Are Phase I Environmental Audits in Asia a Waste of Time and Money? Property Transfer and Environmental Liability in Asia
Randall Shaw
Health, safety and environmental consultant with 40 years experience successfully delivering projects in more than 35 countries across the Middle East, Asian, Europe and North America.
Over the last twenty years, we have carried out Phase I Environmental Site Assessments (ESA) for western–based multinationals in many countries across South-East Asia and the Middle East. However, we have yet to receive a single inquiry for this service from an Asian-based company, leading to the obvious question:
Why do western-based multinationals carry out ESAs while Asian companies do not?
In most recent blog post I attempt to answer this question. In particular, I describe:
- purpose and history of ESA
- standards for conducting an ESA
- property transfer and residual environmental liability issues, and
- my thoughts on the applicability of ESAs as a tool for liability protection arising from a commercial property or investment in Asia.
For those of you interesting in reading the details, you can find the blog post here.
Thanks for reading. Keep safe. Be healthy. Respect your environment.
This article contains excerpts from the blog post Are Phase I Environmental Audits in Asia a Waste of Time and Money? Property Transfer and Environmental Liability in Asia.
Randall D. Shaw, Ph.D. is Managing Director at Redlog Environmental Ltd. He has a wide-ranging background in health, safety and environment, with a focus on those HSE issues faced by industry in Asia. Dr. Shaw’s writes a weekly blog post - HSE Asia - where he shares his experience from working in more than 30 countries, his pragmatic approach to solving HSE problems, and his desire to pass on this knowledge to others. Ultimately, his goal is to help HSE professionals and companies across Asia tackle their HSE issues.
You can find him on Twitter at @RedlogHSE and can check out his most recent blog post here.
Business Analyst | Product Owner | Process Optimization | Agile | Scrum
5 年Great post, Deli Yu with the recent increase in climate change and the environmental impacts it has on the Asian Environment due to Anthropogenic actions, would you say the level of HSE awareness and compliance has improved over time since this post was made
Health, safety and environmental consultant with 40 years experience successfully delivering projects in more than 35 countries across the Middle East, Asian, Europe and North America.
9 年For me, the key question is not whether such contaminants exist, because they most certainly do in many sites, but the legal and financial issues related to responsibility and liability transfer. Western companies have faced these issues and have concluded that they would rather spend money evaluating these issues during the property transfer stage than ignoring and facing large clean-up bills later. It is the prerogative of a company to determine their risk threshold, and as noted by Deli, some companies are doing this via their own resources. I suspect that this trend will continue
Health, safety and environmental consultant with 40 years experience successfully delivering projects in more than 35 countries across the Middle East, Asian, Europe and North America.
9 年Dear Awinash, Thanks for your comments. But, I respectively disagree. As per my reply to Deli, there are other options for a Phase I other than ASTM. The reason for performing a Phase I is to identify potential liabilities during the property acquisition process. To say that there are no environmental issues in Asia or other developing countries because “Asian never had such industries” is simply wrong. There are of course many examples of these industries operating across the region. I have audited many sites in Asia where there were clear cases of contaminants in soil and/or groundwater from historical or current site activities or from adjacent properties. This could be from leaking underground tanks, leaking waste/sludge ponds, infiltration of oily waste into the ground, improper storage of hazardous chemicals, etc. In fact, visit pretty much any older industrial facility in most countries in Asia and it is more likely than not that you will find a potential issue.
Adviser ESG, EHS, Ecologist, Author, Knowledge broker, Mentor, Startups coach, Innovation catalyst & Entrepreneurship Strategist.
9 年Randall standards used like BRGM in France or ASTM in US are not relevant to Asia. So why even ask a question. lets be clear first of all Europe and US have had heavy Industries, toxic chemical manufacture, ammunition manufacture and dumps etc.. Asia never had such Industries. So why Environment DD? Take a country like Madagascar no heavy Industry in its back yard and some fellow wants Phase I Environment Audits as per BRGM or ASTM standards.. funny it is not. Where is super Fund and applicable standards or even CERCLA relevant. Notice that World Bank/ ADB/ Financial Institutions want Environment DD during any A&M so they hire EPFI's consultants, in debit the developing country. Not relevant in Asia. Your views only looking for business which is expensive and of limited use in Asia. Just European Investors will spend money on such buzz studies that have no significance.
Health, safety and environmental consultant with 40 years experience successfully delivering projects in more than 35 countries across the Middle East, Asian, Europe and North America.
9 年Deli, I agree. ASTM standard for Phase I ESA is based on US needs for liability protection and not necessarily the best approach to follow in other countries, particularly in those where environmental liability is less of an issue. Costs are also definitely a factor particularly if the client wants to follow E1527 approach. We have found that some clients are happy with a summary Phase I DD report, which saves time and money and provides most of the same information as E1527 report, albeit is a more condensed but also more reader friendly format.