The U.S. Environmental Protection Agency (EPA) began the New Jersey Chemical Industry Project (NJCIP) in 1995 as one of a number of efforts to reinvent how it does business. EPA's Office of Policy (currently the Office of Policy, Economics and Innovation) was exploring approaches to working cooperatively with different industry sectors to examine how strategies for environmental protection might be improved based on the characteristics of a specific sector. The aim was to work with a multi-stakeholder group to find innovative ways to maintain or improve environmental quality while lowering the financial and/or transaction costs of complying with environmental requirements. EPA's Office of Policy worked with New Jersey Department of Environmental Protection (NJ DEP) , US EPA Region 2, and a Stakeholder Group made up of industry, environmental group, union, and community representatives on this project involving the batch chemical industry in New Jersey.

     The batch chemical industry in New Jersey was identified as a good candidate for this effort as a complement to EPA's work with a large continuous process chemical manufacturer.

This project began in the Industry Strategies Division, which was reorganized to become the Emerging Strategies Division and then the Performance Incentives Division. This division focuses on identifying, evaluating, and encouraging strategies and tools for improving environmental performance in the business sector.

Several members of the Chemical Operations Team of the President's Council on Sustainable Development noted that many regulations seem to be written with large continuous process manufacturers in mind and urged EPA to look at the special challenges that batch chemical manufacturers face in complying with these regulations. New Jersey is one of the top states for batch chemical manufacturing and the industry was willing to work with EPA to look for innovative ways to improve both environmental performance and economic efficiency.

     We started by asking what inspires companies to achieve--or keeps them from achieving--better environmental performance. From this information, we developed a list of 45 issues for possible pilot projects to test new environmental protection strategies. The Stakeholder group chose to focus on four pilots: materials recycling across and within facilities; flexible track for good environmental performers; trading effluent limits; and compliance assistance.

PROJECT GOALS

• Strengthen working relationships between different levels of government, industry, and communities.
• Identify how industry decision factors can be used to enhance environmental quality.
• Develop flexible, performance-based environmental management strategies.
• Explore new approaches for regulatory flexibility with a geographic focus.
• Use a stakeholder process to involve the community in environmental policy-making.

PROJECT OBJECTIVES

     The objectives of the NJ CIP were to:

1. Work with a multi-Stakeholder group to identify possible opportunities for improving approaches for protecting the environment;
   
   
2. Work informally with EPA and other agencies to resolve issues identified that could be readily addressed;
   
   
3. Design and implement pilot demonstration projects to develop, test, and refine new and innovative approaches (the largest part of the NJ CIP); and
   
   
4. Make recommendations back to EPA and the other parties for making improvements that are beyond the scope of the project.

5. Document the key methods for managing a successful project.

PROJECT PLAN

     This project consisted of five phases: Project Initiation; Project Definition; Definition of Test Approaches; Testing and Analysis; and Project Documentation (see Project Plan graphic below). We have relied on the stakeholder process throughout these phases and have held all four of the planned stakeholder meetings. (The Project Diagram shows how the meetings and phases are integrated.)

     Project activities and accomplishments for each of these phases are described in more detail in the links that can be accessed below.

• Project Initiation describes how EPA assembled a balanced Stakeholder Group and established an open and honest working atmosphere.
  
  
• Project Definition describes the information sources used to identify issues for possible Pilot Projects and lists each issue identified.
  
  
• Define Test Approaches describes how the Stakeholder Group chose the four Pilot Projects and briefly describes each.
  
  
• The Testing and Analysis phase embodies the centerpiece of the project - the four Pilot Projects developed by the Pilot Teams. These Pilots actually developed and implemented new innovative strategies for improving the operation of our environmental protection infrastructure while enhancing environmental quality. This led to benefits for agencies, industry, communities, and the environment. The four pilots are described with links to detailed discussions and documentation of the work completed.
  
  
• Project Documentation and Outreach describes some of the outreach efforts done throughout the project and provides links to many of the project reports and other products prepared early in the project and by the Pilot Project Teams. The NJ CIP staff are currently preparing a final report titled, "Learning to Listen: A Cooperative Approach to Developing Innovative Strategies for Environmental Protection." This report will be posted when completed. Here are some highlights from the report:

Project Recommendations:

     In establishing a Stakeholder Group, EPA sought balance between government, industry (large and small businesses), and environmental and other groups, and sought to identify participants who would think innovatively, could represent their organization yet still work cooperatively with others without promoting a set "agenda." Stakeholders agreed to a set of operating principles, including open and honest communication, non-adversarialism in all proceedings, being open to ideas for better approaches, and seeking to develop approaches that would have broad applicability for the sector and potentially other sectors. A key factor in creating a positive working relationship was frequent, open, and honest communications. Background materials were faxed before each of the many conference calls and detailed summaries were sent afterwards. A concerted effort was made to solicit input from all participants.

     Ideas given by potential Stakeholders in initial meetings served as the basis for a project plan that described how the project would proceed. This plan identified in general terms what would be accomplished at each of four Stakeholder meetings as well the tasks to be completed between meetings. The plan gave Stakeholders a clear vision of the structure of the project yet provided flexibility for them to identify the substantive issues to be addressed.

     EPA provided significant contractor support to research issues and document proceedings, thus keeping the substance of the project moving. This freed up other project participants for thinking, planning, and interacting. Senior project staff are skilled in facilitation and negotiation, which allowed the project substance to be addressed quickly. While EPA funded the project and managed the process, it did not seek to control outcomes. This assured all participants that their views would be heard and that they had a genuine opportunity to make a difference.

     The NJCIP Stakeholders designed and implemented four Pilot projects to test new approaches to environmental protection. The goals, outcomes, and recommendations of these Pilots are summarized below.

• The Compliance Assistance Pilot Team developed an extensive set of Compliance Assistance Materials (CAM) using a collaborative approach involving industry representatives and regulatory agency staff. The materials include plain language descriptions and agency contact information for many of New Jersey's environmental regulations; descriptions of ongoing NJ DEP compliance assistance activities; applicability flowcharts for six key regulations; and an extensive bibliography of compliance assistance resources published by NJ DEP, other regulatory agencies, and trade associations. The success of this effort led to the establishment of an ongoing working group of NJ DEP and industry representatives to maintain the CAM and continue to explore additional innovative approaches for improving compliance assistance in New Jersey. When implementing Compliance Assistance efforts like this, the industry-government collaboration is powerful for identifying the topics that most needed to be addressed and formats that are most useful. This collaboration is also valuable in the crucial task of keeping materials up-to-date and developing new materials. Finally, it is important to get the word out on how to access the materials so that they can help facility staff in protecting the environment.
  
  
• The Materials Recycling Pilot Team sought to identify opportunities to recycle or reuse process materials and clarify how hazardous waste management regulations applied to these situations. The Team described five typical batch process scenarios found in the chemical industry and identified where materials can be safely recycled, yielding environmental and financial benefits. New Jersey and federal hazardous waste regulations are the same so the lessons learned through this effort are relevant in other states where the federal rules apply. The government-industry collaboration is also valuable for conserving resources through materials recycling. Stakeholders urge facility staff to discuss opportunities for recycling with agencies and urge agencies to encourage innovative recycling activities. Where recycling activities differ from those allowed under the regulations, agencies may wish to test them with a few facilities before changing national policy. Facilities with proven track records of good environmental performance, such as Flexible Track participants, may be good test sites.
  
  
• The Effluent Trading Pilot Team worked to identify and address the barriers to effluent trading and to establish the first local pretreatment trades in the nation between indirect dischargers. Trading allows facilities to work together to control the discharge of pollutants in a manner that is cheaper for all parties. Trading at PVSC also benefits the environment, since 20% of the allowable metals units that are traded will be "retired," and not discharged into the environment. Stakeholders note that POTW credibility, both in establishing defensible local limits and maintaining a strong compliance and enforcement program, is crucial for establishing a successful trading program. Because lack of information and uncertainty are significant barriers to trading, "trading teams" or the POTW can assist facilities. Trading should be introduced when new local limits are being developed or existing ones revised to give facilities time to plan and establish trades.
  
  
• The Flexible Track Pilot Team developed the framework for a program within the NJ DEP for good environmental performers. This program seeks to provide incentives for facilities to achieve, maintain, and go beyond good compliance. Facilities will receive some flexibility and public recognition for their good performance. The community will have improved input into the environmental management process and increased understanding of the impacts of facility operations. The environment will benefit from the sustained good environmental performance of the participating facilities. This framework has been adopted by the New Jersey Department of Environmental Protection for its Silver and Gold Track for Environmental Performance program. The multi-Stakeholder process was invaluable to developing a framework and identifying eligibility criteria and incentives for participation that would work for industry, the agencies, and the community. One of the most difficult aspects of developing Flexible Track was identifying types of flexibility that were feasible for agencies to implement and would attract facilities to participate. Finally, outreach can help both industry and communities recognize the benefits of Flexible Track.
  
  
• Participants in each Pilot prepared reports summarizing the activities, accomplishments and lessons learned from the effort. In publishing these reports, the participants hope to document the outcomes of the Pilots so that others seeking to undertake similar efforts to improve environmental protection approaches can benefit from their experiences.

Measures of Success:

     At their fourth and final meeting, the NJCIP Stakeholders concluded that the project was a success in terms of both process and substance. In reaching this conclusion, they considered a range of questions, including: Is it possible for industry, government, and environmental and community groups to work together in a non-adversarial forum? Are projects like the NJCIP a good way to improve environmental protection? Do the approaches developed through this project have the potential to be on-going, functional programs that can be implemented on a broader scale?

     All indications are that the answers to these questions are yes:

• There was a very high degree of Stakeholder satisfaction at the conclusion of the project. Stakeholders noted that their initial skepticism about working with regulatory agencies on this type of project was dispelled.
  
  
• The NJCIP Stakeholders had no shortage of ideas to explore for developing new approaches to environmental protection. They were highly motivated to find the best approaches by focusing on the merits of each issue and pooling ideas and efforts.
  
  
• The efforts of the NJCIP Stakeholders resulted in the design and implementation of innovative Pilot projects that broke new ground in developing efficient and effective approaches to environmental protection.
  
  
• Each of the approaches developed through the Pilots still function as planned several months to years after being implemented, with all indications that this success can continue into the future. In fact, there is substantial interest among agencies and industry in using the Pilots to inform or serve as models for similar efforts in other states and for national initiatives.

Recommendations for Success:

     The NJCIP and other multi-stakeholder efforts represent a significant culture change in how all parties approach environmental protection. These efforts require regulatory agencies at the federal, state, and local levels to adopt a cooperative approach to working with the regulated community. Further, they require that these agencies work together with industry and with environmental and community groups in a non-adversarial forum. The NJCIP Stakeholder Group has developed a number of recommendations on how the lessons learned from the NJCIP can be applied to other similar efforts in the future. These recommendations are intended to help develop a workable process for conducting the project and to enhance the potential for achieving substantive results.

• Sector basis. Focusing on one sector allowed us to capitalize on relationships within the industry and address issues more in-depth.
  
  
• Geographic focus. By working in one location, we were able to build on and strengthen existing relationships to develop an honest and open atmosphere in which there could be cooperation among industry, environmentalists and all levels of government.
  
  
• Balanced Stakeholder group. The Stakeholder Group was balanced among industry (including smaller and larger companies), government (local, state, and federal), environmental and community groups, unions, and academia to ensure that new environmental approaches developed would be broadly applicable and beneficial. Future efforts may want to look for opportunities to provide financial support to help sustain NGO participation throughout the project.
  
  
• Stakeholder-driven. Stakeholders helped design the project, chose and designed the Pilots, and developed recommendations for future efforts. This inspired active participation because Stakeholders knew they could make a difference.
  
  
• Choose participants well. Stakeholders were selected because of their ability to bring the knowledge and the perspective of their organization to project discussions, as well as for their innovative thinking and their ability to listen to and understand others' perspectives, express their views in a non-adversarial manner, and work to develop "cleaner, cheaper, smarter" solutions that would be genuinely better for everyone.
  
  
• Open and honest atmosphere. Establishing an open and honest atmosphere allowed the project to be a forum for learning the pros and cons of different environmental protection approaches, not for political debate or divisiveness.
  
  
• Completely voluntary. Participation in the project was voluntary. Yet we achieved a high degree of Stakeholder participation without making promises of direct benefits to any participating company or organization. Stakeholders exhibited exceptional altruism and high quality service in contributing to a greater good.
  
  
• Management commitment. Sufficient resources must be allocated to see the project through to completion. It was critical to have dedicated staff to push the project forward by researching issues, developing project materials, documenting meetings, and keeping everyone informed and on-track.
  
  
• Communication, communication, communication. Our emphasis on open and honest communication began in the earliest phase of the project when EPA staff first began meeting with potential Stakeholders and we maintained it throughout the full duration of the project. Frequent communication with Stakeholders along with careful listening to and appreciation of their input was crucial to building the trust needed for this project to succeed.
  
  
• Seek the public good. We set groundrules for the project that were designed to achieve substantive goals: 1) cooperative mode of interacting, 2) seek general agreement in the group, not 100 percent consensus, 3) seek solutions that are transferrable to other facilities and industries, 4) seek solutions that do not threaten participants -- don't avoid change, but seek change that can benefit everyone.
  
  
• Focus on substance. The ultimate purpose of the NJCIP was to develop better approaches for protecting the environment. Maintaining focus on this goal was instrumental to keeping participants involved -- making a positive difference is the reason the Stakeholders worked with us.
  
  
• Mechanism for change. The NJCIP had many successes, demonstrating that innovative approaches can result in economic and environmental benefits. Stakeholders noted the importance of developing a mechanism through which some of the issues raised in the Pilots could be translated into regulatory changes. This requires a strong commitment of senior regulatory staff to implement, where appropriate, the findings of projects like the NJCIP that aim to identify and test new approaches.

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Last Revision: March 22, 2000
http://www.epa.gov/emergingstrategies/njcip/home.htm