An MD&DI May 1998 Column
While ISO 14001 compliance isn't mandatory, it could make medical device companies more competitive and help save the environment.
Saving the environment is an enormously sensitive and growing concern around the world, triggering worries about the processes of manufacturing, packaging, and product use and disposal. In September 1996, the International Organization for Standardization (ISO) published ISO 14001, a voluntary environmental management system standard that has since been embraced by companies such as Kodak, Sony, and Toyota. U.S. medical device manufacturers and suppliers also may benefit from implementing the provisions of this standard, especially because several nations in Asia are considering making ISO 14001 compliance mandatory for conducting business in their countries. Further, most companies find that the costs of implementing an ISO 14001based environmental management system are recouped within two years through gains in efficiency and cost reductions.
To be as universally applicable as possible, ISO 14001 does not establish environmental performance requirements. Rather, the standard was written to apply to organizations of all types and sizes in diverse geographical, cultural, social, and economic situations. It seeks to balance socioeconomic and business needs with the protection of the environment and prevention of pollution. Compliance with ISO 14001 is within the reach of powerful multinational companies that can afford the best available technology as well as of smaller businesses in less-developed countries.
ISO 14001 DEFINED
ISO 14001 provides a disciplined system to enable an organization to achieve its stated environmental objectives and to satisfy regulatory requirements, while simultaneously attaining its financial and corporate goals. In spite of its similarities to ISO 9000, ISO 14001 is far more user-friendly than its quality system cousin. Its auditable requirements are succinctly stated in six sections on three pages.
ISO 14001 encompasses the elements that are common to all effective management systems and states that an environmental management system should be "part of an overall management system that includes organizational structure, planning activities, responsibilities, practices, procedures, processes, and resources for developing, implementing, achieving, reviewing, and maintaining environmental policy."
To comply with ISO 14001, an organization must first identify and then manage all significant environmental aspects of its activities, products, or services. Once a company has identified the processes that affect the environment, it can develop the objectives, targets, and programs necessary to manage those effects and meet its own goals as well as all other applicable rules and regulations.
Figure 1. The environmental management system model for ISO 14001 progresses through six phases.
In meeting ISO 14001 requirements, a manufacturer would employ an environmental management system that progresses continuously through six phases: development of policy, planning, implementation and operation, checks and corrective action, management review, and continual improvement (Figure 1). ISO constructed this management system based on five principles:
- Commitment/Policy. A company should define its environmental policy and commit to an environmental management system based on it. The organization also must commit itself to complying with applicable legislation and regulations.
- Planning. A company should formulate a plan to fulfill its environmental policy. During this stage, the company should determine its environmental objectives and targets and establish specific programs that will meet each goal.
- Implementation. For effective implementation, a company should develop the capabilities and support mechanisms necessary to achieve its set environmental policy, objectives, and targets.
- Measurement and Evaluation. A company should measure, monitor, and evaluate its environmental performance.
- Review and Improve. A company should review and continually refine its environmental management system, with the objective of improving its overall environmental performance.
These five principles allow a great deal of flexibility in setting up an environmental management system. As the standard notes, "two organizations carrying out similar activities but having different environmental performances may both comply with [the standard's] requirements."
Further, the standard recognizes that the environmental management system it specifies may not be the complete answer to protecting Earth's natural resources:
The adoption and implementation of a range of environmental management techniques in a systematic manner can contribute to optimal outcomes for all interested parties. However, adoption of this international standard will not in itself guarantee optimal environmental outcomes.
In practical terms, this means, for example, that the Environmental Protection Agency (EPA) may accept an ISO 14001 environmental management system only as demonstration that an organization has partially met requirements. Proof that performance requirements have been met may also be necessary.
Because the standard is voluntary, companies may use its requirements merely as an internal benchmark, or they may self-declare conformance or hire an independent, third-party auditor, or registrar. If an organization uses a third-party registrar or self-declares its conformance, it must be able to objectively demonstrate that it has met the requirements specified by ISO 14001. Among other things, the organization must document its conformance to the standard, maintain procedures for critical elements of its environmental management system, and periodically audit the system.
The primary difference between self-declaration and third-party registration is that registration provides a professional, objective verification that an organization's environmental management system meets ISO 14001 requirements.
IS REGISTRATION WORTHWHILE?
Like ISO 9000, ISO 14001 is a voluntary standard. And there is no evidence yet that this will change in the United States or European Union in the foreseeable future.
The situation in Asia may be different. China, Vietnam, Thailand, and Singapore reportedly are considering making ISO 14001 national policy. ISO 14001with its associated apparatus of accredited registrars and course providers to assess, register, and monitor environmental management systemswould provide the regulatory infrastructure for environmental protection that these countries otherwise lack. Brazil is also encouraging companies to seek registration.
Even though the European Union hasn't required registration yet, the EU has closely embraced ISO 14001; the European Committee for Standardization (CEN) has implemented it as EN ISO 14001. The standard also has been integrated into the EU's primary system for voluntary environmental management, known as Eco- Management and Audit Scheme. EMAS, which was established under EU Council regulation 1835/93 on June 29, 1993, and came into full force on April 10, 1995, has been implemented by all EU member statesmost widely in Germany. Under Article 12 of the EMAS regulation, compliance with EN ISO 14001 also demonstrates compliance with a number of EMAS requirements.
While ISO 14001 registration is not yet a requirement around the globe, thousands of organizations in Europe and Asia have secured or are seeking registration. Within the United States, the greatest push toward registration is from U.S. subsidiaries of European and Japanese companies, but U.S. companies could be wise to heed their examples. Peer pressure from other companies and customer demands are fueling the drive toward registration, as are some of the advantages inherent in adopting an environmental management system.
Smart Business. For many companies, environmental management is simply a sequence of unrelated reactions. One person works on EPA regulations; another is responsible for satisfying FDA; another works with OSHA. This is an inefficient and wasteful strategy.
ISO 14001 offers an alternative integrated approach that is within the reach of most U.S. medical device companies, which already have initiatives, procedures, and systems in place to manage hazardous wastes, prevent worker exposure to toxic chemicals, control rodents, ensure biological quality, manufacture uncontaminated products, minimize air pollution, and so on. These are all aspects of operations that have environmental impacts, and they should be incorporated into a single environmental management system.
In addition, overseas markets continue to change product requirements. For example, three new European medical device directives require manufacturers to control a product not only in manufacture but through sale, use, and disposal. Moreover, a packaging and packaging waste directive (European Council Directive 94/62/EC) sets targets for the recovery (50 to 65% by weight) and recycling (25 to 50% by weight) of packaging waste. The targets must be met within five years of the implementation date. The packager, e.g., the importer, is responsible for recovery and recycling.
Any company that wishes to do business in Europe will need to respond to these changes. Without a system to organize and coordinate its environmental activities, a company will simply react to these challenges instead of managing them.
Marketing/Public Relations. A registered environmental management system can give organizations a competitive advantage with customers that are strongly committed to protecting the environment. Community and Environmental Activist Groups may also be more satisfied with a registered system than with a self-declared one. Indeed, some groups may request environmental management system registration of a local facility.
Regulatory Bodies. EPA and/or state regulatory agencies may accept a registered environmental management system as satisfying some regulatory requirements, resulting in reduced reporting and monitoring and fewer inspections. EPA has already taken steps in this direction. For example, it waives penalties for companies whose internal auditing identifies, corrects, and reports noncompliances. Most states have similar programs. EPA's voluntary Environmental Leadership Program provides regulatory flexibility to companies that have acceptable environmental management systems in place, allowing companies to spend fewer dollars while also reducing their environmental impact.
Insurance. Insurance or banking and financing companies may provide preferences, e.g., lower rates or better access to capital, if a company has a registered environmental management system.
Judicial System. Recent actions by the U.S. Sentencing Commission indicate that companies with an active environmental management system (such as that defined by ISO 14001) may see real benefits if they are called to appear before federal courts for environmental violations. If the system is registered, a company is better protected.
Registration aside, an environmental management system provides considerable internal benefitsassurance to management that environmental impacts are structured and controlled, improved processes for continual improvement (e.g., setting objectives and targets, implementing programs to meet these marks, and creating systems to monitor and measure progress), better cost control, conservation of input materials and energy, and a source of evidence for reasonable care and regulatory compliance.
With these benefits in mind, it may make sense for a medical device company to begin to implement an ISO 14001based environmental management system now. If registration later seems like the right strategy, a sophisticated, integrated system should already be in place and functioning.
SETTING UP AN ENVIRONMENTAL MANAGEMENT SYSTEM
For medical device companies, the foundation for building an environmental management system is already in place because of the new quality system regulation, which is harmonized with ISO 9001. Training, documentation (less is required for ISO 14001), document control, internal auditing, and management review are common to ISO 9001 and ISO 14001.
When creating an environmental management system, an organization should follow these steps:
Analyze Current Status. A company must first conduct a "gap analysis" to compare its existing system to the system required in ISO 14001 and identify any gaps. The organization then must develop a process to identify environmental aspectsi.e., the causes or possible causes (e.g., exhaust emissions, potential for spillage)and their possible effects on the environment (e.g., air pollution or water contamination).
After this analysis is complete, the organization should develop or revise its environmental policy for managing these aspects and impacts.
Plan. With the environmental policy as a foundation, the organization next sets objectives and targets based on its significant impacts, regulatory requirements, stakeholder views, and business goals. It also develops the programs and plans to meet those objectives and targets.
Implement. The implementation stage includes analyzing and improving existing programs and systems, developing new ones where needed, and documenting and institutionalizing best practices. ISO 14001 elements such as training, communication, and document control can be integrated into other management systems, e.g., ISO 9000. Also during this time the organization begins the ongoing process of executing planned programs to meet objectives and targets.
Measure. During the initial analysis, the organization should measure environmental performance to provide a baseline and then maintain an ongoing measurement system.
Improve. Based on these measurements, management needs to take continual corrective and preventive actions. Management should regularly review and revise aspects, policy, objectives, programs, and systems.
PROCEEDING WITH REGISTRATION
Organizations that decide to seek registration typically will follow seven steps.
1. Define the scope for each organization that will be registered to ISO 14001. Conduct internal audits to assess facility conformance in preparation for formal registration assessment.
2. Select a registrar, and submit an application that defines the rights of both parties.
3. Make available to the registrar all documents applicable to the environmental management system.
4. Schedule a preassessment by the registrar or another party to determine the environmental management system's current status (an optional, but highly recommended, step).
5. Undergo a formal assessment by the registrar to validate conformance with ISO 14001 requirements.
6. Accept registration to ISO 14001. If a conditional approval or disapproval is issued, make all necessary corrections.
7. Plan for semiannual surveillance audits to ensure that the system is being maintained and improved over time, as well as plan for a complete reassessment every three years.
In this time of change, instead of waiting passively for local or international requirements to overtake them, many medical device companies are taking preemptive actions to meet the challenges posed by ISO 14001 and are beginning to harmonize their environmental management systems to the new standard.
There is little downside to this course of action. At the very least, compliance with ISO 14001 will improve companies' business processes, reduce costs, and enhance their competitive posture. In the years to come, compliance may position companies to meet future U.S. and EU requirements, which many now see as inevitable.
Suzan L. Jackson is business development manager for Excel Partnership, an international training and consulting firm whose U.S. operations are based in Sandy Hook, CT. She is also the author of The ISO 14001 Implementation Guide: Creating an Integrated Management System, New York, John Wiley, 1997. Ron Belmont is director of food/drug and health-care support activities for Excel Partnership.