Just exactly what is “used oil”?

Used oil is defined as any petroleum-based or synthetic oil that has been USED. When you use oil, impurities or contaminants such as dirt, metal scrapings, water or other chemicals can get mixed in with the oil. such impurities may make your oil less effective as a lubricant for example.

Some examples of used oil are engine oil, transmission fluid, refrigeration oil, compressor oils, metal working fluids and oils, laminating oils, electrical insulating oil, industrial process oils, etc. Waste oil is not used oil. Oil that has been spilled is not classified as used oil because it has not been used for its original purpose.

You should recycle your used oil by re-conditioning, re-refining or burning it for energy recovery. EPA has specific management standards that you should comply with if you handle used oil in your business. You should label all containers and tanks as “Used Oil”. Keep these containers in good condition. You are not permitted to store used oil in lagoons, pits or surface impoundment.

If your used oil is mixed with hazardous waste, you may have to dispose of the mixture as hazardous waste. So make sure you store your used oil away from other hazardous wastes.

Always check with your state agencies because they may have more stringent used oil regulations.

Surviving in lean times for environmental managers

I came across an excellent articleon this topic written by my friend Richard MacLean. It was published in the 2009 summer issue of The Environmental Quality Management Journal. Richard touched on a number of corporate staff reduction issues and offered some common sense recommendations. It is a must read for all environmental managers.

The best part of his article was hisCase Study. Here is a recap. A corporate EHS director was facing an order from senior management to cut staff by 25% across the board. The across the board cut is a somewhat cowardly way of doing it as Richard intimated and I fully concur. The director – with Richard’s help – was able to make a case for a LARGER budget to an influential corporate attorney and garnered her support. She went to bat for the director before the management board and needless to say there was a happy ending.

As someone who has worked in the corporate world for many years, I can attest to the wisdom in the approach described in the Case Study. As an environmental manager, you ALWAYS want to have the corporate legal department on your side. ALWAYS.

It is really not that hard to do even though you may not have a Harvard law degree. Why? Because environmental managers deal with liability every day. Attorneys understand liability. Senior management fear liability. So if you have those attroneys on your side, senior management will start to fear you too.

To be successful, you have to do your homework and be MORE knowledgable about environmental issues than your attorney colleagues. That’s not too hard to do either because many corporate attorneys are not environmental attorneys. But they do know liability! It is their job to minimize corporate liability. So get to know these folks. Do not be afraid of them. Do not let them treat you like a “janitor in a suit”. Take them to the plants. Keep them updated on any on-going environmental issues.

When you are traveling with them, stay at the SAME expensive hotels as they do. Hell – If that hotel is good enough for them, it is good enough for you. The reason you must stay at the same hotel is that it will give you more time to offer them environmental advice. Some call it bonding. That was my excuse and my boss (a vice president) never once questioned my expensive hotel bills. Take them out to expensive dinners on your expense account. They love that. A side note: First year law school teaches law students how to spot expensive restaurants in any town.

In more ways than one, survival in the corporate world is like jungle survival. If you look and act weak, you will be eaten or cut. Try to maintain a certain level of mystique about your work. The Vice President of Manufacturing does not need to know or understand everything you do. No more than you need to know in excruciating details how he makes his widget. All he has to know is that you are helping his plants stay in compliance or save money AND you are the go-to person when something bad happens with the environmental agencies or when he needs an environmental permit in a hurry.

A true story: A newly promoted vice president once asked me to give him an engineering book on waste water treatment design because he wanted to be an expert on it overnight. Those were his exact words and he was a fool. And he did make a fool of himself the next day at the management board meeting. He had one of those MBA degrees.

On a slightly political note: My friend Richard stated in his article that “the George W. Bush era only deepened the assumption that environmental concerns were “under control” and represented a low business priority”. There are no truer words written than those. But then Richard ended his otherwise excellent article by saying that the (regulatory) “demands will only become more difficult in the future, especially if the Obama administration fulfills its promise to enact additional environmental mandates.”

Well – could it be that the Obama administration is simply trying to reverse 8 long years of neglect and delusion? What do you think, readers?

Corporate view of safety program vs environmental protection

As someone who has seen up close and personal how senior management views its health and safety program and its environmental protection program, I would like to share some of my thoughts here with our readers.

Corporate health and safety program gets much higher level of management support for a number of reasons. Cost accounting is the main one. Performance of health and safety is monitored at the corporate level through workers compensation costs. A program that drives down the workers comp costs is viewed as an effective one. And rightly so. When the management board sees an 80% reduction in workers comp cost in a few years after implementation of a safety program, it is going to continue to support it with large budgets and manpower.

Safety performance can be reduced to dollar and cents.

Environmental performance, on the other hand, is much harder to track. Environmental protection budgets are often hidden in O&M. The benefits are even harder to quantify – as opposed to a workers comp cost. An environmental program that is working for the company means the company is not being fined. There isn’t a line item in the monthly budget to senior management that reflects that. On the other hand, senior management only knows that the environmental program has failed when it is hit with a big fine. In other words, senior management does not see a need to maintain or improve the environmental budget until something bad happens.

The key really lies in environmental cost accounting. If a company’s accounting system can show management the financial benefits it is getting from its environmental program, management will continue to support it in the same manner that it is supporting the safety program.

Unfortunately, not too many companies have such an accounting system.

Good apples vs bad apples

We have had some lively discussions about EPA’s self-audit policy lately. The topics of good apples and  bad apples came up in the context that EPA does not trust the bad apples. These are the companies that have a bad reputation and a long history of non-compliance.

One of observations I have made in my seminar business over the past 10 or more years is that bad apples never send their employees to training classes. They never want to spend the money to train their employees. And that’s a main reason why they are bad apples! If their employees don’t know what to do in their daily routines, they are going to get into trouble with the regulatory agencies. It is the age old question that dishwashing detergent salesman faces all the time: Do I sell my detergent to people with dirty dishes or people with clean dishes?

The answer is ….(drum roll please)…..: You sell detergent to people with clean dishes. People with dirty dishes don’t buy detergent. That’s why they have dirty dishes.

If you are an environmental manager with a bad apple, you have a long road ahead of you. It takes a long long time for a bad apple to be converted into a good apple in the eyes of EPA. You need to do everything you can to resist management’s tendency to delay, procrastinate and obfusicate when it comes to environmental compliance. There are  managers who still think that for every year that they delay compliance, they save a year’s interest on the expenditure. These are the same people who have never heard of EPA’s economics benefits portion of the civil penalty. These are also the same type of people who think becasue of their elevated position in their company they are somehow “immune” from prosecution for environmental crimes.

If you know what you are about to do is the right (and legal) thing to do, go ahead and do it if you can. Don’t ask for permission from management becasue you know the answer is going to be no. Admiral Grace Hopper used to say: “It is easier to ask for forgiveness than it is to get permission”. There is some truth to it.

The transition from bad apple to good apple generally takes a few years. You have to demonstrate to the agency through your action that they can trust you when you tell them you are going to do certain things. One way to do that is to always respond to the agency in a timely fashion. Always meet any deadlines that you have with the agency. Never play mind games with the agency. Make sure you hire the right kind of consultants to represent you before the agency. You also need to protect yourself from personal liability if your company is a bad apple. Here is an article I wrote recently on this topic.

We cover all of these ideas and many more in our 2-day seminars. <—-occasional shameless plug here.

Harvard/Georgetown University Study on EPA Self-Audit Policy

One of our readers made the comment that a recent Harvard/Georgetown University study on EPA’s Self-audit Policy shows that it may not be good for all companies. 

Below is a brief summary of the Harvard/Georgetown findings from the reader’s website:

“Our results … demonstrate that Audit Policy participants with clean past compliance records improved their environmental performance by reducing their accidental releases of toxic chemicals to the environment.  We also find that regulators rewarded these effective self-policers with an inspection holiday.  By contrast, bad apple self-disclosers did not improve their performance compared with similar non-disclosing firms.  We find no evidence that regulators altered their scrutiny over these ineffective self-policers.

… it turns out that regulators are quite adept at … sorting the good apples from the bad.  We found that regulators had accurately parsed these two groups of self-disclosers, rewarding the former but not the latter with inspection holidays.

… self-disclosing firms on average reduce the number of abnormal events resulting in toxic chemicals being released to the environment.”

____________________________________________________________________

My comments on this study are as follows:

The study is flawed in its basic premise. It presupposes that a company undertakes the self audit because it expects an “inspection holiday” AND improved performance. Quite the contrary – the MAIN focus and reason for a company to go the self-audit route with EPA is to secure substantial penalty waiver and avert possible criminal sanction in the face of uncovered environmental violations. The subsequent improvement in environmental performance is a natural byproduct and bonus as a result of the remedial action following the self  disclosure.

The study also finds out that “self disclosing firms on average reduce the number of abnormal events”. Well – the reason is very simple. They have few is because they perform audits! They discover small problems before they become major abnormal events. Nothing new here. That’s why people do environmental audits.

As to the “inspection holiday” – you do not need a Harvard study to discover that a regulatory agency carries out more inspections on the bad apples. It is common sense and it happens in the real world. Agencies generally do not waste their limited resources on good apples. Why would they?  They can get a much larger return by going after the dirty companies. Again, nothing new here.

 

EPA’s self-audit policy – a case study

Under EPA’s Audit Policy – finalized on April 11, 2000 – if a company discover environmental violations through its own voluntary audit, it can report the violations to EPA within 21 days of discovery and seek significant reduction in civil penalties from the agency. The company must meet nine conditions to be eligible for a 100% reduction of the gravity portion of the civil penalty. (More on the gravity portion later).

The 9 conditions are:

1. The audit must be systematic.
2. It must be voluntary.
3. Prompt disclosure of violations within 21 days.
4. Audits must be independent of permit or settlement conditions.
5. Correct violation within 60 days.
6. Prevent recurrence of violation.
7. No repeat violations.
8. No serious harm to human health or environment.
9. Cooperate with agency.

EPA’s civil penalty polciy has two portions: Gravity and economic benefits portions. The gravity portion of the civil penalty refers to the part of penalty that pertains to how much damage is done to the environment or the severity (gravity) of the violation. The economic benefits portion is the amount of money the violator has saved by not being in compliance.  For example, if you have been dumping your toxic wastes into the river for a year, you have saved a certain amount of money by not having to pay for the proper disposal of those wastes. The economic benefits portion of the civil penalty would be the amount of money you have saved that the agency wants from you.

Click here for a list of frequently asked questions about EPA’s self-audit policy.

On april 30, 2004, subsidiaries of Koch Industries purchased 40 manufacturing plants from DuPont. Twelve of these facilities are located in the United States. The company entered into a corporate-wide auditing agreement with EPA under EPA’s self-audit policy and uncovered over 680 violations of water, air, hazardous waste, emergency planning and preparedness and pesticide regulations. The company disclosed these violations in accordance with EPA’s  audit policy agreement. 

As part of a Consent Agreement, EPA waived the gravity portion of the civil penalty but fined the company $1.7 million as the economic benefits portion of the civil penalty. This would be the amount of money EPA estimated the company would have saved by not being in compliance from the time it acquired those 12 facilities to the time when all the violations are corrected.  The company also agreed to spend between $240 and $500 million to correct all the environmental violations at those facilities.

This is a classic case of how a large company can take advantage of EPA’s self-auditing policy to start over with a clean slate. By agreeing with EPA to conduct a self-audit, the company averted the gravity portion of the penalty and paid only $1.7 million for over 680 violations. Without the self-audit agreement beforehand, the company would have to pay a substantial gravity portion of the civil penalty in addition to the $1.7 million for economic benefits. 

This particular case has helped EPA to develop a separate self auditing policy designed specifically for “new owners” of facilities. If you acquire a facility and conduct a voluntary self-audit of that facility within 9 months from the date of acquisition, you may be eligible for waiver of the gravity portion of the civil penalty under the “new owner” policy which relaxes some of the nine conditions cited above.

You will still be liable for the economic portion of the civil penalty.

Why don’t we wash our rental cars?

Have you ever wondered why we never wash our rental cars before we return them to the rental company?

Because we don’t own the rental cars!

The same goes with writing environmental plans. If the employees who are responsible for implementing the plan (SPCC, stormwater, RCRA contingency, etc.) have not been involved in the development and preparation of the plans in any way, they are not going to have ownership of the plans and they are not likely to implement them.

Remember: Many of these plans (especially SPCC) are perfromance-based. That means if they are not implemented as written, you can end up with a violation.

Get your employees involved in some fashion before you finalize your palns. Have them review the draft. Get them involved.

How to work with your plant folks

This blog gives you some practical ideas on how to interact with your colleagues at the plants. Let’s start by taking a hard look at the plant manager. The degree to which your plant maintains its environmental compliance status depends largely on the attitude of the plant manager.

There are basically two types of plant managers. The first type understands the need to stay in compliance and will work with you to achieve that goal. The plant managers in this group understand the legal aspects of environmental compliance and will make sure that his staff works with you to make sure that the plant stays in compliance. Fortunately, most plant managers fall into this category. The second group of plant managers is made up of those people who consider environmental compliance a nuisance.

With the first group of plant managers, your work is fairly straightforward. All you need to do is to make sure that the plant personnel get the necessary corporate support to fix any deficiencies. Make sure they have the necessary resources to stay in compliance. As you go thorough the facility and notice a non-compliance situation, you should sit down with the plant manager or person in charge and go through what needs to be fixed. Your immediate focus should not be on preparing a plant visit or audit report that details all the environmental problems. The focus should be on getting the problems fixed as quickly as possible. For example, one of your central roles may be to help the plant prepare a capital appropriation request in order to obtain the necessary funding from corporate to get the issue resolved. If your financial resources are not sufficient to tackle all the problems, prioritize them and work on the ones with the most significant human health or environmental impact first.

By the way, once the problem is corrected, make sure you document the efforts your company has undertaken to resolve the issue. It never hurts to document your good faith efforts.

A few words of caution here. Try not to do everything for the plant even though it will make you real popular at the plant. You want to make sure that the plant personnel have ownership of any plans or documents that are specific to their operation. Support them by all means – but don’t do all the work for them. For example, you want to make sure that they are involved in the development of their Spill Prevention and Control Countermeasure Plan (SPCC), their hazardous material inventory form (Tier II report), their Stormwater Pollution Prevention Plan, or their hazardous waste contingency plan. Most of these plans contain plant-specific information and documented inspections. Unless the plant personnel are involved in the development of these plans, they are not likely to have ownership and nothing will be done by way of follow-up or implementation.

For example, the RCRA contingency plan requires the facility to identify an on-site emergency coordinator and to list where hazardous wastes are accumulated. Tier II report requires the plant to show where they store certain hazardous chemicals. Since they know where they store their own chemicals, it makes sense for the plant to prepare its own inventory. It is fine to have outside consultants come in to assist the plant personnel in preparing their hazardous waste contingency plan or spill prevention plan. Just make sure the plant personnel are involved in the process. Otherwise, the plan will end up being just a nicely prepared document prepared by some outside consultants that sits on the plant manager’s bookshelf. No one will ever look at it, update it or implement it because there is no ownership at the plant. And when the agency inspectors come by to inspect the plans, they look for evidence of implementation. For example, if the plan calls for weekly inspections, the agency wants to see log book entries that demonstrate that. The inspectors will always check to make sure the plans are current and up-to-date.

The second group of plant managers looks upon environmental compliance as a hindrance to meeting their production goals. These folks are totally focused on numbers – meeting their production quotas and getting their bonuses – and they will do just about anything to circumvent environmental regulations. Worse yet – some of these managers also take an adversarial approach to the regulatory agencies. They see everything as “us versus them”. If you sense that the relationship between the plant management and the local agency staff is somewhere between antagonistic and hostile, you need to bring that situation to a halt as quickly as possible. Let senior management at headquarters know about it as well. It is a sad but true fact that many major enforcement actions can be traced back to a poor working relationship between the regulator and the regulated.

Interestingly enough, very often you will find these same plant managers pay a lot of attention to workers’ injuries while totally ignoring environmental compliance issues. The reason is quite simple. The monthly costs of safety non-compliance can be easily tracked by senior management through incident rates and workers comp costs. Environmental non-compliance costs, on the other hand, are much harder to track. These costs are often hidden in overhead and maintenance. As a result, senior management at the corporate level often set safety goals for their plants and reinforce them with safety performance bonuses for the plant managers. Lower incident rate translates to a larger year-end bonus. The attitudes of many of these plant managers are then shaped by such financial incentives and that explains why they pay much more attention to safety concerns than environmental issues. If you find yourself faced with such a situation, what you want to do is to work closely with safety manager. Try to incorporate some environmental training at the same time when you or your safety counterparts do safety training. For example: When you are doing OSHA’s hazard communication training, tack on at the end a session on emergency response training for those employees who handle hazardous wastes.

With this second group of plant managers, you will also need to make sure that the plant manager’s supervisor is informed of all non-compliance issues and extra efforts must be made to ensure follow-up. You want to find someone up the management ladder – above the plant manager’s level -who is cognizant of the need to stay in compliance. You will need the support of this senior corporate officer to help you put your program in place at the plant. In other words, you need a “champion” who can overrule the recalcitrant plant manager.  If such a person does not exist within your organization, you may want to think about moving on to another company.

You also need to be vigilant in making sure that you don’t become party to a “bad decision” making process. For example, if a plant manager should ever suggest to you or his staff in your presence that they “alter” or falsify a wastewater Discharge Monitoring Report or ship hazardous wastes to an unlicensed facility, you need to make your objections known in a highly visible and documented manner to everyone involved –  including the plant manager’s supervisor. The worst thing you can do for yourself and your company in this case is to “go along in order to get along”. In a highly regulated industry, silence on your part can be easily interpreted by the law enforcement agencies to mean acquiescence.

After all, you are supposed to be in charge of the environmental programs, aren’t you?

How to use EPA’s RCRA online database

There is a little known database in EPA’s website that addresses hazardous waste management issues. It is the RCRA-online database.  It stores hundreds of guidance documents prepared by EPA over the program’s 29-year history. If you go to the database and type in your keywords, you may just find a few guidance documents prepared by EPA on your topic.

Below is an example of an EPA guidance document on the subject of representative sampling under RCRA:

A company wanted to dispose of a large number of fluorescent tubes in 1995. It sent one spent fluorescent tube to a laboratory for TCLP (Toxic Characteristic Leaching Procedure) analysis. The result came back indicating that the one tube “passed” the TCLP test – meaning none of the regulatory levels for the 40 chemicals on the TCLP list was exceeded. The company wrote to EPA to ask if it could then dispose of its entire inventory of spent tubes as non-hazardous waste.

EPA wrote back and told the company that the one tube that was tested was not a representative sample of the entire inventory of spent tubes.  The sampling had to take into account the different brands, the various ages of the tubes, and different wattages, etc. The EPA letter is one of the Faxback documents (Faxback 11907) that you can obtain from RCRA online.

To fight or not to fight …that is the question

In my last post, I noted the efforts by industry to work with government to forge a solution to the global warming problem. It dawned on me later today that I have a compelling story from my previous life to tell. 

I joined StarKist Seafood in 1989 as its one and only corporate environmental manager. The H.J. Heinz Company owned StarKist at that time. The day after I joined the company, I found out that EPA’s Region 2 (New York) and Region 9 (California) had issued orders to the company to comply with its wastewater discharge permit conditions at its tuna canneries in Puerto Rico and American Samoa – the world’s two largest tuna canneries at that time.

Tuna wastes are very high in organics and nutrients (phosphorus and nitrogen). The wastes comes mainly from the thawing of frozen tuna and they contain high concentrations of blood an dfat. These wastes were discharged into the Caribbean Sea in Puerto Rico and Pago Pago Harbor in American Samoa after primary treatment. EPA in both regions – particularly Region 9 –  were very concerned about entrophication of the receiving waters.

Region 9 came to StarKist and strongly suggested that the company construct a 2-mile long pipeline in the Pago Pago Harbor in order to carry the tuna waste water to a much deeper portion of the harbor to allow for diffusion and dilution.

The  General Manager at StarKist -prior to my joining – was a British engineer who believed that the company should always fight with EPA and delay the process for as long as possible. His philosophy was that for every year delayed, the company would save so much money by avoiding the expenditure. He came up with all kinds of reasons for not extending the outfall: (1) It was too costly. (2) It would cost the company $7 million and the company simply could not afford it. (3) The company might have to close the plant in Samoa and throw thousands of people out of work on the small island.

While he was making such argument to EPA, the CEO of Heinz was flying around the world in his opulent private corporate jet. The CEO at that time was also ranked as the highest paid CEO in America – pulling in over $60 million a year.

So it was not hard to understand why EPA was not buying this British engineer’s financial hardship case. EPA finally issued Administrative Orders to StarKist and threatened to take the company to court to compell its compliance.

The British engineer was fired by his boss for talking back to him (in an unrelated case) just before I joined the company.

Faced with EPA’s enforcement order, I contacted several pipeline contractors in America and New Zealand and obtained bids on constructing a 2 mile long pipeline to carry our tuna waste away from the shallow harbor. The cost turned out not to be $7 million as claimed. It was more like $1.5 million. I also hired a competent ocean engineering firm in Hawaii and conducted an engineering feasibility study that demonstrated that the pipeline would meet EPA’s objectives.

With this information, I went to our Vice President of Operations and told him that he had two options: He could continue to fight with EPA and delay the construction and face severe penalties from EPA and a court-ordered construction project that would be much more expensive than $1.5 million. Or we could go ahead and build the pipeline and begin to comply with the law of the land.

Much to his credit, the Vice President went along and we began construction of the outfall.  We completed the pipeline 3 months ahead of EPA’s schedule despite losing two weeks of construction time due to a typhoon.

The moral of this story is that we did not let EPA dictate the details of the pipeline. We did not fight and try to prolong the inevitable. We simply did it our way but in such a way that met EPA’s objectives.

Everyone was happy at the end.