Environmental legislation ignored at cost

UK manufacturing SMEs are putting their livelihoods at risk by struggling to keep up with increasing environmental legislation - 46% of their managers are not aware of existing environmental law.
UK manufacturing SMEs are putting their livelihoods at risk by struggling to keep up with increasing environmental legislation - 46% of their managers are not aware of existing environmental law. Small and medium-sized enterprises (SMEs) in the manufacturing sector - recognised as the backbone of British industry - are putting their livelihoods at risk because they are struggling to keep abreast of increasing environmental legislation. City and Guilds has found that almost half (46%) of SME managers in manufacturing companies are not aware of existing environmental law with which their businesses must comply.

The new research from the UK's leading provider of work-related qualifications, carried out to encourage businesses to adapt good manufacturing practices, reveals a lack of understanding about the impact of non-compliance.

One in seven SME managers are ignorant of the fact that infringements could result in hefty fines, and 12% are oblivious to potential prosecution.

Alarmingly, only 19% of managers believe that an environmental offence caused by their company could put them out of business, despite the fact that 42 per cent think it could lead to long term damage to the company's reputation and finances.

New rules introduced in last year's Clean Neighbourhoods and Environment Act mean that environmental polluters can be arrested, and face prison sentences and fines of up to GBP 50,000.

In December 2004 Sevalco was ordered to pay GBP 310,000 after it released 17 times the authorised levels of cyanide into the Severn Estuary, affecting local invertebrate life.

Yet businesses can avoid legal pitfalls and organisations such as the British Coatings Federation (BCF) have shown that good manufacturing practices and training have a positive effect on a company's reputation - and bottom line.

In 2005, BCF helped establish a decorative coatings environmental policy.

This policy covers agreements to reduce pollution caused by decorative coatings, to encourage the efficient use of products and minimisation of waste, and to guide the industry on the safe disposal of wastes from the use of decorative coatings.

Distressingly, despite these examples, many SME managers are still not seeking advice on how to comply with environmental legislation.

Almost one in ten don't consult anyone to ensure that their working practices comply because they don't feel they need advice or they don't know where to go to get it.

The research also found that ignorance of environmental legislation is more prevalent among managers in small manufacturing companies, with 20% not knowing they could be personally prosecuted and 27% unaware that they could be personally fined if their employees do not comply.

Sadly, a significant number of employees in SME manufacturers are unaware of even basic environmental rules.

For example, 34% did not know that washing paint brushes in sinks that drain into the waste water supply was illegal and 13% did not know that disposing of industrial oil down the sink is against the law.

One in ten employees also felt that their managers would sometimes turn a blind eye to such breaches.

Lynne Oliver, Manufacturing Working Practices specialist at City and Guilds, commenting on the research results, said: 'According to the Environment Agency, the SME manufacturing sector accounts for 80% of pollution incidents in England and Wales*.

This makes in-depth training vital for both managers and employees.

Increased knowledge and training will not only outline environmental obligations and better workplace practices, but will also boost staff morale and efficiency, helping SME manufacturers process quality products that are equally 'green'.

'The lack of knowledge surrounding the latest regulations is a significant barrier to improvements in the UK's environmental track record.

It is only through continued training that companies will keep a competitive edge, and improve their efficiency within the global marketplace.' * The European Environmental Liability Directive (2004), Clean Neighbourhood and Environment Act (2005) and DEFRA's environmental key performance indicators (2006) all apply to SMEs and failure to comply will lead to prosecution and fines.

* SME manufacturers directly account for 2.4m jobs in the UK - around eight per cent of total employment - and contribute £200 billion to UK turnover.