Carl Wirdak Occidental Petroleum Corporation GEMI Gemstones Environmental Management Systems GEMI Conference March 2003

GEMI Gemstones – March EMSs - What are they? This survey addresses the use of environmental management systems (EMSs) in organizations. Can range from the formal ISO approach to one that is based on organization-specific procedures and practices. For the purpose of this survey, either end of the EMS spectrum is considered valid.

GEMI Gemstones – March Survey Overview 175 registrants attending 47 surveys completed –27% response rate Thank you to all participants!

GEMI Gemstones – March Do companies have an EMS? 33 of 40 companies have an EMS No EMSs in use by –Academics –Agencies –Consultants –but this is a very limited sample

GEMI Gemstones – March How mature are the EMSs? Most EMSs are still toddlers There are a few teenagers out there # of EMSs

GEMI Gemstones – March EMS Drivers Business needs drive adoption and implementation of EMSs

GEMI Gemstones – March What are the “other” drivers? Believe in the importance / usefulness of an EMSs to drive continuous improvement To obtain performance improvement Desire functional integration and performance focus Competitors actions Company President's initiative Relationships with local regulators & public opinion Socially responsible investment community It was the right thing to do

GEMI Gemstones – March EMS Elements Environmental policy Training, awareness and competence Documentation and records Operational control Emergency preparedness and response Non-conformance corrective and preventive action Cost tracking Environmental aspects Legal and other requirements Objectives and targets Environmental mgmnt program(s) Communication Monitoring & measurement Audit / assessment Management review 30% >80% >90% 100%

GEMI Gemstones – March EMS Verification All companies verify their EMS Systems 6 years and older favor internal verification by 3:1 margin Systems < 5 years favor internal verification by 4:3 margin

GEMI Gemstones – March Verification Frequency Every company verifies its EMS at least every 3 years Companies that use external verifiers are biased to more frequent reviews

GEMI Gemstones – March ISO Certification 58% certified –Majority of systems have been in place more than 5 years –60% (11 companies) use external verifiers 42% not certified –10 of 14 have been in place < 5 years –7% (1 company) uses external verifiers

GEMI Gemstones – March Does EMS help in decision-making? If EMS is ISO certified, average is 3.5 –Absent ISO certification, the average is 2.2 If EMS in place > 5 years, average is 3.6 –If < 5 years, average is 1.9

GEMI Gemstones – March Other EMS Benefits What’s in it for companies that institute an EMS? –Helps improve compliance and environmental performance and reduce risks –Enhances relationships with variety of external constituents

GEMI Gemstones – March Goals and Targets Companies link EMS goals with overall business goals Typically, annual targets and action plans are established if a company has an EMS Only 50% of firms link performance vs. goals to compensation NoYes Targets No Goals Yes Number of Companies

GEMI Gemstones – March Monitoring & tracking performance 94% track environmental performance 82% track progress against EMS goals 85% compare performance across facilities Roll-up of EMS information

GEMI Gemstones – March Communication of EMS information Internal CommunicationExternal Communication

GEMI Gemstones – March