Environmental Compliance Requirements

Darian McBain

Head of Sustainable Development Policy

October 2003

Content

• Introduction

• Regulatory Considerations

• Environmental Procurement

• Sustainable Development

• Contacts and Further Information

Introduction - NHS PASA

Executive Agency of the Department of Health, established April 2000

remit to modernise and improve purchasing and supply performance in the NHS

150 purchasing professionals in the Agency and 300+ in the NHS

3,000 contracts and framework agreements worth +£2.3b covering +1M product lines with 1,400+ suppliers

centre of expertise and knowledge

ISO 14001 certified environmental management system, third annual environmental report published September 2003

Why are environmental issues important?

• the environment affects human health

• EU policy

• Government policy

• New Environmental Strategy for the NHS

• bottom-line

• environmental legislation

Environmental legislation

• WEEE (Waste Electrical and Electronic Equipment) Directive – Agreement reached on new EC Directive– Introduction of mandatory collection, re-use and recycling of WEEE

• Packaging Regulations– Producer Responsibility Obligations (Packaging Waste)

Regulations 1997– Packaging (Essential Requirements) Regulations 1998

• Integrated Product Policy (IPP) – aims to minimise the environmental impact that products have on the environment– Advisory Committee on Consumer Products and the Environment

(ACCPE)– Market Transformation Programme (MTP)

WEEE – Who? Why?

Waste Electrical and Electronic Equipment Directive

• EU Directive to improve producer responsibility

• Makes producer responsible for the COLLECTION, TREATMENT AND RECYCLING of WEEE

• Aims to minimise environmental impact by considering whole of life costs

• Producer is financially responsible

• Producer includes manufacturer, importer or retailer selling their own goods

WEEE – What?

• Covers all equipment dependant on electrical currents or electromagnetic fields

• Applies to 10 categories

• Category 8 (Medical Devices) – no targets

• Excepts all implanted and infected products

• Cat 8 includes: radiotherapy equipment, cardiology, dialysis, pulmonary ventilators, nuclear medicine, laboratory equipment for in-vitro diagnosis, analysers, freezers, fertilization tests, other appliances

WEEE – When?

• Adopted by EU in October 2002, to be transposed to UK Law by August 2004

• Most producer responsibility requirements will be in force by August 2005

• At least 4kg of WEEE must be collected per head of population - some 250,000 tonnes in the UK - by 31 December 2006

Meet the Family (1) - ROHS

Restriction on Use of Hazardous Substances

• Sister of the WEEE Directive

• Electrical goods source of heavy metals and organic pollutants

• Bans the use of mercury, cadmium, lead, hexavalent chromium, PBDEs and PBBs from July 2006, with certain exemptions

• Applies to 9 areas of WEEE directive

• Medical Devices will be reviewed by Technical Advisory Committee 2 years AFTER entry into force

Meet the Family (2) - EEE

Electrical and Electronic Equipment Directive

• Work in harmony with WEEE and ROHS

• Aims to improve the environmental impact of EEE from design stage

• Aims to harmonise product related environmental requirements for EU market

• Stardardisation bodies (eg CEN) to develop harmonised technical standards

• Will encourage use of life cycle assessment, EMS, ecolabelling

Packaging Regulations

Producer Responsibility Obligations (Packaging Waste) Regulations 1997

• Applies to: ‘all products made of any material of any nature used for the containment, protection, handling, delivery and presentation of goods, from raw materials to processed goods, from the producer to the user or the consumer’

• Applies to 6 types of activity – packaging manufacturer, converter, packer/filler, seller, wholesaler, importer

Packaging Regulations

Packaging (Essential Requirements) Regulations 1998

• Controls packaging placed on the market

• Essential Requirements:

– minimal packaging;

– minimise noxious or hazardous substances

– Recoverable

• Heavy Metal Limits: aggregate <100 ppm

(cadmium, mercury, lead, hexavalent chromium)

Packaging – case study

Pharmaceutical company - reusable plastic delivery crates

• Cost savings on packaging

• Cost savings on waste disposal, both for pharmaceutical company and for clients

• Fewer breakages

• Modular designed crate to allow easy repair of broken containers

• Collapsible empty crates easy to transport

• Transport efficiency – cycled back to depot

Source: Envirowise

EC Procurement Rules

• Non-discrimination

• Freedom of movement

• Equal treatment

There must be a direct link between award criteria and the subject matter of the contract

What is environmental purchasing?

• the pursuit of environmental policy goals through procurement activity

• integration of environmental issues into procurement and financial accounting systems

• integration of procurement into environmental management systems

• the optimisation of value for money

Scope of environmental purchasing

• what is purchased

• what is not purchased

• the purchasing and supply process

• how products are manufactured/services are delivered

• end-of-life

• supply-chain performance

The business case for environmental procurement

• reduce waste and improve resource efficiency

• secure the supply of goods and services

• provide cost savings, improve profitability

• provide added value

• protect or enhance reputation

• create markets for new products and services

• satisfy stakeholder expectations

• opportunity for competitive advantage

adapted from the IEMA/CIPS/NHS PASA guide Environmental Purchasing in

practice, 2002, Section 3, pp9-14

Whole life costing

• Lowest price vs value for money

• Whole life costing – cradle to grave

• Enables running costs to offset any increase in capital costs

• Applies to payback over the life of the equipment or service contract

• Consider – running costs, special storage or handling facilities, material inputs, waste management costs from use or ultimate disposal

• Encourage Design for the Environment adapted from the IEMA/CIPS/NHS PASA guide Environmental Purchasing in

practice, 2002, Section 3, pp9-14

Design for the Environment

• Reduce total materials used

• Reduce component count

• Minimise harmful materials

• Extend product life

• Extend materials life

• Design for energy efficiency

• Minimise pollution

Case Study - DFE

Varian Medical Systems

• Implemented cleaner design techniques to reduce environmental impact of products throughout life

• First applied to collimator unit of radiotherapy simulator

• Benefits include:– Lower production costs– Reduced environmental impact of products– Positive marketing feature– Improved quality product– Easier disassembly and increased recyclability

adapted from the IEMA/CIPS/NHS PASA guide Environmental Purchasing in practice, 2002, Section 6, p40

What is the Agency doing? supplier environmental survey

• survey of all nationally contracted suppliers in 2001 to determine environmental performance in the NHS supply chain

• 59.5% response rate achieved

– 86% top management place at least some importance on environmental issues

– 52% affected by environmental issues– 11% operating under a certified ISO14001 or EMS scheme, 39%

have an environmental policy– 3% make self-declared environmental claims which comply with a

recognised standard– 7 % use third party eco-labels– 18% had not taken steps to reduce the packaging applied to

products supplied to the NHS

Eco-labelling

• eco-labels are a guide for consumers to help them choose products and services that cause less damage to the environment and to human health

• products or services awarded an eco-label must comply with an agreed set of criteria which are determined on the bases of life-cycle assessments (i.e the cradle to grave approach)

• life-cycle assessments consider environmental impacts associated with raw material acquisition, manufacturing, packaging, distribution, operation, maintenance, and disposal

• eco-label criteria can be used as the basis for “green” specifications

• Global Eco-labelling Network - http://www.gen.gr.jp/

EU Eco-label product groups

• Tissue paper• Dishwashers• Soil Improvers• Bed Mattresses• Indoor paints and varnishes• Footwear• Textile products• Personal Computers• Laundry Detergents• Detergents for dishwashers• Copying paper• Lightbulbs• Portable Computers

• Refrigerators• Washing machines• All purpose cleaners and

cleaners for sanitary facilities• Hand dishwashing detergents• Televisions• Hard floor coverings • Vacuum cleaners• Tourist accommodation• Furniture• Tyres• Rubbish bags• Converted paper products• Batteries for consumer goods

Those in italics are under development - see http://europa.eu.int/comm/environment/ecolabel

Sample of Eco-labels

Green Flags/Quick Wins

• Joint project with NHS Logistics

• To appear in catalogues for NHS Buyers by end 2003

• Identify those products and services complying with eco-labelling program

• Suppliers should highlight to their relevant buyer if they meet this category

• OGC.buying solutions to highlight ‘Quick Wins’ in their catalogues

Awards and External Benchmarks

• ACCA awards

• FTSE4Good Index

• Business in the Environment’s Index of Corporate Environmental Engagement

• Dow Jones Sustainability Index

• Reduced risk – show better performance through reduced risk, possibly better shareprice performance

The future - sustainable development

• sustainable development is a very simple idea…it’s about ensuring a better quality of life for everyone, now and for future generations to come (UK Government 1998)

• meeting four objectives at the same time: social progress which recognises the needs of everyone effective protection of the environment prudent use of natural resources maintenance of high and stable levels of economic growth

and employment(see: www.sustainable-development.gov.uk)

• applicable at local, national, international and global level

preventative healthcare

treatment

care

resources

increased life expectancy

improved quality of life

emissions to air, land and water

decreased life expectancy/reduced

quality of life?

decreased life expectancy/

reduced quality of life?

emissions to air, land and

water

Sustainable development - the NHS rationale

Sustainable development: sustainable procurement

• what is sustainable procurement? inclusion of environmental and social, as well as economic,

considerations in the procurement process procurement processes that support and help deliver sustainable

development objectives

• public sector procurement is governed by EC Treaties and directives, as well as UK Government procurement policy. The situation is more complex than in the private sector, but there is still considerable scope to pursue procurement in ways that support sustainable development

• focus of current activity across Government, and within the Agency and NHS, is environmental procurement

• social issues are more problematic to tackle, but by no means impossible - this is an emerging area

NHS as Good Corporate Citizen

• Public procurement accounts for 14% of GDP for EU as a whole

• NHS spends over £11 billion annually on goods and services.

• significant influence over not only the type and quality of services purchased, but also over local economies and the prospects for sustainability.

• By behaving as a Good Corporate Citizen, the NHS can help support local communities and create a better environment

NHS-sid

What should you do?

• comply with all environmental legislation

• respond positively to requests for environmental information – whether during the tendering process or execution of the contract

• improve environmental performance by moving up the performance

hierarchy e.g. environmental policy, EMS, eco-labelling

• minimise the amount of packaging applied to products, and consider re-usable options and packaging take-back

• re-examine product design and explore opportunities for reducing impacts on the environment throughout the life-cycle of the product

• consider how your business can contribute to the achievement of sustainable development

Further information

• Agency website: http://www.pasa.nhs.uk

• Environmental Purchasing in Practice – guidance for organisations (copies can be purchased from IEMA)

• NHS PASA Environmental Report 2002/03 – available on the website or in hard copy

• Envirowise website: http://www.envirowise.gov.uk

• UK Government sustainable development website: http://www.sustainable-development.gov.uk