With many environmental

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1 Environmental Audit A Proactive Tool For Pollution And Accident Prevention By Ir. Dr. Chong Hock Guan, CEO and Principal Consultant, GMP Environmental Consultants With many environmental accidents happening these days, we should be more proactive to find ways to prevent accidents. One of the ways is the effective use of environmental audits to regularly check an organisation s environmental management and practices. Most engineers know the word Environmental Audit, but not many know its importance and benefits. Some have a misconception that environmental audit is a fault-finding exercise and a waste of time. Coupled with inexperienced auditors with poor understanding and application of audit methodology, many environmental audits are conducted in a sub-standard manner, merely to satisfy the needs of certification or contractual requirements. Concepts Of Environmental Audit Contrary to what most people believe, environmental audit is actually fact-finding work. A proper and systematic environmental audit will definitely yield benefits, and some of these benefits include: Highlight positive efforts made in environmental performance Identify potential environmental accidents Initiate corrective and preventive action to avoid accidents and disasters Ensure compliance with environmental legislation Improve efficiency Reduce wastage and improve cost savings Enhance corporate image of the organisation Increase confidence of customers in the processes and products Educate and motivate the workforce Demonstrate management commitment to environmental control Improve the working environment making the place safer and healthier Encourage self-regulation - thus reduce the burden of enforcement So, what is environmental audit? Environmental audit can be defined as a measure of environmental risks, and an assessment of environmental opportunities. The popular management concept What gets measured, gets done is well applied here. This means, audit should have measurement involved, and audit tools, which can measure quantitatively, will be able to measure the environmental performance effectively. Legal Requirements The Environmental Quality Act (EQA) 1974 of Malaysia specifies requirements on environmental audit; as contained in Section 33A Environmental Audit noted below: (1) The Director General may require the owner or occupier of any vehicle, ship or premises, irrespective of whether the vehicle, ship or premises are prescribed under Section 18 or otherwise, to carry out environmental audit and to submit an audit report in the manner as may be prescribed by the Minister by regulations made under this Act. (2) For the purpose of carrying out an environmental audit and to submit a report thereof, the owner or occupier so directed shall appoint qualified personnel who are registered under subsection (3). (3) For the purpose of this section, the Director General shall maintain a list of qualified personnel who may carry out any environmental audit and submit a report thereof. In addition, Section 51 of the EQA 1974 further states: (1) In addition to and not in derogation of any of the powers contained in any other provision of this Act, the Minister after consultation with the Council may make regulations for or with respect to - (t) regulating environmental audit and the submission of an audit report and the appointment of qualified personnel to assist the Director General in carrying out an environmental audit of any vehicle, ship or premises, irrespective of whether the vehicle, ship or premises are prescribed under section 18 or otherwise, and their manner of operation, and prescribing the fees chargeable Environmental audit in the EQA 1974 is defined as a periodic, systematic, documented and objective evaluation to determine (a) the compliance status to environmental regulatory requirements (b) the environmental management systems, and (c) the overall environmental risk of the premises. It can be interpreted that the Act requires three types of the environmental audit to be done notably: BULETIN INGENIEUR 8

2 Compliance Audit Environmental Management Systems Audit Risk Audit As noted below, these are three of the many other types of environmental audit. cover feature Types Of Environmental Audit The main types of environmental audit can be categorised as: 1. Compliance Audit mainly to check on compliance with the legal or corporate requirements 2. Environmental Management Systems Audit The International Standard, ISO Environmental Management Systems- Specification with guidance for use specifies clearly such a requirement. This audit checks the whole management system with regards to the requirements of ISO Standard. Figure 1 shows the ISO EMS model. 3. Risk Audit This type of audit evaluates the level of environmental risks with regards to the operation and activities in such organisation. 4. Due Diligence Audit This is used by organisations or banks to evaluate environmental conditions when dealing with merging, acquisition or divestment of properties. 5. Environmental Impairment Liability Audit an essential prerequisite for organisations to obtain insurance to cover the liability resulting from environmental pollution and impact. 6. Environmental Marketing Audit such an audit is used by organisations to check that their products are in conformance with consumer and legislative requirements. 7. Energy Audit Since energy production involves natural resources, this type of audit covers the collection, analysis and interpretation of energy audit. The results are cost savings and efficient use of energy. 8. Certification Audit This involves assessment against an agreed standard prior to issuance of certificate. 9. Environmental Performance Audit checks on environmental performance, including continual improvement in reducing environmental pollution. 10. Audit on Contractors and Suppliers examines the environmental activities of its contractors and suppliers, in particular, in reference to their compliance to environmental legislation and standards. 11. Product Audit This usually checks the product life-cycle, from conception to final disposal, to ensure all processes and raw materials used are in-line with environmental requirements. 12. Cleaner Production Audit Also called Waste Minimization Audit. This audit finds the processes involved in reducing and eliminating the use of toxic chemicals, which aims to result in less pollution and toxic wastes produced. As there are many types of environmental audit, every organisation has to be clear on and specific which type of environmental audit it needs. Systematic Environmental Audit Methodology A systematic environmental audit consists of three main stages: BULETIN INGENIEUR 9

3 1. Pre-Audit Pre-audit deals with preparations prior to the audit on-site. The work include: communicating with the site personnel on the audit obtaining background information about the site defining the scope and intent of the audit determining the type of audit selecting audit team members preparing the necessary equipment audit checklists, personal protective equipment and other audit tools making preparations on logistic, accommodation and transportation if needed, and sending a letter of notification to the site to confirm the audit onsite 2. On-Site Audit This is the main bulk of the audit, and is done in the auditee. Auditee is defined as the organisation being audited. This phase comprises five events in sequence, they are: (i) Opening meeting This is the first formal event at the site, and should be attended by audit team and the management of the auditee. Usually the top management will address the audience first, and the audit team leader will then inform the management on the agenda and the methodology of the audit. (ii) Familiarization tour The audit team members are accompanied by key personnel of the auditee to visit the site briefly in order to be familiar with the nature of operations and the environmental concerns. It should be noted that this is not site inspection. This event is not needed if the audit team members are familiar with the site. (iii) Interviewing the knowledgeable persons This is the essence of the on-site audit, whereby key personnel are interviewed to obtain facts in response to the audit questions. Figure 2 shows the importance sequence of events for this on-site audit technique. (iv) Verification The facts obtained from the knowledgeable persons are verified. There are three techniques of verification: Document review this exercise examines the manual, procedures, work instructions, records and supporting documents Verification interviews involves interviewing employees randomly to check the implementation of systems in place. Site Inspection all physical installations at the site are checked against the standards and good environmental practices. A combination of any three verification techniques can be used, with the main intent of confirming evidence of the facts obtained. Interviewing Knowledgeable Persons Facts Verification of Responses Verification Interviews Document Review Site Inspection GMP ENVIRONMENTAL CONSULTANTS Audit Findings BULETIN INGENIEUR 10

4 (v) Closing Meeting Audit findings and conclusions are presented by the audit team leader to highlight Noteworthy Efforts (conformities) and Areas for Improvement (nonconformities). Recommendations should be provided by the audit team, though they are not binding. 3. Post Audit This is mainly report writing and follow up after the submission of report. The report is confidential, and should be factual with key findings from the audit, notably with sections on Noteworthy Efforts and Areas for Improvement. Recommendations for improvement should be included, unless specifically requested to be excluded by the client. A good audit report should contain the following sections: Cover Letter Executive Summary and Score Sheet Working Copy Findings from Site Inspection Summary of Verification Interviews Conclusion and Suggestions for Action Depending on the contractual requirements, usually two copies of the reports are submitted to the client, with a copy extended to the auditee. The client may pose questions after reading the audit report, and the audit team leader must be prepared to meet the client and the auditee s representatives to make presentations of the findings and to answer specific questions. Audit Tool A good audit tool consists of checklists that are accurate and reliable so that competent auditors using the tool and working independently would reach similar audit findings from evaluating the same audit evidence. A good audit tool should preferably have a qualitative or quantitative measurement of the audit results. GMP ISO Audit Scheme is one such tool which has been widely used in industries for measuring quantitatively the audit results of environmental management systems (EMS). Figure 3 shows that using the GMP ISO Audit Scheme, the overall audit results can be measured quantitatively against the EMS Standard from a scale of 0-100%. Figure 4 shows the detail results for each component of ISO in achieving the overall results in Figure 3. Responsibilities Of Auditors Environmental auditors, whether internal or external auditors, are professionals. As such, proper codes of ethic or principles should be followed. ISO 19011: 2002 Guidelines for Quality or Environmental Management Systems Auditing states clearly the principles for auditing as noted below: Ethical conduct: The foundation of professionalism. Trust, integrity, confidentiality and discretion are essential to auditing. Fair presentation: the obligation to report truthfully and accurately. Audit findings and conclusions should be accurate substantiated with facts and evidence. Due professional care: the application of diligence and judgment in auditing. Independence: auditors should be unbiased and free from conflict of interests. Figure 3 - Audit Score using GMP ISO Audit Scheme 100% 22.7% EMS Standard Areas for Improvement Noteworthy Efforts Evidence-based approach: the rationale method for reaching reliable audit conclusions in a systematic audit process. Audit team members should be competent with the following criteria (based on ISO 19011:2002 for EMS Auditors): (a) Entry qualification the minimum entry qualification is secondary education, though a university/college qualification is preferred. (b) Qualified in specific knowledge and skills these can be achieved via university education or external training. For an environmental management systems auditor, the training syllabus should include: Audit principles and methodology Management systems - ISO EMS Standard Environmental engineering and technology Organisation s operation and general business process Environmental law (c) At least 40 hours of training is needed for the above courses. Environmental related work experience at least two out of a total of five years for those with Baseline EMS Audit Result for AAA Sdn Bhd 5-7 July 2004 cover feature BULETIN INGENIEUR 11

5 Figure 4 - Graph on Details of Audit Score GMP ISO AUDIT SCHEME GMP ISO AUDIT SCHEME - GRAPHICAL PRESENTATION Audited Site : AAA Sdn Bhd Date : 5-7 July 2004 BASELINE EMS ISO AUDI T PERFECT SCORE % 4.2 ISO CLAUSE ` 14.3% 16.7% % % 37.5% AVERAGE 22.7% SCORE PERCENTAGE Infancy Developing Maturing Advanced Desired GMP Environmental Consultants secondary education, and at least two out of a total of four years for those with university/college qualification. (d) On-the job training and experience minimum four complete audits for a total of at least of 20 days. In Malaysia, the Society of Environmental Auditors Malaysia (SEAM) was set up in 1998 to gather the environmental auditors in Malaysia and to provide them with information networks regarding the development of environmental audit and environmental management. Conclusion And The Way Forward While there are many benefits and need for environmental audit, challenges still exists which must be resolved. Some factors that can be considered to ensure success of environmental audit in Malaysia are: Enforce the use of environmental audit through Environmental Audit Regulations by the Department of Environment. Enforcement imposed by the Government will increase the practice of environmental audit. Increase awareness on the importance and benefits of environmental audit, through talks, training, campaigns, promotions and bulletins. Recognise and promote environmental auditors as important professionals in the development of the nation. Provide incentives to organisations practicing good environmental audits this can be done through awards and tax incentives. Train more environmental auditors to encourage the proper application of environmental audit. There are tremendous opportunities for environmental audit to grow in Malaysia. Both the public and private sectors have respective roles to play to ensure the success of environmental audit in Malaysia. REFERENCES 1. Chong H.G., December 1999, Environmental Audit from the Perspective of A Consultant, Bengkel Audit Alam Sekitar, Department of Environment, Malaysia. 2. Chong H.G., March 2004, Environmental Audit Training Manual (Edition 9), GMP Environmental Consultants, Malaysia. 3. International Organization for Standardization, 1996, ISO 14001: Environmental Management Systems Specification with Guidance for Use, Switzerland. 4. International Organization for Standardization, 2002, ISO 1901: Guidelines for quality and/or environmental management systems auditing, Switzerland. BEM BULETIN INGENIEUR 12