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TORONTO-Environmental management should be an integral part of a business plan rather than an adjunct to one, an expert advises.
Also, every Canadian company should have environmental management and environmental emergency plans in order to protect its bottom line and reputation, panelists said.
A company's goal should be to have the environmental processes "hidden" within the overall business practices, said Paul Farrow, vp with Arthur D. Little of Canada Ltd. in Toronto. Mr. Farrow spoke at the Canadian Risk & Insurance Management Society's conference in Toronto earlier this month.
He said the first step in developing the plan is to assess three factors: Which areas of the company are vulnerable to an environmental incident, what effect an incident would have on the environment, and what the risk to the company would be.
The risk manager must work with corporate departments representing each step in the production, marketing and sales functions to fully assess the risks, he said.
One critical aspect companies sometimes overlook after implementing the plan is to review the plan and use it not just to fix the problems that occur but to eliminate causes of problems, he said.
Though it sounds like a long, difficult process, it need not be that involved, Mr. Farrow said. Building an elaborate system "is not the complete answer," he said. An independent bureaucracy will not solve the company's environmental concerns, he said.
"You don't have to be certified by ISO to have an effective environmental management program in place," he said. The International Standards Organization is a Swiss-based organization that has published environmental standards and certifies corporate environmental management systems (BI, Nov. 11, 1996).
Having a plan provides numerous benefits. Not only could a plan help lower insurance premiums and lower workers compensation benefit costs, but it will provide a competitive advantage compared with other companies that don't have plans.
Mark Madras, an attorney with Gowling, Strathy & Henderson in Toronto, said a company should have an environmental emergency response plan in place as well as a environmental management plan. The emergency plan is key to making smart decisions quickly under stressful conditions, he said.
A few companies have such a plan, and many more should implement one, he said, as "there are many substances out there that when burned or spilled will have environmental consequences."
In Ontario, a company has a legal obligation to respond to a pollution incident and should not strictly rely on public authorities to clean up, Mr. Madras said.
"Remember it's your mess," he said, so "if the fire department does not respond correctly, the corporation is liable."
A company that decides to contract with an outside environmental cleanup company rather than handle problems in-house should not wait until an incident has begun to hire an outside contractor, as that's generally too late, he said.
The environmental emergency plan also should include deploying legal and public relations teams. The lawyers should be present at the accident site to deal with the public authorities and gather evidence for defending future suits or criminal prosecutions under Canadian law.
Public relations experts should be hired to deal with the media in order to address the public's concerns.
After a spill, the company also should assess who might sue or be sued. And the insurers involved must be notified. All activities and instructions must be put in writing with an eye toward future litigation, he said.
Companies also should think about how to pay for cleaning up the accident. Believing insurance will take care of the financial aspects is a myth, said Kenneth Murphy, senior vp and practice leader for Aon Reed Stenhouse Inc. in Toronto.
Insurance is one part of the financing strategy, he said. Some other ways include using the capital markets or obtaining a loan.
Linda Stojcevski, manager-health, safety and environmental loss prevention for Speedy Muffler King Inc. in Toronto, moderated the session.