Dealing with environmental regulations and agencies: an industry perspective - Business and the Environment

Business Horizons, March-April, 1992 by E.G. Fiesinger

Once upon a time life was simple. Environmental laws and regulations were short and issued infrequently. Environmental departments at plant sites consisted of only one person, and that person usually ran the department on a part-time basis while holding down a regular staff assignment. All managers needed to do to comply with the laws was to sit back and wait for regulations to be issued. Then, after reading and understanding the laws, they simply told plant engineers what to install and how to do so within regulations. They could then attend to the other business of keeping the production units operating. If managers wanted to build or expand a unit, they simply told their engineers to design it and reminded them to keep safety in mind. After the engineers built the unit, the public looked upon new construction as a source of jobs and income for the community.

Today the environmental climate is different. Laws and regulations are incredibly long and complex. In fact, the newly amended Federal Clean Air Act is 355 pages long-299 pages longer than the 1970 Act. Legal interpretation is required to correctly follow the regulations; they no longer lend themselves to plain readings by managers or engineers. Environmental department and operating department permit files now often fill entire rooms; liquid waste is defined as solid waste; and hammers are now drop-dead dates-companies must comply by a certain date or they will cease to operate.

Plant environmental departments now need numerous employees to run air, solid waste, and water departments, to clean old sites, and to maintain data bases and waste minimization programs. Inspectors visit plan sites frequently to check control devices and permit records. It now can take months to obtain a permit to construct or operate assuming the firm has survived the public notice and comment period for proposed construction and that there are no demonstrations at the front gates.

Coping with all the new federal, state, and local environmental laws and regulations now requires a new approach. No longer is it adequate to wait until a regulation is issued to learn what changes are needed. To survive in today's environmentally sensitive atmosphere, industry must be proactive. Business leaders must work with regulators and environmentalists to present and negotiate their cases. However, there are both good and bad ways to accomplish this. How can negotiations be conducted to ensure that all parties either remain winners or at least feel they were able to voice their opinions and be heard?

ESTABLISHING A CREDIBLE PRESENCE

Before someone can effectively present a case that regulators will listen to and accept, a good base must first be established. I call this process "establishing a credible presence"-getting to know the regulators and giving them a chance to get to know you so that you are not perceived as overbearing. This can be accomplished most effectively by taking the relationship slowly. Establishing a credible pressence with an agency takes time. Do not attempt to accomplish everything in one night. Nothing is worse than trying to work with agency personnel who feel threatened by your attitude.

Concentrate at first on seeing and being seen; do not feel that you always have to ask questions or volunteer information; take the time to learn who has the authority, who has the information you need, and who is willing to take the time to talk to you. If state or local regulatory agencies have periodic meetings open to the public, take the time to attend and learn the agency's method of conducting business. Also, obtain a copy of the agency organization chart, as it is often helpful in putting unfamiliar names and faces together. Establish a dialogue: pick and choose your questions carefully, as well as your timing in talking to agency personne.

NETWORKING

To be effective in dealing with the agencies, one must become knowledgeable about regulatory processes and what the public concerns are. With this knowledge, one can punctuate arguments with examples the regulators can understand. Additionally, it can be advantageous to approach the agencies as a group of companies to make your point stronger. However, keep in mind that comments from a group representing 80 to 90 companies often count as only one comment in the agency's final analysis-this is called the "bean counting" syndrome.

Still, talking to employees in other plants or companies is necessary if one wishes to learn what is going on in the overall regulatory environment. Working through industry trade groups and professional organizations effectively accomplishes this because many diverse views can be introduced while developing comments without triggering antitrust or collusion concerns. Additionally, all of these groups have legal counsel that review proposed testimony, comments, and press statements to ensure that federal or state antitrust laws are not violated.

On the national level, the Chemical Manufacturers Association (CMA) represents major chemical companies, the American Petroleum Institute (API) represents the refining industry, and the Synthetic Organic Chemical Manufacturing Association (SOCMA) represents smaller specialty chemical producers. On the state level, organizations such as the Texas Chemical Council (TCC), Louisiana Chemical Association (LCA), and the Midcontinent Oil and Gas Association (TMOGA) represent the concerns of industry. Locally, various chambers of commerce and councils of governments (COGs) represent cities and towns in their areas. However, one must realize that these national, state, and local organizations often have broader agendas (such as taxes and economic development) than simply tracking and influencing environmental issues.