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ISO 14000: Regulatory Reform and Environmental Management Systems

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ISO 14000: Regulatory Reform and Environmental Management Systems by Jason Kenneth Switzer B.Eng., Civil and Environmental Engineering, McGill University, 1995 Submitted to the Department of Civil and Environmental Engineering and Technology Policy Program in Partial Fulfillment of the Requirements for the Degrees of Master of Science in Technology and Policy and Master of Science in Civil and Environmental Engineering at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY June 1999 © Massachussetts Institute of Technology, 1999. All Rights Reserved. AUTHOR Departme Of C il Andnvironmental Engineering January 14, 1998 CERTIFIED BY iohn R. Ehrenfeld Senio esearch Associate, Center for Techno g Policy and In ustrial Development r/ 7 f) Thesis Supervisor CERTIFIED BY David Marks Cra RAsor oCivil d Environmental Engineering f 1 0Thesis Supervisor ACCEPTED BY Andrew J. Whittle Chairman, Departmental Committee on Graduate Studies Departmen f Civil And Environmental Engineering ACCEPTED BY MS URichard DeNeufville Chairman, Technology and Policy Program ENG ISo 14000 ISO 14000: Regulatory Reform and Environmental Management Systems by Jason Switzer Submitted to the Department of Civil and Environmental Engineering and to the Technology Policy Program on January 15, 1999, in partial fulfillment of the requirements for the Degrees of Master of Science in Civil and Environmental Engineering; and Master of Science in Technology and Policy. Abstract ISO 14001 is an environmental management system design standard. Accredited private auditors (registrars) may be hired to periodically verify that a firm's management system conforms to the standard's requirements. Many influential companies, such as IBM, Ford and Toyota, are voluntarily implementing third-party verified management systems that conform to this standard, and encouraging their suppliers to follow suit. Thus, ISO 14001 may become a competitive requirement. Depending on the nature of registered facilities, the impact of adoption on management objectives, and the credibility of third party oversight, ISO 14001 may have a positive impact on environmental performance. As a result, state and federal environmental agencies are debating the use of ISO 14001 registration as a qualifier for regulatory flexibility. However, the standard lacks performance requirements. Firms are not even required to be in compliance with environmental law as a condition of registration. This study therefore asks: What is the appropriate regulatory response to ISO 14001 in the US ? A statistical evaluation of adopter-facility characteristics shows that registered sites are more likely to be large, foreign-owned, registered to ISO 9000, and to operate in comparatively heavily-regulated, emission-intensive industry sectors. A survey of registered organizations shows that ISO 14001 will likely have a positive impact on environmental performance, by stimulating firms to develop more specific and achievable performance goals, with greater management commitment. A survey of registrars, however, concludes that third party auditors may be susceptible to conflicts of interest. This study concludes that ISO 14001 registration alone is insufficient justification for granting regulatory flexibility to facilities. It offers suggestions, therefore, for revising the standard, for enhancing the accountability of registered firms, and for making use of the standard in regulatory reform initiatives. Thesis Supervisor: John Ehrenfeld Senior Research Associate, CTPID Thesis Supervisor: David Marks Crafts Professor of Civil and Environmental Engineering Technology, Business and Environment, MIT 3 Acknowledgements Many people have educated, inspired and guided me. It is my hope that each of them sees in this study a reflection of what they gave. It is far from perfect, but this thesis taught me many things, and we shall see if it has some use out there in the real world. All errors are, of course, entirely my own. To John Ehrenfeld, a great teacher, who once opened up a meeting by declaring, "We founded this research group to save the world...," thank you for giving me such a wonderful place to grow here. Your calm reason and deep knowledge, your devotion to your students and to what you believe will always inspire me. To Jennifer Nash, Mike Lenox and Andy King, your frequent assistance, your patience and your insightful advice will always be appreciated. To Vicky Milledge and Sandra Rothenberg, kudos for your excellent suggestions! And to those I interviewed, thanks for giving so freely of your opinions and knowledge. What I learned, I learned from you. Thank you, Richard de Neufville, for giving my parents a phone call that made them so proud of their son, and that changed my life. To Larry Susskind and Patrick Field, for taking a chance on me early on. To the great teachers at MIT, Harvard and McGill, I have been fortunate indeed to have learned from you all. You do make a difference. Keep teaching ! I have a special place in my heart for Gail Hickey, Renee Smith, and Linda Manion for smoothing the path for so many of us. For Jennifer Knapp-Stumpp, thank you for your wonderful coffee sessions. And for Dave and Tom, at Christopher's Caf6, for the bean that got the job done. A heartfelt thank you to my mentors: David Laws, you are a true friend; Jim Nicell, you first taught me to think like an engineer about social problems; Brian Tucker and Carlos Villacis, you work every day to make the world a better place, and I thank you for letting me share in your dream for a while. And though I have met him only once, to teacher and activist David Suzuki, for changing with one speech the way I viewed the world. To my friends, and they know who they are, my love. The International House (Andrea, OP, Carlos and Santiago), the Portuguese twins, 'Ortiz'(!), Nicholas (knight of 1000 talents), the fabulous Lackners, Gena, Patrick, Sean, 'Pato' (and her 'whale' story) and Magali (le pumpkin), Prabal, Bertrand and Christina, the Scotts, Mark, Karlynn, the Mothaship... Most of all: to my 'roommates', who made these years so amazing - Jen (erratically wonderful), Rob (Cap'n Brunch), and Jed (no surprise who pays for lunch after all!). Two and a bit years and a lot of stories later, our friendships have only just begun. I do not know where we meet next - but I know we will - for another set of adventures. To those who know me best: Ed (rowdy Buddhist activist), Katie (see you in SF!), Darren and Marnie (those who Bula together stay together), Leah (you go, Doc!) and Vlad (Mr. Congeniality) - Our deep friendships will always stand the test of distance and time. I have an incredible family, and to them this thesis is ultimately dedicated. Mom, Dad and Dave, Baba and Zaida, you brought me here, you gave me the chance; I hope to make it count. I love you. And most of all, to Alyson. 4 Technology, Business and Environment, MIT ISo 14000 Table of Contents TITLE PA G E ................................................................................................................................................ 1 A B ST R A C T................................................................................................................................................... 3 TABL E O F CONTENTS ............................................................................................................................. 5 IN TR O D U CTION ........................................................................................................................................ 7 CHAPTER 1: REGULATION AND ISO 14001.................................................................................... 9 1.1 BUSINESS AND THE ENVIRONMENT: A NEED FOR REGULATION ................................................... 9 1.2 REGULATION: COORDINATION OF INTERESTS TOWARDS BROAD SOCIAL VALUES ...................... 10 1.3 GETTING FROM VALUES TO ACTIONS: EVALUATIVE CRITERIA FOR REGULATORY STRATEGIES .... 11 1.4 EVALUATING THE PREVAILING US REGULATORY STRATEGY ..................................................... 12 1.5 ALTERNATIVE REGULATORY STRATEGIES ................................................................................... 15 1.6 ISO 14001: COMMUNITARIAN REGULATION WITH PUBLIC POLICY POTENTIAL........................... 17 1.7 POLICY QUESTION: WHAT IS THE PROPER PUBLIC POLICY ROLE OF ISO 14001?..................... 23 1.8 RESEARCH QUESTIONS AND STRUCTURE OF REPORT ................................................................. 23 CHAPTER 2: WHAT IS ISO 14001 AND HOW DOES IT WORK ?........................... ................... .. 25 2.1 A HISTORY OF INTERNATIONAL STANDARDS AND QUALITY MANAGEMENT ................................. 25 2.2 THE ISO AND ENVIRONMENTAL MANAGEMENT ........................................................................ 29 2.3 H ow D OES ISO 14001 W ORK 9 ........................................ .. ....................... ....................... .. .. .. 31 2.4 C RITIQ UES OF ISO 1400 1 .............................................................................................................. 36 2.5 SUM M ARY AND CONCLUSIONS ...................................................................................................... 42 CHAPTER 3: WHO IS ADOPTING ISO 14001 IN THE US ?............................................................. 43 3.1 IN TR O D U C TION .............................................................................................................................. 4 3 3.2 EARLY ISO 14001 ADOPTION IN THE US: SOME HYPOTHESES
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