Environmental Management PDF

Environmental
Management
A business management approach
Editor: SJ Smit
Environmental Management
A business management approach
Editor
Sarel J Smit
Contributors
Elriza Esterhuyzen
Leonie B Louw
JH Wynand Louw
Environment Management.indb 1 11/11/15 9:03 AM

Environmental Management – A business management approach
First published 2015
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Contents
Preface......................................................................................................................................................... x
About the editor and contributors.............................................................................................. xi
Chapter One: Introduction to environmental management........................................ 1
1.1 Introduction................................................................................................................................. 1
1.2 Defining environmental management.............................................................................. 2
1.3 Relationship between environmental management and business
management................................................................................................................................ 3
1.4 Cross-functional teams........................................................................................................... 4
1.4.1 Line manager......................................................................................................... 5
1.4.2 Environmental manager.................................................................................... 5
1.4.3 Safety practitioner............................................................................................... 5
1.4.4 Occupational health expert............................................................................. 6
1.4.5 Ergonomics expert............................................................................................... 6
1.4.6 Engineer................................................................................................................... 6
1.4.7 Human resources manager.............................................................................. 7
1.4.8 Financial manager............................................................................................... 7
1.4.9 Enterprise safety risk manager....................................................................... 7
1.4.10 Maintenance department staff...................................................................... 8
1.4.11 Training department staff................................................................................ 8
1.4.12 Fauna, flora and marine expert...................................................................... 8
1.4.13 Water, air and soil expert.................................................................................. 8
1.4.14 Expert in the general psychological and social well-being of
humans..................................................................................................................... 8
1.4.15 Quality management ........................................................................................ 9
1.4.16 Special services..................................................................................................... 9
1.5 Environmental management – emergence..................................................................... 9
1.6 Environmental management and corporate social responsibility......................... 10
1.7 Components of the environment........................................................................................ 11
1.7.1 The natural environment.................................................................................. 11
1.7.2 The built environment........................................................................................ 12
1.7.3 The social environment...................................................................................... 12
1.8 Principles of environmental management and environmental costs.................. 13
1.8.1 Principles of environmental management................................................ 13
1.8.2 Environmental costs........................................................................................... 14

1.9 Environmental management strategies........................................................................... 14
1.9.1 Outside-in strategy............................................................................................. 15
1.9.2 Inside-in strategy................................................................................................. 15
1.9.3 Inside-out strategy.............................................................................................. 16
1.10 End result – the impact of human activity..................................................................... 16
1.11 Conclusion.................................................................................................................................... 17
Review questions....................................................................................................................... 17
References..................................................................................................................................... 17
Chapter Two: Sustainability and triple bottom line......................................................... 19
2.1 Introduction................................................................................................................................. 19
2.2 The King reports......................................................................................................................... 20
2.2.1 King I report........................................................................................................... 20
2.2.2 King II report.......................................................................................................... 20
2.2.3 King III report......................................................................................................... 21
2.2.4 Key differences between King II and King III reports............................ 22
2.3 Triple bottom line (TBL) versus triple context................................................................. 24
2.4 Sustainability principles.......................................................................................................... 27
2.5 Ethics and companies in South Africa.............................................................................. 28
2.6 Conclusion.................................................................................................................................... 29
References..................................................................................................................................... 31
Chapter Three: The natural environment................................................................................ 33
3.1 Introduction................................................................................................................................. 33
3.2 The nature of the general and natural environment.................................................. 34
3.3 Characteristics of safety hazards......................................................................................... 35
3.3.1 Structural characteristics of substances..................................................... 35
3.3.2 Functioning characteristics of substances................................................. 35
3.4 The appearance of the natural environment.................................................................. 36
3.5 The origin of safety risk and environmental risk.......................................................... 37
3.6 Environmental hazards and environmental aspects................................................... 37
3.7 The impact of human activity on the natural environment.................................... 38
3.7.1 Depletion of sources in sustaining life........................................................ 38
3.7.2 Enhancement of the quality of life.............................................................. 38
3.7.3 Establishing supremacy via conflicts and wars....................................... 39
iv

3.8 Natural driving forces that influence change in corporate behaviour................ 40
3.8.1 Excessive energies................................................................................................ 40
3.8.2 Lack of specific energies.................................................................................... 40
3.8.3 The presence of unwanted energies............................................................. 41
3.8.4 Societal emphasis to consider human life and human needs........... 41
3.9 Business endeavours to protect the environment....................................................... 41
3.9.1 Establishing and implementing a multi-faceted corporate
policy......................................................................................................................... 42
3.9.2 Compliance with environmental management legal
requirements.......................................................................................................... 42
3.9.3 Utilisation of cross-functional teams.......................................................... 43
3.9.4 Corporate consultation with interest groups........................................... 43
3.9.5 Corporate culture and corporate climate focus...................................... 44
3.10 Conclusion.................................................................................................................................... 44
References..................................................................................................................................... 45
Chapter Four: ISO 14000.................................................................................................................. 47
4.1 Introduction................................................................................................................................. 47
4.2 The need for international standardisation.................................................................... 48
4.3 The position and purpose of the ISO................................................................................. 48
4.4 Origin of ISO 14000.................................................................................................................. 49
4.5 The basic objectives of ISO 14000...................................................................................... 49
4.6 Scope of ISO 14000................................................................................................................... 50
4.7 Elements of ISO 14000 as an international standard for an EMS......................... 50
4.7.1 Design an EMS in accordance with standardised requirements...... 50
4.7.2 Formulate an environmental policy that sets the basis of the
total EMS effort.................................................................................................... 51
4.7.3 Specify and elicit environmental aspects that could generate
safety and health risks that could affect the environment
adversely or positively........................................................................................ 51
4.7.4 List and scope all legal and other requirements which the
organisation subscribes to and that apply to its
environmental aspects....................................................................................... 51
4.7.5 Establish all objectives, targets and plans for developing and
implementing an EMS........................................................................................ 51
4.7.6 Perform a training needs analysis and implement training............... 52

4.7.7 Create, maintain and improve internal and external
communication..................................................................................................... 52
4.7.8 Create and disseminate documentation regarding the EMS............. 53
4.7.9 Establish procedures and means to maintain and control
documentation..................................................................................................... 54
4.7.10 Develop procedures to deal effectively with significant
environmental impacts...................................................................................... 54
4.7.11 Develop and assess effectiveness of emergency preparedness
and response procedures.................................................................................. 55
4.7.12 Determine the key qualities of operations that could
significantly impact on the environment.................................................. 55
4.7.13 Evaluate compliance with the view to implement corrective
and preventive action........................................................................................ 56
4.7.14 Compile and maintain procedures related to listing and
keeping EMS records........................................................................................... 56
4.7.15 Design and apply a programme for auditing EMS compliance
by qualified auditors........................................................................................... 57
4.7.16 Establish a review process to ensure EMS efficiency and
effectiveness.......................................................................................................... 57
4.8 Applicability of ISO 14000..................................................................................................... 58
4.9 Rationale for ISO 14000 registration................................................................................. 58
4.10 Relationship of ISO 14000 and regulatory requirements......................................... 59
4.11 Conclusion.................................................................................................................................... 59
References..................................................................................................................................... 60
Chapter Five: The environmental management system.................................................. 61
5.1 Introduction................................................................................................................................. 62
5.2 The structure and functioning of an EMS....................................................................... 62
5.3 The context of the Deming Wheel...................................................................................... 63
5.4 Scope of an EMS........................................................................................................................ 64
5.5 EMS requirements...................................................................................................................... 64
5.5.1 Environmental policy.......................................................................................... 64
5.5.2 Planning................................................................................................................... 66
5.5.3 Implementation and operations.................................................................... 67
5.5.4 Checking.................................................................................................................. 70
5.5.5 Management review........................................................................................... 72
5.5.6 Continual improvement.................................................................................... 73
vi

5.6 Conclusion.................................................................................................................................... 74
References..................................................................................................................................... 75
Chapter Six: Pollution and waste management.................................................................. 76
6.1 Introduction................................................................................................................................. 77
6.2 Pollution and waste management – a brief overview................................................ 77
6.3 Definition of pollution............................................................................................................. 77
6.4 Types of pollution...................................................................................................................... 78
6.4.1 Air pollution........................................................................................................... 78
6.4.2 Water pollution..................................................................................................... 78
6.4.3 Soil pollution.......................................................................................................... 78
6.4.4 Noise pollution...................................................................................................... 79
6.5 National Environmental Management: Air Quality Act 39 of 2004..................... 79
6.6 National Water Act 36 of 1998 and Water Services Act 108 of 1997...................... 80
6.7 National Environmental Management: Biodiversity Act 10 of 2004................... 81
6.8 Environment Conservation Act 73 of 1989.................................................................... 81
6.9 Definition of waste.................................................................................................................... 81
6.10 National Environmental Management: Waste Act 59 of 2008.............................. 82
6.11 Sustainable development....................................................................................................... 83
6.12 Managing pollution and waste – business strategies................................................. 84
6.12.1 Elements of a waste management plan..................................................... 85
6.12.2 Waste management activities........................................................................ 85
6.12.3 Integrated waste management (IWM)........................................................ 86
6.13 Consequences of polluting practices................................................................................. 86
6.14 ‘Cradle to grave’ principle....................................................................................................... 86
6.15 ‘Polluter pays’ principle........................................................................................................... 87
6.16 Conclusion.................................................................................................................................... 87
References..................................................................................................................................... 88
Chapter Seven: Impact of industry and agriculture on the environment............ 89
7.1 Introduction................................................................................................................................. 89
7.2 Impact of industry on the environment........................................................................... 90
7.2.1 Important definitions......................................................................................... 90
7.2.2 Impact of industry on the environment: overview................................ 91
7.2.3 Impact of industry on the environment: fisheries and forestry....... 92
vii

7.2.4 Impact of industry on the environment: mining.................................... 93
7.2.5 Impact of industry on the environment: energy and
water supply........................................................................................................... 94
7.2.6 Impact of industry on the environment: construction........................ 95
7.2.7 Impact of industry on the environment: trade and tourism............. 95
7.2.8 Impact of industry on the environment: transport............................... 95
7.3 Impact of agriculture on the environment..................................................................... 96
7.3.1 Differences between an agroecosystem and a natural ecosystem..... 96
7.3.2 Implications of environmental impact by human activity................. 99
7.4 Climate change........................................................................................................................... 99
7.4.1 What is climate change?................................................................................... 99
7.5 Business strategies to minimise industry impact......................................................... 105
7.5.1 Pollution prevention........................................................................................... 105
7.5.2 Design for the environment............................................................................ 106
7.5.3 Benchmarking and strategic design............................................................. 106
7.5.4 Regulatory requirements.................................................................................. 107
7.5.5 Root causes approach........................................................................................ 108
7.5.6 Training and development and awareness................................................ 108
7.5.7 PDCA.......................................................................................................................... 109
7.5.8 Reducing greenhouse gas emissions........................................................... 109
7.6 Conclusion.................................................................................................................................... 109
References..................................................................................................................................... 110
Chapter Eight: Integrating environmental management with the
business environment......................................................................................................................... 113
8.1 Introduction................................................................................................................................. 113
8.2 The business environment model........................................................................................ 114
8.2.1 Business and the environment....................................................................... 115
8.3 Environmental management and the micro business environment.................... 116
8.3.1 Components of the micro business environment.................................. 116
8.3.2 Impact of environmental issues on the micro business
environment........................................................................................................... 117
8.3.3 Managing the impact of environmental management issues
on business activities.......................................................................................... 119
8.4 Environmental management and the market business environment.................. 120
8.4.1 Components of the market business environment................................ 121
viii

8.4.2 Impact of environmental management issues on the market
business environment........................................................................................ 122
8.4.3 Turning environmental management challenges into business
opportunities......................................................................................................... 122
8.5 Environmental management and the macro business environment................... 123
8.5.1 Components of the macro business environment................................. 123
8.5.2 Global environmental management incidents........................................ 125
8.5.3 Globalisation and global environmental disasters................................. 126
8.6 Conclusion.................................................................................................................................... 127
Review Questions....................................................................................................................... 127
References..................................................................................................................................... 127
Chapter Nine: Ethics of environmental management..................................................... 129
9.1 Introduction................................................................................................................................. 129
9.2 Ethics of environmental management............................................................................. 130
9.2.1 Ethics defined ....................................................................................................... 131
9.2.2 Environmental ethics.......................................................................................... 134
9.3 Intrinsic value, instrumental value and prudential value......................................... 135
9.3.1 Intrinsic value........................................................................................................ 136
9.3.2 Instrumental value.............................................................................................. 136
9.3.3 Prudential value.................................................................................................... 136
9.3.4 Instrumental value versus intrinsic value ................................................. 137
9.4 Applying environmental ethics to business policies and decisions....................... 137
9.4.1 Introduction........................................................................................................... 137
9.4.2 Sustainable development................................................................................. 137
9.4.3 Business ethics...................................................................................................... 138
9.4.4 Environmental ethics and business policy................................................. 141
9.5 Applying ethics to lifestyle decisions................................................................................. 142
9.5.1 Introduction........................................................................................................... 142
9.5.2 Moral and cultural values................................................................................. 142
9.5.3 Forms of African value systems..................................................................... 143
9.5.4 Applying ethics in everyday life..................................................................... 146
9.6 Conclusion.................................................................................................................................... 149
References..................................................................................................................................... 152
Index............................................................................................................................................................. 155
ix

Preface
Modern society is very concerned about the conservation of the environment. Companies
and organisations therefore need to take ownership of the impact their activities may
have on the environment. They should also be environmental stewards to maintain an
acceptable quality of the environment for generations to come.
This book provides perspectives and guidance for organisations to manage their
business activities in such a way as to prevent adverse impacts on the environment.
The focus is on the essential elements of environmental management that sustain the
nature and characteristics of the natural environment as far as practicably possible.
Special attention is given to the different elements of pollution, the generation and
management of waste, and the threats that industry and agriculture hold for the
natural environment.
There is a clear description of the importance and practices that are needed to integrate
environmental management with the business environment so that environmental
protection can become an integral part of all business operations. The most effective
way to ensure such an integrated approach is through implementing an environmental
management system that accounts for all applicable elements of environmental
protection in everyday business operations. In this regard, the directives explained in
the internationally accepted ISO 14000 provide invaluable guidelines for businesses.
In the final instance, an organisation needs to justify why and how it is making
environmental protection and environmental management an indispensable part of its
everyday operations. The ethical elements of environmental management are clarified
to provide applicable and appropriate support in this respect.
The authors trust that this book will provide the necessary guidelines for organisations
to effectively implement applicable environmental management systems to prevent
unnecessary and detrimental environmental impacts. By doing so, organisations will
preserve the quality of the environment for future generations.
Dr Sarel Smit
Pretoria
September 2015

About the editor and contributors
Dr Sarel Smit is the owner of a safety consultancy business with continuous involvement
in the facilitation of training in safety management in the workplace, the monitoring
of implementation of behaviour-based safety programmes, and the assessment of
managers and safety practitioners at assessment centres. His tertiary qualifications
include a PhD in Social Science (University of the Free State), a BEd in Tertiary Education
(UFS) and a Diploma in Teaching (Johannesburg College of Education). He also did an
MSc in Industrial Safety Management at the Central Missouri State University (now
known as the University of Central Missouri) in the USA, where he received an award
for the best research dissertation of graduate students and the best graduate student.
Before joining the private sector, Sarel held the position of professor and director at the
Centre for Traffic Safety Education at North West University (NWU). In 1993 he joined
NOSA as General Manager: Training & Research, until 1996. Sarel is currently involved
as an e-tutor for undergraduate students in Safety Management at the University of
South Africa (Unisa) and also assists with the development of new study material. He is
a registered South African Qualifications Authority (SAQA) assessor, has authored and
co-authored a number of publications, and has delivered papers at various national and
international conferences.
Elriza Esterhuyzen is currently employed as a senior lecturer in Safety Management
in the Department of Business Management at the University of South Africa (Unisa).
She was previously employed as a part-time lecturer in Basic Financial Calculations,
Basic Business Skills, Personnel Management and Management of Training at Tshwane
University of Technology. Her tertiary qualifications include a BA degree (University
of Pretoria), a BCom degree with specialisation in Law (Unisa), an MPhil degree in
small-business management and entrepreneurship (UP, with distinction) and various
certificates in Environmental Management and Environmental Law from North West
University and the Unisa Centre for Business Management. Before joining the academic
community, Elriza owned and managed her own business for 12 years. She is registered
with the South African Qualifications Authority (SAQA) as an assessor and moderator
and is a member of the Golden Key International Honour Society. Elriza is currently
completing her DCom degree in Business Management (with the focus on Safety
Management) at Unisa. She has authored and co-authored a number of publications
and has delivered several conference papers.
Leonie Louw obtained her BCom (Business Management) and BCom Honours (General
Management) from the University of South Africa (Unisa) in 2007 and 2010 respectively.
She is a lecturer in Safety and Environmental Management at Unisa and is working
toward completing an MCom degree. Before joining Unisa, she worked in the private
sector for eight years as a small business consultant and strategist. During this time, she
developed a passion for small business management as a research area. Over the years,
her involvement in the non-governmental organisation sector included serving on the
management board of two non-governmental organisations. She is also involved in

community engagement and community upliftment projects and is a registered skills
development facilitator, assessor and moderator with the South African Qualifications
Authority (SAQA). Leonie completed various postgraduate certificates in Environmental
Management and Safety Management and has co-authored various publications.
Wynand Louw is the CEO of Aquilla Financial Solutions, a registered Financial Services
Provider, and chairman of a non-governmental organisation, Inter Trauma Nexus. He
is also a co-owner of Aquilla Advisors, a business advice and consultation company.
Wynand is currently contracted as senior lecturer for Moonstone Business School of
Excellence. He is past president and current treasurer for the Insurance Institute of
Northern Gauteng (IING) and a professional member of the Financial Planning Institute
(FPI). He is also a fellow, the highest designation awarded by the Insurance Institute
of South Africa (IISA). He received his BTh degree from the University of South Africa
(Unisa) and holds various postgraduate diplomas as well as a certificate in Management
Development Programmes from Unisa’s Graduate School of Business Leadership. Wynand
is a registered skills development facilitator, assessor and moderator with SAQA and has
authored and co-authored a number of publications.
xii

Chapter One
Introduction to environmental management
Elriza Esterhuyzen and Sarel J Smit
Learning Outcomes
After studying this chapter, you should be able to:
• explain the field of operation of environmental management
• compare environmental and business management
• depict the role of cross-functional teams (CFTs) in environmental management
• account for the emergence of environmental management
• link corporate social responsibility to environmental management
• differentiate between the different components of environmental management
• discuss the principles and costs that apply to environmental management
• clarify the strategies that apply to environmental management
• outline the impact of human activity on the environment, which can result in
degradation.
Overview of this chapter

This chapter provides an overview of the different elements in the range of
activities and functions that an organisation has to perform when developing
and implementing an environmental management programme. The general
picture offered in this chapter depicts, in brief, all the elements of environmental
management that are discussed in the following chapters in more detail.
1.1 Introduction
Many people in South Africa live in conditions that are harmful to their health and
well-being – even though it is a fundamental right of all South Africans to live in
an environment that is not harmful to one’s health and well-being. Environmental
management should be integrated into all development activities and co-operative
environmental governance should be provided for by establishing decision-making
principles regarding all matters concerning the environment.1
1 NEMA, 1998.

1.2 Defining environmental management

Environmental management can be defined as the way in which businesses deal
with environmental aspects.2 Environmental aspects are regarded as any element
of the activities, products or services of an organisation that interacts with raw
materials or resources in the environment. Strydom3 regards the natural world
as an environment that comprises numerous natural sources that are available
to be used by the manufacturing industry as raw materials. According to Section
1(xi) of the National Environmental Management Act 107 of 1998 (NEMA), the
environment can be seen as the immediate and remote surroundings within which
individuals and organisations exist. Such surroundings are constituted by the
atmosphere, water and land, plus micro-organisms, fauna and flora, as well as
any section, combination or interrelationships between these elements, plus the
physical, chemical and cultural properties and conditions of any element(s) in this
list that may affect human and/or organisational health or well-being. All these
elements represent objects that are made of matter with which humans interact on
a daily basis and which could affect humans either positively or adversely.4 See
Chapter 3 of this book for more detail on the nature of the natural world.
To interact with raw materials as resources in industrial processes requires
particular ways of dealing with such processes in order to achieve specific objectives.
Kolk5 maintains that such ways of dealing with elements in the environment
requires ‘soft’ factors within the context of management. Smit6 indicates that the
mandate of management to humankind is that humans use natural resources in a
responsible and orderly manner and as economically as possible. Orderliness within
the context of the economic principle applies to human activities, such as planning,
doing, developing, implementing or destroying. Humankind must be accountable
in meeting its own and societal needs and targets through utilising resources in an
orderly fashion. Accountability and stewardship in terms of orderliness in using
resources, with due consideration of economic principles, are crucial in all human
conduct.
Management represents human endeavours to understand and describe the ways
that natural, human, financial and man-made resources should be used to reach
specified goals, objectives and targets, while giving full recognition to and applying
the economic principle. The application of the economic principle does not imply
thriftiness. The economic principle refers to practising economic efficiency. Soft
issues that apply to environmental management include commitment, dedication,
inspiration, involvement, culture, recognition, leadership and many more. All such
elements must be incorporated as integral parts of an organisational environmental
management system (EMS).7 The best directives for implementing an EMS effectively
are to be found in ISO 14000, a series of environmental management standards,
2 Kolk (2000) 3. 5 Kolk (2000) 213.

3 Strydom (2011) 37. 6 Smit (2012) 65.
4 Smit & Esterhuyzen (2014) 139–140. 7 SABS (2009) 2.

One: Introduction to environmental management
published by the International Organization for Standardization (ISO), which

provide guidelines for implementing an organisational EMS. Such implementation
needs to be based on an environmental management plan and must take place in
full consideration of the needs and interests of interested parties (individuals and
groups) that may be affected by an EMS.8 See Chapter 5 of this book for more detail
on environmental management within the framework of the implementation of an
organisational EMS.
1.3 Relationship between environmental management and business

management
There is a close congruence between business management and environmental
management. Business management can be regarded as the orderly and organised
utilisation of resources in providing goods and services to customers with due
consideration of the economic principle.9 The rendering of services and the
provision of goods via the co-ordination of work-related activities result from
the effective utilisation of human and other resources while implementing the
functions of planning, organising, leading and control (POLC-cycle).
• Planning implies thinking about the options involved in activities that relate
to the achievement of organisational business objectives.
• Organising is concerned with structuring people into functional groups and
assigning tasks, authority and resources accordingly, in order to realise
organisational objectives.
• Leading refers to influencing and inspiring employees to realise the success
of a business organisation.
• Control means applying processes to organise and regulate human and all
other resources involved in order to realise organisational objectives.10
Environmental management and business management differ in terms of functional
focus. Environmental management focuses on ways to deal with environmental
aspects in order to prevent any adverse environmental impacts. Environmental
aspects refer to the involvement of any activities, products or services with any
substance or group of substances in the environment. Business management
focuses on the orderly utilisation of resources for the purpose of financial gain.
Implementing environmental management means that an organisation plans and
implements all its activities, products and services in terms of environmental
management principles and strategies. In addition, environmental management
implies Plan, Do, Check and Act (PDCA-cycle), which enables an organisation to
realise its environmental policy objectives and targets.
8 NEMA, ss 11 & 35. 10 Strydom (2011) 24–25.

9 Strydom (2011) 24.

The PDCA-cycle, which was developed by Deming,11 corresponds congruently

with the POLC-cycle of business management. Planning provides for thinking
through and considering all options related to activities, products and services in
preparation for implementing an EMS. Based on such planning the organisation
moves to the Do-stage, during which all planned activities are put into practice.
The Do-stage involves frequent periods of checking and reviewing to see whether
objectives and targets have been achieved. After this stage, the organisation has
to act to rectify any non-conformities and to implement preventative action as
and when necessary.12 The ISO 14000 guidelines, developed by the ISO, uses the
same approach in the effective implementation of an EMS. The stages outlined by
ISO 14000 in implementing an EMS are planning, implementation and operation,
checking and management review.13
It is clear that there exists great congruence between the systematic approaches
of business management, the Deming cycle and the operational stages of ISO 14000.
In the implementation of environmental management, total quality management
(TQM) is continuously applied to determine the level of management efficiency. The
key elements of environmental management that TQM focuses on are: management
approach, continual improvement in advance of legal compliance, elimination
of root causes of problems, the involvement of staff and interested parties, and
customer satisfaction. The focus of TQM greatly ties in with the formerly mentioned
POLC, PDCA and the stages outlined in ISO 14000. The different approaches
place different emphases on specific elements of an EMS, but in essence they all
operate from similar bases to ensure that the implementation of an EMS greatly
resembles the guidelines and requirements set by the ISO with regard to advancing
the objectives and targets of environmental management. The approaches of
business management, TQM and environmental management are integrated via
the application of the Deming PDCA-cycle on a consistent basis, in accordance
with continual improvement through expanding the focus and increasing levels of
advancement. See Chapter 5 for more information on the application of the PDCA-
cycle in environmental management.
1.4 Cross-functional teams

Cross-functional teams (CFTs) provide the best and only integrative approach to
effectively managing safety, health and the environment (SHE) in the workplace.
Robbins14 notes that the members of such teams come from almost similar hierarchical
levels in an organisation. Such teams are multi-disciplinary in nature, because the
members come from different professions or disciplines that convene to produce the
best available solution to any SHE challenge in the workplace. Workers from lower
levels may also be included, depending on the nature of the challenge. Thompson
11 Deming (1982) 54. 13 SABS (2009) 3, 5, 7 & 9.

12 Kolk (2000) 107. 14 Robbins (2001) 261.

et al15 indicate that CFTs can play an important part in innovation and change. The
members of CFTs can be regarded as belonging to complementary professions on
the basis that they all deal with similar challenges concerning, inter alia, SHE in
the workplace; however, their approach to challenges will differ in accordance with
the focus of their particular discipline. CFTs are purpose driven and do not function
beyond the scope of the challenge for which they need to find a solution. Members
of a CFT each have their own focus; these foci are complementary to a particular
challenge and the solution to such a challenge.
Which professions or disciplines should be included in CFTs for the purpose
of effectively developing, managing and sustaining SHE in the workplace? The
professions or disciplines which should be included are outlined below.
1.4.1 Line manager

Line managers are responsible for the effectiveness of organisational activities,
products and services. This applies in particular to the SHE management of the
working and surrounding environments. Line managers have to make the final
decisions on the nature of programme elements, implement the programme
and evaluate its outcome. Line managers have to engage the expertise of a
range of complementary disciplines to ensure that effectiveness and quality of
environmental management programmes within an organisation’s EMS is achieved
and maintained. As previously noted, such expertise is vested in a team of experts,
namely a CFT, in which each member functions as an expert within a different field
of operation.
1.4.2 Environmental manager

Managing the immediate and adjacent environments in the workplace is an
important element of qualitative SHE in an organisation. Environmental specialists
contribute to monitoring environmental issues in and around an organisation’s
facilities; therefore they should be included in CFTs when appropriate and necessary.
1.4.3 Safety practitioner

Safety practitioners are responsible for guarding the quality of safety programmes.
They have to facilitate the discussion and decision-making processes. The quality
of the outcome of CFTs that meet to enhance SHE in the workplace rests squarely
on the shoulders of the safety practitioner. Safety practitioners are also responsible
for ensuring that the implementation of an outcome occurs in accordance with the
CFT’s decisions. Their overall guidance, in which their authority as experts and
their creative use of personality (personal traits) play a major role, will determine
success.
15 Thompson et al (2005) 560.

1.4.4 Occupational health expert

Occupational health experts, including health practitioners and nurses, are
renowned for their preventative approach to possible harmful effects of work and
working conditions on workers.16 The main issues that occupational health experts
address are: ensuring that people are placed in suitable work; performing biological
monitoring and health surveillance, in accordance with applicable legislation;
monitoring the health quality of the work environment; health counselling and
health education; delivering occupational health services; and keeping health
records and performing health liaison in connection with health services external
to an organisation.17 Occupational health experts play an important role in
monitoring the effects of the immediate and remote environments on the health
and well-being of organisational workers and on the community at large. It is
important to remember that certain legal functions pertaining to SHE can only
be performed by occupational health personnel. Their input and knowledge that
relate to pre- and post-medical examinations, medical surveillance, injury reviews,
personal protective equipment (PPE), etc are indispensable when it comes to safety
risk assessment, incident analyses and solutions that result from their input.
1.4.5 Ergonomics expert

An ergonomic expert is an important partner in CFTs which focus on the
health and safety of the work environment. Ergonomics focuses on the human-
machine interface, which includes four elements: the environment, the machine
(eg equipment), the capabilities of the person and the interaction (interface) between
the person and the machine. Stranks18 provides a fairly extensive picture of the
responsibilities of an ergonomics expert towards the SHE of the immediate working
and the adjacent environments. The design of workplaces plays an important role
in this regard. Elements such as illumination, ventilation and manual handling
are addressed by ergonomics experts. The focus is mainly on the people, the work
environment, the human-machine interface and the total working system.
1.4.6 Engineer
Engineers play a very important role in most industries. Their knowledge and
expertise is of particular interest to environmental management, because the
basis of handling all substances is to be found in the physical and chemical
nature (structure and functioning) of things. Engineering for safety primarily
focuses on work equipment, which includes machinery and materials, the overall
work environment (buildings, plants and mines) as well as the general living
environment.19 Engineers are most knowledgeable about the SHE risks associated
with the design of machinery and equipment, with the aim of limiting energy
16 Stranks (2012) 185. 18 Stranks (2012) 142–162.

17 Stranks (2012) 185–187. 19 Stranks (2012) 229–238.

release at the source. This can be significantly prevented via the appropriate design
of equipment and handling processes.
1.4.7 Human resources manager

The human resources manager, who to a great extent relies on business psychology,
has an important role to play as a member of a CFT. Factors such as selection
and placement of employees, understanding human needs and human behaviour,
performance appraisal and conducting surveys among workers are some of the
important fields of work that human resources can address. Making decisions about
human behaviour in order to enhance SHE practices in the workplace via effective
environmental management is where the human resource manager can be most
helpful as a member of a CFT.
1.4.8 Financial manager

Very few, if any, decisions on developing and sustaining effective SHE practices
in the workplace and environment are without financial implications. The
introduction of any new form of improvement or innovation requires some level
of financial expenditure. No CFT can function effectively without the input of the
financial manager or a representative. Any change in machinery, equipment, work
procedures or, for example, the release of dangerous substance(s) goes hand-in-
hand with financial requirements. Decisions of this kind must have the backing of
a person from the finance department as part of the CFT.
1.4.9 Enterprise safety risk manager

Enterprise safety risk management focuses on the financial safety risk that an
organisation incurs in operating its basic business activities, products and
services. Like other complementary professions or disciplines in an organisation,
environmental management has an important role to play in minimising the
possible financial losses associated with SHE practices. Developing, implementing
and sustaining an EMS effectively will ensure consistent qualitative SHE in the
workplace and surroundings, with due prevention of unnecessary organisational
enterprise safety risk. Enterprise safety risk management relies greatly on the quality
of an organisation’s EMS with the aim of minimising financial loss. As a member
of the CFT, the input of enterprise safety risk managers can be of great significance
when, for example, determining and monitoring the financial implications of
the application of a new smoke emission system in a manufacturing plant. In
this regard, the enterprise risk manager performs a corporate risk management
function.20
20 Valsamakis et al (1992) 80.

1.4.10 Maintenance department staff

The maintenance department of an organisation can provide important input with
regard to the SHE in the workplace. Maintenance staff provide information on the
probability of the performance of hardware; this is essential for making decisions
on the functional integrity of machines and equipment. Maintenance records of
machines and equipment provide important information for making decisions on
hardware related to SHE in the workplace and surrounding environment. Stranks21
lists particular fields within which maintenance staff can deliver important
contributions where environmental management is concerned, namely: mechanical,
chemical, electrical, physical, pressure, structural and access.
1.4.11 Training department staff

Innovation or changes pertaining to SHE issues in the workplace frequently require
workers to increase their level of competence. SHE training has to be innovative in
accommodating requirements in this regard. Being a member of a CFT provides the
opportunity to take note of requirements that flow from innovation and to validate
the current quality of training when necessary. Goetsch and Davis22 emphasise the
importance of regular training and re-training to ensure that workers sustain their
competence in dealing with environmental risks. The CFT creates the context with
regard to knowledge and competence about which workers and the community
need to be kept informed.
1.4.12 Fauna, flora and marine expert

Experts in these fields assist environmental managers to take ownership and
accountability of potential and actual environmental impacts on the environment.
The input of these experts assists an organisation in caring for all life in, among
others, the animal world, the vegetation and the marine environment.
1.4.13 Water, air and soil expert

Experts who specialise in the prevention or minimisation of damage to water, air
and soil assist organisations in implementing an EMS that will prevent or minimise
damage to such elements of human, plant and animal life.
1.4.14 Expert in the general psychological and social well-being of humans

It is important that all industries, as far as possible, abstain from harming human
functioning in any respect, including psychological and physical harm. Adverse
impacts on the environment can also negatively impact on human functioning.
Specialists of all kinds in human well-being need to be part of CFTs to assist
organisations to implement an EMS in such a way that it results in as little harm
to humans as possible.
21 Stranks (2012) 276. 22 Goetsch & Davis (2001) 194–196.

1.4.15 Quality management

Cross-functional teams offer organisations opportunities to learn from many other
fields of specialisation that play a role in environmental management. Quality
management refers to functions of inspection, quality control and quality assurance.23
In essence, quality management implies performing the functions and associated
activities of planning and control. Within the context of participating in a CFT for
the purpose of ensuring an acceptable quality of environmental management, quality
management focuses on the effectiveness of dealing with significant environmental
aspects and the prevention and/or control of environmental impacts.
1.4.16 Special services

Although not frequently required, environmental management may need the input
of one or more special services offered by a particular company, profession or
contractor. Enhancing environmental well-being may, for example, require the
expert advice of, for example, the legal profession; a contractor, who is a specialist
in rendering a particular service, such as implementing behaviour-based safety; a
fire-fighting department; or a company that provides an information service on
handling hazardous substances. A service provider that specialises in the provision
of personal protective equipment is often included as a member of a CFT because
the need to safeguard workers frequently produces challenges pertaining to SHE.
It must be clearly understood that an organisation does not necessarily need
the input of the entire range of complementary disciplines all at once. Needs
could fluctuate. There are also many more complementary disciplines that are not
listed in this chapter. This list serves as a basis of complementary disciplines that
could apply. The composition of a CFT depends on the need for specific expert
advice; this is determined by the nature of the environmental aspects and related
environmental impacts associated with a particular organisation.
1.5 Environmental management – emergence

Section 24(a) of the Constitution of the Republic of South Africa, 1996 (the
Constitution) indicates that ‘everyone has the right to an environment that is not
harmful to their health or well-being’. There are a number of environmental conditions
that are currently posing environmental safety risks to the health and well-being of
humans and all other living organisms, including ecosystems. Issues such as global
warming, ozone depletion, disastrous weather patterns, urbanisation, as well as
water, air and soil pollution require that environmental management receives high
priority in order to prevent irreversible damage to the global environment. Business
organisations are increasingly taking action to prevent environmental degradation
through implementation of an EMS in accordance with international, national and
local environmental legislation.
23 Krüger & Steenkamp (2008) 157 & 161.

It is important to note that environmental legislation is of vital importance in

promoting environmental sustainability, both as a source of guidance and of
enforcement.24 The Constitution provides the overarching legislative foundation
for all environmental management in South Africa, with NEMA as the primary
environmental framework Act. Specific environmental management Acts (SEMAs),
such as the National Environmental Management: Air Quality Act 39 of 2004 and
the National Environmental Management: Waste Act 59 of 2008, are linked to
NEMA. Further chapters will look at some of the SEMAs in more detail.
1.6 Environmental management and corporate social responsibility

Environmental management should be utilised to ensure sustainable development.
Sustainable development, according to NEMA, refers to the integration of social,
economic and environmental factors into the planning, implementation and decision
making of a business in order to ensure that development that is undertaken will
serve not only the present generation but also future generations. As development
might have an effect on the environment, it is only fair that such impacts be
deliberated with the people who might be affected.
When assessing the environmental impact of any application for environmental
authorisation, all potential interested and affected parties should be given the
opportunity to raise their concerns and make comments on any issues relevant
to such an application. This public participation process is described in NEMA.
Furthermore, interested and affected parties are described in NEMA as including:
any person, group of persons or organisation interested in or affected by
such operation activity; and
any organ of state that may have jurisdiction over any aspect of the
operation or activity.
All businesses need to have customers to buy their products or make use of their
services – no business can function in isolation. Therefore, businesses have a
responsibility to take any social impact of their business activities into consideration.
As much emphasis is given to environmental issues on a global scale, businesses
need to revise their policies to include environmental aspects if they want to ensure
a competitive advantage and sustainable development. Policies might include
engaging with the community in order to improve the environment in terms of
air, water and soil; producing eco-friendly goods; and taking responsibility for
products from ‘cradle to grave’. Corporate social responsibility and sustainable
development will be discussed in more detail in later chapters.
24 Environmental Legislation and Policies (2015) 1.
10

1.7 Components of the environment

The environment comprises three main components, namely the natural environment,
the built environment and the social environment. The natural world consists of
all physical and chemical substances, all forms of life, as well as all ecological
processes and interactions between any one or more of the preceding elements.
The built environment, which is man-made, is made up of physical structures and
infrastructures, while the social environment consists of socio-cultural structures
and processes, as well as the community and product safety and health. Although
the three components exit within clearly differentiated structures, they function on
a continuous integrated basis.
Natural environment Built environment

Organisation
Social environment
Figure 1.1: Components of the environment
NEMA depicts the environment as the total surroundings within which the
human race exists. Such surroundings are made up of all physical structures and
infrastructure, all forms of life and processes of ecological existence, plus the total
sphere of human social expressions.
1.7.1 The natural environment

People live in a vast and intriguing environment that is constantly changing and
comprises thousands of things. All things, also called objects, can be classified as
either observable or non-observable. Observable things can be seen or experienced
by humans. Non-observable things cannot be seen or experienced by humans.
All things have substance, whether they are observable or non-observable.
Substances (things or objects) that are made of matter can make contact with one
another; such substances have contact ability. Only things that are made of matter
can interact with one another. A thing, substance or object that can make contact
and interact with other objects has the potential to harm people and damage
property and the physical environment. Anything that has the potential to harm or
damage is a safety hazard. A safety hazard can be defined as any substance that
has the potential to pose harm or damage to something or someone else.
Safety hazards create safety risks during the mutual interaction between one or
more safety hazards in the environment. Such safety risks can cause harm to people
11

or damage to property or the environment. It is during the interaction of and

dealing with objects (as safety hazards) that organisations create environmental
aspects. Such environmental aspects can result in environmental impacts, which are
observable in adverse or positive effects on the environment. It can be concluded
that all substances are potential environmental safety hazards because of their
ability to be instrumental in creating environmental aspects and environmental
impacts. See Chapter 3 of this book for a detailed discussion of the natural world.
1.7.2 The built environment

The environment of an organisation comprises two distinguishable groups of things,
namely things that are made by people and things that are not made by people.
Although things that are not made by people have a natural origin, such things are also
substances, made of matter, and are inclined to make contact and interact with other
natural and man-made substances in the environment. Such interaction also generates
safety risks. The built environment includes all structures, processes and practices
humans create to advance their quality of life. In many instances such creations
endanger the many elements and systems in the natural world. Examples include the
pollution of air, water and soil, deforestation, the destruction of ecological systems, the
production of excessive waste and the extinction of species of fauna and flora.
Organisations need to consider all elements within the natural world when
implementing an environmental management programme. The main focus must
always be on environmental conservation, with as little damage as possible to the
natural world. Preventing damage and, if any damage occurs, sustaining the status
quo with the purpose of rectification, if possible, must be the essential endeavour
in the total process. Organisations need to understand that all elements of the
components of the environment are always in some way in consistent reciprocal
interaction; organisations should therefore apply an integrated approach when
they implement environmental management policies.
1.7.3 The social environment

Humans form an important part of an organisation’s external and internal
environment. All the needs of human parties who may have interests or could be
affected by any part of an environmental programme must be considered. The total
well-being of the surrounding human environment in both immediate and remote
contexts has to be considered with reference to safety, security, physical and mental
health, as well as social and cultural issues, and more. All the components of the
external environment of an organisation are consistently in interaction with and
have a mutual effect on each other. An integrative approach to considering the needs
and interests of the natural world, the man-made world and the social environment
is essential in implementing an environmental management programme.
12

1.8 Principles of environmental management and environmental costs

Any economy needs resources in order to be sustainable. Such resources are assets
that are used to produce goods and render services to meet the needs and wants of
humans. As these resources are scarce (limited amounts are available) they need to
be properly managed in order to fulfil the wants and needs of society, but also in
such a way as to ensure that future generations will also be able to use them.
Common goods comprise all resources that are found in nature such as land,
water, plants, animals and air. In many instances humans do not pay for these
resources; therefore, nature can be used and misused for economic and/or social
reasons without remuneration. Humans are causing irreparable damage to natural
resources by irresponsibly using too many resources and polluting resources.
Population growth, pressure on water supplies and an ever-increasing demand for
energy all lead to global environmental issues.
1.8.1 Principles of environmental management

Specific principles guide and direct the development and implementation of an
environmental management programme.25 The principles cover a wide range of
elements. The following list provides a summary of the most significant principles.
• Everybody has the right to an environment that is in all respects safe with
regard to one’s health and general well-being.
• Environmental conservation is the primary focus with an emphasis on the
prevention of pollution and, where damage has already occurred, limiting or
reversing the damage, if possible.
• Any organisation that implements an environmental management
programme is held responsible for all the effects of the programme for as
long as the programme runs. Such ‘cradle to grave’ responsibility goes hand-
in-hand with the rule that the ‘polluter pays’ for all adverse effects that may
flow from the programme of such a polluter (these two concepts will be
described in more detail in Chapter 6).
• The responsibilities for conservation and for the prevention of pollution differ
between developed and developing countries. Developed countries contribute
more to global environmental degradation as a result of industrialisation.
• The main focus of all environmental management is to serve all humans, as
well as their values and needs, equitably.
• The outcomes and developments of environmental management must be
socially, environmentally and economically sustainable, with due reference to
the conservation of ecosystems, prevention of pollution, waste management,
prevention of disturbance to landscapes, the use and exploitation of non-
renewable resources and protection of the environmental rights of humans.
25 NEMA, Chapter 1.
13

• Environmental education, sharing knowledge and experience, as well as

raising environmental awareness and other appropriate means must be used
to advance community well-being.
• All decisions concerning environmental management must be open and
transparent. All parties who have an interest in or who may be affected by
an environmental programme must be duly consulted.
• Environmental managers must fully recognise and implement an integrative
approach, acknowledging that all the elements of the environment are
reciprocally linked and integrated.
• Environmental policies, legislation and action with regard to environmental
management must be harmonised and co-ordinated via intergovernmental
co-operation, in accordance with local, national and international
requirements and standards.
1.8.2 Environmental costs

Environmental costs comprise a wide range of environmental management
activities. Such costs range from cleaning up land that has been contaminated
to installing solar power to supply energy to a business. Kolk26 identifies four
environmental costs:
• Costs that are not directly or legally the responsibility of the business. Such
costs include environmental impacts due to, for example, carbon dioxide
emissions from burning coal in a steam engine when delivering goods to
industry.
• Costs due to compliance with environmental legislative requirements. These
include costs for waste disposal, costs associated with pollution prevention
and fines for non-compliance.
• Costs related to the implementation of environmental measures. Costs related
to innovation to produce and market green products are included in the costs
related to environmental measures.
• All costs that are related to environmental management in a business. These
include costs for water, energy, fuel and raw materials. By reducing these
costs owing to a reduction in usage, businesses often also reduce their impact
on the environment.
1.9 Environmental management strategies

Implementing environmental management occurs with full recognition of three
specific strategies, outlined by Kolk:27
26 Kolk (2000) 156–157. 27 Kolk (2000) 78-82.
14

1.9.1 Outside-in strategy

Factors external to an organisation affect the implementation of an environmental
plan. This requires that an organisation clearly formulates a strategy to accommodate
such factors and the effects they could have on the internal operations of the
organisation. Specific issues need to be considered in the outside-in strategy:
• The nature and quality of the competition offered by external competitors
need to be identified and analysed in the context of an organisation’s own
strategies and activities aimed at achieving its environmental objectives and
targets.
• A thorough survey needs to be conducted in order to identify the total
number of competitors and the nature of the opposition that they offer;
this gives an idea of numbers, size, markets and market positions. All of
these issues need to be fully considered when drawing up an environmental
management strategy.
• An analysis of the nature and characteristics of products and types of
markets must be carried out in order for an organisation to develop a
competitive strategy for its own products and to achieve a competitive edge
in the market place. Issues that are of importance in this regard are mass,
fragmented or segmented markets, or local, regional, national or global
markets, etc.
Performing an outside-in strategy will enable an organisation to counteract outside-
in effects on the development and implementation of its own environmental
management plan.
1.9.2 Inside-in strategy

Developing a competitive strategy requires that an organisation determines the
availability of staff, skills, resources and appropriate organisational arrangements.
An audit on financial, tangible and intangible assets needs to be conducted. Issues
to be clarified are staff expertise and know-how, patents, buildings, equipment and
more, with a view to ascertain and define firm-specific advantages. The need for and
nature of co-ordination on an internal basis, as well as with complementary external
resources, has to be established in order to design effective vertical integration in
operation processes. An inside-in strategy also applies to an organisation which
has branches at different locations.
Clarity on an inside-in strategy leads to efficiency in tackling environmental
management issues at various levels and locations, if applicable, within an
organisation.
15

1.9.3 Inside-out strategy

This strategy depicts the structure and functioning of the external networks within
which an organisation operates. The inside-out strategy clarifies the position the
organisation occupies and the influences it exercises within networks. Interaction
within a network focuses on the allocation of values and on exchanging goods,
technology and capital. The strength of an inside-out strategy sets the need for
and emphasises external dependency and bargaining relations in order to enhance
competition in general. The potential of control over product chains, which
influence the expansion of environmental practices, flows from dependency
relations. The effectiveness of an inside-out strategy, in which the strength of
internal characteristics is mobilised, plays an important role in achieving core
positions to influence the effectiveness of integrated environmental management.
It is therefore clear that an organisation has to develop these three environmental
strategies to ensure that it focuses on the fundamental issues that determine the
success of its environmental management plan.
1.10 End result – the impact of human activity

Humans cannot be separated from the environment; they live in the environment,
utilise natural resources and cause most of the environmental issues. Owing to the
inconsistency of humans, they have a tendency to misuse limited natural resources.
Human impacts on natural resources (the environment) include two key factors:
• the number of people using the natural resources
• the rate at which the natural resources are used.
Human activities impacting on the environment include:
• Urbanisation: Large areas of nature are utilised for urban areas – think of big
cities such as Johannesburg, Pretoria and Cape Town. Such urban areas use
vast amounts of natural resources and in the process generate vast amounts
of waste. People usually have a limited knowledge of environmental issues
and their impact.
• Economic activities: All economic sectors have an impact on the
environment – unfortunately mostly negative. Such sectors include mining,
retail, manufacturing, communication and tourism.
• Public sector: The government, both national and local, contributes to
pollution. Population data should form a critical part when planning for
development as population growth leads to an increase in environmental
impact. Furthermore, people should be involved (through public
participation, etc) and empowered in environmental management. Legislation
with regard to environmental issues should be encompassing and should be
enforced. Environmental management should be a priority with government:
nationally as well as locally.
16

1.11 Conclusion
This chapter indicates that environmental management has a wide field of
operation. It includes a spectrum of planning and activities that focuses on
protecting the human environment from adverse effects that could flow from
natural happenings and in particular from human endeavours and activities. It
is quite clear that environmental management has a significant role to play in
promoting environmental conservation, thereby preventing irreparable damage to
the environment.
Review questions
1. What would you include in your definition of environmental management?
List the main elements.
2. In what ways are environmental management and business management
alike?
3. List the possible members of a cross-functional team for environmental
management.
4. Explain how environmental management emerged.
5. Describe the components of an environmental management programme.
6. Describe the strategies of an environmental management programme.
7. List 10 principles of environmental management; explain only five.
8. List the various environmental costs which may be incurred.
9. Briefly explain the impact of human activity on the environment.
10. How does corporate social responsibility tie in with environmental
management?
References
Constitution of the Republic of South Africa, 1996. Pretoria: Government Printer.
Deming, WE. 1982. Quality, productivity, and competitive position. Cambridge,
Massachusetts: MIT Press.
Environmental Legislation and Policies. 2015. Available: http://www.ru.ac.za/
environment/resources/envirolegislation/. (Accessed 11 March 2015).
Goetsch, DL & Davis, SB. 2001. ISO environmental management. New Jersey:
Prentice Hall.
IoDSA. Institute of Directors in Southern Africa. 2009. King Report on Corporate
Governance for South Africa. Sandton: IoDSA.
17

ISO. International Organization for Standardization. 2009. Environmental manage-

ment: The ISO 14000 family of international standards. Available: http://www.
iso.org/iso/theiso14000family2009.pdf. (Accessed 18 November 2014).
ISO. International Organization for Standardization. 2014. ISO 14000 – Environ
mental management. Available: www.iso.org/iso/iso14000. (Accessed 18 Novem
ber 2014).
Kolk, A. 2000. Economics of environmental management. London: Pearson Education.
Krüger, LP & Steenkamp, RJ. 2008. Basic OPQ-M principles for operations, project
and quality management. Menlo Park: Red Pepper Books.
NEMA. National Environmental Management Act 107 of 1998. Pretoria: Government
Printer.
Robbins, SP. 2001. Organizational behaviour. New Jersey: Prentice Hall.
SABS. South African Bureau of Standards. 2009: SANS 14001:2005. Pretoria:
SABS Standards Division.
Smit, SJ. 2012. Introduction to health and safety management: Course in the
fundamentals of occupational health and safety management. Pretoria:
Foundation for Professional Development.
Smit, SJ & Esterhuyzen, E. 2014. The basics of safety hazards and the origins of
safety risk. Pretoria: Business Print.
Stranks J. 2012. Health and safety at work: An essential guide for managers.
London: Kogan Page.
Strydom, J. 2011. Introduction to business management. In Strydom, J. (ed). Princi
ples of business management. Oxford: Oxford University Press.
Thompson, AA, Strickland III, AJ & Gamble, JE. 2005. Crafting and executing
strategy: A quest for competitive advantage – Concepts and cases. Boston:
McGraw-Hill/Irwin.
Valsamakis, AC, Vivian, RW & du Toit, GS. 1992. The theory and principles of risk
management. Durban: Butterworths.
18

Chapter Two
Sustainability and triple bottom line
JH Wynand Louw
Learning Outcomes
• understand and explain the importance of the King reports
• differentiate between the issues covered in the King II and King III reports
• explain the important concepts of the triple bottom line and the triple context
• discuss the Global Reporting Initiative guidelines
• be conversant in the principles of sustainability
• clarify ethics in South Africa.

Chapter 2 focuses on sustainability and the triple bottom line. The King I, II and
III reports are discussed and the key differences between the King II and III reports
are highlighted. Ethics in South African businesses is briefly discussed, alongside
sustainability and the Global Reporting Initiative (GRI).
2.1 Introduction
Environmental problems require flexible and transparent decision making that
incorporates diversity of knowledge and values.
In the macro business environment, stakeholder participation in environmental
decision making has been increasingly embedded in national and international
policy. In order to incorporate the ideals of the King III recommendations, a more
participatory process is required with all the relevant role players. This may seem
risky, but there is evidence that if management designs this well, these risks may
be well worth taking.
For many years, corporate management abdicated its responsibilities towards
environmental issues raised by activists and scientists. Businesses focused only on
making profits, irrespective of the cost to the environment and the safety of people.
As a result, environmental resources were overexploited for many years.
The management of the environment was seen as non-critical and did not have
a high priority in the strategic plans of companies. Environmental issues were
viewed as a necessary evil that ate into company profits.

In the past, the sustainability of a business was only measured in terms of its
financial results. Managers and shareholders wanted greater profits and higher
dividends. If these were not delivered, shareholders moved their investments
elsewhere.
During the Industrial Revolution, the need for environmental protection was
not taken into account. All that mattered was the economic interests of companies
whose aim was economic progress and economic development at any cost and
the elaborate use of resources. Companies and governments transformed the
environment into an economic competition between the industrialised nations.
In the 1990s environmental issues began to play an increasingly important
role in organisational activities. In South Africa this became evident with the
introduction of the King I, II, and III reports, especially with regard to public
companies. Other businesses had to follow suit in order to be competitive and to be
seen as ethically responsible entities.
A number of tools were created by companies to monitor and improve their
environmental performance. Examples of tools of analysis and control are the
environmental management systems (EMS) and environmental audits used by
many governments and companies across the world.
2.2 The King reports

2.2.1 King I report
The first King report on corporate governance (King I) was published in 1994. This
report was the first corporate governance code for South Africa. King I established
recommended standards of conduct for boards and directors of listed companies,
banks and certain state-owned enterprises. It included not only financial and
regulatory aspects but also advocated an integrated approach that involved all
stakeholders.
2.2.2 King II report

King II included new sections on sustainability, the role of corporate boards and
risk management. This revised code of governance became applicable from March
2002.
In addition to the types of organisations listed in King I, the code of
governance became applicable to state departments and national, provincial or
local government administration falling under the Local Government: Municipal
Finance Management Act (MFMA). The code was also applicable to public
institutions or functionaries exercising a power or performing a function in terms
of the Constitution, or exercising a public power or performing a public function in
terms of any legislation, but excluded courts or judicial officers. King II encouraged
all companies to adopt the applicable principles from the revised code.
20

Two: Sustainability and triple bottom line
2.2.3 King III report

This report, released in September 2009, recommended that organisations
produce an integrated report in place of an annual financial report and a separate
sustainability report, and that companies create sustainability reports according to
the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines.
Companies in South Africa now have a framework for reporting to help them
achieve good governance in the context of the King I, II and III reports. It is
premised on the philosophy that governance in any context must reflect the value
system of the society in which it is based and operates.
The creators of the King I, II and III reports were mindful of the need to create a
uniquely South African business culture, different from that embraced by American
or European businesses. The reports incorporate the African value system that
emphasises:
• collective over individual good
• principles of mutual interdependence and co-existence
• a spirit of humanity, in which individuals are entitled to respect
• a hierarchical political ideology, based on an inclusive system of consultation
at various levels
• a preference for consensus over dissension
• a mentality of inherent trust and belief in the fairness of human beings.
The reports require a shift in organisational emphasis from a decision-making
hierarchy to more consultative and consensus-based techniques. By recognising
the existence of an Afrocentric view on corporate governance, the King reports aim
to bring on board those people who previously felt excluded or alienated by the
Eurocentric character of corporate governance in South Africa, regarding it as an
attempt to impose European value systems on Africa.
The King II and III reports advocate that corporate governance is essentially
about effective leadership. The philosophy of the King III report revolves around
leadership, sustainability and corporate citizenship.
The King III philosophy of leadership, sustainability and corporate citizenship is
outlined below:1
• Good governance is essentially about effective leadership. Leaders should rise
to the challenges of modern governance. Such leadership is characterised by
the ethical values of responsibility, accountability, fairness and transparency
and is based on moral duties that find expression in the concept of ubuntu.
Responsible leaders direct company strategies and operations with a view to
achieving sustainable economic, social and environmental performance.
1 IoDSA (2009b).
21

• Sustainability is the primary moral and economic imperative of the 21st

century. It is a source of both opportunities and risks for businesses. Nature,
society and business are interconnected in complex ways that should be
understood by decision makers. Most importantly, current incremental
changes in sustainability are not sufficient – a fundamental shift in the way
companies and directors act and organise themselves is needed.
• The concept of corporate citizenship flows from the fact that the company
is a person and should operate in a sustainable manner. Sustainability
considerations are rooted in the South African Constitution, which is the
basic social contract that South Africans have entered into. The Constitution
imposes responsibilities upon individuals and juristic persons for the
realisation of the most fundamental rights.
’It is leadership for efficiency in order for companies to compete effectively

in the global economy for probity, because investors require confidence, that
management of a company will behave honestly and with integrity towards the
owners of the company’s capital, and leadership with responsibility as companies
are increasingly called upon to address legitimate social welfare concerns relating
to their activities.‘ 2
2.2.4 Key differences between King II and King III reports
Table 2.1: Key differences between King II and King III reports3
Area King II King III
Alternative This is not dealt with In recognition of the fact that litigation is not
dispute in King II. always in the best interests of the company (it
resolution is often costly, may take years to finalise and
(ADR) does not always lead to the best outcome),
the practice of ADR has been introduced as
part of the board’s overall duty to act in the
best interests of the company. Its intended
purpose is to ensure the effective, efficient
and expeditious resolution of disputes through
mediation.
2 IoDSA (2009b). 3 Hendrikse & Hefer-Hendrikse (2012).
22

Area King II King III
Application of Applies to ‘affected Applies to all companies, regardless of their

the code companies’ (those size or structure. Like its predecessor, King
listed on the JSE, III sets aspirational best practice corporate
banks, financial and governance standards for these companies.
insurance entities
and state-owned
enterprises). It is an
aspirational code for
other companies
Audit The board should In terms of the 2008 Companies Act,

committee appoint an audit shareholders of the company in the general
committee. meeting must appoint an audit committee.
King III largely mirrors the provisions of the Act
concerning the criteria for audit committee
members, as well as the significantly increased
scope of the audit committee’s duties. Under
the Act, the audit committee has a statutory
role, as well as a number of additional
responsibilities which King III recommends be
vested with this committee (eg the review of a
company’s integrated reporting).
In South Africa, the King III report encouraged an era of accountability and
responsibility for all role players in the various industries by expecting companies
to report not only on their financial well-being but also on that of all the
stakeholders and the environment. Companies listed on the JSE had to become
more environmentally responsible in order to continue attracting investors. As
investors have become increasingly aware of environmental issues, they want to
invest in companies which are perceived as ethical.
King III follows an inclusive approach towards stakeholders, in which the
legitimate interests of stakeholders (employees, suppliers, customers, regulators,
environment, community, etc) are recognised over and above the interests of the
shareholders, in a manner that benefits the long-term sustainability of an entity.
23

Implications: the board should identify important stakeholder groupings and

management will have to engage with them to ascertain their legitimate
expectations.
Judge Mervin King introduced the principle of the triple bottom line into the South
African corporate environment, thereby changing the responsibility landscape
not only of South Africa but also of other parts of the world. Multinational
companies that do business in South Africa also have to comply with these new
requirements.
2.3 Triple bottom line (TBL) versus triple context

The term triple bottom line (TBL or 3BL) was coined by John Elkington in 1994
and discussed in 2009 in an article in the Economist.4 Since then many authors
have used this term in relation to companies and their social and environmental
responsibilities.
After King II, people started to refer to the triple bottom line in company-
reporting requirements. However, King III no longer refers to the triple bottom line
but rather to the triple context.5
There is now an understanding that financial factors impact on non-financial
factors and vice versa, although it is perhaps not appropriate to use the term
non-financial as all factors eventually have an effect on the long-term financial
performance of a company.
After the release of the King II report in 2002, investors evaluated potential
investment options by looking at whether a company was making a profit and what
the prospects were of it continuing to do so. Over the last two decades, investors
have realised that making money and being a sustainable business require more
than just focusing solely on the financial bottom line. This led to the development
of the notion of a triple bottom-line, made popular in the King II report.
The triple context referred to in King III recognises that a ‘bottom line’ should
not solely reflect the economic return on investment of a business. Other aspects
dealing with issues of environmental sustainability and social capital, ranging from
product responsibility and labour practices to community upliftment, should also
be included. The triple context is underpinned by three objectives:
• economic prosperity
• environmental sustainability
• social responsibility.
4 Elkington (1997). 5 IoDSA (2012).
24

The ability of a business to continue in a sustainable manner will result from

a positive and balanced return on the triple context of capital: economic,
environmental and social.
The process of identifying, assessing and reporting on a company’s business
activities in terms of its economic prosperity, environmental sustainability and
impact on society can be defined as the triple context.
This will impact on the core values of a company and all its activities. Reporting in
terms of the triple context focuses not only on the financial returns to shareholders
but also on the non-financial returns. The triple context can be viewed in two
ways:
• a reporting device in annual reports
• a tool in decision making and reporting to explain the implications of
decisions of management.
Annual reports no longer focus only on the financial aspects of reporting. Companies
are now measured by the triple context disclosure of information. When using the
triple context effectively in the annual report of the company, it can serve as an
effective tool to:
• promote a company
• market its goods and services
• attract high-calibre employees
• explain the reasons for the existence of a company.
Corporate success is now measured against a company’s performance in terms of
the triple context, which created new rules for businesses.
The new generation of business leaders need to incorporate triple context
reporting into their vision and mission statements, as well as into the daily activities
of the company. This also needs to filter through to the empowerment of its staff.
The performance indicators of the Global Reporting Initiative (GRI) Guidelines,
both qualitative and quantitative, need to be at the core of a sustainability report. The
sustainability report covers three categories, namely the economic, environmental
and social dimensions of the sustainability of a company’s actions.
Each of these triple context categories have certain core indicators and additional
indicators that management should identify:
• Economic prosperity: The main focus of this section is concerned with an
organisation’s impact on the economic resources of its stakeholders and with
economic systems at local, national and global levels. Economic prosperity
refers to the profit-making business of a company, which is after all the main
reason for a company’s existence.
25

• Environmental sustainability: This covers an organisation’s impact on living

and non-living natural systems, including land, air and water, and eco-
systems. It also covers the environmental impact of a company’s:
products and services
use of materials
water usage
energy usage
greenhouse gases and other emissions
effluents and waste generation
recycling policy
waste reduction methods
possible impact on biodiversity
use of hazardous materials
other environmental programmes
environmental expenditures.
Environmental responsibility also includes health and safety issues.
• Social responsibility: This can be grouped into three main clusters:
labour practices, ie diversity, employee health and safety
human rights, ie child labour and compliance issues
broader social issues, ie bribery, corruption and community relations.
Social responsibility relates to the different expectations of a diverse group of
internal and external stakeholders – shareholders, employees, customers, suppliers
and community and other interest groups that comprise civil society.
Triple context reporting enhances accountability, sustainability and governance
of organisations in South Africa. Reporting in terms of the triple context ‘forces’
management to rethink their responsibilities and interactions with the following:6
• Governance: A company board (or board of directors) responsible for
corporate governance needs to shift its thinking in order to become more
inclusive. This can be accomplished by developing dialogues with a diverse
range of stakeholders.
• Values: There is a need to shift from focusing on the ‘hard’ value of
profitability to the ‘soft’ values of integrity, community trust, respect for
employees and sustainability. Many of these factors cannot be measured
against direct financial returns. There should be a steady growth in these
factors that can be ascribed to the values of an organisation and its employees.
• Markets: Organisations need to follow more sustainable business practices, and
in such a way gain a competitive advantage. Operating in an environmentally
6 IoDSA (2009b).
26

responsible manner will also have an impact on an organisation’s markets. If

its market is business to business, it will have to ensure that its customers also
comply with triple context reporting requirements.
• Life cycle: Organisations need to shift their focus from product to function
and the inclusion of the impact and behaviour of suppliers. This places a big
responsibility on supply chain managers to ensure that their own company
is not negatively affected by their suppliers, for example by the use of child
labour.
• Transparency: Organisations have to shift towards a transparent reporting
structure in their reporting to the public and the authorities. Greater
transparency is required due to shareholder and public pressure for the
‘right to know’. Organisations also have increased reporting requirements
owing to compliance legislation implemented by the government. A lack
of transparency in reporting runs the risk of involuntary disclosure by a
globalised media.
• Partnerships: Organisations need to move to new symbiotic partnerships
to help detect change, foresee problems and achieve results. Through
engagement with a range of non-governmental organisations and
environmental groups, organisations are more able to discern changing
public concerns. Many organisations have formed partnerships with groups
that will complement the organisation’s philosophy and values.
• Time: Increasing demands are made and more events happen in one minute
than ever before. Sustainable development therefore requires a mind shift
about time. Organisations need to remember that time is longer than it
appears as environmental change occurs over a geological time scale.
2.4 Sustainability principles

The Brundtland Commission’s report of 1987, commissioned by the United
Nations in 1983 to investigate the concept of sustainable development, developed
the following definition, still widely used today: ‘Sustainable development is
development that meets the needs of the present without compromising the ability
of future generations to meet their own needs.’7
There is increased emphasis on sustainability and its inseparable interface
with strategy and control. King III calls for integrated reporting (reporting of
financial information, together with sustainability issues of the social, economic
and environmental impacts of a company) and recommends that a company’s audit
committee engage an external assurance provider to provide assurance over the
material aspects of the sustainability reporting in the integrated report.
7 United Nations (1987) 41.
27

Implications: The skills set of an audit committee will have to include member(s)
proficient in sustainability issues.
Furthermore, integrated reporting may require registered auditors and assurance
providers who can provide assurance on both the financial components and the
sustainability issues covered in a report. This is likely to have an impact in terms
of the engagement of an external auditor, the associated costs and director
liability in the event of misrepresentation.
A board has the following responsibilities:

• institute controls to ensure the integrity of the integrated report (the report
should be prepared annually, cover financial and sustainability performance
in sufficient detail, focus on substance over form, and describe how the
company made its profits)
• comment on the company’s financial results
• disclose if the company is a going concern
• convey the positive and negative impact of operations and how these will be
improved in the following year
• delegate the oversight, reporting and evaluation of a company’s
sustainability performance to the audit committee (who should ensure that
sustainability reporting and disclosure are independently assured).
The ‘bottom line’ for any business is making profit – this is essential – but
sustainable development must start from within. The financial well-being of a
business is portrayed in its financial statements and annual reports; these reports
are often presented as a reference when seeking new contracts.
However, the world at large is now seeking more environmental commitment
from business by demanding sound reporting, which not only discloses a company’s
financial status, but also its commitment to the environment.
2.5 Ethics and companies in South Africa

The King III report, published in 2009, stipulates that organisations have to consult
with all stakeholders and interest groups with regard to policies, activities, products
and services, with specific reference to the environment and the communities in
which they operate.
Organisations are legally required to report to shareholders on a regular basis
about their activities.8 Additionally, management is also responsible for consulting
with its health and safety committee on preparing and reviewing policies, plans
and documents that relate to all organisational activities.9
8 Mine Health and Safety Act, s 2. 9 Mine Health and Safety Act, ss 8 & 11.
28

The extensive nature of the natural environment demands that organisations must
engage all other interested parties in developing and implementing an environmental
management system to effectively deal with environmental challenges. An explicit
objective and directive of the National Environmental Management Act (NEMA)
is to ‘ensure adequate and appropriate opportunity for public participation in
decisions that may affect the environment’.10 Directives such as these lay the basis
for organisational transparency with regard to developing and implementing an
environmental management programme.
The International Standard ISO 140001:200411 requires every organisation
involved in activities that relate to production and service delivery to establish and
implement an environmental policy within the framework of an environmental
management system (EMS).12 See Chapter 5 for details on the development
and implementation of an extensive EMS, which deals with different types of
environmental hazards and environmental aspects.
In addition to the International Standard ISO 140001, companies in South Africa
must comply with environmental management directives specified in NEMA. This
will be discussed in more detail in Chapter 9.
2.6 Conclusion
In this chapter the importance of sustainability was discussed and the concepts
of the triple bottom line and the triple context were introduced. Both the King
II and King III reports highlight these concepts and what they mean for South
African businesses. Sustainability is a term used throughout this book; this chapter
defined the principles of sustainability in terms of both environmental and business
practices.
Review questions
1. Which is the definitive guide to corporate governance?
a. The Retirement Reform
b. The Constitution
c. The King III report
d. GAPP
e. NHI
2. In your estimation, why would you say that it is important to have a
sustainability report in place in your organisation or business? Will this
make a difference in attracting investors to do business with you? If yes, why
do you say so?
10 NEMA, s 23. 12 SABS (2005).
11 ISO (2009).
29

3. Ubuntu is an African value system that focuses on:

a. the spirit of humanism
b. respect for people and the country
c. service delivery
d. a & b
e. a, b & c
4. The creators of the King reports were mindful of the need to create a
uniquely South African business culture, different from that embraced by
American or European businesses. The reports incorporate the African value
system that emphasises certain aspects. Which is not correct?
a. Principle of mutual interdependence and co-existence
b. Spirit of humanity where an individual is entitled to respect
c. A hierarchical political ideology, based on an inclusive system of
consultation at various levels
d. Preference for dissension over consensus
e. A mentality of inherent trust and belief in the fairness of human beings
5. Find a company’s annual report and answer the following questions:
a. Which company’s annual report have you selected?
b. Why did you choose this specific company’s annual report?
c. Did the company report in terms of the triple bottom line (TBL) or the
triple context?
d. Was an equal amount of attention allocated to each of the three aspects
of the TBL or the triple context?
e. In terms of economic prosperity measures, what was the company’s
annual profit?
f. On the social responsibility measurement, who was the company’s social
responsibility partner?
g. What was the company’s arrangement with this partner?
h. What did the company disclose in terms of its environmental
sustainability indicators?
i. What was the company’s impact on the living and non-living natural
systems?
j. What did the company do to reduce its energy needs?
k. How is the company managing its waste generation?
30

References
Elkington, J. 1997. Cannibals with forks: The triple bottom line of 21st century
business. Oxford: Capstone Publishing.
Elkington, J. 1998. Accounting for the triple bottom line. Measuring Business
Excellence, 2(3): 18–22.
Elkington, J. 2009. Triple bottom line. The Economist, 17 November 2009. Available:
http://www.economist.com/node/14301663. (Accessed 7 April 2015).
Hendrikse, JW & Hefer-Hendrikse, L. 2012. Corporate governance handbook:
Principles and practice. Cape Town: Juta.
IoDSA. Institute of Directors in Southern Africa. 2009a. King code of corporate
governance for South Africa. Johannesburg: IoDSA. Available: https://www.
iodsa.co.za/resource/collection/94445006-4F18-4335-B7FB-7F5A8B23FB3F/
King_III_Code_for_Governance_Principles_.pdf. (Accessed 7 April 2015).
IoDSA. Institute of Directors in Southern Africa. 2009b. King report on corporate
governance for South Africa. Johannesburg: IoDSA. Available: http://www.
iodsa.co.za/?kingIII. (Accessed 7 April 2015).
IoDSA. Institute of Directors in Southern Africa. 2012. King III Chapter 9: The
integrated report. Johannesburg: IoDSA. Available: https://www.iodsa.co.za/
resource/collection/24cb4885-33fa-4d34-bb84-e559e336ff4e/King_III_Ch_9_
Integrated_Report_April_2012.pdf. (Accessed 7 April 2015).
ISO. International Organization for Standardization. 2009. Environmental man
agement: The ISO 14000 family of international standards. Available: http://
www.iso.org/iso/theiso14000family2009.pdf. (Accessed 18 November 2014).
ISO. International Organization for Standardization. 2014. ISO 14000 – Environ
mental management. Available: www.iso.org/iso/iso14000. (Accessed 18
November 2014).
Kibert, CJ, Monroe, MC, Peterson, AL, Plate, RR & Thiele, LP. 2012. Working towards
sustainability: Ethical decision making in a technological world. Hoboken, New
Jersey: John Wiley & Sons.
Mine Health and Safety Act 29 of 1996. Pretoria: Government Printer.
Printer.
Occupational Health and Safety Act 85 of 1993. Pretoria: Government Printer.
SABS. South African Bureau of Standards. 2005. SANS 14001:2005. Pretoria:
31

Stringer, LC & Reed, MS. 2007. Land degradation assessment in southern Africa:
Integrating local and scientific knowledge bases. Land Degradation and
Development, 18: 99–116.
United Nations. 1987. Report of the World Commission on Environment and
Development: Our common future. Transmitted to the General Assembly as an
Annex to document A/42/427 – Development and international co-operation:
Environment. Available: http://www.un-documents.net/a42-427.htm.
32

Chapter Three
The natural environment
Sarel J Smit
Learning Outcomes
• understand the nature of the natural environment in which humans live
• explain the impact of human activities on the natural environment
• discuss the natural driving forces that influence change in corporate behaviour
• discuss business endeavours to protect the environment.

Chapter 3 reflects on four interrelated components that are of specific concern for
safety, health and environmental management, namely:
• the natural environment
• the impact of human activity on the natural environment
• natural driving forces influencing change in corporate behaviour
• business endeavours to protect the natural environment.
The discussion focuses on the nature and characteristics of the natural environment,
human interaction with the environment and the impact of this interaction on the
environment, changes in corporate behaviour resulting from natural driving forces
in the environment and corporate efforts to prevent any adverse effects of corporate
endeavours on the environment. While people are dependent on the environment
to sustain an acceptable quality of business operations, the environment also
needs protection from human activities. Let’s get to grips with the nature of the
environment, with specific emphasis on the natural environment.
3.1 Introduction
It is not possible to engage in environmental management without a basic
understanding of the nature and characteristics of the environment. Comprehending
the features of the natural environment provides a basis for purposeful involvement
in protecting the environment against any adverse impact resulting from human
endeavour or from natural forces.

3.2 The nature of the general and natural environment

The human environment comprises two distinct but interwoven parts. These parts
are the natural and the man-made elements. This section will describe the nature
of the natural environment.
The natural environment consists of numerous substances. All things (sub
stances) in the universe are made of matter. Matter is the universal material.1
Kurtus2 notes that the material basis of all things makes all things tangible and
contactable. Matter is the common, universal and essential characteristic that
forms the basis of each and every different tangible thing. If a thing or object has
no substance, it is not tangible, because it is not made of matter. Matter defines
substance solidity. Matter is the property that holds things together and retains the
shape of objects. Matter is composed of atoms; atoms comprise a core and rotating
protons, neutrons and electrons.3 This implies that all substances of the natural
world basically possess inherent kinetic energy.
Substances exist in three different formats, namely single or pure substances,
compound elements and multiple elements. Single or pure elements are listed on the
periodic table. The well-known periodic table arranges the basic natural elements
in nature, of which things are made, in order of increasing atomic number.4 Many
things (substances) consist of mixtures of substances. Such mixtures are compound.
Compound substances are made of or are formed by two or more single natural
elements.5 Compound substances appear in the form of a single entity because of the
integrated combination of the different substances. A good example is the nature of
water that comprises two distinct elements, namely oxygen and hydrogen that are
integrated into a single compound substance. A multiple substance distinguishes
itself from a single or compound substance on the basis of the multiple substance
bases of which it is composed and the multiple threats that it poses to all other
substances. Multiple substances are formed when different single and/or compound
substances form a separate unity. A bunch of keys and a fork with separate tines
are examples of multiple substances.
All substances that are made of matter are contactable via one or more of
the human senses. If a substance is contactable it has the potential to cause harm
to humans and damage to other substances (property) and to the environment.
For example, air that is contactable can cause any level of loss, from minute to
disastrous. If a substance is contactable and has the potential to create loss it is
a safety hazard. Anything that has no substance and is not contactable is not a
safety hazard. Smit and Esterhuyzen6 outline a list of so-called safety hazards that
do not meet the requirements of being safety hazards. All members of the animal
kingdom, fauna and flora meet the requirement of being made of matter and being
contactable. In terms of the natural environment, this implies that everything which
1 Zumdahl & Zumdahl (2007) 25. 4 Zumdahl & Zumdahl (2007) 55.
2 Kurtus (2013) 1. 5 Tech Topics (2013) 1.
3 Zumdahl & Zumdahl (2007) 25. 6 Smit & Esterhuyzen (2014) 32.
34

Three: The natural environment
is made of matter and which is contactable is a safety hazard; it does not apply to
things such as a dream, a thought, a story, etc. As material things present themselves
in different formats, all such things in any format are safety hazards. Therefore, all
elements of the natural environment such as water, oxygen, rocks, trees, flowers,
smoke, bees, lions, the sun, the moon, planets, meteors, etc are safety hazards.
3.3 Characteristics of safety hazards

All safety hazards have certain common characteristics that contribute to safety
and environmental risk. Such characteristics relate to the structure and functioning
of each particular safety hazard.
3.3.1 Structural characteristics of substances

Substances possess the following characteristics:7
• Tangibility relates to a substance’s material basis that makes it contactable.
Remember, if a substance has no contactability there is no safety or
environmental risk.
• Density implies the amount of matter, which sets the framework for
solids, liquids and gases. Each of these formats present different types of
environmental risk.
• Size relates to the volume of substances, which contributes to environmental
risk in different contexts.
• Weight relates to the amount of material substance of things and can
contribute to environmental risk in different ways.
• Shape relates to the impact of the point of contact between substances and
can contribute to environmental risk in different situations.
• Texture or surface relates to the effect in terms of environmental risk of the
contact between different substances.
3.3.2 Functioning characteristics of substances

The different functioning characteristics of substances that contribute to
environmental risk are the following:8
• Energy relates to the kinetic energy that is an indispensable part of the
constellation of the atoms of each substance. Energy is seen as the capacity
to do work. The two very basic energies that all substances have are kinetic
and potential energy.9 McDonald and McDonald10 outline a list of basic
manifestations and configurations of energies that are involved in doing
work in the environment.
7 Smit & Esterhuyzen (2014) 45–58. 9 Crowell (2006) 68.
8 Smit & Esterhuyzen (2014) 58. 10 McDonald & McDonald (1994) 12.
35

• Consistency (also called symmetry) relates to substances, whether single,

compound or multiple, functioning in accordance with natural laws under
given circumstances. For example: water heated sufficiently will always boil
and vapourise; a piece of iron heated sufficiently will take a liquid format;
lightning can start a fire, etc.
• Interaction relates to the ability to make contact with other substances and to
exchange energies with one another; this always coincides with the exchange
of energies between such substances. For example, dragging a heavy tree
trunk on gravel will result in generating heat on the trunk and ploughing
some furrows in the gravel.
• The ecosystems that function in the natural environment set examples of the
interaction of different types of systems in different situations in the natural
environment.
• It is important to remember that the contribution of the different
characteristics of substances to safety and environmental risk is always
situationally determined. For example: petrol vapour is more dangerous than
petrol fluid in given situations because it can ignite. Likewise, one can drown
in petrol fluid, but not in petrol vapour.
• Humans form an integrated part of the natural environment. Humans have
one additional characteristic that contributes to safety and environmental
risk, namely inconsistency. Although the human body’s structural and
functioning organ systems are bound by natural laws, the human mind
operates on the basis of norms. Humans have the freedom and ability
to decide upon their conduct in every situation in life. Such freedom of
choice often results in behaviour that is inconsistent to the requirements of
environmental safety.11
3.4 The appearance of the natural environment

The natural environment comprises millions of substances. Because such substances
are tangible and contactable, they can pose a threat to the safety of other substances.
In this context, all tangible substances are safety hazards. Safety hazards exist as
pure hazards, compound hazards or multiple hazards. Safety hazards (substances)
come in different formats, namely solids, fluids and gases. All hazards each have
a set of eight common characteristics that contribute to safety and environmental
risk. However, humans have an additional unique characteristic that distinguishes
them from all other substances. More about this will follow later. Substances appear
in the natural environment in a countless range of types of safety hazards.
11 Smit & Esterhuyzen (2014) 91.
36

3.5 The origin of safety risk and environmental risk

When substances come into contact they interact, during which energy or energies
are set free. Such energy or energies present the risk that could impact on the
environment. For example: lightning strikes a tree on a game farm. Thermal energy
is set free. The tree and grass catches fire. The wind spreads the fire very rapidly. A
group of antelope is burnt to death. See Smit and Esterhuyzen12 for an example of
energies that appear in the natural environment.
Thus, safety risk originates when hazards interact and energy or energies are
set free.
3.6 Environmental hazards and environmental aspects

Aucamp13 sees an environmental hazard as ‘any situation or state of events that
poses a threat to the surrounding environment’. In a real sense, a hazard stays
a hazard because of its contactability and its potential to exchange and release
energy upon interaction with any one or more other safety hazards. A condition
or state of events cannot be hazards because they do not meet such criteria for the
definition of a safety or environmental hazard.14 The basic requirements that apply
are that ‘any tangible object that has the potential to complement or interfere with
the performance of a task’ and that possesses ‘closing and collision potential, is a
safety hazard’.15
Using the term environmental aspect establishes an acceptable recognition of
the origin of damage to the environment. An aspect can be regarded as a particular
part or feature of a situation. As such, the risk threat for the surrounding environment
still originates via the interaction of hazards and the resultant release of one or more
energies. An aspect represents the event that flows from the interaction and energy
release. For example: air is a hazard. Safety risk originates when the interaction of
air, sun, earth and moisture results in a hurricane. Such interaction and resultant
risk is an integral part or aspect of the natural environment. Thus, an aspect of the
natural environment offers a threat to the surrounding environment as a result of
the risk that comes from the interaction and energy exchange of safety hazards.
Environmental aspects refer to any organisational activities, products and
services that are involved in dealing with any environmental hazards and their
associated energy exchange. Environmental impacts refer to any change that may
occur in the environment, whether good or adverse, that may result from dealing
with environmental hazards and their energy exchange.16
12 Smit & Esterhuyzen (2014) 61. 15 Van Fleet (2000) 112.

13 Aucamp (2014) 60. 16 SABS (2005).
14 Smit & Esterhuyzen (2014) 33.
37

3.7 The impact of human activity on the natural environment

Aucamp17 states that the environment comprises water, land and the atmosphere
surrounding the earth, micro organisms with flora and fauna, the combination
of and interrelationships between such elements, as well as the chemical and
physical properties and conditions that can affect human health and general well-
being. Safety hazard interaction could result in different incidents that are normal
incidents or part of the natural environment and each could result in different
levels of magnitude or severity of adversity.18
Human activity is one of the major elements that impacts on the natural
environment. Such impact can be positive, but is currently more negative.19
Human activity that impacts on the natural environment relates to a range of
human involvement for different reasons or purposes. Humans are almost in all
respects of life dependent on the natural environment. Human involvement and
activities pertaining to life arise from specific issues, namely the need to sustain
human life, the purpose of enhancing the quality of life and the quest to establish
and prove supremacy.
3.7.1 Depletion of sources in sustaining life

Humans use many elements of the natural environment to maintain life. Farming
in different contexts, as well as fishing and hunting to provide food, are major
activities. The use of pesticides to deliver more and better crops has detrimental
impacts on the natural environment. Deforestation to create space for dwellings and
more intensive farming diminishes the generation of oxygen, with negative effects
on the atmosphere surrounding the earth.20 Slaughtering and eliminating large
animals, birds and fish badly impacts on the quality of natural life and its benefits
for humans in sustaining life. Efforts to maintain and sustain life in conjunction with
other activities adversely impact on the natural environment. The over-population
of the earth in order to ensure human existence threatens the quality of the natural
life inadvertently. Sernau21 postulates that human activity has encouraged the spread
of deserts, the depletion of soils, and the destruction of forests.
3.7.2 Enhancement of the quality of life

Human activities to enhance the quality of life and to provide ever increasing needs
result in major negative impacts on the natural environment. Establishing industries
of different kinds, factories and mines, skyscraper buildings, sewerage plants, farming
on a massive scale, squatter camps, transport systems of different kinds, and many
more threatens the trouble-free development of the natural environment. Factory
emissions, electrical and nuclear power plants, electricity distribution installations,
17 Aucamp (2014) 2. 20 Sernau (2014) 348.

18 Aucamp (2014) 69 & 82. 21 Sernau (2014) 356.
19 Aucamp (2014) 68.
38

vehicle and airplane emissions (eg carbon monoxide), pesticides, ground falls,
overpopulation of certain areas, water and ground contamination and pollution,
and many more human activities aimed at improving the quality of life impact the
natural environment negatively. The creation of electrical power via the utilisation
of fossil fuel and nuclear energy is another example of human activity that impacts
on the natural environment severely.22 Carbon leakage as the main element of
greenhouse gas has detrimental impacts on the natural environment.23 Such effects
are directly related to global climate change as a result of the steady increase in
the mean temperature of the world’s climate.24 Acid deposition from agricultural
and industrial activities impacts negatively on water and soil quality, which affects
the ecosystems in the natural environment adversely.25 Emissions from industries,
as well as from petrol- and diesel-using vehicles, create major air pollution that at
times almost suffocates people in major cities. Oil spills endanger the continuation
of plant and animal ecosystems in the seas with adverse effects on beach pollution
and reduction of sea food sources for people and animals.26
Human traits such as inconsistency and irresponsibility are in many ways
instrumental to forms of pollution, for example water and soil pollution, with
the resultant damage to the natural environment’s capacity to maintain effective
growth. Sewage sludge that spills from sewerage cleansing plants serves as an
example in this regard.27 Human endeavour to sustain and enhance the quality of
human life has therefore affected the natural environment in numerous ways. The
majority of such effects, however, are inclined to be negative.
3.7.3 Establishing supremacy via conflicts and wars

People have the tendency (quest) to prove themselves better, stronger, and superior
compared to others, for example the competition to conquer outer space or conflict
in the form of waging war. Many of these human activities affect the natural
environment adversely. Sernau28 indicates that warfare always has a negative effect
on the natural environment, for example the use of weapons of mass destruction to
gain the upper hand on the enemy. Regional and factional fighting is renowned for
its destruction of many parts of the natural environment with regard to fauna, flora
and ecosystems. The negative impacts of warfare are evident in the natural disastrous
effects of chemical, biological and nuclear weapons on humans, on civilisation and
on parts of the natural environment, for example land mines make former farmland
worthless.29 Another example is the extremely negative effects of the atom bombs
dropped on Hiroshima and Nagasaki during World War II. The quest to conquer
outer space has added to the adverse effects of nuclear power on different aspects of
the natural environment. The waste that accompanies successful, futile and failing
efforts to conquer space results in sea pollution, rocket debris, and more.
22 Cresser et al (2013) 416. 26 Sernau (2014) 313.
23 Cresser et al (2013) 199. 27 Cresser et al (2013) 468.
24 Sernau (2014) 325. 28 Sernau (2014) 241.
25 Cresser et al (2013) 363–364. 29 Sernau (2014) 254–257.
39

3.8 Natural driving forces that influence change in corporate

behaviour
Natural forces which are based on the consistency of natural laws as well as on
forces that have their natural off-spring in the nature of human civilisation affect
changes in corporate behaviour in order to accommodate requirements and needs
that flow from such natural laws and human needs and interests.
Examples of natural forces that have an impact on corporate behaviour in one
way or another include tsunamis, global climate change, urbanisation, population
growth, excessive rain, drought, hurricanes, earth quakes, snow falls, heat waves,
eruption of volcanoes, destruction of fauna, flora and ecosystems, water, soil and
air pollution, human needs for security and general well-being, the quality of
community life, and humans’ need for self-development, to list only some of the
most evident issues.30 These natural forces usually relate to conditions of excessive
energies, a lack of specific needed energies, the presence of unwanted energies, and
societal pressure to accommodate people’s needs.
3.8.1 Excessive energies

In most cases the presence of unwanted excessive energies has adverse effects
on the natural environment. The occurrence of tsunamis, volcanic outbursts,
emissions of carbon, sulphur and other chemicals via industries and vehicles, acidic
water from mine works, sewage sludge from urbanisation, rain storms, galeforce
winds and hurricanes, heat waves, various kinds of fires, smoke, smog, pesticides
and other chemicals from industrial and farming activities, explosions via mining,
earth works or wars, and more all affect the environment badly.
Human urbanisation has introduced special energy needs as a result of vast
numbers of people and their corresponding needs for water, electricity, gas,
transport, buildings, health, recreation, shelter and forms of labour involving
different kinds of activities to sustain life in meaningful ways. Society produces
ever-growing rubbish dumps and landfill sites, leading to major concerns about
the challenges of dealing with the resultant increase in different types of energy
and the potential impact of such waste on the environment. These excessive energy
effects impact on the normal functioning of businesses; such impacts require and
affect changes in corporate behaviour to maintain survival and a competitive edge.
3.8.2 Lack of specific energies

A lack of specific energies can also change corporate behaviour. During winter
and snow storms, for example, there is a lack of wanted thermal energy (heat).
Thermal energy is also necessary to prepare most foods. Water energy is necessary
for moisturising (eg human sustenance), cleansing, growing crops, sustaining
fauna and flora, and more. Natural wind, natural sun light and natural thermal
30 Cresser et al (2013) 414.
40

energy (heat) are necessary to perform a great variety of corporate functions and
responsibilities. For example, no wind turbine to generate energy can turn if no
wind blows. Growing specific crops or manufacturing specific products cannot occur
when certain specific chemical or physical energies are not present or available. The
unavailability or lack of specific wanted energies can therefore have adverse effects
on corporate performance and on the achievement of objectives. In such instances,
companies may need to change their behaviour in order to stay in business. The
decline of certain types of energies that goes with the decline of certain substances,
like water, oxygen in the atmosphere, soil erosion and more, requires management
to develop different strategies to sustain the livelihood of business.
3.8.3 The presence of unwanted energies

Corporate behaviour is to a large extent determined and changed by the presence of
unwanted energies. In order to be successful, businesses cannot tolerate unwanted
energies. The presence of unwanted energies associated with carbon dioxide, heat of
the sun, rain, lightning, volcano lava and ashes, earthquakes, smoke, radioactivity,
chemical acids, tsunamis, noise, viruses (Ebola, malaria, yellow fever, etc), animals
(eg birds at airports), and more as a result of the presence or absence of a range of
substances (environmental hazards) forces management to adjust their strategies,
approaches and activities in order to ensure continuation of business within a
stress-generating environment.
3.8.4 Societal emphasis to consider human life and human needs

Urbanisation of people has a wide range of effects on the natural environment.31
Megacities with their industrial giants, railroads, tarred roads, congested vehicle
traffic and more, aimed at accommodating the needs of humans in trying to sustain
and enhance their quality of life, depict the destruction of the natural environment.
However, at the same time, these activities are unable to prevent the development
of ghettos, slums and squatter camps that illustrate people’s inability to really care
for and sustain the quality of the natural environment. Deforestation and drying of
wetland areas that result in desertification, the creation of industries to provide for
a wide range of human needs and the emphasis on prosperity inevitably represent
and generate different types of natural energies and collective human energies that
management has to cope with to survive and grow their businesses.
3.9 Business endeavours to protect the environment

Corporate responses to protect the environment have gradually changed from fairly
ignorant to responsible goal-directed business management. Prominent corporate
behavioural changes that have been instituted include the following:
31 Sernau (2014) 277.
41

3.9.1 Establishing and implementing a multi-faceted corporate policy

Civilisation requires that corporate policy provides maximum protection of the
natural environment. Such protection applies to water, soil, air, as well as all fauna,
flora and all forms of ecosystems in which businesses operate. Such protection
must also include full engagement in combating global climate change in terms
of the development of the greenhouse effect with its unwanted temperature
warming and disastrous adverse results. Most of these requirements are framed in
proper applicable legislation, which sets clear directives that need to be followed
and implemented in order to protect the natural environment. The International
Standard ISO 140001:2004 sets requirements for every organisation involved in
activities that relate to production and service delivery to establish and implement
an environmental policy within the framework of an environmental management
system.32 See Chapter 5 for details on the development and implementation of an
extensive environmental management system (EMS), which deals with different
types of environmental hazards and environmental aspects.
3.9.2 Compliance with environmental management legal requirements

In addition to the International Standard ISO 140001, companies in South Africa
must comply with environmental management directives that are specified in the
National Environmental Management Act 107 of 1998 (NEMA).
The basic elements of this Act, which focuses on providing an environment
that enhances the health and well-being of every member of society, contains all
the legal prescriptions and regulations required to sustain continuity and profitable
endeavours. Prescribed legal and self-determined directives direct organisations
to utilise a variety of resources to develop and implement an EMS that fully and
effectively complies with such requirements. Such compliance places a heavy
burden on the financial capacity of organisations.
Sections 33 to 35 of NEMA set out clear legal requirements, with which
organisations must comply, with regard to establishing, developing and implementing
an environment management programme (EMS). Section 24N of NEMA specifies
the content of an EMS. The purpose of NEMA is to ensure integrated environmental
management and to promote the integration of the principles of environmental
management.33 In order to comply, an organisation needs to utilise different
resources; this has specific financial implications. All environmental management
programmes are to be accepted, registered, certified and amended in accordance
with legal requirements. No company is allowed to develop and implement an
EMS without the deliberate approval of the applicable competent authority. The
Minister of Minerals and Energy is the legally accepted competent authority, while
the Department of Minerals and Energy administers NEMA.34
32 SABS (2005). 34 NEMA, s 24(2A).

33 NEMA, s 23.
42

3.9.3 Utilisation of cross-functional teams

Cross-functional teams (CFTs) provide the best and only integrative approach to
effectively managing the development and implementation of an EMS. Businesses
realise that the nature of the natural environment and interaction with environmental
hazards via business activities, products and services results in different types of
environmental aspects, with potential levels of environmental impacts. Dealing
effectively with such challenges requires a broad spectrum approach and strategy,
which is derived from deliberation and consultation with CFTs that comprise a
range of expertise. Robbins35 stipulates that the members of such teams come from
almost similar hierarchical levels internal and external to an organisation. Such
teams are multi-disciplinary in nature, because the members come from different
professions or disciplines that convene to produce the best available solution to
any environmental aspects and actual or potential environmental impacts. Workers
from lower levels may also be included, depending on the nature of the challenge.
Thompson et al36 indicate that CFTs can play an important part in innovation and
change. The members of CFTs can be regarded as complementary professionals on
the basis that they are all concerned with challenges relating to environmental
protection, but that their approaches to the challenges will differ in accordance
with the focus of their particular discipline. CFTs are purpose driven and do not
function beyond the scope of the challenge for which they need to find solutions.
Members of a CFT each have their own focus, but these foci are all complementary
to the challenge and the solution to challenges. This applies to addressing all issues
concerning all types of environmental aspects and environmental impacts related to
the EMS of a specific organisation. Utilising different experts from various fields of
study in the application of the EMS implies specific financial resources additional to
the main course of activities, products and services.
3.9.4 Corporate consultation with interest groups

The nature of the natural environment and the interaction with various
environmental hazards require that businesses have to consult with various groups
and stakeholders, within and external to the organisation, that have a vested interest
in an organisation’s impact on the environment. The King report37 stipulates that
organisations have to consult with all stakeholders and interest groups with regard
to their policies, activities, products and services, with specific reference to the
environment and the community in which they operate. Organisations are legally
required to report to shareholders on a regular basis about activities.38 Additionally,
management also has the responsibility to consult with its health and safety
committee on preparing and reviewing of policies, plans and documents that relate
to all organisational activities.39 The extensive nature of the natural environment
35 Robbins (2001) 261. 38 Mine Health and Safety Act, s 2.

36 Thompson et al (2005) 560. 39 Mine Health and Safety Act, ss 8 & 11.
37 IoDSA (2009).
43

demands that organisations must engage all other interested parties in developing
and implementing an environmental management system to effectively deal with
environmental challenges. An explicit objective and directive of NEMA is to
‘ensure adequate and appropriate opportunity for public participation in decisions
that may affect the environment’.40 Such directives set the scene and requirements
for organisational transparency with regard to developing and implementing an
environmental management programme.
3.9.5 Corporate culture and corporate climate focus

Geller41 postulates that people are more inclined to achieve goals and objectives
that they set individually or within a group context. The impact of consultation
with employees and other interest groups sets the basis for achievement orientation.
Such orientation forms the foundation of employee endeavours and behaviour
to focus on engaging with the environment safely at all times. Developing a
corporate culture and corporate focus on the importance of and enhancement of an
environmental safety policy, which informs an organisation’s products and services
in dealing with the natural and man-made environments, has become a major
focus in establishing and sustaining a competitive edge in business longevity.42 The
ultimate point of departure in developing an organisational culture and climate is to
create and utilise employees’ passion for driving the importance of environmental
protection and emphasising the importance of dedicated efforts to realise company
objectives in this regard.
Organisations must consider all potential environmental impacts which could
result from their activities, products and services during their involvement with
environmental hazards and their energies that could result in environmental
aspects. Negligence in this regard could have major adverse implications for the
environment and for organisations.
3.10 Conclusion
It is quite clear that organisations must effectively focus on dealing with
environmental conservation in the execution of their business activities, products
and service delivery. Efforts in this regard must consider the actual physical and
chemical elements of the natural environment. It has to be remembered that all
substances possess energy or energies and that involvement in business endeavours
implies interaction with environmental hazards and their energies. Organisations
need to identify all environmental aspects that could be present via their interaction
with environmental hazards. Furthermore, all organisations need to assess the
actual or potential environmental impacts that could flow from environmental
aspects.
40 NEMA, s 23. 42 Goetsch (2010) xvii–xviii.
41 Geller (1996) 26–27.
44

Organisations need to understand the effects of their activities, products and services,
as well as societal activities, on the natural environment. Such understanding
needs to be reflected in the development and implementation of an environmental
management programme (EMP) and environmental management system (EMS).
Businesses also have to develop and apply their EMPs and EMSs in accordance
with the specific legal requirements of local, national and international origin.
Organisations have to clearly indicate their actual involvement in the pursuit to
protect the natural environment against any adverse effects of environmental
aspects and environmental impacts.
Review questions
1. Explain the basic physical and chemical structures and functional
characteristics of the natural environment.
2. Explain the difference between environmental hazards, environmental
aspects and environmental impacts.
3. Briefly sketch the impact of human activities on the natural environment.
4. Stipulate and discuss the natural driving forces that influence change in
corporate behaviour.
5. Outline corporate efforts to protect the environment.
References
Aucamp, PJ. 2014. Environmental impact assessment: A practical guide for the
discerning practitioner. Pretoria: Van Schaik Publishers.
Cresser, M, Batty, L, Boxall, A & Adams, C. 2013. Introduction to environmental
science: Earth and man. New York: Pearson.
Crowell, B. 2006. Discover physics. Fullerton, California: Crowell. [Self-published].
Geller, ES. 1996. Working safe: How to help people actively care for health and
safety. Bacon Raton: CRC Press.
Goetsch, DL. 2010. The basics of occupational safety. New Jersey: Pearson Education.
Governance for South Africa. Sandton: IoDSA. Available: http://www.iodsa.
co.za/?kingIII. (Accessed 7 April 2015).
Kurtus, R. 2013. States of matter. http://www.school-for-champions.com/science/
matter_states.htm#.VYk2IUbdWSo. (Accessed June 2013).
McDonald, GL & McDonald, EL. 1994. A taxonomy of fatalities in the primary
aluminium industry. Crestmead, Queensland: Geoff McDonald & Associates.
45

Mine Health and Safety Act 29 of 1996. Pretoria: Government Printers.

Printers.
Occupational Health and Safety Act 85 of 1993. Pretoria: Government Printers.
Robbins, SP. 2001. Organizational behaviour. New Jersey: Prentice Hall.
Sernau, SC. 2014. Global problems: The search for equity, peace, and sustainability.
3rd ed. New Jersey: Pearson Education.
Tech Topics. 2013. Matter. www.thetech.org/exhibits/online/topics. (Accessed May
2013).
Thompson, AA, Strickland III, AJ & Gamble, JE. 2005. Crafting and executing
strategy: The quest for competitive advantage: Concepts and cases. New York:
McGraw-Hill/Irwin.
Van Fleet, E. 2000. Debunking safety myths. In Swartz, GS. (ed). Safety culture.
Chicago: National Safety Council.
Zumdahl, SS & Zumdahl, SA. 2007. Chemistry. Boston: Houghton Mifflin Company.
46

Chapter Four
ISO 14000
Elriza Esterhuyzen
Learning Outcomes
• position the International Organization for Standardization (ISO) within a world
context
• explain the objectives of the ISO
• elicit and define appropriate terms uniquely relevant to ISO 14000
• discuss the structure and functioning of the elements of ISO 14000
• clarify the scope of the directives that ISO 14000 sets for the implementation of
an environmental management system (EMS)
• motivate the rationale for registration with ISO 14000
• state the applicability of ISO 14000
• briefly explain the structure and functioning of the PDCA-cycle.

The focus of Chapter 4 is on the international role of the ISO in setting acceptable
standards for safety and health on an international basis. The endeavour is to
provide an explanation of the nature and functioning of ISO 14000,1 combined with
the valid basis for setting directives for developing an organisational environmental
management programme (EMP) and an environmental management system (EMS).
The explanation will add value to the clear understanding and context applicability
of ISO 14000 terminology.
4.1 Introduction
It is essential to gain a perspective on the origin and objectives of ISO 14000. Such an
understanding creates a framework for understanding its structure and functioning.
In order to enhance an understanding of the nature of ISO 14000, specific terms
that uniquely relate to the nature of ISO 14000 will be introduced and clarified.
Understanding the context of ISO 14000 enhances the underscoring of the applicability
of standards that provide directives for safety and health on an international basis.
The initial departure of the explanation focuses on the need for international
standardisation, plus the position and objectives of the ISO in this regard.
1 ISO (2009).

4.2 The need for international standardisation

A workplace in a particular business operation in a specific country sets safety
requirements that are unique to such business and country. When creating safety
directives for such a workplace, the directives usually apply to the immediate
environment within which the business operates. Such requirements or directives do
not necessarily apply internationally. However, the safety risk that can result from
activities in a particular business may affect the environment of adjacent countries
or the international world. If the global environment could be adversely affected,
then such directives need to meet certain quality standards. Such standards should
meet international requirements in order to ensure that the global environment is
kept intact. Such requirements need to be made acceptable prescribed standards of
practice for dealing with and preventing safety and health risks that may affect the
international environment adversely.
Guidelines for arc welding activities, for example, are usually determined by
the specific conditions in which such an activity takes place, because it mainly
affects the local environment. Not all countries worldwide engage in arc welding
on a large scale.
Many countries in the world are highly industrialised. The emission of industrial
smoke, for example, on a great scale will affect the quality of the environment on
a global scale. In this instance there is a need to set guidelines for directing the
prevention or control of smoke emission. Such guidelines should apply as standards
that effectively deal with the emission of industrial smoke in all industrialised
countries. The international standardisation of such guidelines will ensure that all
industrialised countries meet the same standards in dealing with the emission of
industrial smoke.
4.3 The position and purpose of the ISO

The International Organization for Standardization (ISO) was established in 1947.2
This non-governmental organisation, which is based in Geneva, Switzerland,
resulted out of an international need for standards to control processes of
international trading.3 The ISO was created with the purpose of enhancing the
standard of trading, communication and manufacturing on an international basis
through the development of appropriate international standards.
The ISO has to respond to the needs of organisations to develop standards
that relate to both specific and general trade and industry. Such standards set
practical standardised directives for implementing specific programmes, with a
view to enhancing quality related to specific industrial or business needs. Any
country can become either a Full, a Correspondent or a Subscriber Member
of the ISO. South Africa is a Full Member of the ISO represented by the South
2 Goetsch & Davis (2001) 3. 3 Fuller & Vassie (2004) 212.
48

Four: ISO 14000
African Bureau of Standards.4 International committees, which comprise different

members, are responsible for developing international standards. However, the ISO
has no authority to enforce the application of standards created. The application of
any international standard of the ISO is completely optional; however, customers’
needs for quality assurance may pressurise organisations to implement and adhere
to international standards developed by the ISO. Specific directives are built into
standards to enhance adherence to particular quality imbedded in standards.
ISO 14000 is a very good example of an international standard that sets
requirements with guidance for use applicable to the implementation of
environmental management systems (EMS).
4.4 Origin of ISO 14000

Many organisations are concerned with the effects of their business operations
on the quality of the natural and man-made environments. Such concerns relate
to specific or all types of activities, products and services. These concerns flow
mostly from new stringent legislation as well as from customer, stakeholder and
shareholder demands related to the protection of the environment for generations
to come.
A major concern about the environment is the serious threat to ecology
and the world’s ecological systems. The uncontrolled pollution that flows from
industrialisation and urbanisation, which depicts people’s disregard for the
preservation of nature’s ecosystems, has led to a realisation of the urgent need
to develop a preventative and turnaround strategy to combat the adverse (and in
some ways, irreversible) effects on the environment. Global warming and ozone
layer depletion, which offer numerous possibilities of threats to humans, cause a
great deal of such ecological degradation.
A serious focus on environmental standards began in 1993. The ISO established
the Technical Committee 207 (TC207) with the aim of developing a uniform
international EMS, as well as directives and tools for its implementation. The 50
participants of TC207 generated ISO 14000, which was published in 1996.
4.5 The basic objectives of ISO 14000

The ISO played a vital role in developing a range of standards in order to assist
organisations in exercising a proactive approach to the management of environmental
concerns. According to Goetsch and Davis,5 the basic objective of ISO 14000 focuses
on assisting organisations to prevent environmental impacts that could flow from
any business activities, products and services. The crucial focus of ISO 14000 is to
provide support to organisations in their efforts to protect the environment, and
4 Goetsch & Davis (2001) 4 & 230. 5 Goetsch & Davis (2001) 7.
49

to balance pollution levels against socio-economic needs. The service that ISO
renders includes assisting organisations to continually make progress in meeting
applicable regulatory and policy requirements. ISO 14000 provides all the necessary
elements for implementing an EMS effectively. However, setting environmental
goals or prescribing absolute requirements that apply to environmental performance
are not part of such elements. Measuring organisations’ compliance to ISO 14000
international standards, as well as to applicable national and local regulations, lies
within regulatory agencies. The ISO’s international standards merely set guidelines
for the valid and internationally acceptable uniform implementation of an EMS.
4.6 Scope of ISO 14000

The ISO presents an all-inclusive portfolio of standards for selecting and testing
methods to hone in on environmental management challenges. ISO 14000
substantiates such approaches and practices and culminates in the most recognised
constellation for developing and implementing an EMS.
The scope of ISO 14000 specifies requirements with guidance for use pertaining
to an EMS. Such scope simultaneously elicits the elements or component parts of
the international standard. Continual improvement is an essential focus of ISO
14000.6 Continual improvement is seen as a process that recurs often in order to
enhance an EMS to achieve and confirm environmental performance, according
to an organisation’s environmental policy.7 In its scope the ISO 14000 addresses
a range of foci to improve an EMS, validate congruency between organisational
environmental policy and EMS endeavours and activities, provide confirmation
of conformance with applicable legal requirements via internal and external
assessment and evaluation, and to verify recognition of interested parties in the
organisation, such as stakeholders, customers and employees.
4.7 Elements of ISO 14000 as an international standard for an EMS

ISO 14000, which serves as an international standard for an organisation to develop,
implement and improve an EMS, consists of different integrated and inseparable
elements. The following elements apply:8
4.7.1 Design an EMS in accordance with standardised requirements

An EMS can be regarded as an indispensable part of the normal management
systems of an organisation. An EMS establishes and applies an organisation’s
environmental policy and manages all related dealings with environmental aspects
and environmental impacts.9
6 Goetsch & Davis (2001) 171. 8 Goetsch & Davis (2001) 7–8.
7 SABS (2009) 1. 9 SABS (2009) 2.
50

Four: ISO 14000
4.7.2 Formulate an environmental policy that sets the basis of the total EMS
effort
An organisation’s environmental policy must stipulate all its intentions, as well as
its directions that relate to setting the parameters for its environmental performance
as expressed by top management, in consultation with stakeholders, employees
and other applicable interested parties.10 Blunden and Thirlwell11 emphasise the
important role of policy in the context of environmental activities and postulate
that a policy statement provides the benchmark for measuring all organisational
activities and endeavours.
4.7.3 Specify and elicit environmental aspects that could generate safety and
health risks that could affect the environment adversely or positively
An environmental aspect refers to any element of the activities, production
processes or services provision of an organisation that can interact with elements
in the environment. In this case, interaction implies making contact with any one or
more observable or unobservable substances in the nearby or distant environment.
Such interaction with substances, which represents safety hazards, sets one or more
energies free which could create any level of safety risk. Safety risk could result in
any form of adverse or positive effect or effects.12
4.7.4 List and scope all legal and other requirements which the organisation
subscribes to and that apply to its environmental aspects
ISO 14000 sets clear legal directives that apply to developing and implementing
an EMS. Such requirements are not absolute. Directives in organisational policy
clarify the focus of legal and other requirements with which an organisational EMS
must comply. Applicable fields of focus include ground, air and water pollution,
global warming, preservation of energy, and many more. International, national
and local legal and regulatory requirements apply. The input of stakeholders,
clients, customers, employees and other applicable interested groups or parties
must also be reflected in accordance with prescriptions that apply to requirements
pertaining to consultation. Interested parties are seen as any individual or group
that may be affected by the development and implementation of an environmental
management programme (EMP) or environmental management system (EMS).
4.7.5 Establish all objectives, targets and plans for developing and
implementing an EMS
An organisation’s environmental policy must establish environmental objectives to
measure the achievement of clearly specified targets. Compliance with legislative
and regulatory requirements and directives specified in its environmental policy
10 IoDSA (2009) 230; SABS (2009) 3. 12 Smit & Esterhuyzen (2014) 40.
11 Blunden & Thirlwell (2013) 228.
51

must be the basis for setting environmental objectives. All objectives must elicit
particular targets that serve as a measure for determining the achievement of
environmental objectives, as elicited and explained in the environmental policy.
Explicit plans to achieve all objectives in par with targets must be realised as
an essential part of an EMS. Periodic review of the progress towards achieving
environmental objectives is an essential part of confirming progress. Such a review
is a crucial part of an EMS and utilises the Deming PDCA-cycle13 as suggested in
the ISO 14000 application.
4.7.6 Perform a training needs analysis and implement training

A training needs analysis must focus on the competence to prevent the occurrence
of any significant environmental aspects. Such an analysis must include training
in realising the implementation of organisational policy within the context of an
organisational EMS. Employees need to be familiar with significant environmental
aspects and the potential of each with regard to environmental impacts. Emphasis
must be laid on mastering and consistent improvement of personal competence
pertaining to roles and responsibilities concerning the implementation of the EMS.
The required staff must be knowledgeable with regard to emergency preparedness,
emergency responses, as well as the implementation of appropriate emergency
procedures.14 All staff must be informed of the potential effects of not complying
with particular relevant and accepted procedures of operation. Continuing learning
in the form of retraining and additional training must be standard practice to
keep all applicable staff informed of current and new additional elements of
environmental aspects, environmental impacts, as well as roles and responsibilities
associated with new developments in organisational activities, products and
services.15 The emphasis must be a focus on the continual improvement of personal
and organisational efficiency.
4.7.7 Create, maintain and improve internal and external communication

All staff at all levels and functions within an organisation must at all times be kept
fully informed on all environmental aspects and environmental impacts related
to organisational activities, products and services. The organisation is responsible
for creating, developing, utilising and improving appropriate procedures to ensure
effective communication for such purposes. The first priority in this regard is the
effective communication of the organisation’s environmental policy. All staff
must be conversant with all significant environmental aspects associated with
organisational activities, products and services, as well as potential environmental
impacts. The necessary internal communication to enhance and maintain an
effective level of information of staff may take different forms, for example: group
meetings, newsletters, bulletin boards, intranet sites, reports and personal notes.
13 Deming (1982) 54. 15 SABS (2009) 14.

14 Goetsch & Davis (2001) 55.
52

Four: ISO 14000
Feedback and reaction on all communiqués should be standard procedure to ensure

that information is received and read. The emphasis is on ensuring that employees
are consistently informed of the progress, success and improvement in achieving
objectives and targets that are set in the organisation’s environmental policy.
Besides internal communication procedures, interaction with interested parties
must also be established. Interested parties can be regarded as individuals or groups
that can be affected by an organisation’s EMP and EMS.16 Transparency enhances
involvement, teamwork and commitment of external resources in working towards
achieving an organisation’s environmental performance. Interested parties may
include employees, non-governmental organisations, government departments,
stakeholders, labour unions and customers. Information concerning emergency
planning and emergency procedures should be a high priority and communicated
to external interested parties. Such an approach applies especially to joint efforts
in emergency procedures.
4.7.8 Create and disseminate documentation regarding the EMS

Documentation of all elements of an EMS plays a very important role in enhancing
the successful implementation of the EMS. Documentation should explain the
overall structure and functioning of an EMS, plus how all the different facets of the
EMS work together. All staff must be conversant about sources where information
on any elements of the EMS can be obtained. The format of documentation, and
communication via such documentation, will be affected by factors such as the
size of the organisation in terms of numbers and levels of staff to be informed,
for example differences in cultural groups, and by geographical distribution. The
purpose of establishing and using appropriate documentation is to ensure that all
employees are equally well informed concerning the status quo of the progress
of the EMS in relation to objectives and targets postulated in the environmental
policy. The focus should be on the consequences of not meeting such ends;
demonstrating compliance with legal and other requirements; stating gap analyses
in order to enhance diligent and effective dedication towards goal achievement;
and enhancing team involvement in all functions at all levels. Documentation
should explicate measurement of success and provision of directives to improve
where and when necessary.
In order to ensure qualitative record keeping of activities and their effects
on the EMS, specific guidelines and standards should be developed to generate
documents to provide proof of and validate implementation.
16 SABS (2009) 3.
53

4.7.9 Establish procedures and means to maintain and control documentation

Specific procedure and means must be instigated in order to ensure that relevant
and appropriate documentation is created and maintained with regard to all
structural and functioning elements and facets of the EMS. Communication on
all such issues of the EMS should be created and disseminated on a regular basis.
The creation of documentation, such as progress and evaluative reports, must be
implied in the environmental policy, planned and constituted to be produced at
different stages and disseminated with dedicated precision. All documentation
must be maintained in order to keep record of all activities of the EMS and the
effects thereof. Procedures for keeping and maintaining documentation should be
standardised.
To ensure proof of activities, the nature thereof and the effects thereof are
available at all times, strict control must be kept with regard to documentation
of all elements of an EMS. The application of directives on the recording of the
contents of reports and other documentation will contribute to quality control of
documentation. However, strict control must be implemented to control access
to documentation with the purpose of keeping and producing valid proof of all
elements, stages and facets of an EMS. Such documents must be kept safely and
must be readily available and easy to present.
4.7.10 Develop procedures to deal effectively with significant environmental

impacts
The SABS17 depicts an environmental impact as any change in the environment
as a result of one or more organisational environmental aspects related to its
activities, products or services, which could interact with environmental hazards
in the natural world. Such change could be adverse or positive in nature. The
change could be partial or whole in size. Such hazards could be in the immediate
or distant environment. For example: organisational activities may disturb the bees
in a nearby bee nest which could result in a team of employees getting stung. In
contrast, an explosion at a nuclear plant could have a major effect on human life
far away from the location of the explosion. Typical environmental impacts are air,
ground and water pollution, global warming and ozone depletion.
An organisation needs to establish, develop and implement procedures for
dealing effectively with any of the possible environmental impacts that could result
from environmental aspects that could flow from its activities, products or services.
Specific criteria and methods should be established and applied to determine
significant environmental aspects and associated environmental impacts. It is
needless to reiterate that the focus in dealing with environmental impacts should be
on prevention, coupled with emergency preparedness and emergency procedures,
should any foreseeable or unforeseeable environmental impact occur.
17 SABS (2009) 2.
54

Four: ISO 14000
4.7.11 Develop and assess effectiveness of emergency preparedness and

response procedures
Emergency preparedness and emergency response procedures constitute important
indispensable elements of any effective EMS. Emergency preparedness and
emergency procedures should focus on:
• dealing with safety hazards and unsafe behaviour on site, because they are
the culprits that lead to environmental aspects
• mitigating all unacceptable levels of safety risk on site and in the
environment in order to prevent any environmental impact
• dealing with incidents and accidents with regard to preventing such
occurrences and using lessons learnt as a basis for corrective and preventive
action
• communicating on an internal and external basis to keep all interest groups
within the organisation, as well as interest groups in the community,
informed on the progress and successes of the EMS
• minimising environmental damage of any kind in order to lessen any adverse
effects of significant environmental aspects and environmental impacts
• compiling and effectively using lessons learnt from any incident or accident
on site or in the environment
• setting regular schedules for testing of emergency response procedures and
emergency preparation in order to confirm and validate the efficiency of
such plans and implementation
• confirming the effectiveness of evacuation exercises, evacuation routes and
associated training via regular training, drills and practical exercises
• testing and proving, via regular practices, the effectiveness of utilising the
assistance of contributory external resources (eg neighbouring organisations)
in dealing with environmental impacts
• verifying, via regular virtual exercises, the appropriateness of the list of key
personnel and aid agencies in the prompt and speedy implementation of
emergency response procedures.
An effective EMS requires that all these important issues pertaining to emergency
preparedness and emergency response procedures are in place, tested and
continuously improved.
4.7.12 Determine the key qualities of operations that could significantly impact
on the environment
An organisation needs to determine the key characteristics of the operations that
can have a significant impact on the environment. Specific procedures have to be
developed in order to monitor and measure the qualities and effectiveness of all
55

operations and related activities. Information obtained via such monitoring and
measurement forms an important basis for developing and implementing corrective
and preventive action. Key characteristics to focus on are the effectiveness in
managing significant environmental aspects, the contribution in achieving
environmental management objectives and targets as well as the extent to which
environmental performance is improved. International and national measurement
standards applicable to determining the quality of an EMS should serve as criteria for
judging effectiveness. All equipment used for measuring effectiveness and quality
must be valid and calibrated in accordance with prescribed legal requirements.18
4.7.13 Evaluate compliance with the view to implement corrective and

preventive action
ISO 14000 has no legal authority to enforce compliance; however, the proof of the
effective implementation of an EMS comes through confirmation of compliance
with applicable legal and other requirements with which the organisation has
chosen to comply. Such compliance includes obtaining and applying applicable
licences and permits. A specific issue that needs to be clarified is the identification
of any non-conformity which occurs when an organisation does not meet or fulfil
a requirement. In the event of the identification of non-conformity, the necessary
steps need to be put in place to prevent any future occurrences of non-compliance.
In the event of the identification of a potential non-conformity, action to prevent
such an occurrence needs to be put in place.
4.7.14 Compile and maintain procedures related to listing and keeping EMS
records
Keeping records that prove the effectiveness of an EMS forms an essential part of
an EMS. Goetsch and Davis19 stipulate the four levels of documentation and records
applied to an EMS. The first level refers to all issues related to an organisation’s
environmental policy. The second level covers all the procedures that apply to
working on and implementing the EMS. Level three focuses on all the practices
and work instructions as per relevant levels and functions of employees. Finally,
level four provides proof of achievements and associated corrective and preventive
actions.
The best way to demonstrate effectiveness is by producing observable proof
that underscores the achievement of an organisation’s environmental objectives
and targets set out in its environmental policy. Observable proof can be presented
via written documentation and many forms of technological assistance. SABS20
lists records and documents that state results obtained or that produce evidence of
activities that were performed in meeting set objectives and achieving set targets.
18 SABS (2009) 17. 20 SABS (2009) 4.

56

Four: ISO 14000
An organisation must put in place procedures for identifying, storing, preserving,

retrieving, and disposing of EMS records. Procedures to ensure the legibility,
identification and traceability of records must be established and maintained.
4.7.15 Design and apply a programme for auditing EMS compliance by qualified
auditors
Implementing ISO 14000 goes hand-in-hand with auditing quality. An organisation
is required to introduce and operate a system of periodic auditing. The purpose of
an audit is to confirm and ensure compliance with applicable legal requirements
contained in ISO 14000. Audit reports must inform management about the
efficiency of implementing the EMS and serve as a basis for working on continual
improvement of the EMS. Audit procedures must be established and applied. Such
audit procedures must detail the scope of each audit, the frequency of audits, the
methodology of the auditing process, and the requirements and responsibilities for
performing the audits and producing the auditing results.21 The audit report must
state to what extent the EMS achieves its objectives and targets as set out in an
organisation’s environmental policy, with due consideration to the requirements of
the international standards depicted in ISO 14000. An audit report must also verify
to what extent such standards have been effectively implemented and maintained.
Such results must define the context of a management review of the complete
utilisation of ISO 14000 in implementing an EMS.
4.7.16 Establish a review process to ensure EMS efficiency and effectiveness

Management must periodically review an organisation’s EMS. The review will
focus on the suitability, adequacy and effectiveness in creating opportunities for
continuous improvement via valid changes. The focus will be on scrutinising the
environmental policy, EMS objectives and targets. Management must review a
range of documentation and records in order to evaluate the audit results, the
efficiency of its communication, its overall environmental performance, the
achievement of objectives and targets, the status and effectiveness of corrective and
preventive action, the outcome of previous management reviews, the effectiveness
of emergency preparedness and any circumstantial changes that may affect the
EMS, and must provide recommendations to improve its EMS.22
The process of review by management needs to happen frequently throughout
the overall implementation of an EMS. Such a review should happen as part of the
Plan-Do-Check-Act cycle. This PDCA-cycle, which was developed by Deming,23
is extensively explained by Kolk.24 This cycle of actions should be implemented
with regard to all activities, products, services and procedures. The management
review fits into the Check-stage. However, a management review must be applied
21 Goetsch & Davis (2001) 86. 23 Deming (1982) 54.

22 SABS (2009) 9. 24 Kolk (2000) 105–107.
57

during every element and its sectors. For example, the outcome of management
review with regard to organisational resources sets the basis for planning during
the development of an organisation’s environmental policy. See Chapter 5 for a
more detailed explanation of the structure, functioning and application of the
PDCA-cycle. This cycle should be applied on a micro and macro level, depending
on the focus and associated range of activities. Application of the cycle takes the
form of a rising spiral as the focus grows in terms of the range of contents and the
level of difficulty.
4.8 Applicability of ISO 14000

ISO 14000 has applicable value for any organisation whose activities, products or
services could have an impact on the environment. Such applicability has value for
organisations of different sizes and kinds, whether private or public, or informal or
formal. ISO 14000 provides guidelines and directives for implementing, maintaining
and improving an EMS; ensuring compliance with international standards and
elements formulated in the environmental policy; validating and demonstrating
compliance to all interested parties, seeking and acquiring registration and
certification of an EMS by an external world-renowned institution; and for
confirming conformance that an EMS meets the requirements of ISO 14000 as a
recognised international standard.
The implementation of the ISO 14000 family of standards has a wide range of
applicability and provides a basis for building organisational image and stature on
a local, national and international basis.
4.9 Rationale for ISO 14000 registration

Implementing ISO 14000 is optional for all organisations; no organisation can be
forced to do so. An organisation has to decide independently whether to dedicate
specific resources and finances to undertake such an effort. Once an organisation
has decided to implement ISO 14000, it can register and obtain a certification of
registration from the ISO. Obtaining certification for implementing ISO 14000 has
specific advantages or benefits. Goetsch and Davis25 list the following important
benefits for registration and certification:
• The common and general application of the accepted international standard
will enhance trade and increase profits.
• Compliance with ISO 14000 requirements increases acceptance of products
and services, thereby contributing to a competitive edge and to building an
organisation’s image and stature.
58

Four: ISO 14000
• Certification improves credibility pertaining to organisational seriousness

about environmental conservation.
• Implementing ISO 14000 contributes to the elimination of challenges and
problems with regard to implementing an EMS.
• Following the guidelines and directives contained in ISO 14000 in
implementing an EMS reduces liability and risk, as well as associated
financial implications.
• The level of acceptable efficiency that goes with implementing ISO 14000
in an EMS will add to profitability and reduce pressure from stakeholders,
customers and other environmental interest groups.
• Expenses pertaining to insurance will be less because an organisation can
present proof of effectiveness in reducing enterprise risk associated with
significant environmental aspects and significant environmental impacts.
4.10 Relationship of ISO 14000 and regulatory requirements

ISO 14000 has no interest in dictating any prescriptions or strategising any objectives
for environmental performance to any organisation. This international standard sets
guidelines and directives for the effective development, implementation and continual
improvement of an organisation’s EMS. Regulatory bodies worldwide are inclined to
establish environmental regulations that apply to the different countries within which
they operate. ISO 14000 was created to assist organisations in managing their EMS
in response to, and in accordance with, all applicable regulatory requirements. In
order to ensure qualitative uniformity, all registered organisations must comply with
ISO 14000, as well as with local government regulations that apply to implementing
an EMS. It is the responsibility of each organisation to ascertain, list, explain,
communicate and apply all statutory and regulatory requirements that pertain
to implementing an EMS in the organisation’s country and vicinity of operation.
Such legal elements set the scene and context within which the organisation has
to develop, implement, maintain and continually improve its EMS. Internal and
external auditing of an organisation’s EMS must declare and report to what extent
an organisation complies with statutory and regulatory requirements that apply to
such a particular entity in a specific societal environment.
4.11 Conclusion
From the preceding explanation it is clear that the nature, structure and functioning
of ISO 14000 stipulates the international standard for developing, implementing,
evaluating and improving an organisation’s EMS. Organisations can benefit
immensely by tapping into the wide spectrum of expertise and guidance that
ISO 14000 offers to help them to implement an EMS effectively.
59

Review questions
Try your hand at the following in order to help you review the chapter’s content:
1. Explain the differences between environmental aspects and environmental
impacts.
2. What advantages does registration of an environmental management
system with the International Organization for Standardization have for an
organisation? Set out a rationale in this regard.
3. List all the elements of ISO 14000 that set guidelines and directives for the
effective development and implementation of an environmental management
system.
4. Can you set out all the elements of ISO 14000 that need to be addressed when
implementing an environmental management system? Explain very briefly in
not more than two to three pages.
5. Briefly sketch the origin and objectives of ISO 14000.
6. What does the scope of ISO 14000 entail? Explain.
7. What is the relationship between ISO 14000 and its regulatory requirements?
Briefly outline the relationship.
References
Blunden, T & Thirlwell, J. 2013. Mastering operational risk. 2nd ed. Harlow, UK:
Pearson Education.
Deming, WE. 1982. Quality, productivity, and competitive position. Cambridge: MIT
Press.
Fuller, CW & Vassie, LH. 2004. Health and safety management. London: Prentice Hall.
Goetsch, DL & Davis, SB. 2001. ISO 14000 environmental management. New Jersey:
Prentice-Hall.
IoDSA. Institute of Directors of Southern Africa. 2009. King Report on Corporate
ISO. International Organization for Standardization. 2009. Environmental manage
Kolk, A. 2000. Economics of environmental management. Harlow, UK: Pearson
Education.
60

Chapter Five
The environmental management system
Sarel J Smit
Learning Outcomes
• explain the contents, purpose, structure, functioning and necessity of an
environmental management system (EMS)
• understand the applicable terminology that applies to an EMS
• explain the relevance of the Deming Wheel to an EMS
• understand and explain the responsibility of management within an EMS
• outline the importance and value of documentation in an EMS
• clarify the integrity of EMS driving forces that influence change in corporate
behaviour
• explain the spiral cyclical nature of an EMS
• motivate that it is important to effectively control the implementation of an
EMS.

Chapter 5 explains the nature of an environmental management system (EMS) in
its full context. Specific issues that will be focused on are:
• the integration of the Deming Wheel in the implementation of the EMS
• the importance of meticulous and diligent accounting for the effective
management of an EMS
• the establishment of a sound and directive company environmental policy
• the rigorous assessment and evaluation of EMS practices
• the indispensable role of an EMS in maintaining a company’s competitive
edge.
The explanation hones in on the nature and characteristics of an EMS. The focus is
on the requirements to implement an EMS effectively, while maintaining links with
the Deming Wheel.1 The preventative and corrective actions needed to sustain an
effective EMS are briefly specified. International requirements for implementing an
EMS are also briefly listed.
1 Deming (1982) 54.

The South African National Standard (SANS) 14001:2005,2 which is an identical

copy of ISO 14001:2004, forms the basis of the explanation of an EMS in this
chapter.
5.1 Introduction
The EMS is of international origin. Companies and organisations which endeavour
to develop their business to a level of international acceptance and recognition
apply an EMS, with a view to achieving an acceptable competitive edge. Modern
global society requires that businesses focus on ensuring that the environment is
left as far as possible in a state of high quality for generations to come. Chapter 5
provides perspectives on maintaining the quality of the environment via effective
implementation of an EMS.
5.2 The structure and functioning of an EMS

An EMS has a fairly unique nature and corresponding structure. As part of an
organisation’s general management function, an EMS represents all management
efforts to develop and implement a planned environmental policy with due focus
on dealing with environmental aspects and impacts effectively. An EMS comprises
different elements that function on a cyclical basis. The purpose of the total
functioning of an EMS is to sustain continual improvement under all possible
conditions. The different elements follow one upon the other in consecutive order,
although, at times, a return to a preceding element or elements does occur. An EMS
has a relative permanent structure in the form of specific elements that are always
present as part of the EMS. These elements function as an integrated cyclical system
within which all elements affect one another reciprocally.
The basic structure of an EMS appears on the following page. The structure
comprises the elements of environmental policy, planning, implementation and
operation, checking, management review and continual improvement. These
elements function on a systematical and cyclical basis within the framework of the
Deming Wheel.3 The phases of the Deming Wheel are Plan-Do-Check-Act (PDCA).
The different elements come into play during the different phases of the cyclically
systematically functioning Wheel. The structure and functioning of an EMS need to
meet specific requirements as depicted in the structure and functioning of an EMS
model for sustainable environmental protection.
2 SABS (2005). 3 Deming (1982) 54.
62

Five: The environmental management system
Continual improvement
Environmental policy
Management review Planning
Checking and Implementation

corrective action and operation
Figure 5.1: Elements of an EMS
5.3 The context of the Deming Wheel4

The PDCA-cycle with its different phases is increasingly recognised by organisa
tions for its strategically important contribution to ensuring consistent quality
management.
This functioning cycle provides the context within which an EMS functions.
The application of the consecutive PDCA-cycle phases ensures that the EMS is
consistently focused on achieving its objectives in accordance with applicable
standards. The phases of the Deming Wheel comprise the following elements:5
4 Deming (1982) 54. 5 Deming (1982) 54.
63

PLAN DO
• Set objectives • Implement plan to
• Establish standards achieve objectives and
standards
ACT CHECK
• Review performance • Measure progress
against standards and against plan
take action
Figure 5.2: The Deming Wheel6
5.4 Scope of an EMS

The International Standard ISO 14001:2004 sets specific requirements for an EMS to
assist organisations to establish and apply an environmental policy and objectives.
It focuses on applicable environmental aspects that can have a significant effect
on organisational efficiency. The efficiency of an EMS is judged in relation to the
scope that a particular international standard implies.
5.5 EMS requirements

When implementing an EMS an organisation must consider specific requirements
set out by the international standard mentioned above. Such requirements are in
the form of directives, which pertain to establishing, documenting, implementing,
maintaining and continually improving an EMS, with due consideration to the
suggested prescribing international standard. Particular elements must be put into
place.
5.5.1 Environmental policy

An organisation must establish an environmental policy. An organisation is defined
as any combination of individuals that forms a legally recognised functioning
unit that has recognised functions and administration. Environmental policy is
established during the planning phase of the PDCA-cycle. An organisation’s EMS
policy provides perspectives on intentions and achievements that the organisation
will endeavour to attain with regard to environmental performance; this will
6 Deming (1982) 54.
64

demonstrate practically measured results with regard to organisational aspects and

related environmental impacts.
Environmental aspects refer to any organisational activities and services that may
interact with any environmental hazards and their associated energy exchange. See
Chapter 4 for more on environmental hazards.
Environmental impacts refer to any changes that may occur in the environment,
whether good or adverse, that may result from dealing with environmental hazards
and their energy exchange.
The characteristics of an environmental policy are outlined below:
• The policy correlates with the activities, products or services of an
organisation with due consideration to the nature and scale of environmental
hazards and the impacts of the associated energy exchange during activities,
production or service delivery.
• There is a commitment to continual improvement of all efforts to prevent
environmental loss. Top management must demonstrate their intention and
dedication to identify and apply the EMS to fit new demands.
• The policy contains an explicit undertaking to comply with legal and other
requirements related to environmental aspects and impacts. Such legal
requirements may be of local, national or international origin.
• Environmental objectives that correlate with continual reviewing and
renewal of environmental targets are set. Proof must be evident that the
policy is a working document that provides directives and acknowledgement
of policy achievements.
• Proof of documentation of plans is kept, as well as proof of the
implementation and maintenance of activities related to all elements of an
organisation’s EMS, including non-conformities or non-fulfilment of any one
or more requirements. Appropriate records must be kept and be available.
• Proof of intentions and practical proof of the communication of all elements
of an EMS to all persons working for or on behalf of the organisation must
be evident. Regular and reciprocal interaction in either technological or
direct personal format is essential to keep the EMS effectively functional.
• The environmental policy must be available to the public. Access must exist
for any person to view and comment on the document.
• There should be consultation pertaining to environmental policy contents,
objectives and processes with all employees and relevant interested parties
and stakeholders, who are internal or external to the company.7 Interested
parties refer to individuals or groups whose interests could be affected by
organisational environmental activities.8
7 IoDSA (2009) 23–24. 8 SABS (2005) 3.
65

An environmental policy instigates momentum for the application and consistent

improvement of an EMS in order for an organisation to achieve and sustain
its competitive edge. Blunden and Thirlwell9 postulate that a policy statement
provides the benchmark for measuring all organisational activities and endeavours.
Such EMS policy must depict top management’s commitment to realise effective
environmental protection under all circumstances.
5.5.2 Planning
An organisation’s environmental policy sets the framework for planning the different
facets of the EMS. A wide range of activities need to go into planning the execution of
the directives and the intentions that are set out in the organisation’s environmental
policy. Stranks10 is of the opinion that to be successful an organisation needs to
follow a planned and systematic approach to policy implementation. The aim is
to prevent and minimise environmental aspects associated with an organisation’s
activities, products and services. Important issues need to be considered.
Environmental aspects
An organisation needs to identify, implement and maintain specific procedures that
flow forth from its environmental policy. Procedures that focus on environmental
aspects that can occur when organisational activities, production or service delivery
interact with environmental hazards are of particular importance. Procedures
specify steps to perform activities or processes. The focus should be on control and
preventative measures, especially of those environmental aspects that originate in
new or modified procedures related to changes in activities, production and service
delivery. The emphasis should be on those environmental aspects that can result in
significant adverse environmental impacts on the environment. Keeping a record
on an ongoing basis of all such planning is essential in planning for any deviances.
Environmental aspects that can result in significant environmental impacts
must receive high priority to ensure the effective implementation of the EMS.
Consideration of operating conditions under all circumstances, including shut-
downs, commissioning and emergency situations, apply. Any form of environmental
pollution, whether air, water or soil/land pollution and environmental loss must be
taken into account. The purposeful use and conservation of energy or energies are
also of great importance. Due consideration needs to be given to all issues related
to the processes and outcomes of activities, products and services that could result
in environmental aspects via the handling of environmental hazards. Examples in
this regard are the manufacturing, packaging, distribution and disposal of products.
Planning must focus on the prevention of potential environmental impacts, as well
as on dealing with any effects of actual environmental impacts. Such preventive
action focuses on eliminating the likelihood of any nonconformity.
9 Blunden & Thirlwell (2013) 228. 10 Stranks (2010) 61.
66

Legal and other requirements

Organisational EMS planning must include the establishment and maintenance of
specific procedures in order to access and identify applicable EMS requirements,
whether legal or any other, to which an organisation may subscribe. Legal
requirements may be of local governmental, departmental, national, provincial or
international origin. Other requirements may relate to agreements with specific
groups or authorities, customers, codes of practice, company requirements, product
stewardships, and more. Planning needs to address the applicability and potential
effects of environmental aspects associated with an organisation’s activities,
products and services and the potential environmental impacts thereof on its
EMS. The requirements of legal and other types of documentation are of particular
significance in this regard.
Objectives, targets and programmes

An organisation must formulate and instigate a measureable EMS policy, based on
objectives and targets at all hierarchical functional levels within the organisation.
Such objectives and targets, which represent short- and long-term endeavours,
must be documented and easily accessible. EMS objectives and targets must be
related to legal and other requirements, and must set directives for commitment
and for continual improvement. The main focus must be on preventing and
minimising environmental impacts via environmental aspects when dealing with
environmental hazards during activities, production and service delivery.
In its efforts to achieve EMS objectives and targets an organisation must focus
on developing, applying and maintaining one or more programmes with specific
procedures. Programmes should specify the designation of responsibility and
accountability for the realisation of objectives and targets at applicable function
levels in the organisation. Specifying time frames for achieving objectives and
targets must be an integral part of all programmes. The PDCA-cycle must be utilised
in planning and implementing each programme. The different characteristics of
project management phases of planning, designing, constructing, commissioning,
operation evaluating, decommissioning, and management reviewing could apply
in implementing programmes.
Programmes need to be in place for the implementation of each element of
the EMS and the utilisation of the PDCA-cycle. Specific objectives, targets and
procedures should apply to each element and cycle in order to determine the
effectiveness of the EMS.
5.5.3 Implementation and operations

Implementation and operations within an EMS forms part of the Do-phase of
the Deming Wheel.11 There are a number of particular issues pertaining to the
operations of and implementation of an EMS.
11 Deming (1982) 54.
67

Resources, roles, responsibility and authority

All applicable and adequate human, technological, infrastructural and financial
resources must be made available to practically implement an EMS in its total
context. Responsibilities, authority and accountability must be clear pertaining
to positions at different hierarchical levels. This particularly applies to top
management representatives in the EMS team. The EMS team must ensure that an
appropriate EMS is established, effectively applied, and maintained as required by
the International Standard ISO 14001:2004. Regular reporting on the effectiveness
of the EMS is an essential part of implementing the EMS. Such consistent feedback
forms the basis of management reviews and leads to continual improvement of the
EMS.
Competence training and awareness

All staff involved in implementing an EMS must acquire and maintain relevant
expertise (training and experience). Records must be kept of their existing and on-
going competence. Such competence must directly relate to the needs and require-
ments of implementing an EMS effectively. Procedures must be implemented to
ensure that all relevant staff is kept aware of the following issues:
• the effects of non-conformity with the requirements of the EMS, which are
listed in the environmental policy, procedures and international requirements
• the existence of significant environmental aspects and their potential
environmental impacts (in terms of likelihood and severity), with due
emphasis on the effective and continual improvement of performance
• the importance of their roles and responsibilities in effectively implementing
the EMS according to specified procedures.
Communication
In order to keep staff informed about the implementation of an EMS, an effective
internal organisational communication system involving all positions at all
hierarchical levels must be developed and maintained. The consistent sharing of
information on implementation, progress and improvement is crucial for achieving
EMS objectives and targets. The development of procedures for communication
with external sources and interested groups can be established in accordance with
the needs of, and agreements with, such entities.
Documentation
Documentation on the implementation of an EMS must include the following:
• the basic values, intentions and directing objectives and targets specified in
the environmental policy
68

• the EMS scope that defines the focus of investment of resources of different
kinds for a range of environmental objectives and targets
• an explanation of the nature and interactive functioning of the main
elements of the EMS, with reference to applicable documents
• all documentation required by the International Standard ISO 14001:2004 to
verify international accountability
• all organisationally required documentation, including records that relate to
the effective development, implementation, maintenance and improvement of
the EMS.
Control of documents
An organisation must keep control of all documents in connection with the
development and implementation of an EMS in accordance with the International
Standard ISO 14001:2004, as specified in paragraph 5.5.3.4. In this regard, an
organisation must develop and maintain appropriate procedures to create and
control all documentation related to the implementation of the EMS. Procedures
must focus on the following:
• clarification and validation of the adequacy of all documents by the
appointed authorities at different functional levels before such documents are
used; such consent confirms reliability
• confirmation of the revision, reviewing, updating and reapproval of
documents on an ongoing basis to ensure continual improvement
• confirming and ensuring the availability of copies of relevant current and
revised documents whenever necessary
• ensuring that documents are correctly identifiable and fully legible at all
times
• ensuring that documents that originate externally to the organisation are
relevant to the EMS and are correctly distributed to the different functional
levels within the organisation
• reviewing documents to ascertain whether they have become obsolete and
are therefore no longer valid; preventing the application of such documents
in the EMS.
Operational control
An EMS must concentrate on establishing operations that relate to environmental
aspects and their potential environmental impacts that are identified as significant
in terms of organisational environmental policy, objectives and targets. Care
must be taken to ensure that such operations are applied correctly under all
circumstances. In order to ensure such control, all procedural steps in all operations
must be documented to give execution to environmental policies, objectives and
69

targets. The criteria that apply during operations must also be stipulated in writing.
Procedures and operational requirements that apply within all operations related
to potential environmental impacts that may flow from significant environmental
aspects associated with organisational activities, products and services must be
developed and communicated to all entities involved or to those who have a
vested interest in the implementation and outcome of the EMS. Operational control
contributes to ensuring the effective achievement of EMS objectives and targets.
Emergency preparedness and response

In order to identify and deal with emergency situations and potential environmental
impacts, an organisation must put appropriate procedures in place. Applicable
operations with relevant procedures must be developed and applied in dealing with
emergency situations and environmental impacts, in order to prevent or mitigate
potential or actual environmental loss. With the focus on continual improvement,
the organisation must instigate regular reviews to revise the effectiveness of
emergency preparedness, as well as the response procedures to emergency situations.
This applies specifically after immediately dealing with an emergency situation.
The regular testing and possible revision of emergency response procedures must
form part of the effective implementation and continual improvement of an EMS.
5.5.4 Checking
Checking, the third step in the Deming Wheel, focuses on determining the efficiency
of the development and implementation of an EMS.12 Checking focuses on the
following specific issues of an EMS.
Monitor and measure progress

It is important that the organisation monitors the applicability, validity and
effectiveness of EMS practices in dealing with significant environmental impacts
via the development and implementation of control and measuring procedures.
Applicable documentation of all monitoring activities and the measurements of
effects form essential parts of the checking element of an EMS. The appropriate
validity and calibration of monitoring and measurement equipment must also be
verified and documented.
Evaluation of compliance
The following issues pertaining to compliance need to receive attention:
• Commitment to compliance forces the organisation to put appropriate
procedures in place to evaluate compliance to applicable legal requirements
on a regular basis and to produce documentation on the outcome of such
checking.
12 Deming (1982) 54.
70

• An organisation must also determine its compliance to all other requirements

to which it subscribes and must produce the appropriate outcomes of such
checking of documentation.
Action to correct and prevent non-conformities

An organisation must outline procedures to deal with potential and actual non-
conformities, as well as to implement preventive and corrective action. Such
procedures will stipulate requirements pertaining to the following:
• dealing with non-conformities, with the focus on mitigating the effects of
their environmental impacts
• identifying the causes of non-conformities through incident analysis
and applying appropriate actions to prevent the recurrence of such non-
conformities
• determining whether a need for the prevention of non-conformities exists
and instigating actions to prevent their occurrence
• documenting the procedures and actions taken to correct or prevent non-
conformities, together with the results of such interventions
• validating the effectiveness of action(s) taken to prevent or correct non-
conformities.
All preventive and corrective actions must directly relate to the significance and
loss potential of environmental impacts foreseen or dealt with. EMS documentation
must be changed and adjusted in accordance with all newly identified issues
pertaining to the handling of non-conformities.
Record control
An organisation must generate applicable documental proof in order to confirm
conformity to all the requirements that apply within an EMS, whether legal, self-
determined or those relating to the International Standard ISO 14001:2004; the
results that were achieved must also be recorded. Appropriate procedures must be
instigated, applied and maintained to ensure that records related to all activities
involved in implementing an EMS are kept in an acceptable functional condition.
Internal audit
Pain13 suggests that auditing represents a unique opportunity to assess an
organisation’s performance with regard to its EMS. Fuller and Vassie14 specify that
internal auditing delivers support to management with regard to the achievement
of organisational objectives and targets. Implementation of the EMS requires
that internal auditing of such implementation be applied at stipulated intervals.
13 Pain (2010) 111. 14 Fuller & Vassie (2004) 377.
71

Auditing forms an integral part of the Check-phase of the Deming Wheel.15 Such
auditing is necessary in order to verify the congruency of the planned arrangements
and procedures of the EMS in accordance with the International Standard ISO
14001:2004. Furthermore, an audit must determine to what extent an EMS has
been effectively implemented. The outcome of the audit will serve as a basis
for a management review of the overall EMS. The objectivity and impartiality
of EMS auditors and the auditing process are non-negotiable in order to deliver
valid information concerning the achievement of objectives and targets, as well as
shortfalls that require intensive management review. The effectiveness of an audit
is determined by its focus on continual improvement with specific reference to the
prevention and reduction of non-conformities.16
5.5.5 Management review

Determining the continuing applicability, quality and effectiveness of an EMS is an
essential function of top management. Management performs such responsibility
via management reviews at predetermined intervals. Such overviews serve as
bases for decisions on improvements and adjustments of the EMS. Management
reviews need to be intensive and extensive. Geller17 indicates that continual
improvement requires valid evaluation. Changes may apply to the environmental
policy, objectives, targets and procedures. The outcome of management reviews
and decisions about change need to form part of EMS overall documentation.
Management reviews of an EMS must consider the following:
• the outcome of internal audits, especially assessment of legal compliance
(eg with ISO 14001:2014) and compliance with any other self-determined
requirements
• information (eg recommendations and complaints) provided by interested
parties external to the organisation
• success in achieving objectives and targets as the basis for determining the
efficiency of an EMS
• the relevance of, and progress in, applying corrective and preventive actions
• the extent to which recommendations of previous reviews have been
implemented
• any new or changing conditions and circumstances, especially changes
in legal requirements that apply to environmental aspects and changes to
environmental impacts
• directives to improve the EMS and to advance continual improvements in
order to sustain a competitive edge
15 Deming (1982) 54. 17 Geller (1998) 119.

16 Pain (2010) 109.
72

• accident statistics, related recommendations, lessons learnt and effectiveness

of the implementation of recommendations
• corrective actions and their effects carried out since the previous review
• recorded instances of any ineffective procedures, with a view to improvement
• the adequacy of emergency procedures as a basis for determining emergency
preparedness.
Management reviews must in all cases focus on recommendations with regard
to environmental policies, objectives, and targets and associated changes to any
one or all elements of an EMS, thereby demonstrating that they are committed to
continual improvement.
5.5.6 Continual improvement

Pain18 contends that continual improvement represents a process of improvement
that is ongoing and that never ends. Continual improvement is an integral part of
the Act-phase of the Deming Wheel19 because recommendations of management
reviews are implemented by EMS actions. Management needs to be fully committed
to and focus on creating an organisational culture of continual improvement.
The emphasis must be on advancing performance in order to improve the EMS
and to phase out weaknesses that adversely impact on the implementation of an
EMS.20 Maintaining qualitative development and implementation of an EMS is the
ultimate endeavour of an organisation. Continual improvement to keep abreast
with innovation and to sustain a competitive edge in terms of products and services
is absolutely essential.
As depicted in Figure 5.3, the process of developing and sustaining an effective
EMS takes place in the context of an inclining spiral. The management review
provides the directives and guidelines for increasing the quality of an EMS to an
advanced level of effectiveness. Such spiralling runs consecutively with the phases
of the PDCA-cycle.
18 Pain (2010) 126. 20 Fuller & Vassie (2004) 393.

19 Deming (1982) 54.
73

Continual improvement
Environmental policy
Management review Planning
Checking and Implementation

corrective action and operation
Figure 5.3: An EMS spirals to advanced levels of effectiveness
5.6 Conclusion
This chapter has focused on the nature and functioning of an EMS. The context
of the PDCA-cycle of the Deming Wheel21 was incorporated into the discussion.
The role and effects of the International Standard ISO 14001:2004 were also high
lighted. The importance of an EMS policy and the consistent measurement to
determine progress and success were also explained. The leading contribution of top
management in determining and enhancing the effectiveness of an EMS was clearly
elucidated. Finally, the focus on the effectiveness and continual improvement of an
EMS to sustain organisational continuation was discussed.
Review questions
1. What elements constitute an environmental management system and how do
they relate to one another? Use a diagram to support your answer.
2. Explain the functioning of the Deming Wheel.
21 Deming (1982) 54.
74

3. Clarify where the different phases of the PDCA-cycle link in with the
elements of an environmental management system.
4. Why should a management review focus on continual improvement?
5. An internal audit represents organisational efforts to check to what extent an
environmental management system policy statement is being realised. Is this
statement true or false? Motivate your choice.
6. What international institution sets legal requirements that management must
consider and apply in an organisational environmental management system?
Explain.
References
Blunden, T & Thirlwell, J. 2013. Mastering operational risk: A practical guide to
understanding operational risk and how to manage it. 2nd ed. Harlow, UK:
Pearson.
Deming, WE. 1982. Quality, productivity, and competitive position. Cambridge: MIT
Press.
Fuller, CW & Vassie, LH. 2004. Health and safety management. London: Prentice
Hall.
Geller, ES. 1998. Working safe: How to help people actively care for health and
safety. Bacon Raton: CRC Press.
IoDSA. Institute of Directors of Southern Africa. 2009. King Report on Corporate
Pain, SW. 2010. Safety, health and environmental auditing: A practical guide.
London: CRC Press.
Stranks, J. 2010. Health and safety at work: An essential guide for managers. 9th
ed. London: Kogan Page.
75

Chapter Six
Pollution and waste management
Elriza Esterhuyzen
Learning Outcomes
• provide a brief overview of pollution and waste management
• define pollution
• describe the types of pollution
• explain the relevance of the National Environmental Management: Air Quality
Act 39 of 2004 (Air Quality Act) regarding air pollution
• indicate the importance of the National Water Act 36 of 1998 (Water Act) and
the Water Services Act 108 of 1997 (Water Services Act) with regard to water
pollution
• explain the applicability of the Environmental Management: Biodiversity Act 10
of 2004 (Biodiversity Act) with regard to soil pollution
• indicate the relevance of the Environment Conservation Act 73 of 1989 regarding
noise pollution
• define waste
• elucidate the importance of the National Environmental Management: Waste
Act 59 of 2008 (Waste Act)
• elaborate on sustainable development
• describe business strategies for managing pollution and waste
• explain some consequences of polluting practices
• explain the meaning of the ‘cradle to grave’ and ‘polluter pays’ principles.

Waste and pollution are two aspects of environmental concern that need to be
managed properly. This chapter will clarify the meaning of pollution and waste
and indicate some of the types of pollution. As sustainable development is of great
importance, waste and pollution should be incorporated into business strategies in
order to ensure that corporate social responsibility is taken into account and also to
ensure legal compliance. This chapter will briefly depict some applicable legislation
and business strategies with regard to pollution and waste.

Six: Pollution and waste management
6.1 Introduction
Due to the ever-increasing global population rate and industrialisation, more strain
is constantly being put on the environment. More waste is generated, and coupled
with increased pollution rates, has led to rapid environmental degradation and
social as well as economic problems.
6.2 Pollution and waste management – a brief overview

As indicated in Chapter 1, everyone has the constitutional right to have an
environment that is not harmful to his or her health and to have the environment
protected for the benefit of present and future generations. Section 24(a) of the
Constitution1, as well as the Waste Act, indicate that this is achieved by reasonable
legislative and other measures that:
• prevent pollution and ecological degradation
• promote conservation
• secure ecologically sustainable development and the use of natural resources,
while promoting justifiable economic and social development.
Pollution prevention (or minimisation) and the control of the potential impact of
waste are the responsibility of all sectors of society. Private households, businesses
and industry (such as mining) impact on the environment. Both pollution and
waste management are regulatory requirements and therefore necessitate careful
consideration.
6.3 Definition of pollution

The National Environmental Management Act (NEMA) defines pollution as any
change in the environment caused by:
• substances
• radioactive or other waves
• noise, odours, dust or heat.
The above can be the result of:
• any activity, including the storage or treatment of waste or substances
• construction
• provision of services.
The above can be caused by:
• any person or
• organ of state.
1 Constitution of the Republic of South Africa, 1996.
77

Such a change in the environment has, or will in the future have, an adverse effect
on:
• human health or well-being
• the composition, resilience and productivity of natural or managed
ecosystems
• materials useful to people.
From the above, it can be seen that pollution is much more than what one can see
at any given point in time. This definition specifically includes negative effects on
the environment that might only be realised in future.
6.4 Types of pollution

Pollution can take many forms. The air that we breathe, the water that we drink
and use, the ground in which we grow our food, and even the increasing noise we
hear every day, to name a few. These all contribute to a lower quality of life and to
health problems. In this section, we will briefly look at some of the major types of
pollution: air, water, soil and noise pollution.
6.4.1 Air pollution

Air pollution is seen as ‘the condition in which air is contaminated by foreign
substances, or the substances themselves. Air pollution consists of gaseous, liquid,
or solid substances that, when present in sufficient concentration, for a sufficient
time, and under certain conditions, tend to interfere with human comfort, health
or welfare, and cause environmental damage. Air pollution causes acid rain, ozone
depletion, photochemical smog, and other such phenomena’.2 The Air Quality Act
states that air pollution encompasses any change in the composition of the air
which could be caused by, among others, solid particles, gases, fumes and dust.
6.4.2 Water pollution

Water pollution is defined as ‘the presence in water of harmful or objectionable
material in sufficient quantity to measurably degrade water quality’.3 The Water Act
further indicates that water pollution includes direct and indirect changes to the
physical, chemical or biological properties of any water resource.
6.4.3 Soil pollution

Soil pollution is mainly due to the presence of man-made waste. Soil, which has
different names such as ground, dirt and mud, mainly becomes contaminated due
to humans. Waste produced by nature itself, such as dead animals, plants and
2 Business Dictionary (2015). 3 Business Dictionary (2015).
78

rotten fruit, actually increases the fertility of the soil. Man-made waste contains
chemicals, not naturally found in nature, thus causing soil pollution.4 The main
causes of soil pollution are: industrial activities, agricultural activities, waste
disposal, accidental oil spills and acid rain; the effects of soil pollution include: the
effect on human health, the effect on plant growth, decreased soil fertility, toxic
dust and changes in the structure of soil.5
6.4.4 Noise pollution

Noise pollution is seen as any noise that is disturbing or excessive and may
negatively impact on human or animal life. Excessive noise levels might lead
to cardiovascular effects and elevated blood pressure in people, among other
conditions. Such pollution affects health and behaviour, damages psychological
health and leads to increased levels of stress.6 Any noise which disrupts normal
activities, such as conversation and sleep, can be seen as noise pollution. A noise
nuisance is seen as ‘any sound which disturbs or impairs or may disturb or impair
the convenience or peace of any person’.7
6.5 National Environmental Management: Air Quality Act 39 of 2004

The National Environmental Management: Air Quality Act 39 of 2004 (Air Quality
Act) sets out to protect the environment by providing reasonable measures for
pollution prevention, the prevention of ecological degradation and securing
ecologically sustainable development. All of the above should be achieved while
enhancing economic and social development. Furthermore, the Air Quality Act
provides national norms and standards for the regulation, management and
monitoring of air quality in South Africa.
The quality of the ambient air in parts of South Africa does not provide for a
healthy environment for the people living in those parts of the country. The Air
Quality Act further indicates that the poor are mostly affected by the polluted air.
Air pollution leads to high social, economic and environmental costs. Air pollution
should be minimised through control, technology and production processes that
are cleaner. Legislation (such as the Air Quality Act) protects the environment and
ensures that the ambient air is not harmful to the health or well-being of people.
Businesses should ensure that they adhere to applicable legislation in order to
minimise the pollution that they cause. Each business should include an air quality
management plan (AQMP) in their environmental management plan. According to
the Air Quality Act, such an AQMP must ensure the following:
4 Conserve Energy Future (2015) 1. 7 Noise Control Regulations GN R154 of 1992,

5 Conserve Energy Future (2015) 2–4. in terms of s 25 of the Environment Con
6 Mann (2014) 1. servation Act.
79

• improve air quality

• identity and reduce negative impacts on human health and the environment
• address issues arising from the use of fossil fuels in residential areas
• address issues with regard to emissions from industrial sources
• implement South Africa’s obligations in respect of international agreements
• ensure that best practice is followed with regard to air quality management.
6.6 National Water Act 36 of 1998 and Water Services Act 108
of 1997
The National Water Act 36 of 1998 (Water Act) states that the control of water
resources should focus on sustainability and equity, as the guiding principles, with
regard to the protection, use, development, conservation and management of water.
By adhering to the guiding principles of sustainability and equity, the basic human
water needs of the present and future generations should be protected and fulfilled.
The Water Act also indicates that social and economic development should be
promoted through the use of water resources. Water resource management needs to
be implemented to ensure the sustainable use of water for the benefit of all users.
As is well known, water is a scarce resource and is unevenly distributed
nationally (some areas of South Africa have a lot of water and others do not). Care
needs to be taken in order to conserve water. Conservation of water includes the
efficient use of water and the saving of water, which can be achieved by taking
appropriate measures such as implementing water efficient processes; managing
the demand for water; making use of water saving devices; and rationing water.8
As described above, water pollution refers to the direct or indirect change to
the physical, chemical or biological elements of a water resource. The Water Act
indicates that such water pollution causes water to be:
• less fit for any purpose for which it could reasonably be used
• harmful or potentially harmful to the health, safety and/or welfare of
humans; to any organisms in the water; to the quality of the resource; and to
property.
The Water Services Act 108 of 1997 (Water Services Act) makes provision for the
rights of access to basic water supply and basic sanitation in order to ensure an
environment that is not harmful to health and well-being. Basic sanitation refers
to the ‘prescribed minimum standard of services necessary for the safe, hygienic
and adequate collection, removal, disposal or purification of human excreta,
domestic waste-water and sewage from households’. Basic water supply refers
to the ‘prescribed minimum standard of water supply services necessary for the
reliable supply of a sufficient quantity and quality of water to households’ which is
8 Water Act, s 1(1).
80

necessary to support life and for personal hygiene. It is important to note that both
rights (basic water supply and basic sanitation) also apply to informal settlements.
As previously mentioned, it is the poor who suffer most from the adverse
effects of pollution. The Water Services Act also makes provision for the disposal of
industrial waste water which needs to be collected, removed, disposed of or treated
in such a way as to avoid or minimise pollution.
6.7 National Environmental Management: Biodiversity Act 10 of 2004

The National Environmental Management: Biodiversity Act 10 of 2004 (Biodiversity
Act) supports the conservation of both plant and animal biodiversity, also including
the soil and water upon which it depends. This Act further sets out to enhance
the sustainable use of indigenous biological resources and the fair and equitable
sharing of benefits involving these resources.
The sustainable use of biological resources implies the use of resources in such
a way and at such a rate that does not lead to long-term decline, that does not
change the ecological integrity of ecosystems and that ensures that the needs of
present and future generations of people will be met. Pollution and waste must
clearly be managed in such a way that the sustainability of these biological
resources is not harmed.
6.8 Environment Conservation Act 73 of 1989

The environment is defined in the Environment Conservation Act 73 of 1989 as the
sum of all surrounding objects, conditions and influences that may affect the life and
habits of humans or of any other organism or collection of organisms. As any kind
of pollution may affect the life of humans or any other organism or collection of
organisms, the management of pollution is clearly necessary. Furthermore, section
25 of this Act indicates that noise (also vibration and shock) must be prevented, or
if prevention is not possible, it should be reduced or eliminated.
6.9 Definition of waste

In a general sense of the word, waste refers to anything that is no longer required
and is therefore discarded. The decision to discard something can be a decision that
is taken lightly, without really thinking about it, for example throwing away an
empty can. The decision to discard something can also take a lot of thought before
deciding to throw it away, for example deciding to throw away a family heirloom
that is no longer of any use.
The National Environmental Management: Waste Act 59 of 2008 (Waste Act) defines
waste as any substance, whether or not that substance can be reduced, re-used,
recycled and recovered:
81

• that is surplus, unwanted, rejected, discarded, abandoned or disposed of

• which the generator has no further use of for the purposes of production
• that must be treated or disposed of
• that is identified as a waste by the Minister by notice in the Government
Gazette, and includes waste generated by the mining, medical or other sectors.
It is important to note that the Waste Act further indicates that a by-product is
not considered waste; and that any part or portion of waste that has been re-used,
recovered and recycled is no longer considered waste.
6.10 National Environmental Management: Waste Act 59 of 2008

The minimisation of pollution and the minimisation of the use of natural resources
are priorities in the National Environmental Management: Waste Act 59 of 2008
(Waste Act). In order to ensure that the environment is protected from the impact of
waste, the Waste Act indicates that the following should be implemented:
• vigorous control measures
• cleaner technologies
• cleaner production and consumption practices
• waste minimisation.
The Waste Act sets out to:
• reform the law regulating waste management in order to protect health
and the environment by providing reasonable measures for the prevention
of pollution and ecological degradation and for securing ecologically
sustainable development
• provide for institutional arrangements and planning matters
• provide for national norms and standards for regulating the management of
waste by all spheres of government
• provide for specific waste management measures
• provide for the licensing and control of waste management activities
• provide for the remediation of contaminated land
• provide for a national waste information system
• provide for compliance and enforcement
• provide for matters connected therewith.
Waste management practices in many areas of South Africa are not conducive
to a healthy environment; such improper waste management practices impact
disproportionately negatively on the poor. Such negative impacts may reflect
locally as well as globally (such as global warming).
82

It is important to remember that waste can, under certain circumstances, be a

resource and as such offer economic opportunities. An example of this is when
cooldrink cans are recycled to produce other products. As mentioned earlier, waste
(such as discarded cans) stops being waste as soon as it is recycled.
The Waste Act indicates that waste and related waste management practices are
matters that:
• require national legislation to maintain essential national standards
• require uniform norms and standards that apply throughout the country, in
order to be dealt with effectively
• have to apply uniformly, in order to promote and give effect to the right to
an environment that is not harmful to health and well-being
• require strategies, norms and standards which seek to ensure best waste
practices within a system of co-operative governance.
From the above, it is clear that the regulation of waste management practices
should be applied throughout South Africa and is the responsibility of all entities
generating waste (including individuals, businesses and the government).
The objective of the Waste Act is to protect health and well-being, as well as the
environment, by promoting the following measures (this list is not exhaustive as
further measures are included in s 2 of the Waste Act):
• Keep consumption of natural resources to a minimum.
• Avoid or minimise, if it cannot be avoided, the generation of waste.
• Reduce, re-use, recycle and recover waste; treating and disposing of waste is
a last resort.
• Prevent pollution as well as ecological degradation.
• Make sure that development is undertaken in an ecologically sustainable
way, while also promoting economic and social development that is
justifiable.
• Ensure remediation of polluted land.
• Ensure waste management reporting and planning.
• Ensure that people are aware of the impact that waste might have on their
health and well-being and on the environment.
6.11 Sustainable development

Sustainability is seen as being able to grow and endure, while taking care of
the present generation and those to come, and is key to economic and social
development while protecting the natural environment.9 Sustainable development,
9 Sernau (2014) 354.
83

according to the National Environmental Management Act 107 of 1998 (NEMA)

should ensure that the environment is preserved for present and future generations.
In ensuring this, social, economic and environmental factors must be integrated
when planning, implementation and decision making is undertaken.
This is reiterated in the Waste Act, as it indicates that sustainable development
requires that the generation of waste must be avoided, or where it cannot be
avoided, that it is reduced, re-used, recycled or recovered; only as a last resort is it
treated and safely disposed of. Development should be sustainable and should be
carried out in such a way that the environment is protected for present and future
generations by, for example, effective waste and pollution management.
South Africa is currently experiencing an unsustainable scenario in which
the supply of natural resources is decreasing and the demand for these resources
is constantly increasing. Pollution and waste are two of the factors leading to
a decreasing supply of natural resources as it leads to contamination of natural
resources, which in turns leads to less resources being available. One example of
this is the contamination of drinking water. If drinking water gets contaminated, it
may no longer be fit for human consumption.
Pollution and waste can have devastating effects on the quality of human,
animal and plant life. It can lead to diseases and death; economic losses (for
example in the tourism industry – no one wants to visit a polluted wetland where
all animals and plants are sick and/or dying); the depletion of natural resources;
and long-term financial burdens (refer to the ‘polluter pays’ principle below). Soil
pollution may lead to less soil that is conducive for farming purposes, leading to a
shortage of food for the population.
Businesses and individuals alike may encounter legal liabilities if they do not
comply with legislation applicable to pollution and waste. They may be unaware
of such legislation or they may hope to get away with their actions. However,
ignorance is not an acceptable defence when in contravention of a legal liability.
Managers, in particular, should be aware of applicable legislation in order to ensure
compliance to avoid prosecution and/or fines.
Sustainable development is of great importance as it indicates the ability of a
generation to take care of its own needs and to do so without compromising the
ability of future generations to take care of their needs.10
6.12 Managing pollution and waste – business strategies

As pollution is caused by waste, we will look at some of the legal regulations which
apply to businesses. The Waste Act specifically mentions business waste as being
waste coming from premises that are used mainly (or totally) for commercial,
retail, wholesale, entertainment or government administration purposes. Waste
management includes waste collection, treatment, recycling and disposal. In terms of
10 Sernau (2014) 356.
84

the Waste Act, disposal of waste includes the ‘burial, deposit, discharge, abandoning,
dumping, placing or release of any waste into, or onto, any land’. Businesses need to
take special care to ensure legal compliance with regard to waste.
In order to deal with waste in a legally compliant way, businesses need strategies.
This can include plans, objectives, guidelines, systems and procedures. Provision
is made in the Waste Act11 for the preparation of waste management plans aimed
at avoiding or minimising the generation of waste, reducing negative impacts on
health and the environment and conserving natural resources.
6.12.1 Elements of a waste management plan

Section 30 of the Waste Act outlines what should be included in a business’s waste
management plan. These elements include:
• the amount of waste that is generated
• measures to prevent pollution as well as ecological degradation
• targets for waste minimisation (through waste reduction, re-use, recycling
and recovery)
• programmes to minimise the generation and final disposal of waste
• reduction of waste by changes to packaging, product design and/or
production processes
• informing the public of the impact of waste-generating products or
packaging on the environment and the financial contribution that needs to
be made in order to support consumer-based waste reduction programmes
• the period that is required for the implementation of the waste management
plan
• methods for monitoring and reporting the waste management plan.
From the above elements, it can be seen that pollution prevention should form part
of the waste management plan of businesses.
6.12.2 Waste management activities

Waste management activities are listed in the Waste Act12 in order to ensure that
businesses do not undertake any such activities without meeting the set standards
or having a waste management licence, if required.13 As waste can easily lead to
pollution, the following are some of the activities listed as waste management
activities and are regulated: transportation of waste; accumulation and storage
of waste; transfer of waste; disposal of waste; treatment of waste; collection and
handling of waste; reduction, re-use, recycling, and recovery of waste; and also the
generation of waste.
11 Waste Act, s 28. 13 Waste Act, s 20.

12 Waste Act, Schedule 1 & s 19.
85

6.12.3 Integrated waste management (IWM)

Integrated waste management (IWM) refers to a holistic and integrated system
(refer to the Deming PDCA-Cycle in Chapter 1) which is aimed at the prevention
and minimisation of waste impacts during the entire life cycle of products and
is driven by the need for sustainable development. In order to achieve such a
holistic approach to sustainable development, social, financial and environmental
aspects should be taken into consideration. Section 12 of the Waste Act outlines the
content of an IWM plan. An IWM plan should include the following:
• a description of the population and development profiles of the area to which
the plan relates
• an assessment of the quantities and types of waste that are generated in the
area
• a description of the services related to waste collection, minimisation, re-use,
recycling and recovery, treatment and disposal.
The IWM approach is linked to the principle of ‘cradle to grave’ as discussed below.
6.13 Consequences of polluting practices

Businesses need to be competitive in order to survive. However, polluting practices
may have devastating consequences for businesses. As indicated above, businesses
need to be legally compliant in order to avoid prosecution and liability. Besides
this, being identified as a polluter and causing harm to the health and well-being
of people and/or to the environment (contamination and degradation of scarce
natural resources) may lead to the destruction of a business’s public image, a drop
in share prices (if applicable) and long-term financial implications. The ‘polluter
pays’ principle discussed below will explain this point in more detail.
6.14 ‘Cradle to grave’ principle

A business is responsible for its products from creation to disposal, in other words,
throughout the entire life cycle of a product.14 This means that as we have the right
to use natural resources, we have the responsibility to prevent environmental harm.
In a business context, a business should take responsibility from the conception of
a product right through to the end of its life cycle. Businesses should be moving
towards a ‘cradle to cradle’ approach and recycle products instead of sending
them to their grave. One example of how this can be achieved is when a business
produces printer cartridges; it can buy back the used cartridges from its customers
in order to recycle and re-use them.
14 Business Dictionary (2015).
86

6.15 ‘Polluter pays’ principle

This is the rule that says the cost of pollution control, prevention, and remediation
should be borne by the entity which profits from the process that causes the
pollution.15 It is important to note here that this principle does not give anyone the
right to pollute, even if there is money to pay for the cost of such pollution. If a
business wants to produce something, for example recycling motor vehicle tyres to
manufacture floor covering, and the community feels that it might pollute the air,
the burden of proof lies with the business that the activity will not cause pollution.
The business will be liable for any damage caused by their actions.
As discussed previously in the definition of pollution, pollution may not be
immediately visible. However, even if the pollution only becomes apparent later, the
polluter will still have to pay. Remember that ‘paying’ does not only include money;
it can also include legal responsibilities and associated fines and/or imprisonment.
Furthermore, the business stays responsible, even when making use of contractors.
6.16 Conclusion
This chapter showed that it is possible to manage waste properly and to integrate
this into business strategies. As sustainable development is of great importance,
waste and pollution management should be incorporated into business strategies in
order to demonstrate corporate social responsibility and to ensure legal compliance.
The needs of growing populations place increased strain on the environment;
sustainability measures and legal compliance become ever more vital. Not only
will current and future generations be responsible for their own sustainable
development and waste management, but they will also have to find a way to deal
with the damage caused by past generations.
Review questions
1. Define pollution.
2. Describe the different types of pollution and give an example of each type.
3. Explain the relevance of the National Environmental Management: Air
Quality Act 39 of 2004 (Air Quality Act) regarding air pollution.
4. Indicate the importance of the Water Act and the Water Services Act with
regard to water pollution.
5. Explain the applicability of the Biodiversity Act with regard to soil pollution.
6. Indicate the relevance of the Environment Conservation Act 73 of 1989
regarding noise pollution.
15 Business Dictionary (2015).
87

7. Define waste.
8. Elucidate the importance of the Waste Act with regard to waste management.
9. Explain the concept of sustainable development.
10. What are the business strategies that can be utilised in managing pollution
and waste?
11. Explain some of the consequences of polluting practices.
12. What is meant by the ‘cradle to grave’ and ‘polluter pays’ principles?
References
Business Dictionary. 2015. Available: http://www.businessdictionary.com. (Accessed
9 March 2015).
Conserve Energy Future. 2015. Causes and effects of soil pollution. Available:
http://www.conserve-energy-future.com/causes-and-effects-of-soil-pollution.
php. (Accessed 9 March 2015).
Constitution of the Republic of South Africa Act, 1996. Pretoria: Government
Printer.
Environment Conservation Act 73 of 1989. Pretoria: Government Printer.
Mann, K. 2014. Noise pollution: What is legal and what isn’t? News24.com,
20 August 2014. Available: http://www.news24.com/MyNews24/Noise-Pol
lution-What-is-legal-and-what-isnt-20140819. (Accessed 9 March 2015).
National Environmental Management: Air Quality Act 39 of 2004. Pretoria:
Government Printer.
National Environmental Management: Biodiversity Act 10 of 2004. Pretoria:
Government Printer.
National Environmental Management: Waste Act 59 of 2008. Pretoria: Government
Printer.
National Water Act 36 of 1998. Pretoria: Government Printer.
Printer.
Sernau, SR. 2014. Global problems: The search for equity, peace, and sustainability.
3rd ed. London: Pearson.
Water Services Act 108 of 1997. Pretoria: Government Printer.
88

Chapter Seven
Impact of industry and agriculture on the environment
Leonie B Louw
Learning Outcomes
• elicit and define the important terms relevant to climate change and the impact
of human activity on the environment
• explain the importance of biodiversity
• briefly explain the impact of various industries on the environment
• explain the differences between natural and agroecosystems
• identify and explain the impact of the great ocean conveyor belt on climate and
how this acts as proof of the human-induced climate change phenomenon
• state the causes of climate change and how climate change impacts on the
environment and on economies
• provide a brief overview of the applicable legislation, agreements and protocols
• implement business strategies that will minimise the impact of industry.

The focus of this chapter is the impact of human activity on the environment.
These activities, both industrial and agricultural, can be reduced by implementing
responsible business practices. The endeavour is to explain climate change at a very
basic level and to expand on the role businesses and individuals can play to limit
the emission of greenhouse gases. The responsibility businesses and individuals
have towards the environment will also be discussed.
7.1 Introduction
It is important to understand that human activity has a great impact on the
environment. Understanding the extent of this impact and how it can be managed is
the first step towards becoming responsible global citizens. This chapter provides a
very brief overview of the damage human activity is inflicting on the environment,
as well as how this damage might be mitigated and possibly reversed. In order to
understand the full extent of the impact human activity has on the environment,
this chapter will investigate the impact of industry, agriculture and human-induced
climate change.

7.2 Impact of industry on the environment

7.2.1 Important definitions
In Chapter 1, the term ‘environment’ was defined as the surroundings within which
humans exist. These are made up of the land, water and atmosphere of the earth;
micro-organisms, plant and animal life, or any part or combination of this; the
interrelationship among and between them; and the physical, chemical, aesthetic
and cultural properties and conditions of the foregoing that influence health and
well-being.1 Before we can look at the impact that industry has on the environment,
we first need to define the term ‘industry’.
Industry includes commercial activities, commercial agricultural activities,
mining activities and the operation of power stations.2 According to Statistics SA,3
the economic sectors in South Africa that can be classified under industry are:
forestry and fishing; mining; manufacturing; electricity, gas and water supply;
construction; trade; transport, storage and communication; real estate; and
community, social and personal services.
In order to understand the impact of industry and agriculture on the environment,
the terms ‘ecosystem’ and ‘agroecosystem’ also need to be defined.
An ecosystem is defined as any self-sustaining and self-regulated community
of organisms and the interaction between such organisms with one another and
with their environment.4 The National Environmental Management Act 107 of
1998 (NEMA) defines an ecosystem as a dynamic system of plant, animal and
micro-organism communities and their non-living environment interacting as a
functional unit. This phrase was first used by Roy Clapham in an attempt to define
the physical and biological components of an environment in relation to each other
as a unit. When looking at the definition of an ecosystem, it is notable that it is
made up of living organisms – plants, animals and micro-organisms. The definition
also includes their environment – soil, rock, water sources, and the atmosphere of
this system. Finally, the definition of an ecosystem looks at the interaction of these
living organisms with the physical environment and vice versa.
A natural ecosystem provides the environment with oxygen, produced by trees,
and with clean water, filtered by wetlands.
An agroecosystem, in contrast, is an ecosystem that has been changed for
agricultural activity. It is usually a farm or field and its boundaries have been set
for the purpose of agricultural activity. Agriculture is defined as the science, art,
or practice of cultivating the soil, producing crops, raising livestock, and preparing
and marketing the resulting product.5
Biodiversity is the variety of life on earth. It includes all organisms, species,
and populations; the genetic diversity among these and their complex assemblages
of communities and ecosystems.6 If we look at this definition more closely, it
1 NEMA, 1998. 4 Environment Conservation Act, 1989.

2 Waste Act, 2008. 5 OECD (2001) 50.
3 Statistics SA (2013). 6 UNEP (2010) 2.
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Seven: Impact of industry and agriculture on the environment
highlights three levels of biodiversity: genetic diversity, species diversity and

ecosystem diversity. Different genes in all living things, different species within a
natural environment and different environments making up the earth are vital to
the survival of everything on earth. Biodiversity is important for the sustainable
production of crops needed for food and for industry components. Biodiversity
is also important for the ecological services provided by a natural ecosystem and
the biological support it provides to the production of crops. Finally, biodiversity
protects against ecosystem instability. The loss of biodiversity is caused by habitat
loss, changes in ecosystem structures, the invasion of alien species, unacceptable
agricultural practices, over-exploitation of natural resources, pollution and
degradation, deforestation, desertification, illegal trade in species, and finally by
climate change. Illegal trade in species is the second biggest threat to wildlife, after
habitat loss.7
7.2.2 Impact of industry on the environment: overview

The impact that these activities have on the natural environment and on resources
depends on the number of people who have access to these resources and who
make use of it; it also depends on the rate of consumption. Population growth is
at a record high and it is therefore understandable that resource consumption will
be very high as well. For many years there were no practices in place to ensure
that resources were consumed at a sustainable rate. The greatest impact on natural
resources is usually seen in urban areas where there are larger quantities of people
in a small space, consuming immense quantities of resources and producing vast
quantities of waste with little regard for the environmental impact of their actions.
The more advanced a civilisation is, the more waste it produces.
Any economic activity relies on natural resources in direct or indirect ways
and all economic activity impacts on natural resources in direct and indirect ways.
These economic activities cannot just be stopped since they contribute to job
opportunities and income for South Africans. Unfortunately the benefits are only
calculated in terms of monetary value and the damage to the natural environment
is not calculated. If natural resources are over-used and depleted it will have a cost
on the future wealth of the country, but this is not reflected in calculations that are
done today.
Some industries have commercialised the direct use of natural resources. These
industries include agriculture, fishing and forestry, and other natural product
industries. Other sectors rely on natural sources at a subsistence level for the most
basic needs of food, shelter, fuel and medicine. Even these basic survival activities
can cause unsustainability and degradation.
7 WWF (2015).
91

Ecological processes are responsible for the direct transformation of natural systems.
These ecological processes include the generation of soil, pollination of crops, pest
control, and water purification processes. Many industries rely on these processes,
but at the same time they are over-exploiting these processes or inadvertently
destroying the components that make these processes possible.
Pollution is not the only damage that occurs in the process of over-exploitation.
Any changes in the physical landscape can cause long-lasting damage by causing
land degradation. As explained earlier in this chapter, industry and other human-
related activities impact on the environment. The impact of these activities on
biodiversity can be summarised in three broad categories: habitat loss and
fragmentation; over-exploitation of species; and the introduction of invasive alien
species. Habitat loss is caused by the expansion of human activity, specifically
in food production activities to meet the increasing demands of an increasing
population. Research has shown that about 85% of species are under serious threat
as a direct result of habitat loss.8
7.2.3 Impact of industry on the environment: fisheries and forestry

Fisheries and forestry industries cause damage to the environment and biodiversity
by removing indigenous vegetation and replacing it with species that grow faster
and are more commercially viable since their yield is greater. Sometimes indigenous
species do not have to be removed; simply introducing alien species overwhelms
and destroys indigenous species. Fishing gear and destructive fishing practices
cause damage to the physical environment. These destructive practices include
bottom trawling, cyanide fishing, and dynamite fishing. Endangered species are
accidentally caught up in commercial fishing activities aimed at the harvesting of
other species.
Most fishing activities are unsustainable and threaten the future of many
species. Oceans do not receive sufficient protection and it is very difficult to police
those areas since they cover such a vast area of the planet. Fish farms, often cited as
a solution to unsustainable fishing activities, also contribute to the damage of the
natural environment. Farmed fish threaten local species by invading their habitat
and introducing parasites that are increasingly resistant.9 The fisheries industry
is characterised by the waste of fish. Not everything that is caught will be sold
and eaten and these practices have placed many marine species, such as dolphins,
sharks and coral reefs, under threat.
The impact of the fisheries industry is worsened by pirate fishing vessels who
have no respect for laws and treaties, as well as the harvesting and sale of juvenile
fish species, that have not yet had the chance to reproduce.10
8 WWF (2015). 10 WWF (2015).

9 WWF (2015).
92

7.2.4 Impact of industry on the environment: mining

Mining is one of the major industries in South Africa; mining activities have
a large impact on the natural environment, rivalled only by local and regional
municipalities in this regard (this is discussed in further detail below). Once an area
has been mined, it will never return to the same state again. Mining companies
can only try to return the environment to some state of functionality after their
operations have ceased. The impact of mining activities on the natural environment
has resulted in regulations and legislation specifically for the governance of this
industry. Mining activities cause great disturbance to the land and physical habitat;
they make use of great amounts of water that need to be removed from somewhere
else. Chemicals and run-off from mining operations can poison whole water
systems, including underground water. Any processed material has the potential to
become a leaching hazard given the right circumstances. One example is rainfall
which falls on these material dumps, causing them to leach into the groundwater.
This occurs when facilities are not built according to regulations and these facilities
are not lined or the membrane is damaged.
However, even strict regulations and legislation do not prevent business
practices that damage the environment. Many companies deem it too expensive to
treat waste by-products as per regulation and they simply store these dangerous
materials in big reservoirs that pose a danger to the environment in numerous
ways. One of these hazardous elements is Chromium(VI) (CR+6), which has been
classified as a carcinogen. Carcinogens are cancer-causing agents. Chromium(VI) is
used in many industrial and metallurgical processes and water contaminated with
Chromium(VI) and its by-products are very dangerous to the health of people and
animals consuming such water.11
Steel and gold mining has resulted in serious incidents of pollution. Goldfields
have been responsible for the contamination of groundwater around the
Witwatersrand basin in southern Gauteng. Past mining activities have led to the
pollution of three basins to such an extent that they now need to be treated. Their
levels are rising to environmentally critical levels and risk the contamination of
natural groundwater resources and the rest of the area with water that contains
high levels of acidic sulphur, as well as high levels of various heavy metals. Any
of these components will have seriously adverse effects on both the environment
and human health. The Department of Water Affairs has built new water treatment
plants in response to this. These plants are said to be the biggest of their kind in the
world. At this stage, the cost of treating water in these facilities to acceptable levels
so that it can return to rivers runs in the area of R210 million rand, excluding the
capital costs that have been incurred.12
Coal mines have also caused serious damage to the environment. In 2012, the
water in the Boesmanspruit Dam, which supplies water to the town of Carolina, was
contaminated by acid mine drainage from the nearby mining enterprises. It took
11 EPA (2013). 12 Seath & Van Niekerk (2011).
93

over seven months to get the problem resolved and further investigation revealed
that nearby wetlands had been heavily contaminated as well. The contamination
was allegedly caused by a rain storm, which caused an overflow of the holding
ponds at the coal mine.13
7.2.5 Impact of industry on the environment: energy and water supply

Electricity, gas and water supply activities require a lot of infrastructure. In order
to supply water, it first needs to be gathered or purchased. The construction of
dams and the infrastructure required to transfer water impacts in the same way as
other construction activities impact on the natural environment. However, there are
additional impacts on the natural environment further downstream from where a
dam has been constructed. Most of the time there will be a drastic reduction in the
amount of water that moves through these environments in comparison to before
dam construction. However, in times of heavy rain when the dams are filled and
threaten infrastructure, floodgates will be opened, flooding the environment down-
river.14
Power generation contributes to global warming and is a great contributor
to pollution. Electricity is generated by burning fossil fuels. Coal, oil and natural
gas (fossil fuels) are the main source of CO2 pollution; these emissions contribute
directly to the climate change crisis faced today. The ash produced by the burning
of coal also gives off very high pH levels that contaminate both the air and soil.
Oil and gas refineries and the transportation of these valuable resources are
a grave threat to the natural environment as it not only involves the mining of
natural resources, but also carries with it the constant threat of pollution.15
The energy problems experienced in South Africa are often reported in the news.
The cost of fuel and electricity continues to increase at a rate that is unprecedented.
South Africans experience black-outs, or load shedding, on a regular basis, as well
as fuel shortages at times. Although government is funding numerous research
projects on alternative energy production, and new developments are focusing
on constructing green buildings, a definitive solution to the ever-growing energy
problems in South Africa is still a long way off. South Africa is on the right track
though; this was proved by the launching of South Africa’s first solar power plant
in 2015.
The public sector, which supplies energy and water to the population, is one
of the worst polluters. All services that are provided by various municipalities
create waste and carry the risk of pollution. It is just as important that government
institutions be held accountable for their environmental impact as it is for businesses
and individuals to be held accountable. Local, regional and national governmental
institutions waste precious resources by duplicating services and ignoring
the importance of environmental management. These institutions determine
13 McCarthy & Humphries (2013). 15 WWF (2015).

14 Kraljevic et al (2013).
94

development and population planning and in the past numerous projects have
been undertaken with little regard for the environmental impact of their choices.
Besides the provision of electricity, gas and water supply, domestic households
also require waste removal and a range of other economic services, all contributing
to the impact humans have on the natural environment.
7.2.6 Impact of industry on the environment: construction

The construction of housing and other infrastructure can only be achieved by
clearing land. This means the removal of natural species through deforestation
and the removal of layers of natural soil. Natural resources are required in the
process of construction; the construction industry can easily over-exploit these
natural resources, contributing to habitat fragmentation. Once construction has
been completed, alien species may be introduced, deliberately or inadvertently, in
the gardens of these newly constructed areas.
The construction industry needs space in which to develop new houses,
industries, etc. This is sometimes achieved by drying wetlands. Wetlands act
as nature’s filter and play an important role in purifying water. If wetlands are
destroyed, there is a loss of habitat for indigenous species and also a loss of clean
water. Pollution increases in these areas due to increased human activity.16
Providing housing and other infrastructure for people disrupt natural ecosystems,
which, in turn, have an adverse effect on the future existence of numerous species.
7.2.7 Impact of industry on the environment: trade and tourism

As with most other economic activities, trade and tourism require the construction
of infrastructure. Tourists visit areas renowned for their natural beauty and take
their vehicles off-road in order to get to these areas. They cause disturbances to the
natural environment and pollute these areas. Tourists pay exorbitant amounts of
money for sports such as recreational fishing in order to obtain species that they
deem collectable. Although tourism does have its advantages when it comes to
environmental education and the creation of awareness regarding environmental
issues, there needs to be a balance.
7.2.8 Impact of industry on the environment: transport

So many industries and individuals make use of transport that it can be classified
as an industry. In the process of making transport possible, roads and railways
need to be constructed. As with all construction processes, a lot of damage is done
by reshaping the land and removing indigenous species. Additional traffic through
natural areas contributes to pollution and threatens the biodiversity of these
affected areas. Roads causes habitat fragmentation by changing the landscape. If
roads are built through a natural area, the affected species can no longer reach the
16 WWF (2015).
95

other side of the road, for example in search of water, without extensive risk. These
are all factors that affect the biodiversity of an area, but which are seldom taken
into account when there is profit to be made.
7.3 Impact of agriculture on the environment

In the process of human activity, people have set boundaries that would not have
occurred naturally. These boundaries are devised for the purpose of producing
agricultural products effectively. The set boundaries usually have no correlation to
the boundaries that a natural ecosystem would have.
The characteristics of a natural ecosystem are:
• relatively stable over time
• without input or management
• nutrients are recycled
• structured trophic system
• nutrients are harvested by a variety of plants
• soil organisms enable decomposition to occur – providing nutrients and
organic matter.
The characteristics of agroecosystems are:
• management and human control
• human intervention
• disturbance
• regulation of the system
• habitat fragmentation
• variability.
7.3.1 Differences between an agroecosystem and a natural ecosystem

Diversity and complexity
Agroecosystems are very simplistic when compared to natural ecosystems. There is
very little diversity in terms of the species involved and in the way these species are
arranged within a physical space. The species that are involved in an agroecosystem
may be genetically modified; even if they are not, there is very little genetic variety
since the same crops remain in the same physical space. In an agroecosystem,
maize, wheat, rice and potatoes make up most of the food that is consumed on a
global scale.
96

Biomass
Biomass is defined as the amount of living matter in a unit area or volume of
habitat or the biological material derived from living organisms.17
The biomass of livestock in South African agriculture is much greater than
the biomass usually present in a natural ecosystem, for example a greater number
of cattle per hectare will be found in an agroecosystem than could be supported
in a natural ecosystem. This happens because the goal of agricultural activities is
to gain the most economic profit possible, even if it means that extensive human
interference and management will be required. The implication of this increase
in biomass is an increase in resources required to sustain the agroecosystem, an
increase in the pollution and waste produced, and a substantial decrease in the
natural nutrients available in the agroecosystem.
Disruption
Natural disasters such as floods, fire, droughts, etc are part of the natural ecosystem.
When these disruptions occur, it actually boosts the growth and survival of the
organisms in these ecosystems. A good example is the veld fires that run rampant
in the northern parts of South Africa during the winter months. The veld ends up
blackened with seemingly nothing left alive, but when the first rains come the
grass grows back stronger and healthier than before. There are even certain Protea
species that only germinate after they have been exposed to veld fires.
However, these natural disasters wreak havoc with agroecosystems, completely
devastating the delicate balance that exists in these man-made systems.
Agroecosystems have no natural built-in protection, since many of the species are
not native to the region.
Erosion is also notably higher in agroecosystems than in natural ecosystems
since humans remove most of the built-in protection provided by forests and other
natural habits when an agroecosystem is prepared for agricultural activity.
Pollution
Agroecosystems make use of pesticides and fertilisers, both of which do not exist
in a natural ecosystem. This not only affects the agroecosystem in which these
pollutants are being used, but the run-off from these high amounts of phosphor
and potassium from agricultural activities also infects surrounding ecosystems,
sometimes poisoning water for human consumption. Agroecosystems also produce
more waste than is found in natural ecosystems; this waste sometimes contaminates
the wild ecosystems surrounding these man-made agroecosystems.
Pesticides and herbicides have been proven to cause mutations and fertility
problems in animals. It is postulated that they can cause serious health problems
in humans as well.18
17 Biomass Energy Centre (2011). 18 WWF (2004).
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Management and control

Almost everything about an agroecosystem is controlled and managed by humans.
This includes the types of plants and animals that will be cultivated or raised,
resources to be invested in the area, the pesticides to be used and the reproduction
of the animals and plants. In a natural ecosystem, there is a self-regulating process
in which nutrients from the soil are used by plants; these plants are eaten by animals
and insects and, in so doing, the animals and insects ingest the nutrients. Nutrients
are returned to the soil when animals and plants die and decompose. This natural
system requires very little management and interference, while agroecosystems
require careful management to ensure that the soil is not just stripped bare, but that
enough nutrients are returned to the soil to ensure successful crops in the future.
Boundaries
As explained in the definition of agroecosystems, the boundaries of these systems
are man-made and are determined by economic need. Natural ecosystems have
borders that are blended together very well. Usually one would not see clear
lines separating boundaries in natural ecosystems. Living organisms have greater
freedom of movement between these different systems. The impact of these man-
made boundaries is called habitat fragmentation.
Energy sources and cycles

In light of the factors discussed above, it is clear that there will be differences in
the energy cycles of agroecosystems compared to natural ecosystems. There is no
complexity in the structure of an agroecosystem; all incoming energy is diverted
to one purpose – producing economically viable produce. Very little nutrition is
transferred back into the soil and surrounding areas and the cycle of life is very
limited in these agroecosystems. The energy from dead and decaying organic matter
is much lower in man-made ecosystems than in natural ecosystems. Even solar
energy is channelled differently since agroecosystems are designed to minimise
competition and maximise the effectiveness of the system, in order to produce the
maximum amount of the desired crop.
Human-introduced crops require much more water than would naturally be
consumed by the natural environment. Despite the amounts of water needed to
irrigate crops, trillions of litres of water are wasted in these processes. These losses
occur due to unprofessional and unsustainable agricultural practices and irrigation
systems that leak water.19
Alien plants
The impact of invasive alien plants, introduced for agricultural purposes, may be
irreversible in some cases. Invasive alien species are usually introduced as a result of
19 De Nooy (2003).
98

human activity. The search for better food resources that can feed more people with
less energy input leads to the introduction of foreign species for cultivation and
hunting. Invasive species threaten the habitat of native species and can cause their
extinction. Invasive alien species also cause irreversible damage to ecosystems.20
7.3.2 Implications of environmental impact by human activity

There are some serious consequences for the damage that people have done to
the environment. Acid rain and ozone depletion are just the tip of the iceberg.
Climate change has caused unpredictable weather patterns; many regions that
were previously tropical, now receive little or no rain and vice versa. This has led
to increased incidents of water scarcity, extreme floods, and extreme droughts,
leading to a situation where consumers simply have to pay more for even the most
basic resources.
7.4 Climate change

Climate change and global warming have been contested subjects for many years,
with some scientists and politicians becoming a driving force behind reformation
and the need to make environmentally responsible decisions, while other scientists
and politicians still believe that it has not yet been proven that any threat to
our current way of life exists. Some of the arguments that attempt to disprove
the existence of global warming appear to be rooted in personal agendas. Other
arguments are due to a misunderstanding of the science behind global warming.
The purpose of this chapter is not to convey the science of climate change and
global warming in detail, but to provide a brief overview of the current state of
affairs and how it impacts on business decisions.
7.4.1 What is climate change?

The Intergovernmental Panel on Climate Change21 defines climate change as
observable changes in the climate system. These changes can be measured and
compared to historical data in the form of ice core samples extracted from the polar
regions of the earth. This means that major changes in the observable weather,
and the origin of these observable changes, can be traced back to changes in
ocean levels, average rainfall patterns, increases in the average global temperature,
and more regular and prolonged occurrence of extreme weather events. The
United Nations Framework Convention on Climate Change (UNFCCC) makes use
of a different definition for climate change. According to the UNFCCC,22 climate
change is defined as the changes in climate as a result of human activities that
are changing the composition of the atmosphere, resulting in changes in weather
20 IUCN (2011); WWF (2015). 22 UNFCCC (2014).

21 IPCC (2007) 6.
99

systems and sea-levels. These changes are in addition to the natural changes in the
climate system.23
Although weather changes daily and seasonally, when weather patterns are
compared to available historical data, it is clear that the earth’s overall climate
has changed drastically in the last 30 years. This is worrying, as such changes in
climate usually happen over thousands of years. Any major changes in temperature
and rainfall patterns impact on whole ecosystems. In recent years a lot has been
written about the melting ice caps. Not only does this cause a rise in sea levels, it
also results in a smaller physical environment for cold climate creatures to live in.
The real danger of climate change is that it is happening at such a rapid rate that
the species inhabiting the earth do not have the time to adapt to these changing
conditions.24
How the normal system works

If scientists are able to discern a difference in climate which is significant enough
to give them cause for worry, it makes sense that a ‘normal’ system exists as a
base for comparison. However, it is not that simple since the climate system is very
complex.
The most important aspect that influences the earth’s climate is known as
the great ocean conveyor belt. This conveyor belt acts as a weather buffer for
temperatures across the globe. It is responsible for the gradual changes in seasons,
which balance heat and cold around the world. Without this conveyer belt, the
earth would look quite different. This great ocean conveyor belt includes deep
ocean currents and surface ocean currents that circulate the earth in a 1 000 year
cycle. This circulation cycle results in the following two processes: warm surface
currents carry less dense water away from the Equator, towards the poles, while
cold, deep ocean currents carry colder, denser water away from the poles towards
the Equator. This circulation cycle is vital for the distribution of heat energy, the
regulation of weather and the cycling of gases and nutrients.25
The worrying thing about climate change is that it leads to an increase in the
surface temperature of oceans, which in turn leads to the evaporation of seawater.
Climate change also increases the temperature of the earth’s surface which leads
to the melting of glaciers and sea ice. Melting glaciers cause an influx of warm
freshwater into the ocean, disrupting the conveyer belt system by blocking the
formation of sea ice.
23 IPCC (2007) 6. 25 NGE (2015).

24 UNEP (2010) 2.
100

Great ocean conveyor belt
Heat release
to atmosphere
Pacific
Atlantic Ocean
Ocean
Indian Warm surface

Ocean current
Cold saline
deep current
Heat release
to atmosphere
WMO UNEP
Figure 7.1: The great ocean conveyor belt 26
Figure 7.1 illustrates the flow of the ocean currents described in this section. It is
important to note that climate change should not be confused with El Niño and
La Niña cycles. These cycles are the two opposite phases of the El Niño-Southern
Oscillation (ENSO) cycle. The ENSO cycle is a scientific term that describes the
variations in temperature between the ocean and the atmosphere. The La Niña
phase is sometimes referred to as the cold phase of ENSO, while El Niño is referred
to as the warm phase of ENSO. These deviations from normal surface temperatures
have a global impact, not only on ocean processes, but also on global weather
and climate. The difference between ENSO-cycle climate change and the climate
change we should be worrying about lies in the fact that ENSO cycles follow a
predictable pattern of occurrence. El Niño and La Niña episodes last from nine to
twelve months and occur every three to five years.27
Causes of climate change

Climate change does not have a single cause, but is the product of various different
environmental impacts that act synergistically. Causes can be natural or human
induced. The factors that induce climate change include temperature changes,
changes in rainfall patterns and humidity, and changes in wind and pressure.
26 NOAA (2015). 27 NOAA (2015).
101

Temperature changes are caused by carbon emissions that trap heat under the
earth’s atmosphere. These heat-trapping gases trap the heat emitted from sunlight
and do not allow it to reflect back through the atmosphere. These carbon gases
are emitted by power-generation activities, various factories, and motor vehicles.28
Power-generation activities are responsible for 24% of emissions, while industry and
transport each contribute to 14% of greenhouse gas emissions. Agricultural activities
contribute 14% to greenhouse gases, as much as is contributed by industry.29
Changes in rainfall patterns include changes in both the intensity and frequency
of rainfall in a specific area.
As explained earlier, climate change can be natural or human induced. Volcanic
eruptions are a good example of natural elements causing climate change. When
a volcano erupts, it spews large quantities of greenhouse gases such as carbon
dioxide and methane. These greenhouse gases build up in the atmosphere. Heat
builds up in the sunshine; this heat is not released by the gases. As the heat builds
up over time, it affects the local and global climate, which in turn has an effect on
plant growth and natural ecosystems.
Human-induced carbon emissions have the same effect, but on a larger scale,
since human activities are so numerous. Livestock, farmed on an agricultural
scale, produce immense quantities of methane gas – a lot more than would
occur naturally. In order to meet human consumption demands, large numbers
of livestock, for example cows, are bred for milk and meat. These unsustainable
agricultural activities contribute to methane gas production on a large scale, which
in turn contributes to global warming.
There are many other examples of human activities impacting on greenhouse
gas emissions on earth. If these emissions are not drastically reduced, the earth
could face devastation.
Impact of climate change

Climate change forces wildlife to adapt to life on a warmer earth, due to changing
weather patterns.30 Normally, these changes would occur over thousands of years
but species are now forced to adapt very quickly or become extinct.
Climate change contributes to deforestation; deforestation contributes to
greenhouse gas emissions and climate change. Forests act as air filters in a certain
sense and are responsible for changing human-produced carbon dioxide into
oxygen.
Rising temperature and changing rainfall and snowfall patterns force trees
and vegetation to move towards the colder polar regions and up mountain slopes.
These shifts undermine much of the work that the conservation community has
accomplished over the years. Traditionally, the natural environment was protected
by using conservancy preserves, local land trusts and national parks. If the face
28 The Nature Conservancy (2015). 30 WWF (2015).

29 Stern (2006) 254.
102

of vegetation changes, animals will try to migrate, but will come up against man-
made borders. Some species will be left without viable habitats, putting much of
our treasured wildlife at risk. Polar bears are the most famous example of this.
Higher temperatures also increase the amount of moisture that evaporates from
land and water, leading to droughts in areas that never previously had a problem
with lack of water. Land affected by droughts is more vulnerable to flooding.
These floods will increase as global temperatures continue to increase. Agricultural
activities will be forced to change since such practices will no longer be viable in
the affected areas. This has already happened in certain areas in Africa and Asia;
the effects can be seen in the changes in water supply, human health and human
activities. These warmer and drier conditions increase the risk of both veld fires
and forest fires. In the western parts of the USA, conifer forests are drying out, due
to decreased snowfall and increased summer temperatures. In South Africa, fynbos
fires in the southern parts of the country have been worsened by longer hotter
summers and a decrease in the traditional winter rainfall.
The effects of climate change on businesses and economies can be felt around
the world. If climate change is threatening the most basic elements of human
life, it is definitely the responsibility of the business environment, as well as of
international governments, to address the issue.
The projected cost of climate change on annual GDP averages 5–10%. However,
if governments acted immediately to reduce the effects of climate change, it would
only cost 1% of annual GDP.
Many industries are unable to continue with business as usual due to the
impacts of climate change. The fisheries industry struggles with species, whose
numbers are threatened by the stresses of heat and growing parasites in oceans, due
to rising temperatures. Rising sea temperatures are also threatening the survival of
coral reefs. These reefs generate billions of dollars’ worth of goods and services.
Ski resorts are often unable to open during ski seasons because of a decline in
snowfall. These businesses cannot even obtain loans to get them through periods
of decreased income, as banks have realised that these businesses may never return
to normal.
Lowering lake and dam levels cause irreparable damage to shoreline
infrastructure and force the relocation of harbours at a cost of millions. Hurricanes
and rainfall are becoming more intense, causing damage to infrastructure and
property that amounts to billions of dollars.
Furthermore, it is the poorest who suffer the most. The impacts of climate change
pose a grave threat to the poorest countries. These developing countries, which depend
on agricultural activities for survival, are already at a geographical disadvantage as a
result of warmer climates and shortages of water. These countries are also plagued by
poor healthcare systems and poor public service systems and are therefore struggling
to cope with the additional current climate challenges they face.31
31 Stern (2006) iv.
103

Although traditionally colder countries will initially see benefits in climate change
through increased crop yields, reduction in heating requirements and reduced winter
mortalities, the long-term damage to infrastructure, the economy and biodiversity
will be irreversible.32
Despite the bleak outlook on the future of the world when taking the impact
of climate change into account, the economic world powers do not have to choose
between the promotion of economic growth and limiting the impact of climate
change. With improvement in power generation and transport technologies, the
future looks less bleak.
Legislation on climate change

The National Environmental Management Act 107 of 1998 (NEMA) forms the basis
of all environmental legislation. With specific reference to carbon emissions, the
White Paper on Renewable Energy focuses on climate change as one of the major
threats facing the environment and introduces the concept of carbon emissions tax
in South Africa.
Carbon emissions tax has been charged since 2015. South Africa is the 11th
biggest polluter in the world; this is very concerning since the South African
economy only makes up 1% of the world’s economy. According to Business Day,
however, South Africa is the 13th most active country when it comes to its attempts
to reduce carbon emissions.33
The Kyoto Protocol was adopted by the United Nations Framework Convention
on Climate Change (UNFCC) in 1997. This protocol was introduced to do more than
merely suggest that industrialised countries should reduce their greenhouse gas
emissions. The protocol commits industrialised countries to reduce greenhouse gas
emissions and has been ratified by 195 countries. The Kyoto Protocol also makes
use of other mechanisms to reduce greenhouse gas emissions by industrialised
countries and has given rise to the phenomenon of emissions training, also
known as the carbon market, which encourages joint efforts between participating
countries to address the issue.34
The countries in the southern part of Africa belong to the Southern African
Development Community (SADC), established in 1992. The SADC member countries
are: Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar,
Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland,
Tanzania, Zambia and Zimbabwe. The goal of this alliance is to increase economic
growth, improve the living conditions of people in the region and support
sustainable development and democratic principles. SADC countries have poor
access to water and many people living in the region suffer from malnutrition.35 As
explained earlier, it is the poorer countries who suffer the most when it comes to
climate change since they are already battling harsher climates. The SADC region
32 Stern (2006) iv. 34 UNFCC (2014).

33 Lester (2013). 35 Chishakwe (2010).
104

is one such example. Not only do the people living in this region struggle with the
HIV/Aids pandemic and child-run households, but they face daily challenges of
water insecurity and malnutrition.
SADC countries have a number of agreements and protocols, as well as
numerous intergovernmental programmes, in place to monitor, mitigate and
support countries with regard to climate change. These programmes include a
Drought Monitoring Centre (DMC) to monitor drought and act as an early warning
system; the Programme for Biomass Energy Conservation (ProBEC), a regional
programme for biomass energy conservation; and the Common Market for Eastern
and Southern Africa’s (COMESA’s) climate change initiative aimed at addressing
climate change in order to reduce the impact it has on a social and economic level.
These are just a few of the intergovernmental projects running at the moment. In
addition, there are numerous civil society projects to assess climate change impacts,
drive alternative energy production, mitigate disasters and support conservation.36
7.5 Business strategies to minimise industry impact

Simply speaking, the best solution for minimising the impact of human activity
on the environment will be to start thinking before acting. Every business and
every individual will need to determine what the threats are over which they have
influence and then take action to put policies, procedures and habits in place to
limit these threats.
For businesses, the first step is to gather as much information as possible from
impact assessments and ecological assessments. Awareness of base-line data and
how measurements change over time is vital. Every organisation needs indicators
to measure their impact on the environment, for example, in the Florida Everglades,
the population of alligators is used as an indicator for the entire ecosystem. If the
alligator population thrives and numbers increase, it is safe to assume that the rest
of the ecosystem is doing well.
In a business context, awareness and education programmes are the best ways
to educate and inform employees and stakeholders.
7.5.1 Pollution prevention

In every step of a product’s life cycle there are opportunities for pollution prevention.
The same can be said for the daily activities of any business organisation, for
example a business can conduct a pollution prevention audit that will produce a
tailor-made report on all the areas where waste can be reduced or eliminated.37
Pollution prevention is the responsibility of everybody in an organisation. All
employees need to be encouraged and their behaviour controlled and rewarded in
order to ensure that they behave appropriately and that this modified behaviour
36 Chishakwe (2010). 37 Crognale (1999) 14.
105

continues. Pollution prevention needs to become part of their daily habit and be
taken into account in all future strategic planning. Pollution prevention should not
just be implemented in the manufacturing processes, but also in administrative
processes and office functions. It is relatively easy to determine the specific actions
that will contribute to pollution prevention; however, the real challenge will be to
ensure consistent pollution prevention by employees.38
7.5.2 Design for the environment

Designing for the environment (DfE) was prompted by stricter regulations. These
regulations forced businesses to take environmental issues more seriously and
be more innovative in all aspects of the manufacturing process. DfE requires
organisations to look upstream in their manufacturing processes and completely
rethink their processes, with the conservation of energy resources and raw materials
in mind. Consuming fewer resources in order to generate less waste is at the heart
of this philosophy. In the process of manufacturing responsibly, businesses also
need to focus on producing goods that are reusable or can be successfully recycled.
Designing for the environment can be divided into the following steps:
1. Evaluate the product life cycle.
2. Determine the goals for the DfE process.
3. Agree on the principles the organisation would like to implement.
4. Implement a life-cycle management system.
5. Develop the DfE process.
Each step in a product’s life cycle, from the acquisition of raw materials to the
disposal of the product at the end of its life cycle, needs to be considered.
The ideal goal of DfE is to attain a balance between environmental concerns,
monetary goals and other stakeholder issues, such as compliance, social issues and
legal responsibilities.39
7.5.3 Benchmarking and strategic design

The ideal way to minimise the impact of business activities on the environment is
to incorporate it in company strategy from the get-go. By analysing the long-term
goals of a business, top management can integrate environmentally responsible
goals into its existing organisational goals. In this process of reflection, a business
can also investigate whether its existing environmental management system is
effective and reflective of its chosen environmental strategy. Once the processes
have been re-evaluated and implemented, the business can use both its historical
performance and its ideal world model, against which to benchmark its performance.
38 Crognale (1999) 15. 39 Crognale (1999) 39.
106

Another part of a business that can make a vital contribution in terms of

environmental responsibility is its human resources department. Incorporating
principles such as work ethic and environmentally responsible decision making
in personnel training will be greatly beneficial to the business in achieving its
environmental strategies. These employees can also be trained in the International
Organization for Standardization’s family of standards, ISO 9000 (quality
management) and ISO 14000 (environmental management) to allow them the
opportunity to gain awareness of environmental and quality issues and where the
business stands in terms of its long-term goals and strategies.40
Once the organisational strategy has been determined and the long-term goals
set in place, it is important to get the business to pull together and commit to
attaining its set goals. Gaining a commitment to addressing environmental issues is
vital. Both the highest levels of management and the lower-level employees need to
be committed and to actively demonstrate this commitment. A letter signed by the
CEO or an annual environmental report can motivate employees towards attaining
the organisation’s environmental goals. Compiling annual reports is mostly
a voluntary gesture, but over the years it has begun to carry more weight with
stakeholders to enable them to see how a business is achieving its environmental
goals. The information contained in an annual report can be used as the benchmark,
against which an organisation will evaluate each consecutive year’s performance.
Other stakeholders, such as customers and suppliers, also attach value to these
annual reports and to the fact that an organisation is working to make a difference
to the environment. Improving product packaging and advertising to reflect the
environmental principles of an organisation could target a whole new customer
base, as well as improve customer retention. Since marketing and sales managers
are more interested in sales figures than in the environment, an environmental
report should also include some of the harder issues such as product sales and
packaging in an effort to win such managers over to more environmentally friendly
business practices.41
7.5.4 Regulatory requirements

It is important to keep up to date with the latest industry-related regulatory
requirements. There are numerous ways of getting hold of these regulatory
requirements, including subscriptions to regulatory boards, attendance of
workshops and conferences and membership of professional bodies. Information
on regulatory requirements is contained in laws and in documents and books on
regulations. Government departments and international organisations such as the
United Nations are a treasure trove of information on anything environmental
and compliance related. Some publishers provide a loose-leaf service, whereby
one can purchase legislation and regulations and, for an annual subscription fee,
receive any updates. In South Africa, the two biggest providers of this service are
40 ISO (2009). 41 Crognale (1999) 156.
107

the publishers LexisNexis and Juta & Co. Newsletter subscriptions will provide up-
to-date information and inform subscribers of pending and possible changes in
regulations and legislation.
Voluntary compliance to non-compulsory regulations shows even more
commitment towards environmental issues and provides business with the
opportunity to stay ahead of regulatory requirements. Instead of businesses being
taken by surprise by new requirements, and spending a lot of money on meeting
these requirements, organisations can anticipate these regulations and implement
them in a timely fashion. It is also important to aim at exceeding expectations,
instead of just meeting the set minimum requirements to the letter. This principle
needs to be applied to all business units in an organisation. The focus should not
simply be on compliance or on quality, but also on the people within the organisation
doing things correctly and understanding why it needs to be done that way.42
7.5.5 Root causes approach

A thorough audit of a business’s EMS will reveal some of the root causes of the
problems the organisation faces. These audits provide organisations with the
information they require to make the changes necessary for their environmental
goals to succeed. The root cause approach is aimed at fixing the core issue and
not simply fixing the symptoms. For example, if waste is not properly stored and
disposed of, the process that produces the waste needs to be investigated and
the employees involved should be trained to manage hazardous materials more
responsibly. Simply fixing messes after they have been made will not solve the
problem in the long run. Being able to address root causes will be well worth the
money a business needs to spend on conducting an environmental audit.
7.5.6 Training and development and awareness

Training and development is vital to an organisation’s success in addressing
environmental issues, as is awareness. Employees need to be aware of the proper
usage, storage and disposal procedures for each hazardous substance they work with.
But environmental training requires more than simply awareness and training in
hazardous substances. All employees need to be aware of emergency procedures and
how to take the correct preventative measures, so that these emergency procedures
will not be necessary. Employees should receive training in both hard skills, such
as training associated with dealing with hazardous materials, as well as training in
soft skills, such as environmentally responsible decision making. If an organisation
has a philosophy of simply complying with the minimum requirements, this attitude
will be reflected in its employees. However, if an organisation has an attitude of
exceeding minimum compliance regulations and behaving in a manner that is
environmentally responsible, this attitude will also be conveyed by its employees.
42 Crognale (1999) 388.
108

7.5.7 PDCA
The PDCA-cycle, also known as the Deming cycle, has already been discussed in
previous chapters. The Plan-Do-Check-Act cycle is a common problem-solving
technique that was developed in the 1930s. The PDCA-cycle is also applied in ISO
14001. This cycle provides a business with a systematic system on which to base
its decision making, thereby structuring that organisation’s information gathering,
implementation and decision making to maximum efficiency.43 Consult Chapter 5
for details on this vital part of environmental management.
7.5.8 Reducing greenhouse gas emissions

There are four ways to reduce greenhouse gas emissions:44
1. Reduce the demand for emissions-intensive products and services.
2. Increase the efficiency of manufacturing processes that are financially
efficient and that reduce emissions.
3. Reduce deforestation and other human activities that indirectly impact on
greenhouse gas emissions.
4. Focus on technologies that are more environmentally friendly and emit fewer
greenhouse gases. These low-carbon technologies can be implemented at any
stage of the manufacturing and supply chain process.
Initially, the cost of reducing greenhouse gas emissions may be exorbitant, but
this is outweighed by the long-term benefits of taking global warming and climate
change seriously.
7.6 Conclusion
South Africa is currently experiencing a situation of increased demand for
decreasing resources. Population growth and technology has led to a situation
in which the rate of consumption and the resulting pollution is increasing at an
alarming rate. More people need more food and more space; the more advanced
a society is, the more advanced their needs are. This in turn threatens the natural
order of things. Natural resources such as air, water, soil, fossil fuels, minerals, and
living organisms are threatened. This cycle needs to be broken in order to make
growth more sustainable. Minimising the impact of industry and agriculture on the
environment starts with one person – you. Everybody can make a difference by
making better choices and living with greater environmental awareness.
At the level of policy establishment, world economic powers need to focus on
reducing emissions by taxing carbon emissions, introducing policies that support
the development of clean technologies and making these behavioural changes as
easy as possible.
43 Crognale (1999) 136. 44 Stern (2006) ii.
109

All business strategies to minimise industry impacts require a champion inside the
organisation to drive these new ways of thinking and of doing business. Anybody
with a passion for the environment can be that champion and help to change the
world.
Review questions
1. Explain the concept of biodiversity and its importance.
2. List the elements of the environment that are impacted by industry.
3. List the differences between natural ecosystems and agroecosystems.
4. Sketch the great ocean conveyor belt and explain its importance in the
climate system.
5. Explain the concept of greenhouse gas emissions.
6. Discuss any two business strategies to minimise industrial impact on the
environment and explain how you would implement these strategies in your
organisation.
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Chapter Eight
Integrating environmental management with the
business environment
JH Wynand Louw and Leonie B Louw
Learning Outcomes
• briefly explain and depict the business environmental model
• describe the components of a micro business environment
• explain the impact of environmental issues on the micro business environment
• discuss the management of the impact of environmental management issues
• describe the components of a market business environment
• motivate turning environmental management challenges into business
opportunities
• describe components of a macro environment
• briefly discuss global environmental management disasters as long-term
consequences of globalisation policies.

This chapter provides an overview of the integration of environmental management
with the business environment. A discussion of the business environment provides
insight into the impact of environmental management policy on the micro business
environment, market business environment and macro business environment
respectively.
8.1 Introduction
The goal of this book is to teach students environmentally sound management
principles. The term environmentally sound management was first used in the
National Environmental Management: Waste Act 59 of 2008, with specific focus
on the management of waste. Here the term is applied to all management activities.
Environmentally sound management is the taking of all practicable steps to ensure
that business activities are managed in a manner that will protect people’s health
and the environment. In order to manage a business in an environmentally sound
manner, the business environment should first be understood.

8.2 The business environment model

The business environment can be divided into three general environments, namely:
the micro business environment, the market business environment and the macro
business environment. This chapter focuses on these three environments and their
importance from an environmental management perspective.
Macro environment
Market environment
Micro environment
Figure 8.1: The business environment model
As illustrated in Figure 8.1, the macro environment encompasses both the

market and micro business environments. The components of the macro business
environment are those that a business has no control over, although these factors
have a direct impact on the business.1 These components include the technological
environment, economic environment, politico-legal environment, demographics
and cultural environment, international environment and the ecosystem.2 The
market environment consists of a business’s customers, competitors, intermediaries,
supplies and labour force.3 This environment impacts on the business; the business
in turn impacts on the market business environment.
The micro environment is the smallest of the three business environments.
Both the macro and market business environments impact on the micro business
environment. The micro business environment consists of everything over which
a business has control. This includes the vision and mission of the business, the
individual business functions and the resources that a business has.
Just as the business environment can be divided, environmental issues can also
be divided into local, regional and global issues. The different levels of environmental
issues need to be addressed at different levels of the business environment.
1 Erasmus et al (2013). 3 Botha & Musengi (2012).

2 Botha & Musengi (2012).
114

Eight: Integrating environmental management with the business environment
In responses to environmental impacts on a global scale, countries have signed

conventions and protocols. On a local and regional scale, the response to
environmental threats takes the form of legislation and financial incentives.
Legislation translates the protocols that were signed at an international level into
measurable and enforceable rules, aimed at protecting the environment. Even before
these protocols have been translated into law, businesses can comply by adhering
to the environmental standards compiled by the International Organization for
Standardization (ISO).
Financial incentives for businesses are achieved in the form of tax cuts.
Businesses which achieve certain environmental standards and make use of
sustainable, environmentally friendly technology will not be liable for additional
emissions taxes. Individuals have received tax breaks when they purchase greener
cars since the implementation of emissions taxes on new car purchases.
8.2.1 Business and the environment

Most businesses in South Africa are registered as closed corporations under the
Close Corporations Act 69 of 1984, or as private companies, under the Companies
Act 71 of 2008. Before businesses were regulated by legislation, they started out as
sole proprietors who traded the goods they produced for other goods or, later on,
for money. As the population grew, so did the size of businesses required to provide
the necessary goods and services. Businesses, driven by population growth, grew
into the global economic systems we know today. The industrial revolution brought
with it a mechanisation of production systems, replacing animal and human labour
with machinery. Processes that were driven by wind and water energy, such as
milling plants, were also replaced with machinery. Machinery was first driven by
coal and fire and later on developed into electricity-dependent processes.
Businesses exist because shareholders perceive value in such enterprises. The
goal of any business is to provide products or services in exchange for profit. When
businesses prosper, all stakeholders are supposed to gain from their prosperity.
Stakeholders include shareholders, employees, clients, suppliers and the surrounding
community. Clients share in the prosperity of a successful business when prices are
more competitive and products are of a higher quality. Shareholders gain a profit,
not only for today but also the foreseeable future. Suppliers gain the continued
business from such a profitable business venture and communities surrounding the
business will see an improvement in their standard of living.
However, we are currently facing a situation in which business development
has not been managed sustainably; this situation has been exacerbated by
globalisation. While Friedman postulated in 1970 that the concern of business was
not with social or political issues, but only with the goal of maximising profits,
this has since been proven to be untrue.4 Although many businesses still continue
as though this statement is absolute, the truth is that everybody is responsible
4 Friedman (2013).
115

for implementing sustainable business practices. This is proven by the growing

recognition of the King reports and the stricter legislation that follows in their
wake. All major organisations now include corporate social responsibility as part
of their annual reports.
8.3 Environmental management and the micro business environment

As explained in the introduction, the micro business environment is the part of a
business environment over which an individual business has the most influence
or control. The micro environment influences the market and macro environments
to a limited extent, but is greatly influenced by factors in the market and macro
environments. In short, the micro business environment consists of the business
functions of an individual business, as well as the resources within that business’s
control.
8.3.1 Components of the micro business environment

According to Van Zyl et al,5 a micro business environment consists of the following
business functions:
• General management. General management activities include all activities
that are conducted to oversee and direct all the other business functions
that will be discussed in this chapter. Traditionally these activities
include planning, organising, leading and controlling activities. From
an environmental management perspective, such activities are divided
according to the Deming Wheel: Plan-Do-Check-Act. The principle behind
both these thought schools is similar, as are the eventual goals that these
activities aim to achieve. Environmental management systems use the
terminology as it appears in the Deming Wheel so it will be beneficial for
managers to understand this cycle in order to better implement changes in
the organisation. Leadership and management skills form an integral part of
general management functions.
• Operations management. Operations management focuses on activities that
allow a business to supply customers with products and services. Operations
management involves activities such as the design of products and services,
the delivery of such services, the manufacturing of products, planning for
demand, and designing production systems.
• Administrative management. The main goal of administrative management
lies in the administration of information. Information is recorded, analysed
and reported. Office management also falls under the responsibilities of this
management function.
5 Van Zyl et al (2012).
116

• Marketing management. Marketing management can be summarised as

providing the right products at the right price to the right people. The main
focus of marketing management is the achievement of customer satisfaction
by balancing customer orientation, profit orientation, systems orientation
and social responsibility.
• Human resources management. Human resources management is responsible
for everything that has to do with personnel. Appointments, training,
payment and retention of personnel all fall under this management function.
Human resources management is responsible for placing the right people in
the right positions.
• Financial management. The financial management function is responsible for
all financial activities within a business. Financial management determines
the best price to ask for a product in relation to the costs involved in
production, marketing and selling these products. This function manages
cash flow and asset acquisition. It provides management with projected
earnings as well as projected costs.
• Purchasing and supply chain management. All businesses require resources in
order to deliver their products and services. The purchasing function focuses
on determining the resources needed, the acquisition of such resources, and
negotiating with suppliers of such resources. These purchases range from
regular perishables to larger, more expensive purchases. Any management
functions that are contracted out to external suppliers also fall under the
responsibility of purchasing management.
• Public relations management. Public relations management is a vital function
relating to the public view of a business. All communications to the public
should be either written or reviewed by the public relations manager. The
public relations manager builds relationships with many of the community
stakeholders, making it easier to communicate information about the
business to the public.
The next section discusses each of these business functions in terms of how they
relate to current environmental issues.
8.3.2 Impact of environmental issues on the micro business environment

Environmental management issues that have come about due to unsustainable
business practices have forced businesses to change their policies and practices.
These environmental issues include the scarcity and pollution of fresh water, food
shortages, soil erosion and soil pollution, desertification, climate change, and the
decline of wetlands, coral reefs and natural ecosystems. Socio-economic issues,
such as overpopulation, unemployment, lack of access to safe water, food and
sanitation services, and unpredictable power supply have also led to unsustainable
business practices.
117

• General management. As stated earlier, leadership and management skills

form an integral part of general management functions. This means that
the capacity to lead employees and other stakeholders to more responsible
business practices lies within this management function. Managerial skills,
such as technical, interpersonal, conceptual, diagnostic, communication,
decision making and time management skills will all help to transform the
way that business is conducted.6
• Operations management. Environmentally responsible business practices
will increase awareness, reduce safety and environmental hazards and
thereby lead to a significant decrease in operational risk faced by operations
managers.7 Since operations management is responsible for so much of the
manufacturing and service delivery processes, this management function
exerts a lot of control over more responsible business practices.
• Administrative management. Administrative management is responsible for the
administration of information. Information can be administered in ways that
are paperless and more environmentally friendly. In service businesses, office
management could be the one function that will have the greatest impact.
• Marketing management. In terms of environmental management, marketing
management is responsible for marketing socially acceptable products.8
The main focus of a business cannot simply be on the maximisation of
profits. A business organisation forms part of a larger community, and
has a responsibility to the community. This responsibility extends to all
stakeholders, as well as to the environment. Socially responsible marketing
means that a business will not engage in business practices that are harmful
to the environment.
Green marketing is an excellent example of socially responsible marketing
management.9 The steps that a business takes in producing more environmentally
friendly products can be used as part of their marketing campaign. This includes
making use of recycled materials or supporting environmental rehabilitation
projects. Eco-labelling forms part of green marketing and is discussed later in
this chapter.
• Human resources management. Having the right people in the right positions
is especially vital if a business aims at implementing more environmentally
responsible business practices. Appointing managers and employees, whose
ethical values do not align with environmentally sustainable business
practices, is counterproductive. The down side of environmental awareness
is the cost involved in retraining all employees and management to be more
responsible and aware. Environmental policy changes need to be included in
employee training in order to increase their awareness.
6 Van Zyl et al (2012). 8 Van Zyl et al (2012).

7 World Bank Institute (2008). 9 Van Zyl et al (2012).
118

• Financial management. The financial management function will be able

to determine the long-term financial benefits of more sustainable business
practices. This management function will also be able to estimate the losses
that will occur in the event of non-compliance. Although a business may
choose to simply continue with its existing business practices, it is important
to first consult the financial manager in order to determine what the cost
implications to both the business and other stakeholders are. This can then be
compared with the projected savings that environmentally friendly business
practices can incur, in order to substantiate the decision to conduct business
in a more environmentally responsible manner. A business with a proven
track record of environmentally responsible behaviour will have easier access
to capital, since many financial institutions and even competitors prefer
partnering with such businesses.
• Purchasing and supply chain management. Purchasing managers have a
lot to do with the resources procured for use within an organisation, as
well as with the suppliers of these resources. It is within the power of this
management function to ensure that resources are procured in a sustainable
manner from sustainable sources, as well as pressuring suppliers to be more
environmentally responsible.
• Public relations management. It is the responsibility of the public relations
manager to ensure that the organisation has a positive public image, that
environmental achievements are communicated to all stakeholders and that
they form part of the business’s marketing campaign. It is also the responsibility
of the public relations management function to deal with any fallout from
environmental transgressions. This is not an easy issue to deal with and has
caused the downfall of multinational companies. It is therefore advisable to
avoid situations that expose businesses to negative environmental publicity.
8.3.3 Managing the impact of environmental management issues on business

activities
The impact of environmental management issues on business activities is managed
through management systems and integrated environmental management (IEM)
practices. The Department of Environmental Affairs has published extensively on
this topic; this information can be accessed from the DEA website.10
Businesses on the Dow Jones are rated according to their sustainable practices
and these ratings are recorded on the Dow Jones Sustainability Indices. The Dow
Jones Sustainability Indices, launched in 1999, analyses a collection of economic,
environmental and social factors. Every year the companies listed on the Dow
Jones Sustainability Indices are measured according to set standards and the list
changes annually.11 The United Nations has also added sustainable environmental
10 http://www.environment.gov.za. 11 RobecoSAM & S&P Dow Jones Indices (2014).
119

practices to its millennium development goals (MDGs), in addition to the alleviation

of poverty.
Environmental indicators are another way of managing the impact of
environmental management issues on business activities. Almost anything can be
used as an indicator. In an office environment, it could be as simple as measuring
paper consumption and endeavouring to reduce this aspect. The usage of paper can
be compared on a weekly, monthly or annual basis and the endeavour to reduce paper
consumption can be incentivised to encourage employees to work more sustainably.
Other office-related measures could be recycling practices (distinguishing between
paper, glass and foods), cartridge consumption, cartridge and consumables disposal,
and reducing power usage. Other environmental indicators work on the same
principle, although on a bigger scale. These environmental indicators include: carbon
dioxide (CO2) emissions, chlorofluorocarbon (CFC) consumption, sulphates and
nitrates emissions, waste generation, municipal waste per capita, freshwater quality,
water usage, fish production, energy supply per capita, and threatened species.12
Policies and audits

It is vital to create a social responsibility and environmental policy for a business.
The process of writing such a policy will afford business owners and stakeholders
the opportunity to take a closer look at current business practices and decide how
this will change in the future, in order to make their business more sustainable and
environmentally friendly.
Business organisations may also need to hire an auditing firm, which can
analyse their business in terms of its applicable standards (such as ISO 14000) and
assess what can be done to make that business more environmentally friendly.
In the end, these environmental management tools can be used by businesses
on a micro environmental level to make their products and waste more recyclable,
to prolong the life cycle of products produced, and to reduce the inputs, energy
and harmful waste.
8.4 Environmental management and the market business environment

The market business environment is divided into four components: consumers,
suppliers, intermediaries and competitors. The market environment influences
the micro business environment to a great extent and is influenced by the micro
business environment to a lesser extent. The macro business environment,
however, influences the market environment to a greater extent. This means
that environmentally related decisions and movements that occur in the market
business environment will cause changes that will directly impact on the decisions
that businesses need to make in order to survive.
12 OECD (2008).
120

8.4.1 Components of the market business environment

Consumers
The green consumption movement encompasses aspects such as environmental
labelling, re-using shopping bags or finding other uses for them, eating fresh organic
foods and supporting local businesses to minimise the impact of transporting goods.
The green consumption movement aims to illustrate that consumers do have power
and by making more environmentally friendly choices, they are exerting that power
and slowly changing the impact human activity has on the environment. Green
consumption should be more than just a passing trend; it should become a lifestyle
of making choices that are good for the earth. Businesses, which advocate green
consumption and practice the principles of sustainable environmentally friendly
business practices, should market these aspects of their business to consumers since
it may be one of their most sought-after assets.
Competitors
Competitors operate in the same market environment as a specific business, and
provide the same or similar products and services. Competitors influence the quality
of a product or service, as well as the price at which these can be sold. Businesses
operating in the same environment compete in terms of the quality of their products
and services, the price at which these are offered, the resources available to
produce these products, the intermediaries selling their products and the consumer
market, which has limited spending power.13 The competitive environment directly
influences a business’s strategic planning. Businesses in the same market can also
compete in terms of their environmentally responsible business practices.
Intermediaries
Intermediaries play a vital role in bridging the gap between manufacturers and
consumers. Intermediaries include insurance brokers, bankers, wholesalers and
retailers.14 One of the greatest changes that has occurred in the intermediaries’
environment is the prevalence of online shopping and to a certain extent, the
monopoly that certain retailers have in this industry.
Suppliers
Suppliers provide a business with the resources required to deliver products and
services to its consumers. These resources include raw materials, capital and labour.
The quality of products and services provided by a business greatly depend on the
quality of input received from suppliers.15 This is why supplier relations are so
important.
13 Erasmus et al (2013). 15 Erasmus et al (2013).

14 Erasmus et al (2013).
121

Environmental issues have forced businesses to manage their supplier relations

differently. It is important for businesses to choose their suppliers wisely. It stands
to reason that the greener the supplier of raw materials and products is, the greener
the end product or service will be. It is important to ensure that suppliers have
an environmental impact and sustainability policy in place, or at the very least, a
social responsibility policy. Merely having such a policy, however, does not mean
that these intentions are translated into practice. It is important for a business to
ask questions and get to know a supplier if it is serious about managing the impact
of environmental issues.
8.4.2 Impact of environmental management issues on the market business

environment
Most business activities impact on the environment. In production activities,
businesses consume raw materials, use natural resources, and contribute to pollution.
Business operations impact on the quality of the environment’s surrounding areas
and on the quality of life of the surrounding communities.
Businesses tend to only comply with environmental issues as far as is essential
for their survival. This has forced regulations and legislation to become stricter.
According to King III and the Companies Act of 2008, owners and directors
of businesses can be held personally liable for environmental and social
transgressions. These steps were introduced because of the nonchalance with which
environmentally harmful business decisions were historically made.
8.4.3 Turning environmental management challenges into business

opportunities
If businesses are able to implement a more holistic approach to their business
practices, they will become the trendsetters of their industry. ‘Cradle-to-grave’ means
that businesses look at a product’s life cycle from the time of conception to the
disposal of that product by the customer. Taking this one step further, the business
can approach this from a ‘cradle-to-cradle’ point of view where the business takes
responsibility for a product’s sustainability from the time of conception, beyond
the point of disposal, to recycling, reusing or upcycling. This holistic approach to
business practices will increase a business’s competitiveness and customer retention
and encourage suppliers to follow the same approach to their business activities.
Facing environmental management challenges affords a business the unique
opportunity to change their image within the community. Consumers, competitors,
intermediaries and suppliers form part of this community. Many businesses claim
that they are environmentally responsible and sustainable; however, a business
which acts on these claims will attract more customers, increase its competiveness
and therefore be more successful. Standards and regulations are not a punishment
to force compliance. They should rather be viewed as an opportunity to increase
competitiveness and market share by following marketable business practices.
122

When investigating the opportunities that environmental challenges present, a

business should conduct an environmental self-assessment.16
Environmental self-assessment
1. Identify the environmental issues affecting your company.
2. Identify existing environmental activities (such as recycling programmes,
energy-efficient practices, partnerships with suppliers, competitors,
intermediaries and surrounding communities).
3. Identify environmental short-falls. Is there an environmental policy in
place; is this policy being implemented via an awareness programme; is
environmental awareness an integral part of daily business activities; and are
environmental achievements documented and communicated/marketed?
4. Assess your organisation’s capabilities.
5. Assess your organisation’s resources.
After completing the environmental self-assessment and deciding on a course of
action, it is important to make the suggested changes and to regularly report back
to not just management, but to all stakeholders.
8.5 Environmental management and the macro business environment

The macro business environment exerts influence on both the market business
environment, as well as on the micro business environment.
8.5.1 Components of the macro business environment

The macro business environment comprises the economic, technological, social,
physical, institutional and international environments.
Political and institutional environment

In the political and institutional environment, environmental governance is achieved
through command and control. Command and control tools include permits, licences,
environmental standards and audits. The good thing about command and control
tools is that there are consequences to non-compliance, which include restraining
orders, prosecutions, penalties and fines, and criminal prosecution. Command and
control as an environmental governance tool is based on the evaluation of actual
performance against the standards set in laws and regulations. The disadvantage of
command and control tools lies in its inflexible nature. Businesses may decide to
continue their harmful manufacturing practices at the risk of a fine, since the fine is
16 World Bank Institute (2008).
123

much less than the loss of income they face if they change their business practices.
This will continue to be true until the applicable legislation is updated to penalise
violators with more realistic fines and penalties.
There are many laws in the political and institutional environment which are
used as governance tools to enforce environmental governance. South Africa has
been working to make environmental legislation as comprehensive as possible. The
next challenge in the governance process lies in the enforcement of this legislation.
In the South African political environment, as with many other countries,
politicians tend to make many promises in order to gain support and votes.
Unfortunately, many of these promises of environmental reform do not come to
pass after votes have been cast.
Economic environment
Environmental governance tools used in the economic environment consist mostly
of market-based and fiscal instruments. These tools include pollution taxes,
tradable permits, trade restrictions imposed on businesses and countries which do
not comply, encouragement of green purchasing, adjustment of pricing policies,
tax concessions, and carbon emissions taxes, to name but a few. These incentive
and disincentive instruments allow for greater flexibility than can be gained with
command and control tools. They also act as a source of income for the government
and are more cost effective to implement.
Robbins et al17 discuss macro environmental solutions to environmental
management problems, describing green taxes as the most direct method of
influencing the way business is conducted. Green taxes directly increase the price
of goods and services, with the intent of forcing businesses and consumers alike to
make more sustainable choices.
Social environment
The social environment includes many of the factors that play a role in consumers’
consumption habits. These include demographics, education, urbanisation,
awareness of consumer rights, the social responsibilities of a business, business
ethics and culture.18 Many of these factors have already been discussed; ethics will
be discussed in more detail in the next chapter.
In the social environment, environmental governance tools are based on civil
instruments. These civil instruments include:
• eco-labelling, where manufacturing information is included on the packaging
of a product (eco-labels indicate whether a product was manufactured in
an environmentally friendly manner, whether it is recyclable and if the
packaging is biodegradable)
• public participation processes
17 Robbins et al (2010). 18 Erasmus et al (2013).
124

• civil legal action

• consumer education (there is a big movement to support products that are
manufactured in an environmentally friendly manner, to consume foods
that are organically produced and to encourage consumers to be more
environmentally friendly)
• social impact assessment, either as a part of environmental impact
assessments or as an assessment on its own.
Physical environment
The physical environment includes the following elements: population, health of
this population, food and water, energy, climate and biodiversity. It is vital to
take these elements into consideration when making environmentally responsible
business decisions. The physical environmental factors present both opportunities
and threats and these need to be assessed by businesses to help them survive.
International environment
The international environment provides an even larger arena of opportunities and
threats that exert an influence on a business.19 Environmentally aware businesses
will find a foothold in international markets if they comply with and even exceed
international standards.20 An exemplary reputation will open doors to businesses
in the international arena.
Technological environment
Conducting business in an environmentally responsible and sustainable manner
contributes to innovation.21 New technologies are needed to enhance business
profitability while conducting business in a sustainable manner. Technological
advancement has brought the world to where it is today. Improved healthcare,
manufacturing processes and communication are all results of technology. The
next wave of technological advancement should be focused on protecting the
environment and on more sustainable business practices and living conditions.
8.5.2 Global environmental management incidents

All environmental disasters have an impact. This is even more so with global
environmental disasters.
In 2010 an oil rig exploded, releasing millions of barrels of oil into the Gulf of
Mexico. Although this explosion occurred in April, the oil well was only capped
three months later. The BP oil spill resulted in extensive damage to kilometres
of coastlines. BP budgeted $42 billion for the clean-up expenses, penalties and
19 Erasmus et al (2013). 21 World Bank Institute (2008).

20 World Bank Institute (2008).
125

damages. The court cases and damage determination has, to date, not been
completed, but it would seem that the estimated $42 billion will not be nearly
enough to cover class action payouts, penalties and civil trials.22 This international
incident received greater media coverage and harsher penalties because, although
it was the largest disaster of its kind, it was not the first disaster of this kind and
people nowadays are less tolerant of negligence that leads to environmental harm.
Lead pollution in Guangdong, China, killed 160 children in 2012. These emissions
came from factories in the area that poisoned the air, water and food consumed
by people. Heavy metal poisoning has the greatest harmful effect on children;
even if they survive, they may be plagued by mental and physical disabilities. This
incident was preceded by numerous incidents of non-lethal poisoning, calling for
worldwide action against heavy metal emissions.23
These cases illustrate that environmental disasters occur on a global scale
and these international events influence local legislation and regulation in many
countries. These events also influence public opinion to a great extent and show
that the public is becoming more informed and has a lot less patience with
environmental disasters.
8.5.3 Globalisation and global environmental disasters

Globalisation is an economic phenomenon that has impacted greatly on the
environment. Economic activities have gone global in order to cut costs and
streamline processes. The world is a long way from the small communities who
provided for themselves and only produced what was needed. Today, businesses are
producing goods and services to export on a global scale. Unfortunately this has
increased pressure on the environment on a global scale. The world’s population has
grown exponentially, increasing the waste generated on a global scale. This would
be bad enough, but with the advancement of technology and civilisation, the waste
that is produced has become less biodegradable and more toxic. More people need
more space to live and they need more jobs, which in turn requires more resources.
Globalisation has caused a decline in fresh water through irresponsible
agriculture, aimed at food security. Agricultural practices and waste production
threaten the quality of water that is available.
In a global environment there is a greater demand for energy. The processes
of producing more energy have greatly increased greenhouse gas emissions and
pollution, which has contributed to the climate change crisis the world faces today.
The global tragedies mentioned above can all be traced back to the phenomenon
of globalisation in one way or another. If globalisation is causing global disasters,
it should call for global solutions to environmental issues and global collaboration
to implement these solutions.
22 Reuters (2014). 23 Reuters (2012).
126

8.6 Conclusion
Environmental management is an aspect of the global business environment that
can no longer be ignored. The impact that environmental issues have on the micro
business environment provides both challenges and opportunities. These challenges
need to be planned for at all levels of business functions in order for businesses to
survive in the long term and prove to be sustainable.
Review Questions
1. Define environmentally sound management.
2. Depict the business environmental model and its major components.
3. Depict the components of the micro business environment.
4. Discuss the impact of environmental management issues on each of the
micro business environmental components.
5. Depict the components of the market business environment, including a
summary of the most important aspects of each component.
6. Briefly explain the contribution of globalisation towards environmental
disasters. Give an example.
References
Botha, S & Musengi, B. 2012. Introduction to business management: Fresh
perspectives. London: Pearson.
Erasmus, BJ, Strydom, JW & Rudansky-Klopper, S. 2013. Introduction to business
management. 9th ed. Cape Town: Oxford University Press.
Friedman, J. 2013. The blog: Milton Friedman was wrong about social responsibility,
6 December 2013. Available: www.huffingtonpost.com/john-friedman/milton-
friedman-was-wrong_b_3417866.html.
OECD. Organisation for Economic Co-operation and Development. 2008. Key
Environmental Indicators. Paris: OECD Environment Directorate.
Reuters. 2012. China lead pollution poisons 160 children: report. Available: http://www.
reuters.com/article/2012/03/04/us-china-lead-posion-idUSTRE82303F20120304.
Reuters. 2014. Timeline: BP oil spill litigation at a glance. Available: http://
www.reuters.com/article/2014/09/05/us-bp-gulfmexico-ruling-timeline-
idUSKBN0GZ2LX20140905.
Robbins, P, Hintz, J & Moore, SA. 2010. Environment and society: A critical
introduction. Hoboken, New Jersey: Wiley-Blackwell.
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RobecoSAM & S&P Dow Jones Indices. 2014. Results announced for 2014 Dow
Jones Sustainability Indices Review; DJSI celebrates 15 year anniversary. Press
release. Available: http://www.robecosam.com/images/140911-djsi-review-
2014-en-vdef.pdf.
Van Zyl, J, Van Noordwyk, A & Du Toit, R. 2012. Business functions: An introduction.
Cape Town: Juta Publishers.
World Bank Institute. 2008. Managing environmental and social impacts of local
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128

Chapter Nine
Ethics of environmental management
JH Wynand Louw
Learning Outcomes
• define ethics
• briefly explain the relationship between ethics, religion, etiquette and laws
• discuss the development of environmental management ethics
• differentiate between intrinsic values, instrumental values and prudential values
• discuss the concept of sustainable development
• define the concept of business ethics
• explain how environmental ethics should influence business policy
• link moral and cultural values to the application of ethics to lifestyle decisions.

This chapter provides an overview of ethics in general, as well as a more focused
view on environmental ethics and environmental management ethics. The chapter
then discusses business ethics and the role of environmental ethics on business
policies. Finally, there is an overview of moral and cultural values and the
application of ethics to lifestyle decisions. The goal of this chapter is to provide
students with the knowledge and tools to enable them to make ethical decisions in
both their personal and business environments.
9.1 Introduction
Dealing with environmental problems is complex, diverse, uncertain, and multi-
faceted. These problems affect multiple participants and role players. Interacting
with these multiple role players demands transparent decision making that is
flexible to changing circumstances. The decision making should embrace a diversity
of knowledge and values.
As people become aware of their environment, participation in these decision-
making processes is regarded as a democratic right. This right is enshrined in the
United Nations Economic Commission for Europe’s 1998 Arhus Convention. This
democratic right is also instilled in the Constitution of the Republic of South Africa,
1996, in Chapter 2, s 24, which deals with the Bill of Rights. The following is an
extract from the Bill of Rights:

ENVIRONMENT
You have the right to a healthy environment.
You have the right to live in a protected, healthy environment.
Ethics and ethical codes are a part of today’s professional environment. These
codes and principals can be found in almost all fields of study, with environmental
management being no exception.
Stakeholder participation has progressed through a series of recognisable phases
throughout the years:
• Awareness raising in the 1960s was the order of the day.
• The incorporation of local perspectives in data collection and planning
occurred in the 1970s.
• The development of techniques in the 1980s that recognised local knowledge,
such as farming systems research and participatory rural appraisals, took place.
• An increase in the 1990s in the use of participation as a norm, with the
sustainable development agenda of the UN Conference on Environment and
Development (UNCED), occurred.
• Finally, there has been a growing consensus over what constitutes best
practice by learning from the mistakes and successes in history.
The integration of environmental management into the modern management of
business is a very young science and was assisted in its accomplishments by the
introduction of the King reports1 which were discussed earlier in this book.
9.2 Ethics of environmental management

Ethical questions are often raised in the areas of ecological research, and
environmental and biodiversity management. The questions include issues such
as responsibilities and duties to the scientific community and the welfare or use
of research animals. Lately, questions have also been asked about inter-species
communication and interaction. Many people are asking questions regarding our
ecosystems and the abuse or use by businesses.
There is no simple way to deal with these questions. They remain a challenge
because most of the role players do not have an established field of expertise, with
a support network that is focused mainly on the environment to guide them in
making ethical decisions.
Some insight is provided into environmental values and the duties these impose
on humans through environmental ethics. There is a long-standing tradition of
ethical values and decision making in the broader scientific community, especially
in the field of medical ethics, perhaps because it deals with human interactions.
1 IoDSA (2009).
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Nine: Ethics of environmental management
Most other disciplines have not considered many of the common responsibilities
and obligations that are relevant to their field of expertise. Many universities
and colleges, as well as professional bodies, now require a component or subject
relating to the field of ethics.
There is a need to bring together people across disciplines, such as ethicists,
religious leaders, scientists, and managers in the fields of biodiversity, environment
and business. There are a number of cases that illustrate the types of ethical questions
faced by researchers, and managers in the areas of biodiversity, environment and
business practices.
From a management perspective, we can draw on the ethical traditions in
the animal and environmental research fields. As said earlier, there is a strong
ethical tradition in hospitals and research centres in the fields of bioethics and
medical ethics. Scientists and doctors often consult directly with ethics committees
or qualified bioethical personnel before making any ethical decisions, especially
where there are no past historical decisions in this regard.
Bioethics and medical ethics provide a recognised forum for the discussion
of ethical issues. This is seen as one of the more established scholarly areas of
research. These discussions regularly yield many new research findings; support
networks also exist to assist researchers, doctors and scientists in making practical
ethical decisions.
9.2.1 Ethics defined

Ethics in the scientific community is largely considered as a branch of philosophy.
The early philosophical fathers held many debates and much has been written on
the topic of ethics. Yet it seems that people still battle between the concepts of good
and evil, and right and wrong.
How then can ethics be defined? A definition of ethics could include the following
aspects:
• It is a methodical study of morality and human behaviour.
• It is the concepts on which society’s morality is based, namely moral codes
and basic beliefs.
• Ethics can be viewed as the science of morals in human conduct.
• Ethics can be said to be entrenched in what a particular society defines as
acceptable behaviour.
What people perceive as ethical values may therefore vary drastically between
societies. What may be acceptable in one society may not be acceptable in another.
Ethical values are found in most societies in the world. There seems to be a basic
set of common beliefs among various cultural and religious groups. Most societies
in the world would, for example, find murder unacceptable.
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The terms moral (mores) and ethics (ethos) come from Latin and Greek respectively.
Some philosophers believe that morality refers to the customs, practices and
principles of cultures or of people. Ethics is said to refer to the domain of morality.
Moral or ethical values can be judged by measuring the good or bad, (or right
or wrong), in human character, behaviour and decisions. This is based upon
accepted societal rules, laws and regulations. All societies have standards of human
behaviour that are regarded as acceptable or unacceptable; these standards portray
the dominant feelings of a particular culture about various ethical issues, such
as abortion, human sacrifice, animal sacrifice, prostitution, animal rights, war or
issues relating to business practices.
What may be deemed moral to one person, culture or society may not be
deemed moral by another person, culture or society. Reflect for a moment on some
crucial differences in your circle of friends or colleagues. In our modern day life
some of these rules of acceptable behaviour might seem out of date or unnecessary.
However, there may be consequences to neglecting these rules, which are not
always immediately apparent. One only realises later when one sees the negative
impacts of past decisions.
An example of unforeseen consequences can be seen in the development of the
motor car. As a replacement for horses, it was believed that cars would advance
humankind. However, cars are a source of pollution, for example from leaded fuel
and greenhouse gases. No one thought about the long-term impacts at all.
Ethics therefore involves making moral choices and contemplating the values
that lie behind these choices. Making bad choices can impact on a person’s life,
often only years later, and the choices that are made often have a price to pay.
As stated earlier, ethical values are concerned with judging whether some
thing, or some decision, is right or wrong, good or bad. Sometimes it is difficult
to judge whether a thing or a decision is right or wrong; such a scenario is called
an ethical dilemma. This can occur when an organisation or person may benefit
from something, but the benefit may be unethical. The question then is does one
go ahead or not?
For example, failure to declare one’s income to the South African Revenue
Service results in more money for one’s personal use or for the company to be
utilised for the benefit of the shareholders or staff. How ethical would that be?
Who decides? The easiest way to deal with such a dilemma is to follow the standard
problem-solving tool. First is the recognition of the dilemma. Second, gather all the
facts. Third, identify all the options, both positive and negative. Then test each one
of the options for factors such as legality or illegality, and rightness or wrongness
of the option, as well as the benefits of each option. Make a decision as to which
option or options could be taken. The final stage is to decide what family, friends
or employees would say and do regarding the choice that has been made. Once a
decision has been made, take action.
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In asking what the right thing is to do or what the good is in something, the answer
might be a choice of wrong and wrong or bad and bad. Many people when faced
with such a scenario try and find answers by approaching the courts and have
someone else make the decision for them or give them guidance on which direction
would be acceptable.
What then are values? Values can be ascribed as a person’s principles or standards
by which they live. It could also be argued that it is the judgement of what is
valuable and important in the life of an individual. Examples of societal structures
which have an influence on values and ethical behaviour are outlined below:
• Ethics deals with the right or wrong or good or bad of a situation or decision.
This influences our reputation and conscience through praise or assigning
blame.
• Religion, in contrast, defines right and wrong as the sin in people’s lives.
It also deals with what is permissible or not as defined by the religious
authority. A person who behaves and does well will be rewarded; those who
do wrong or commit a sin will be punished. This punishment will be carried
out by a supernatural agent or being.
• The law determines if someone acted legally or illegally, as defined by the
judicial system. Punishment for illegal deeds is determined by law and
sanctioned by the judicial system.
• Etiquette can be described as societal conventions regarding proper or
improper behaviour. Behaviour is seen as appropriate or inappropriate.
Inappropriate behaviour leads to social disapprobation.
• Values constitute a shared conviction of an organisation’s desired objectives
in the business environment; values are influenced by factors such as
religion, law, or etiquette to name but a few. In business, there are also
unwritten laws or rules that dictate how one should behave or act as a
business person. South African regulations are increasingly focusing on
various business codes of ethics and codes of conduct.
• Integrity is another concept when dealing with the field of values or ethics.
Integrity can be defined as a more restricted concept of ethics and refers to
a person’s character. According to Rossouw and Van Vuuren,2 integrity is
often associated with concepts such as fairness, consistency, uprightness and
wholeness. Integrity can be described as the constant application of ethical
behaviour by an individual.
The question which arises now is what is the purpose of morality in a society? Much
has been written on this topic; a search of the internet will bring up many websites
debating this topic. Morality serves a number of purposes in a society. For a start, it
keeps a society from falling apart or disintegrating. It reduces human suffering in
2 Rossouw & Van Vuuren (2004).
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the world we live in and encourages humans to flourish and grow. Morality assists
humans to resolve conflicts of interest in a just and orderly fashion. Morality also
assigns praise and blame, reward and punishment and guilt within a particular
society or environment.
None of the above are the sole purpose of morality, but each of them is part
of a comprehensive purpose, which enables humans to live a good life in a just
society. Think of an additional purpose that can be ascribed to morality that was
not mentioned.
9.2.2 Environmental ethics

Environmental management ethics is only one of the many fields of study in ethics.
Most of the fields of study address an area of ethics, code of conduct or ethical
values of some kind.
Environmental management ethics is a way in which organisations try to
face the challenges of ethics and ethical questions in the business environment.
Environmental management ethics is considered to be a field that aims to provide
moral justification for the need for global environmental protection.
Western ethics has long focused on the moral values, rights and obligations of
humans. Vaughn3 said that ethical questions that are asked are those such as: ‘What
is good for humans? What value should we place on a human life or person? What
obligations or duties do we have to our fellow humans? What moral rights, if any,
do humans have? The nonhuman animals, the plants, the waters, the land – these
only mattered if at all, largely because they affect the well-being of humankind.’
Vaughn4 describes environmental ethics as ‘a branch of applied ethics, which
explores questions about the value of nature and its constituents, the relationship
between the environment and humans, and the moral obligations that humans
have towards the environment’.
Environmental management ethics

Environmental management embodies sustainable development through various
mechanisms. Environmental management combines various processes in the
production of goods and services, such as technology, sustainability and economic
growth. Environmental management is not the direct management of the
environment itself, but deals with the impact of humans on the environment.
Environmental ethics attempts to apply principles and moral values to the
environment. It tries that in the same way in which ethics in general has had an
impact on the business world, the medical environment, the engineering field and
on technology areas.
3 Vaughn (2013) 497. 4 Vaughn (2013) 497.
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Environmental ethics invites one to reflect on three key propositions:

• The earth and its living beings have intrinsic value.
• The earth and its living beings have moral status, worthy of concern.
• Human beings should consider ‘sum totals’ that include other forms of life in
the environment.
Environmental management systems, when correctly implemented, contribute to an
increase in an organisation’s competitiveness and the reduction of an organisation’s
environmental impact.
There are a number of main reasons for management to implement an environmental
management programme in an organisation.
• Professional ethical reasons are important, especially in the field of research
or in the provision of professional services.
• National and/or international regulations need to be adhered to. Companies
need to follow standards related to products and goods to stay in business
with their export partners, for example the European Union countries.
• Economic profitability is enhanced. A business may lose contracts if the
contracting company is not satisfied with the goods and/or services that are
supplied. Refer to the discussion of the triple context in the King III report in
Chapter 2.
• It is the right thing to do.
Environmental resource management

Environmental resource management deals with the protection and maintenance
of the environment for future generations. Managers need to consider, as the King
III triple context suggests, the economic ethical, social, technological and scientific
variables involved in maintaining the integrity of an ecosystem.
Businesses need to realise that there is a constant tension between meeting the
needs of humans and protecting environmental resources. Managers who can find
this balance should be able to protect the environment and find a way to have
socially responsible sustainability.
9.3 Intrinsic value, instrumental value and prudential value

The word value is normally associated with the financial value of something.
Managers need to value everything they do and justify it in terms of returns, profits
and money. Boards will not give approval to any projects which are not financially
viable. Business ventures must contribute to the financial bottom line.
In a discussion of the financial value of the environment, economic approaches
have a number of limitations. Value is not only linked to the financial value of
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something; one can also distinguish between things that have intrinsic value,
instrumental value or prudential value. Let’s look at the differences between these
aspects of valuation.
9.3.1 Intrinsic value

Something has intrinsic value if it is good in and of itself. Intrinsic value is not
merely a means of acquiring or accomplishing something else in the process.
Intrinsic value has nothing to do with something’s usefulness. Intrinsic value is
ascribed to something that is valuable in itself. When something is of intrinsic
value it is pursued for what value it has and what use it will have for humankind.
Intrinsic value is never given by someone but is always recognised. Things with
intrinsic value possess value in themselves. Their value lies in what they mean or
what they stand for. These values could be spiritual, moral, symbolic or cultural. As
an example, happiness can be seen as having an intrinsic value because happiness
is good for you. It is good because it’s good to be happy, not because happiness
would lead to or accomplish something else.
9.3.2 Instrumental value

Something that possesses instrumental value always refers to its function or
usefulness. Objects such as a watch, a pencil or a cellphone possess instrumental
value because they can be used to generate, increase or accomplish something of
value.
Instrumental value is always ascribed by humans to things that will benefit
them. The instrumental value is not in the object, but in the usefulness of the
object. The value of a watch or cellphone lies within its usefulness in checking the
time or making a call to accomplish or attain something of value. If such an object
stops working, it becomes useless and loses its value.
Think about modern technology that has become outdated because no one uses
it anymore. Would you prefer a typewriter or a computer? If you prefer a computer,
would you like the kind that works with floppy drives on a DOS operating system
or do you want the latest model that money can buy and technology can provide?
When we think of natural objects as resources we are treating them as something
that has an instrumental value. As human interests and needs change, so too do
human values and uses of the environment.
9.3.3 Prudential value

Jamieson5 relates prudential values to those values that communicate a person’s
own interests. There are many debates as to whether one should consider prudential
values as values at all. There is, however, no doubt that we value nature by
reminding ourselves of what nature does to support our survival and well-being.
5 Jamieson (2008).
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9.3.4 Instrumental value versus intrinsic value

Some people would say that biodiversity has an intrinsic value. The question that
arises is how do we put a price on the very existence of an ecosystem or a species
if the ecosystem or species has its own value independent of humans?
How do you determine the value of some nearly extinct animal, for example?
Is it the price of the highest bidder? What if it is the only one of a species left? Is it
then priceless? What is, for example, the price that we can attach to the loss of our
South African rhinos? We might feel that something that is intrinsically valuable
must be of infinite value. If this is true, then we should be willing to pay almost
any price to save it.
9.4 Applying environmental ethics to business policies and decisions

9.4.1 Introduction
Environmental ethics and business management have been considered to be two
opposing or sometimes even incompatible areas. This situation has led to conflict
between the need for economic performance and environmental responsibilities
within organisations.
Let’s take an example of a manager facing financial problems and who has
to make a choice between saving the company financially or implementing an
environmental management programme. If the manager chooses to consolidate
the financial position of the company, he or she will have to defend this action
in a context where more and more companies are analysing their environmental
impact and choosing to implement environmental management policies to reduce
their environmental risks.
Economics and economic analysis plays a major role in any environmental
policy or management programme. This is true at local, national and international
level. Many companies have incorporated what they call sustainable development
programmes or policies. Sustainability is a concept that has continued to gain inroads
into a wide range of sectors and institutions in South Africa and internationally.
9.4.2 Sustainable development

The Brundtland Commission, commissioned by the United Nations in 1983 to
investigate sustainable development, came up with the following definition still
widely used today: ‘Sustainable development is development that meets the needs
of the present without compromising the ability of future generations to meet their
own needs.’6
Various books and articles have been devoted to contemporary challenges
to sustainable development. Kibert et al7 have outlined some of the issues that
businesses need to think about regarding the sustainable development of companies:
6 United Nations (1987) 41. 7 Kibert et al (2012).
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• population growth and consumption

• climate change
• non-renewable resources
• loss of biodiversity
• overfishing
• eutrophication (over-enrichment of water bodies)
• desertification and acidification
• poverty
• ecosystem services and quality of life.
Similar to the King III model, Kibert et al suggest that sustainable development has
three components:
• environmental
• social
• economic.
9.4.3 Business ethics

Ethical behaviour in a business context consists of the collective behaviour of the
individuals who own or are employed by a business. These values and conduct guide
the actions and decisions in the work environment. If the owners of the business
(and senior management) value ethical behaviour highly, they will implement an
ethical framework within the business to guide employees with regard to what is
considered to be ethical behaviour.
On the other hand, if the owners do not value ethical behaviour highly, it
is unlikely that they will pay much attention to the question of ethics within a
business context.
Ethical behaviour covers a wide range of different activities within a business,
including how clients and employees are treated, as well as the environment. The
challenge is to find the balance between the conflicting interests of the business and
those of clients and other stakeholders. Ethical behaviour is about recognising there
may be a difficult choice to be made, taking the appropriate action or decision, and
then accepting responsibility for that action or decision.
Rossouw8 defines business ethics as:
The specific application of this general principle (what is good or right for
human beings) to business activities. To act morally within the business
environment, means ensuring that the consequences of business actions are
not detrimental to others. Alternatively, to put it more positively: ensuring
that business activities contribute towards personal well-being, the well-
being of others and the societies who are influenced by these actions.
8 Rossouw (2002) 3.
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An ethical framework creates a standard against which to evaluate possible ethical

choices that need to be made. It also sharpens awareness of ethical and moral
issues by consciously examining personal values and choices. This awareness is
extremely useful when faced with a difficult ethical choice. Most importantly, a
strong ethical framework also builds trust and credibility between the business and
the stakeholders.
However, even though people often face ethical dilemmas and questions in
their work environments, business ethics have yet to be fully integrated into the
strategies and daily operations of a business. Although strides have been made
locally in this direction, with the publishing of the King Code on Corporate
Governance9 and various other means of promoting ethical behaviour, unethical
behaviour in the business world is still rife.
Some of the ethical dilemmas that staff can experience on the job are:
• conflict of interest between what is best for the client and what is best for
the company
• acting with honesty and integrity versus the pressure to compromise
• being loyal versus speaking the truth
• deciding whether to blow the whistle.
Business factors that could cause damage to the environment

The environment is affected by a number of factors. These factors can generate
destructive effects that might have a long-term or even permanent impact on
the environment. This can be ascribed to a lack of minimum ethical principles in
some individuals and organisations. Factors that most often bring damage to the
environment include:
• over-consumption, the main destructive factor affecting the environment
• over-development, the long-term effect of economic downturn
• lack of environmental education (too few educational institutions include this
in their management training and school curricula)
• research responsibility, which promotes the profit motive irrespective of the
environment
• technology, which leads to increased consumption of energy
• religion, which can promote the idea that the only reason nature exists is to
serve humankind
• social responsibility, which sees the main objective as the achievement of
profit.
9 IoDSA (2009).
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Business ethics are influenced by the leadership of the company. Leadership is the
ability of a manager to guide and direct subordinates, staff or colleagues to achieve
specific goals. This in turn will influence the company’s values.
Corporate governance
What do we mean by corporate governance? We can identify it as the oversight
of senior management by a company’s board of directors. A board of directors is
normally responsible for hiring, firing, disciplining and remunerating the CEO of
a company in South Africa. The management of a company is responsible to the
general public, and to the employees, investors and consumers. In terms of the
Companies Act 71 of 2008, directors and shareholders can now be held personally
responsible for the activities or inactivities of a company.
Codes of conduct
A code of conduct can indicate the responsibility a profession takes towards the
environment. Many of today’s professions have a code of conduct or ethical values,
which includes:
• a general code of conduct, designed to guide members’ conduct and
behaviour
• a specific code of conduct, designed for specific guidance for individuals
within a profession.
Examples of these codes of conduct include the Hippocratic Oath taken by doctors,
which was first implemented more than two thousand years ago; the code of ethics
of the Institute of Directors in Southern Africa (IoDSA); and the Financial Advisory
and Intermediary Services Act 37 of 2002 (FAIS), which contains general and
specific codes of conduct, as well as treating customers fairly (TCF) regulations.
Many of South Africa’s professional bodies have an ethical code for their
members. Most new legislation makes provision for regulations that would contain
codes of conduct for the individuals in a particular industry.
In response to unethical practices in the business environment, a number of
ethical codes have been developed, particularly in relation to the professions.
However, although an ethical code governs and specifies the required level of
ethical behaviour within a business, having a code does not necessarily mean that
a business will always be ethical. For a code to be effective, the provisions of the
code must be integrated into the processes and procedures of the business.
Ethics must also form an important part of the culture and identity of a business.
However, this can only be achieved if ethics is given sufficient attention through
a top-down approach. Rossouw and Van Vuuren10 outline a number of different
terms for ethical codes:
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• credo
• code of conduct
• declaration of business principles
• value statement
• standard of conduct
• code of business practice.
In some industries, especially where self-regulation has not resulted in ethical
behaviour, legislation has been enacted in order to ensure that ethical guidelines are
followed. This legislation and its subordinate legislation provide for both general
codes and more specific codes of conduct to regulate industry.
Codes have been developed by professional membership bodies, as well as
by companies, to guide both their members and employees in practising ethical
behaviour. Professional industry bodies have developed codes of ethics to set
standards of conduct for their members.
9.4.4 Environmental ethics and business policy

Environmental management systems (EMS) encourage companies to accept
responsibility for protecting the environment. Companies can also ensure
continuous improvement in the way in which they manage their environment.
When companies implement an EMS they must adopt environmental strategies and
implement environmental policies. The difficulty for companies in implementing
environmental strategies is to find a balance between economic and social factors.
An investigation into organisations’ annual reports clearly indicates that most
companies have embarked on the road of establishing a value statement. In most
cases, one of the core values in these value statements is ethical behaviour, often
supported by an ethical code of conduct.
An important question is: how does government influence business policy and
business affairs? This can be done through legislation and regulating what
businesses are allowed to do or not to do. There is a great deal of legislation that
influences business policy or business behaviour in all sectors of the economy.
Examples include:
• Consumer Protection Act 68 of 2008
• Labour Relations Act 66 of 1995
• Competition Act 89 of 1998
• Occupational Health and Safety Act 85 of 1993
• National Environmental Management Act 107 of 1998 (NEMA).
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9.5 Applying ethics to lifestyle decisions

9.5.1 Introduction
Business ethics can be divided into three main categories:
• micro-ethics relates to the accountability of owners and management
towards the business with regard to the vison, mission, policies and
procedures, and legislative compliance
• market ethics relates to accountability towards customers, competitors and
suppliers
• macro-ethics is the collective social responsibility of a profession or
professionals within a company with regard to technology use, the economic,
cultural, political, legal and international environments and the ecosystems
or natural environment.
9.5.2 Moral and cultural values

Companies can advance their reputation by implementing strong value-based
ethical programmes. The result should be access to more capital, increased
economic prosperity, a positive effect on employees and improved customer loyalty.
Organisations which display ethical behaviour will also find that it has a positive
impact on the nature and quality of the jobs that employees perform, which can
lead to better morale and work performance.
Business ethics sets standards of conduct and identifies appropriate behaviour
for an organisation based on values, beliefs, judgements and attitudes concerning
issues such as what is good or bad, or right or wrong. This includes the way
humans interact with one another.
According to Rossouw and Van Vuuren, ‘when ethics is applied to business
we consider the implications of economic activity on the interests of all who are
part of such activity. The ethical impact of economic activity is studied in business
ethics, but so too is the economic impact of ethicality’.11
The institutionalisation of business ethics has become strategically vital for a
business’s survival. Traditionally organisations made use of the compliance approach
to institutionalise ethics into their organisations. This approach forces business
ethics upon employees. However, a potential problem with this approach is that it
forces itself on all stakeholders. The question thus is whether all stakeholders will
internalise the same set of values. This means that a value shift needs to take place.
According to Rossouw and Van Vuuren,12 ‘the modes of managing morality
model explains the changes in modes of managing ethics within organisations’.
These modes indicate the strategy of an organisation in managing its ethics. The
model consists of five modes describing organisations’ preferred choice of strategies
for managing ethics.
11 Rossouw & Van Vuuren (2004) 4. 12 Rossouw & Van Vuuren (2004) 44.
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There are a number of different sources of ethical standards.

• Legislation encourages ethical behaviour. In South Africa, the Constitution,
through the Bill of Rights, lays down the foundations for ethical standards.
• The policies and procedures of an organisation set ethical standards, for
example, on issues such as sexual harassment and whistle-blowing, and
outline general and specific codes of conduct.
• A moral stance is often revealed in the position people take when there is no
law that governs an issue, or no policy and procedure guidelines. Within any
business or organisation this may be supported or undermined by the culture
of the business or organisation.
• Ethical codes, such as the King Report on Corporate Governance13 or the
ethical codes of professional organisations.
• Personal codes of ethics.
9.5.3 Forms of African value systems

Ubuntu
An extract from a speech made in 2006 by then Deputy President, Ms Phumzile
Mlambo-Ngcuka, at a national imbizo on ubuntu and nation building, best describes
the principles of ubuntu:
What is ubuntu? Ubuntu is what defines us as Africans, as distinct from
other people, what we normally refer to as the spirit of African humanism;
it is the foundation upon which most African societies are founded. It
defines what is best about us as Africans.
The values of ubuntu are based on principles of caring for humanity, love
for one’s people, respect for people and their country, affording each other
nationhood. These are the very same values that our South African society
was founded upon when we adopted our new Constitution in 1996.
Besides the Constitution, our principles of ubuntu are deeply rooted in
an African culture, and the African saying among the Nguni and Sotho-
speaking people which say ‘Umuntu ngumuntu ngabantu’ or ‘Motho ke
motho kabatho’. When directly translated into English it means that ‘A
person is a person because of other people’. But, I believe this saying is
deeper and more profound than that; it defines the concept of ubuntu.
This saying instructs us that our existence is dependent upon other people.
Our successes are due to the role that our communities have played in
nurturing and developing us.
13 IoDSA (2009).
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It speaks about the need for us to have a sense of community spirit as a

people. It says community members must play a constructive role towards
the development of their communities. It also tells us about the need to
give back to our communities what they have given us; it tells us that the
most important value of ubuntu lies in giving. Having an open heart and
giving to those who are needy and poor is not a sign of weakness, rather
a sign of strength. Making sacrifices for the common good is what keeps
our society together.
Firmly embedded in this saying is an injunction that, without the support
of other people, our existence is meaningless. It instructs us that we have
a central role to play in the empowerment of our communities, who are
mostly poor and destitute. Because of this spirit of ubuntu that permeated
our communities the weak, the young, the poor and the vulnerable were
not as exposed to the harshest conditions of our society and dangers in
our streets as it is the case today.
Ubuntu acted as a social security network or fabric that cushioned many
in our communities. It was the glue that held our society together. Several
articulations by President Mbeki on ubuntu reveal both the government’s
attitude as well as the vital role ubuntu can potentially play in revitalizing
the African Renaissance. It therefore means that revival of ubuntu will not
be something strange and new for a majority as it has some resonance
born out of collective memory and experiences. Given the picture painted
above and the preponderance of ubuntu in our communities at one point
in time, there is a serious decline in our values of ubuntu and this is tearing
our society apart and causing disintegration of our communities and
families. But our society while still facing challenges of crime, violence,
rape, murder, greed, and other social ills, is however a fundamentally
moral society, which is influenced by the values of ubuntu.
We must ask ourselves how can we infuse (re-infuse) our society with a
spirit of ubuntu by making concrete policy interventions and suggestions
instead of sentimental utterances to make a positive impact on people’s
lives. As the leader of Moral Regeneration Movement collective, I will
be keenly interested in your advice on how to re-energize our campaign
utilizing the values of ubuntu.
The wonderful thing about ubuntu is that it embodies universal human
values that are essentially not in contradiction with values of our diverse
communities in the country. Ubuntu values are also found in Christian,
Islam, Jewish religion, Hindu, Buddhism, Bahai religions/belief systems.
It is for this reason that ubuntu could provide a platform that every racial
and cultural group of this country can relate to.
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We could begin this work so that even visitors who come to our country
and those who will come for 2010 FIFA Soccer World Cup can begin to
experience the legendary spirit of ubuntu.
Archbishop Desmond Tutu explains the concept of ubuntu as follows:14
A person with ubuntu is open and available to others, affirming of others,
does not feel threatened that others are able and good, for he or she has
a proper self-assurance that comes from knowing that he or she belongs
in a greater whole and is diminished when others are humiliated or
diminished, when others are tortured or oppressed.
One of the sayings in our country is ubuntu – the essence of being human.
Ubuntu speaks particularly about the fact that you can’t exist as a human
being in isolation. It speaks about our interconnectedness. You can’t be
human all by yourself, and when you have this quality – ubuntu – you
are known for your generosity. We think of ourselves far too frequently as
just individuals, separated from one another, whereas you are connected
and what you do affects the whole World. When you do well, it spreads
out; it is for the whole of humanity.
Nelson Mandela explained ubuntu as follows:15
A traveller through a country would stop at a village and he didn’t have
to ask for food or for water. Once he stops, the people give him food,
entertain him. That is one aspect of ubuntu, but it will have various
aspects. Ubuntu does not mean that people should not enrich themselves.
The question therefore is: Are you going to do so in order to enable the
community around you to be able to improve?
According to Michael Onyebuchi Eze, the core of ubuntu can best be summarised
as:16
A person is a person through other people strikes an affirmation of one’s
humanity through recognition of an ‘other’ in his or her uniqueness and
difference. It is a demand for a creative intersubjective formation in which
the ‘other’ becomes a mirror (but only a mirror) for my subjectivity. This
idealism suggests to us that humanity is not embedded in my person
solely as an individual; my humanity is co-substantively bestowed upon
the other and me. Humanity is a quality we owe to each other. We create
each other and need to sustain this otherness creation. And if we belong
to each other, we participate in our creations: we are because you are,
and since you are, definitely I am. The ‘I am’ is not a rigid subject, but a
dynamic self-constitution dependent on this otherness creation of relation
and distance.
14 Tutu Foundation UK (2010–2015). 16 Oddie (2015) 106.

15 Oddie (2015) 106.
145

9.5.4 Applying ethics in everyday life

Fraud is a manifestation of unethical behaviour. According to Rossouw and Van
Vuuren,17 Deloitte and Touche conducted a survey in 1999 on fraud in 17 African
countries. In every country, with the exception of Botswana, fraud was on the
increase. ‘The kinds of fraud that were identified included forging bank documents,
tax evasion, false insurance claims, and electronic funds-transfer fraud. Other
forms of unethical behaviour that are well documented include unfair dismissal of
people with AIDS; race and gender discrimination; intimidation of employees to
perform work they find morally repugnant; and neglect of the safety of employees
in the pursuit of profit’.18
One needs to look no further than at the recent past to find that big international
corporations such as Enron, WorldCom, CityGroup, JP Morgan, ICN Pharmaceuticals
and AT&T, to name but a few, have been involved in gross scandals relating to
unethical behaviour.
Enron bankruptcy
The saga of Enron’s bankruptcy in 2001 is an example of what can happen when
employees, management, boards of directors and shareholders do not ask questions
about a company’s performance and ethical values. In an online interview, Kirk
Hanson, Executive Director of the Markkula Centre for Applied Ethics, suggested
that the two most important reasons for what happened to Enron had been the lack
of truthfulness by management and the culture of Enron:19
This scandal demonstrates the need for significant reforms in accounting
and corporate governance in the United States, as well as for a close look
at the ethical quality of the culture of business generally and of business
corporations in the United States. There are many causes of the Enron
collapse. Among them are the conflict of interest between the two roles
played by Arthur Andersen, as auditor but also as consultant to Enron; the
lack of attention shown by members of the Enron board of directors to the
off-books financial entities with which Enron did business; and the lack
of truthfulness by management about the health of the company and its
business operations. In some ways, the culture of Enron was the primary
cause of the collapse. The senior executives believed Enron had to be the
best at everything it did and that they had to protect their reputations and
their compensation as the most successful executives in the U.S. When
some of their business and trading ventures began to perform poorly, they
tried to cover up their own failures.
17 Rossouw & Van Vuuren (2004). 19 Nakayama (2002).

146

Silverstein,20 in an online article, wrote:

Altogether, 16 former Enron exe[cutive]s including Skilling had been
sentenced to prison. A lot of people have suffered, not the least of whom
are the shareholders and pensioners who lost it all. It was a sad ‘ending’
to what had appeared to be a promising beginning to the New Economy
in which the internet age would spread wealth and create jobs throughout
the social spectrum. While Enron may be the crown jewel of corporate
prosecutions, it was preceded by guilty verdicts for top exe[cutive]s at
Adelphia Communications, Tyco International and WorldCom.
Some lessons that can be learnt from this ordeal are:
• One needs adequate liquidity in a company.
• Disproportionate leverage is usually a high-risk approach.
• Fraudulent behaviour never pays.
• Employees need to continually update their skills and knowledge.
• If investors cannot understand a company’s financials, then they should not
invest in the company.
• The same company cannot be the auditors and the consultants, as this creates
a conflict of interest.
• The board of directors, investors and shareholders should ask more questions
about a company’s activities, especially those off-book.
• One’s own failures should not be covered up.
The film Enron: The Smartest Guys in the Room is a good lesson in ethics and
corporate governance. If Enron did indeed have value statements in place, it is
an illustration that the mere existence of value statements and ethical codes of
conduct does not ensure ethical corporate behaviour.
Ethical behaviour, like any other type of behaviour, does not manifest because of
the mere existence of a set of rules. In the case of Enron and many other companies,
rules may have been in place, but these were wilfully and perhaps even skilfully
circumvented. The result is that investors, as well as internal and external stakeholders,
are losing trust in companies which are managed on unethical principles.
Whistle-blowing
Ethics and its application in everyday life cannot be discussed without mentioning
whistle-blowing. One can ask questions such as: Why did the Enron executive not
blow the whistle on the CEO and CFO earlier? Why did the board not ask questions
or let the authorities know about their book entities that were created? By the time
Watkins and Cooper blew the whistle on the Enron situation, a lot of damage had
already been done.
20 Silverstein (2013).
147

This leaves us with the question, what is whistle-blowing? A whistle-blower is a

person who exposes dishonesty, misconduct, malpractices, the endangerment of
others’ safety or illegal activities in an organisation. In other words, it is someone
who publicly exposes an organisation’s wrongdoing.
One of the most famous whistle-blowers was Erin Brockovich, about whom a
film was made. We find that many companies will have a whistle-blowing policy
or a helpline or a company that will handle this on their behalf. Another film worth
watching is Silkwood.
Whistle-blowing is not easy. It has major implications for the company, as well
as for the whistle-blower. Whistle-blowers can experience alienation from their
colleagues; they may even lose their jobs or their families may be persecuted. This
may result in financial difficulty for the people involved; it may also hamper their
chances of getting a new job or starting their own business. Whistle-blowing can
also have extreme consequences. An example includes whistle-blowers from the
KwaZulu-Natal Education Department who were murdered because they exposed
the fraudulent practices of certain school principals in the province.
Organisations may have internal whistle-blowing processes; these days
businesses often use external companies to encourage employees to inform on
suspicious events. It is important for companies which are serious about ethics and
values to have a way for employees to confidentially report illegal activities. Some
companies also offer a reward for employees who report such activities.
The costs of unethical behaviour

Most people do not realise how the costs of unethical behaviour can escalate.
Below is a list of costs that can be incurred as a result of unethical behaviour:
• Much of the costly work carried out by attorneys and advocates is due to
unethical behaviour.
• The cost of law enforcement and security personnel adds up. Security guards
would not be necessary if it was not for people’s unethical behaviour, such as
stealing.
• Costs are incurred for the physical protection of people and property, such as
alarm systems, electric fences, vaults, etc.
• Wasted or misused investors’ funds by unscrupulous investment companies
incur costs; money must be spent on regulators and examiners because of
the unethical behaviour of a few who bend the rules and do not act in the
best interests of their clients.
• Recovering and collecting undeclared taxes from companies and individuals
incurs costs.
• The need for forensic auditors and accountants to trace moneys defrauded or
stolen incurs costs.
148

• Consumer protection agencies, ethical business agencies and consultation

companies all incur expenses.
• Revenue is lost by creditors when companies and individuals declare
themselves bankrupt.
• The low investment that results from external investors and tourists not
visiting a country, or clients not doing business with a company.
• Costs are incurred by committees investigating governmental fraud and
unethical behaviour and wrongdoing.
• Welfare costs are incurred for those without a means of income when parties
to unethical behaviour are imprisoned.
There are also costs to business; these can be seen from the Enron example:
• the costs of declaring the company bankrupt
• the higher cost of the debt incurred
• the costs incurred through the involvement of regulators in a company
• the loss of business assets
• increased security costs
• the loss of customers as part of the aftermath of the unethical behaviour
• the loss of employees who would rather work elsewhere; this includes the
costs invested in their training and development
• the cost of legal expenses, which cannot always be claimed as a tax
deduction in South Africa
• the loss of investor confidence, reflected through lower share prices, and
difficulty in getting finance or funding
• the ultimate loss of the company’s reputation; this is the biggest loss of all
for any company.
9.6 Conclusion
Businesses have much to gain if they have a reputation of corporate governance
based on ethical behaviour. A company’s reputation is the most important aspect
for the success of any entity.
Unethical behaviour may enable a company to gain ground and have an
advantage over its competitors, but that is temporary. In the long run, individuals,
companies and society will pay a price for the unethical behaviour of employees
and management.
149

It stands to reason that any organisation that has a reputation for corporate
governance and ethics is able to:
• attract new investors
• attract ethically discerning customers
• be a preferred employer for people who perceive themselves as having the
capacity to thrive in an environment that fosters ethical behaviour.
Our environment is important for the future of everyone in this world. We as
management and future management have the responsibility to look after it. We
cannot take responsibility for the harm that previous generations caused to the
environment, but we can change the future through ethical behaviour on the part
of individuals and companies.
South Africa has a Constitution that ascribes many rights to people. Many
people claim these rights and stand by their rights. We need to be aware that
standing by one’s rights is fine and well, but every right that is claimed brings
with it a responsibility. We should not allow rights and the responsibilities to be
separated from one another.
Ultimately it is important to remember to do unto others as you want them
to do unto you. This can be achieved by doing what is right. Respect others, take
responsibility for your action or inactions and you will achieve positive results.
Check before you do anything. Know your values that are uncompromisable.
David Cottrell21 said: ‘The toughest issues any of us face are those involving
‘right versus right’. The problem: there are no obvious “wrongs” to avoid.’
Review questions
1. In your experience:
a. Is the environment getting cleaner?
b. Are environmental problems more or less of an issue than when you first
became aware of them?
c. Are some problems getting better or worse? Which?
d. Do you have any thoughts about why some are improving and others
are not?
2. What criteria do you use to establish moral standing? Where do you draw
the line between objects that count and those that do not?
3. Should polluters be required to prove that their pollutants are safe before
being allowed to discharge this material, or should they be allowed to pollute
until the material is shown to be harmful? Motivate your point of view.
21 Cottrell (2002) 23.
150

4. Some people in South Africa mourn the decline of the family farm in favour
of a commercial centralised agricultural business. What values, both social
and personal, might be involved in a family farm that would be missing in
large businesses?
5. Should industries, local communities and countries be forced to keep the
toxic waste they generate or should they be allowed to pay others to bear
this risk for them? Write a detailed motivation for your point of view.
6. Sometimes South Africa is seen and portrayed as a developing county and
other times it is portrayed as a developed country.
a. Do you see South Africa as a developed or developing country, and
why?
b. Should industrialised countries have a greater responsibility for
implementation of environmental policies than developing countries?
Why?
7. Many of South Africa’s resources are exported to industrialised countries
such as Europe, America and China. South Africa then imports the
manufactured goods, mainly from China, which is currently one of SA’s
largest trade partners. This has caused South Africa to be a net importer from
China.
a. Do you agree with the ‘production at all cost’ policy of our trade
partners? Motivate your point of view.
b. Would you be willing to pay more for imported products as a means
to encourage exporting countries to meet environmental standards?
Motivate your point of view.
c. Should South Africa create a system of environmental protection tariffs?
Explain your answer.
8. In your opinion, is humanity in general at fault for the ecological crisis, or
are specific people, such as those with power and money, more responsible
than those without power and money? Give reasons for your answer.
9. Many people in South Africa believe that ubuntu is central to their decision-
making process regarding ethical issues. This implies that rural people
believe that tradition is a good guide for deciding public and business policy
matters. In your experience, what traditional values support environmental
management policy in businesses? Which traditional values do not support
environmental protection and would not be advisable to use in business and
public policy decision making?
10. How do ethical dilemmas complicate your community or your workplace?
11. How can companies maintain high ethical standards?
12. Explain what corporate social responsibility is.
151

13. Name at least five regulations or Acts that influence business policy or
business behaviour in all sectors of the economy.
14. Discuss some of the costs of unethical behaviour for societies and companies.
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153

Index
This index is in letter-by-letter alphabetical order; spaces, hyphens and introductory words
such as ‘and’, ‘of’ and ‘in’ are ignored.
A page number in bold indicates a definition of the term on that page.
A page number in italics indicates that information on the topic can be found in a table or
figure on that page.
A
African value systems 21
ubuntu 143–145
agriculture 90
impact on environment 96–99
agroecosystems 90, 96
and natural ecosystems 96–99
air pollution 78, 79
air quality management plan (AQMP) 79–80
National Environmental Management: Air Quality Act 39 of 2004 79–80
alternative dispute resolution (ADR) 22
audit committees 23, 27–28
audits 71–72, 108, 120
B
biodiversity 90–91
National Environmental Management: Biodiversity Act 10 of 2004 81
biomass 97
Programme for Biomass Energy Conservation (ProBEC) 105
built environment 11, 12
business
see also environmental management
business environment model 114–115
culture 21
and the environment 115–116
ethics 138–141
functions 116–117
and protection of the environment 41–44
strategies to minimise industry impact 105–109
waste and pollution management strategies 84–86
business management and environmental management 3
C
carbon emissions 102
see also energies; greenhouse gases
legislation 104

CFTs (cross-functional teams) 4–9, 43

checking 70–72
civil instruments in environmental governance 124–125
climate change 99, 99–101
causes 101–102
impact 102–104
legislation 104–105
climate systems see climate change
codes of conduct 140–141
communication in EMS 52–53, 68
compliance with legal and regulatory requirements 42, 51, 56–58,70–71, 107–108
conservation 12, 13
see also environmental protection
Environment Conservation Act 73 of 1989 81
construction, impact on environment 95
corporate citizenship 22
corporate governance 20, 21, 140
see also environmental governance
corporate social responsibility 10
see also social responsibility
‘cradle to cradle’ 86, 122
‘cradle to grave’ 13, 86, 122
cross-functional teams (CFTs) 4–9, 43
D
degradation of the environment 13, 49, 79, 82, 91–92
Deming Wheel (Deming cycle) 62–64, 64, 116
see also PDCA-cycle
DfE (designing for the environment) 106
documentation 53–54, 56–57, 68–71
see also record control; records
Dow Jones Sustainability Indices 119
E
eco-labelling 118, 124
ecological processes 92
economic environment 124
economic principle 2, 3
economic prosperity 25, 142
ecosystems 90, 13, 96
see also agroecosystems; natural ecosystems
156

Index
EMS (environmental management system) 2–3, 50, 63

see also EMS requirements
audits 57, 71–72
communication 52–53, 68
compliance 55–56, 70–71
context 63–64, 73
documentation and record keeping 53–54, 56–57, 68–69, 71
emergencies 55, 69
environmental aspects 51, 66
and ethics 135, 141
international standards (ISO 14000) 50–59
legal requirements 51, 67
non-conformities and corrective actions 56, 71
objectives 52–52, 67
operational control 55–56, 57, 68, 69–70
procedures and programmes 54–55, 67
scope 64
structure 62–63
training 52, 68
EMS (environmental management system) requirements
checking 70–71
continual improvement 73–74
environmental policies 51, 64–66, 67
implementation and operation 67–70
management review 57, 72–73
planning 66–67
energies 40–41
energy and water supply 94–95
Enron 146–147, 149
enterprise safety risk management 7
environment 2, 11–12, 11
see also industrial impact on the environment
environmental aspects 2, 3, 12, 37, 65, 66
environmental awareness and training 14, 68, 107, 108
environmental costs 14
environmental disasters 125–126
environmental governance 123–124
environmental hazards 37
see also environmental aspects; environmental impacts
environmental impacts 12, 37, 54, 55, 65
see also environmental aspects; environmental hazards
157

environmental indicators 120

environmental issues 9, 114–115
impact on micro business environment 117–119
environmental legislation 9–10
National Environmental Management Act 107 of 1998 (NEMA) 29, 42, 90, 104–105
National Environmental Management: Air Quality Act 39 of 2004 10, 79–80
National Environmental Management: Waste Act 59 of 2008 81–83, 84, 85
National Water Act 36 of 1988 80
Water Services Act 108 of 1997 80–81
environmentally sound management 113
environmental management 2, 9–15
and business management 3–4
challenges 122–123
and corporate social responsibility 10
environmental costs 14
and macro business environment 123–126
and market business environment 120–122
and micro business environment 116–119
NEMA 29, 42, 90, 104–105
participation by public and stakeholders 29, 44, 124, 129–130
principles 13–14
programmes 12, 13, 135
strategies 14–16
environmental management ethics 134, 134–135
and business policies and decisions 137–141
environmental management issues 120
see also environmental management: challenges
global environmental management incidents 125–126
impact on market business environment 122
management of impact on business activities 119–120
environmental management system see EMS
environmental management system requirements see EMS requirements
environmental objectives 51–52
environmental policies 42, 51–52, 64–66
environmental protection 41–44
see also conservation
environmental resource management 135
environmental rights 13, 129–130
environmental risks see safety hazards; substances (safety hazards)
158

Index
environmental safety
policies 44
safety risks 9
environmental self-assessment 123
environmental sustainability 26
ethics 131–133
see also environmental management ethics
business ethics 138–141, 142
and companies in South Africa 28–29
ethical codes/codes of conduct 140–141
ethical dilemmas 139
ethical framework 139
in everyday life 146–149
impact on the environment 139
and legislation 141
and lifestyle decisions 142–149
moral and cultural values 142–143
and societal structures 133
sources of ethical standards 143
unethical behaviour 146–149
and values 133
and whistleblowing 147–148
exploitation and over-exploitation of resources 13, 91, 92, 95
F
fisheries and forestry, impact on environment 92
G
global environmental management incidents 125–126
globalisation 126
Global Reporting Initiative (GRI) Guidelines 21, 25
global warming see climate change
great ocean conveyer belt 100, 101
green consumption movement 121, 122
greenhouse gases 102
see also human activities, impact on the environment
green taxes 124
Kyoto Protocol 104
reducing greenhouse gas emissions 109
H
human activities, impact on the environment 16, 38–39
human environment see social environment
159

I
industry 90
impact on the environment 91–99
business strategies to reduce impact 105–109
instrumental values 136, 137
integrated environmental management (IEM) 16, 42, 119
integrated reporting 27–28
interested parties 53, 65
see also interest groups; stakeholders
interest groups 43–44
see also interested parties; stakeholders
intergovernmental programmes 104–105
internal audits see audits
international environment 125
intrinsic values 136
ISO 14000:2004 29, 42, 49–50
applicability 58
elements 50–58
rationale for registration with 58–59
and regulatory requirements 59
scope 50
ISO (International Organization for Standardization) 3, 48–49
IWM (integrated waste management) 86
K
King reports 20–24
differences between King II and King III 22–23
King I 20
King II 20
King III 21–24
Kyoto Protocol 104
L
legal requirements for EMS 51, 52, 59, 67
legislation
see also environmental legislation
Bill of Rights 129–130
on climate change 104–105
Constitution of the Republic of South Africa, 1996 9–10, 142
liability 84, 87, 122, 140
litigation 22
160

Index
M
macro business environment 114, 123–126
management 2
managers 5, 7–8, 14
management reviews 57–58, 68, 72–73
market business environment 114, 120–123
matter in the natural environment 34–35
micro business environment 114, 116–117
impact of environmental issues 117–120
mining, impact on environment 93–94
N
natural ecosystems 90, 91, 96, 97, 98
see also agroecosystems; ecosystems
natural disasters 97
natural environment 11–12, 33–45
human activities, impact on 16, 38–39
matter 34–35
nature of the natural environment 34–35
safety hazards 11, 11–12 ,34–38
safety risks 11–12, 37, 48, 51
substances (safety hazards) 11–12, 34–37
natural driving forces on corporate behaviour 40–41
natural resources 82–86
natural world 2, 11
see also natural environment
NEMA (National Environmental Management Act 107 of 1998) 29, 42, 90, 104–105
noise pollution 79
non-conformities 56, 71
O
occupational health 6
operational control in EMS 69–70
orderliness as economic principle 2
P
PDCA-cycle 3–4, 57–58, 62–63,67, 73–74
see also Deming Wheel
physical environment 125
POLC-cycle 3, 4
161

policies
business policies and environmental ethics 141
environmental policies 63, 64–66, 67, 122
political and institutional environment 123–124
‘polluter pays’ principle 13, 87
pollution 77–78
and agriculture 97
consequences of polluting practices 84, 86–87
and mining 93–94
prevention of 105–106
and sustainable development 83–84
types of pollution 78–79
prudential value 136
public participation in environmental management 29, 44, 124
see also stakeholders
Q
quality management 9, 63, 107
R
record keeping in EMS 53, 56–57, 65, 68
see also documentation
record control 71
regulatory requirements 59, 107–108
resources 13
see also environmental resource management
biological resources 81
consumption of 91
impact of human activity on 16
impact of industry on natural resources 91
in implementing environmental management systems 68
in micro business environment 116–119
natural resources 82–86
water resources management 80
root causes approach to minimise industry impact 108
S
SADC (Southern African Development Community) 104–105
safety hazards 11, 35–36
safety, health and the environment (SHE) 4–9
safety risks 11–12, 37, 48
enterprise safety risks 7
environmental risks 9, 35–37
162

Index
SANS (South African National Standard) 14001:2005 62

SHE (safety, health and the environment) 4–9
social environment 11, 12, 124
social responsibility 24, 26, 139
see also corporate social responsibility
policies 120, 122
soil pollution 78–79
stakeholders 28, 26, 43–44, 55, 56
see also interest groups; interested parties
participation in environmental management 130
standards 48–49
see also ISO 14000
strategies
environmental management 14–16
pollution prevention 105–106
to reduce industry impact on environment 105–109
strategic design 106–107
waste management 84–85
substances (safety hazards) 11–12, 34–37
sustainability 83, 20, 22
principles 27–28
Dow Jones Sustainability Indices 119
reports 21, 25–26
sustainable development 10, 27, 83–84, 137–138
T
technological environment 125
total quality management (TQM) 4
trade and tourism, impact on environment 95
training 8, 52, 68, 108
transparency in triple context reporting 27
transport, impact on environment 95–96
triple bottom line (TBL) 24
see also King reports
triple context 24–27
see also King reports
U
ubuntu 143–145
unethical behaviour 146–147
the costs of unethical behaviour 148–149
163

V
values 135–137, 142–143
value statements 141
value systems 21, 143
see also ubuntu
W
waste 81–82
business waste 84
integrated waste management (IWM) 86
management strategies 84–85
National Environmental Management: Waste Act 59 of 2008 81–83, 84, 85
water pollution 78, 80–81
National Water Act 36 of 1988 80
Water Services Act 108 of 1997 80–81
wetlands 95
whistle-blowing 148, 147–148
164

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Environmental

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Overview of this chapter

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1.2 Defining environmental management

2 Kolk (2000) 3. 5 Kolk (2000) 213.

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published by the International Organization for Standardization (ISO), which

1.3 Relationship between environmental management and business

8 NEMA, ss 11 & 35. 10 Strydom (2011) 24–25.

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The PDCA-cycle, which was developed by Deming,11 corresponds congruently

1.4 Cross-functional teams

11 Deming (1982) 54. 13 SABS (2009) 3, 5, 7 & 9.

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1.4.1 Line manager

1.4.2 Environmental manager

1.4.3 Safety practitioner

15 Thompson et al (2005) 560.

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1.4.4 Occupational health expert

1.4.5 Ergonomics expert

16 Stranks (2012) 185. 18 Stranks (2012) 142–162.

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1.4.7 Human resources manager

1.4.8 Financial manager

1.4.9 Enterprise safety risk manager

20 Valsamakis et al (1992) 80.

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1.4.10 Maintenance department staff

1.4.11 Training department staff

1.4.12 Fauna, flora and marine expert

1.4.13 Water, air and soil expert

1.4.14 Expert in the general psychological and social well-being of humans

21 Stranks (2012) 276. 22 Goetsch & Davis (2001) 194–196.

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1.4.15 Quality management

1.4.16 Special services

1.5 Environmental management – emergence

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It is important to note that environmental legislation is of vital importance in

1.6 Environmental management and corporate social responsibility

24 Environmental Legislation and Policies (2015) 1.

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1.7 Components of the environment

Natural environment Built environment

1.7.1 The natural environment

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or damage to property or the environment. It is during the interaction of and

1.7.2 The built environment

1.7.3 The social environment

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