This is Part 2 of a two-part blog series on environmental audits/assessments. The below article discusses the key characteristics of a robust assessment program. To learn more, check out the latest edition of ELI’s Law of Environmental Protection.
What are the key characteristics of a robust assessment program?
First, as Jennifer Williams-Avarez writes in Agendaweek, an assessment program includes a significant orientation toward the future. This means integrating long-range strategies and goals that will result in compliance with existing or future regulations, maintain existing environmental programs, and resolve issues with technical, factual, or legal uncertainties. Companies should develop a long-range “objectives statement” reﬂecting the environmental goals of the company or division and company policy, and a description of the method by which objectives will be monitored for completion.
Second is a holistic approach. Health, environment, safety, and risk engineering or process safety programs (HESRE) tend to be compartmentalized in large corporations. Management of the individual functional areas is often the responsibility of different corporate ofﬁcers. Consequently, basic program management issues can go unnoticed. A “Program Management Review” can show how the company’s HESRE programs are integrated (including operations, risk management, preventive and predictive maintenance, management of change and capital issues); how they compare with corporate policies, procedures, and guidelines; and how they attain their stated intent.
The three purposes of a program review are: (1) to determine if the division’s HESRE programs are consistent with corporate policies, procedures, guidelines, and—in some companies—corporate directives and company standards; (2) to evaluate these programs relative to their stated intent; and (3) to provide an opportunity to capitalize on identiﬁed improvements. The critical point is to determine if appropriate and necessary management systems are in place and functioning; if adequate resources are provided to ensure the systems’ continuation and effectiveness; and if appropriate measures are executed to measure the quality of program performance, including the means to meet future challenges. Note that reviews may need to extend beyond HESRE components and include ongoing business management systems.
Third, audit/assessment programs are often facility-speciﬁc. They review the performance of the facility’s implementation of HESRE programs. But it’s important to focus periodically on the broader-range management issues that affect the quality of the HESRE performance. A program review will assist in identifying speciﬁc program element deﬁciencies, implementation inconsistencies, and inconsistent management criteria and execution. These reviews can also be effective in testing the adequacy of a corporate program and identifying quality control issues.
The takeaway? Assessments can identify the root causes of problems, including common management deﬁciencies that decrease the effectiveness of efforts to comply with policies, procedures, and regulations. This provides senior management valuable information that can positively affect the corporation’s future performance and proﬁtability.
The final word: “Resources”
Adequate compliance resources have significant legal implications and should be a major focus of a program review. In July 2020, the DOJ released its Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations. For the first time, the DOJ announced its investigators and prosecutors will consider compliance programs at the charging stage in criminal antitrust investigations and offer incentives to companies with effective compliance programs in place.
The DOJ guidance sets forth nine factors to be considered in evaluating any corporate program and used by its prosecutors when evaluating corporate compliance departments The new guidelines “bring a more exacting focus to whether compliance teams are adequately resourced” and examine if there have been “times when requests for resources by compliance and control functions have been denied, and if so on what grounds.” In short, as Jennifer Williams-Avarez writes, “The new guidance basically says, ‘We’re going to look under the hood [procedures and programs] if you get in trouble to make sure there is a substance beyond compliance.’”
The point is clear: make certain your company has in place an audit/assessment program that means business—and not simply paying lip service to the idea of EHS&S.
What are you waiting for?
Convinced of the value of establishing a strong environmental assessment program? If you aren’t yet sold, check out Chapter 8 in the latest edition of Law of Environmental Protection—and also keep an eye on the home page of your favorite news site. I can guarantee you’ll soon see examples of noncompliant companies, while firms with strong EHS&S programs move profitably—and responsibly—forward into 2023.
This is Part 2 of a two-part blog series on environmental audits/assessments. Part 1 discusses the importance of robust assessments. To learn more, check out the latest edition of ELI’s Law of Environmental Protection.