The environmental standard11 December 1998
The hydro power industry is taking an interest in implementing environmental management systems which have been certified to international standards. Suzanne Moxon reports
As we approach the next millennium worldwide interest in environmental issues shows no sign of easing. In the wake of intensifying environmental awareness comes a plethora of complex regulations which, through their aims of setting ecologically high standards, are becoming burdensome for members of the hydro industry.
With such considerations in mind, one could be forgiven for thinking that the hydro industry as a whole would shy away from the thought of more environmental standards, and their subsequent paperwork and expenditure. The truth, it seems, is quite the opposite. Members of the industry appear to be embracing voluntary environmental standards, recognising the potential benefits for their organisations, their customers, their profits and, it must not be forgotten, the environment.
The ISO 14000 series is a product of the International Organisation for Standardisation (ISO). Described as a collection of voluntary consensus standards, they have been developed to assist organisations in achieving environmental and economic gains.
ISO 14001 (environmental management system) is one such standard which is being taken up by members of the hydro power industry. It utilises an effective environmental management system (EMS) which puts procedures into place to regulate the environmental aspects of design, procurement, manufacture and construction. Ultimately it enables companies to evaluate and control their impacts on the environment as cost-effectively as possible.
There are fives stages to the implementation of ISO 14001:
•Environmental policy — A company gains commitment and backing from senior management. Relevant environmental legislation and other requirements to which the company is obliged to subscribe are identified.
•Planning — Environmental impacts of the business are identified and targets for improvement and a management achievement programme are set up at this stage.
•Implementation and operation — Provisions for continual improvement of the company/facility’s environmental performance are established. Environmental training and education for all employees, particularly those whose job may have a significant environmental impact, are provided.
•Checking and corrective action — This process ensures that targets are on track and action is taken to correct areas that do not comply. Procedures for internal auditing of the EMS are implemented.
•External third-party auditing of the EMS takes place, with continual assessment.
As Clive Stallwood from the British Standards Institute (BSI) explains, ISO 14001 was designed to apply to all types of industry and is equally applicable to the hydro power and dams sector. It can relate to an organisation (a utility or a manufacturer etc), different sites or projects. Published in 1996, it is applicable to any organisation that wishes to implement, maintain and improve an environmental management system; assure itself of conformance with stated environmental policy; and demonstrate such conformance to others through the certification/registration of its environmental management system by an external organisation. The standard has been granted to over 5400 company sites worldwide — more than 50% of these are in the European Union.
Why be involved?
But why does the hydro industry want to become involved with the ISO 14000 standards, specifically 14001? George Schroeder, who is responsible for quality, environmental and safety management at Sulzer Hydro explains. ‘When we decided to instigate an environmental management system our decision was prompted by the expectation that the hydro market will soon require it,’ he said. ‘Our customers in the hydro industry are very much under pressure with regards to environmental issues and they are more or less being forced to be effective environmental managers.
‘If developers of hydro power projects are under pressure we expect that they will also put their suppliers (ie us) under an equal amount of pressure. This was the main reason why we introduced ISO 14001 at a relatively early stage,’ Schroeder said. ‘We intend to have our major group companies certified by 2000,’ he added.
Other players in the hydro industry share this view — customer demand is prompting an interest in voluntary environmental standards. ‘Our clients are beginning to stipulate ISO 14001 certification as a pre-requisite for tendering,’ Michael Robertson from ABB Environmental Affairs said. ABB expects to have ISO 14001 implemented at 80% of its sites worldwide by the end of 1998. Although it does not have a single manufacturing site dedicated to hydro power equipment many of its certified facilities would be involved in supplying equipment (power generation and transmission) for a large hydro power plant.
Other companies, which currently do not have ISO 14000 certification, also agree that there is growing customer demand for recognised environmental standards.
‘Clients are increasingly asking for evidence of some kind of EMS and are even requiring suppliers to be certified,’ Simon Rogers from Kværner admits. Kværner says it is committed to its own Environmental, Health and Safety (EHS) management system but will not ignore the benefits that any national or international initiative has the potential to bring. Within the confines of the group EHS policy, individual companies determine their own need to implement an EMS and have it certified to ISO 14001. Indeed, Kværner’s companies operating in the hydro industry are currently reviewing their need for certification with an eye on the current market and stakeholders’ expectations.
Siemens Power Generation Group currently does not have 14001 accreditation for any of its hydro manufacturing plants. ‘At the moment we are preparing to integrate important environmental aspects into our quality management system (ISO 9001),’ Axel Bergbauer, head of the company’s quality department for fossil fuelled power generation, explained. ‘Integration of the environmental aspects will be carried out for all product phases from research and development via the construction of power plants including hydro stations.’ The company however believes that it will be ‘worthwhile’ for the dams and hydro industry to make itself aware of the requirements of ISO 14001 standards. ‘Companies will need to meet the requirements placed on them due to the ever-increasing environmental awareness of their customers,’ Bergbauer added.
Voith in Heidenheim, Germany does not have ISO 14001 certification but is audited to a comparable environmental standard, the European Union’s Eco Management and Audit Scheme (1836/93), which incorporates an EMS. The company instigated this in October 1997. ‘Due to the demands of our customers,’ Mr Froehlich explained, ‘Voith decided it needed to have an environmental audit with external accreditation.’ However, perhaps in recognition of the increasing demand for ISO 14001, at the next audit for the EU standard Voith will also complete documentation for the 14001 certificate.
Other companies looking to implement ISO standards in the future include the UK’s renewable energy agency, the Energy Technology Support Unit (ETSU). ETSU is liaising with the UK’s small hydro industry about environmental issues and wants to gain ISO 14001 certification itself. ‘We aim to be the world’s most influential environmental services business,’ Mark Allington said, ‘so it’s time we practised what we preached.’
As the above companies have demonstrated, there is undoubtedly a customer demand for ISO 14001 but this begs the question — why? What benefits will customers of the hydro industry derive from it?
ABB’s Robertson believes that what its customers are demanding ‘fulfils a growing urge of society and individuals to take more care of the environment in which they live.’ Rogers from Kværner believes that an EMS will help to implement power projects in a more environmentally sound manner. Schroeder from Sulzer agrees: ‘ISO 14001 can help our customers (hydro power developers) by showing that they require high environmental standards,’ he said. Ultimately an EMS which monitors the use of materials and resources will lead to reduced costs for the customer, Schroeder added.
Choosing a standard
The next question has to be why choose the ISO standards? Even though Voith is currently using an EU standard and Kværner has its own environmental policy, why are so many members of the hydro industry looking to use the 14001 standard? ‘If a company has its own corporate policy it can be difficult to prove how good it is to the outside world,’ Schroeder said. ‘The most important thing is that with ISO 14001 you get certification through a neutral body. An internal system might be even better but to prove it would require considerable effort.’
Robertson has some strong views. ‘A “home-made” system without certification and continual improvement audits may have little value and serve only as a “wish list”,’ he said. ‘In a global market we see the need for globally accepted standards on quality and environmental performance, audited by internationally recognised third-parties. Furthermore,’ he added, ‘an internal system would present difficulties to clients in adjudicating tenders to evaluate environmental performance on an equal basis. A corporate environmental policy on its own is not enough.’
ETSU said that ISO 14001 gives a company credibility and the view of an independent third party is likely to be more trusted. This appears to be the main motivating force behind signing up to ISO’s standards. Both Voith and Siemens agreed that a corporate policy may be just as effective but again there is a lack of evidence to substantiate such claims. ‘A corporate policy can be as or more effective than 14001,’ Froehlich from Voith said, ‘but it won’t be recognised. We estimate that customer pressure may bring companies, who think their own EMS is sufficient, to undertake ISO 14001. They may be forced into it,’ he added. A lack of evidence from third parties may mean that a corporate policy will not be as respected within its own industry or by the public, Siemens’ Bergbauer added.
However, as Rogers from Kværner believes, it is not the hanging of the certificate on the wall that counts. ‘This should only be the final act,’ he said. ‘It is the sincerity of an EMS that counts. Not all companies need to obtain ISO 14001. Some have publicly stated that they will not be pursuing it because their own systems are viewed as exceeding the requirements of the standard.’
Rogers still believes though that ISO 14001 is becoming the ‘rubber stamp’ of approval. It says a company has at least considered environmental issues and is trying to improve on them. ‘We get questionnaires coming in every day from investment houses, consultant groups and government organisations asking for evidence of an operational EMS,’ he went on to explain. ‘Most of these include a tick-box asking “are you registered to 14001?” — tick that box and you save yourself a lot of further questions.’
So what benefits do organisations get from being certified to ISO 14001? The general consensus appears to be the following:
•Such certification can be used as a marketing tool, giving organisations (particularly manufacturing companies) a competitive edge, enabling them to distance themselves from competitors. For example, Sulzer’s recent success in winning two Norwegian contracts was helped by the company’s ISO 14001 certification.
•An effective EMS can save a company money, particularly in the design phase of a product. Michael Robertson from ABB commented that ISO 14001 helps design engineers to avoid falling into traps such as using materials that will be ‘black-listed’ for environmental reasons in the near future. Production and operational processes are also optimised.
•Companies gain an increasing awareness of legal issues related to the environment. The risk of potential liability is reduced through education and assurance that legal obligations are being adhered to.
•Certified hydro project sites will produce many benefits for hydro developers. Improved site management and monitoring leads to less risk of environmental damage. Continual auditing of environmental performance means that improvements during actual operation are required, reaping benefits for the local environment.
‘A project with ISO 14001 certification can win praise as a “showcase” project,’ Robertson commented. ‘These projects will ease approval for future schemes. Indeed, such an environmental insurance policy is particularly reassuring in developing countries where legislation to enforce environmental protection may not be in place.’
•Many companies involved in ISO 14001 have also spoken about improved motivation within their own staff. Employees have demonstrated a willingness to take an active part in the process and ‘do their bit’ for the environment.
•Improved public image.
The ultimate cost
There may be many potential benefits from taking part in the ISO 14001 standard but what is the ultimate cost to participating organisations and, most importantly, is it really worth it? Froehlich wouldn’t commit himself, commenting that the process is not inexpensive and that smaller companies may hesitate at the thought of the cost. ‘However,’ he added, ‘in the medium to long term they may well be forced into the standards. You have to take the total cost and its benefits into consideration.’ Indeed, Siemens believes that the main problem is not the direct costs of certification. ‘The main problem,’ Bergbauer said, ‘is the knowledge base. It might be that small hydro companies do not have the knowledge in their own organisation in order to meet ISO 14001 requirements. They may have to search for possibly expensive, competent consultants and this could prevent small hydro players from adopting the standards.’
‘In our experience,’ ABB’s Robertson said, ‘the process is not very expensive. In many cases it generates opportunities
for cost reduction, in particular by reducing materials, energy consumption and waste.’
Sulzer’s Schroeder estimated that implementing the company’s certified EMS has cost them about SFr200,000. ‘I am personally convinced that ISO 14001 will be worthwhile,’ he added. Although the company will not achieve immediate payback from this expenditure, Schroeder is certain that it has been beneficial. Sulzer also stressed the advantages of combining an EMS with a quality and safety management programme — this saves money as various requirements will overlap, becoming part of a general trend of process management and improvement.
Although ISO 14001 is still in its infancy in the hydro power industry, individuals are certain that it is here to stay. There is growing speculation that within the next five years it will become a mandatory requirement within tender specifications and forecasts predict that the number of certifications will increase dramatically. ‘We think it will be the standard of the future,’ Bergbauer from Siemens said, ‘and it will become increasingly recognised and respected worldwide.’