Legal news and trends for Canadian in-house counsel and c-suite executives
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By Marc McAree Environmental plans Not bulletproof, perhaps green proof I t's said you never hear the bullet with your name on it, which makes it dif- ficult to duck. That's where a comprehensive environmental management system comes in. An EMS is an organizational framework for ensuring environmental risk and compliance considerations are routinely factored into the corporate decision-making process. It allows an organization to identify, monitor, and control its environmental performance. In undertaking an EMS, you will have to identify the relevant environmental statutes, regulations, and instruments defining compliance in your jurisdic- tion. You'll enumerate and quantify the environmental risks of your business operations and highlight any potential weak spots. Once those risks are known, you'll implement measures to mitigate them and to establish due diligence checks and balances. This systematic approach should maintain environ- mental protection as a high-priority item on the corporate agenda, minimize the associated legal and financial repercus- sions, and enable a corporation to docu- ment environmental due diligence. Key components of an EMS include an environmental mission and values statement setting out reasonably achiev- able environmental goals and object- ives for the corporation, with top-down approval from the board of directors; a written environmental plan describing objectives and targets for environmental management and performance, and also has the stamp of approval from the board; the collection and dissemina- tion of key information as inputs to an environmental management system, including all legal aspects necessary to achieve compliance; continuous train- ing about EMS policies and procedures to ensure management and staff are familiar with laws, regulations, policies, procedures, and practices affecting oper- ations, including best industry practices; and an assessment of risks identified by the EMS and, using this analysis, meas- ures to prioritize and mitigate risks. The EMS should be both proactive and preventative. It should predict and reduce the prospect of adverse environ- mental events and harm. It should ensure that management, including directors and officers, understand environmental operational issues and associated risks. Review industry practices to ensure the standard is current, sufficiently high, and addresses emerging environmental issues. An EMS won't make your com- pany bulletproof. It will warn you when it's time to act. If things go wrong, a spill or some other accident, a historic contamination problem surfaces or a new toxic threat emerges, everyone will understand their roles and responsibil- ities. Some call this "green proofing." Implementation of an EMS should also satisfy the environmental expect- ations of your firm's suppliers, con- sumers, shareholders, and investors. Stakeholders demand corporations dem- onstrate environmental prudence. Many consider the International Organization for Standardization 14001 as the EMS benchmark. The ISO standard gives guidance to establish, maintain, and evaluate an EMS system. It does not prescribe precisely how to establish a system. In-house counsel can be a cor- poration's vital link to identifying rel- evant, pressing, and emerging environ- mental law issues, achieving defensible due diligence, and keeping the company and its directors and officers out of peril. Success in these areas often turns on in-house counsel advocating for imple- mentation of a company-wide EMS. In-house counsel with environment- al expertise should be able to review the legal implications of the EMS, providing input on the appropriate and relevant compliance standards, which can be especially problematic for larger firms operating in more than one jurisdiction; provide an independent liaison to the board of directors, providing objective advice about potential environmental risks, and board members' individual and collective liabilities; and ensure that the EMS lays the firm basis for a compel- ling due diligence defence in the event of an environmental release or accident. If the first step to comprehensive environmental risk management is designing and implementing an EMS, the second step is continuous oversight and improvement of the system. A suc- cessful EMS must identify new and emerging risks, anticipate future busi- ness implications associated with those risks, and support the implementation of mitigation measures in a timely fash- ion. In-house counsel can take a lead role in staying on top of the rapidly evolving and expanding environmental arena. Environmental performance is now a front-runner issue in the management of overall corporate risk. There is pub- lic pressure for companies to perform "green," while governments impose ever tighter regulatory requirements, and emerging environmental issues further complicate already onerous environ- mental compliance obligations. In-house counsel can't make a company or organ- ization bulletproof. With a comprehen- sive and up-to-date EMS in place, they can help make it "green proof." IH Marc McAree is a partner at Willms & Shier Environmental Lawyers LLP in Toronto. INHOUSE APRIL 2009 • 9