By: Amy Bauer
Continuous compliance with environmental laws and regulations is time-consuming, costly, and challenging. Some companies incorporate third party environmental, health and safety (EH&S) audits as part of their overall compliance program. EHS Support LLC (EHS Support) recently attended the National Association for Environmental Management (NAEM) 2015 Compliance Excellence Conference in Atlanta, Georgia, with many corporate EH&S and Sustainability leaders. One session looked at the approach to auditing. Speakers discussed past management structures, motivations for reorganizing programs, and the resulting gains and audit outcomes.
As consultants, we are asked to manage and conduct many different types of third party audits. The “what is an audit” is easy— a systemic objective tool to assess regulatory compliance in the workplace. However, the “why audit” varies and is often difficult to explain to personnel within an organization, facility personnel, and management alike. An audit may be voluntary or required as part of an enforcement action. Many times, an audit is triggered as one of the speakers put it, when “something bad happens.”
The approach to the auditing session caused us to reflect on our own auditing experiences. We asked one of our lead auditors, Mike Arozarena, to expand on some of the points made during the conference in support of third party EH&S auditing.
What are the benefits of an audit?
Simply stated, the audit process is designed to identify and correct compliance issues before “something bad happens.” The benefits of conducting third party audits are numerous:
- Identify actual or potential compliance issues before they become a problem
- Determine the root cause of compliance problems to prevent a recurrence
- Prepare for announced or unannounced regulatory compliance audits by Federal, state, or local regulators
- Provide independent eyes on the operations to voice an objective assessment
- Maintain a good corporate image in the community
- Avoid potential Notice of Violations (NOVs) and potential fines
- Institute best management practices to further protect your company from spill or release incidents
- Encourage a responsible culture within the company
- Prepare for new regulations in the pipeline that may impact operations and future compliance
- Reduce the risk of business and personal liability
- Identify ways to improve the efficiency and cost effectiveness of the compliance program.
What are the drawbacks of an audit?
Even though there are many benefits to conducting third party EH&S audits, there are several drawbacks to at least be aware of before going into an audit.
- The expense of conducting the EH&S audit. Depending on the complexity of the site it may require two or three auditors for a period of one to three days plus time to prepare the audit report.
- Facility EH&S staff, management personnel, and operations staff are critical parts of a successful audit. Their time is required prior to, during, and after the on-site audit. For example, preparing documentation for the auditors, participating in the audit process, and implementing the corrective action plan.
- Facility personnel will need to dedicate time and resources to correct audit findings.
- Once findings are identified and presented to on-site personnel it is the responsibility of the site to correct these deficiencies. If no action is taken, a regulatory agency may view these as more serious “knowing violations”.
- And we get this question quite a bit – Should the findings be disclosed to the regulatory agency? Many states have audit privilege laws to protect the facility from fines. This may mean involving internal or outside legal counsel.
As long as all parties are aware of these potential drawbacks, a third party EH&S audit is a critical tool for a sound EH&S program.
What should be the goal of most EH&S compliance audits?
We all know there will be “low hanging fruit” identified during the audit. However, the focus of most audits should be to identify high impact EH&S issues without ignoring the common type findings.
What audits are undervalued?
The NAEM session identified the environmental management system (EMS) audit as the most undervalued. Having an EMS is good for several reasons, such as to manage change, improve in the eyes of customers and vendors, cope with legacy issues, and so forth. The EMS audit will ensure the EMS is effective.
Does auditing fix a problem?
No. The audit discovers the noncompliance issue and identifies its root cause. It is up to the well-designed corrective action plan and full implementation to correct a finding.
What’s the point of auditing if you are having the same findings?
If a facility is experiencing repeat findings then the root cause was not correctly identified or the corrective action plan was not implemented. It is important to continue a rotation frequency (e.g., two or three years) of third party audits to ensure prior findings are corrected and the facility is adapting to new regulatory changes.
Should we audit for the minimum standard?
Not necessarily. Just because it is an official standard does not mean it is right for a facility. Most companies want to standardize their audit protocol and add their own flavor to it, sometimes beyond the regulatory requirements. This puts the company in a position where they can be proactive usually with favorable results.
How do you explain to management that you need to audit? It’s not like we are being pushed by any stakeholders or regulatory agencies to do this.
Facility EH&S staff are extremely busy keeping up with day-to-day activities at the site and putting out fires. It is difficult to objectively look at your site for compliance issues. It takes an objective viewpoint to look at regulatory compliance and identify systemic problems. EHS Support has expert auditors trained and experienced in conducting audits. Because our auditors work with many industry sectors we see many approaches to compliance and opportunities for best management practices which we can share with the site. Often we tell a company, just let us audit one of your sites and you will see the benefit.
Why use a third party auditor?
There are many reasons. The most significant are:
- Ensure your facility is in total compliance with EH&S regulations
- Independent and objective viewpoint
- Experienced auditors
- Knowledgeable of many industry sectors and experience with Federal and state regulations.
What are EHS Support’s recommendations for a successful audit?
- Identify potential problems or areas of concern to the auditors. No matter how experienced, don’t rely on the auditor to know the facility or its history as well as you do.
Surprise audits have their value, but for a scheduled audit provide enough information to the auditors to be prepared (e.g., location of EH&S records, personnel available to interview, best times to observe certain production areas while in process).
- Ensure your auditor is adequately trained and experienced. You don’t want a junior or mid-level auditor. This is the time to use a senior level auditor who has the facility experience and interviewing techniques.
- Checklists are an effective tool to ensure all technical areas are adequately addressed. Checklists are not all inclusive and the auditor should understand what to look for beyond what’s on paper.
- Finally, take action after the audit. Ensure findings are corrected and procedures are put in place to avoid repeat findings.
Amy. Bauer has 15 years of experience conducting and managing environmental site assessments, regulatory compliance audits, environmental investigations, and regulatory compliance support…. Read More