Cal/EPA Environmental Management System Project
Report to the Legislature: Fourth Quarterly Update
July through September, 2000

Contents

• Executive Summary
• Introduction
• Major Accomplishments
• Artistic Plating EMS Implementation and Accomplishments
• IBM San Jose Facility EMS Implementation and Accomplishments
• Upcoming Activities

Executive Summary

The purpose of this report is to update members of the Legislature on the Cal/EPA Environmental Management System (EMS) Project authorized by passage of Assembly Bill 1102 in July of 1999. This fourth quarterly report includes

• a brief overview of major accomplishments this past quarter, including a description of the new phase of the EMS Project;
• information presented by two of the California pilot facilities, Artistic Plating in Anaheim and IBM's San Jose facility, on their EMSs and accomplishments; and
• upcoming activities.

Cal/EPA reports quarterly on progress to the Legislature and will provide a final analysis of results by January 1, 2002.

Previous updates to the Legislature and additional information on the project may be obtained from the website (http://www.calepa.ca.gov/EMS).

Major accomplishments this quarter include

• facilitating regional EMS working group meetings to learn about and comment on individual pilot project EMS development and implementation,
• providing training for the working groups on the practical development of EMSs with sustainability components,
• drafting individual pilot project work plans,
• collecting update data on EMS design and performance, and
• drafting the California Supplemental Data Protocol to answer questions posed by Assembly Bill 1102.

A new phase of the California EMS Project has begun. Regional Working Group meetings are being organized to facilitate a dialogue between pilot project participants and stakeholders regarding facility EMS design and implementation. Pilot facilities are sharing information on EMS implementation, providing a facility tour, answering questions, and receiving feedback. Over twenty representatives from government agencies, other pilot companies and interested businesses, academia and public interest groups were in attendance at each of the September meetings of the Regional Working Groups. IBM gave a presentation on the design and implementation of its EMS and provided a tour of its chemical distribution center for the Northern California Working Group. The Southern California Working Group met at Artistic Plating Company in Anaheim. The meeting highlighted the pollution prevention and compliance successes that have resulted from the implementation of their EMS. Brief summaries of the information presented by the two pilot organizations are included in the report.

Artistic discussed the progress made toward achieving objectives and targets. A significant change was the elimination of perchlorethylene usage and replacement with an ultrasonic aqueous immersion cleaning tank for parts cleaning. This change yielded a decreased exposure risk, decreased air sampling costs, decreased risk to workers, decreased worker compensation insurance premiums, decreased medical and biological monitoring, decreased lab analysis and disposal costs, and decreased air quality district emission fees.

Currently, IBM's San Jose facility is working toward reducing its environmental impacts in the following areas: energy use, water use, chemical use, waste discharges and employee transportation.

Upcoming activities of the Cal/EPA EMS Project include

• continuing to facilitate regional EMS working group meetings at pilot project locations to learn about and comment on individual pilot project EMS development and implementation,
• finalizing individual pilot project work plans,
• performing quality assurance of update data on EMS design and performance, and
• finalizing the California Supplemental Data Protocol to answer questions posed by Assembly Bill 1102.

The purpose of this report is to update members of the Legislature on the Cal/EPA Environmental Management System (EMS) Project authorized by passage of Assembly Bill 1102 in July of 1999. This fourth quarterly report includes

• a brief overview of major accomplishments this past quarter, including a description of the new phase of the EMS Project;
• information presented by two of the California pilot facilities, Artistic Plating in Anaheim and IBM's San Jose facility, on their EMSs and accomplishments; and
• upcoming activities.

Cal/EPA reports quarterly on progress to the Legislature and will provide a final analysis of results by January 1, 2002.

Previous updates to the Legislature and additional information on the project may be obtained from the website (http://www.calepa.ca.gov/EMS). An introduction to the EMS project was included in the first, second, and third quarterly update reports.

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Introduction

During the previous phase of the EMS Project, public hearings were held in Northern and Southern California in fulfillment of the legislative requirement for a public hearing prior to selection of the pilot projects. Receiving one procedural comment, Cal/EPA announced selection of the pilot projects as proposed and adopted the pilot selection criteria, model pilot project work plan, and monitoring and evaluation parameters.

The following seven pilot projects were selected by Cal/EPA:

1. Anheuser-Busch in Fairfield,
2. Wastewater treatment facilities (Central Marin Sanitation Agency in San Rafael and City of San Diego Metropolitan Wastewater Department, Operation and Maintenance Division),
3. IBM Corporation in San Jose,
4. Lockheed Martin Aeronautics Company (formerly the Skunk Works) in Palmdale,
5. Metal finishing companies (Artistic Plating in Anaheim and Gene’s Plating in Los Angeles),
6. Pentel of America, Ltd. in Torrance, and
7. Vineyards and wineries (Davis Bynum Winery and Benziger Family Winery in Sonoma County).

Initial observations of results from implementing EMSs, based on preliminary data shared by several of the Cal/EPA pilot projects, were included in the Third Quarterly Update. Preliminary results include notably positive experiences in the areas of regulatory compliance, employee involvement, interested party involvement, environmental performance and cost reduction, pollution prevention, public information, and supply chain relationships.

Major accomplishments this quarter are described below.

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Major Accomplishments

Major accomplishments this quarter include

• facilitating regional EMS working group meetings at pilot project locations to learn about and comment on individual pilot project EMS development and implementation,
• providing training for the working groups on the practical development of EMSs with sustainability components,
• drafting individual pilot project work plans,
• collecting update data on EMS design and performance, and
• drafting the California Supplemental Data Protocol to answer questions posed by Assembly Bill 1102.

Regional Workgroup Meetings
A new phase of the California EMS Project has begun. Regional Working Group meetings are being organized to facilitate a dialogue between pilot project participants and stakeholders regarding facility EMS design and implementation. Pilot facilities are sharing information on EMS implementation, providing a facility tour, answering questions, and receiving feedback. Over twenty representatives from government agencies, other pilot companies and interested businesses, academia and public interest groups were in attendance at each of the September meetings of the Regional Working Groups. IBM gave a presentation on the design and implementation of its EMS and provided a tour of its chemical distribution center for the Northern California Working Group. The Southern California Working Group met at Artistic Plating Company in Anaheim. The meeting highlighted the pollution prevention and compliance successes that have resulted from the implementation of their EMS. Brief summaries of these presentations are included later in this report.

EMS Training
In August, the Northern and Southern California EMS Project Working Groups each participated in one-day hands-on EMS implementation workshops taught by Peter Wilson from the WSP Group, United Kingdom and Ed Quevedo from Pillsbury, Madison & Sutro. Through participatory exercises, attendees learned how to develop an environmental policy, how to identify environmental aspects and impacts, targets and objectives, and discussed environmental reporting. Each one-day session closed with a discussion of EMSs and the relationship to sustainability. Approximately 25 members of the Northern California Working Group participated and about 20 members of the Southern California Working Group participated. These working group members include business, government, non-governmental organizations and academics.

Pilot Project Work Plans
The purpose of the individual Pilot Project Work Plans currently being drafted is to describe how the work of each of the pilot projects will be carried out and how the goals of the California EMS project will be accomplished. This includes describing the pilot project management; data collection and management; data quality assessment, validation, and usability; and data analysis process. The Model Pilot Project Work Plan, finalized after Regional Working Group input and public hearings earlier this year, serves as the template for drafting the individual pilot project work plans. The Regional Working Groups will have the opportunity to review and comment on the Pilot Project Work Plans next quarter.

Data Collection Protocols
Currently, update data on EMS design and performance is being collected using the national EMS data protocols. Evaluation and Monitoring Parameters have been adopted by Cal/EPA and are comprised of the national EMS data protocols and a California supplement. In coordination with other states, detailed national data protocols have been developed to collect standardized information on EMS design and performance. The national data protocols are available for review through a web site link at http://www.mswg.org. In order to answer the questions provided in AB 1102, Cal/EPA is supplementing the national data protocols with a few additional questions. Using these combined protocols, also referred to as the Evaluation and Monitoring Parameters, pilot projects are submitting information in the following categories:

• environmental performance,
• regulatory compliance,
• use of pollution prevention techniques,
• continual improvement,
• employee involvement,
• involvement of interested parties,
• quality and quantity of information to the public,
• EMS design, and
• EMS costs and benefits.

Information presented by two of the California pilot facilities, Artistic Plating in Anaheim and IBM's San Jose facility, is summarized in the following sections. This information was presented by the pilot project participants as background for establishing dialogue with stakeholders during the September Regional EMS Working Group meetings.

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Artistic Plating EMS Implementation and Accomplishments

Artistic Plating provided Southern California Working Group members with a tour of their facility operations and an overview of the EMS implementation progress on September 21, 2000. Artistic Plating is a medium-sized, 125 employee, metal finishing facility in Anaheim, California. The facility performs copper, nickel, brass, and chrome electroplating. Artistic specializes in electroplating zinc die-cast parts and aluminum wheels for commercial customers.

Background
Artistic Plating has volunteered to test an EMS template developed by U.S. EPA as part of the Merit Partnership Metal Finishing EMS Template (MFEMS) project. The Merit Partnership for Pollution Prevention (Merit) is a cooperative venture of the public and private sectors whose mission is to develop and promote pollution prevention practices and technologies that both protect the environment and contribute to economic growth. Merit is conducting a series of pilot projects to evaluate the environmental and economic results of ISO 14001-based EMSs in various industries. (ISO 14001 is the voluntary, global standard for Environmental Management Systems.) The MFEMS Template is intended to provide a simplified and industry-specific template that can form the basis for a company’s EMS, and that could, when implemented, serve as an initial step towards ISO 14001 certification.

Unique EMS Characteristics
Unique aspects of this project include

• development of an industry-specific EMS template,
• focus on small and medium sized enterprises and how EMSs might help them,
• involvement with the industry association, and
• demonstration of a joint U.S. EPA and Cal/EPA pilot project.

Nine metal finishing companies, including Artistic, recently completed a series of workshops learning to develop and implement an MFEMS at their facilities. U.S. EPA sponsored these workshops for interested members of the Southern California Metal Finishing Strategic Goals Program (Strategic Goals Program). The Strategic Goals Program is a voluntary, multi-stakeholder program aimed at improving environmental performance, exceeding compliance, and reducing business and environmental costs at metal finishing facilities. At its core is a set of environmental performance goals for metal finishers and a set of "enabling actions" other stakeholders will undertake to help metal finishers achieve the goals. Members of the Strategic Goals Program include U.S. EPA, Cal/EPA, local regulatory agencies (i.e. water and air), metal finishing companies, the Metal Finishing Association of Southern California, academics, and non-governmental organizations.

Strategic Goals Program Goals
Improved Resource Utilization

• 98% metals utilization
• 50% reduction in water use
• 25% reduction in energy use

Reduced Hazardous Emissions

• 90% reduction in organic TRI emissions
• 50% reduction in metals emissions
• 50% reduction in hazardous sludge disposal
• Substantial reduction in sludge generation
• Reduced worker and community exposure

Increased Economic Payback & Decreased Compliance Costs

• Achieve long-term economic benefits
• 50% reduction in unnecessary costs through burden reduction with no loss in environmental performance

EMS Overview
The materials Artistic shared included their environmental policy statement, the list of environmental aspects and impacts, their objectives and targets, and the costs and benefits of environmental improvements. The top five environmental aspects and impacts are perchloroethylene vapors from degreasing operations, chrome-containing wastewater from chrome plating, cyanide-containing wastewater from cyanide plating, liquid chlorine from cyanide wastewater reduction processes and nitric acid from stripping operations.

The top five objectives and targets identified are as follows:

1. Eliminate perchloroethylene usage in parts cleaning.
2. Reduce hexavalent chromium discharge to the wastewater treatment plant.
3. Decrease cyanide in wastewater discharge.
4. Reduce liquid chlorine usage.
5. Reduce nitric acid use.

Progress toward the top five objectives and targets is described below.

Perchloroethylene
Artistic discussed the progress made toward achieving objectives and targets. A significant change was the elimination of perchlorethylene usage and replacement with an ultrasonic aqueous immersion cleaning tank for parts cleaning. This yielded a decreased exposure risk, decreased air sampling costs, decreased risk to workers and decreased worker compensation insurance premiums, decreased medical and biological monitoring, decreased lab analysis and disposal costs, and decreased air quality district emission fees.

Hexavalent chromium
Artistic is working toward its target of decreasing hexavalent chromium discharge by 10% through several specific source reduction actions. Specifically, a new drip board was installed to reduce dragout, workers received dragout reduction training, and anodes were repositioned to achieve comparable plating at a lower chromium concentration.

Cyanide and liquid chlorine
The target to reduce cyanide discharge concentration to a level 50% lower than the permitted limit is progressing through source reduction actions, improved treatment and waste treatment. A third stage cyanide treatment unit was added, workers received dragout reduction training, and the pH of the cyanide baths was lowered which improved cyanide treatment. Moreover, increased analytical monitoring was implemented on a bi-weekly basis to fine-tune the cyanide reduction pretreatment process. Finally, a cyanide-based nickel strip was eliminated from cyanide plating operations allowing for a significant reduction in the amount of liquid chlorine usage.

Nitric acid
The target to reduce nitric acid use by 95% is still in process. Material substitution alternatives are still under investigation. Nitric acid usage increased significantly due to introduction of a new plating line. Artistic installed a new aluminum plating line and one of the processes for plating aluminum requires dipping in a triacid solution made up of 70 percent nitric acid. Artistic believes that the target of reducing nitric use by 95% can be achieved in the next several months as many nitric acid substitute chemical technologies are becoming more available and yielding better results. Some of these newly developed technologies are presently being tested at Artistic. The actual results will be known in the time frame previously mentioned.

Progress toward other objectives and targets

Other objectives and targets include reductions in copper, sludge, and process water.

In order to ensure compliance, copper discharges to the local wastewater treatment plant were lowered by monitoring the wastewater treatment process more closely and fine-tuning the pre-treatment process.

Sludge volume has been indirectly reduced by the installation of conductivity sensors in the rinsing tanks. Dragout techniques have been put into practice and enforced more strictly. In addition, the overall wastewater process operations are monitored more consistently, and another operator was hired.

Efforts to reduce process water use through source reduction and in-process recycling are ongoing.

Costs and Benefits
The costs and benefits realized from managing perchloroethylene, hexavalent chromium, cyanide and liquid chlorine, nitric acid, copper, and sludge are described below from estimates by Artistic Plating.

Perchloroethylene
The estimated costs and benefits of eliminating perchloroethylene are as follows. The decreased air sampling costs saved $2,000 per year. Decreased medical and biological monitoring saved $1,500. The savings in the reduced need for testing and lab analysis is approximately $1,000 per year. Decreased disposal costs saved are $1,000 per year. The air quality management district factor emission fees saved $2,000 to $3,000 per year, based on quantity emitted. The value of decreased workers compensation insurance premiums cannot yet be determined, but the insurance company has committed to using a smaller factor in underwriting calculations.

Hexavalent chromium
Decreased chromium discharges to the local treatment plant ensured the elimination of potential discharge violations. Costs for increased water testing and lab analysis is $2,000 per year.

Cyanide and liquid chlorine
Cyanide discharges to the local treatment plant were decreased ensuring the elimination of potential discharge violations. Liquid chlorine usage was reduced, yielding $3,500 per month in cost savings. A reduction in other wastewater treatment materials saved $500 per month. Increased water testing and analysis costs an additional $4,500 per year. The addition of a third stage tank with mixer and controls cost $10,000.

Nitric acid
Nitric acid cost savings of $360 per day are realized through the reduction of plating rejects due to poor activation of substrate metal. Costs of nitric acid use come from treatment of the spent triacid (70% nitric acid) which totals $1,050 per week in additional costs. The added cost of caustic soda totals $450 per week.

Copper
Decreased copper discharges to the local treatment plant ensured the elimination of potential discharge violations. Costs for increased water testing and lab analysis is $2,000 per year.

Sludge
The decrease in sludge volume has meant 26,966 pounds less sludge generated per quarter. Saved disposal costs per quarter are $4,724. The reduced quantity of testing and lab analysis has led to $2,500 in savings. The hiring of an additional wastewater treatment operator costs $26,000 per year.

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IBM San Jose Facility EMS Implementation and Accomplishments

The Northern California Working Group of the Cal/EPA Innovation Initiative Environmental Management System (EMS) Project met at the International Business Machines (IBM) facility in San Jose on September 19, 2000. The IBM San Jose facility employs approximately 7,000 workers who develop, manufacture, and market computer storage components and systems. Manufactured products include thin film magnetic recording heads, thin film storage disks, and disk drive systems.

Background
IBM has a long history of adopting measures to improve its environmental performance. In June 1997, as part of IBM's program to register all of its manufacturing and development sites worldwide, the San Jose Storage Technology Division site became the first IBM facility in the U.S. to register to ISO 14001. This facility has since undergone annual audits to ensure its continued compliance with the ISO 14001 standard.

Key milestones in the design and implementation of IBM's EMS are tabulated below.

Milestone	Date
Established Corporate EMS	1972
Certified to ISO 9001*	1992
Design of ISO 14001 EMS	1996
Implementation of EMS	1996
Certified to ISO 14001 EMS	June 1997
Continual Improvement	Ongoing

* ISO 9001 refers to international standard for quality assurance in design, development, production, installation, and servicing.

Unique EMS Characteristics
Because IBM is already certified to ISO 14001, they provide a unique opportunity to see pre- and post-EMS data much earlier in the pilot project process. Another unique characteristic of IBM's registration is that the company holds a single global registration. IBM's decision to have all its facilities ISO 14001 certified under one registration reflects corporate policy. It ensures international consistency, promotes efficient and effective business processes, and validates that IBM executes the same EMS no matter where in the world it does business.

EMS Overview
During the September 19, 2000 meeting of the Northern California Working Group, IBM gave a presentation on the design and implementation of its EMS. After summarizing its activities at the San Jose facility, IBM provided the Working Group with information related to its EMS experience. Specifically, IBM discussed the scope of its EMS, its environmental policy, the process for identifying/selecting aspects, the process of monitoring/measuring environmental performance, the process used to perform audits, and management review of the program. IBM also provided a tour of its chemical distribution center.

Currently, IBM's San Jose facility has identified its significant environmental aspects as including energy use, water use, chemical use, waste discharges and employee transportation. The EMS implemented at this facility addresses each of its significant aspects and their respective environmental impacts. The objectives for the significant aspects are as follows:

1. Reduce power consumption
2. Reduce solid waste disposal
3. Improve recycle rate
4. Use water more efficiently
5. Reduce air emissions
6. Reduce traffic congestion
7. Reduce waste generation
8. Reduce chemical use and waste
9. Reduce wastewater flow to San Francisco Bay
10. Use chemicals more efficiently

Progress Toward Objectives
During the presentation, IBM discussed the criteria for selecting objectives and targets which include consistency with IBM's environmental policy, commitment to environmental leadership, prevention of pollution, and continual improvement. They also shared tables that showed a continual decrease in the impact of their significant aspects. Below is a brief description of the progress that IBM reported for several of its objectives. (IBM did not have sufficient time at the meeting to discuss progress towards meeting all of its objectives.) However, through the pilot project protocols submitted over the next several months, Cal/EPA will evaluate IBM’s pre and post-EMS data to assess the impact of its EMS on environmental protection, as well as the quality and quantity of information available to the public.

Reduce Power Consumption
IBM anticipates meeting its energy conservation target of 4% (expressed in kilowatt hours) for calendar year 2000. Over the past several years, IBM has consistently met its energy conservation target, which is defined as a 4% reduction in consumption relative to what the consumption would have been in a given year without the conservation measures. One strategy towards meeting the target involves the replacement of motors for production-related activities with high efficiency motors.

Reduce Solid Waste Disposal and Improve Recycle Rate
IBM presented historical information on its recycling of solid waste. IBM has been well above the State target of 50%. Specifically, IBM is on schedule to meet its current San Jose facility target of 73%, which exceeds its corporate goal of 67%. The primary solid wastes that are recycled include: scrap metals (41% of the total recycled materials), wood and landscape materials (18.1%), cardboard (14.6%), paper (9.7%), and construction materials (9.4%).

Use Water More Efficiently
As a result of its efforts to implement its SB 14 Waste Reduction Plan, IBM anticipates a reduction in the use of water. It is currently tracking use and will report on trends in its next annual report, which is expected to be available in March of 2001.

Reduce Traffic Congestion and Reduce Air Emissions
IBM instituted programs to increase employee participation in commute alternatives that help to reduce congestion and improve air quality. Examples include providing each employee with a free pass to use public transportation as well as operating a shuttle service to the site from nearby transit stops and other local IBM locations. IBM measures the use of key elements of its Alternative Commute Program. For example, annual survey data shows that employee participation in one of its programs (EcoPass) increased 52% from 1998 to 1999, and was used by approximately 24% of the site population.

Reduce Waste Generation
IBM uses the SB 14 Waste Reduction Plan process as a key means of identifying the largest generators onsite and working with them to plan for reductions. IBM strives to reduce hazardous waste generation year-to-year indexed to production and has implemented a number of pollution prevention projects toward that end.

Reduce Wastewater Flow to San Francisco Bay
The San Jose/Santa Clara Water Pollution Control Plant (WPCP) treats and discharges nearly 120 million gallons per day of sanitary and pretreated industrial effluent from households and businesses in Silicon Valley, including IBM. IBM is constantly seeking ways to reduce its wastewater discharges to assist the WPCP in meeting flow restrictions designed to protect the saltwater marshes of South San Francisco Bay. For example, IBM participated in a voluntary partnership with the City of San Jose to evaluate opportunities for water conservation and wastewater flow reduction. IBM also provided information to employees about home conservation opportunities as a partner in the City's "Slow the Flow and Save the Bay" campaign.

Use Chemicals More Efficiently
As part of its efforts toward continual improvement, IBM launched a new, coordinated effort in 2000 to review chemical uses throughout the site's operations and evaluate opportunities to improve efficiency.

Upcoming activities of the Cal/EPA EMS Project are described below.

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Upcoming Activities

Benziger Family Winery is hosting the Northern Regional EMS Working Group meeting in November. Lockheed Martin Aeronautics Company in Palmdale is hosting the November Southern Regional EMS Working Group meeting.

Individual pilot project work plans will be reviewed by the pilot participants and EMS Working Groups in the upcoming quarter. After the plans have been finalized, they will be posted on the Cal/EPA EMS Project website (http://www.calepa.ca.gov/EMS).

Update data on EMS design and performance will be reviewed for quality assurance, and the California Supplemental Data Protocol, designed to answer questions posed by Assembly Bill 1102, will be finalized.

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