As the trend of corporate expansion into new international territories shows no sign of slowing, Corporate Audit Programs must find efficient ways of embracing global complexity. Companies must address the challenge of building one standardized and consistent compliance system in face of different languages, cultures, perceptions, regulations and enforcement practices.
This month, Enhesa would like to get a little personal with its readers. In this article, we interviewed a few of our seasoned experts on international audits. Fabio Cherubini, Director at Enhesa, Paul Soler-Sala, Enhesa Senior Consultant, and Ellen Zhang, China EHS Consultant, would like to share their experiences and offer advice on what makes an International Audit Program successful.
What are the biggest challenges you have faced while conducting international audits?
Paul: One of the first issues I find most often is ensuring that the expectations of the audit program are clearly communicated. Audit program language is generally very English-intensive, so it is important to be clear and open to additional explanation, from pre-audit to post.
It is also vital to make sure the auditee understands what the value of the audit is—not just getting through it. Some audit programs base their bonuses off of audit performance. It’s really imperative that the purpose is fully conveyed and embraced to lessen any unnecessary anxiety or gaps in information—especially in countries that are not fully used to the process.
Fabio: In my experience, auditing at an international level is not that much different than auditing in the US except for the fact that you are confronted with a language you do not understand, and that you’re trying to make sense of legal requirements that have been created by a mind clearly not following your same logic. You often find yourself discussing it with people that rarely share your same appreciation of the relative importance of the issues you are raising.
Ellen: Another challenge is varying enforcement practice. In China, I’ve seen some companies claim “no enforcement” as a legitimate excuse for non-compliance.
Paul: I agree, Ellen. I’ve also experienced issues with enforcement practice. Sometimes you’ll have a serious finding at a facility, but the local government and plant manager told them they didn’t need to do it. It then becomes difficult to convince them that the issue is significant.
Ellen: Knowledge beyond EHS issues is also critical. For example—a regulation obligates a facility to notify Bureau “A” about one issue, but in practice or due to changes in government authority or function, that issue is now being taken care of by Bureau “B.” Some related regulations are not updated immediately, so it is up to the Auditor to consider that if a company fails to notify Bureau “A”, it could be possible that the notification was just sent to a different government authority.
What might be an example of a cultural misunderstanding during an audit that could lead to confusion?
Paul: Familiarizing yourself beforehand with cultural behaviours is crucial. For example, in some cultures, it is uncommon for someone to ask questions or to admit that they don’t understand something, because in their culture, saying “no” or admitting confusion is perceived as offensive. This is why clarity and openness should be taken very seriously.
Ellen: Clarity is vital to avoid any cultural misunderstanding and it has to be constantly reiterated. During one audit I experienced, the auditor was talking about issues of hazardous chemicals, but the locals thought they were talking about dangerous goods. Constant reminder was needed to have both sides on the same page.
Paul: You might also run into unanticipated and sometimes humorous “time challenges” to your audit day. In one audit, I lost half of the day due to a lunch that took up the entire afternoon. In that culture, however, extended lunches were a norm. In another instance, you might find that the locals are so proud to show you their facility that the initial tour of it also takes up half the day. These situations might present you with a time crunch you weren’t prepared for.
We’ve touched a lot on field experience. What are some issues for EHS Managers to take into account while developing a successful International Audit Program?
Paul: An international management system needs to have accurate and complete regulatory information available. I’ve always believed that you can have a great team, good resources and lots of funding, but if you don’t have someone on site that has the proper tools to access the regulations, then a lot of energy is wasted on figuring out what those regulations are.
Fabio: Without the proper tools, figuring out those regulations is not easy. There is often the absence of a codified regulatory framework that can be clearly framed as a “scope” of the audit. Contrary to, for example, the US CFR Title 40, most international environmental requirements are scattered in a multitude of individual and, at best, interconnected pieces of legislation. The scope of an audit or portions thereof cannot therefore be defined by simple reference to one or several specific articles, but must be linked to more general “areas” (air, water, fire safety, etc) whose actual regulatory content must be pulled together and digested into auditable requirements.
Paul: It’s also really important to realize that a lot of legislation out there was not written to be translated into a protocol. There will be ambiguities, lack of clarity, gaps, vagueness and poorly written legislation in the world. Understanding the applicability and jurisdiction that your facility falls into is essential, and, as Fabio said, finding the right tools and practices to interpret these regulations into something comprehensive will help make any international audit program successful.
Enhesa shared international audit program experiences in a webinar to address the challenges of International Auditing, how Enhesa Audit Protocols & ScoreCards improve your Audits and Audit Program, and how other companies are using Enhesa services. If you are interested in viewing the recording, please contact us at firstname.lastname@example.org.