Posts filed under ‘Risk Management’
What’s the big deal about nanotechnology?
Kate Sellers
Perhaps you can relate to this situation: Just as our client’s sales force was poised to ship a hot new product to a dozen market countries, one of the process chemists happened to mention to the environmental manager that the product contained a “nano” component. Suddenly these small particles became a very big deal to the environmental manager, who needed to determine the relevant regulatory restrictions on a tight schedule.
Although the use of nanomaterials dates back centuries, commercial use has increased dramatically over the last decade as manufacturers have used their unique properties to create competitive advantage. In response to this increased use, environmental managers now must navigate an ever-evolving suite of regulations and health and safety precautions for those employees working with nanomaterials.
Nanomaterials can offer increased strength, conductivity, or reactivity, but particle size can also affect certain physicochemical properties, and even the toxicological effects of the substance. These may include:
- Decreasing the size of a particle increases the relative proportion of atoms on the surface. Consequently, the dissolution rate and the relative rate of reactivity can increase, for example.
- Each atom on the particle surface has fewer bonds than it would have if it were located in the middle of the particle. As a result, the energy associated with those atoms, known as the “surface free energy” differs from the free energy associated with atoms in the center of the particle. The surface free energy can affect such physical properties as the melting point, equilibrium solubility, and reactivity. The latter explains why nanoscale catalysts can be so effective.
- When the diameter of the particle is of the same magnitude as the wavelength of the electron wave function, so-called “quantum effects” occur. At this point the electrical and optical properties of the particle may change, allowing for carbon nanotubes to conduct electricity, or silver particles to appear blue, for example.
Managing the potential risks of nanomaterials can be a daunting challenge for environmental managers. One of the most difficult issues to solve is that regulators around the world define “nanomaterial” differently, with the size cutoff ranging up to 2000 nanometers (nm) and some definitions including other parameters. An environmental manager concerned with product registration must carefully parse the regulatory definitions and their application to nanomaterials, to determine if their products are regulated differently than bulk materials. Other environment, health and safety (EHS) risks associated with nano-scale materials include:
- Evolving product registration requirements;
- Appropriate health and safety precautions for workers;
- Waste management;
- Perceptions and misperceptions by customers; and
- Other life cycle concerns.
The scenario described at the beginning of this blog ended with a twist. Although the raw material supplier characterized their product as a nanomaterial, perhaps for the “cool factor” associated with the name, it did not actually meet the regulatory definition of a nanomaterial in any of the market countries. No special registration, classification, or labelling provisions applied to the material, and our client’s product could be shipped without delay.
Kate Sellers is Principal Environmental Engineer with Arcadis and co-author of the book, “Nanotechnology and the Environment”. She will continue the discussion about managing nano-scale materials during NAEM’s upcoming webinar “Understanding the EHS Opportunities and Challenges of Nanotechnology” on August 16.
Does your crisis communications plan involve social media?
Sandy Nessing
The power of social media recently became crystal clear following a couple of major events that captured much of the nation’s attention. When the lights went out June 29 for millions of electric customers in the wake of a super “derecho” that hit the Midwest and East Coast, many turned to their mobile devices for information and to make contact with the outside world. The companies whose infrastructure was damaged or destroyed by the severe weather relied on social media to provide updates of restoration efforts, safety information such as what to do if you encountered a downed power line, how to report an outage and to engage with customers who were very frustrated about being without power in triple digit heat.
More than 1.4 million American Electric Power (AEP) customers in six states lost power following a series of storms that began that day — and that was just one company. To try and satisfy customers’ hunger for information, AEP burned up the Twittersphere with regular updates almost around-the-clock, and posted videos and photos to its web sites and to company YouTube, Facebook and Flickr pages. We were able to answer customers’ questions in real time and give them information about restoration times and tips to survive the heat with no power.
As one would imagine, there was plenty of frustration over the duration of the outages. But when customers realized how bad the damage was, many began to understand why it was taking so long to turn the lights back on. As the work progressed, customers increasingly took to the airwaves to thank our crews and express appreciation for the information they got via social media. AEP received thousands more followers and significantly increased traffic to all of its web sites, Facebook pages, Twitter accounts and YouTube videos. It became a life line for many and allowed us to interact directly with our customers during a major crisis.
Not long after that event, the horrible mass murders in Aurora, Colorado occurred. Amid the grief, shock and anger over those senseless shootings, something else interesting happened. Reporters in the field were getting updates from law enforcement officials via Twitter – and sharing news as the story unfolded, in real time, without waiting for periodic briefings. As a news junkie, it met my insatiable need to know what was happening as it happened. That’s when it became clear as day: Social media are critical during a crisis. It is vital to the flow of information and is an invaluable communications vehicle; one might even say it has become as important in a crisis as a business continuity plan. When crisis strikes, will you be ready with a social media strategy?
Sandy Nessing is the Director of Sustainability & ESH Strategy & Design for American Electric Power Co. Inc. She wrote and published AEP’s first Corporate Sustainability Report in 2007 and in 2010 published AEP’s first integrated Corporate Accountability Report, a combination of the annual sustainability report and Annual Report to Shareholders. Follow her on Twitter at @Watts4U.
Sandy Stash: “Not on my watch”
With more than 30 years in the oil and gas, and hard rock and coal mining industries, Sandy Stash has significant experience representing business on controversial natural resource, public health and environmental issues. A petroleum engineer by training, she spent her early career as one of the first women to work as a drilling engineer and drilling rig foreman at ARCO locations across North America. Today she is the Global Senior Vice President of Health, Safety, Security, Environment and Operational Assurance at Talisman Energy. Her current project is introducing a holistic operational management framework that will govern risk management across Talisman’s global businesses. We spoke with her at NAEM’s recent Environmental Women’s Leadership Roundtable about her career.
GT: You were one of the first women to work as a drilling engineer. What was it like for you back then?
SS: Actually, it was a blast! In all seriousness, I made a conscious decision, particularly as a woman, to get some good solid field experience. The first thing I learned about was the equipment. I also gained a better understanding of the culture of the oil industry. And finally, I learned an awful lot about influencing people because as you might imagine, I was a 22-year-old female thrown on a drilling rig, ostensibly to be “the boss,” yet I really didn’t know what I was doing. I think I learned a lot about how to listen to people, how to influence them and how to build the teamwork necessary to make me successful.
GT: Throughout your career, you’ve also been involved with driving change in a lot of complex organizations. What are some of the strategies you’ve used?
SS: Well, first of all, it’s very, very hard work because I think that as human beings we tend to be change resistant, so I think it’s important to take the time to understand everyone’s perspective. Number two, there’s a bit of collaborative work that needs to be done to come up with a common vision. In other words, it’s a lot easier if you own part of the change, rather than having someone else telling you that you need to change. The third thing is that once you’ve made the decision, you need to be very clear about who is accountable for the outcomes. And finally, and this may be the toughest part, you’re always going to have some people who don’t want to get on board, and you need to get them out of the way.
GT: You have been involved with structuring the EHS guidelines for Talisman’s hydrofracking operations. One of the most important components you identified was a commitment to transparency. Could you explain why you included that?
SS: Hydrofracking or ‘fracking’ comes under a lot of pressure because of the concerns that people have about the materials or the chemicals that go into the frack jobs. Truthfully, it’s a very, very small percentage because mostly it’s water and sand, but we feel that we can dispel a lot of concerns and bad information by just fully disclosing what chemicals are in our frack jobs. And finally, by being transparent about chemical usage and whatever it is, the next very important step is that you actually set metrics to improve, reduce or increase whatever the metric is. So transparency leads to very important target-setting, which is important for all of us to continuously improve our businesses.
GT: You also said that your attitude when it comes to incidents is “Not on my watch.” What did you mean by that?
SS: I think that as HSE professionals we should be preventing accidents, not responding to them. We may always have the need to respond, but the more we can do in the way we design our plants, operate our plants, train our people and create clarity around people’s accountability, the better we will be at preventing accidents in the first place.
For more interviews with speakers from the Environmental Women’s Leadership Roundtable, please visit www.youtube.com/NAEMorgTV.
EHS Success at the Intersection of Engagement and Coordination
Brad Waldron
When I first decided to take my current position with Caesars Entertainment Corp., I was concerned about the prospect of managing more than 40 properties across a dozen states and at least twice as many regulatory agencies.
In the absence of on-site staff exclusively dedicated to environmental affairs, I thought it would be difficult to educate and motivate employees. But the first couple of weeks brought a great discovery – the employees were already educated and motivated. The property-level employees who carry environmental compliance responsibility at Caesars are among the most dedicated I have ever met. The engineering staffs at the properties are truly interested in being successful and doing the right thing. Even if they can’t cite the regulatory reference, they are familiar with work practice standards and operating guidelines, which have enabled them to largely remain compliant.
Each property has developed its own environmental strategies to comply with the things that are relevant to them. Some of the larger properties have either relied on external consultants, or had a senior engineer on staff that happens to know something about it from a prior position. Sometimes it’s a relationship they have with a former colleague outside the company; many times it has been research and a desire to be compliant. But whatever the reason, they have found a way to accomplish what they need to.
I soon transitioned into a role focused on sharing more effective management strategies, consolidating record-keeping, streamlining inspections, opening communication channels, and ultimately, making environmental management feel more like a base requirement. In my past experience with heavy industrial sites, environmental compliance was a way of life for every position. Each employee had it engrained in them because of the vast number of requirements and experience with past penalties. Within the hospitality industry, we have significant and diverse requirements, and people are aware of them, but true success will only become possible through integrating roles into every job around the organization.
Once employees have a basic understanding and the desire to comply, the next step entails giving them the tools to be effective and showing them the methods to make those tools most efficient. Efforts are now being made to accomplish environmental tasks within everyday duties. Doing the right thing is often surprisingly easy, and making employees aware of how to reduce the company’s environmental footprint seems to increase everyone’s willingness to be involved.
Brad Waldron is Corporate Manager of Environmental Affairs for Caesars Entertainment Corp., where he manages efforts to maintain Caesars’ position as an environmental leader. He will talk about how he collects and tracks his programs’ metrics at NAEM’s EHS Compliance Excellence conference on Aug.1-2 in Chicago.
Extended Producer Responsibility: Recycling for the 21st Century
Dania Nasser
In April, Dania Nasser, a graduate student at Yale University and a member of NAEM’s Emerging Leaders group, sat down to speak with Michael Washburn, Director of Sustainability at Nestlé Waters North America, about why the company is supporting an innovative approach to recycling called extended producer responsibility (EPR).
DN: Michael, what exactly is EPR?
MW: Common in Europe and Canada, EPR requires industries, such as the beverage industry, to pay for the collection and recycling of their products once they reach the end of life. We hope to bring the financial responsibility of recycling back to the industry, while collaborating with municipalities to increase access to curbside recycling and recycling away from home.
In 2010, Nestlé Waters North America (NWNA) supported the launch of an EPR program in the Canadian province of Manitoba, featuring four key elements: curbside recycling, public spaces recycling, commercial/institutional recycling and a public education plan. Results thus far have been encouraging, and will provide key learnings for EPR in the U.S.
DN: Why does NWNA support EPR?
MW: At Nestlé Waters, we seek to capture and reuse every Polyethylene terephthalate (PET) beverage container, so we put ourselves on the front lines of advancing recycling, whether it is in the lab, the field or at the policy level. While PET containers for bottled water make up less than 1 percent of all U.S. municipal solid waste, much work remains to ensure these, and all valuable recyclable materials, stay out of landfills.
It’s really in our best business interest as well: EPR serves as a risk-reduction strategy around our materials. Volatile commodity prices are an issue for us, and the ability recoup materials can help stabilize our costs.
To evaluate how to get our bottles back for creation of recycled PED (rPET) bottles, we examined a variety of recycling programs and found we’d need a multi-pronged approach that includes institutional and commercial recycling, as well as curbside and away-from-home. We see EPR as the only way you can do it, by folding fees into a broad variety of packaging, isolating them – importantly, outside of government – and then using funds derived from those fees to meet recycling goals that are set by state government.
Speaking of recycling goals, we hope that EPR will help to double U.S. recycling rates for all PET plastic bottles to 60 percent by 2018, a Corporate Citizenship goal we set in 2008.
DN: Some states have redemption incentives for in place for people. Did you examine this approach as well?
MW: We don’t want to dismantle bottle bills, but we do want to out-perform them, and so we are focusing our current efforts on non-bottle bill states. But there are other challenges to consider. Among other issues, bottle bills reinforce the notion that plastic bottles and beverage containers are the problem, when, in fact, these are only part of a broader societal problem in which too much valuable packaging material is going to landfills.
We want to have a deliberate, fact-rich dialogue on what EPR is and how it works, so we are working to launch EPR in states that don’t have a bottle bill, but have good recycling infrastructure and support in place, like Minnesota and Maryland. This will mean we can collaborate around EPR as a new model, without having to delve too far into the relative wisdom or merits of bottle bills.
In addition, we want to engage the kinds of stakeholders who traditionally support bottle deposits so they can come with us on this journey and understand that we can get higher rates of recovery with a different tool, and – from an environmental and efficiency standpoint – can ultimately out-perform bottle bills.
DN: What kinds of industry players and other stakeholders are you working with in support of EPR?
MW: We’re working with a really broad range of stakeholder groups, including consumer product companies, beverage companies, various trade associations, commodity groups, private haulers, municipalities, state legislatures, environmental NGOs, grocery retailers, other retailers, the forest product industry and more.
I’ll share one example of a stakeholder group. Recycling Reinvented is a 501(c)(3) nonprofit organization committed to advancing recycling rates of waste packaging and printed material in the U.S. through an EPR model that would require brand owners to develop and fund effective recycling programs. We are directly supporting Recycling Reinvented’s efforts, both through funding and our CEO Kim Jeffery’s leadership as a member of the organization’s board.
In addition, many people are aware of a dialogue process facilitated by a group called Future 500 that has brought together 30 organizations to talk about the best attributes of an EPR program that could work in states in the U.S and how to craft a legislative package and a strategy to successfully pass that package. We’re going to try and move legislation in 2013.
DN: Obviously, you’re hoping for the legislation to be successful. What’s its best selling point from a societal and government perspective?
MW: This is really the most rational approach to what is a challenging dynamic around the disposal of valuable materials in this country. Taxpayers should be uncomfortable with contributing to a system that brings only a 30 percent recycling rate for plastic bottles. So this is deeper than our own interests in the issue. We’re going to see a louder drumbeat growing over time from the standpoint of commodity associations that want this material back, municipal governments who are fiscally burdened by the current system and stakeholder groups that think that companies should shoulder this responsibility. I think that’s where our broader culture is headed—more and more, companies are expected to take responsibility for their products, from the sourcing of ingredients to disposal of packaging.
Dania Nasser is completing a Masters in Environmental Management at Yale University. She is Director of Environmental Affairs at a New York law firm specializing in environmental and construction law and a member of the Board of the Manhattan Chamber of Commerce Green Finance Committee. Ms. Nasser has an undergraduate degree in environmental engineering and a law degree.
Understanding OSHA’s Globally Harmonized Hazard Communication Standard
Mark Duvall
On March 26, the Occupational Safety and Health Administration (OSHA) published its updated Hazard Communication Standard (HCS). The new rule, which applies to all hazardous chemicals, has been harmonized the Global Harmonization System (GHS) and will affect all companies that make, transport or use hazardous materials. Mark Duvall, Principal at Beveridge & Diamond P.C., has been following the HCS since it was a proposal in the early 1980s. We caught up with him this week to learn more about the updated rule and to understand its potential impact.
What’s the genesis of this latest HCS update?
OSHA adopted the HCS in 1983 and since then they’ve made a number of adjustments to it. They made the latest round of changes for two reasons. The first is because the GHS is out there and the United States wants to harmonize its hazardous communications with those of other countries for the promotion of international trade. The second is that the agency believed that GHS would represent a clear improvement in the hazardous communication standard and thus help protect employee safety.
What is the GHS?
In 1992 the United Nations Conference on Environment and Development issued a mandate to develop a globally harmonized chemical classification and labeling system. It adopted the GHS in 2003. The standard was intended to create a common system for hazard communications. At the time, the lack of consistency across countries was a burden to international trade.
The GHS applies to hazardous chemicals. It doesn’t apply to articles, or products that have a fixed shape, which are not intended to release a chemical. There are also exemptions for certain kinds of chemicals that are subject to detailed regulation in specialized areas. So drugs, toy additives and pesticide residues in food ‘at the point of intake’ are not covered by GHS. It does, however, apply to worker exposure and transportation of drugs, food additives and pesticide residues in food.
It’s important to note that the GHS is a hazard-based system designed for trade; it’s not a risk-based system. Each company in the supply chain must consider its own risk and exposure conditions and decide on risk abatement measures.
How does OSHA’s rule compare to the GHS?
Let’s begin by talking about the three main elements to the GHS:
1. The classification system: The GHS has identified physical hazards, chemical hazards and environmental hazards, and classified them by defining them and defining different categories within each hazard class with objective criteria. Once a classification for a chemical component has been determined, you then need to classify the mixture to which it belongs. Under the old OSHA standard, there was a pretty simple rule for determining the hazards of a mixture. The mixture was determined to have all the health hazards present if they had it at .1 percent or greater, with no regard to dilution. And that ran into a problem with acute toxicity for example if you took something that was acutely toxic at 100 percent and dilute it down to 5 percent, it might not qualify as acutely toxic anymore. What GHS does is it provides guidance on how to calculate the hazards of a mixture depending on the particular hazard categories of the various components and their proportions in the mixture. And there are different approaches for different kinds of hazards. It’s more complicated, but it’s generally regarded as a more accurate system than the old OSHA system.
2. Labeling: Under the GHS there are multiple things that must appear on the label: the product name, the company’s name address and phone number, the standardized hazard statement, a pictogram and a precautionary statement. Under the old OSHA standard, you could express a hazard using any statement you wanted. Under GHS, there is a prescribed hazard statement assigned to each hazard category. There’s also a requirement for a pictogram, or a symbol conveying a visual idea of the hazard. A precautionary statement is what you should do in response to this hazard information (e.g. first aid instructions, personal protective equipment). And finally, there’s a requirement for a signal word. One is ‘Danger,’ the other is ‘Caution’. This is all different from the old OSHA rule, which required only the name and address, the name of the product and “appropriate hazard warnings” (which led to very different descriptions of the hazards for the same product).
3. Safety Data Sheets: A safety data sheet is a written compilation of information about the hazards of that product. In industrial chemicals, there is a list of data elements that have to show up. Under the old OSHA standard there was no required format for that. Now, under GHS and now under OSHA, there’s a prescribed format for the disclosure on the safety data sheets. GHS does not use the term ‘material safety data sheet’, and OSHA is adopting that language so MSDSs will now be called Safety Data Sheets (SDS). There’s a standard format and there’s also specific information that has to be included in each section.
What are some of the differences between the GHS and the updated HCS?
OSHA has not completely taken GHS. There’s a whole set of environmental hazards that are classified in GHS, which are not included in the new OSHA rule because the agency doesn’t have statutory jurisdiction. However, OSHA does require companies to include the section heading for environmental hazards; the hope is to encourage voluntarily disclosure of that information.
OSHA also adds some requirements that focus on the workplace where chemicals are present and where there is exposure potential. It requires training, it requires a written hazard communication program and it requires labeling of containers and chemicals in the workplace. Because GHS focuses on trade, it doesn’t really address the occupational exposure aspect.
The OSHA rule also differs from GHS in its classification requirements. Under the old OSHA standard, you simply had to indicate that something was acutely toxic. Now, under the harmonized rule have to classify the hazard of acute toxicity and put it into one of several buckets. Rather than adopt all five GHS categories, OSHA omitted the lowest toxicity level because it concluded that it wasn’t appropriate to in a worker protection context.
When does the new OSHA rule go into effect?
The rule goes into effect on May 25, 2012 but compliance will take place in stages:
- Dec. 1, 2013: Deadline for training employees on the new label elements. Companies will start transitioning to GHS and they need to train employees to understand the new label warnings, particularly the pictograms.
- June 1, 2015: Classification, labeling and the SDS requirements. This is the same date that the European version of the GHS goes fully into effect. Distributors, however, may continue to ship products with the old labels until December 1, 2015.
- June 1, 2016: The other workplace requirements take effect. These include requirements for hazard communication program and training on newly identified hazards. Between now and then, companies can comply with old rule, new rule or with both.
Mark Duvall is a Principal with Beveridge & Diamond, P.C. in Washington, DC, where he heads the law firm’s chemicals practice, as well as its FDA and OSHA practices. He will share his advice during NAEM’s upcoming webinar, “Preparing for the OSHA’s Globally Harmonized Hazard Communication Standard” on April 24.
What We Can Learn from Apple’s Foxconn Factory Audit
Bruce Klafter
As most of us know by now, in February, 2012 the Fair Labor Association (FLA), a multi-stakeholder organization focused upon workers’ rights, inspected three large factories in China, where Foxconn assembles products on behalf of Apple, probably our country’s most iconic brand manufacturer. The report that was issued is interesting reading and offers some lessons that any business would be wise to learn and apply:
- Listen to your workers: In the health and safety area, the FLA found that workers were alienated from safety and health committees, and had little confidence that management would address safety issues. Keeping in mind that the scale in this case is unprecedented (i.e. FLA surveyed 35,000 employees out of the 179,000 working at these three locations!) the challenge of uncovering EHS issues is one that EHS professionals and management confront all the time. It is virtually impossible to identify issues without the assistance of line workers, and workers will report issues only if they believe there will be no retaliation and that corrective action will follow. In this instance, Foxconn has agreed to assure the election of worker representatives without management interference, something that was lacking and that prevented open communication about EHS issues.
- Compliance can be hard, but the alternatives are generally worse: The principal problem that precipitated these audits and that FLA confirmed was widespread at Foxconn is noncompliance with Chinese law and voluntary code prescriptions for hours worked. Chinese law limits work to 40 hours per work and 36 hours of overtime a month, meaning a workweek should generally be no more than 49 hours. Foxconn workers were found to regularly work 60 hours a week or more. The causes of excessive working hours are manifold, including a desire on the part of workers to get as much overtime and compensation as possible, and the solutions are going to be extraordinarily difficult. Foxconn has pledged to comply with the law and to maintain compensation for its workforce, necessitating the hiring of tens of thousands of new workers. Given the amount of bad press this situation has created for Foxconn and Apple, it is no wonder that many are calling this Apple’s “Nike moment”, meaning the moment where it has been forced to meaningfully confront poor working conditions in its supply chain. Apple was by no means sitting idly by while these violations persisted, but it was unable to devise a solution even with knowledge of its existence – an alarming state of affairs for any manager.
The kinds of issues disclosed by the FLA report are unfortunately endemic in China and other parts of the world, and are by no means confined to Foxconn and Apple, or even to the electronics industry. Hopefully the attention generated by the situation will create some positive momentum for lasting change.
What do you think about the potential impact of this situation? Has it provided an opportunity for renewed conversation about EHS in your company?
Bruce Klafter is head of Corporate Responsibility and Sustainability at Applied Materials, Inc., where he leads the effort to fulfill the company’s commitment to sustainability in the design and implementation of business strategies and worldwide operations.
From Strong Relationships Comes Healthy EHS Culture
Stephen Evanoff
At a February meeting of my company’s environment, health and safety (EHS) leaders, a guest speaker reminded the group how important relationships are in effective EHS management. The following day, I picked up the Feb. 20, 2012, issue of Time magazine that featured a cover article on the science of animal friendships.
I’m certainly not suggesting that animal friendships can teach us how to develop effective workplace EHS relationships, but these two incidents did remind me how the relationships we build as EHS managers directly impact the organization’s EHS culture. Here are a few of my observations on relationship-building principles that have worked to strengthen EHS culture in organizations:
- Emphasizing the team over the individual: This applies to EHS programs, projects involving cross-functional teams, safety committees, awards, and just about everything else within an EHS context except, perhaps,filling out regulatory agency required reports. The fact is that the EHS function can accomplish almost nothing on its own. Without interdepartmental relationships founded on trust, the EHS role can be lonely and frustrating.
- Acting as an enabler: Before approaching a person or team of people with an EHS issue, answer the questions: “What’s in it for each of them? And how can I help?” This exercise will start you down the path toward a consensus-based solution and help you develop an enabler’s mindset.
- Validating the other person’s perspective: When business leaders and core business process owners feel that the EHS people are cognizant of the demands of their jobs, understand the pressures they face and are aligned with the overall goals of the enterprise, they will be more receptive to EHS initiated projects, and more likely to include the EHS function in decision-making.
- Standing for what’s right: EHS managers who consistently act in the best, long-term interest of the organization (rather than doing what’s expedient, politically advantageous, or in the near-term interest of the EHS function) will, over time, build credibility and respect. These are characteristics of healthy EHS working relationships.
I am sure there are other important principles to relationship-building. What other principles or relationship-building experiences have had a significant impact on EHS culture in your organization?
What is the value of water?
David Crisman
This week NAEM’s Upper Midwest Local Networking Group met to discuss regional water management challenges and to explore best practices from around the world. We caught up with speaker David Crisman, Principal of EHS Management Associate LLC, to learn about his research on water management approaches in Australia.
GT: Why did you begin research water management approaches in Australia?
DC: In the case of Australia, what has been the most fascinating to me is the Murray-Darling River Basin. It’s 14 percent of the country area-wide, six percent of the water that falls on Australia falls in the basin. It’s something like half of all the agriculture comes from the basin. Just to give you an idea, 44 percent of the water consumed in Australia goes to agriculture, so you’ve got fairly substantial land area, not so big of an input (because the only input is rain) and a huge water take. And now even in a good year less than half of the water makes it to the ocean. So it’s like our Colorado River.
In Australia, the individual states control resources, so the federal government said, “Wait a second. We’ve got three major states drawing water and as the federal government, we need to say what is the environmental water needed just so it makes it to the ocean so we have aquatic habitat, we have tourism, we have those benefits that we don’t normally think about, rather than throwing it on a rice field.
I thought this was a really good example to look at because as industry people, we don’t think of water coming in; our requirements are always on the water going out. And in the industry, I used to work in (specialty chemicals), water quality was important. If you start taking too much water out of this area, you start having saline problems, you start having acidification problems. Even if I had a plant in this area, you could be saying, “Is it drinkable?” but also, “Is it even useful in a manufacturing setting?” We don’t think of the upstream side. We think of the wastewater side.
So I was really trying to get into that particular issue by taking a look at Murray Darling. I think the cutting-edge thought was what they came up with, which was to create a water market. They said, “The Basin has a finite amount of water and we’ve got to balance this whole water usage and it doesn’t matter if you’re taking it from a well or you’re taking it directly from the river, we’ve got to figure out that balance. It’s a commodity, there’s going to be years it’s in surplus, years that it’s deficient, so how do we, as Australia, buy water to lower the allocation within the Basin so there’s enough water for fish, for flow and all those other things?”
It’s a good technical problem.
GT: What are some of the guidelines of the water market Australia established?
DC: There’s permanent trades that going on – I can actually sell you my rights as a property owner—and there are allocation trades—I can sell you my annual take because it’s low this year. So if the tomato farmer decides it’s more worth his while to sell his allocation this year, he can give it to the guy who owns the vineyard. So what is the value of water? There are also regulations in place to ensure that the way you use the water on your land doesn’t impact others. So the legal framework is critical, too.
GT: How can those lessons be applied to water management in the Upper Midwest region?
DC: Everything has a yin and a yang. So the fact that we have constant supply is really great. We may never think about water coming into a facility, but when we turn the tap, we will have water. The negative is ‘Have I really been thinking of the cost?’ And will that price for water increase? And will it become a variable cost for me? Meaning that one year I will pay x, but two years later it may be 5x or something more. For businesses, it’s probably easier to plan on price than to deal with a disruption. So that’s probably an overall positive.
The next thing is quality. If I can get to a consistent quality grade it’s going to mean less disruption, less upset for my manufacturing process. But that again boils down to price. And then you start to see intangible benefits and impacts. People can’t come to work because their neighborhood is on fire. If you can have consistent supply, you can perhaps deal with drought situations. And of course there are lifestyle impacts in Australia because if you look up Australian water restrictions online you’ll see pages of instructions of when you can water your lawn, do your laundry. That’s at a more personal level but it could reach industry as well.
GT: How close do you think we are to seeing some of the approaches being used in Australia to be applied to the U.S.?
DC: It’s hard to say because it sometimes seems like if we want to focus on an issue, we need to have a crisis. Last year we were dealing with too much water. I think the question of quantity has to be driven by a drought. And certainly the Texas situation if it continues may end up pushing a lot of buttons because those Great Lakes look awfully tempting.
David Crisman is the Principal at EHS Management Associate. As the former EHS Director for a global, specialty chemical company, he is well-aware of the challenges facing today’s EHS managers. He continues to study trends to deal with water supply and quality issues throughout the world.
To learn more about NAEM’s Upper Midwest Local Networking Group, please visit http://www.naem.org/?LNG_Upper_Midwest
Are your sustainability efforts scalable?
Dr. Jennifer Schmitt
One corporation can make a difference. Can’t it?
I struggle with this question much like I struggle with the idea that one person can make a difference. I firmly believe one person or one corporation can make a difference. I have to. Otherwise, much of what I do, personally and professionally, would be for naught. When I am pressed on this belief I must acknowledge that it is my assumption that many others are also taking similar actions and thus collectively my actions, or a corporation’s actions, can make a difference. In essence I have faith that my actions are scaled up by the collective actions of many.
Alas, I am a scientist so my faith leads me to exploration and research. Fortunately as a research fellow with the NorthStar Initiative for Sustainable Enterprise I have the opportunity to research the scaling up of sustainability. To date we do not have an example of a particular sustainability action that has been scaled up globally, across sectors and countries. At NorthStar we have begun exploring the idea of globally scaling up a sustainability action through our research into financing energy efficiency improvements in global supply chains.
We are partnering with a company that is working with upwards of 10,000 factories to identify energy efficiency improvements, aggregate them and link them with large global investors. We are examining who all is involved in this financing of a “saved kilowatt hour” including the supply chain factories, the retail parent companies, energy service companies, financial institutions, etc. By scaling up one factory’s energy efficiency improvement project(s) to a portfolio of many factories’ energy efficiency improvements, large scale global investors can finance sustainability and institutionalize a system of global aggregation of sustainability actions.
Our financing a “saved kilowatt hour” project is only in its infancy, but once we have an understanding of what it takes to finance a “saved kilowatt hour” we can expand our research to explore a “saved gallon of water” or an “adverted toxic ingredient”. We can ask questions such as how to aggregate these sustainability actions? And whether the global financial world will provide the financing? This will then give a resounding “YES!” to the question of whether one corporation can make a difference.
In the meantime, I’d love to hear from you: Does your company have an aggregation story of a sustainability action occurring in your supply chain? Or all your worldwide offices? Perhaps you know of a global, cross-sector sustainability initiative that we have missed?
Dr. Jennifer Schmitt is a postdoctoral research fellow with the NorthStar Initiative. Her research is broadly focused how sustainability initiatives lead to improvements in environmental and social metrics. You can contact her at jorg0206@umn.edu.
