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Key departmental publications, e.g. annual reports, budget papers and program guidelines are available in our online archive.

Much of the material listed on these archived web pages has been superseded, or served a particular purpose at a particular time. It may contain references to activities or policies that have no current application. Many archived documents may link to web pages that have moved or no longer exist, or may refer to other documents that are no longer available.

Southcorp
Environmental Management System - Meeting the Needs of a Global Organisation

May 2000

Wine Barrels

Southcorp faced a major challenge when it decided to develop an environmental management system for all its facilities — covering such varied industries as wine, water heaters and packaging. Operating globally from more than 70 sites, Southcorp is the producer of such well-known brands as Penfolds, Lindemans, Seppelt, Rheem and Solahart. Its headquarters are in Melbourne. Southcorp has more than 9,000 employees worldwide, with 6,000 of them in Australia.

The company has a strong commitment to the environment, and this is reflected at all levels, from its Board through its wide-ranging production facilities. It wants to be seen as a good corporate citizen, taking a pro-active role in environmental management, rather than merely reacting to imposed regulations and requirements.

When it made the decision to prepare and adopt an environmental management system, Southcorp recognised that individual systems would be required at the various sites, but it wanted overall corporate coordination, to ensure the integrity of the approach. The corporate Southcorp Environmental Management System (SEMS) provides the basic framework, but individual sites maintain ownership of their systems, with some choosing to be certified under ISO 14001, and others deciding to forego certification.


Overview of the Process Used to Develop the EMS

Rationale: During the first half of the 1990s, Southcorp’s Board of Directors became increasingly aware of the importance of environmental issues, and the need for the company to have a soundly based environmental management system. Many of its products are household names, and the company’s reputation is important to its business. It recognised that many purchasers, both in Australia and overseas, are concerned about a company’s environmental actions. Some of the retail firms selling Southcorp products, such as Sainsbury’s in the UK, are attempting to ensure sound environmental performance among their suppliers.

Board members also recognised that legal decisions, both in Australia and overseas, that held Directors of companies liable for company activities with a detrimental effect on the environment meant that environmental management is an integral part of overall company operations.

Wine Barrels

Initial Steps: When it first undertook to develop an EMS, Southcorp needed to obtain basic information about what would be involved. It hired a consultant to provide a broad overview of requirements and essential elements of an EMS. Then in 1995, Southcorp hired Sharon Blum-Caon to be their Corporate Environmental Manager. Her primary responsibility initially was the development and adoption of an environmental management system.

Southcorp identified three pilot sites to begin work on the EMS, with the intention that these sites would serve as a model and provide assistance to people at other sites. Each of the sites was encouraged to work out its own approach, so that the effectiveness of varying approaches could be compared. Although excellent progress was made at a number of sites, early progress on some pilot sites was slower than the company desired, so in the end the Managing Director issued a directive to all Australian sites to undertake work on an environmental management system. His directive specified a deadline for adoption of the EMS.

Developing the EMS: Southcorp decided early on that although it wanted to develop its own environmental management system, it would model its work on the requirements in ISO 14001. Each of the sites identified its environmental aspects and legal compliance requirements, linked to specific site processes. Aspects were then narrowed down to focus on key risk areas as a first priority.

The model used for prioritising aspects takes into account business risk, environmental risk, contamination issues, and legal issues. The potential for economic savings is also considered. Next, the sites identified excisting systems for management of environmental performance.

Southcorp’s Corporate Group assisted the sites in their initial identification processes. It developed a Southcorp Environmental Management System (SEMS) Manual that provides the basis for all the site systems. The manual contains:

So long as the individual systems conform to the requirements set out in the manual, the different groups are free to adopt approaches that reflect their own operations and needs.

Southcorp’s Environmental Policy was developed in consultation with all operating Groups, with legal oversight. The introduction to the Policy states:

Southcorp believes that sound environmental management is an essential part of business practice and integral with our Mission and Values.... Southcorp will aim to minimise environmental impact of its operations through all product phases. This is consistent with our values of delivering world class business performance and behaving with integrity.

Some key commitments in the Policy include:

Some sites retained consultants to assist them in working out their systems because they were under time pressure to meet the deadline for completion. Accountability for implementing SEMS lies with line management.

SEMS differs somewhat from ISO 14001. The aim of SEMS is to bring about actual environmental improvement, whereas ISO 14001 is seen as only requiring due diligence in environmental management. SEMS has a broader and more pragmatic approach to identification and management of legal compliance than is required under ISO 14001.

Implementing the EMS

Targets: Individual sites establish targets based on the activities and environmental aspects relevant to them. They also devise action plans for achieving the targets.

Staff Training: No formal program was created to provide training in development and implementation of an environmental management system. Advice and assistance from the Corporate Group and consultants, as well as the information provided in the Environmental Manual were expected to give staff the help they needed. Some sections of the company ran training workshops for their sites. Looking back now after five years, Corporate Environmental Manager, Sharon Blum-Caon, feels that progress might have been faster and easier if more resources were devoted to education at the beginning of the process.

As part of general environmental skills training at sites, and awareness programs for new staff, information is presented about the importance of environmental issues, how their site impacts on the environment, and the importance of the company’s Policy and SEMS in managing and mitigating those impacts.

Contractor Involvement: Contractors and subcontractors are required to abide by all environmental regulations. Information is provided to contractors, as necessary, on the environmental issues relevant to their work.

Monitoring: Southcorp will set up key performance indicators for each of the Company’s Groups. The aim is to ensure that sites continuously try to improve their performance, not just maintain things as they are.

Documentation: Every site maintains a copy of the corporate Environmental Manual and specific site documentation. This documentation includes a listing of environmental aspects, impacts, issue prioritisation, and the action plans. In addition, it lists key responsibilities for the SEMS. Within the documentation, cross-references are provided to other relevant procedures.

Where environmental incidents occur, they are handled in accord with a three-tier hierarchy of seriousness. All incidents are documented on site. Depending on their severity and consequences, incidents may be reported up to the Group or Corporate level. Quarterly reports are provided to the Board on incidents in the top two levels of importance. The most serious types of incidents are reported monthly.

System Audits: Comprehensive system audits are conducted every two years.

Specific equipment and facilities, such as stacks, may be tested more frequently. Internally certified auditors carry out audits. They examine whether the site has adopted an EMS that meets all the requirements of the SEMS framework, including review of action plans and targets. In doing so, they look for areas in need of improvement from both a system and technical perspective. Audit findings are reported up the line of managers to the Board of Directors. Future audits will compare results to monitor improvement.

Integration with Other Systems: The environmental management system was co ordinated across the company by the Corporate Group. Safety and Quality Systems were managed by the separate company Groups. As a result, some Groups have integrated the three systems, but others have yet to do so.

Impediments to Implementation: Staff at Southcorp readily agreed that development of an environmental management system was a good idea. The pace at which the system was prepared was slower than anticipated, primarily because people are very busy and didn’t necessarily see the EMS work as top priority. Not all staff had a clear understanding of environmental impacts. The role of the initial environmental review work was also unclear, because some staff viewed the work as an audit, when it was really intended as a diagnostic tool to think through processes.

Certification

Southcorp leaves individual sites free to decide whether or not to seek certification under ISO 14001. So far, some wine producers and a US packaging site have obtained certification, others have not. The decision about certification generally rests on the business unit’s view as to whether it would offer a benefit in sales to the public or in dealings with retailers.

Resources Required

Southcorp’s Corporate Environmental Manager says that it is really impossible to estimate the cost of the development of SEMS because of the large number of people and variation in approach at the different sites.

The process of developing SEMS for Australian and New Zealand sites took five years.

Benefits of the EMS

Direct financial savings were not the primary motivation for Southcorp’s development of its SEMS. Senior management was more concerned about enhancing the company’s environmental reputation and the avoidance of risk. Experience so far with the system has shown that it is producing efficiency improvements, because it has required sites to look carefully at their processes and their material use. This attention has led to greater separation of wastes and reduced waste disposal costs. Improved energy efficiency has reduced greenhouse gas emissions and produced financial savings at some sites.

When the identification of key performance indicators is completed, and sites have installed planned monitoring and data collection systems, the company will be able to collate data on environmental performance across the organisation.

The SEMS provides assurance that the company will not be faced with future legal fees and cleanup costs for site contamination. It has produced a higher level of legal compliance and improved relations with regulators.

One important outcome of the SEMS has been the sense of pride engendered in Southcorp staff. Most people really care about the environment, and they feel good about contributing to improved environmental performance. Southcorp hopes to foster a work environment where people’s environmental beliefs can be acted upon in the interest of the company. In Southcorp’s view, such an approach helps make the company a good place to work.

Future Plans

Southcorp is moving to extend its SEMS beyond its current coverage of Australia and New Zealand. It has begun to address its sites in the United States next, and will then proceed with sites in Asia.

The Southcorp program is designed to achieve real environmental improvement. The company believes that SEMS provides management with guidance for developing cleaner production systems and designing environmentally friendly products, as well as ensuring compliance and managing contamination and emissions.

Contact Information

Ms. Sharon Blum-Caon
Corporate Environmental Manager
Southcorp
469 Latrobe Street
MELBOURNE   VIC    3000
telephone: (03) 9679 2292
fax: (03) 9679 2288
email: Sharon_Blum-Caon@Southcorp.com