Category Archives: consultants

The dangers of environmental indices

There is this axiom that says: “If you can’t measure it, you cannot manage it”. That is true to a certain extent. But the flip side of this axiom is that if you measure the wrong thing, you can end up with a disaster.

There is a big refinery in the U.S. that offers a classic case in point. After its corporate office acquired another major refinery in the 1990s, senior management ordered a significant budget cuts across the board. This impacted the maintenance budgets in all of its refineries. At the same time, the CEO instituted personal safety measures throughout the company. One well known example was that all employees must carry their hot beverages in closed cups. This was to avoid scalding of employees from spilled hot liquid.

The company also instituted a “Getting Health, Safety and the Environment Right” policy – known as GHSER.

The company started tracking OSHA incident rates as a key safety metric at its refineries. However it did not track Process Safety Management key performance indicators such as closure of action items, equipment inspections, and relief valve testing. These were not incorporated into the GHSER.  At one of its refineries, the OSHA incident rate was very low in the years leading to 2005. At the same time, equipments were in a continuing state of deterioration due to the reduction in maintenance budget. Personnel working with the equipment at the refinery sensed that a major accident was about to happen any time. In 2005, a production unit at the refinery exploded and killed 15 persons and injured hundreds.

Management thought plant safety was doing fine based on the personnel injury rate. It was measuring the wrong metric.

Many companies track performance using metrics such as kilowatt-hour, water consumption and wastes generated per unit of production. These indices can be very helpful as a trend line within a specific production unit over time. They can provide managers valuable information on how well the unit is working over time. Any deviation from the normal trend line will alert operational staff to look for underlying problems.

Unfortunately, these indices are not very useful when they are applied across the board to different productions at different locations.

Yet some some managers make the mistake of grouping all these indices and distilling them into one single number and try to rank a company’s overall environmental performance based on such singular index. They call them “green index” or “compliance index” with the notion that a company with a higher green index is performing better than others based on some hypothetical and arbitrary environmental ranking scale.

Such practice is misleading and can be downright dangerous. A company’s environmental performance comprises many varying factors. To assign a single value or index to represent a company’s environmental performance would be akin to the three blind men describing an elephant by touching different parts of the beast. One describes the elephant as a long thick hose; another describes it as a solid stump and the third describes as a piece of large flapping fan.

They are all correct in parts and all wrong with the complete picture.

The impetus of condensing environmental performance into a single index comes from consultants who are trying to sell services to customers in the guise of “making life easier” for their clients. So they concocted these numbers which are misleading and not very useful.

There was one young consultant in Canada who suggested that these single digit indices would help an environmental auditor. The auditor could just review these indices instead of having to review reams of raw data and reports. That was one consultant who has no idea on how to perform an environmental audit.

There are also software vendors out there who promote complicated programs that purport to provide environmental indices in the guise of “efficiency”. Very often, we find the purchasers of these software programs being reduced to data entry slaves or they are tied into long term data maintenance contracts. This is a clear case of “Caveat Emptor”.

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Not all attorneys are the same

There was a discussion in LinkedIn a few days back when an environmental consultant was lamenting openly why the federal government was immune from federal environmental laws!! When asked who told him that nonsense, he proudly announced that his authoritative source is an attorney (so it must be true). The attorney also told him that the federal government could pollute its own land due to sovereign immunity and anyone can do what he wants to his own property. Just imagine that! So we have a clueless attorney advising an even more clueless environmental consultant who ought to know better. We figure the attorney must be an old real estate fellow who had never heard of CERCLA and was in a coma when sovereign immunity was done away with many years ago.

I have been to conferences where I posed a difficult question (about disclosure) and someone would say: “I will check with my attorney”. It was as if the attorney has all the answers – and correct answers at that. If that were the case, there would not be a robust judicial system in this country where two attorneys enter a courtroom and out comes one winner.

When I worked for a multinational, our law department (30 plus corporate attorneys) rarely handled any specific EPA or OSHA cases. They went straight to outside counsel. And righty so.

It is important  to understand that not all attorneys are the same. It is a simple enough principle (attorneys and engineers all have their own specialties within their own professions) and yet it is often overlooked. You should no more hire a civil engineer to design a refinery than to hire a chemical engineer to build a dam.

Always do your own due diligence before accepting an attorney’s words or anyone else’s. Or else you are going to look like that consultant in LinkedIn who was misled into thinking sovereign immunity still exists for federal agencies.

Do you really know your consultant?

I came across a discussion panel in LinkedIn recently that was very interesting. There was this environmental consultant who was asking people questions like:

How do you prepare a Health and Safety Plan? Can someone send me a copy because I have to review a Health and Safety Plan for my client? I don’t know how to write a report. Can someone show me? He also posted on the same discussion panel his background which I show below unedited (bad grammar and all):

“I have MS in Environmental engineering. As far as experience,i dont have any,But i feel confident in doing this job. my company is a very small one with 7 employees.as far as training is concerned,no training is provided to me.i just have to review the previous reports,understand it and write a report based on the site conditions and other data.final correction is made by my boss before sending to the client”.

He asked a lot of questions but he never participated in any discussion of any kind. Why? Because he has neither the experience nor the knowledge to engage in any discussion. He is like a baby chick sitting in a nest with its mouth wide open waiting to be fed by his mother.

This recent college graduate works for an environmental consulting firm in New York and is being billed out as a Project Manager to the clients!

The teachable moment is this: Before you hire a consulting firm, insist on finding out who is going to be working on your project. Is it  going to be a recent graduate who has no experience? Is he going to be learning on the job at your expense? Or does the firm provide training to this employee. Many consulting firms will tell you that they will be assigning the best and brightest engineer to your project in their proposal to you. But as soon as you award the contract, you find out that it is a recent college graduate that is learning at your expense.

Always insist that the firm gets your written approval before they make any assignment changes in your project. Insist that you talk to that engineer directly.

On any given day you can find advertisement in the local newspapers or the Internet from large environmental consulting firms looking for “environmental professionals” with 0 to 2 years of experience.

Caveat emptor is the operative phrase here. Are you really getting what you are paying for?