Tag Archives: e-waste

Voluntary Environmental Management Standard Turns Into Third Party Whistleblower

It is not uncommon for EHS auditors to be asked (or ask themselves) “If you find a noncompliance during your audit, do you report it to the regulators?”

The answer depends on the company and audit program, but a recent news item caught our attention due to a variation on the theme.

We have no information other than what is publicly available here, but it appears that an organization managing a voluntary electronic waste management certification program found alleged significant non-conformities at a specific company seeking certification.  As a result, the organization declined to issue its certification to that company.

So far, so good, but the story doesn’t end there…

In its declination letter to the company, the organization states:

Further, there is substantial reason to believe that such exports may violate Public Act 095-0959 (Electronic Products Recycling and Reuse Act, recycler requirements) of the State of Illinois, the Federal CRT Rule, (40 CFR Parts 9, 260, 261, 271; Cathode Ray Tubes; Final Rule) as well as the waste importation laws of Hong Kong/China. Further, while it is not our policy to disclose the results of certifying body audits, we can state that the audit only further substantiated all of our concerns.

In an apparent contradiction to the “policy” referred to in the above statement, the organization’s cc’d “Selected news media”, the Illinois State Environmental Protection Agency and the US Environmental Protection Agency Enforcement on its letter, which can be seen below the signature block.

It is certainly possible that the company themselves had made prior disclosure to the regulators on this issue.  But this event may cause companies pursuing voluntary programs/certifications to carefully consider how the company and auditor will manage regulatory non-compliances that are found or alleged in the course of related audit activities.

UPDATE:  Reports today indicate that the company is taking legal action against the certifying organization stating that the allegations on which the organization based its decision – as well as its disclosure to the press and regulators – are false.

Incubating Environmental “Black Swans” In the Nest

Our last entry discussed the concept of “Black Swan” events, a term created by noted author Nassim Nicholas Taleb to describe an event that is (a) so low in probablility that it is unforeseeable and (b) so catastrophic in impact that it changes history.

Certainly, risk assessments are predictive in nature and no one can predict the future with complete certainty.  But in our view, one of the best tools available for risk assessments is an open mind.    This can be a challenge in the EHSS world as we generally have engineering and other technical backgrounds.  We have been trained to seek absolutes and eliminate uncertainties.  At Elm, we believe that involving external support helps to identify and explore events (and their related exposures) that are relevant but get “technically rationalized” by internal staff.

With the BP oil spill and the December 2008 Kingston, Tennessee coal ash pond failure, we began thinking about some of the Black Swan events discussed with clients in the past.  Below are a handful of EHSS Black Swan risk events that we have discussed with clients over the past years – and some that are currently on our mind.

  • Radical change in EPA’s regulation of coal ash management (discussed several years before the Kingston event, and vehemently opposed by the client)
  • Catastrophic failure of GHG emissions trading market
  • Dramatic failures/errors in GHG footprint calculation methodology
  • Nationalization of privately-owned CO2 emissions assets
  • Regulation and class-action level public concerns over chemical content of consumer goods
  • Waste disposal liability for and public pressures about exporting electronic wastes
  • Dramatic increase in OSHA/EPA enforcement – frequency, severity and targeted industries/sites
  • Major expansion of pollution exclusions/limitations in insurance policies
  • Increased success of US-based NGOs in successfully obtaining US venue for lawsuits concerning EHSS allegations for non-US sites/projects/activities
  • Unprecedented shareholder and SEC pressure on public companies related to EHSS matters
  • Increased importance of EHSS in supply chains and procurement decisions

Perhaps these seem far-fetched to you or your company.  But if that is the case, the egg of that – or another – Black Swan is quietly incubating somewhere in your organization.