Environmental Audits, Assessments And Investigations

By: Nina V. Novak, P. Biol, P.Eng.



3.1.1 The Environmental Audit

An environmental audit is usually considered the first step of a phased approach to site environmental assessments. It is a non-intrusive (no sampling) assessment of a property, establishing a basis for cost-effective assessments and investigations at a later time.

As specified in the CSA "Guidelines for Environmental Auditing: Statement of Principles and General Practices" (CSA Z751-94), an environmental audit is:

…."a systematic process of objectively obtaining and evaluating evidence regarding a verifiable assertion about an environmental matter, to ascertain the degree of correspondence between the assertion and established criteria, and then communicating the results to the client. A verifiable assertion is a declaration or statement about a specific subject matter which is supported by documented factual data.."

Audit criteria, which establish the standard to which a site is evaluated, usually consist of applicable laws and regulations, and industry or corporate standards, policies, plans, practices or procedures established to protect the environment and ensure effective management of environmental risk.

Numerous other definitions of environmental auditing exist, but their essence is the same: focusing on the determination of compliance with applicable legal, industry or corporate criteria and standards.

Common benefits of various environmental auditing programs are:

determine and verify compliance with appropriate federal, provincial and local laws and regulations, or corporate policies;

assist in securing insurance and financing;

provide assurance to management that systems for managing environmental affairs are operating effectively;

determine the current cost of compliance with environmental requirements and identify potential cost savings;

enable comparison between operating facilities and identify shared problems and their solutions;

assist facility management in identifying and correcting compliance problems;

assure adequate, up-to-date environmental information for internal management awareness, decision-making and regulatory requirements;

improve waste management practices;

evaluate existing employee training programs and provide a comprehensive database which can aid in training personnel;

assess and increase the effectiveness of emergency response activities;

reduce costs by improving operation effectiveness and identifying poor operating and maintenance procedures;

improve the overall environmental performance of operating facilities by reducing and containing environmental problems; and

avoid corporate liabilities and enforcement proceedings, and minimize fines.

Additional benefits from undertaking environmental audits usually include improved overall environmental awareness, proactive environmental risk management, improved communication between management and operating facilities, and progression toward the development of an effective environmental management system. Another important benefit from a well-planned environmental audit program is that it is a critical aspect of exercising due diligence, a form of legal defence for environmental infractions.

The essential components of an environmental audit are:

define objectives and scope, identifying criteria for evaluation and level of detail for the study;

select audit resources, establishing the audit team and communication network;

review background information, either corporate documentation or that available to the public;

develop the audit plan, and incorporate an element for establishing audit principles, such as CSA Z751-94, to collect sufficient factual information to support the study findings with respect to the overall objectives;

collect information through interviews, personal observation and inquiry,document review, report and data analysis, independent confirmation, review of internal controls, tracing or recomputing data, comparison and analysis of other data for similar activities, physical observation, measurement and records;

evaluate the findings with respect to the agreed criteria; and

communicate the results through a report providing a clear and consistent understanding of the environmental audit expectations and outcomes.

Establishing the appropriate corrective actions in response to the audit findings is then the responsibility of the client, possibly leading to the need for further environmental assessments or investigations.

Generally, environmental auditing programs initially implement the reactive approach of avoiding problems by undertaking audits that focus on regulatory compliance. As a corporate environmental management program matures, this focus shifts through a diagnostic phase to ultimately a proactive management phase aimed at improved organizational learning and corporate efficiency.

It is important to realize that undertaking an environmental audit does not act as a substitute for the compliance activities mandated by the legislation or standards in place. The audit is merely the tool used to measure corporate performance in meeting prescribed environmental standards.

3.1.2 The Environmental Site Assessment

In a situation where the state of site contamination must be determined, a Phase I Environmental Site Assessment is required to provide preliminary identification of actual and potential site contamination. An Environmental Site Assessment has been defined by CSA (CSA Z768-94, ‘Phase I Environmental Site Assessment’ (ESA)) as:

…."the systematic process, as prescribed by this Standard, by which an Assessor seeks to determine whether a particular property is or may be subject to actual or potential contamination. A Phase I ESA does not involve the investigative procedures of sampling, analysing, and measuring unless enhancements are agreed upon between the Client and Assessor."

Unlike an Environmental Audit, the focus of the Environmental Site Assessment is to identify environmental risks and liabilities. Some of the more common applications of a Phase I Environmental Assessment are presented below:

Financial - as a consequence of the possible legal and financial liabilities associated with control of a contaminated property, property owners, prospective purchasers, lending institutions and insurance companies are requiring ESAs to estimate the likelihood, type and locations of contamination on a property. The information obtained is then used to guide the evaluation of the risk level and possible reclamation costs associated with environmental contamination at the property.

Baseline studies- depending on the level of detail of available environmental information, a Phase I ESA may provide sufficient information to act as an environmental baseline for the site. Future needs may require a determination of site environmental impacts by updating baseline data. Comparison with previous data would highlight the factors that have degraded.

Legal - most contraventions of environmental legislation are considered "strict" forms of liability. In this situation, it is the responsibility of the charged party to demonstrate that all reasonable care had been taken to prevent the commission of the offence. This is referred to as the "due diligence defence." As one component of a comprehensive corporate environmental management system, properly implemented Phase I ESAs may be one step in establishing a due diligence defence.

Remediation - as an initial component of the phased approach to site assessment and remediation, Phase I ESAs provide a basis for determining subsequent needs for site sampling, contaminant analysis and contaminant delineation testing. As such, Phase I ESAs provide many of the initial reviews necessary for property reclamation or decommissioning.

The general components of a Phase I ESA are essentially the same as those presented previously for a Phase I Environmental Audit, except that the applicable standard would be CSA Z768-94 - ‘Phase I Environmental Site Assessments’. The focus of the ESA is also different, being to identify any areas of the property that may present an environmental liability. Therefore, a historical component to all information reviews is essential in assisting with the identification of past practices that are no longer undertaken, and that may not have been remediated to current standards. Familiarity with the biophysical characteristics of the site (e.g. soils, groundwater, surface water, topography, vegetation and wildlife) is also necessary to estimate contaminant migration possibilities and assist in identifying potential receptors of the contaminants. Adjacent land uses, both present and historical, should also be reviewed to determine whether there is the possibility of contaminant migration to the property from off-site locations.

3.1.3 Environmental Site Investigations

As a component of the phased approach to overall site assessment and contaminated site remediation, the Phase I Environmental Site Assessment is the initial stage determining the necessity and direction of following stages. The subsequent investigations and activities can be summarized in the stages identified below:

Phase II Environmental Site Investigation: thorough contaminant sampling and analysis and characterization is performed to identify contaminants and delineate the extent of contamination.

Phase III Remedial Investigation: possible remediation options for the contamination delineated at the site are identified, and the most appropriate method is determined.

Phase IV Reclamation: the Phase III recommended method of site reclamation is implemented; this may involve a subsequent monitoring program.

The critical difference between the Phase I ESA and the Phase II investigations is the use of quantitative sampling and analytical techniques in Phase II. Phase II field sampling and analysis programs must be developed on a site-specific basis, using information obtained from the Phase I ESA and other sources, e.g. underground utility locations.

The sampling and analysis program may contain any of the following:

soil drilling and/or test pit digging;
geophysical analysis;
installation of probes for soil vapour surveys and subsurface vapour sampling;
surface water sampling;
groundwater sampling;
indoor air sampling;
outdoor air sampling;
sediment sampling;
vegetation and wildlife sampling;
analysis for organic and/or inorganic chemicals, metals, soil or water characteristics, or radioactivity and
analysis for adverse health effects (individuals or populations).

Following the identification of contaminant types and locations in Phase II Environmental Site Investigations, a subsequent field sampling and analysis program is usually necessary to delineate thoroughly the areas of contamination that exceed regulatory limits. Owing to the large number of samples and analyses required, appropriately selected, inexpensive "indicator" parameters may facilitate this component of site characterization, combined with selective detailed analyses.

Once the contaminated areas requiring remediation have been delineated, a Phase III remedial investigation is usually implemented. Remedial investigations are performed to develop appropriate reclamation protocols for areas having unacceptable levels of contamination. This involves minimal field work, focusing on theoretical science and engineering considerations of the applicability of various reclamation methods to the site and the contaminant(s). Other considerations involve impacts of the reclamation activities, contaminant residues or byproducts; adjacent landowner concerns; residue waste handling and disposal; occupational health and safety; space availability; extent of contaminant reduction necessary for compliance; and time limitations for the remediation. After the remedial method is chosen, additional components of the remedial investigation may include treatability studies (bench and pilot scale); detailed design; preparation and tendering of contract documents; regulatory permitting; and public consultation. The actual implementation of the reclamation program is sometimes referred to as the last phase, Phase IV, of site assessment and reclamation. A general requirement after the reclamation activities are completed is to monitor the site to ensure that remedial activities were effective.

3.1.4 Need for Undertaking Environmental Audits or Site Assessments

Environmental liabilities are becoming more expensive as new environmental legislation and guidelines are being implemented. Businesses, whether they are the property owners, prospective purchasers, lending institutions or insurance companies, are in a situation where they must make themselves aware of site environmental concerns and take appropriate remedial actions if they are to exercise the level of care necessary to show due diligence. A few of the major motivating factors initiating environmental audits or assessments are listed below:

exercising due diligence by being aware of site conditions and responding appropriately;

the high cost of non-compliance, either as a result of fines or the cost of remediation;

negative implications to a corporation’s borrowing potential when deemed to be the party responsible for a contaminated site;

loss of property value resulting from site contamination, either on or adjacent to the site (in some cases, cleanup costs far exceed the market value of the property even after it is remediated); and

under certain circumstances, a lender may become the party responsible for the environmental damage. This is known as direct lender liability.

One or a combination of all the above factors invariably initiates most environmental audits and assessments.


3.2.1 Standards

All current standards for environmental audits or assessments are voluntary, since none of the requirements for qualifications or activities is legislated through statutes or regulations. However, numerous industry organizations have generated or are generating guidelines for undertaking environmental audits or assessments. Some of these organizations are listed below:

Canadian Standards Association: CSA Z751-94 and CSA Z768-94; CSA Z750, Z763, Z760 and Z766;
Canadian Mortgage and Housing Corporation;
Canadian Association of Petroleum Producers;
International Standards Organization (ISO 10011 - and ISO 14000 series);
Treasury Board of Canada
Forest Care
Canadian Council of Ministers of the Environment (CCME);
International Chamber of Commerce;
Coalition for Environmentally Responsible Economies (CERES) Principles;
Canadian Chemical Producers’ Association;
Keidanren (Japan Federation of Economic Organizations);
Business Council on National Issues;
European Petroleum Industry Association (EUROPIA);
National Round Table on the Environment and the Economy (NRTEE); and
The Association of Professional Engineers, Geologists and Geophysicists of Alberta.

3.2.2 Standard Applicability

At present, the only enforceable standards or criteria are those identified through federal, provincial, or local legislation. Phase I Environmental Audits are intended to provide a routine check to ensure that facility activities are in compliance with these standards or criteria. As previously mentioned, however, many environmental infractions are legally considered "strict and several" forms of liability, for which the defence is to prove "due diligence". As such, any individual in a position to control an activity resulting in pollution of the environment must show that all "reasonable care" under the circumstances was taken to prevent the infraction from occurring. Considering this, the established voluntary standards would assist the courts to determine whether all "reasonable care" was undertaken. The voluntary standards are distributed by many organizations as indications of their expectations, and therefore assist in establishing the "industry standard" on which "reasonable care" is assessed. It is in this manner that the voluntary standards become enforceable.

3.2.3 Practitioner’s Qualifications

The recommended requirements for an environmental audit (CSA Z751-94) include independence and objectivity about the property, professional competence and due care. Environmental auditors usually have quite different educational backgrounds. Nonetheless, an auditor should have adequate proficiency, knowledge and experience in the following areas:

auditing processes, procedures and techniques;
analysis of environmental management systems;
applicable regulatory requirements, environmental policies and guidelines;
environmental protection systems and technologies;
facility operations, or systems; and
potential environmental hazards associated with the types of facilities and operations being audited.

The qualifications of Phase I Environmental Assessors are similar to those of Phase I Environmental Auditors. It is also recommended by CSA Z768-94 that assessors have knowledge in the following technical areas:

water/waste water treatment;
manufacturing or operation processes;
waste management;
air emission control;
building sciences; and

In addition, it is useful for the auditor to have an appreciation of the interactions of biophysical factors with contaminants, so that contaminant dispersion potential can be estimated.

Individuals undertaking remedial investigations must have a highly technical background in areas such as engineering, geology/hydrogeology, chemistry, biology or soil science. This must be combined with knowledge of available reclamation technologies, their applications and limitations, process design concepts, feasibility assessments, risk management, occupational health and safety, and project design and management.

All the above requirements must be combined with a solid basis of experience with related projects. Some clients also require errors and omissions insurance coverage for consultants undertaking environmental audits, assessments or investigations.

3.2.4 Certification of Practitioners

As a result of the lack of enforceable environmental audit and assessment standards, combined with the vast number and diverse background of individuals providing these services, the question of certification arises. Clients need some guidance as to the credibility of the practitioners offering these services. Currently, the majority of client security comes from hiring individuals possessing professional status, since these individuals are ethically bound to undertake only those activities for which they are qualified. This is usually augmented by requiring contractors to have adequate errors and omissions insurance coverage. Based on their education background and professional status, it is common to have professional engineers performing Phase I environmental audits and assessments.

A number of agencies either have or are considering certification of environmental professionals. A brief list of some of the industry agencies providing either registration or certification is presented below:

Canadian Environmental Auditing Association;
Canadian Environmental Assessment Agency;
Canadian Council for Human Resources in the Environment Industry;
National Association of Environmental Professionals (Washington);
National Registry of Environmental Professionals (Glenview, IL);
Institute of Professional Environmental Practice (Pittsburgh);
American Academy of Environmental Engineers (Annapolis, MD);
California Environmental Protection Agency (EPA);
Nevada Bureau of Chemical Hazards Management;
Environmental Protection Academy (Jacksonville, Fl);
Federation of Environmental Professionals (Jacksonville, Fl); and
The Wildlife Society.

Educational requirements can vary from none to B.Sc. or M.Sc. degrees. Experience levels range from none to in excess of 15 years (with a technical degree). Testing, from oral exams to 3-hour written exams, may be required. Practice standards have not been developed by many of these groups, while codes of ethics exist with most of them. The right to the title (by copyright) is available with approximately half the groups, but a government approved right to practice exists only with the California EPA and the Nevada Bureau of Chemical Hazards Management.

The extent of protection provided to clients is questionable, however, when the limitation of rights to practice is not enforceable and no disciplinary opportunities exist within the groups providing the certification.

National certification is being promoted as necessary for business to identify competent practitioners and to improve the level of practice. The need for a national infrastructure to comply with ISO 14000 standards on environmental auditing and assessments is also presented as a basis for a national certification program. Considering that there are currently many professionals - engineers, geologists, lawyers and accountants - working in these areas and controlled by a licensure regime, a critical consideration must be to determine the actual need for certification. The possibility also exists for a conflict between the certification activities and the regulation of certain professions. The certification standards may not provide any additional guarantee of qualified individuals and may only serve to confuse or mislead the clients.

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