Defining excellenceNorth Carolina businesses have made passage of the "Environmental Excellence Act" one of their top priorities for the short session of the General Assembly. Industry lobbyists say that in order to compete in the global marketplace, they need to find quicker and cheaper ways of complying with state and local environmental rules.
Twenty-two states now have voluntary programs that offer companies varying degrees of freedom from existing environmental laws in hopes of encouraging better compliance. While some initiatives have been proposed by businesses, others have come out of state regulatory departments. The best programs from the standpoint of the environment are ones which reward companies that go beyond existing anti-pollution standards--such as those operating in Oregon and some other states, says Gary Hunt, director of North Carolina's Division of Pollution Prevention and Environmental Assistance. The worst are in Texas and North Carolina's proposed program, he says, which allow companies that simply meet current regulations to be exempt from environmental rules.
One thing "environmental excellence" programs have in common is that very few companies have signed up to take advantage of them. In Washington state, home to Weyerhaeuser--the company leading the charge for a North Carolina "excellence" bill--only one business has applied, and it isn't the giant paper producer.
Weyerhaeuser's lobbyist didn't respond to phone calls from the Independent. and the company's communications manager wasn't familiar with the situation in Washington. But Preston Howard, head of the Manufacturers and Chemical Industry Council of North Carolina, has a theory about why more companies aren't signing up for "excellence" programs: "In the course of getting these programs adopted, the business community proponents may have traded away or compromised many of the incentives for participating," he says.
Here are a few examples of what "environmental excellence" programs look like in other parts of the country:
Georgia: A 1996 certification program rewards innovative pollution-prevention programs with a one-year reduction in fees companies pay to the state's hazardous waste trust fund and the state Environmental Protection Division.
Louisiana: A 1997 law allows the state to grant "regulatory flexibility" to companies for projects that will provide "superior environmental performance."
Massachusetts: The state grants regulatory flexibility on an industry-wide basis to dry cleaning, photo processing and printing companies that show they will improve environmental protections and reduce costs to the taxpayers.
Michigan: Runs a Clean Corporate Citizen plan that gives faster permit reviews and other incentives to businesses that have demonstrated "consistent compliance" with pollution laws and no unresolved violations.
New Mexico: Green Zia program administered by environmental groups gives public recognition to companies that address environmental issues in cost-effective ways.
Oregon: A 1997 law authorizes the state to waive some environmental rules for companies that show they will achieve "exemplary results" in reducing pollution.
South Carolina: The state gives public recognition, membership on the Environmental Excellence Council and some "opportunities for regulatory flexibility" to companies that are committed to reducing waste.
Texas: A 1997 law grants companies exemption from some environmental rules "as long as the alternative standard is at least as protective" as current law.
Washington: A 1997 law allows the state to give regulatory flexibility to companies that promise "more effective or efficient" pollution-control results.
Wisconsin: The state can offer companies "regulatory relief" in return for their commitment to state-approved environmental management plans designed to improve environmental protection.
The traveling exhibit parked across from the legislative building last week proudly heralded the 100th birthday of the Weyerhaeuser Company. A green-and-white banner directed visitors inside a trailer, to a series of panels and push-button displays tracking the history of the Washington state-based paper company and touting its environmental record.
"The most significant trend of the 1990s was the company's growing environmental awareness," one such panel told visitors, citing the awards Weyerhaeuser has received for its recycling program and other conservation policies--including those now in use at the company's seven manufacturing plants in North Carolina. Among them are a first-place ranking from Fortune magazine for Weyerhaeuser's environmental record and a "Landowner of the Year" award from the Oregon Department of Fish and Wildlife. What the exhibit didn't tell visitors is that Weyerhaeuser is the leading force behind a proposed bill that would allow North Carolina businesses to bypass state pollution laws.
The "Environmental Excellence Act" would let companies waive local, regional and state environmental regulations in favor of contracts negotiated directly with the state secretary of environment and natural resources. Flexibility would be given to companies that want to pursue cutting-edge pollution-control strategies not recognized under current rules.
What would those strategies be?
Business representatives are a bit vague on that score.
"I don't know that we have a particular example in mind," says Marc Finlayson, Weyerhaeuser's North Carolina communications manager." We would have to see what the regulators would like accomplished in terms of environmental improvements."
Finlayson says Weyerhaeuser had a "good experience" with an environmental excellence program administered by the federal Environmental Protection Agency at the company's pulp mill in Georgia. "Since then, when opportunities have come up to pursue state versions of the EPA program, we have been interested," he says.
Preston Howard, president of the Manufacturers and Chemical Industry Council of North Carolina--another leading backer of the proposed legislation--says a survey of his group's members failed to turn up any current examples of the "innovative" projects the bill is designed to encourage.
But Howard insists that's not because businesses aren't eager to find new ways to comply with environmental rules. He says many companies simply aren't willing to risk developing new programs until there are regulatory incentives in place. To show how the proposed bill would work, Howard cites a hypothetical example of an industrial plant that has four smokestacks, one of which emits more pollutants than the other three.
"Under existing rules, you'd have to control all four stacks to the same degree," he says. "What this bill would allow the secretary to do is, if the company could put a much higher level of control on the really big stack and not control to the same degree the three smaller stacks, the overall impact would be to eliminate more pollutants at less cost."
Environmentalists are highly skeptical that the "excellence" bill will lead to less pollution.
"What this measure really does is undermine the existing structure of the state's environmental regulations," says Nat Mund, a lobbyist for the Conservation Council of North Carolina.
Mund points out that the proposed bill allows "cross media" trades that would give industries the ability to vary the pollution they cause in different areas. So, for example, a company would be permitted to discharge more toxins than the law allows into the water in exchange for promising to send less into the air. "That's basically a change in the rules that have taken the public years to develop," Mund says. Conservationists are also concerned that the measure authorizes the granting of industrywide permits that would give entire business sectors the chance to negotiate agreements outside of existing environmental rules.
State regulators are no more enthusiastic about the bill. Daniel McLawhorn, general counsel for the N.C. Department of Environment and Natural Resources, warns that the "excellence" legislation could lead to the creation of an "environmental czar" by giving the secretary sweeping powers to ease regulations--including local zoning laws. He also worries about the lack of a clear exit strategy for terminating environmental-excellence agreements and the absence of any meaningful role for the public after those contracts are signed.
Leslie Bevacqua, a lobbyist for N.C. Citizens for Business and Industry--which has made passage of the "excellence" bill a top legislative priority--counters that critics overlook the fact that the program is strictly voluntary. She likens the measure to the state's charter school program, which also grants regulatory flexibility in return for hoped-for innovations.
"To me, this seems simple and straightforward, and I've been very surprised by the opposition," Bevacqua says. "What I would hope is that, as one or two companies have success with these programs, they could be models for other companies to do the same thing."
North Carolina isn't the only place where businesses are pushing for more flexibility in complying with anti-pollution laws. Twenty-two states now have voluntary programs that offer incentives to companies that want to boost their environmental compliance. (See "Defining Excellence," page 14.) But while most other states reward companies that promise to go beyond what's required under existing environmental statutes, North Carolina's proposed program offers incentives even to companies that merely provide protections equal to those already on the books.
That has many critics questioning the purpose of an "excellence" bill. "We've never gotten an answer to the question of what it is businesses can't do under the existing laws that they would do under this bill," says Molly Diggins, state director of the N.C. Sierra Club.
The bill's sponsor stresses that the legislation is aimed at Tar Heel companies that already have positive environmental records. "The people who would engage in environmental excellence programs are not the bad actors, they're the good actors," says state Rep. Pryor Gibson (D-Montgomery). "The intention of this bill is to find a way to maximize the technical expertise of the business community with the byproduct being protection of the environment."
Pryor is well aware of criticisms of the bill. After the legislative Environmental Review Commission voted to send the "excellence" act to a state House committee in May, newspaper editorials across the state--including The News & Observer and the Wilmington Star-News--blasted the idea as a smokescreen for allowing businesses to circumvent pollution laws. Pryor had been brokering compromise discussions on the bill between business representatives, conservationists and state regulators. But when those talks came to an impasse, he decided to introduce the original version, which didn't include any of the suggested changes.
Pryor insists that concerns raised by environmentalists will be brought out in debate if House Bill 1580 comes up for a vote this session. "It's not in anyone's best interest to railroad this through," he says. "It all boils down to trust. The businesses have to trust the Department of Environment and Natural Resources and the environmentalists have got to trust the business folks."
Conservationists say they'd have more faith in the bill if businesses could come up with some concrete examples of the pollution-control programs it would help launch. "We've asked for that over and over and haven't gotten any," says Trip Van Noppen, senior attorney with the Southern Environmental Law Center in Chapel Hill.
Howard, of the Manufacturers and Chemical Industry Council, says businesses will continue to push for the bill because industries need to lower their environmental compliance costs in order to compete effectively. But he adds that compromise proposals to limit the scope of the proposed legislation are "still on the table."
Meanwhile, environmentalists are holding their breath, hoping the "excellence" bill won't make an appearance anytime soon.
"These types of things can always pop up," says David Knight, a lobbyist for the N.C. Sierra Club. "They're never dead until the session is over."