ISO-14000 in the US and EU: A World of Difference

Date: Oct 01, 2001

Companies in the EU increasingly appear to be embracing ISO-14000 certification (the environmental branch of ISO). Companies in the US have, by and large, not done so. Why the difference?

The answers can be found largely in differences between the legal regimes of the two regions as well as the markets.

Implementing environmental management programs offers enormous benefits to companies. In the US, however, businesses have not seen either the business necessity or the regulatory benefits of ISO-14000 certification. The US has an elaborate series of federal, state, and local laws and a long history of aggressive enforcement of environmental laws. Stiff fines and even criminal penalties may be assessed. EPA enforcement authorities work with the US Dept. of Justice to initiate suits, and federal authorities may cooperate with State Attorneys General in certain enforcement actions involving state and federal issues.

The US legal environment is characterized by the unique opportunity to initiate citizens' suits, including "bounty hunter" suits, such as those authorized under California's Proposition 65. This allows environmental advocacy groups and plaintiffs' attorneys to directly initiate suits. In addition, given a legal environment in which contingency fee suits are authorized and liberal discovery rules are the norm, plaintiffs' lawyers have found creative theories on which to pursue instances of pollution or other acts allegedly harmful to the environment under tort law.

In short, the legal regime in the US is one in which companies, both large and small, face potential liability for violations of environmental laws. Thus, concepts of environmental management, including using environmental management techniques to further regulatory compliance obligations, took hold in the US many years ago.

In contrast, the legal regime in the EU is based largely on a code system. The EU lacks centralized enforcement authority and is much less reliant on private litigation than the US Codes, so certification requirements become more attractive in that legal environment.

Some nations require ISO-14000 certification, and the EU has adopted the Eco-Management and Audit Scheme (EMAS). In a sense, auditors take on a regulatory compliance role in the EU much different than in the US.

Another seminal difference between the US and EU relates to the heavy reliance in the US on "right to know" provisions of key environmental statutes. A vast array of information on environmental activities and emissions, for example, generally is publicly available in the US. This often occurs through mandatory reporting requirements or through mandatory permit applications. Through a perusal of publicly filed reports, or through Freedom of Information Act requests, non-governmental organizations, plaintiffs' lawyers, and competitors can access an array of permits, reports, and records on environmental activities.

The media plays an important role as well. Environmental and consumer groups review TRI information, issuing press releases and reports targeting companies with top emissions. The media pressure, in turn, creates incentives to further reduce emissions. Public disclosure obligations of ISO-14000 become a mechanism to obtain transparency about environmental activities in the absence of mandatory legal requirements.

Many US businesses experienced in conducting environmental management and compliance audits criticize moves to mandate adherence to ISO-14000 (particularly third-party certification requirements) as unnecessarily costly and duplicative of our detailed legal regime.

Most, however, recognize that while mandatory third-party certification may be unnecessary, environmental management initiatives can prove to be vital tools in handling environmental obligations, regardless of where a firm is located.

Reproduced with the permission of Paper, Film & Foil CONVERTER magazine (312.726.2802). Copyright © 2001 by Intertec Publishing. All rights reserved.

For further information about this article, please contact Sheila A. Millar at 202-434-4143 or by e-mail at millar@khlaw.com.