Page 40 - Occupational Health & Safety, April 2017

CHEMICAL MANAGEMENT
Corporate Risk and the Growing Case for Sustainable Chemical Management
Being responsible for the impact of a chemical disaster— on staff, local communities, the environment, and the local economy—is every CEO’s nightmare.
BY ROBERT POLITO
EP4 Environmental Protection | APRIL 2017
www.eponline.com
Like much of the developing world, Vietnam had a dilemma on its hands. Keen to attract foreign investment, the government there was accused of streamlining its approval process
for multinationals entering its buoyant market, to the detriment of the environment.
Plenty of evidence points to a huge release of toxic chemicals1 into the Vung Ang bay on the country’s north central coast as the root cause of a devastating fish kill; some 70 tonnes of dead fish washed up on the beaches in the region.
Who is responsible for the chemical spill—which is likely to have huge implications for the Vietnamese seafood and tourism sectors—is unknown. Most eyes instantly turned to what seemed to be the most obvi- ous of instigators: the Formosa Ha Tinh Steel Compa- ny (FHS) complex, a deepwater port that has already benefited from more than $10 billion of investment in recent years. Facing a tide of social media speculators, the government has been quick to deny any wrongdo-
ing by the business, with FHS stating flatly that all of its activities complied with Vietnamese laws and regu- lations, and it just couldn’t explain the huge number of dead fish piling up on local beaches.
The argument between a defensive government and a newly liberated, social media-savvy commu- nity continues to rage across Vietnam. And the tale highlights once again the implications for business of poor chemical management and the negative impacts of environmental destruction—conscious or other- wise—on corporate reputation.
The world is slowly waking up to corporate envi- ronmental or social ills. The advent of social media has armed consumers with a wealth of new informa- tion about the brands and companies they engage with. The new generation of so-called Millennials is more concerned than ever with green issues. And people, in general, now better understand issues that have long gone unreported: climate change, deforesta- tion, droughts, floods, erratic weather events, human rights abuses, and modern slavery are all terms about which people are more familiar and concerned.
Social networks also provide new tools to share and shout about such issues, along with whether com- panies are giving social and environmental responsi- bility the attention it deserves.
More than a quarter of the value of small and mid- sized companies is tied to their reputation. In the UK, for example, the total value of corporate reputation for all listed companies is around £1.7 trillion, according to the Quoted Companies Alliance (QCA) and BDO. The worrying trend, however, is that few companies are doing something to protect that value. Of the 220 companies polled for the QCA/BDO study, most rec- ognize the importance of corporate reputation, yet only two-thirds have a formal plan in place to manage it. More than half of the financial advisers who were asked whether small and mid-sized firms adequately safeguarded their reputation said they do the “bare minimum,” with 40 percent saying that firms were completely unprepared for reputational shocks.
Just look at what happened to Volkswagen in the weeks following news of how it cheated emissions testing of its vehicles. Some £15 billion was wiped off its value price. Similarly, when the financial practices of insurance broker Quindell were called into ques-
Nightman1965/Shutterstock.com