ISO 14000

Charles L. Schott IIIUniversity of Indianapolis

Charles L. Schott ill is currently a full-time undergraduate in Economics andFinance at the University of Indianapolis, Indianapolis, Indiana

2535 Fox Harbour LaneIndianapolis, IN 46227

(317) 783-5866

2ISO 14000

ISO 14000 is a new approach to environmental protection. It challenges organizations to

take a serious approach to environmental issues. ISO 14000 commits organizations to

continuous improvement to make their processes as effective and reliable as possible. It brings

organizations, as a whole, toward awareness for their environmental responsibilities. ISO 14000

helps organizations reduce the negative ways they affect the environment.

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Firms today, are not only faced with the issue of how to deal with international trade, but

they musta1so face environmental laws, which vary from country to country. The International

Organization for Standardization (ISO) 14000 series addresses this concern because it has been

developed to help align countries worldwide so that all nations abide by similar environmental

laws and regulations

Within the past twenty years the world has become more aware of how industry affects

the environment. It has become apparent that industrial changes are needed to help reduce ozone

depletion, acid rain, and rain forest deterioration. Environmental awareness has become an

important issue among industrialized countries. Many organizations face greater responsibility

toward hazardous waste because they are being held more accountable for their actions. Pushing

the environment to the forefront in the industrialized world makes companies address the issue of

adjusting operations so they are in accordance with environmental regulations.

The ISO 14000 series is an answer to the worldwide environmental regulation confusion.

Organizations find it difficult to not only abide by the numerous laws and regulations of the

country, but they must also understand and abide by other country's regulations to operate

worldwide. ISO 14000 simplifies the issue because it promotes worldwide compliance to an

environmental standard. It requires organizations to be aware of every environmental law and

regulation.

The ISO 14000 series is still a relatively new concept. Some countries have been slow to

accept it because they are still questioning how it will benefit industry. Others, however, realize

the importance of an international environmental standard and have supported it from day one.

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WHAT IS ISO 14000

ISO 14000, the Environmental Management System (EMS) standard, was first developed

by the International Organization for Standardization, ISO. ISO 14000 is not a standard in itself,

instead it categorizes a series of 20 standards and guidelines (7). The 14000 series, taken as a

whole, aims to provide guidance for developing a comprehensive approach to environmental

management and for standardizing some key environmental tools of analysis (2). Though

numerous standards are still under development, two standards have been finalized and

implemented, ISO 14001 and ISO 14004 (7).

ISO 14001, entitled "Environmental Management System -Specification with Guidance

for Use" is arguably the most consequential in the ISO 14000 series. It lays out the elements of

the Environmental Management System. Organizations seeking registration or certification must

confonn to these elements (2). The ISO 14001 standard composed five key principles as a

method to establish an EMS (4).

Principle 1 "Commitment and Policy. Top management must make a commitment to

the program. A statement of environmental direction that is acknowledged

and adhered to by both senior management and the rank-and-file."

"Planning. To be successful, the program must be organized. ThisPrinciple 2:

includes establishing an organization's structure, promoting internal and

external communication, and identifying environmental impacts."

"Implementation. The implementation program must include writtenPrinciple 3:

process descriptions, establishment of prevention programs and employee

..,traInIng.

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Principle 4 "Measurement and Evaluation. A mechanism for assessing performance

and progress towards goals must be established. This also involves

making and documenting all coaective actions."

Principle 5 "Management Review. Senior management must routinely review the

EMS activities to ensure that all activities are appropriate." (7)

ISO 14004 entitled "Environmental Management Systems -Guidelines on Principles,

Systems, and Supporting Techniques" provides supplementary information (2). The five key

principles of ISO 14001 also apply to ISO 14004. The difference between the two is that ISO

14004 is not designed for registration or certification. Organizations looking to implement or

upgrade an EMS use ISO 14004. This standard mainly applies to small and medium size

companies trying to implement an EMS. However, larger organizations trying to improve an

existing Environmental Management System can also use it. ISO 14004 is a good reference

document for organizations because it contains guidelines and helpful hints on all aspects of an

EMS (9).

How to Become ISO 14000 Registered

When an organization registers for ISO 14001, it should consider the following things;

does it coincide with company goals, is the company compliant with the standard, and does the

company want to self-certify or use a third-party. The first consideration should revolve around

the organization's goals and objectives. If the organization's goals and objectives are not

parallel with the standard, then it is not in the organizations best interest to seek ISO 14001

certification (the tenns registration and certification are such that they can be used

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interchangeably (9».

The organization should evaluate the current status of their Environmental Management

System (EMS) to decide if they are compliant with ISO 14001 requirements. If they are not, the

organization may decide to first take time to make corrections to the EMS before pursuing

to obtain it (registration) more quickly (9).

If an organization already has a solid foundation for its EMS, it can choose to become

registered two ways, either by a third-party or through self-certification When an organization

are certified. This method of registration applies mainly to small service businesses, local

governments, and nonprofit organizations

When a company chooses to register its EMS through a third-party it first must hire a

registrar, a tenD used to designate third-party auditing organizations The registrar then conducts

a thorough audit (9). The decision of choosing a registrar is probably one of the most crucial

steps in the registration process. Registrar organizations can operate quite differently, and not all

of them have the same accredibility. The kind of evaluation and criteria used to register the

company depends on the registrar selected. It is recommended that national accrediting bodies be

used for registration. Using a national accrediting body reduces the risk that other organizations

might not recognize the registration.

Third-party registration is achieved through an audit. This is by far the most beneficial

and the most widely accepted form of registration. Audits are conducted in two phases. The first

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step involves a review of EMS documentation, which entails how it is set up and a site survey.

The second step evaluates whether the EMS operates in accordance with ISO 14001 as well as

the company's written procedures (7). Some companies see clear benefits in hiring auditors.

Auditors scrutinize environment-related processes more carefully than the process of self-

certification (6). A third-party assessment of environmental management will likely carry more

weight than any internal program (5).

To actually become certified, the audit team interviews people throughout the business,

reads procedures and other documentation, and observes how well the management system

works (2). The audit team then assesses whether the procedures documented by the company

meet ISO 14001 requirements. If they do, they are granted ISO 14001 certification. If they fail

to meet the requirement, the audit team will provide them with a detailed listing of operations

needing change The business is then instructed to make necessary changes in order to become

certified. If corrective action is not taken, the company does not become certified.

When a company achieves ISO 14001 registration, certification lasts for three years and

then the registration process must be repeated. During those three years, a company is required

to continually be audited to ensure that the system is being maintained and improved. Achieving

ISO certification definitely is not the final stage

Costs of ISO 14001 Registration

The ISO 14000 process is not easy and requires a strong commitment from the entire

organization. "Get all of your people involved in your process, it will increase the likelihood of

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your success."(6) Many organizations are skeptical about considering ISO 14000 registration.

Cost is a major concern. The cost of implementation varies depending upon the size and

complexity of the business. The cost of an auditor can range from $1000 to $2000 per day

during the 12 to 18 months it takes to become registered, causing the initial registration to be

expensive (6). Once an organization becomes certified there are sometimes additional costs, such

as training and consulting (6). The total cost of implementation can be extremely expensive.

THE NEED FOR ISO 14000

Worldwide, there seems to be mixed opinion about the importance and relevance of

having an Environmental Management System. Some critics argue that in the United States

enough environmental regulations already exist, and adding another standard is just going to

increase the amount of inspections and confrontations with regulators. On the other hand, some

see the new international environmental standard as a way to consolidate all of the different

regulatory bodies into one, thus creating a worldwide regulation. By creating one comprehensive

environmental regulation, awareness among all types of organizations increases and puts the

environment in the mainstream of business (6).

Akerlund & Rausing (A&R), a food packaging supplier throughout Europe, felt the

pressure for the need to have an environmental standard. A&R is in the process of certifying all

fourteen plants in Europe because of the recent concern from A&R' s customers about their

environmental work. A&R customers have been demanding products that show concern for the

environment at each production stage (8). Studies in Europe have shown that the third most

important factor in selecting goods for purchase, after price and quality, is environmental

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consideration (8). With consumer preferences leaning toward environmental issues,

organizations that have met international environmental standards, such as ISO 14000, will be

pushed to the forefront. "I believe companies who ignore the issue do so at a greatly increased

risk to their long-tenD survival. Retailers are a powerful influence today and expectations of

their suppliers' safety and environmental performances is increasing rapidly," said Ceri Swift an

environment, health and safety engineer in Wrexfan, UK at a Tetra Pak's plant (8). Tetra Pak is

a world leader in packaging material, and in 1998 they won first place in the Wales Environment

Award program

Companies that follow the ISO 14001 standard also see the advantage of being viewed by

the public and clients as environmentally friendly (1). ISO 14001 causes corporations to take a

global look at themselves. They must examine the external benefits of a regulatory framework.

ISO 14001 certification could mean benefits in tenns of less attention from regulatory agencies

and the possibility of having lower environmental liability (6). Ultimately, ISO 14001 leads to

cost reduction and higher levels of profitability. For instance, sound environmental management

can result in significant cost savings for many types of organizations as wastes and inputs of raw

materials are reduced (1).

In a competitive market, the loss of a contract due to non-compliance can damage a firm's

prestige and finances. ISO 14001 offers an organized approach to manage environmental issues

This approach can help a company cut environmental costs and thereby increase profits by

decreasing energy costs, lowering expenses for waste disposal and treatment, and reducing

remediation costs (7).

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THE INTERNATIONAL VIEW

The overall response around the world to the ISO series of standards for environmental

management systems is generally positive (2). According to Pamela Bridgen, vice president of

ICF Kaiser International, "there appears to be an ubiquitous interest on the part of governments

and industries in moving from command-and-control environmental regulation, to voluntary

EMS."(2) With any new innovative idea there are critics as well as supporters. Most of the

countries having difficulty accepting ISO 14000 are the more developed countries which already

have some form of regulatory body. Most of these countries are trying to evaluate the benefit of

having another regulatory standard. Developing countries on the other hand appear to be more

willing to accept ISO 14000. These developing countries have little or nothing in the way of

environmental legislation and regulation, which adds to the importance of the ISO 14000 series

standards,

North and South America

The United States government is experimenting with applicability and usefulness of ISO

14000.

The government recognizes the need for less government regulation and the need for

some type of environmental regulation world wide such as the ISO 14000 series. However, V.S

companies are interested but hesitant to register because they are not feeling enough pressure

from their customers (6). Until customers demand participation or direct commercial advantage

results, U.S. companies are waiting to make an investment in the process (2).

Canada's feelings in the beginning were much the same as the United States today; it

showed a lot of hesitancy toward accepting the ISO 14000 series. Canadian viewpoint has

f

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recently changed however, and now seems to favor ISO 14000 series standards. One reason is

the significant number of customers demanding that the standards be met. Companies not already

certified are taking measures to ensure registration as quickly as possible. Pamela Bridgen

claims that, "Canada is starting to realize that the ISO 14001 auditing standards will soon

become international standards and that certification will be essential to operate successfully in

the global marketplace."(2)

In South America awareness of ISO 14000 is not as widespread as in North America, but

recent measures have been taken to introduce the environmental standard. Over the past year,

knowledge of 180 14000 has increased significantly, which is partly due to Brazil's involvement

in the ISO 14000 process. Other countries in South America do not seem to be as attentive to the

importance of the standard. If Brazil did not have confidence in the ISO 14000 series, there

might not be any participation at all among these countries. The Brazilian government

recognizes that the standard will help to improve the relationship between environmental

regulations and economic activities and expects benefits from the proactive approach of ISO

14000 (2),

The Pacific Rim

The Pacific Rim countries are by far the most involved in the ISO 14000 process. These

countries believe that ISO 14000 is the wave of the future. They have accepted the

environmental standard willingly. Japan, Korea, and Australia believe that there are strong

environmental advantages of the ISO 14000 series standards

Governments and industries in both Japan and Korea support the process The Japanese

.

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government and industry recognizes the importance of the international standardization and

expects that ISO 14000 can help to decrease environmental risks and costs (2). Japan and others

in Asia-Pacific are extremely aggressive when it comes to 14001 They see it as a competitive

advantage (6). The Korean government and industry believe that implementation of ISO 14000

could provide them with a competitive edge in worldwide markets, as well as translate to

environmental benefits such as pollution prevention (2),

Australia is a country divided; the government is not quite ready to accept the standard

while the industry has accepted it quickly. The Australian government has been very slow to

recognize the benefits of ISO 14000. The industry on the other hand believes that the standard is

the "ticket to worldwide markets", and that ISO 14000 can be used as a marketing tool to attract

consumers on the basis of an environmentally friendly company (2).

European Nations

European nations are divided in their attitudes toward ISO 14000 because there is concern

regarding the applicability of ISO 14000 in the context ofEco Management and Audit Scheme

(EMAS) (8). The EMAS is very similar to ISO 14000 because it to is an Environmental

Management System. The EMAS is widely used among the European nations as an

environmental standard. The major discussion among the nations is how the two systems can be

integrated. Some feel that EMAS is more comprehensive than ISO 14000 and that ISO 14000

could undennine EMAS's objectives (2). Although there are these concerns, most of the

European nations do regard ISO 14000 as a good device and believe it can be a useful tool to

protect the environment and deal with these issues. Most European nations anticipate that ISO

14000 will provide the basis for an important industry and government partnership to lead its

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nations and the world to sustainability (2).

There is cautious acceptance in developed countries of the ISO 14000 process as an

essential tool in the improvement of a consistent international standard for EMS (2). Many of

these countries are trying to address the issue of what to do with current regulatory bodies and

how these can co-exist if ISO 14000 is implemented. Nonetheless, worldwide it is generally

recognized that a standard such as ISO 14000 is needed to promote environmental protection and

international trade (2).

CONCLUSION

The ISO 14000 series is an innovative approach to improving the international

environmental relationships among industries. Countries worldwide have acknowledged the fact

that one international regulatory body is needed and could be extremely beneficial for trade and

trade relations. With the environment becoming an important issue, ISO 14000 makes perfect

sense. The standard gives specific recognition to those organizations that have made a

commitment to adjust their day-to-day operations so that the environment is clean and safe.

The ISO 14000 series is the future in international environmental standardization. As the

environmental issues become even more important in the future, countries and industries will

recognize the need to join together to address them. The ISO 14000 series is the starting step for

an internationally accepted standard for environmental regulation

.

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WORKS CITED

1

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Environmental Quality Management Autumn 1996,45-49.

3

International Environmental Management Standards. New York: McGraw-Hill, 1996

4, Deaver, Tom. "Integrating facilities Planning and ISO 14000." September 1998

<http://web.lexis-nexis.com/univers. ..5=fOO 1 e7b52f214f6d126cc2bc02cb03ce>

5

August 1998. <http://web.lexis-nexis.com/univers5=fO92d95ee8745afcaed96>

6. Hasek, Glenn "ISO's Green Standards Takes Root." Industry Week 16 February 1998.

<http://insite.palni.edu/WebVFETCH. ..ntitytoprecno=28 :entitycurrecno=28>

7. Hersey, Kevin. "A Close Look at ISO 14000." Professional Safety July 1998.

<http://insite.palni.edu/WebZJFETCH. ..ntitytoprecno=9:entitycurrecno=9>

8. "ISO 14000 andEMAS: Proving Your Environmental Worth; Environmental Standards."

October 1998. <http://lexis-nexis.comlunivers5=6ff949cdcacdff4age6dc582dedbe4e9>

9. Jackson, Suzan L. The ISO 14001lmulementation Guide: Creating an Integrated

Management S~stem. New York: John Wiley & Sons, Inc., 1997,