Environmental Audit

Project impacting environment require an environmental assessment and audit when. The assessment provides the scientific data and approach for understanding whether there are any risks and how they might be mitigated. Assessments are undertaken by professionals. The audit provides an independent, robust and defensible process to assess the extent of the contamination and the risk posed to the environment. In the simplest terms, it validates the assessment

Environmental audit is essentially an environmental management tool for measuring the effects of certain activities on the environment against set criteria or standards. Depending on the types of standards and the focus of the audit, there are different types of environmental audit. Organizations of all kinds now recognize the importance of environmental matters and accept that their environmental performance will be scrutinized by a wide range of interested parties.

An environmental audit should not be confused with environmental impact assessment (EIA). Both environmental auditing and EIA are environmental management tools, and both share some terminology, for example, ‘impact’, ‘effect’, and ‘significant’, but there are some important differences between the two. 

The Environmental impact assessment is an anticipatory tool. It attempts to predict the impact on the environment of future action and to provide this information to those who make the decision on whether the project should be authorized or not. EIA is also a legally mandated tool for many projects in most countries, while, the Environmental Auditing is carried out when development is already in place and project is working, and is used to check on existing practices, assessing the environmental effects of current activities. It gives an idea of what is happening at that point in time in the project.

Benefits of Environmental Audit:

Financial Benefits

• Helps avoid fines by regulatory agencies
• Identifies issues of non-compliance sooner versus later allowing for proactive financial planning Lowers corrective action costs
• Waste minimization opportunities realized, leading to reduced operating costs

Compliance Benefits

• Reduced agency enforcement actions and penalties
• Increased employee awareness of environmental standards and responsibilities

Stakeholder Relations Benefits

• Improved employee relations and increased morale
• Improved community image of the Company Goodwill
• Firms with sound environmental stewardship programs are desirable to investors

General Benefit:

• Maintenance of sustainable level of development.

Objectives of Environmental Audit:

• To serve to achieve compliance standards and establish a report with regulatory bodies.
• To review the implementation of policies.
• To identify liabilities. To review management systems.
• To identify needs, strengths, and weaknesses.
• To assess environmental performance
• To promote environmental awareness.
• To improve production safety and health
• To conserve nocturnal resources.
• To reduce waste,
• To assess compliance with a regulatory requirement
• To place environmental information to the public.

Areas of Environmental Audit:

Design Specification and Layout:

While setting up an industry, adequate provisions are made in the design specification and layout to augment the production capacity but corresponding provisions to meet the environmental criteria are often overlooked. During Environmental Audit, adequate provisions are, therefore, necessary to upgrade pollution control measures to meet the future environmental standards that are getting stringent day by day.

Resource Management:

The resources include air, water, energy and other raw materials. The Environmental Audit will provide data to the management on the efficient use of the resources per unit production, and, thereby, help reduce resource consumption and waste minimization.

Pollution control systems and procedures:

The audit helps ensure that the systems and procedures governing the environmental activities/operations of pollution control equipment are rightly followed and to determine the efficiency of the system.

Emergency plans and response/safety system:

The review of the emergency response system will ensure adequate knowledge, alertness and readiness of the staff concerned to effectively face an emergency.

Medical and health facilities/industrial hygiene and occupational health:

The productive element of an industry is dependent on the health of its human resources. Audit in this regard will provide an insight into the actual requirements to warn suitable orientation of existing facilities.

Confirmation to regulatory requirement:

New regulations and standards are being stipulated at such a pace that they render the existing systems archaic. Factory managers may not be fully aware of the latest requirements and this will make the top management/owners vulnerable for prosecution under various environmental acts. An audit helps compare the existing status with the stipulation and standards prescribed by various agencies and ensure compliance.

Contents of Environmental Audit

There are standard requirements for what must be included in a report. These include the following:

• An evaluation of the environmental quality of the project or the risk posed by the project or activity to the environment.
• An assessment of whether the condition of the project or activity is detrimental or potentially detrimental to any part of the environment.
• An assessment of whether any cleanup is required. If cleanup is required, the report must make recommendations on how to undertake the cleanup.
• Additional measures or investment proposed for environmental protection and abatement of prevention of pollution.

Enforcement of Environmental Audit:

The enforcement of environmental audit conditions is the responsibility of local government. If a project authority fails to comply with requirements set out in a statement of environmental audit, then the local authority or Environmental Protection Authority should be notified.

Environmental Audit in India:

The concept of environmental audit was introduced in India in 1992 in the Environment (Protection) Rules, in the form of Rule 14. This rules make it mandatory for all persons carrying on an industry, operation or process requiring consent under S. 25 of the Water Act or under S. 21 of the Air Act or both or an authorization under the Hazardous Wastes (Management and Handling) Rules, to submit environment statement every year for the period ending on 31st March. Such a statement is to be submitted to the State Pollution Board on or before 30th September of each year. Thus environmental auditing is compulsory to all industries which are identified as potentially polluting industries.

In Indian Council for Enviro-Legal Action v. Union of India AIR 1996 SC 1446 (Bichhri Case) case, the court observed that the most industrialized countries subscribe to the polluter pays principle. This means polluters should internalize the costs of their pollution, control it at its source, and pay for its effects, including remedial or cleanup costs, control it at its source, states or future generations to bear such costs. In this case, this principle has been recognized by the Supreme Court as a universal rule to be applied to domestic polluters as well. Court also opined that the head of several units/agencies should be made personally accountable for any lapse and/or negligence on the part of unit/agencies. The idea of an “environmental audit” by specialist bodies created on the permanent basis, with powers to inspect, check and take necessary action not against only erring industries, but also against erring officers, may be considered.