A guide to enhanced compliance planning.

• Author: Bensinger, Douglas L.
• Position: Leadership in Environmental Initiatives

New and far-reaching environmental regulations require a much stronger integration of compliance plans with the overall strategic business plan.

As environmental programs have continued to grow in scope and complexity, the need to integrate strategic environmental planning into business planning has become abundantly clear. This point is reinforced by the most recent major environmental program change, the Clean Air Act Amendments of 1990 (CAAA). As the U.S. Environmental Protection Agency (EPA) and individual states develop and implement new regulations over the next few years in response to the CAAA, businesses will realize that environmental compliance can be as integral as tax planning to the financial success of an enterprise.

The specific details of the Clean Air Act and the new regulations, many of which have not yet been promulgated, will challenge the tax codes in complexity and convolution. Regulations, including operating practices, limits, and standards, are being developed and implemented as part of an ambitious schedule that extends through the end of the decade.

Although the CAAA are perhaps best known for the 700 pages of detailed technical changes to the Act, they also contain several far-reaching regulatory policy shifts. The combination of these changes has moved compliance with environmental legislation from the tactical decisionmaking arena into the realm of strategic business planning. Compliance decisions are no longer a matter of operational or single-plant financial impact. Today, they have long-term corporate consequences and will affect the company's ability to compete in the marketplace.

For companies that have major operations affected by the Clean Air Act, it is essential that directors and senior management be involved in establishing goals, objectives, and planning criteria for complying with the Act and take an active role in integrating compliance into strategic business planning. Following are guidelines that should be used in developing these goals and objectives:

1. Although the Clean Air Act has many complicated and interdependent requirements, don't begin compliance planning with the paradigm that the issues are too complex to be fully understood by the company's senior management or your board. On the contrary, insist that each step and element of the compliance strategy be flow-charted or illustrated in a straightforward manner that enables everyone to understand the measures being taken. If you allow...