment
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The following case illustrates the cost analysis of a P2/CP project.
A company considers switching to a water-based coating system in order to
eliminate solvent use required by its present coating system. The new coating system
requires capital investment of PhP150,000. The impact of the project on company operating
costs is shown in the following worksheet.
Identification of the initial and incremental costs is followed by their translation into
annual cash flows over a project’s economic lifetime. Cash flows refer to the actual outflows
and inflows of money – expenditures and savings – incurred and generated by a project.
Initial (one-time) cash flows are the cost of the equipment and all expenses required for
installation and running the new process. In the case of the water-based coating system,
this is represented by the capital outlay of PhP150,000. Operating (also called period)
cash flows consist of all the incremental costs of operating new equipment or operating
the newly-installed process and all the savings (avoided) costs generated by the project.
As shown in the previous operating costs summary, the net savings for the proposed new
system is PhP74,600. The complete details and profitability assessment results of the
water-based coating project are shown at the end of this chapter.
Sample Worksheet for P2/CP Project Analysis
Operating Costs Summary
Cost Item Before Project After Project
Material Cost:Coating Materials PhP 250,000 PhP 275,000
Operating and Maintenance Labor:Direct Labor - Coating 340,000 340,000
Utilities:Electricity 60,000 45,000
Other Manufacturing Inputs:Disposal Costs:
Cost to Dispose Solvent, Rags and Liners 40,000 2,000
Environmental Fees:Supplies:
Cleaning Materials 48,000 2,400
Others:Environmental Compliance 5,000 4,000
Total Operating Costs PhP 743,000 PhP 668,400
Operating Cost Savings:
Operating Cost Before – Operating Cost After = Operating CostProject Project Savings
PhP743,000 – PhP668,400 = PhP74,600
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5.2.1.2 Applying Measures of Profitability
A profitability indicator is a single number that characterizes the profitability of the
project to the company. Some of the most common profitability indicators in project analysis
are Simple Payback, Net Present Value and Internal Rate of Return.
5.2.1.2.1 Simple Payback
Payback period analysis (simple payback) measures how long a project will take
to return its original investment. It ranks projects according to the length of the period –
the shorter the period, the more attractive is the project. The payback period is the amount
of time required for an investment to generate enough cash flow to just cover the initial
capital outlay for that investment. In P2/CP investments, the net cost savings usually
represent the project’s cash flow. Depending on the nature of the cash flows, payback
period can be calculated as follows:
• If annual cash flows are equal, the initial investment amount is divided by the
cash flows. For example, if the initial investment is PhP12,000 and the cash
flow is PhP15,000 per year, then the payback period is PhP12,000/
PhP15,000=0.8 years. In other words, it will take less than a year for the
investment cost to be recovered.
• If the cash flows vary each year, the cash flows are added incrementally until
they equal the initial investment amount. The period of time that corresponds
to when the added cash flows equal the investment is the payback period.
For example:
An investment of PhP50,000 has the following cash flow: 1st year - PhP25,000;
2nd year - PhP30,000; 3rd year - PhP30,000. The
payback is 1.83 year, computed as PhP25,000
recovered in year 1; another PhP25,000 to be
recovered in year 2. So, the payback is equal to 1
year and PhP25,000/PhP30,000 or 1.83 years.
5.2.1.2.2 Net Present Value
Net Present Value (NPV) analysis relies heavily on the
concept of the time value of money and is a powerful tool for
assessing profitability over the life of the project. The time value of
money recognizes that PhP100 today can be invested to earn a
return.
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The time value of money measures the value of money at different points in time
as determined by a discount rate. The discount rate is the interest rate that is used to
convert the future value of money to its present value (value now at year 0). The discount
rate is the rate of interest or return that a business or person can earn on the best alternative
use of money at the same level of risk. The discount rate is a function of what the company
must pay to acquire capital (money) and what rate of return for a given level of risk it must
earn on the investment.
The time value of money is considered in the financial analysis of cleaner production
projects when the cash flows received over the lifetime of the project are converted to
their present values. The present values of cash flows that will be received in the future
can be calculated using a financial calculator, spreadsheet software or a present value
table which lists the present value factors at different discount rates and period (years).
The present value factor is multiplied by the cash flows that will occur in the future to bring
the respective cash flows in their present values.
Period Year 1 Year 2 Year 3
Projected Cash Flows PhP1,000 PhP2,000 PhP4,000
multiplied by:
PV factor at 10% discount rate 0.9091 0.8264 0.7513
Present Value of Cash Flows PhP909.10 PhP1,652.80 PhP3,005.20
Meaning:
at a discount rate of 10%, PhP1,000 received a year from now is worth PhP909.10
today;
at a discount rate of 10%, PhP2,000 received two years from now is worth
PhP1,652.80 today;
at a discount rate of 10% PhP4,000 received three years from now is worth
PhP3,005.20 today.
The time value of money is important in the financial analysis of P2/CP projects
since the project has an initial investment cost that occurs now (year 0), but, the cash
flows or savings from the project will only accrue to the company over a period of time in
the future. So, in order to determine the profitability of the project, the initial investment
(amount of money to be spent) on the project should be compared to the time-adjusted
(present value) cash flows of the project over its lifetime. A positive net present value
occurs when the sum of the present values of all the cash flows from the project (investment
cost and cash flows over the project’s lifetime) is greater than 0. This means that the
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project is profitable at the time frame and at the discount rate used in the analysis.
Conversely, a negative net present value occurs when the sum of the present values of
the cash flows from the project (investment cost and cash flows over the project’s lifetime)
is less than 0. Projects with negative present values are deemed unprofitable at the time
frame and discount rate used in the analysis.
Illustration of Net Present Values Analysis:
A project’s initial investment cost is PhP5,000 with cash flows projected at PhP1,000
for the first year; PhP2,000 for the second year; and, PhP4,000 for the third year. The
discount rate is 10%.
Investment Cost (PhP5,000.00)*
Add: Present Values of Cash Flows at 10%
First Year PhP1,000 x PV factor 0.9091 PhP 909.10
Second Year PhP2,000 x PV factor 0.8264 1,652.80
Third Year PhP4,000 x PV factor 0.7513 3,005.20 PhP5,567.10
Net Present Value + 567.10
* The investment cost is a negative cash flow or an outflow of cash from the company.
5.2.1.2.3 Internal Rate of Return (IRR)
The IRR is a profitability measure, expressed in percentage terms, that is analogous
to an average rate of return from an investment. IRR is the discount rate that will yield a
net present value of zero for a given stream of cash flows. This method allows a comparison
between the IRR of a project and a company’s self-determined discount rate (hurdle rate).
A financial calculator or a computer spread sheet can be used to determine IRR. In general,
if the IRR is greater than the company’s hurdle rate, the project will be accepted. If the
IRR is less than the hurdle rate, the project will be rejected.
5.2.2 Other Financing Issues That Could Affect Project Analysis
Briefly discussed below are the other factors that may affect project profitability
assessments:
5.2.2.1 Inflation
Inflation refers to the decline in the purchasing power of the peso, causing the cost
of goods and services to rise. As we know from experiencing inflation, the same item will
go up in price as time passes – things cost more in the future. As a result of inflation,
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money is more valuable now than later. It can be said
that money loses purchasing power over time. In
forecasting the cash flows over the lifetime of the
project, it is important to incorporate projected inflation,
especially when the pollution prevention project
derives significant savings from avoided costs
of purchased goods. Instead of adjusting the cash
flows over the lifetime of the project, inflation
can be alternatively taken into account in the
determination of the discount rate used in project
analysis.
5.2.2.2 Taxes and Other Credits
Taxes can be an important project cash
flow. A firm may have to pay national and/or local
income taxes on the revenues or savings
generated by a project. The project’s cash flows should be reduced by the income tax to
be paid on the company’s added income resulting from the savings in operating costs
from the project.
Depreciation is the reduction in the value of a long-lived asset over its useful life.
Depreciation expense is a noncash expense because there is no outflow of cash that
corresponds with the annual depreciation charge. The cash outflow occurred at the time
the initial costs were incurred. As a noncash expense, depreciation is a source of cash
because the depreciation charges decrease taxable income; thus, the tax that is not paid
represents a cash savings that should be included in project analysis. The value of the
depreciation tax shield is determined by multiplying the depreciation expense by the tax
rate. The resulting figure equals the amount of tax that is not paid and, thus, represents
additional cash flows (cash savings) to the firm.
5.2.3 P2/CP Profitability Assessment Software
A software called E2 Finance Philippines is available for the financial analysis of
cleaner production projects. The software is a Philippine-modified version of the P2 Finance
software developed by Tellus Institute and is part of the training package of the course,
Environmental Cost Assessment: Profiting from Cleaner Production, being offered by the
Philippine Institute of Certified Public Accountants (PICPA).
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Table 5.2 provides examples of the tasks required under Quantitative Analysis to
meet the objectives indicated.
Table 5.2 Illustrative Examples of Tasks Under Quantitative Analysis
1. Identify andestimate the costand savings thatare relevant to theanalysis
1.2 Compute forthe indicatorsof profitabilityusing thesimple anddiscountedmethods
2. Adjust calculationstaking intoconsideration otherfactors, such astaxes and inflation
3. Acquire the P2/CPprofitabilityassessmentsoftware that canbe used in yourcompany
1.1 To know whatincrementalcost items areto be includedin your projectanalysis andwhere tosource theseinformation
1.2 To know howto compute forthe indicatorsof profitability
2. To know whatother finance itemsto consider in theassessment
3. To know whatP2/CP profitabilityassessmentsoftware isavailable
1. P2/CP ProfitabilityAssessment
1.1 Collection ofP2/CP ProjectCost andSavingsInformation
1.2 Application ofMeasures ofProfitability
2. Consideration ofOther FinancingIssues
3. SoftwareApplication
1.2 Application ofsimplepaybackindicator, NPVor InternalRate of Returnin a P2/CPproject
Phase/Activity Objective Task Illustrative Example
5.3 QUALITATIVE FACTORS IN P2/CP
The financial analysis of a P2/CP investment project may involve the presence of
other factors that are difficult to quantify, but, may have strategic significance for a business
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enterprise. Positive impact on productivity, market share, public image, stakeholder relations
and other factors must be considered for a clearer picture of P2/CP profitability. Less
tangible benefits may provide the needed advantage to secure approval for P2/CP projects.
Table 5.3 shows an illustrative example of a task under this subject.
Table 5.3 Illustrative Example Under Qualitative Analysis
1. Less TangibleBenefits of P2/CP
1. To know what thequalitative benefitsof P2/CPimprovements inyour company
1. Determine and
include in theP2/CP profitabilityassessment thequalitative or lesstangible benefits inorder to strengthenproposal
1. Improved
productivity,increasedmarket share,improved publicimage aredifficult toquantify but canbe included asqualitativefactors
Phase/Activity Objective Task Illustrative Example
5.4. FINANCING FOR P2/CP IMPLEMENTATION
Several sources of funding can be considered to finance a P2/CP project. Generally,
projects can be implemented by utilizing funds from the following sources:
5.4.1 Internal Sources of Funds
Internal funds can be generated by retained profits or capital supplied by the
owner(s) of the firm. Earnings retained in the business can also be utilized
for other purposes, such as P2/CP improvements. The owner(s) of the
business may also decide to put in additional money to implement P2/
CP.
5.4.2 Funds from Outside Sources
If internal funds are not available, the firm will have
to look for outside sources of finance. Financing may come
from external private sector sources, including banks,
development corporations, equipment vendors and
subsidiary finance companies.
The government can be an important supplier of
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capital to finance projects for P2/CP through the provision of grants or subsidies.
Government-managed development funds are those where the finance is provided, with
conditions on the types of project it can support, by an institution such as the United
Nations or the World Bank. Examples of government-managed development funds are
the financing facilities available from government financial institutions.
The Land Bank of the Philippines (LBP) and the Development Bank of the
Philippines (DBP) offer various lending facilities with favorable terms for environment-
related projects, such as investments for pollution control and abatement, cleaner
production, pollution prevention and waste minimization. Table 5.4 shows illustrative
examples of tasks under this subject.
Table 5.4 Illustrative Examples of Tasks Under Financing P2/CP Projects
1. Sourcing Financefor P2/CP ProjectImplementation
1.1 InternalSources ofFinance
1.2 ExternalSources ofFinance
1.1 To know whatfunding sourcesare availablewithin thecompany for theimplementationof P2/CP
1.2 To know whatP2/CP financingfacilities areavailable fromoutside sources
1.1 Profits, savings,additional capital
1.2 DBP, Land Bank,etc.
1. Determine thedifferent sources offinancing availableto fund theproposed P2/CPProject
Phase/Activity Objective Task Illustrative Example
5.5 SOURCES OF MORE INFORMATION ON ECA
The following organizations and sources of information provide access to available
training, publications and networks in the field of ECA:
• The Philippine Institute of Certified Public Accountants (PICPA) offers a course on
environmental cost accounting as a tool for environmental management and the
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implementation of pollution prevention/cleaner production investments. PICPA’s
Environmental Accounting Committee can be contacted for training schedules
at telephone number (632)723-5467 or at the PICPA national office at
700 Shaw Boulevard, Mandaluyong City, Philippines. PICPA’s website is
http://www.picpa.com.ph
• The United Nations’ Experts Working Group on Environmental Management
Accounting (EMA) has published the workbook, EMA Procedures and Principleswhich can be downloaded at http://www.un.org/esa/sustdev1.htm. This EMA
application tool is intended to track annual environmental expenditures of a facility
and this information can be valuable in documenting the financial returns of EMS
implementation. For EMS implementation, EMA can show that environment-related
costs on an annual basis will decrease over time, while environmental savings
increase.
• For information on networking opportunities, one can apply for membership to the
Environmental Management Accounting Network for Asia Pacific (EMAN-AP).
Membership registration is available at http://eman-ap.net. EMAN-AP’s contact
person in the Philippines is Maria Fatima Reyes (email: [email protected]).
• For information on a broad range of topics on environmental management
accounting, visit the International Website on EMA at http://www.EMAwebsite.org.
• For more information on P2/CP financing, browse the website of the United Nations
Environment Program on CP Financing at www.financingcp.org. In this website,
can be found, among others, the particular topic on preparing a bankable proposal
for CP.
Table 5.5. shows an example of a task under this subject.
Table 5.5 Illustrative Example of a Task Under Sourcing of Information on ECA
1. Sources ofmoreinformation onECA
1. To know where toget moreinformation onECA
1. Research othermaterials on ECA.
Phase/Activity Objective Task Illustrative Example
1. PICPA, UNEP
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VIIllustratingEnvironmentalManagement System,Pollution Prevention/Cleaner Productionand EnvironmentalCost Accounting
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The case study in this chapter involves applications of EMS, P2/CP and ECA.
The technical and financial data are utilized solely for illustrative purposes.
To check the level of knowledge and understanding gained from this Guidebook,
the reader is encouraged to answer the questions provided in this chapter.
Items requiring computations are given with an illustrative example as reference.
BACKGROUND
Millennium Designs (MD) is a local company located in a densely populated area
50 kilometers north of Manila and 150 meters away from a river stream. The company,
with 75 employees, operates on a single shift from 8 a.m. to 5 p.m. with lunch break, 300
days every year. MD, a medium-sized facility, manufactures steel frames for office and
home furniture. The dominant markets are the local manufacturers and distributors of
home and office furniture in Metro Manila and the nearby provinces. Recently, the company
began selling some of its high-end products to customers in Japan and Singapore. Although
the sale from its overseas market is still small, management has optimistically projected a
steady growth in the export division in the coming years.
The figure below shows Millennium Designs’ organizational structure.
Millennium Designs’ Organizational Structure
Technical
Engineering
Pollution Control Officer
Research & Development
Administration/Finance
Production
Quality Control
Personnel
Procurement
Accounting
Sales/Marketing
Domestic
CEO/President
International
Market Research
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The Production Department has three (3) sections: Forming Section, Frame
Preparation Section and Finishing Section. Figure 6.1 shows the flow chart of steel bar
manufacture, indicating inputs and nonproduct outputs.
Figure 6.1 Flowchart of manufacturing steel bars
The manufacturing operations involve the following steps:
• Cutting the steel to the desired length using a steel saw
• Forming the steel to the desired shape
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• Grinding the steel to remove sharp edges brought about by the cutting operation
• Welding the steel pieces together to form the frames
• Grinding the frame to remove excesses in welded joints
• Cleaning of frame to remove dust and dirt
• Application of primer to frame
• Application of finishing coat to frame depending on customer specifications
• Wrapping of frame with plastic as protection
These operations generate waste, such as steel scraps from cutting, spent grinding
pads, spent welding rods, rugs, spray liners and spent solvents. Most of these materials,
particularly scrap metals, are sold to junk shops. A walkthrough in the MD facility revealed
that solvent containers are left open, causing the solvent to evaporate.
Based on observations, most of its environmental problems occur in the facility’s
finishing operations, where solvent is heavily used for cleaning purposes. MD consumes
a dozen 200-liter drums of cleaning solvent (PhP20/liter). Steel frames are coated in the
company’s finishing department where, depending on customer specifications, several
layers of different coating materials are applied to the steel frames using high-volume,
low-pressure spray guns. The gun parts – lines, nozzles, etc. – are cleaned with a solvent
at the end of each shift and when lacquer pigments are changed. The spent solvent,
together with contaminated rugs and spray liners, are placed in container drums for disposal.
As far as management is concerned, a strategy of compliance with environmental
regulations is also important in order to stay profitable in business. Recently, however,
the company has been receiving some complaints from a local environmental NGO about
the improper disposal of the company’s drums, which are fouling up the nearby river; as
well as excessive fumes from the finishing operations.
Worker satisfaction is a corporate priority at MD as shown by the company’s steady
investment in improved working conditions at the facility. Four workers and a supervisor
are assigned to the Finishing Section.
Currently, MD spends the following amounts (all units in PhP) for Coatings
Operations:
• Coating materials ..................................................... 250,000
• Production labor ....................................................... 340,000
• Cleaning solvent ...................................................... 48,000
• Disposal costs (for solvent, liners and rugs) ............ 40,000
• Electricity .................................................................. 60,000
• Environmental compliance reporting ....................... 5,000
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The firm estimated that the Aqueous Coating System would require an initial
investment cost of PhP150,000 for the additional wastewater equipment purchase plus
additional expenses for piping, training and permitting. The additional equipment will
have a useful life of five years.
An analysis of the proposed project revealed the following operating (period) cost
impacts:
• Coating materialsThe cost will increase by about 10%.
• Production laborNo change – the same number of employees would be required to apply the
aqueous-based formulations.
• Cleaning solventSolvent use will be eliminated.
• Disposal costThis will be significantly reduced by the elimination of solvent use. Cost of
rugs and liner disposal will remain at about PhP2,000/year.
• Aqueous-based cleanerThis is estimated at PhP2,400/year.
• ElectricityLess ventilation requirements will reduce electricity cost by 25%.
• Environmental complianceCompliance activities will be reduced by 20%.
One option that the company considered was switching to an aqueous (water)-
based coating system. The potential environmental benefits from the investment are
significant because the aqueous coating system will reduce hazardous emissions and
eliminate the use of solvents for clean-up. However, some additional investment for piping
and equipment is needed to treat the wastewater from the new system. After a careful
consideration of the technical and financial aspects, including less tangible benefits of the
proposed project, the company decided to invest in the new aqueous coating system.
6.1 EMS CASE STUDY:
The MD Environmental Management System
The top management of Millennium Designs realized that the only way for them toeffectively manage the growing environmental concerns of the company was to implementan EMS. The company’s commitment to the environment includes programs to complywith all applicable laws and regulations, prevent pollution and ensure continualimprovement.
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Five phases are involved in establishing the EMS: (1) setting up, (2) planning, (3)
doing, (4) checking and (5) acting. Specific steps for each phase are discussed below. A
set of ‘questions’ and ‘guide’ are provided, though not exhaustively, only to provide clarity
and facilitate understanding of the case study.
1. Setting up the EMS
1.1 Secure commitment from top management.
Questions • What are the environmental problems associated with steel bar
manufacture?
• Are there other environmental problems in addition to waste
discharges and emissions?
• What are the complaints from the surrounding communities?
• Is MD’s image to the public being affected?
• Is the cost of legal penalties for polluting the water significantly
increasing?
• Do customers from Japan and Singapore require an EMS?
Guide • The statement of environmental commitment must come from top
management.
• The recognition of environmental problems need not always come
from the top; it may emanate from shop floor operators, from any
concerned employee or from the public.
• Top management appoints a key person authorized to handle
environmental matters of the company.
• The appointed person must have the proper authority.
1.2 Conduct an IER to determine the status of current efforts of MD to address
environmental issues and concerns.
Questions • Are there existing programs to deal with the current environmental
issues and problems related to fumes from solvents and disposal
of contaminated drums?
• Does MD comply with the Philippine Clean Air Act (RA 8749;
DAO 2000-81) or the Ecological Solid Waste Management Act
(RA 9003)?
• Does the company follow occupational health and safety as well as
quality management guidelines?
• Have actions been taken to address past complaints from the public
or local NGOs?
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Guide • IER is useful in determining the level of MD’s efforts in dealing with
its environmental obligations.
• IER becomes the basis for the company’s EMS.
2. Planning all activities related to the development and implementation ofthe EMS
2.1 Determine the company’s environmental aspects.
Questions • What are its emissions to air, discharges to land, and/or wastewater
discharges to the river?
• Are these aspects and impacts significant?
• Does it throw away large amounts of contaminated solid wastes?
• Do the fumes create problems for its workers?
• Has it received any more complaints from the neighborhood?
Guide • Identify the significant aspects from the operations, such as the
finishing.
• Consider different criteria for determining which aspects are
significant using ecological (e.g., pollution, risks), legal (e.g.,
compliance, excesses), and/or business concerns (e.g., complaints,
costs).
2.2 Identify all laws and regulations that apply to the identified aspects, and those
that MD subscribes to.
Questions • Does MD emit airborne
pollutants?
• Does it use and buy chemicals?
• Does it discharge wastewater to
a river?
• Does it have contaminated solid
wastes?
• Are workers or surrounding
communities exposed to toxic
fumes?
Guide • Secure copies of current laws and regulations with the DENR-EMB
and other regulatory authorities in your area.
• Check out web sites of EMB at www.emb.gov.ph, or DENR at
www.denr.gov.ph., and other environmental organizations.
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2.3 Establish the company environmental policy.
Questions • What are the management’s major environmental concerns?
• Has the management shown commitment to address these
concerns?
Guide • The company must document the environmental policy stating its
commitment to prevention of pollution, legal compliance and
continual improvement.
• The policy must be communicated to all employees and interested
parties.
2.4 Set your environmental objectives and targets.
Questions • Have MD’s waste and emissions been measured?
• Does it have baseline data and information on its waste generation?
• Has noncompliance with applicable laws and regulations been noted
down?
Guide • Objectives and targets must be performance-based, measurable
and achievable.
• Objectives and targets must be documented.
2.5 Establish your environmental management program.
Questions • Are the programs consistent with the environmental policy of MD?
• Do they relate to MD’s significant aspects and impacts?
Guide • EMPs may consist of existing and proposed programs, such as
waste management, energy, water conservation, etc.
• EMPs must come from all levels of company operations.
3. Doing all things needed to achieve the environmental policy
3.1 Organize an EMS structure and identify responsibilities.
Questions • Has an EMR been appointed to handle the EMS?
• Has an organization been set up to ensure that all components of
the EMS are handled by authorized personnel?
• Are suppliers, contractors and subcontractors informed of their roles
and responsibilities?
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Guide • Involve all personnel at the different functional levels of the
organization.
3.2 Conduct awareness and competency trainings.
Questions • Have the critical operations with significant aspects been identified?
• Have personnel been identified for those critical operations?
• Have the competency requirements for critical operations been
identified?
Guide • Include in the training needs analysis personnel requirements in
critical operations.
• Conduct regular competency training for concerned personnel.
3.3 Establish a system of internal and external communication.
Questions • Does everybody know the company’s significant aspects and
impacts?
• Are the interested parties, such as the community, aware of the
company’s environmental policy?
• Are complaints from the public properly recorded and attended to?
Guide • All EMS-related information must be communicated to all employees.
• Environmental policy must be made available to the public.
3.4 Document all EMS activities and maintain a system to control them.
Questions • Is the procedure for handling external complaints being used to
address the problem?
• Is the procedure for carrying out the critical operations being
followed?
• Are procedures and work instructions easily retrieved?
Guide • Documents may be in print or electronic form, current and updated.
• File properly and appropriately all EMS documents.
3.5 Establish operational controls.
Questions • Are controls in place to avoid excessive discharge or fumes into the
air?
• Do procedures consider key operational parameters?
• Is the operator aware of pollution prevention or waste minimization
options?
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Guide • Identify all operations that create significant aspects.
• Know the key operational parameters to control.
3.6 Develop emergency preparedness and response procedures.
Questions • Is there a procedure to handle emergency environmental situations?
• Are there personnel competent to handle such situations?
• Are emergency equipment available and functional?
Guide • Identify all operations which have significant aspects occurring under
emergency situations.
• Conduct drills to test procedures, emergency equipment and
personnel competence.
4. Checking and ensuring that EMS activities are being carried out
4.1 Monitor and measure the key operational parameters.
Questions • Have quantities of emissions and discharges been quantified?
• Have key operational parameters and environmental performance
indicators been identified?
• Is there a procedure to monitor and measure the emission of fumes?
• Is there a competent person to monitor
and measure key operational
parameters?
Guide • Identify all operations that
have significant aspects.
• Determine the key operational
parameters.
• Record all monitoring data
and information.
• Make sure that all
instruments are calibrated.
4.2 Undertake preventive and corrective
actions for any nonconformities.
Questions • Are there non-conformities to the requirements of the EMS?
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• Are there significant aspects occurring in normal, abnormal and
emergency situations?
• Are immediate actions taken to prevent further generation of
aspects?
• Are these situations evaluated to prevent recurrence of problems?
Guide • Procedures should be in place to carry out preventive and corrective
actions.
• Document all occurrences of non-conformities with the system.
4.3 Conduct regular internal audits of the system.
Questions • Has the environmental policy been achieved?
• Are procedures and work instructions being followed?
• Is EMS still effective and appropriate?
• Are objectives and targets monitored?
Guide • Have trained and competent internal EMS auditors.
• Carry out internal audit of the EMS regularly or as necessary. May
not necessarily cover the entire organization.
• Document and report results of the audit.
4.4 Keep records of all EMS documents.
Questions • Is there a signed copy of the environmental policy?
• Has the emission of fumes been monitored and recorded?
• Have the complaints from the public been logged in; has feedback
been given to the complainant?
Guide • Ensure that all records are properly kept and up to date.
• Procedure should be followed for proper record-keeping.
5. Acting on the EMS programs
Questions • Has an internal audit been conducted on the system?
• Are there non-conformities reported?
Guide • Conduct a regular management review of the EMS.
• Use the results of the EMS audit as bases for discussion and action.
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6.2 P2/CP PROGRAM CASE STUDY:
Developing a P2/CP Program for Millennium Designs
With the decision to establish an environmental management system, MD
management decided to develop a P2/CP Program as part of the commitment to comply
with environmental regulations and other requirements, prevention of pollution and continual
improvement.
1. Planning and Organizing Phase
1.1 Organize and orient P2/CP Task Force.
Question • Who are the persons in the MD organization with the authority and
responsibility to carry out a P2/CP Program?
1.2 Set P2/CP program goal(s).
Guide • The P2/CP Program goal may be related to compliance, increased
productivity, improved quality, improved working conditions for
personnel and/or reduced waste generation.
1.2.1 Review corporate policies.
Question • Where can the P2/CP Program goal relate to the established
corporate environmental policy under the EMS?
1.2.2 Identify driving and restraining forces.
Questions • Do regulatory, financial, environmental, public image, employees’
welfare and competitiveness issues drive the establishment of a
P2/CP Program?
• Do financial, economic, policy-related, organizational, technical and
conceptual (resistance to change) issues hinder the implementation
of a P2/CP Program?
1.2.3 Set criteria for prioritization.
Guide • Criteria for prioritization may be based on the severity of a problem,
its frequency of occurrence, cost implications of possible solutions
and cost of not taking any action on the problem area.
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1.3. Identify focus area(s).
Questions • Is an area, process or activity at the facility contributing to the severity
of a problem?
• How often does the problem occur?
• How much will it cost to solve the problem?
• How much will it cost the company if no action is taken? Use steps
1.3.1 to 1.3.4 to validate these.
1.3.1 Collect and review data.
Guide • The following information can help in the
identification of the focus area(s):
process flow diagram, production
data (raw material and other inputs
and product and waste outputs),
plant layout, organizational chart,
initial environmental review, pollution
control officer’s report, engineer’s
report, utility bills, etc.
1.3.2 Verify and construct the process flow diagram through a facility walkthrough.
Questions • Is the process flow diagram on file reflective of what is actually
happening at the shop floor?
• Is it an accurate representation of the activities at the production
area?
1.3.3 Identify waste streams and waste management practices.
Question • What waste is generated in each production step? This may include
not only wastewater, solid waste and air emissions, but, also spilled
raw materials, fugitive emissions, leaking pipelines, production
rejects, etc.
1.3.4 Obtain overall materials balance.
Guide • What goes into the facility must come out of it, either as a product,
by-product or waste. Any discrepancy is an indication of
unaccounted input and/or output. In most cases, this is waste not
recorded.
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1.4 Plan P2/CP assessment.
Questions • When will the P2/CP assessment be done?
• Who will perform which task?
• What information shall be collected at the site?
• Who shall be interviewed during the visit?
1.4.1 Establish environment performance indicators (EPI)
Questions • What are the measures of the performance of the company’s inputs
and/or waste generated vis-à-vis its production?
• What data and cost can serve as measures for the performance of
the facility?
1.4.2 Schedule detailed P2/CP assessment.
Questions • At what time does the facility operate?
• How many shifts does it have? Of particular interest are times during
chemical addition, start-up, preparation for shutdown, cleaning and
maintenance activities.
2. Assessment Phase
2.1 Organize P2/CP Assessment Team.
Questions • Who are the operating staff directly involved in the identified focus
area(s)?
• Who are the facility personnel who have functions that may impact
or are impacted by the activities in the focus area(s)?
• Does the company need an external expert for the P2/CP
assessment?
2.2 Collect data for EPI.
Question • What data and cost information related to the figures identified in
step 1.4.1 should be collected?
2.3 Do materials and energy balance.
Guide • Actual measurements during operations may be necessary to obtain
the materials and energy balance of the focus area(s).
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2.4 Perform cause diagnosis.
Questions • What factors contribute to the generation of waste?
• Is it due to product specification, choice of raw materials, equipment
or facility layout, process control, use of old technology, and/or
operating and maintenance procedures?
• Are there raw materials, intermediates and/or valuable materials in
the waste stream?
2.5 Set objectives.
Guide • Objectives should be specific, measurable, attainable, relevant and
time-bound.
2.6 Generate P2/CP options.
Questions • Does the facility need to change product
specifications, change the raw material,
implement good housekeeping
practices, improve equipment or
facility layout, improve operating
conditions and/or use a new
technology?
• Can waste be used or reused?
• Can a valuable material in the
waste stream be recovered?
2.7 Classify P2/CP options.
Questions • Is the option impractical to implement?
• Is the option low cost/low risk that it can easily be implemented?
• Does the option require further technical and financial evaluation?
2.8 P2/CP Assessment Documentation (Record findings, develop
recommendations, prepare schedules and designate tasks).
Guide • The table on the next page (also referred to as the FIRST – Findings,
Recommendations, Schedules and Tasks – Report) can help the
P2/CP assessment team not only report their output, but, also guide
the P2/CP task force in making decisions.
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3. Feasibility Analysis Phase
3.1 Identify and fill up data gaps.
Questions • Are all information available?
• Is there a need to return to the facility to collect additional
information?
• Is there a need to first establish a monitoring program to validate
previous information collected?
• Can information be collected from secondary sources?
3.2 Perform feasibility analysis of P2/CP options.
Question • Is the P2/CP option viable in terms of technical, economic and
environmental factors?
3.2.1 Technical Evaluation
Questions • Is the P2/CP option functional?
• Will it impact on worker health and safety, and product quality?
• Will there be additional requirements of space and labor?
• Is it compatible with existing production processes?
Waste Cause Objective P2/CP Option Task
< 6 months > 6 months
Whichoperations orprocessesgenerate thiswaste?How muchis this waste?
What is/are theroot cause(s)of this wastegeneration?The objective
must bespecific,measurable,attainable,relevant andtime-bound(SMART)P2/CP options
that can beimplementedin less thansix months;in most cases,these are thelow-cost/low-risk optionsP2/CP options
that can beimplementedmore than sixmonths afterthe assess-ment; theseare generallythose thatneed furthertechnical andfinancialevaluation
Who will
implement theidentifiedP2/CP option?
Example of a FIRST (Findings, Recommendations, Schedules and Tasks) Report
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• Will there be a facility shut-down during its installation?
3.2.2 Environmental Evaluation
Questions • Is there a decrease or increase in the number and toxicity of waste
streams?
• Is there a transfer of pollution from one media to another?
• Will the P2/CP option consume more or less energy?
3.2.3 Economic Evaluation (ECA module discusses this item in more detail)
Questions • How much will have to be invested?
• What is the benefit-cost ratio of the option?
• What is the internal rate of return?
• What is the payback period?
4. Implementation Phase
4.1 Select P2/CP projects for implementation.
Question • Based on the feasibility analysis and prioritization criteria, which
P2/CP options must be carried out?
4.2 Obtain funding.
Questions • Will it be more profitable to finance the project internally?
• If internal funds are insufficient, can the facility secure a loan for the
project?
4.3 Install equipment / Implement P2/CP option.
Guide • The implementation of a P2/CP project does not differ from any
regular project. It may need conceptualization, planning, execution
(procurement, construction and installation) and termination.
4.4 Conduct training.
Question • What skills, knowledge and attitudes of staff involved in the P2/CP
project need change or improvement?
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4.5 Review and adjust.
Guide • The P2/CP project may need some fine-tuning once implemented;
thus, a review of the project is necessary and adjustments made, if
needed. As more information are gathered in its implementation,
the facility also increases its experience.
5. Monitoring and Evaluation Phase
5.1 Acquire and analyze data.
Question • What EPIs were identified before? Can these information and data
be collected in almost the same conditions as before?
5.2 Evaluate economic and environmental performance.
Question • How does the current EPI (after P2/CP program and projects)
compare with the EPI collected during the P2/CP assessment?
6.3 ECA CASE STUDY:
Applying ECA to the Financial Assessment of the P2/CPProposal of MD
MD’s production engineer and accountant organized and led a P2 team to develop
a comprehensive financial analysis of the proposed Aqueous (Water)-based Coating
System Project.
1. Planning and Organizing for ECA at MD
1.1 Management Support. Know what management wants in applying ECA.
Question • How do you get management authority to pursue an ECA?
1.2 Teamwork
Question • Which departments and personnel at MD will play important roles
in identifying and estimating environmental cost information?
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Current CostsThe financial analysis of the proposed project commenced with the
identification and estimation of the costs of the current coating system. The P2/
CP team identified the following cost of the company’s coating operations:
MILLENNIUM DESIGNS - CURRENT COSTS
Coating OperationsCoating materials ................................................ PhP250,000
Production labor .................................................. 340,000
Cleaning solvent ................................................. 48,000
Disposal cost (solvent, liners and rags) .............. 40,000
Electricity ............................................................. 60,000
Environmental compliance.................................. 5,000
1.3 Process Maps
Question • How will process maps help you in the ECA of MD?
1.4 Materials and Energy Balance
Question • Why are materials and energy balance important in the ECA of
MD?
1.5 Cost Checklist
Question • What cost checklist can you use in the ECA of MD?
1.6 Activity-based Costing (ABC)
Question • How will ABC improve management decision in the area of product
pricing and project analysis?
1.7 Internal Sources of Information
Question • Name the internal sources of environmental cost information at MD
1.8 External Sources of Information and Expertise
Question • Do you think MD needs outside expertise? Why?
127127127127127
The firm estimated that the Aqueous Coating System will require an
initial investment cost of PhP150,000 for the additional wastewater equipment
purchase, plus additional expenses for piping, training, and permitting. The
additional equipment will have a useful life of five years.
An analysis of the proposed project revealed the following operating
(period) cost impacts:
• Coating materials: the materials cost will increase by about 10%
• Production labor: no change - the same number of employees
would be required to apply the aqueous-based formulations
• Cleaning solvent: solvent use eliminated
• Disposal Cost: will be significantly reduced by the elimination of
solvent use. Cost of rugs and liner disposal will remain at about
PhP2,000 per year.
• Aqueous-based cleaner: estimated at PhP2,400 per year
• Electricity: Less ventilation requirements will reduce electricity
cost by 25 percent
• Environmental compliance: Compliance activities will be reduced
by 20%
Costs Under the Proposed Project
128128128128128
Cost Item Before Project After Project
Materials Cost:
Coating Materials PhP250,000 PhP275,000
Operating and Maintenance Labor:
Direct Labor - Coating 340,000 340,000
Utilities:
Electricity 60,000 45,000
Other Manufacturing Inputs:
Disposal Costs:
Cost to Dispose Solvent, Rugs and Liners 40,000 2,000
Environmental Fees:
Supplies:
Cleaning Materials 48,000 2,400
Others:
Environmental Compliance 5,000 4,000
Total Operating Costs PhP743,000 PhP668,400
Operating Cost Savings
Operating Costs Before Project - Operating Costs After Project =
Operating Cost Savings
PhP743,000 - PhP668,400 = PhP74,600
AQUEOUS COATING SYSTEM - MILLENNIUM DESIGNS
Capital Cost Summary
Cost Item Cost (PhP)
Equipment Purchased: prices, taxes, delivery PhP133,500
Installation: engineering, construction, etc.
Utility Connections: electricity, water, fuel, etc. 8,000
Start-Up Costs: training, test materials 5,000
Others: permits, licenses, clearances 3,500
Total Capital Costs PhP150,000
Operating Costs Summary
Sample Worksheet for the Financial Analysis of P2/CP Investment
129129129129129
2. Quantitative Analysis
2.1 Collection of P2/CP Project Cost and Savings Information
Questions • What cost items are included in MD’s Investment Cost?• What cost items are relevant to MD’s P2/CP proposal?
2.2 Application of Measures of Profitability
Guide • Using data from MD’s Aqueous Coating Project, recalculate thesimple payback and NPV of the proposed project under the followingscenarios:a) Scenario 1: Project investment cost increased by 20%b) Scenario 2: The net savings from the project increased by 10%
Guide • Determine the profitability of the proposed project using the NPVindicator in scenario 1 and scenario 2.
Sample Calculation of Measuring Profitability Based on the Above Given DataProject Profitability IndicatorsPresent Value of Cash Flow
Simple Payback Indicator Calculation:
Initial Investment Cost
Net Annual Cash Flow
PhP150,000 / PhP74,600 = 2.01 years
Simple Payback =
Net Present Value Indicator Calculation
After Tax Cash Flow Calculation
Net Annual Cash Flow (Savings) PhP74,600
Less: Tax (PhP74,600 x 32% income tax rate) 23,872
PhP50,728
Add: Depreciation Tax Shield 9,600
PhP150,000/5 years = PhP30,000 depreciation/year
PhP30,000 x 32% tax rate = PhP9,600 tax shield
After Tax Cash Flow PhP60,328
Note: Present value tables are found at the end of Chapter VI on pages 131 and 132. The tables are usedto determine the PV factor.
( PhP150,000 )
Cash Flow PhP 60,328
Multiplied by PV factor (5 years at 15%) 3.3522 PhP202,232
Add: Initial Investment Cost PhP150,000
Net Present Value PhP52,232
130130130130130
2.3 Consideration of Other Financing Issues
Guide • Recalculate the NPV indicator assuming that the income tax rate is
increased to 35%.
3. Qualitative Factors in P2/CP Project
Question • Why are qualitative factors important in the evaluation of the
proposed project of MD?
4. Sourcing Finance to Fund P2/CP Project Implementation
4.1. Internal Sources of Finance
Guide • List the possible internal sources to finance MD’s P2/CP project.
4.2. External Sources of Finance
Guide • List the possible external sources of funds for MD’s P2/CP project.
5. Sourcing of More ECA Information
Question • What are some of the best sources of current information on ECA
which can be accessed by MD?
131131131131131
PRESENT VALUE RATE TABLE A
10.
9524
0.94
340.
934
60.
9259
0.91
740.
9091
0.90
090.
8929
0.88
500.
8772
0.86
960.
8621
0.84
750.
8333
1
20.
9070
0.89
000.
8734
0.85
730.
8417
0.82
640.
8116
0.79
720.
7831
0.76
950.
7561
0.74
320.
7182
0.69
442
30.
8638
0.83
960.
8163
0.79
380.
7722
0.75
130.
7312
0.71
180.
6931
0.67
500.
6575
0.64
070.
6086
0.57
873
40.
8227
0.79
210.
7629
0.73
500.
7084
0.68
300.
6587
0.63
550.
6133
0.59
210.
5718
0.5
523
0.51
580.
4823
4
50.
7835
0.74
730.
7130
0.70
840.
6499
0.62
090.
5935
0.56
740.
5428
0.51
940.
4972
0.47
610.
4371
0.40
195
60.
7462
0.70
500.
6663
0.63
020.
5963
0.56
450.
5346
0.50
660.
4803
0.45
560.
3759
0.41
040.
3704
0.33
496
70.
7107
0.66
510.
6227
0.58
350.
5470
0.51
320.
4817
0.45
230.
4251
0.39
960.
3269
0.3
538
0.31
390.
2791
7
80.
6768
0.62
740.
5820
0.54
030.
5019
0.46
650.
4339
0.40
390.
3762
0.35
060.
2843
0.30
500.
2660
0.23
268
90.
6446
0.59
190.
5439
0.50
020.
4604
0.42
410.
3909
0.36
060.
3329
0.30
750.
2472
0.26
300.
2255
0.19
389
100.
6139
0.55
840.
5083
0.46
320.
4224
0.38
550.
3522
0.32
200.
2946
0.26
970.
2149
0.22
670.
1911
0.16
1510
110.
5847
0.52
680.
4751
0.42
890.
3875
0.35
050.
3173
0.28
750.
2607
0.23
660.
1869
0.19
540.
1619
0.13
4611
120.
5568
0.49
700.
4440
0.39
710.
3555
0.31
860.
2858
0.25
670.
2307
0.20
760.
1625
0.16
850.
1372
0.11
2212
130.
5303
0.46
680.
4150
0.36
770.
3262
0.28
970.
2575
0.22
920.
2042
0.18
210.
1413
0.14
520.
1163
0.09
3513
140.
5051
0.44
230.
3878
0.34
050.
2992
0.26
330.
2320
0.20
460.
1807
0.15
970.
1229
0.12
520.
0985
0.07
7914
150.
4810
0.41
730.
3405
0.31
520.
2745
0.23
940.
2090
0.18
270.
1599
0.14
010.
1069
0.10
790.
0835
0.06
4915
160.
4581
0.39
360.
3387
0.29
190.
2519
0.21
760.
1827
0.16
310.
1415
0.12
290.
0929
0.09
300.
0708
0.05
4116
170.
4363
0.37
140.
3166
0.27
030.
2311
0.19
780.
1696
0.14
150.
1252
0.10
780.
0929
0.08
020.
0600
0.04
5117
180.
4155
0.35
030.
2959
0.25
020.
2120
0.17
990.
1528
0.12
290.
1108
0.09
460.
0808
0.06
910.
0508
0.03
7618
190.
3957
0.33
050.
2765
0.23
170.
1945
0.16
350.
1377
0.11
610.
0981
0.08
290.
0703
0.05
960.
0431
0.03
1319
200.
3769
0.31
180.
2584
0.21
450.
1784
0.14
860.
1240
0.10
370.
0868
0.07
280.
0611
0.05
140.
0365
0.02
6120
Perio
d5%
6%7%
8%9%
10%
11%
12%
13%
14%
15%
16%
18%
20%
Per
iod
Pre
sen
t V
alu
e o
f $1
Rec
eive
d a
t th
e E
nd
of
n P
erio
ds
132132132132132
PRESENT VALUE RATE TABLE B
10.9524
0.94340.9
3460.9259
0.91740.9091
0.90090.8929
0.88500.8772
0.86960.8621
0.84750.8333
1
21.8594
1.83341.8080
1.78331.7591
1.73551.7125
1.69011.6681
1.64671.6257
1.60521.5656
1.52782
32.7232
2.67302.6243
2.57712.5313
2.48692.4437
2.40182.3612
2.32162.2832
2.24592.1743
2.10653
43.5460
3.46513.3872
3.31213.2397
3.16993.1024
3.03732.9745
2.91372.8550
2.79822.6901
2.58874
54.3295
4.21244.1002
3.99273.7908
3.79083.6959
3.60483.5172
3.43313.3522
3.27433.1272
2.99065
65.0757
4.91734.7665
4.62294.3553
4.35534.2305
4.11143.9975
3.88873.7845
3.68473.4976
3.32556
75.7864
5.58245.3893
5.20644.8684
4.86844.7122
4.56384.4226
4.28834.1604
4.03863.8115
3.60467
86.4632
6.20985.9713
5.74665.3349
5.33495.1461
4.96764.7988
4.63894.4873
4.34364.0776
3.83728
97.1078
6.80176.5152
6.24695.9952
5.75905.5370
5.32825.1317
4.94644.7716
4.60654.3030
4.03109
107.7217
7.36017.0236
6.71016.4177
6.14465.8892
5.65025.4262
5.21615.0188
4.83324.4941
4.192510
118.3064
7.88697.4987
7.13906.8052
6.49516.2065
5.93775.6869
5.45275.2337
5.02864.6560
4.327111
128.8633
8.38387.9427
7.53617.1607
6.81376.4924
6.19445.9176
5.66035.4206
5.19714.7932
4.439212
139.3936
8.85278.3577
7.90387.4869
7.10346.7499
6.42356.1218
5.84245.5831
5.34234.9095
4.532713
149.8986
9.29508.7455
8.2442 7.7862
7.36676.9819
6.62826.3025
6.00215.7245
5.46755.0081
4.610614
1510.3797
9.71229.1079
8.55958.0607
7.60617.1909
6.81096.4624
6.14225.8474
5.57555.0916
4.675515
1610.8378
10.10599.4466
8.85148.3126
7.82377.3792
6.97406.6039
6.26515.9542
5.66855.1624
4.729616
1711.2741
10.47739.7632
9.12168.5436
8.02167.5488
7.11966.7291
6.37296.0472
5.74875.2223
4.774617
1811.6896
10.827610.0591
9.37198.7556
8.20147.7016
7.24976.8399
6.46746.1280
5.81785.2732
4.812218
1912.0853
11.158110.3356
9.60368.9501
8.36497.8393
7.36586.9380
6.55046.1982
5.87755.3162
4.843519
2012.4622
11.469910.5940
9.81819.1285
8.51367.9633
7.46947.0248
6.62316.2593
5.92885.3527
4.869620
Period5%
6%7%
8%9%
10%11%
12%13%
14%15%
16%18%
20% Period
Presen
t Valu
e of an
An
nu
ity of $1 p
er Perio
d fo
r n P
eriod
s
ANNEXES
133133133133133
Annex 3.1Example of an Environmental Aspect Rating System (EARS)and Procedure
Annex 3.2Example of an EMS Program Matrix Indicating Objectiveand Target
Annex 3.3Example of Document Control Procedure
Annex 3.4Example of Chemical Management and Control Procedure
Annex 3.5Example of Laboratory Accidents Monitoring
Annex 3.6Example of Non-Conformance Action Report (NCAR)
Annex 3.7Example of an EMS Audit Plan
1010101010
1. PURPOSETo establish a system for evaluation of environmental aspects of the organization related to its processes,
activities and services and to determine those which are significant based on a set of pre-determined criteria
2. SCOPEThis procedure shall be applicable to the following:
a. all existing regular processes, activities and services of EMB related to the discharge of its functions
under Executive Order No. 192, PD 984, PD 1586, RA 6969, RA 8749, RA 9003 and other relevant
environmental laws
...3. DEFINITION OF TERMS
...4. REFERENCES
...5. RESPONSIBILITIES
...6. PROCEDURE
6.1 Each environmental aspect category is rated based on the Environmental Aspect RatingSystem (EARS) designed by the Planning Team. EARS is a comprehensive rating systemwhich considers the influence of each environmental aspect category to the following:
6.1.1 International Commitment6.1.2 Natural Resource Depletion6.1.3 Safety and Health Hazard6.1.4 Past Incidents6.1.5 Waste Generation6.1.6 Ecological Impacts (Air, Water, Land, etc.)6.1.7 Impact on Community6.1.8 Control for Abnormal Cases6.1.9 Coverage by National Law(s)6.1.10 Coverage by Bureau Policy(ies)6.1.11 Control on Disposal6.1.12 Annual Bureau Expenditure6.1.13 Annual Consumption
Items 6.1.1, 6.1.2., 6.1.3, 6.1.7, 6.1.9, 6.1.10 shall be scored as YES = 10; NO =0.
ANNEX 3.1
Prepared by: Reviewed by: Approved by:
Staff EMR Director
ENVIRONMENTAL ASPECTRATING SYSTEM AND PROCEDURE
(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
Item 6.1.8, 6.1.11 shall be scored as YES = 5; NO = 0
Items 6.1.4., 6.1.6 shall be scored as NONE = 0, Minimum = 5, Major = 10. For 6.1.4,Major = occurs more than 5 times, Minimum = occurs 5 times or less, NONE = NoOccurrence. For 6.1.6, None = No Pollution, Minimum = With Control and with Pollution,Major = With No Control
Items 6.1.5 shall be scored as LOW = 0, MEDIUM = 5, HIGH = 10. For item 6.1.5, HIGH= Daily Waste Generation/Consumption, MEDIUM = Weekly Waste Generation/Consumption, LOW = Monthly Waste Generation/Consumption.
Item 6.1.12 and 6.1.13 shall be scored as Up to PhP 0.5 Million = 5, PhP 0.5 - 1 Million =10, > PhP 1 million = 15.
The defined threshold is 65. This is the product of the mid-score of five (5) multiplied bythe above-mentioned thirteen (13) aspect categories.
6.2 For aspects below the defined threshold score (65), operational controls shall be consideredand implemented by each Division/Unit. The threshold score is determined by the PlanningTeam from discussion/brainstorming activities and may be changed in the future accordingto the Bureau’s needs and environmental aspect rating.
6.3 Aspects equal or above the defined threshold score shall be considered as significant.For significant aspects, the Planning Team shall propose to the EMR the formulation ofappropriate EMS Programs, Objectives and Targets.
7. ATTACHMENT/S
7.1 Aspect and Impact Matrix (AIM)7.2 Processes, Activity and Service Data Sheet (PASDS)
ENVIRONMENTAL ASPECTRATING SYSTEM AND PROCEDURE
(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
ENVIRONMENTAL MANAGEMENTPROGRAM MATRIX
(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
Initiating Team Prepared by: Reviewed by: Noted by: Approved by:
Staff Chief/OIC/Leader EMR EMB Director
Objective:
Target:
Activity Person In-Charge Timeframe ResourcesRequired1st Qtr ‘03 2nd Qtr ‘03 3rd Qtr ‘03 4th Qtr ‘03
Jan. Feb. Mar. Apr. May Jun. July Aug. Sept. Oct. Nov. Dec.
To reduce the quantity of solid waste discharge to land
15% from current levels by end of Dec.2003
Remarks/Update
Segregation of solid wastes ABC X 10,000.00 Done
AN
NE
X 3.2
DOCUMENT CONTROLPROCEDURE
(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
ANNEX 3.3
Prepared by: Reviewed by: Approved by:
Staff EMR Director
1. PURPOSEThis procedure defines the system for issuance, review, approval, control, retention, distributionand disposal of EMB’s documents
2. SCOPEThis procedure shall be applicable to the following:a. all existing regular processes, activities and services of EMB related to the discharge of its
functions under Executive Order No. 192, PD 984, PD 1586, RA 6969, RA 8749, RA 9003and other relevant environmental laws
...3. DEFINITION OF TERMS
The definitions are valid only for this particular procedure. The following sample terms when usedin this Procedure shall apply:
3.1 DCC Refers to Document Control Center, the Office at EMBresponsible for the management of internal and externaldocuments
3.2 DC Refers to Document Controller, and is the Chief of theRecords Section
3.3 Controlled Copy Refers to documents photocopied from the master copystamped red color and octagon-shape “Controlled Copy” oneach page of the document
3.4 Master Copy Refers to the original document kept by the DCC from which“Controlled Copy” is generated. Only one “Master Copy” ismaintained and kept updated, marked or stamped on allpages with “Master Copy” in green color and flower-shaped
3.5 ...
4. RESPONSIBILITIES4.1 The DC is responsible for distribution, management, retrieval and disposition of documents
pertaining to EMB.4.2 The originators review new and revised documents and approved by the Director.4.3 Recipients of the documents are responsible for protecting and safekeeping of their respective
controlled copies from loss and damage.
5. PROCEDURE5.1 Preparation, issuance and approval of new or revised documents
5.1.1 The originator shall identify and validate the need for the document.
5.1.2 The originator shall prepare the draft document using the electronic DCC formfrom the DC with the accomplished DCCN Form as covering page.
5.1.3 The DC shall forward the draft document with the DCCN to Division Chief/UnitHead for review, comments and approval and to the EMR for endorsement to andfinal approval of the Director.
5.1.4 Once the DCCN is approved, each Division/Unit shall assign a Document No.,and the DC shall update the Document Master List.
5.1.4.1 Document Numbering System
EMB-Office Code -P-001-YYYY (Year Code)
DOCUMENT CONTROLPROCEDURE
(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
P for ProcedureEP for EMS Program ProcedureD for Document (Manual, EMB
Special Orders, EMB MemoCirculars, EMB Office Orders)
F for FormsS for Signages
�����
�����
Sequence No.
�����
Office/Source Reference Code
Bureau Code�����
The Office Code for each division/unit of the Bureau shall be as follows:D - Office of the EMB DirectorM - Management Information SystemsA - Administrative and Finance Division
Aa - AccountingAr - Records
Q - Environmental Quality DivisionQa - Air Quality Management SectionQh - Hazardous Wastes Management Section
G - General
DOCUMENT CONTROLPROCEDURE
(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
5.1 Document Revision
...5.2 Document Distribution
...
5.3 Control of External Document
...
5.4 Control of Forms
...
5.5 Document Retention
...5.6 Document Disposition
...
6. REFERENCESISO 14001:1996(E)EMB EMS Manual
EMB Special Order No. 162 Series of 2002
7. ATTACHMENT/S7.1 Document Master List
7.2 DCC Stamps Sample
7.3 DCCN
7.4 Revision History
7.5 Retention and Disposition Register
7.6 Acknowledgement Slip
7.7 Document Request
CHEMICAL MANAGEMENTAND CONTROL PROCEDURE(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
ANNEX 3.4
1. PURPOSEThis procedure aims to ensure that the chemicals used in the Research and Development Division
(RDD) are properly managed and controlled.
2. SCOPEThis procedure covers the total approach to managing chemicals in the laboratory from purchasethrough acceptance, handling, segregation, storage, usage and disposal.
3. DEFINITION OF TERMSChemicalChemical Control OrderMaterial Safety Data Sheet
CMCO
4. REFERENCE DOCUMENTSEMB Laboratory Manuals
5. RESPONSIBILITIESChemical Management and Control OfficerChemical Register OfficerLaboratory Waste Manager
Technical Inspector
6. PROCEDURE6.1 Purchase
Refer to RDD Laboratory Manual6.2 Selection and receipt of chemicals
Refer to RDD Laboratory Manual6.3 Inventory of chemicals
Refer to RDD Work Instructions per laboratory unit6.4 Staff development
6.4.1 The CMCO shall recommend and coordinate training on chemical managementand control including health and safety of EMB staff.
7. ATTACHMENT/SNone
Prepared by: Reviewed by: Approved by:
Staff EMR Director
Name ofChemical
Severity(Major/Minor)
Accidents Details Occurred Site Activity In-Charge InvolvedEmployee/s
LABORATORY ACCIDENTSMONITORING
(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
YearCovered
Action Completed Action Verified Approved
_______________________________ _________________________________ _________________________________
Chemical Management Program Coordinator EMP Group Leader _______________ EMR
Date _____________________________ Date _________________________________ Date _________________________________
AN
NE
X 3.5
ANNEX 3.6NON-CONFORMANCE ACTION
REPORT(Environmental Management System)
Doc. No.:
Date:
Page No.:
Revision:
ENVIRONMENTAL
MANAGEMENT
BUREAU
Action Completed Action Verified Approved
Name & Signature / Date Name & Signature/IEA HEAD / Date Name & Signature/EMR / Date
Activity Description: Issued To: ____________________
Division/Office: ________________
CC: ____________________
____________________
Report No.:
Date:
Issued By
Description/Illustration of Non- Conformance Major
ObservationNature of Request
Root Cause
Corrective Action
Preventive Action
Answer Date ROOT CAUSE
CORRECTIVE ACTION
PREVENTIVE ACTION
CLOSING THE NON-CONFORMANCE
Auditor
Approved By
IEA Head
Minor����� ����� �����
�����
�����
�����
1. INTRODUCTION1.1 The EMB has installed and implements an Environmental Management System (EMS)
based on ISO14001 as part of its effort to attain global conformance towards environmentalprotection. One of the requirements of ISO14001 is the conduct of an internal audit basedon this Audit Plan;
1.2 The purpose of this Audit Plan is to define the methodology and responsibilities associated
with the conduct of an Internal Audit of the EMB.
2. AUDIT REQUIREMENTS2.1 The requirements to this audit are as follows:
1) Objective. The objective is to determine compliance to ISO14001 requirementsby the EMB
2) Scope. The audit will be at EMB Central Office in Visayas Avenue, Quezon Cityfrom June 5-6, 2003
3) Criteria. The audit criteria are defined in ISO14001: 1996 Environmental
Management Systems - Specification with Guidance for Use
3. REFERENCE DOCUMENTS3.1 The following reference documents will be used during the audit process:
1. EMS-related documents and records, if any2. ISO14001:1996 Environmental Management Systems - Specification with guidance
for use3. ISO14010 - Guidance for Environmental Auditing - General Principles4. ISO14011 - Guidelines for Environmental Auditing - Audit Procedures - Auditing of
EMS
4. AUDIT METHODOLOGY4.1 The methodology used to perform the audit will involve consideration of the following written
and oral information and the conduct of an on-site audit using the audit protocol defined inISO14010 and ISO 14011.
1. Review of the EMS documentation related to the EMS2. Interviews and discussion with staff
3. Physical observations
5. WORKING LANGUAGE5.1 The working languages of the audit are English and Filipino. Reports will be in English.
6. AUDIT TEAM MEMBERS6.1 The following are the internal auditors designated by EMB Special Order 162 Series of 2002.
1. ...
ANNEX 3.7
EMS AUDIT PLAN(Environmental Management System)
7. FUNCTIONAL RESPONSIBILITY7.1 The following functional responsibilities have been identified for the audit:
1. Office of the Director and Assistant Director2. Environmental Management Representative and Environmental Management
Coordinator
3. ...
8. AUDIT SCHEDULE
AUDIT NOTICE
This is to inform EMB employees that there will be an Internal EMS Audit on June 5-6, 2003.Please make yourself available on the said period.
Time ISO Element Auditee Signature Auditor Signature
June 5, 2003
9:00 - 9:30 Opening Meeting
9:30 - 10:30 4.2/4.3.2/ Director All Auditors
4.3.3/4.3.4/ Assistant
4.4.1/4.6 Director
Additional EMR
4.3.1/4.5.1 EMR
10:30 - 11:30 4.3.3.4.3.4/ Division Team A
4.4.1/4.4.2/ Chiefs Team B
4.4.3/4.4.4/ Unit Heads Team C
4.4.6/4.4.7/
4.5.1/4.5.2/
4.6
12:30 - 14:00 B R E A K
14:00 - ... ...
15:45 - 17:30 Audit Team Meeting
1. Preparation of Audit Report
2. ...
17:30 - 18:30 Closing Meeting
SOURCES OF INFORMATION ONEMS, P2/CP AND ECA
GOVERNMENT ORGANIZATIONS
☛☛☛☛☛ BOARD OF INVESTMENTS - Environment UnitDepartment of Trade and Industry
#385 Sen. Gil Puyat Avenue, Makati City
☎☎☎☎☎ 896-9239 • 896-8453 • 759-3422
Fax No. 895-3568 • website: www.boi.gov.ph
☛☛☛☛☛ BUREAU OF PRODUCT STANDARDS (BPS)Department of Trade and Industry
3rd Floor, Trade and Industry Building
#361 Sen. Gil Puyat Avenue, Makati City
☎☎☎☎☎ 890-5225 • 890-5129 • 897-6682 loc. 225/226
Fax No. 890-5225
☛☛☛☛☛ DEPARTMENT OF ENERGYEnergy Center, PNPC Complex
Merritt Road, Fort Bonifacio, Makati City
☎☎☎☎☎ 844-7214 • 840-0771 • 845-0853
Fax Nos. 840-0771 • 844-9505 • website: wwe.doe.gov.ph
☛ ENVIRONMENTAL MANAGEMENT BUREAU (EMB)Department of Environment and Natural Resources
DENR Compound, Visayas Avenue, Diliman, Quezon City
☎☎☎☎☎ 927-1517 • 925-2795 to 97
Fax Nos. 927-1518 • 920-2251 • website: www.emb.gov.ph
☛☛☛☛☛ INDUSTRIAL TECHNOLOGY DEVELOPMENT INSTITUTEDepartment of Science and Technology
Integrated Program on Cleaner Production Technologies
Environment Division, Annex Building
DOST Compound, Gen. Santos Avenue, Bicutan, Taguig, Metro Manila
☎☎☎☎☎ 837-2071 local 2273/2274
Fax Nos. 837-2071 local 2274 • website: www.cptech.dost.gov.ph
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☛☛☛☛☛ TECHNOLOGY AND LIVELIHOOD RESOURCE CENTER (TLRC)CityState Centre, #709 Shaw Blvd., Pasig City
☎☎☎☎☎ 637-4018 to 22 • 637-4108 to 12 • website: www.tlrc.gov.ph
BUSINESS/INDUSTRY/PRIVATE INSTITUTIONS
☛☛☛☛☛ ENERGY COUNCIL OF THE PHILIPPINES11th Floor, Phinma Plaza
#29 Plaza Drive, Rockwell Center, Makati City
☎☎☎☎☎ 870-0253 • Fax No. 870-0433
☛☛☛☛☛ PHILIPPINE POLLUTION PREVENTION ROUNDTABLE (P3R)#90A West Tektite Towers, Philippine Stock Exchange Center (PSE)
Exchange Road, Ortigas Avenue, Pasig City
☎☎☎☎☎ 637-9537 • 631-4648 • Fax No. 637-9540
☛☛☛☛☛ THE PHILIPPINE ENVIRONMENT INDUSTRY ASSOCIATION (PEIA)Unit E, 9th Floor, Strata 100 Building,
Emerald Avenue, Ortigas Center, Pasig City
☎☎☎☎☎ 637-6626 to 27 • Fax No. 637-7316
NON-GOVERNMENT ORGANIZATIONS
☛☛☛☛☛ PHILIPPINE BUSINESS FOR SOCIAL PROGRESS (PBSP)Ground Floor, PSDC Building,
Magallanes corner Real Streets, Intramuros, Manila
☎☎☎☎☎ 527-7741 • Fax No. 527-3743
website: www.pbsp.org.ph
☛☛☛☛☛ PHILIPPINE BUSINESS FOR THE ENVIRONMENT (PBE)2nd Floor, DAP Building, San Miguel Avenue, Pasig City
☎☎☎☎☎ 635-3670 • 635-2650 to 51
Fax Nos. 631-5714 • 636-6014 • website: www.pbe.org.ph
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ADDITIONAL ISO14001 AND
POLLUTION PREVENTION SOURCES
EMS BOOKS AND OTHER REFERENCES
Bureau of Product Standards – Department of Trade and Industry. EnvironmentalManagement System – Specification with Guidance for Use or PNS1701/ISO14001:1996.
Bureau of Product Standards – Department of Trade and Industry. EnvironmentalManagement System – General Guidance and Principles, Systems andSupporting Techniques or PNS1704/ISO14004:1996.
Bureau of Product Standards – Department of Trade and Industry. Guidelines forEnvironmental Auditing – General Principles or PNS1710/ISO14010:1996.
Bureau of Product Standards – Department of Trade and Industry. Guidelines forEnvironmental Auditing – Audit Procedures – Auditing of EnvironmentalManagement Systems or PNS1711/ISO14011:1996.
Bureau of Product Standards – Department of Trade and Industry. Guidelines forEnvironmental Auditing – Qualification Criteria for Environmental Auditing orPNS1712/ISO14012:1996.
Cascio, Joseph, ed. 1998. ISO 14000 Handbook. Milwaukee: ASQ Quality Press.
Edwards, A.J. 2001. ISO 14001 Environmental Certification Step by Step. Oxford, U.K.:
Butterworth-Heinemann.
Global Environment and Technology Foundation. 2000. Final Report: The USEPA EMSPilot Program for Local Government Entities. Annandale: GETF.
Kanholm, Jack. 1999. ISO 14001 Manual and Procedures: EMS Manual, 21 Proceduresand Forms. Pasadena, Calif.:AQA Press.
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Kinsella, Hohn, Annette Dennis McCully, and David Burngasser. 1999. Handbook forImplementing an ISO 14001 Environmental Management System: A PracticalApproach. Bothell, Wash.: EMCON.
Roberts, Hewitt, and Gary Robinson. 1998. ISO 14001 EMS Implementation Handbook.
Oxford, U.K.: Butterworth-Heinemann.
Schoffman, Alan, and Allan M. Tordini. 2000. ISO 14001: A Practical Approach. Oxford,
U.K.: OUP.
Tever, Beth. 1999. ISO14001: Lessons from the Early Adopters. Arlington: Cutter
Information Corporation.
Woodside, Gayle, and Patrick Aurrichio. 1999. ISO 14001 Auditing Manual. New York:
McGraw-Hill.
POLLUTION PREVENTION
Bernstein, Janis D. 1993. Alternative Approaches to Pollution Control and WasteManagement: Regulatory and Economic Instruments. Washington: The World
Bank.
Cheremisinoff, Nicholas P. 2001. Handbook of Pollution Prevention Practices. New York:
Marcel Dekker Inc.
Chin, Shen-yann and Bob Peters. Industrial Pollution Prevention. Manila: Asian
Development Bank.
Environmental Protection Agency. 1997. Guide to Accessing Pollution PreventionInformation Electronically. Boston: U.S. Environmental Protection Agency —
Northeast Waste Management Official’s Association.
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Purcell, A.H. Hazardous and Solid Waste Minimization, ISBN/ISSN:0865871361.
Government Institutes Inc.
Waste Minimization Manual, ISBN/ISSN: 0865877319. Government Institutes Inc.
Wittman, Marlene R. Costing and Financial Analysis of Pollution Prevention Projects.
Massachusetts Office of Technical Assistance.
World Bank. 1999. Pollution Prevention and Abatement Handbook. Washington: The
World Bank Group.
EMS WEBSITES
• http://www.epa.gov
• http://www.epa.gov/owm/wm046200.htm
• http://es.epa.gov/partners/iso/iso.html
• http://www.ecologia.org/iso14000/
• http://www.iso.ch
• http://www.iso.ch/presse/presse12.html
• http://www.iso14000.com
• http://www.iso14000.net
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GLOSSARY
CLEANER PRODUCTION (CP) is the continuous application of an integrated, preventive
environmental strategy to processes, products and services to increase overall efficiency
and reduce risks to humans and the environment.
DEPRECIATION is the reduction in the value of a long-lived asset over its useful life.
ECO-EFFICIENCY was coined by the World Business Council for Sustainable
Development (WBCSD) in 1992 to denote the delivery of competitively-priced goods and
services that satisfy human needs and bring quality of life, while progressively reducing
ecological impact and resource intensity throughout the life cycle to a level at least in line
with the Earth’s estimated carrying capacity.
ENVIRONMENTAL ASPECT is the element of an organization’s activities, products or
services that can interact with the environment (ISO 14001, 1996).
ENVIRONMENTAL COST ACCOUNTING (ECA) is the innovative practice that seeks to
help identify and estimate environmental cost information for a host of business reporting
and management decision-making functions.
ENVIRONMENTAL IMPACT is “any change to the environment, whether adverse or
beneficial, wholly or partially resulting from an organization’s activities, products or
services”. These impacts are the effects arising from the causes of environmental problems,
and they could be significant.
ENVIRONMENTAL MANAGEMENT SYSTEM (EMS) is the part of the overall management
system that includes organizational structure, planning activities, responsibilities, practices,
procedures, processes and resources for developing, implementing, achieving, reviewing
and maintaining the environmental policy.
GREEN PRODUCTIVITY, a term used by the Asian Productivity Organization (APO), is
defined as a strategy for enhancing productivity and environmental performance for overall
socio-economic development.
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INDUSTRIAL WASTE means any liquid, gaseous or solid matter, or other waste substance
or a combination thereof resulting from any process of industry, manufacturing, trade or
business or from the development, processing or recovery of any natural resources which
may cause or tend to cause pollution or contribute to the pollution of the water, air and
land resources.
INFLATION refers to the decline in purchasing power of the peso, causing the cost of
goods and services to rise.
INTERNATIONAL ORGANIZATION FOR STANDARDIZATION (ISO) is a non-governmental
organization founded in 1946; based in Geneva, Switzerland. It has over 130 member-
countries, represented by their national standard bodies. Its objective, among others, is to
develop management system standards. Standards developed are voluntary and reviewed
every five years.
INTERNATIONAL ORGANIZATION FOR STANDARDIZATION 14000 (ISO14000) is a
series of international standards that provide guidance to organizations wishing to develop
and implement an effective environmental policy. It provides a framework for setting and
measuring environmental performance.
INTERNATIONAL ORGANIZATION FOR STANDARDIZATION 14001 (ISO14001) specifies
requirements for an environmental management system to enable the organization to
formulate a policy and objectives, taking into account legal requirements and information
about significant environmental impacts and aspects.
INTERNAL RATE of RETURN (IRR) is a profitability measure, expressed in percentage
terms, that is analogous to an average rate of return from an investment; IRR is the
discount rate that will yield a net present value of zero for a given stream of cash flows.
PRESIDENTIAL DECREE NO. 984, otherwise known as the Pollution Control Law, defines
pollution as “any alteration of the physical, chemical, and biological properties of any
water, air, and/or land resources of the Philippines, or any discharge thereto of any liquid,
gaseous or solid waste as will or is likely to create or to render such water, air and land
resources harmful, detrimental or injurious to public health, safety or welfare or which will
adversely affect their utilization for domestic, commercial, industrial, agricultural, recreational
or other legitimate purposes.”
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POLLUTION PREVENTION (P2). The United States Environmental Protection Agency
(USEPA) defines Pollution Prevention (P2) as “the use of materials, processes or practices
that reduce or eliminate pollutants or waste at the source.” It includes practices that reduce
the use of hazardous materials, energy, water or other resources, those that protect natural
resources through conservation or more efficient use. Meanwhile, Environment Canada
defines P2 as the use of processes, practices, materials, products or energy that avoid or
minimize the creation of pollutants and waste, and reduce the overall risk to human health
or the environment.
SOURCE REDUCTION is any practice that reduces the amount of any hazardous
substance, pollutant or contaminant entering any waste stream or otherwise released to
the environment. Source reduction may be achieved through either product changes or
process change.
WASTE MINIMIZATION is the reduction, to the extent feasible, of hazardous waste
generated or subsequently treated, stored or disposed of. It includes any source reduction
or recycling activity undertaken by a generator that results in either (1) the reduction in
total volume or quantity of hazardous waste, or (2) the reduction of toxicity of hazardous
waste, or both, so long as the reduction is consistent with the goal of minimizing present
and future threats to human health and the environment.
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ACRONYMS
APO - Asian Productivity Organization
AusAID - Australian Agency for International Development
CDO - Cease and Desist Order
CFLs - Compact fluorescent lamps
DBP - Development Bank of the Philippines
DOST - Department of Science and Technology
ECA - Environmental Cost Accounting
EMA - Environmental Management Accounting
EMAN-AP - Environmental Management Accounting Network for Asia Pacific
EMB - Environmental Management Bureau
EMP - Environmental Management Program
EMS - Environmental Management System
FIFO - First in-First out
IPCT - Integrated Program on Cleaner Production Technologies
IRR - Internal Rate of Return
ISO - International Organization for Standardization
ITDI - Industrial Technology Development Institute
IWEP - Industrial Waste Exchange Program
LBP - Land Bank of the Philippines
MD - Millennium Designs
PBE - Philippine Business for the Environment
PD - Presidential Decree
PICPA - Philippine Institute of Certified Public Accountants
PNS - Philippine National Standard
P2/CP - Pollution Prevention/Cleaner Production
QMS - Quality Management Systems
SME - Small-to-medium enterprise
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UNEP - United Nations Environment Programme
USEPA - United States Environmental Protection Agency
WBCSD - World Business Council for Sustainable Development
WWTP - Wastewater Treatment Plant
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SELECTED BIBLIOGRAPHY
Acharya, Anjali, et. al. 2000. Philippines Environment Monitor 2000. The World Bank.
Bishop, Paul L. 2000. Pollution Prevention: Fundamentals and Practice. McGraw-Hill Book
Co.
Clean and Competitive: Environmental Management Accounting for Business. United
Nation’s Division for Sustainable Development.
Environmental Cost Assessment: Profiting from Cleaner Production – A Training Course
of the Philippine Institute of Certified Public Accountants (PICPA). 2000. PICPA,
700 Shaw Boulevard, Mandaluyong City, Philippines.
Environmental Management Bureau – Department of Environment and Natural Resources.
1994. Market-Based Instruments to Promote Pollution Reduction in the Philippines.
Quezon City: Industrial Environmental Management Project.
Environmental Protection Agency Government of Victoria. 1994. Guidelines for PreparingWaste Assessments. Melbourne, Australia.
Higgins, Thomas E. (editor). 1995. Pollution Prevention Handbook. Lewis Publishers.
Improving Your Competitive Position: Strategic and Financial Assessment of PollutionPrevention Investment. Northeast Waste Management Officials’ Association, U.S.A.
Integrated Program on Cleaner Production Technologies. 2002. Cleaner ProductionAssessment Training Manual. ITDI/DOST.
LaGrega, MD, et. al. 1994. Hazardous Waste Management. McGraw-Hill Book Co.
New South Wales Environment Protection Agency. 2000. Profits from Cleaner Production:A Self-Help Tool for Small to Medium-Sized Businesses. NSW, Australia.
Oposa, Antonio A., Jr. 2002. A Legal Arsenal for the Philippine Environment. Batas
Kalikasan Foundation.
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United Nations Industrial Development Organization and United Nations Environment
Programme. 1991. Audit and Reduction Manual for Industrial Emissions andWastes. UNEP.
United States Environmental Protection Agency. 1992. Facility Pollution Prevention Guide.
Washington, D.C.
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GUIDEBOOK PROJECT STAFF
Engr. Julian Amador - EMB DirectorAtty. Fernandino Concepcion - EMB Assistant DirectorMr. Manuel Sabater - Project Manager, IISE and
Lead Coordinator, GuidebookProjectMs. Elenida del Rosario-Basug - Chief, Environmental Education and
Information Division, EMB andCo-coordinator, Guidebook Project
Ms. Ritchie Anne Guzman - Project Staff, IISE andAsst. Coordinator, Guidebook Project
Members:Environmental Education and Information Division (EEID) - EMB
Mr. Harry QuiaoitMs. Carmelita PasseMs. Cristina FranciscoMs. Gerarda MeriloMr. Virgilio SantosMs. Bernardita BondocMs. Alicia Laplana-Sabater
Industrial Initiatives for a Sustainable Environment (IISE) ProjectEngr. Leonie Lynn RuizMr. Nasser Lawrence LuminogMr. Rey SalvadorMr. Marlon GenoviaMs. Marjorie Balogo
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