The best defense against pollution - environmental management; includes related article

Nation's Business, Nov, 1991 by Bradford McKee, Eric A. Hillenbrand

Every dollar that Al Karg spends in his job as an environmental manager is an expense that brings in no income. So he is always looking for ways to spend each dollar more effectively.

Karg, employed by Diceon Electronics Inc., in Nashua, N.H., tracks the amounts and costs of chemicals the firm uses to clean waste water. This enables him to see if an alternative chemistry--ideally, one that would work with less-toxic results--would be more cost-effective. Recently he found a chemical process that cuts the company's water-treatment costs by more than two-thirds, for savings of about $83,000 a year:

Also, the new process saves Diceon about $15,000 a year in waste-handling fees. Because the more-concentrated sludge generated by the new system contains more reclaimable metals, Karg explains, the waste-removal company charges Diceon $200 per ton, or about half the regular fee, to take it away.

As environmental-compliance costs go up, a lot of small and midsized companies, like Diceon, are viewing waste--hazardous or not--as inefficiency, and they are taking steps to prevent it. Small businesses are finding that preventing pollutuion through environmental management can pay for itself quickly and bring some unexpected benefits.

In many companies as recently as a decade ago, Karg says, "management didn't concern itself with environmental affairs." Such matters generally were left to engineers as long as managers and directors "didn't get bothered by the lawyers," he says. Today, however, a company's environmental performance is a major part of its public image, and corporate officers can be held personally liable for their companies' environmental crimes. The new provisions of the Clean Air Act, for instance, raise "knowing" or "intentional" violations to felony offenses punishable by prison terms of up to 15 years and fines of up to $1 million. (For more on penalties for violating federal regulations, see "A Criminal Trap For Businesses," in the September Nation's Business.)

Enforcement is spotty, but smaller companies increasingly are targets of environmental regulators, says Patrick Parenteau, a Portland, Ore., environmental attorney and a former official of the U.S. Environmental Protection Agency. In addition, most major environmental laws allow citizens' suits against polluters on behalf of the government.

Major industrial sources of pollution largely have adopted many of the latest environmental controls, Parenteau says, but air and water quality still fall below what is acceptable under federal law in many regions. Thus "the regulatory juggernaut is moving toward smaller and smaller sources" of pollution, he says. Small businesses are finding the best way to cope with this trend is to prevent pollution in the first place.

Preventing pollution usually starts with a physical examination, or audit, of a company's environmental status. The audit begins with a survey of the firm's equipment, production process, paperwork, and waste-handling methods. If an audit turns up toxic spills, leaks, or waste, the consultant typically recommends remediation, or cleanup.

An audit can be central in improving housekeeping and stopping pollution at its source--and in helping a company meet tougher environmental standards, as a North Carolina textile plant discovered. United Piece Dye Works Ltd., in Edenton, found itself under strict new rules for nitrogen and phosphorus discharges in 1983. North Carolina's rigid new limits were meant to stop blooms of algae in the nearby Chowan River. Harold Lloyd, technical director of the plant, says the plant was "considerably above" the new pollution limits.

Lloyd knew of several ways to treat the factory's discharge to take out the phosphorus content, but all were "complicated, costly, and hard to maintain," he says. He initiated an audit at his plant, seeking substitutes for phosphorus in the textile dyeing and finishing process. Replacing phosphate chemicals with nonphosphate substances reduced the factory's phosphorus discharge sevenfold, bringing the firm into compliance at no major cost.

Lloyd says he had to educate his vendors about the substitute materials he needed. And trials of the new chemicals were not problem-free. "There are areas where [the new process] is a compromise--the best products happen to be phosphates--but we just had to do the best we can," he says. "We found that eliminating the source of [pollution] is better than trying to doctor the problem."

Sometimes a company finds that changing the materials used in the manufacturing process isn't enough to prevent pollution, and more-radical--and even financially riskier--changes must be made in the production process itself.

The Robbins Co., a small plating firm in Attleboro, Mass., had been cited in 1985 by the state's Department of Environmental Quality Engineering as "a major polluter" along the Ten Mile River, says the firm's environmental manager, Paul Clark. The company had antiquated pollution controls, he says, and when it would dump waste water laden with heavy metals into a nearby brook, it often violated the terms of the discharge permits it had obtained from the state environmental agency under the Clean Water Act. (A violation of the federally mandated permit occurs when testing--done by the company or by any interested party--shows that pollutants discharged into a body of water exceeded the levels allowed in the permit.) Robert E. Chatel, president of Robbins, says the company believed "we were doing everything we could to comply [with environmental regulations] at the end of the pipeline, but it was increasingly difficult."