C&EN Northeast News Bureau

Ten years ago, the Chemical Manufacturers Association adopted the Responsible Care program. Without it, CMA's 197 members, representing some 90% of the basic chemical output of the U.S. chemical industry, realized that doing business could ultimately be made much more difficult by a rising tide of public and governmental disgust with the chemical industry. The 1984 toxic gas leak at a Union Carbide pesticide plant in Bhopal, India, killed thousands and horrified millions worldwide. Closer to home, a smaller leak from a Union Carbide pesticide plant in Institute, W.Va., in 1985 injured plant personnel and local residents and proved that the U.S. was not immune to a serious chemical industrial accident.

Against this backdrop--and earlier fears raised because local government authorities improperly allowed a developer to build housing on top of a chemical waste dump known as Love Canal in Niagara Falls, N.Y.--CMA adopted the Responsible Care program in the U.S. The altruistic principles the program embraced made critics wonder: Could an industry as broadly under attack and suspicion as the chemical industry be issuing more than a public relations broadside? Could the industry endorsement of ethical principles bring performance improvements? "Track us, don't trust us," was the rallying cry from CMA.

Sidebar: Responsible care timeline

The Management Systems Verification (MSV) program is CMA's current brand of third-party verification to prove that it indeed has embraced a more benign and open operational ethic. Some critics still say CMA's verification process is a whitewash, but they are fewer in number than they once were. Some even appear to grudgingly accept that companies in the industry are indeed making an effort to mend their ways.

CMA's Responsible Care program is "filled with good intentions," says Alison LaPlante, a right-to-know advocate with the U.S. Public Interest Research Group, Washington, D.C. But, she adds, Responsible Care "is unenforecable and lacks teeth." Like the community advisory panels many companies set up to create a dialogue with plant communities, MSV panels largely are controlled by the chemical companies themselves, she says.

Ted Smith, executive director of the Silicon Valley Toxics Coalition, San Jose, Calif., says that through the Responsible Care program, "some companies have actually succeeded in building trust" with the communities in which they operate. "But more often than not, the program is a public relations effort and doesn't provide for a system of accountability." He fears the Responsible Care program and its MSV protocol are being used as an excuse for the chemical industry and others that adopt it to argue for even less government oversight than now exists of health, safety, and chemical emissions practices at industrial sites.

Frederick L. Webber, CMA's president and chief executive officer, says the industry cannot ignore its critics. "The chemical industry is on a mission," he says. "We are determined to earn the public trust and, by doing so, secure our franchise to operate." CMA vice president of Responsible Care, Dick Doyle, adds, "After 10 years of Responsible Care, we've seen significant industry performance improvements, but the public impact has not been as large as the improvements warrant." However, he is confident the MSV process will serve to verify the ethical commitment the industry has to improving environmental health and safety matters. "MSV is credible because of outside public participants," Doyle says. CMA's goal is to have all members go through the MSV process.

Early on in the Responsible Care program, the industry tried to prove its commitment by issuing company environmental health and safety reports. Under the collective aegis of CMA, the industry worked to develop a track record that showed substantial reduction in emissions to air, water, and landfills. Members signed on to voluntary government programs to quickly meet pollution reduction targets. Under the Environmental Protection Agency's 33-50 program, for instance, CMA member companies cut their releases of 17 priority Toxics Release Inventory chemicals by 62% between 1988 and 1994--much better than EPA's goal to see emissions reduced 33% by 1992 and 50% by 1995.

But now, 10 years after the start of the Responsible Care program, the industry has what it describes as an outside verification program that is meant to track the industry's embrace, company by company, of its responsibilities to the public, employees, the government, and users of its products. To date, 40 companies have undergone the voluntary MSV protocol that CMA established in 1996. Another 84 have scheduled an MSV review. CMA is still shy by 73 companies of the commitment it has encouraged from all its member companies.

The MSV process examines procedures member companies have installed to comply with the Responsible Care codes and their goals. The six codes of management practices together form the ethical basis of the Responsible Care program. Each of the codes contains a subset of performance goals.

The codes and their performance goals, adopted between 1989 and 1992, commit CMA members to plan ways to handle disasters with local communities, prevent pollution, operate safe plants, distribute products in a way that reduces hazards to people and the environment, protect the health of people at plant sites, and promote the safe use of chemicals from manufacture to recycling and disposal.

Through the use of company outsiders, the MSV program is intended, in part, to establish mutual trust between the public and the industry, CMA says. Companies work with CMA's contractor, Verrico Associates, Newark, Del., to choose from one to nine public participants, often from the company's community advisory panel of local citizens, and to choose two verifiers from peer companies. The group visits company headquarters where they interview top executives and inspect at least two production sites and sometimes more. Acting as referee, Verrico Associates helps put together a 40- to 50-page panel report examining the extent to which the company has adopted systems to implement the ethic of Responsible Care from senior management down to the plant operator level.

Some observers contend that phrases such as Responsible Care and MSV sound attractive, but are also nebulous and vague. Lofty goals and fancy procedural names dreamed up by an industry association have a way of putting off a suspicious public. Industry associations, they argue, are best known for serving member interests, providing advice and mutual support. Often associations pool member efforts to ward off unwanted government notice. And rarely is a trade group critical of its members or industry.

But with the Responsible Care program, CMA has at least attempted to align the public good with its own interests. It has historic precedent for doing the right thing. As early as 1905, the association then known as the Manufacturing Chemists Association called for a curb on hand-blown glass bottles, known as carboys, and urged replacement with iron-molded carboys to minimize accidental spills of corrosive liquids.

"Responsible Care started as a reaction" to criticism of the industry, points out David C. Smith, president and CEO of the nonprofit Council for Ethics in Economics. But Responsible Care, he says, "has gone beyond the public relations initiative it seemed at first to be about." The Columbus, Ohio-based council has consulted with CMA on the Responsible Care program, Smith says, "and it is interesting to see that as people talked about principles, they were driven to think seriously about Responsible Care. It is now an interesting ethical model." It is certainly very different from the approach taken by the tobacco industry, Smith says, which appears to have "stonewalled" the public for years in the face of health concerns over cigarette smoking.

"Our general impression is that Responsible Care is a leap forward as the industry makes itself more responsive to the community," says Mark A. Scott, president and CEO of the National Institute for Chemical Studies, Charleston, W.Va. The nonprofit group long has been active in the effort to create a dialogue between the industry and the local communities in which plants operate. "MSV opens plant operations that were not open before. I believe more companies will embrace MSV. The challenge is to involve local communities in the process," he says. The "trick" with MSV will be to get public participants involved to understand what they are looking at. "There really is no perfect model for this kind of audit," he says.

Ross Vincent, chairman of the environmental quality strategy team of the Sierra Club, says, "third-party verification is crucial if Responsible Care is to have any significant effect in improving the chemical industry's image and performance." A chemical engineer by training and environmental consultant with RVC Associates, Boulder, Colo., Vincent points out that self-regulation and self-oversight are the "bugaboos" of trade associations. But because it brings in plant neighbors, the MSV process, "albeit an imperfect attempt at third-party verification, is improving steadily to where it is almost good."

Vincent is also a member of CMA's Responsible Care public advisory panel, a group of 15 industry critics that has been meeting since 1989 to provide advice to CMA. Although he says he is encouraged that MSV panels are choosing appropriate public representatives in most cases, companies assembling MSV panels are "not doing as good a job as they should in recruiting critics. And they are not routinely releasing the results of the MSV audit."

MSV audits should somehow provide some proof of a clear connection between Responsible Care codes and actual improved environmental, health, and safety performance, Vincent says. He would also like to see CMA commit to mandatory periodic MSVs. And he would like to see panelists choose company facilities to visit. It is possible for a company to prepare and also choose its best site for verification. "Like announced visits from regulators, prearranged site visits can be a waste of time," he contends.

Sidebar: Responsible Care has 10 ethical principles

Former CMA public advisory panel member Mark Sagoff says, "Responsible Care is a rational way for CMA to respond to citizen concerns." Now a fellow at the Woodrow Wilson Center in Washington, D.C., on sabbatical from his professorship at the University of Maryland Institute of Philosophy & Public Policy, Sagoff says Responsible Care tenets calling for such things as more efficient production and less pollution "is like telling your kid to clean his room. It's not a golden rule. It's taking responsibility for your things." In that sense, the industry is making progress, he says.

Sagoff applauds the industry effort to reach out to public participants both on community advisory panels and on MSVs. "There is nothing like the little old lady in greenies standing up to you," he says. "All local citizens need to do is identify a problem and get in the company's face. Otherwise, they can get a lawyer. But the message of Responsible Care is to make it easier to talk."

Monte McKillip, principal of consultants McKillip & Associates, Lincoln, Neb., says, "My understanding is that MSV is a step along the way to verifying performance." A former member of the CMA public advisory panel and a participant on Rohm and Haas's MSV in November 1996, McKillip says MSV panels need to include community participants. "You need Joe Schmo on the panel. He is most directly affected by the local plant. Sure you need some trained people, too, but someone from the local public needs to be involved as well." The proof of whether MSV works will be to see if a company makes changes to respond to the panel's report, says McKillip, whose firm helps companies set up community advisory panels.

However, Andy Smith, director of social and ethical responsibility in investments for National Ministries of the American Baptist Churches USA, Valley Forge, Pa., thinks CMA has to improve its brand of third-party verification. "It's a beginning and has been reasonably successful," says Smith, a member of CMA's public advisory panel, which pushed for a third-party verification scheme. But "it is not good enough," he says.

The environmental, health, and safety reports companies issue "vary greatly in quality," Smith says. He wants to see the industry issue standardized reports like those based on principles set by a group of social investors, environmental groups, unions, and others--the Coalition for Responsible Economies (CERES). The CERES principles encompass many of Responsible Care's tenets, but they also call for eliminating all pollutants and waste; eliminating products that cause environmental, health, or safety damage; redressing injury to the environment; annual self-evaluation audits; and creation of generally accepted environmental audit procedures.

Smith does not dispute that MSVs are valuable, but he thinks "we need a system to gauge sustained performance improvements toward defined goals. Simply to have systems in place without performance goals is not what I want and not what the public wants."

Roger Hirl, president and CEO of Occidental Chemical, says he does not think chemical companies will commit themselves to a CERES-style report. "Shareholders have different views on what data can be released to the public. I don't see it happening at all," he says. "Responsible Care is about as far as the industry will go." But within Responsible Care, Hirl would eventually like to see a second round of industry verification not just of systems but of a company's adoption of the Responsible Care ethic. Hirl says he would also like to see companies go through MSV on a regular three- to five-year cycle to promote continuous improvement.

"U.S. companies are still compliance driven," says J. Vernon Jennings, director for London-based SustainAbility, an environmental performance verification agency. "Their aim generally is to meet regulations to keep the regulators off their backs and to avoid further regulation. The European regulatory framework is behind public opinion. Companies that demonstrate compliance in Europe do not inspire public confidence." For that reason, the International Organization for Standardization's environmental specifications, ISO 14001, are more important in Europe than in the U.S. But like Responsible Care and the MSV review, ISO 14001 takes a systems approach, says Jennings.

"I'm more interested in performance and strategic direction for improvements than in systems," says Jennings. An environmental, health, and safety review is just not broad enough to satisfy the public's demand for more open and responsible operation of chemical industry plants. "Our agenda is not just about the environment, it's about social responsibility, ethics, and the environment."

Sidebar: Six management codes are the basis for MSV

The Institute of Social & Ethical AcountAbility, London, is working to develop international social and ethical auditing principles. Such principles might examine the use of child labor, bribery, contracting services from plant community businesses, charitable giving, the treatment of minorities, ethical testing of new products, or sustainable use of resources. "External verification of environmental, social, and ethical corporate practices will become mainstream practice, hopefully within the next five years," says Katherine Howard, executive director of the institute, whose members include Royal/Dutch Shell, British Petroleum, and accounting firms KPMG and Price Waterhouse.

In Canada, the Canadian Chemical Producers Association (CCPA) does not plan to go as far as the Institute of Social & Ethical AccountAbility envisions. According to Brian Wastle, vice president of Responsible Care for CCPA, all but three of 74 member companies have gone through the mandatory Responsible Care verification process. The reviewers--including two industry experts, an activist usually from the CCPA national advisory panel, and a citizen selected from each visited site--pay a three-day visit to a company. In addition to a report with recommendations for improvement, the verification team either passes or fails the company on major points. "The team repeats visits if necessary until it finds Responsible Care systems and ethics in place," Wastle says. A second mandatory round will commence soon "to ensure no backsliding since the first round," he explains, and to concentrate more on the company's ethical commitment to Responsible Care.

In the U.S., companies continue to wrestle with the first round of verification under CMA's MSV program. Joseph Caporossi, Cytec Industries' director of safety, health, and product regulatory compliance, says the company is preparing for its MSV, which is planned for spring 1999. "We will be doing our own internal verification audit in early 1999 to see if we need to make improvements before the formal MSV," he says. Caporossi says the company plans to use the formal MSV process and report as an internal improvement tool and also plans to discuss the MSV and report with its community advisory panels. But he is not sure if the company will publish the results more widely. At least a few companies have published their MSV reports or highlights of the reports on the Internet, including Ashland Chemical, Rohm and Haas, and Air Products & Chemicals.

Eugene D. Ervin, corporate director of environment, health, and safety for Air Products, says the company completed its MSV in January 1998. Ultimately, he suggests, the MSV process would benefit from an environmental activist's perspective, and he believes verifications should be expanded to include individuals from environmental groups. "But we need to understand that the objective of MSV is to work together and foster improvement," Ervin says. "It's not an opportunity to identify company failings and then publicly expose those failings and penalize a company. The goal should be better health, safety, and environmental performance."

Although critics would like to see more than two company sites reviewed through MSV, Ervin says it would be logistically difficult to expand the MSV process to include all 15 of Air Products' U.S. chemical locations and about 200 industrial gas facilities. It is only practical to go so far with MSV. Additional checks on company operations include regulatory compliance reports to the government such as EPA emission report reviews and Occupational Safety & Health Administration (OSHA) inspections, Air Products' own audit of its operating specifications and regulations, and operating plant Responsible Care compliance initiatives.

Diane E. Larson, manager of Responsible Care for OxyChem, says the MSV panel that reviewed the company's systems suggested a number of changes. Among them was the recommendation that the company require contractors to provide operating records ensuring the contractor meets appropriate environmental standards.

Stephen B. Kemp, OxyChem's vice president for health, safety, and Responsible Care, adds, "As a result of the MSV audit, we will consider asking contractors if they have had OSHA or EPA citations."

Fielding Rolston, vice president for human resources, health, safety, environment, and security at Eastman Chemical, says: "MSV is only a first step to a real third-party audit of Responsible Care practices. I expect to see it strengthened. Ultimately, it should be like a financial audit by an independent auditor."

Despite the effort, lofty goals, emission reductions, and MSV, public esteem of the chemical industry is still quite low. CMA's opinion surveys show only 20% of the public had a favorable attitude toward the industry in 1998. That rating has not budged since 1994, but some in the industry are delighted that the public's attitude toward the industry has ceased to decline, as it had been doing prior to 1994. Given the low public opinion of the industry, former CMA Chairman Earnest W. Deavenport Jr., who is president and CEO of Eastman Chemical, says, "It's no surprise we have such a hard time getting our message heard on Capitol Hill. It's no surprise that we continue to see stifling, ill-advised, and unreasonable regulations placed upon our industry. It's no surprise that the general public has only a vague idea of all the positive ways we impact their lives and their standard of living."

Deavenport says the remedy lies in part through enhancing Responsible Care's guiding principles by addressing social issues and proactively ensuring chemical users consider health, safety, and environmental matters. He comes close to agreeing with the aims of the Institute of Social & Ethical AccountAbility by suggesting that CMA consider making resource conservation, energy efficiency, and sustainable development a part of the Responsible Care guiding principles, and addressing risk assessment and cost-benefit analysis in the principles as well (see page 5).

Sidebar: Service providers offer discounts based on Responsible Care

Consultant Nir Kossovsky says corporations need to add another dimension to their corporate accountability effort. Kossovsky, whose Pasadena, Calif., firm Heisenberg Principals tackles corporate strategic planning, says Responsible Care is a good ethic, but with the rapid change in regulatory expectations, societal expectations, and shareholder expectations, each company must use "scenario modeling" to deal with any number of possible worst-case situations. Like the U.S. military's use of war games, corporations must be similarly ready to imagine and play out any number of possible scenarios--from the effect on the corporation of a plant's release of poisonous gas to the effects of a massive product liability suit. This approach, he contends, "allows firms to create the future and be ready for it."

Working on the future of Responsible Care, Scotty B. Patrick, group vice president for Ashland Chemical, says periodic MSV accreditation might be a good idea. The coleader of CMA's Responsible Care team says other ways to improve Responsible Care might include making performance improvements, rather than systems, the focus of CMA's verification efforts. Ten years from now, he says, the chemical industry should have made even greater progress to an ultimate goal of doing no harm to the environment.

Smith of the Silicon Valley Toxics Coalition says, "Outside accountability has to be the key to whether or not voluntary programs work or have credibility." Whether peer company verifiers on MSV teams fit that definition will in part affect how the public views CMA's Responsible Care effort. How companies choose public representatives and how diverse a group of verifiers companies are willing to tolerate will also play a part in the ultimate credibility or any refinement CMA makes to the MSV program. The experts that companies choose will also prove crucial. The industry's challenge is to continue to act out of enlightened self-interest and do right by Responsible Care.

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