Written by Amber Cicotte, CHMM, Senior Scientist, who leads the EHS Compliance Practice for BBJ Group in our Chicago, IL office.
The world continues to evolve toward a global market. This trend of globalism isn’t just felt by business managers and CEOs, it’s being experienced by people at the ground level, critical to daily production. Often the global influence is demonstrated through environmental and safety standards and regulatory compliance audits, despite differences in regulation between countries.Although facilities outside the US or Europe may not be constrained by similar regulations, companies are beginning to implement compliance audit procedures which reflect the priorities and policies of the US and Europe to limit risks to production in the future and to perform as a responsible global citizen.
Trends in Environmental and Safety Regulatory Compliance Audits
Increasingly, EHS audits are expanding to consider the environmental performance standards and safe (or unsafe) working conditions for employees outside the US. This includes some of the following concepts:
- Impacts to natural resources in areas with ineffective or non-existent environmental policy – Historically, locations with lower standards for environmental performance were considered desirable for relocation of production because the burden of regulatory compliance was considerably lower, sometimes non-existent. With markets and workers being affected by globalization, regulatory requirements are less the driving force, and potential to impact unique natural resources or the quality of life for communities surrounding your facility carry more weight than before.
- Safety and environmental performance of suppliers and how those conditions align with company policies – Frequently, facilities that are operated directly by an international company may be able to meet an extraordinarily high standard for safety or environmental performance, but sourcing materials locally and relying on micro businesses within the supply chain can mean the larger company may be completely unaware of environmental violations or poor safety and working standards for employees of their suppliers.
- Establishing baseline safety standards in developing countries – In areas that are new to industrialization, or where good factory jobs are highly coveted, often employee consideration for their own safety or impacts to their immediate environment can be second to whatever is perceived necessary for the employee to simply keep their job.
- Consumption of public resources in areas with few citizen protections – A lack of understanding of your company’s position in the context of the larger environment or culture can often rise out of simple ignorance. If a local government is welcoming and high internal performance standards are easy to implement, global directors may not be aware of how the facility has affected the local people’s ability to enjoy a critical cultural feature, or access natural resources which had previously been taken for granted.
Developing a thorough compliance audit program which reflects the concerns of global operations, such as those describe above, can identify, quantify, and begin to rectify discrepancies between operations and address inequity in a company’s human capital.
The Importance of Implementing Regulatory Compliance Procedures
Risks exist in not knowing how your company’s employees, the employees of your major suppliers, or the communities and environments surrounding your factories are treated in other parts of the world. Production or supply chains can be interrupted if a compliance audit program isn’t implemented to identify the critical risks from operating disparities between locales.
- Class-action lawsuits may be undertaken by workers who discover a disparity between treatment in their country vs. the US or Europe through the availability of information in social media.
- Governments may prohibit your facility from operating if damage to drinking water, air, or other critical natural resources are associated with your factory.
- Worker strikes may occur when companies are perceived as non-responsive to local concerns, totally disrupting production in that region, and possibly globally.
Compliance audits which incorporate aspects of global working conditions and environmental impacts can reduce risk of interruptions to production and ensure that all employees of your company are treated equally and can work safely, regardless of location.