In these trying economic times, many companies are looking for ways to save money.
One area often overlooked is compliance with environmental regulations. Environmental compliance and increased control of environmental operations are sometimes viewed as a drain on company resources; however, proper management of chemicals, hazardous materials and wastes can lead to process efficiencies and cost savings.
It can be tempting to purchase large quantities of chemicals to obtain a volume discount, but there are hidden costs associated with excess chemical inventories. Besides the obvious need for increased storage space, it may be necessary to provide extra fire protection, increased supervision and other soft costs associated with material storage.
An excess chemical inventory may also require additional environmental reporting under Emergency Planning Community Right to Know (EPCRA) regulations. For example, if chemical amounts exceed the threshold planning quantity of either 500 or 10,000 pounds, it is necessary to notify state and local emergency planning agencies and the fire department.
Chemical inventories also need proper rotation or the shelf life of chemicals bought at a discount may expire, incurring the additional cost of proper disposal. Waste generation has many obvious direct costs, such as sampling and analysis, recordkeeping and disposal expenses, but indirect costs can also occur.
Labor costs associated with on-site management requirements include inspections, monitoring, manifesting, permitting and reporting efforts. There are also significant legal liabilities, such as fines and penalties, for mismanagement of waste materials, and liability for improper disposal.
Frequently, companies will outsource these costs by hiring a broker to manage waste materials. While brokers can assist in facilitating waste disposal, the company still maintains all liability associated with the waste products and must ensure wastes are handled and classified properly.
A common mistake made by smaller companies is to assume that, based on the manufacturing process, a particular waste is hazardous, which may not always be the case. The Resource Conservation and Recovery Act (RCRA) regulates hazardous waste activities and requires that generators classify their wastes appropriately.
Waste classification can be performed with generator knowledge but may require chemical analysis as well. While sampling and analysis costs might seem excessive, the savings associated with proper waste disposal activities is significant and can result in greatly reduced management costs and exposure to liability.
General housekeeping is another area of potential cost savings. Sloppy manufacturing operations can lead to excessive spills and wasted products needing proper disposal. Equipment leaks can result in safety hazards, wasted product and excessive labor and materials to clean up spilled or leaking products.
Often these types of leaks can be avoided by preventive maintenance of equipment and employee attentiveness.
Complying with environmental regulations is often perceived as a cost of doing business, but it also provides a framework for achieving safe, efficient operations that result in significant short and long-term cost savings. Karen L. Walter is an associate with Brouse McDowell. She can be reached at (330) 535-5711 or [email protected].
