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First There Was ISO 9000, Now There s . . . ISO 14000

     by Marion Harmon

Not too long ago, ISO 9000 was like a bit player in a B-grade
movie: a virtual unknown. Then, due largely to becoming an
understudy of the European Community, the international quality
management system began to get rave reviews and a large
following. Now, 40,000 certificates and 95 countries later, ISO
9000 has become a world-class star in its own right.
     While ISO 9000 is now feeling the growing pains of its fame
and the heat of new critics, it remains a bright star in the
global business community. Now, a new standard looms on the
horizon: ISO 14000. Still in its early beginnings, this newcomer
to the international scene could become as famousÑor infamousÑas
its older sibling.

What is it?
     The International Organization for Standardization in Geneva
probably didn't know it had a big hit in the making when, a
decade ago, it charged Technical Committee 176 with developing
quality management standards for organizations. The ISO 9000
series was its first big leap into the "soft" science of
organizational management, and it was a doozy. Businesspeople the
world over have heard of, if not felt, the impetus of ISO 9000.
     Now, ISO heads into another area of management--the highly
complex field of environmental protection activities within
organizations. For several years now, the environmental field has
seen an escalation of national and regional standards. The
British Standards Institution has BS 7750 on environmental
management; the Canadian Standards Association has environmental
management, auditing, eco-labeling and other standards; the
European Union has eco-label and eco-management and audit
regulations; and some two dozen countries such as the United
States, Canada, Germany and Japan have introduced eco-labeling
programs.
     After the rapid acceptance of ISO 9000 and the great
increase of environmental standards around the world, ISO began
an inquiry to assess the need for international environmental
management standards. In August 1991, they formed the Strategic
Advisory Group on the Environment, which was asked to consider
whether such standards could serve to:
*    Promote a common approach to environmental management
similar to quality management;
*    Enhance organizations' ability to attain and measure
improvements in environmental performance; and
*    Facilitate trade and remove trade barriers.

     In the fall of 1992, SAGE made its go-forward recommendation
to ISO's Technical Board, which then charged a new committee, TC
207, with developing international environmental management
standards. Subcommittee members are official representatives from
about 40 countries, including people from industry, standards
organizations, government and environmental organizations. The
standards, currently known as ISO 14000, will cover six areas:
environmental management systems, environmental auditing,
environmental performance evaluation, environmental labeling,
life-cycle assessment and environmental aspects in product
standards (see Figure 1).

How does it affect you?
     The most obvious benefit of a single international standard
is the worldwide focus it brings to the environment. After all,
the end-product of any such system should be a cleaner, safer,
healthier world for us all. The more organizations that focus on
the environment, the better it should be for the world. But what
does it mean for the individual business?
     Aside from the noble, lofty goals of global environmental
excellence and harmonization, organizations may realize some more
down-to-earth benefits from paying attention to these standards
now. Corporations can show good faith ahead of time by getting
involved now--showing an eagerness to comply can hardly hurt.
Cutting down on bureaucracy is an appealing side effect, if it
can be achieved. And the possible public relations benefits of
showing that they're environmentally responsible corporate
citizens can hardly be ignored.
     "U.S. companies need to make sure they are involved in this
process because these standards will have a significant impact on
how they manage environmental issues and standards," says Joel B.
Charm, director of occupational health and product safety for
Allied Signal Corp. in Morristown, New Jersey, and chairman of
the U.S. Technical Advisory Group (TAG) for Subcommittee 1.
     Above all, the fact that companies may someday need
environmental management certification to compete in the global
marketplace could quickly overshadow all practical reasons and
marketing ploys. Recent ISO 9000 convertees can attest to the
strength of that argument.
     "Although voluntary, the ISO 9000 quality standard is
something that's becoming necessary to do business around the
world," said Dorothy Bowers, vice president of environmental and
safety policy at Merck & Co., to attendees of the Global
Environmental Management Initiative conference in March.
"Similarly, the ISO 14000 environmental management standard may
become a de facto requirement for being able to do business in
Europe and other regions."

Who cares?
     While many countries already have or are developing
environmental management standards, a global standard will put a
worldwide focus on environmental management and hopefully lead to
harmonization of such things as rules and labels. The standard is
meant to demonstrate commitment and provide a framework to move
beyond compliance. Harmonizing international environmental
standards will help, not hurt, U.S. industry, according to the
American National Standards Institute. This sentiment appears to
be the consensus view of many other nations as well.
     And the United States is right in the thick of the
developments with ISO 14000. ANSI represents the United States at
TC 207. ANSI, in turn, established a technical advisory group of
about 200 environmental managers, government, association and
environmental-group executives and other interested stakeholders.
This group develops the positions ANSI takes to TC 207.
     "The lesson we learned from ISO 9000 was that the United
States made a big mistake in not getting involved early in the
ISO 9000 process," says Joe Cascio, program director of EH&S
standardization at IBM in Somers, New York, and chairman of the
U.S. TAG to TC 207. "We thought that ISO 9000 was not going to be
applicable to the United States, that we had the Baldrige Award
and all the other stuff. We've learned that we can't let things
just develop and go on, and that's why U.S. industry is very
active now on ISO 14000."

To whom does the 
standard apply?
     According to the environmental management system working
draft, the international standard has been written to apply to
all types and sizes of organizations and to accommodate diverse
geographical, cultural and social conditions. Beyond committing
to continual improvement and compliance with applicable
legislation and regulations, the standard does not establish
absolute requirements for environmental performance. So two
organizations engaging in similar activities but having different
environmental performance may both comply with its requirements.
     A major issue that is yet to be resolved is to what exactly
the standard applies. So far, it applies to plant operations, but
there is a dispute as to whether it applies to products and
activities as well.
     "The general view is that it applies to all three: products,
activities and plant operations," reports Charm. "Some members,
particularly Pacific Rim countries, say that products should not
be included because they are afraid it will create a nontariff
trade barrier. But the prevailing view is that they should be. I
think we've been able to accommodate that concern with the
inclusion of products in a more general way."
     Disclosure--externally communicating the organization's
environmental program--has already been built into the standard.
In fact, it was the U.S. recommendation that disclosure be
included into the standard itself, notes Charm. And they have
resolved that third-party auditing and self-declaration are both
acceptable.
     "A company must set up a process for externally
communicating on its environmental program," says Charm. "We
don't say how and what must be communicated, just that a company
must set up a process."
     European countries, particularly the United Kingdom and
Germany, would like to go into extreme detail in this area,
observes Charm. But because such detail could lead the standard
to becoming incorporated into the U.S. legal structure, the
United States stands firm in its opposition.
     "We think the international standard is a very big step
forward, and having companies sign up to these standards should
be encouraged," emphasizes Charm. "But if it winds up being a
penalty-type situation, then it might be an impediment to moving
the standard forward."
     But being too generic will serve no purpose either. Charm
concurs: "There is a legitimacy to having the standard be
considered by the Environmental Protection Agency to be a good
environmental standard of management leadership. So we don't want
to take it out of the EPA realm, rather, leave enough flexibility
in interpretation."

How will the ISOs relate?
     The first goal is to have ISO 14000 be the pre-eminent
environmental management standard, says Cascio. The next goal,
which is further down the line, is to join ISO 9000 and ISO 14000
together. Virtually everyone involved in developing the
environmental management standards agrees that they should
conform to the philosophy and architecture of the ISO 9000
quality standards.
     "Our belief is that ultimately these two will be joined,"
explains Cascio. "The environmental management standards will be
incorporated, probably by reference, into the ISO 9000 standard.
Our view is that, when you get audited, there really should only
be one audit, not multiple audits."
     To facilitate this eventual convergence, a joint task force
between TC 176 and TC 207 meets regularly to ensure that the two
committees share the same vision. Joining the two standards could
help cut costs and prove less disruptive for auditees. But does
this mean that ISO 14000 may become a requirement to do business
in certain countries, especially European ones? Cascio says there
is a significant likelihood that, soon after the standards are
published, facilities will need to be certified to them in order
to sell their products--particularly in Europe.
     So organizations would seem well-advised to find out exactly
how the environmental management standards will affect them in
the long run. Getting in on the ground floor could help managers
get a jump on lining up their environmental management systems
with the international standards. This may even save them from
some expensive consulting fees for learning even the most basic
facts about the standards. It's no big secret that ISO 9000 has
been under fire of late for rampant commercialization and
possible misuses and abuses by consultants.
     At the very least, assuming no fundamental impediments,
establishing systems to cover environmental management, auditing,
performance and maybe even life-cycle analysis will be costly,
warns Cascio. Third-party certification would also add to that
cost.
     He also cautions that such systems will require integration
into many levels and processes of a facility, touching on the
fundamental parameters of management and decision making.
Managers may find that providing training and gaining buy-in will
begin to eat into their budgets. Small companies may find this
especially prohibitive. While Cascio warns of the costs of
establishing environmental systems, Charm is more optimistic
about the way things will turn out.
     "That's why we're trying to avoid some of the excruciating
detail," says Charm. "If we can do this, then we think it applies
to small companies as well as large, and there will be no
financial barrier to a small company implementing this kind of
standard."

What's happened lately?
     The working groups have met several times. At a plenary
meeting in May in Brisbane, Australia, Subcommittee 1, which has
about 50 members, further refined the environmental management
system standard, which is still a working draft. The
environmental management system will be the main standard that
organizations will be certified to.
     "We have the body of the standard largely completed,"
reports Charm. "We also have a good start on the annex to the
document, which will give further amplification of what's in the
main part of the standards."
     The annex-drafting group will further define how much detail
will actually go into the standard--how much generic language vs.
specific language. At the May meeting, Subcommittee 1 agreed that
the annex group will meet in Chicago at the end of July and that
the full subcommittee will meet again in Vienna in September, at
which time they are scheduled to convert the standard to a
committee draft. Then the draft will begin circulation for
approval by other countries. Those comments will be due back to
the committee by the end of December, resolved during January and
then the revised committee draft will be issued in February for
official ballot. Charm says the target date for publication is
Jan. 1, 1996.
     "It's a very tight deadline," admits Charm. "It's probably
cutting in half the normal time for the development of a typical
ISO standard."
     Why the rush? Charm gives a couple of reasons. First,
there's a great deal of pressure to have an international
environmental management standard established for people to be
able to use. Second, there's specific pressure within the
European Union to have ISO 14000 emerge so that it can be the
backup document for the Eco-Management and Audit Scheme (Emas) in
Europe. The European Committee for Standardization (CEN) has
agreed that if ISO 14000 emerges in a timely fashion, then CEN
will refer to ISO 14000 as their supplementary document. CEN, a
regional standards-making organization in Brussels, has been
charged by the European Union with harmonizing the differing
national standards of the EU countries. If ISO 14000 is not
completed in that time frame, however, the European Union has the
option of developing their own backup document.
     "It's not a competition at the moment, but that depends upon
whether we can finish the standard, ballot it and complete it,
and then publish it within a two-year period," notes Charm.

How much is too much?
     While other areas of the international standard have been
meeting with controversy, the one that's turning out be more
difficult than originally anticipated is the environmental
management system, reports Cascio. The main point under
contention is the regulatory elements that should enter (or not
enter) the management standard.
     To try to make a long story short, the United States relies
heavily on a command-and-control system in the environmental
arena; Congress passes laws, the EPA passes regulations and
strictly enforces them with heavy fines and penalties. The
Europeans tried to set up a command-and-control system as well,
but it never really worked out, says Cascio.
     "Europe wasn't able to set up the same level of supervision
and stringency in their enforcement tactics, so their system has
not been nearly as effective and coercive as the American system
in getting industry to toe the line in environmental protection,"
says Cascio.
     The European countries individually have their own versions
of the EPA, some closer to the U.S. system than others, but they
need something different to pass regulations collectively at the
European Union level. One such system is the Emas regulation, due
to come into force in spring 1995. Under the voluntary Emas
regulation, the European Commission can "recognize" national,
European or international environmental management standards and
audits as equivalent to those of Emas. Companies certified as
meeting these would be considered to comply with the requirements
of the EU regulation.
     Under Emas, companies will be audited by private-sector
third parties, explains Cascio. Basically, the scheme provides
for a system of disclosure that enlists the assistance of the
public either through discrimination of the marketplace or
through information that the public acquires. The companies
themselves are required to produce a public statement on their
environmental system.
     "In a sense, Emas is the Europeans' answer to their lack of
enforcement," says Cascio. "Through a process of third-party
audits and disclosure of information, they will enlist the help
of the public to do what their enforcement agencies have not been
able to do, which is to force companies to toe the line on
environmental protection."
     Cascio says that while the European environmental
regulations system is superior to the U.S. system because it
allows for verification of company statements and for
less-coercive third-party audits, the United States has no need
for another system containing regulatory provisions.
     "We already have a command-and-control scheme in the United
States, so we're not at all willing to accept any performance
criteria in the management standard," declares Cascio. "We're not
going to accept any requirements for performance because we
already have the EPA to contend with, and we don't want ISO to
contend with as well."
     An example of this is the issue of environmental aspects of
products, says Charm. He explains that Emas and BS 7750, the
environmental management standard published by the British
Standards Institution, contain a complete list of all the
environmental issues that have to be explored, including
controlled and uncontrolled emissions to the atmosphere,
controlled and uncontrolled discharges to water or sewers, solid
and other wastes, contamination of land, use of land, water,
fuels and energy and other natural resources, discharge of
thermal energy, noise, odor, dust, vibration and visual impact.
     "The U.S. position is that no list will ever be complete,"
says Charm. "Some of these items might be appropriate, but many
are not. You have to write it in such a way that it lets the
company define the important issues for its products, activities
and plant operations."
     Rozell Hunter, an attorney at the Brussels office of Hunton
& Williams, expresses a similar sentiment in the March 16, 1994,
issue of "World Environment Report." Environmental standards
making in the European Union could pose distinct barriers to
trade and even barriers to further environmental rule making,
warns Hunter. Goals outlined by the European Parliament and
European Commission have created a rigidity that makes
negotiating with bodies like ISO difficult, he says. And
differences between the discovery and enforcement traditions of
the United States and the European Union "could pose problems"
for U.S. business.
     The specific elements of ISO 14000 that the Europeans
currently want in and the United States (and other countries)
want out include continuous improvement of performance and a
required evaluation of suppliers. The impasse may cause the
Europeans to create their own standard. Where will this lead?
     "A lot of momentum is building up behind ISO 14000 because
of the success of the ISO 9000 standard," says Cascio. "That
success is going to spill over onto ISO 14000, so if the
Europeans develop their own standard, the ISO standard will
overshadow it anyway."

What else is happening?
     The other areas of ISO 14000 are in various stages of
development. Cascio reports that environmental performance
evaluation, an area they're having to basically invent from
scratch because it is less well-developed than others like
environmental management systems and environmental auditing, is
moving along surprisingly well.
     "There is a lot of consensus amongst all the participants,"
says Cascio. "We were originally worried about the differences of
views on that subject between the United States and some European
countries, but it turns out that those differences have been
reconciled. This is very satisfactory, given that this was
probably the most divisive and controversial of subcommittees."
     Because environmental performance evaluation didn't have the
pre-existing bodies of knowledge and documents and such that
other areas had, they haven't begun to write a document yet. The
documents for techniques and methodology in performance
evaluation will not be available until later next year, says
Cascio.
     The environmental auditing group is working on three main
documents: a specification document for auditing environmental
management systems, a guidance document on general principles of
environmental auditing and a document on auditor qualifications.
These three documents have been elevated to committee draft
status. This does not mean that they're finished; they still must
be circulated for additional comments and, after those comments
are reconciled, maybe early next year, they will be circulated
for balloting, explains Cascio.
     "The environmental auditing documents are moving along in a
relatively satisfactory way," says Cascio. "Even though some
controversial issues still need to be resolved, there is
recognition at the international level that the documents have
made a lot of progress."
     Because environmental management system audits are not
compliance or performance audits, the environmental
qualifications of the auditors need not be as stringent, says
Cascio.
     "You are essentially auditing a management system, and a
good auditor with good skills and experience should be able to do
this," imparts Cascio. "My general feeling is that those people
need not be environmental experts nor have even moderate
environmental credentials. Light environmental credentials but
heavy experience in auditing concepts and techniques will stand
them in better stead."

Where's the science?
     The product evaluation section of ISO 14000 is going a
little slower, notes Cascio. In the organization evaluation
section, political issues come into play, but in product
evaluation, scientific understanding and consensus are the
issues, and they can't be rushed. Committee members must devise
uniform approaches to the conduct of life-cycle assessments and
product criteria, which are then used to award labels and such to
discriminate in the marketplace.
     Environmental labeling programs have sprung up all over the
map: the Blue Angel, the Green Seal, all the various programs in
all the various countries. The practitioners of those programs
have a vested interest in keeping whatever techniques they
develop in the status quo, observes Cascio.
     "Rather than it be a scientific exercise, which it should
be, it turns into a political exercise, which it shouldn't be,"
says Cascio. "The challenge there is to put those disciplines of
environmental labeling and life-cycle assessment on some kind of
a technical footing."
     A major problem is that a lot of the science is not yet
available in this area. Add this lack of technical knowledge to
political scrambling, and consensus-building could take some
doing. "Right now people are positioning themselves," says
Cascio. "They're figuring out where everyone else is and trying
to position themselves to use the process at this point."

What will happen to 
other standards?
     Understanding ISO 9000 and becoming familiar with national
standards like BS 7750 and Emas and voluntary initiatives like
the U.S. chemical industry's Responsible Care program, all
recommendations that Cascio has put forth, will only help the
global situation.
     National and regional standards present no small task to put
together, and they exist for a definite purpose. BS 7750 is the
compilation of the latest thinking of 450 participating
organizations of all types--businesses, consumer organizations,
users. Its third revision was published January 28th, and BSI
says that use of the standard may be seen as a first step to
meeting European eco-auditing requirements.
     Once the international standards become firmly established,
how will all the existing and still-emerging standards and
regulations fit together?
     "That's the big challenge for all the coordinating bodies,
to make sure that there are no gaps and no duplication," says
Bill Cormie, in charge of sales development for BSI in Vienna,
Virginia. "We've seen the experience with ISO 9000, how difficult
it is to coordinate a worldwide input. Some people are ahead of
the posse, and others are still in catch-up."
     Another question is how involved a company, especially a
U.S. firm, should get in all the different standards and
regulations.
     "That depends on the level of involvement," counsels Cormie.
"At this stage, companies should certainly have awareness,
especially if you're an exporter to Europe. Many of the
businesses in the United States are world-class with a global
reach, so they need to take into account the Eco-Management and
Audit Scheme, and the Eco-labeling that goes with it.
     "From the BS 7750 point of view, there are two ways of
looking at these regulations: Do I have to because I'm being
pressured into it, or is it a noble thing to do? From the second
point of view, I think every American business should be looking
at this model and saying:  We're doing this anyway, or, here are
some gaps that we need to plug.'"

What's next?
     Much as we've stepped into a new era of international
thought with quality management, so we seem to be headed with
environmental management. Whether these international standards
will develop in an orderly and timely fashion remains to be seen.
     Already hampered by conflicting economic interests,
geopolitical differences and talk of trade barriers, ISO 14000
may have a tough road ahead. But its supporters may have learned
some lessons from big brother ISO 9000--they are already
anticipating many issues that have plagued the quality system
standards, such as abuses by third-party registrars and
consultants, and are addressing these issues ahead of time.
     The world will wait while the understudy learns it lines and
heads for the big screen. We will watch to see if this standard
becomes a big star.
     For more information about ISO 14000, contact the American
National Standards Institute at (212) 642-4900.
QD