MIT Sloan Management Review

Business Ethics and Public Policy, Operations Management and Research

 

Making Business Sense of Environmental Compliance

By Jasbinder Singh

April 15, 2000

Companies lose money because they treat pollution control and plant operations as separate concerns. It costs less in the long run to make environmental and plant managers true partners in finding compliance solutions.

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A major paper manufacturing company built a $500 million plant. Unlike some companies, it had been quite careful about the plant’s environmental requirements. It had painstakingly evaluated its obligations and had installed new environmental controls. The company’s environmental manager had worked with the project manager to get the needed permits in time and to be sure that the pollution control technology satisfied everyone’s requirements. Yet a short time after starting production, the boiler supplying electric power and steam failed the environmental compliance tests, and the facility became the subject of an enforcement action.

At a large steel processing company, the plant manager had received yet another proposal to replace another part of the treatment plant. Over the previous several years, the company had been cited for cyanide, zinc, nickel, and arsenic violations one after another. In each case, the environmental manager had suggested his own solutions and had solicited input from the engineering staff. He had also worked with outside vendors and regulatory authorities to find timely solutions. Still, millions of dollars later, here was another problem, and there was no telling when the next one would occur.

In both of these stories, the companies acted in good faith to comply with regulations. Both had done their jobs, yet they failed to prevent the ensuing problems. What went... To read the complete article, login or sign-up using the form below.

 
 

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