Tracking toxics: chemical use and the public's right-to-know.(

[Guest guest]

(this is the legislation that they are currently trying to gut)

Tracking toxics: chemical use and the public's " right-to-know. "

Environment

7-17-96

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Industry, government, and community representatives alike consider the

Toxics Release Inventory (TRI), enacted in 1986 as part of the Emergency

Planning and Community Right-to-Know Act (EPCRA), one of the most successful

environmental laws in U.S. history.(1) TRI is distinctly different from most

other U.S. regulations, which either attempt to closely control how business

manages its waste or rely on market incentives to minimize pollution. TRI is

a simple pollution accounting system. It requires major industrial plants to

publicly disclose every year the levels of pollutants that they have

discharged into the air, water, and land or transferred to other sites for

incineration, recycling, and disposal. TRI also differs from most other U.S.

regulations in one other key respect: For the first time ever, EPCRA made

the comprehensive environmental database generated from the annual TRI

disclosure statements accessible to the public via computer. Arguably, the

public disclosure component has been pivotal in motivating companies to

reduce pollution. The open airing of their activities has encouraged

industry to implement better environmental practices without the hammer of

regulations. A number of major companies, including Monsanto and Boeing,

initiated voluntary programs to reduce pollution by as much as 100 percent

after TRI data revealed the voluminous quantities of expensive and dangerous

chemicals that they were releasing into the environment.

Despite its power, however, public information cannot substitute for strong

environmental laws and enforcement. Acknowledging the public' s " right to

know " about the release of toxic substances does not mean that the burden of

safeguarding the environment and public health should shift to the public.

But, as the experience with TRI attests, public information, in tandem with

strict environmental laws, can exert a positive influence on corporate

decisionmakers, provide government officials with accountability tools, and

empower community groups to work intelligently with local operations to

develop more effective environmental protections and to lower the release of

carcinogens and other dangerous chemicals.

Currently, TRI only collects information on what comes out of the

smokestack, is discharged into the sewer, or is buried in landfills. This

" end-of-the-pipe " emphasis does not measure changes that are made upstream

to reduce toxic chemical use or the generation of pollution. However, if TRI

were expanded to include a full accounting of all the toxic chemicals that

flowed through an industrial facility (a process known as materials

accounting), the complete effects of pollution prevention efforts could be

measured. In its present form, TRI cannot effectively distinguish between

pollution prevention measures and other practices that reduce pollution

releases. In fact, the database is often blind to risk-reducing changes made

upstream. A materials accounting would not only reveal the effects of such

changes but would record the volume of chemicals used at a facility.

Expanding TRI to include materials accounting data would thus give the

public access to greater information about the toxic chemicals used in

consumer products, chemicals that are routinely transported through

neighborhoods and are part of the work environment.

The U.S. Environmental Protection Agency (EPA) is currently considering

expanding TRI in just this way. The success TRI has had in propelling

industry toward voluntary release reduction makes a convincing case for

transforming it from a pollution accounting system into a materials

accounting system. The benefits companies would accrue through more accurate

evaluation of the success of their pollution prevention activities are

substantial. Yet, some do oppose expanding TRI to include materials

accounting data. As was the case in the original debate surrounding EPCRA,

issues of efficiency, cost, and the appropriate level of public disclosure

top the critics' list of concerns. Before examining these, however, it would

be useful to look at some aspects of TRI's history.

The Right to Know

On 3 December 1984, an accidental release of methyl isocyanate at Union

Carbide's pesticide manufacturing plant in Bhopal, India, killed

approximately 3,000 people and injured hundreds of thousands. Around the

same time, several similar (though much smaller) incidents occurred in the

United States.(2) One particularly striking incident occurred eight months

after Bhopal at another Union Carbide facility in Institute, West Virginia,

where more than 100 residents of the town were hospitalized after being

exposed to toxic fumes released from the plant's pesticide manufacturing

operations.(3) Together with the Bhopal spill, these events raised public

awareness about the risks associated with chemical use and fed a ground

swell of support for the public's right to know about chemicals used and

released at industrial facilities. Momentum had already been building at the

local level in the United States for this kind of disclosure: By 1986,

approximately 30 states or cities had some form of pollution disclosure

requirements on the books.(4) In 1986, as part of the Superfund

reauthorization, Congress passed a national right-to-know law, EPCRA.

Section 313 of this act stipulates that U.S. manufacturers must report

annually to EPA the amount of toxic chemicals they release into the

environment or ship off-site as waste. This reporting law covers all major

manufacturing facilities, ranging from pharmaceutical companies to food

producers.(5) Today, TRI covers approximately 650 toxic substances and

roughly 23,000 factories. The federal Pollution Prevention Act of 1990

broadened TRI in 1991 to include a source reduction, recycling, and

treatment report.(6)

Different conceptual models of the required level of public disclosure

emerged during the congressional debates on EPCRA. The original Senate

version of the bill required industrial facilities to publicly provide a

materials accounting of all hazardous substances that came into and out of

manufacturing operations, including " the quantity of chemical substances

transported to the facility, produced at the facility, and transported from

the facility as wastes or products. " (7) In contrast, the House of

Representatives' version only required facilities to publicly report the

actual quantities of hazardous substances released or transferred from the

plant. Industry lobbyists who opposed materials accounting argued that

materials accounting data had no legitimate environmental purpose but were

very valuable to competitors.(8) In the end, the congressional conference

committee compromised, drafting a bill that required only release and

transfer reporting and commissioning a National Academy of Sciences study to

evaluate the concepts and utility of mass balance information.(9)

Although the compromise bill did not include mass balance data elements,

industry officials remained strongly opposed to the on-line environmental

reporting system that was part of TRI.(10) Industry concerns ranged from

fear of potential public overreaction to worries about the potential loss of

trade secrets. Critics argued that the public would not respond rationally

to reports detailing the large volumes of chemicals being released even

though those volumes were technically legal. Government regulation

classified such levels to be of " acceptable risk. " Industry officials

recommended that reporting be limited to acute toxins and that long-term

toxicants such as carcinogens be eliminated from the account. They also

sought to restrict access to the TRI information to government health and

safety officials. As it turned out, lawmakers retained the on-line reporting

system as originally proposed without restricting access and did not limit

release reporting in any way.

The Aftermath

Despite their initial reservations, TRI has generally proven to be positive

for the business community. In many instances, top-level managers had been

unaware of the extent of pollution generated and its related financial costs

until confronted with TRI information. When faced with these facts for the

first time, numerous firms began aggressive voluntary reduction efforts.(11)

Public relations concerns put additional pressure on business to initiate

changes. Beginning in late 1988, national environmental groups started to

routinely compile TRI data to identify the top polluters in the United

States. Major corporations had powerful incentives to avoid membership in

the " Dirty Dozen " club, and many moved quickly to reduce their emissions.

Locally, citizen groups armed with TRI information found themselves better

able to substantiate their concerns and to force previously reluctant

companies to address these issues. In several cases, direct pressure from

local community groups led to company commitments to reduce pollution

discharges into neighborhoods. For example, BF Goodrich reduced toxic

emissions into the air by 70 percent after the citizens of Akron, Ohio,

brought pressure to bear on the company after reviewing its TRI data.(12)

Today, many sectors of the business community embrace TRI. They view the

law's element of public disclosure as an important tool for public outreach

and performance monitoring. As one Monsanto official noted,

public disclosure of the Toxics Release Inventory has been a powerful

motivator to companies . . . to increase our efforts to reduce emissions.

The TRI provides a means where the public can track our progress and do so

on a consistent, measurable basis. We are convinced that this activity will

ultimately result in cost savings for the company and a competitive

advantage.(13)

Since the advent of TRI, an increasing number of corporations recognize the

positive links between public accountability and business performance.

Public Environmental Reporting Initiative (PERI), an industry group formed

to advocate public reporting, points to the " strong connection between

improved environmental reporting, improved environmental performance and

therefore improved organizational performance. " (14) In fact, over the past

five years, more than 100 corporations have begun issuing annual

environmental reports - available to investors, community members,

environmental groups, and government agencies - that map out their

environmental goals, achievements, and setbacks, mostly on the basis of TRI

data.(15)

In addition to eliciting many voluntary business responses, the information

distilled from the TRI database has helped government officials and

policymakers design more effective programs. Pollution information has been

used to better target enforcement actions, identify potential workplace

hazards, and create voluntary reduction initiatives such as EPA's " 33/50 "

program. Begun in February 1991, this program encouraged manufacturers to

reduce the release of 17 hazardous substances by 33 percent in 1992 and to

reach a goal of 50 percent reductions by 1995.(16) The jury remains out on

the success of this initiative, but early data indicate that most of the

1,294 volunteer companies will meet their individual release-reduction

goals.(17) As many as 15 states have enacted innovative pollution prevention

laws as a result of access to TRI data. Recognizing the excessive levels of

legally permitted releases, these laws implemented mandatory planning

requirements designed to encourage businesses to use less toxic substances.

They require companies to systematically account for most chemicals used and

released throughout their facilities and to identify cost-saving

opportunities for more efficient production operations. Legislative

strategies like these represent the movement away from more traditional

end-of-the-pipe regulation.

While public disclosure of the levels of pollution generated now enjoys wide

acceptance, the current accounting system still has shortcomings. Critics

point to the uncertainty underlying industry's claim that it has reduced

pollution by 50 percent since 1988. Environmentalists charge that this

figure includes " phantom reductions, " changes that reduce a company's

releases on paper only, e.g., accounting practices, downturns in production,

or shifts to unreported waste management activities.(18) A study conducted

by EPA in 1991 isolated three key factors contributing to reported

reductions: changes in measurement or estimation techniques, production

changes, and source reduction activities.(19) Fluctuations in production

were the most frequently cited reason for change and accounted for the

largest absolute change. Approximately 70 percent of all respondents

attributed total release and transfer changes in part to different levels of

output.(20)

Aside from the issue of phantom reductions, TRI's coverage of toxic

substances and large polluting industries is incomplete. After reviewing the

number of chemicals regulated as toxic under other environmental laws and

programs, EPA did expand TRI's list of reportable toxic substances from 330

to approximately 650 in 1995. But even this expanded list excludes many

highly persistent toxic substances. Dioxin, which is emitted from factories

and incinerators in small but potentially hazardous amounts, escapes

reporting because the amounts released fall below established thresholds.

Many major industrial sources of pollutants, including power utilities,

mining operations, and recycling firms, are currently not required to report

under TRI. This leaves significant gaps in the perspective afforded by the

data.

Despite these deficiencies, TRI has encouraged business to better control

its environmental releases. But TRI's inability to measure the success of

pollution prevention activities stands in the way of its motivating industry

to adopt cleaner production and closed-loop systems.

The Measurement Challenge

Pollution prevention, also defined as source reduction in the federal

Pollution Prevention Act, is any practice that reduces the use or generation

of hazardous substances prior to recycling, storage, treatment, or

control.(21) This approach is an integral component of industrial ecology

theory, which emphasizes the management of products throughout their full

life cycle.(22)

Pollution prevention differs in fundamental ways from most other release-

reduction activities. Typical source reduction involves some form of

productive efficiency, product redesign, or reduced production inputs. For

example, the makers of Liquid Paper, a popular correction fluid, removed

1,1,1 trichloroethane - an ozone depleter - from their product and replaced

it with a water-based formulation; Hoffman LaRoche retooled its pill

production line to allow for in-process recycling of its coating solution.

In all cases, pollution prevention reduces the quantity of toxic chemicals

used, thereby lowering the risk of harmful chemical exposures to workers,

consumers, and communities. The most effective means of protecting public

health and the environment, pollution prevention strategies directly benefit

industry: Increased production efficiency translates into cost savings. Less

preferred release-reduction activities, ranging from recycling to

transferring production overseas, are cost intensive and often have little

environmental or economic benefit.

But TRI is often blind to the kinds of risk-reducing changes made upstream

that are the hallmark of pollution prevention strategies. A review of 1991

TRI data from two New Jersey firms using phosgene, an extraordinarily

hazardous gas, provides a dramatic example. These data show that one firm

released significantly lower levels of this acute neurotoxin in that year

than the other: Hatco Corporation released 10 pounds while Dupont emitted

1,298 pounds. What the data do not reveal, however, is that Hatco ships in

almost 5 million pounds of phosgene annually, creating a risk of a

potentially fatal transportation spill or storage accident. Dupont, on the

other hand, designed its production line to produce phosgene on-site; most

of the gas is consumed shortly afterwards as an intermediate component. This

approach has several advantages over Hatco' s, but in TRI's one-dimensional

view it appears that Hatco manages its phosgene better.(23)

Because pollution prevention requires more profound system changes than

simple release reductions, an expanded TRI capable of tracking pollution

prevention would need to take into account all the different angles of

impact. Thus, in addition to measuring total waste generation, such a system

would incorporate two more key pieces of information: the amount of the

toxic substance used and the amount incorporated into the final product.(24)

Whether through materials substitution or better inventory practices, all

pollution prevention techniques reduce the use of toxic substances, thereby

lowering occupational and consumer exposures and communities' risks from

transportation accidents. But use reduction does not always translate into a

reduction in discharge levels. Consider, for example, a company that uses

ethylene oxide for a wide variety of purposes at its plant. If the company

reformulates surfactant production so that ethylene oxide is no longer

included, its use of this hazardous carcinogen (and the attendant risk) will

decline. But because fugitive emissions from storage tanks account for most

of the plant's releases and these remain more or less constant regardless of

volume, the TRI data would not reveal any reduction of risk.

Typically, a number of factors influence a company's TRI numbers, ranging

from variations in production to different equipment lines. Use information

can provide insight into the efficiency of the production process, which can

be critical for discerning source reduction impacts. Ironically, according

to TRI data as currently collected, a company could be labeled a laggard

because its releases increased due to a rise in production even though it

had instituted pollution prevention practices that increased efficiency.

During economic upturns, this masking phenomenon would be more pronounced.

Take a recent experience of the Polaroid Corporation. Although Polaroid

instituted an aggressive toxics use reduction program that achieved

significant results, its 1994 TRI data indicate an increase in releases that

year. It turns out that the company had a banner year in 1994, which

required it to keep using older manufacturing processes not yet retooled for

waste reduction. This accounted for the higher emission levels. Even though

many more of the company's product lines had actually increased efficiency,

the TRI data could not discern their impact. When measuring its pollution

prevention gains, Polaroid relies on chemical use information. In its 1994

corporate environmental report, the company verified its success in

virtually eliminating ozone-depleting chemicals by listing actual quantities

of the substances used, not just released. In 1988, 125,949 pounds of

ozone-depleting chemicals were used corporation-wide; in 1994, only 8,642

pounds were used. Polaroid noted in the report that it felt it was necessary

to provide use-based information because TRI and EPA's 33/50 program

" measure only releases; [they do] not directly measure waste reduction as

the means for reducing releases. " (25)

By reducing the toxicity of consumer products, pollution prevention

activities can limit residential exposures from volatilization during use or

eliminate eventual environmental releases from disposal. But TRI sheds no

light on this area of source reduction impacts because it does not track

toxic substances in consumer products. This is a significant gap. By

providing this kind of information to the public, an expanded TRI could

actually encourage cleaner production. Currently, consumers have limited

access to information about commercial goods' toxic components. Many

chemicals are not identified because they are not part of the active

ingredients, and most are not quantified. For example, if a company changed

the methylene chloride concentration in a cleaning product to make it " new

and improved, " the public would never know about their increased or

decreased exposures to a suspected carcinogen.

Experience shows that better public accountability on this score powerfully

influences companies to design cleaner products. California's Proposition

65, which requires a hazard warning on all consumer products containing

reproductive toxins and carcinogens, has prompted numerous manufacturers to

reformulate and redesign products to avoid the negative labeling. Both

product labeling and access to more detailed information about the hazardous

substances contained in consumer products help the public make more informed

decisions about their purchases and increase awareness of any risks they

might be exposing themselves to. Through such decisions, the public can

encourage companies to produce more environmentally sound products.

Retooling TRI

Ultimately, if TRI cannot effectively measure pollution prevention, it

cannot promote it. If it is to play a role in promoting pollution

prevention, TRI must be transformed into a materials accounting system.

A materials accounting system determines the quantity of a chemical present

at key points in the production process, as Figure 1 on page 29 shows. By

including six additional throughput measures, TRI could provide a complete

materials accounting along with the release and transfer data it already

supplies. These measures (in pounds of toxic chemicals) are as follows:

starting inventory (as of 1 January) ([Q.sub.si]); quantity brought on-site

([Q.sub.B]); quantity produced on-site ([Q.sub.P]); quantity consumed in the

production process ([Q.sub.CONSUMED]); quantity shipped off-site as or in

products ([Q.sub.CONTENT]); and ending inventory (as of 31 December)

([Q.sub.EI]).

Materials accounting is a simplified mass balance statement of what comes in

and what goes out of a plant. It can provide a critical facility- wide

perspective of toxics use and industrial efficiency.(26) This information

differs significantly from that provided by an engineering mass balance,

which is a complex, costly exercise. Materials accounting relies on readily

available accounting and production information, such as that for raw

material purchases, inventory, sales, and product composition.(27) It

supplies the public, government, and industry with a host of highly valuable

tools for more effective and efficient operations.

Transforming TRI into a materials accounting system would answer the need

for an effective pollution prevention measurement tool. The data produced by

an expanded TRI would provide three key metrics that would reveal pollution

prevention impacts that might otherwise go unnoticed: the quantity of

chemicals used, the production efficiency, and the amounts of toxic

substances contained in consumer products.

Because pollution prevention activities will always reduce the amount of

toxic substances used, chemical use information is the logical foundation of

any effort to record the impacts of source reduction at a facility. Because

the cause for changes in pollution releases is often unclear, a combination

of chemical use and toxic release information is necessary to discern how

successful a company's source reduction efforts have been. Use data can also

serve as a basis for measures of productive efficiency. When a chemical is

used as a reagent, efficiency can be measured as the amount consumed in the

production process compared with the total quantity used. (Reagents are

chemicals that are used to create different chemicals. Phosgene, mentioned

above, is generally used to create other, less toxic substances.) Another

measure, known as a loss rate,(28) compares the total waste generated with

the total quantity of the chemical used. By providing a picture of how a

chemical moves through the production process, use data can also indicate

changes in the quantities of hazardous substances used or contained in

commercial products. In this way, use data gives insight into potential

consumer risks and serves as a means of tracking changes in toxic

formulations.

An analysis of the operations of the Witco Company of burg, New

Jersey, illustrates how materials accounting can provide a more complete and

representative picture of a company's pollution prevention activities. Their

publicly reported TRI and materials accounting data for 1989 and 1990(29)

indicate that Witco's total releases of hydrochloric acid increased by 18

percent while production increased by only 4 percent. On the surface, it

would seem that Witco became less efficient and had fallen behind in

pollution control efforts during these two years. The materials accounting

data recorded during this same time period, in contrast, reveal that

hydrochloric acid use and generation decreased by 9 percent. This decrease

indicates an improvement in production efficiency. An investigation

determined that Witco had actually prevented pollution by implementing new

operating procedures to increase product yield, which did result in the

generation of less hydrochloric acid. However, an accident at the plant

caused a spill, which accounted for the increase in releases recorded by the

TRI data. While TRI now includes separate reporting for accidental spills,

the full impacts of Witco's pollution prevention activities would still have

gone unrecognized without materials accounting data.(30)

Materials accounting can also help industries improve materials management.

Major companies, including Polaroid, General Motors, and Hoffman LaRoche,

have established corporate materials accounting systems to assist with

internal decisionmaking. Many businesses have achieved significant savings

by using these types of systems. Sandoz, a large pharmaceutical

manufacturer, uses materials accounting for each batch processing step to

calculate " ecograms, " which are the company's measure of waste

efficiency.(31) Sandoz cites savings of several million dollars per year as

a result of these efforts. One semiconductor firm holds monthly " chemical

user " meetings to get departments focused on reducing the use of toxic (and

expensive) chemicals.(32)

In addition to more accurately appraising the effects of pollution

prevention activities, expanding TRI would provide the public with a more

complete picture of the risks associated with using toxic substances.

Generally speaking, those risks are often greater than the risks posed by

toxic releases alone [iLLUSTRATION FOR FIGURE 2 OMITTED]. TRI's current

limitations make it impossible for the public to track the amount of toxic

materials stored or transported near their homes, the extent of workplace

exposures, or the number of toxic chemicals contained in consumer products,

many of which end up in the nation' s waste stream. While increasingly aware

and concerned about these different routes of exposure, people lack the

necessary information to make informed decisions about the risks associated

with toxic substances.

Industry Opposition

Despite all the apparent benefits of materials accounting, a wide cross

section of industry groups oppose this kind of reporting. As they had been

during the original congressional debates about EPCRA, industry supporters

remain concerned about the information's relevance and usefulness to the

public. In a recent letter to EPA Administrator Carol M. Browner, 40 major

industry groups outlined their position, stating

the goals of the TRI are to provide the public information so that they can

make informed decisions about risk. Chemical use is not a good indicator of

risk. It is not a surrogate for exposure, therefore chemical use reporting

is not needed nor is it good public policy.(33)

This directly contrasts with the position held by environmental, labor, and

community organizations, who all feel that chemical use information is a

vital component of risk analysis, particularly in relation to

transportation, storage, and occupational accidents.

The arguments against public reporting of chemical use information are

primarily based on concerns about confidentiality and resource burden.(34)

The potential ability of competitors to back calculate actual formulas,

ingredients, and other trade secrets from facility- level materials

accounting data accounts for much of the anxiety. While the ability to do

this has not been demonstrated, protecting business interests, market

shares, and trade secrets remains a priority for policymakers. The issue of

additional regulatory burdens also plays a role. At a time when

policy-makers are trimming excessive regulation to create a more streamlined

and effective government, proposals for additional reporting requirements

seem out of place. Industry estimates that adding the six throughput

questions to the TRI form will increase costs substantially. A 3M

representative calculates start-up costs for materials accounting to be

almost half a million dollars at a large facility, less at a smaller

facility.(35)

Massachusetts and New Jersey's experiences with mandatory chemical use

reporting directly contradict these fears. Both states have developed

comprehensive trade secret provisions that automatically grant companies

protection upon request. However, despite the ease of obtaining

confidentiality, less than 2 percent of all companies make this claim. In

one analysis of New Jersey firms' materials accounting activities,

researchers found that industry representatives did not consider

facility-level chemical use data confidential because it did not provide

detailed product specifications.(36) This opinion was even confirmed at a

facility that manufactured a single product.(37) That same study showed that

firms needed approximately 7.5 hours, in addition to the staff time

allocated to filing TRI information, to complete materials accounting forms.

The National Roundtable on Pollution Prevention has recommended a phased-in

approach for expanding TRI to include chemical use information. Under its

model, special consideration would be given to protecting confidential

business information and investigations of how to reduce other reporting

burdens would be completed before the expansion.(38)

The Corporate Future and TRI

As the 21st century approaches, U.S. businesses increasingly recognize waste

as an indicator of inefficiency and are actively looking for ways to deal

more intelligently and efficiently with input materials, product design, and

production operations. In a shift from the old methods of treating symptoms

at the end of the pipe, companies now look upstream at the sources of toxic

substances to find ways to prevent pollution. This approach requires that

businesses know what they use and how they use it. Simultaneously, the

public needs tools to motivate industry to move toward cleaner, closed-loop

production. An expanded TRI could support both these ends.

The debate surrounding the expansion of TRI to include chemical use

information has become polarized. Critics and supporters draw two starkly

different pictures of materials accounting. Environmentalists, labor, and

other community interests see it as fulfilling both the public's right to

full disclosure about toxics in commerce and as an effective motivator for

pollution prevention. The other side portrays materials accounting as

another regulatory burden that does not serve the public interest and that

will compromise American competitiveness.

The experience with TRI has taught us many lessons about the value of public

information. Despite their earlier concerns, many corporate chief executive

officers, EPA administrators, and environmental leaders now call this

quasi-nonregulatory approach the success story of the 1980s. TRI has

stimulated constructive change without regulatory prescriptions. Materials

accounting data have similar potential. A revised TRI system could

jump-start industry into the next millennium by encouraging efficiency and

establishing greater openness through public reporting.

NOTES

1. Superfund Amendments and Reauthorization Act of 1986 (SARA), U.S. Code,

vol. 42, sec. 9601 et seq. (1995).

2. P. Hill, executive director, National Institute for Chemical Studies,

personal communication with the author, 8 May 1996.

3. " Leak Not the First Since Bhopal Accident, " ton Daily Mail, 12

August 1985.

4. P. Orum, coordinator, Working Group on Community Right-To-Know, personal

communication with the author, 6 March 1996.

5. The affected industries fall under Standard Industrial Classification

(SIC) codes 20 through 39, which apply to companies with more than 10

full-time employees. These codes cover the following general areas of

manufacturing activity: food products, tobacco products, textiles, apparel,

lumber, furniture, paper, printing, chemicals, petroleum, rubber and

plastics, leather, stone, glass, clay and concrete products, primary metal

industries, fabricated metal products, machinery, electrical equipment,

transportation equipment, measuring instruments, and, lastly, miscellaneous

manufacturing.

6. Pollution Prevention Act of 1990, U.S. Code, vol. 42, sec. 13101 et seq.

(1995).

7. Superfund Amendments and Reauthorization Act of 1986, note 1 above.

8. W. Muir, research director, INFORM, and president, Hampshire Research

Associates, andria, Va., personal communication with the author, 28

August 1993.

9. Superfund Amendments and Reauthorization Act of 1986, 99th Cong., 2nd

sess., Conf. Rep. 962 to accompany H.R. 20005, 292-302. Section 313 (1) of

SARA defines mass balance as " an accumulation of the annual quantities of

chemicals transported to a facility, produced at a facility, consumed at a

facility, used at a facility, accumulated at a facility, released from a

facility, and transported from a facility as a waste of a commercial product

or byproduct or component of a commercial product or byproduct. " The phrase

" mass balance " has several interpretations and can be used to refer to an

engineering mass balance or a materials accounting. The engineering approach

requires complete closure whereby an exact measurement of all inputs at a

facility should equal the total facility outputs. All data points must meet

rigorous standards of accuracy and precision and be independently measured.

Typically, this is a time consuming and resource-intensive procedure. In

comparison, the materials accounting approach to a mass balance calculation

is much less technical and relies on information that is routinely collected

at the facility for business or inventory management purposes. It is

generally recognized that the Senate language intended a materials

accounting methodology.

10. R. Gottlieb, ed., Reducing Toxics: A New Approach to Policy and

Industrial Decisionmaking (Washington, D.C.: Island Press, 1995), 133-35.

11. Office of Pollution Prevention, Environmental Protection Agency,

Pollution Prevention 1991: Progress on Reducing Industrial Pollutants, EPA

ZIP-3003 (Washington, D.C., October 1991).

12. P. Orum, ed., Making the Difference: Part 1 (Washington, D.C.: Working

Group on Community Right-to-Know, February 1990).

13. World Wildlife Fund fact sheet, April 1992, provided by J.

Condray, Monsanto.

14. Public Environmental Reporting Initiative, PERI Guidelines, Q & A

(Washington, D.C., May 1994), 1.

15. D. Lober et al., " Corporate Environmental Reports: An Evolving

Management Tool " (working paper for Duke University, Durham, N.C., 1996).

16. Office of Toxic Substances, U.S. Environmental Protection Agency, 33/50

Program Overview as of December 11, 1991 (Washington, D.C., 1992).

17. T. Naten, associate, Hampshire Research Associates, personal

communication with the author, 3 March 1996.

18. G. V. Poje and D. Horowitz, Phantom Reductions: Tracking Toxic Trends

(Washington, D.C.: National Wildlife Federation, August 1990); Citizens

Fund, Manufacturing Pollution: A Survey of the Nation's Toxic Polluters

(Washington, D.C., July 1991); Citizens Fund, Manufacturing Pollution

(Washington, D.C., August 1992); and J. B. Courteau and N. Lilienthal,

Toward a More Informed Public: Recommendations for Improving the Toxics

Release Inventory (New York: INFORM, 1991).

19. G. Riley, J. Warren, and R. Baker, Assessment of Changes in Reported TRI

Releases and Transfers Between 1989 and 1990, EPA Contract Number

CR81760-01-0 (Research Triangle Park, N.C.: Center for Economics Research,

Research Triangle Institute, May 1993).

20. Ibid.

21. Pollution Prevention Act of 1990, note 6 above. " Pollution Prevention

Policy Statement, " Federal Register 54, no. 16 (January 1989): 3845- 47.

22. R. A. Frosch, " Industrial Ecology: Adapting Technology for a Sustainable

Word, " Environment, December 1995, 16.

23. H. Sheevers et al., A Clearer View of Toxics: New Jersey's Reporting

Requirements as a Model for the United States (New York: INFORM, 1994).

24. S. A. Hearne, " Potential Modifications to the US EPA Toxics Release

Inventory to Better Assess Pollution Prevention, " (Ph.D. diss., Columbia

University, New York, May 1994).

25. Polaroid Corporation, 1994 Report on the Environment (Waltham, Mass.,

1995), 24.

26. S. A. Hearne and M. Aucott, " Source Reduction vs. Release Reduction: Why

the TRI Cannot Measure Pollution Prevention, " Pollution Prevention Review,

Winter 1991/1992.

27. Committee to Evaluate Mass Balance Information for Facilities Handling

Toxic Substances, Board on Environmental Studies and Toxicology, Commission

on Geosciences, Environment, and Resources, National Academy of Sciences,

Tracking Toxic Substances at Industrial Facilities: Engineering Mass Balance

versus Materials Accounting (Washington, D.C.: National Academy Press,

1990).

28. L. Greer, E. Clarence-, and J. Warren, Going to the Source: A Case

Study on Source Reduction of Industrial Toxic Waste (New York: Natural

Resources Defense Council, 1991).

29. In New Jersey, all facilities covered by section 313 of SARA must also

submit materials accounting information to the state's Department of

Environmental Protection for listed TRI substances. This information,

required under New Jersey's Community and Worker Right-to-Know Act of 1983,

has been collected since 1987. New Jersey Department of Environmental

Protection, Office of Science and Research, Worker and Community Right To

Know: Background and Basis Document (Trenton, N.J., April 1984).

Massachusetts is the only other state in the United States with similar

reporting requirements.

30. Hearne, note 24 above.

31. A. White et al., New Jersey's Planning Process: Shaping a New Vision of

Pollution Prevention, Case Study No. 1: Sandoz Pharmaceuticals (Boston,

Mass.: Tellus Institute, December 1995).

32. T. Greiner, president, Greiner Environmental, personal communication

with the author, 24 January 1996.

33. American Bankers Association et al., letter to the Honorable Carol M.

Browner, administrator, U.S. Environmental Protection Agency, 18 December

1995.

34. " Toxics Emissions Reporting: Industry Groups to Wage Campaign Against

Materials Accounting, " Environmental Policy Alert, 14 February 1996, 37.

35. D. Theissen, director, corporate product responsibility, 3M, testimony

at EPA Public Meeting No. 2 during TRI Phase III, Washington, D.C., 18-19

October 1995. The Chemical Manufacturers Association has estimated that

materials accounting will double the costs associated with TRI report

filing.

36. Hearne, note 24 above.

37. Author's personal experience from site visit at BASF plant in New

Jersey, 1991.

38. National Pollution Prevention Roundtable, Chemical Use Information in

TRI (Washington, D.C., January 1996).

RELATED ARTICLE: Tracking Toxics

We at DuPont appreciate the opportunity to comment on A. Hearne' s

article. We agree that the Toxics Release Inventory (TRI) is a credible

measure of industry's progress in reducing waste and emissions of the listed

chemicals, and the company strongly supports initiatives leading to an

informed, actively involved community. We also endorse the trend toward

voluntary initiatives such as the Environmental Protection Agency's (EPA)

33/50 program versus the old command and control approach. Hearne advocates

expanding TRI to require materials accounting and chemical use reporting.

Proponents of this believe that chemical use reporting will lead to

reductions in the use of toxic chemicals and therefore reduce the risks of

hazardous chemical exposures to workers, consumers, and communities. We

feel, however, that chemical use is not proportional to risk and therefore

that chemical use reporting is not additive in understanding risk or

determining if risk has been reduced.

Information about the quantities of chemicals stored, storage locations,

pressure, temperature, operating controls, and equipment design is useful

for understanding and managing the risk of releases and emissions. This type

of information is already being shared with communities through the chemical

industry's worst case scenario program and community advisory panels. Hence.

the public already has the ability to influence risk reduction decisions in

local situations. We need to expand these types of local risk management

partnerships. While TRI reporting of releases and transfers has been useful

in facilitating dialogue with local communities, the proposed national

reporting of materials accounting information would not enhance this

dialogue. It could potentially be misleading for a number of reasons as the

following example shows.

Hearne correctly cited DuPont's Deepwater, New Jersey, plant as a positive

example of risk-reduction efforts. At this plant, the hazardous chemical

phosgene is produced on-site and then quickly converted to a nonhazardous

product so inventories are kept to a minimum. However, a recent EPA report

to President Clinton noted that " . . . DuPont Corporation in Deepwater, New

Jersey reported TRI releases/transfers of only 1,298 pounds of phosgene in

1991. A materials accounting program indicated that, in fact. more than 58

million pounds of phosgene were present within the facility for that same

period of time. " (1) This information suggests that very large quantifies of

phosgene were present on-site, posing a seemingly huge risk to the

community. In reality, however, the 58 million pounds represent the plant's

total annual production and consumption of phosgene, not the amount of the

chemical present at any one time. In fact, the largest quantity of phosgene

present at any point was only a few thousand pounds. In this case. materials

accounting information was clearly not useful for assessing risk and could

be easily misinterpreted.

Our perspective also differs from that of Hearne in the areas of pollution

prevention and recycling. In the section entitled " The Measurement

Challenge. " Hearne states that " pollution prevention is any practice that

reduces the use or generation of hazardous substances. " We believe pollution

prevention is the reduction or elimination of wastes and emissions from

industrial products and processes through a hierarchy of management options.

The highest priority is to eliminate or reduce the generation of wastes and

emissions at their source, followed by environmentally sound recycling and

reuse of production materials and by-products. Employing this hierarchy of

priorities when making waste reduction decisions produces results that

benefit the environment and business.

In the same section, Hearne also states that " recycling . . . [has] little

environmental or economic benefit. " We have numerous examples of the great

environmental, economic, and energy reduction benefits of recycling. For

example, DuPont takes back and recycles used film- processing chemicals from

its customers, thereby eliminating a waste stream and recapturing much of

the value of the materials as well as achieving a competitive advantage.

We recognize the benefits of voluntary materials accounting. It is after all

a sound business practice that can inform decisionmakers about ways to

improve product yield and prevent losses of valuable ingredients. We also

support good regulations, such as those that establish performance standards

for environmental improvements, as well as voluntary initiatives to reduce

waste and emissions such as EPA's 33/50 program. However, we do not believe

that the command-and- control, one-size-fits-all approach to materials

accounting currently being debated would provide the benefits outlined in

Hearne's article. This approach could also effectively damage the

competitiveness of U.S. industry by exposing additional confidential

business information to rivals.

DuPont shares Hearne's goals of a well-informed public, pollution

prevention, cleaner production, and the resultant economic and environmental

benefits. We are actively pursuing these goals in partnership with our local

communities and the regulatory agencies. TRI, risk management programs,

community advisory panels, and worst case scenarios have accelerated our

progress. However, we do not believe a mandated, prescriptive materials

accounting and chemical use reporting regulation would help us achieve these

goals. We welcome a dialogue with various stakeholders to better explore

ways to fulfill these objectives. We also invite Hearne to visit with us at

DuPont and exchange ideas about some of our risk reduction and community

interaction programs. We believe that these programs help inform and involve

the public in a way that leads to local sustainability.

Edwin L. Mongan Manager of Pollution Prevention Programs DuPont Company

Wilmington, Del.

1. Environmental Protection Agency, Expansion of Community Right-to- Know to

Include Chemical Use Data: Part III of the Toxics Release Inventory

(Washington, D.C., October 1995).

A. Hearne's article surveys a range of important issues related to

the use of materials accounting methodology for improved environmental

management, its value to pollution prevention, and its possible use in

public policy through the Toxics Release Inventory (TRI).

Having been professionally involved since 1987 with the application of a

materials accounting framework through Polaroid's voluntary Toxic Use and

Waste Reduction (TUWR) program, I agree with Hearne's conclusions regarding

its environmental utility. Whether or not an additional reporting

requirement related to materials accounting should be added to our already

overburdened command and control regulatory structure is a separate

question.

In the overall framework of Polaroid's TUWR program, materials that are used

become either products or by-products. Notably. TUWR encompasses " all

materials " used by the company: liquids and solids. chemicals or not,

regulated or not. Polaroid's decision in 1987 to structure TUWR in such a

broad fashion reflects the notion that " everything is toxic to something at

some dose. " Program designers recognized this and so assigned all materials

used corporate-wide into one of five categories. Chemicals were assigned to

Categories I through IV (with Category I being the most toxic); all other

materials ( " rubbish, rubble, and trash " ) were assigned to Category V. Each

of these categories has different metrics and objectives. The objective for

Categories I and II is to reduce the use of toxic materials. The objective

for Categories III, IV. and V is to reduce the generation of by-products and

to encourage certain types of recycling. Polaroid's Environment Accounting

and Reporting System (EARS) collects and reports on the progress being made

toward these objectives on a per unit basis so that increases or decreases

are not strongly influenced by production variability.

The decision to assign materials to categories forced the designers of TUWR

to grapple with the toxicity of the materials themselves as opposed to which

particular governmental list they happened to be on. Most individuals,

including environmental advocates, acknowledge that a wide range of toxicity

exists within the substances on the various lists, The internal dynamics of

TUWR encourage reduced use of Category I and II chemicals through a variety

of techniques, including the substitution of less toxic Category III and IV

substances. However, these less toxic chemicals may be on a government list

such as TRI, which does not attempt to distinguish among the toxicity of all

650 listed materials.

Over the first five years of TUWR, Polaroid realized a voluntary 37 percent

reduction in the use of Category I and II chemicals, largely as a result of

materials substitution. The environmental benefits may be difficult to

quantify, but risk was certainly reduced because fewer and less toxic

materials were transported, transferred, handled, and managed. Cost models

based on Category I-IV aggregated TUWR " use and waste " reductions of 23

percent indicate an overall savings of $19 million for this same five-year

period.

To return to the question of incorporating materials accounting data with

TRI, I would look for opportunities to reduce command and control demands

instead of adding a regulatory requirement to the existing structure. With

so many compliance and enforcement priorities already on our plate, I doubt

that the benefits of materials accounting would be fully realized by

pursuing this approach. Furthermore, the addition of an extra regulatory

requirement might actually increase the degree of polarization regarding

materials accounting and TRI.

It strikes me that if materials accounting rather than end-of-the- pipe

controls had been the framework for environmental policy in the 1970s, there

might be less of a real or perceived need for our current array of laws and

enforcement targets. With the focus on continuous improvement in the use of

toxic materials and the generation of by- products that materials accounting

invites. alignment of economic drivers (pollution is waste, waste is money)

with environmental improvement would occur more naturally. As it is, our

current rigid command and control regulatory structure prescribes spending

that consumes limited environmental resources and squeezes out alternative

options, such as materials accounting.

This may be the time and materials accounting may be the way in which we can

reshape our end-of-the-pipe command and control structure into a new

framework that supports broader concerns regarding global sustainability.

The effort to implement such changes affords us the opportunity to more

fully engage the financial accounting community in helping to better align

environmental and economic drivers. Our current regulatory structure is

deeply imbedded and changing it poses a significant cultural challenge, but

the potential value of materials accounting to environmental public policy

may be worth the effort.

Harry Fatkin Senior Director and Division Vice President of Health, Safety,

and Environmental Affairs Polaroid Corporation Cambridge, Mass.

A chorus of pros and cons surrounds the debate over expanding the federal

Toxics Release Inventory (TRI) databases to include materials accounting

information. A. Hearne's portrayal of these opposing viewpoints

brings to mind an earlier time when business and environmental interests

argued the merits of making a chemical release database available to the

public. Those discussions led to the creation of the present TRI system.

Now, 10 years later, industry and environmentalists again find themselves at

loggerheads over TRI but in a regulatory climate that differs starkly from

that of a decade ago. Absent an incident like the Bhopal accident, the

materials accounting debate lacks the urgency that characterized the TRI

debate a decade ago.

Critics of materials accounting in industry focus on the potential risks to

confidential business information and the excessive resources required for

implementing such accounting systems. Environmentalists argue that in the

absence of such systems, true pollution prevention cannot be measured,

communities do not have access to critical chemical risk information, and

consumers lack information about the toxic chemicals contained in products

that they use and are exposed to every day.

While these concerns reflect legitimate differences of opinion, the

character of the current debate threatens to destroy the progress business

and environmentalists have made in the past five years toward collaboration

and partnership. Programs such as the Environmental Protection Agency's

33/50. Green Lights, Climate-Wi$e, WasteWi$e, and the Common Sense

Initiative all attest to the benefits of the partnership approach. At this

juncture, the question is whether common ground can be found in the case of

materials accounting. If not, it is probable that the present rancorous

debate will become a protracted siege that ultimately has to be resolved by

the courts rather than by consensus.

However, both sides still have time to recast the current debate and to

resume progress along a collaborative pathway. As Hearne correctly points

out, most in the business community, although initially opposed to the idea,

now credit TRI with accelerating pollution reduction in U.S. industry. An

expanded TRI system may offer similar business benefits. For many in the

business community, reshaping TRI data gathering (though not necessarily

disclosure) to include materials accounting data is not objectionable per

se. Materials accounting is, after all, sound business practice. The proper

accounting of materials provides the foundation for sound judgments about

improving production efficiency/chemical yields, tracking production costs,

setting prices, targeting cost reduction opportunities, and many other

routine business functions.(1) Few managers would disagree with the view

that materials accounting represents, in essence, a return to the first

principles of wise materials management. Similarly, few environmentalists

deny the value of working with business to achieve environmental

improvements that also enhance long-term competitiveness.

Assuming agreement on the internal benefits of materials accounting, the

challenge becomes how to deal with the more contentious question of public

disclosure. To date, discussions of this issue have been highly polarized.

Industry points to confidentiality threats while environmentalists point to

the low numbers of confidentiality claims filed in Massachusetts and New

Jersey, where materials accounting reporting systems have existed since 1991

and 1987 respectively. This two-dimensional perspective obscures an

alternative vision of public disclosure, a vision that sees it as a vehicle

through which business can constructively engage stakeholders. Leadership

firms recognize the need to broaden their definition of stakeholder to

ensure long- term competitiveness. Joichi Aoi, chair of the board of the

Toshiba Corporation. recently noted that " corporate success will depend on

management's ability to satisfy not just its investors and employees, but

the entire range of interests that make up our society. " (2) This perspective

is shared by forward-looking business leaders throughout the world.

Assuming adequate confidentiality protection, public disclosure of materials

accounting data can facilitate the engagement of environmental and community

stakeholders in constructive dialogue about both facility- specific and

corporate-wide performance. While public disclosure will certainly occasion

a need for careful explanation and interpretation of data, business should

not fall victim to the tired and patronizing argument that the public will

misunderstand the data.

The search for common ground on materials accounting is best seen as a step

in the evolution of environmental partnerships. The signatories of the

Coalition for Environmentally Responsible Economies (CERES) Principles have

already engaged in constructive dialogue about materials accounting and made

concrete progress toward implementing such systems.(3) These companies -

General Motors, SUN, Polaroid. H. B. Fuller, Arizona Public Service, and

Bethlehem Steel, among others - currently report on their materials

accounting practices. Beginning this year, each of these companies will

launch a pilot materials accounting program of its own design, the results

of which will be disclosed to the public along with the firm's plans for

putting a permanent materials accounting system of some kind in place.(4)

The CERES approach is based on the premise - implicitly agreed to by all the

signatories that - materials accounting is a sound management practice whose

economic and public communications benefits will become self-evident as a

result of the pilot projects. For these particular companies, such an

approach comports with an overall commitment to continuously improving the

quality, completeness, and timeliness of public information on corporate

environmental performance.

With firms as diverse as the CERES signatories able to see the benefits of

materials accounting, a consensus between industry and environmentalists

must surely be within reach.

L. White Vice President Dierks Research Associate Tellus

Institute Boston, Mass.

1. A. L. White. D. E. Savage, and A. Dierks, " Environmental Accounting:

Principles for Sustainable Enterprise, " in Technical Applications in the

Pulp and Paper Industry (TAPPI), Book 2 of the Proceedings the TAPPI

International Environmental Conference (Atlanta, Ga., 7- 10 May 1995).

949-58.

2. M. J. Epstein, Measuring Corporate Environmental Performance (Montvale,

N.J.: The Institute of Management Accountants Foundation for Applied

Research, Inc., 1996), 63.

3. J. Nash and J. Ehrenfeld. " Code Green: Business Adopts Voluntary

Environmental Standards, " Environment. January/February 1996, 16.

4. Coalition for Environmentally Responsible Economies, 1995 CERES Report

Form t Boston, Mass., May 1996).

A. Hearne is a program officer at The Pew Charitable Trusts in

Philadelphia, Pa.

Hearne, A., Tracking toxics: chemical use and the public's

" right-to-know. " (CoverStory)., Vol. 38, Environment, 07-17-1996, pp 4(13).