■2012 JSPS Asian CORE Program, Nagoya University and VNU University of Economics and Business Application of ISO 14001 in food processing enterprises Phan Chi Anh* - Dang Thi Huong* Abstract: Environment is becoming hot issue to many countries and has attracted increasing attention of public organizations, businesses and citizens in the world including Vietnam One of the most importance choices for enterprises to control and minimize negative impacts on the environment is application of environmental management system ISO 14001 In Vietnam, food processing enterprises have the highest number of ISO 14001 certificates compared with other industry However, the number of enterprises certificated ISO 14001 is still small and mainly belongs to the enterprises with foreign direct investment (FDI) Therefore, the main purpose of this paper is to investigate current issue of applying ISO 14001 and assessing the factors influencing the implementing of ISO 14001 in food processing enterprises Some suggestions for fostering application of ISO 14001 in Vietnamese food processing enterprises have been also made Keywords: Environment, ISO 14001, environmental management system, food processing enterprises, Vietnam Introduction Therefore, various non-government organizations and In recent years, environment and food safety are pressure groups have been encouraging businesses to becoming hot issues to many countries in the world address the impact they are having on the environment Environment has been seriously destroyed; customers Common reasons that encourage businesses to ―green‖ disbelieve and turn their backs on enterprises These directly threaten the sustainable socio-economic development of each nation Some countries including their practices typically include growing consumer pressure; the reduced costs associated with improved Vietnam are paying a heavy price for economic boom efficiency, the reassurance of regulatory compliance and but of reduced insurance premiums (Peattie, 1995; Welford, environment protection and food safety for customers 1998) Some leading companies are using environmental Therefore, solving the environmental pollution issues in pressure to improve their operational efficiency, raise their while underestimating the importance this current period of accelerating industrialization and corporate image, develop new products and opportunities, modernization is not only an imperative task for governmental organizations but also the responsibility of enterprises and the entire society Chan & Wong (2006) stated that business has an essential and thus gain a competitive edge (Taylor, 1992) To respond to these pressures, many organizations have adopted environmental policies and carried out environmental audits or reviews One tool they could role to play in preventing environmental damage, as it is use to facilitate the implementation of environmental responsible for much of the environmental degradation that policies is a formal environmental management system has occurred because of the process of production (EMS), described by Rothery (1993) as a means of * University of Economic and Business, HaNoi National University ensuring that an organization, in all of its operations 14001 standard foreseeing that their European-based and activities, conforms to environmental targets set by customers will require it Globally, the trend of its policy, which itself relates to standards set by certified companies refusing to business with directives or other criteria EMS has become enshrined non-certified companies is increasing Thus, exporters in EU in developing countries will face more pressure from eco-management and audit scheme (EMAS) and the their trading partners in industrialized countries to International Standardization's implement an environmental management system in standard for environmental management systems ISO compliance with ISO 14001 ISO 14001 EMS standard 14001 The main purpose of the EMS is to organize may become a necessary condition of international environmental work in such a way that an trade Besides that, several surveys and case studies organization's environmental performance improves have been conducted in Europe and in developing continuously (Emilsson, Hjelm, 2002) It allows countries released that generally, enterprises are often organizations to be systematic in the evaluation of their slow to respond to the challenge of improving their processes and activities with regard to interaction with environmental performance due to the lack of financial, the environment knowledge and technical resources (Gerstenfeld, ISO 14001 requires that adopting organizations create Roberts, 2000; Hitchens, Clausen, Trainor, et al 2003; an environmental policy, set objectives and targets, Pimenova, Van der Vorst, 2004) implement a program to achieve those objectives, In Vietnam, processing industry in general and food monitor and measure the program's effectiveness, processing industry in particular are considered one of international standards Organization such for as the correct problems, and conduct reviews aimed at major industries of the whole nation and given special improving the EMS As such, the EMS is a tool that attention by the Government and Party In recent years, allows the continual improvement of the environmental food processing industry with high growth rate has behavior and performance (Emilsson, Hjelm, 2002; Gbedemah, 2004; Johnstone, Scapecchi, Yiterhus, et al, significantly contributed to the country’s GDP and 2004; Lozanoa, Valles, 2007) attracted a large workforce However, it cannot be denied Since the introduction of the ISO14000 series in 1996, that food-processing industry has caused many negative companies seeking the certification have been impacts on the environment, ecosystem, productivity and increasing worldwide The number of studies related to public health, including air pollution, water pollution and implementing ISO 14001 has increased as well solid wastes The number of businesses violating the Massoud, Fayad, Mutasem El-Fadel, et al (2010) pointed out that main motivations, benefits, incentives regulations on environmental protection is increasing The and challenges for acquiring ISO 14001 vary with application of ISO 14000 in food processing enterprises is location with no explicit prioritization This may be still limited with the number of businesses granted ISO attributed to the several independent variables that 14000 certificates are still small Meanwhile, studies related influence decisions and priorities whereby the demands to implementing ISO 14001 EMS in food processing for acquiring the certification are fundamentally market enterprises in Vietnam are still lacking, incomprehensive driven particularly in industrialized countries (Boiral, and scattered 2007; Jiang, Bansal, 2003; King, Lenox, Terlaak, 2005; Toffel, 2000) Many firms in Asia are adopting the ISO Therefore, in this study, we attempt to: + Generalize current situation of applying ISO 14001 in food processing enterprises; + Assess the factors influencing the implementing of ISO 14001 in food processing enterprises; + Give some recommendations for food processing enterprises in order to foster the applying ISO 14001 in Vietnamese food processing enterprises Source: www.vpc.org Some facts and finger Some previous studies found that food processing industry It is suggested that implementing EMS can bring benefits in Vietnam may have caused many negative impacts on to a company not only in financial terms through a the environment, including air pollution, water pollution reduction in energy costs and other resources, but also in and solid wastes In term of air pollution, the most popular terms of improving the company's image with the general source of contamination is the stench of prolonged raw public and other stakeholders (Hemenway & Hale, 1995) materials, decomposed organic compounds in solid wastes Therefore, numbers of companies seeking the certification and wastewater water from sewers and drains…They have been increasing worldwide By December, 2009, ISO create/release toxic gases (H2S, CH4, NH3…); mephitic 14001 was worldwide applied with 223,000 organizations stench of raw materials in outdoor exposure conditions; in 159 countries certified In Vietnam, the certificate of ISO 14001 was first dust, gas and smoke generated by burning coal, wood; or awarded in 1998 and since then the number of temperature, noise arising from the boiler, from the stages organizations certified has increased fast By the end of of food processing: mixing, cooking, baking, frying, December 2009, the number of enterprises certified in steaming… Using much water, food processing industry Vietnam was about 500 enterprises They are mainly also releases large amount of wastewater Wastewater the enterprises with foreign direct investment (FDI), consists of both living and production wastewater, derived specializing in food processing, electronics, chemicals from equipment coolers, cooking and steaming stages as and construction materials This is a significant progress in Vietnamese enterprises’ awareness of well as plant cleaning water Generally, wastewater is environment protection activities However, this organic- rich, easily biodegradable with high contents of number is still small compared to other countries in the COD, BOD5, SS, TS and sugar Long time being in region In 2007, the number of ISO 14001 certificates sewers, it creates stench and toxic gases It also causes land of Vietnam compared to Indonesia, Malaysia, pollution and reduces underground water quality Solid Philippine, Singapore was only 50- 55% and to wastes include wrappings, material containers, redundant Thailand was 35% only materials, ashes, lime residues, deposited mud, living Figure 1: Number of ISO 14001 certificates issued in wastes from foods and drinks…These wastes will reduce Vietnam by 2009 the quality of the air, land and water, negatively affect human heath, even economy, environment and society unless they are appropriately controlled and disposed Discussion Therefore, it is important to encourage food processing The survey result showed that, only three ISO 14001 EMS enterprises to apply ISO 14001 certificates were reported within 15 food processing enterprises in Ha Noi examined They were all big veteran According to experts, the sector of food processing businesses having export market and strong financial (sugarcane, seafood, alcohol, soft drinks ) has the power The others were not much interested in ISO 14000 highest number of ISO 14000 certificates However, They have been generally more concerned with safety and most of them belong to FDI or export enterprises quality issues rather than environmental issues It is which have large scale, strong financial capacity and better capability of investing into the environment necessary for the companies in this industrial sector to be Apart from the pressure from parent companies, these aware of the importance of applying ISO 14001 and enterprises understand that ISO 14001 can help them minimizing environmental pollution reduce costs, promote the customers’ belief and improve the image and competition ability in domestic We also asked these enterprises about the barriers to as well as international market That is the reason why applying ISO 14000 These factors include: they invest more into ISO 14001 ISO 14001 Awareness The application of ISO 14000 in the domestic production facilities and food processing enterprises is still limited The Recently, besides product quality improvement, food number of businesses granted ISO 14000 certificates is processing enterprises pay more serious attention to small but the number of ones violating the regulations on environmental issues because of their importance amid waste water treatment, on environmental protection is fierce competition, increasing demand from customers and increasing The authorities have discovered a mass of food society They understand that the observance of regulations processing enterprises causing environmental pollution by on environmental protection helps to bring about discharging untreated wastewater outside, making sustainable development, cost savings, better images in the residents so distressed eyes of consumers and authorities Good awareness of The research scope of our study was some food environmental protection creates advantages for a processing enterprises in Ha Noi To reach research company to approach business opportunities such as objectives, the questionnaire survey of food processing capital, domestic and international bids Therefore, 67% of companies in Ha Noi was done 50 questionnaires were total food processing enterprises attending the survey sent to senior and middle managers in these companies suppose that applying ISO 14001 ensures sustainable These are the people who are normally highly involved in planning and implementing the EMS in an enterprise business and good profits; 33% of them say that it Finally, 15 responses were obtained, for a response rate influences on immediate profits as well as sustainable of nearly 30% business However, with only 20% of them officially applying ISO 14001, the awareness of this quality low Knowledge and skills of leaders and managers are management system is still limited among the companies still limited Many people majoring in engineering or sociology hold positions of management or business Some leaders improve their qualifications through self- Financial capability Building and applying ISO 14001 need money for a studying or short- term refresher courses Failure to great number of activities such as consulting, training, ensure professional qualifications and management wastewater treatment, solid waste treatment, improving skills of enterprises’ leaders not only affect their drainage treatment performance in present positions but also distract them infrastructure, exhaust systems, management and from accessing quality management systems such as administrative costs, operation supporting costs… The ISO14001 costs vary among each type of enterprises, product In addition, there is the shortage of staff having features and operation scale, but financial resources extensive knowledge of environmental protection in must be prepared enterprises According to the survey, only 20% of Nowadays, the investments in environmental protection enterprises system, and wastewater have environmental division and specialized workers, falling mainly into enterprises mainly depend on companies’ own capital With high granted ISO 14001, the other 80% not have such average capitals, state-owned and FDI enterprises have specialized staff The shortage of environmental more advantages to apply management systems such as workers and the weakness of human resources have ISO, HACCP Small and medium-sized enterprises limited the efficiency in environmental protection, account for 97% of total enterprises in Vietnam 50% of covering the integration of new and environmentally them have average capital of only 1-5 billion dong, which friendly technologies, deployment of clean production programs, and application of new management is a barrier for applying ISO 14001 methods in accordance with ISO 9000, ISO 14001, out of 15 enterprises attending the survey (47%) say that environmental certificates and brands they are willing to pay for applying ISO 14000, but the Technological capability remaining 53% are not because of priority given to In recent years, the food processing sector has made production and business activities Most of them say that, remarkable progress in technology Most companies weak finance is one of the major barriers for them to apply tend to develop and improve technology and ISO 14001 and they need the support from environmental equipment, use advanced technological line for protection funds According to the survey, nearly 100% of production This helps improve productivity, quality, and reduce the impacts of waste on the environment the enterprises say that they did not receive any financial In the process of technological innovation, the most support (or so little) from the national environmental significant measure adopted is to improve existing protection fund and other ones, making it hard to apply production processes To state- owned enterprises, it is environmental management systems less costly and easier than buying new technologies Human resources Meanwhile innovation of the advanced technologies The quality of the human resources in Vietnam helps enterprises with FDI create good products enterprises in general (managers and workers) is still Food processing enterprises have been actively involved in researching, transferring and using Enhancing awareness of leaders and staff environmentally friendly technologies These are some on ISO 14001 major projects they have attended recently: Project of Full understanding of quality management in general and wastewater treatment technology for beer industry (Institute of Beer- Alcohol- Beverage and consulting ISO 14001 in particular is a very first step to build quality office of Australia); Project of wastewater treatment management programs All members in a company, from technology for confectionery industry transferred to senior managers to ordinary workers must that Tràng An confectionery (Technology Transfer Center Although most of food processing enterprises in Ha Noi from National Steering Committee on Water Supply & have different measures to protect environment, the Environmental Sanitation and Japan’s Technology application of ISO 14001 is important and necessary ISO Transfer Office); Wastewater treatment system using 14001 not only helps control environmental issues, but also Belgian technology for Bien Hoa II industrial park; Italian technologies for Hazardous Waste Treatment… reduce costs, improve the image and competitiveness for However, the development and application of the businesses The companies should continue to promote environmental technologies as well as importing some activities such as educating, improving awareness of foreign technologies in Vietnam are still spontaneous both leaders and staff on social responsibilities, There is an absence of orientation and comprehensive environmental management systems through some management of the government, which leads to poor following measures: Attending some training courses of performance of technical equipment, wastage and quality management, ISO 14001; Taking part in some costliness technologies forums, clubs on quality and ISO 14001, learning the should be based on the criteria of modernity, efficiency, methods of applying ISO 14001 from other organizations; relevance and popularity In addition, they must be Enhancing awareness of all staff on social responsibilities easy to manage, warrant, maintain with low costs through some training courses of environment, cultural Choosing environmentally friendly Importing technologies is an indispensable requirement events or emulation movements; Improving the amid weak market of environmental technologies, limited resources of both human and finance… corporation management skills of leaders and enhancing However, besides the limitation of the importing their awareness on green growth, social responsibilities and investment and the limitation of management and economic benefits as well from investing into environment operation skills, the thinking of innovation in processes, protection production methods and technologies is still sluggish That is the reason why the number of environmentally Building environmental policies and the friendly technologies imported is still small while commitment of everyone in the organization backward ones are excessively imported by the In order to build a successful ISO 14000, the companies Therefore, environment pollution tends to enterprises need to have a commitment and an be more serious environmental policy agreed by leaders and all staff Recommendation Environmental policy defined by top leaders represents the orientation on environment of the whole enterprise The environmental policy must be built on the basis of environmental policies for the company, and assessing guidelines, general policies, orientation of sustainable impacts on the environment development, and environmental protection strategies, + The staff must be able to operate the sewage environmental law and related legal documents treatment system, analyze and check the safety of Then, environmental objectives will be defined and goods, environmental standards, regularly update specified in each unit based on the environmental market information related to environment policies Environmental objectives should be specific, Applying quantifiable and evaluable When building and revising technologies the objectives, organizations must consider the legal requirements and many other ones such environmentally friendly Innovating production technologies is one of the most as important solutions to minimize environment pollution environment, technological plans, business, finance, and and stakeholders’ views improve competitiveness Technological innovation helps companies reduce production costs, Deploying ISO 14001 would not be successful without improve products’ quality and meet the demand on comprehensive commitment of senior leaders The standards for packaging, safety, processing, and leaders must have a strategic vision, clear and specific material savings Nowadays, some food processing values as well as customer-oriented goals Besides enterprises start to invest into technologies while many building strategies, systems and measures, they must of others not have enough conditions Their biggest mobilize the participation and creativity of all staff to build barrier is poor knowledge, poor finance, and poor and improve environmental protection capability of the information organization With the direct participation, leadership’ role for applying the system Therefore, they need to have strategies and appropriate is to strengthen and to encourage value creation measures to innovate technologies These are some Training suggestions: In order to apply an environmental management + Innovating sewage treatment equipment to improve system for producing goods with national and operation efficiency and minimize environmental international standards, the companies must plan to pollutants train their staff Studying the environmental standards + and regulations and applying them must be regular Replacing hazardous technologies by environmentally friendly ones activities in the companies According to the survey, + Adding some environmental pollution control there is a shortage of staff having environmental devices to existing equipment in order to minimize, specialization in most food processing enterprises even to prevent discharging harmful substances into Therefore, it is necessary to train the human resource at the air, water and land all positions: + Importing modern, safe and high quality equipment + The leaders must have a full understanding of + Researching the capability of moving to use less organization’s operation, documents, environmental harmful fuels This is one of sound measures that many regulations and the system of standards countries choose for heading + The head of environment department is responsible + Generalizing ISO 14000 in all enterprises, labeling for monitoring environmental situation, solving ―ecological mark‖ on all products related to environmental problems, setting out objectives and environment In addition, a clean production process should be affecting application of ISO 14000 such as ISO 14000 applied in each facility All stages of the production, awareness, finance, human resource, technology… It service and product life cycle should be carefully also suggested some solutions to promote the examined to offer better measures This not only application of ISO 14000 in these enterprises The reduces sewage but also brings about economic above analysis and evaluations would help enterprises benefits thanks to saving materials and energies, which find the causes and solutions promoting more help a company to get more profits, recover capital application of ISO 14000 in Vietnam rapidly and improve the image in the eyes of the public References Approaching and tackling environmental (1) King, A.A., Lenox, M.J., Terlaak, A (2005) information Poor information is one reason of violating ―Strategic use of decentralized institutions: exploring environmental protection regulations Vietnam certification with the ISO 14001 management enterprises are facing difficulties of approaching the standard‖, Academy of Management Journal, 48 (6), information of markets and products Therefore, apart pp 1091–1106 (2) from information from the authorities, they 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that, only three ISO 14001 EMS enterprises to apply ISO 14001 certificates were reported within 15 food processing enterprises in Ha Noi examined