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Implementation of the ISO 14000 System

in the New Suzhou Industrial Park

ISO 14000 has attracted quite a bit of attention in China. ISO 14000 is of particular
interest because

Enterprises which have been certified and which have made improvements to their
overall management and public image - resulting in greater efficiency and improved
sales - are very keen to further refine their environmental management to reach
international standards, and

Enterprises which focus on products for export have to consider how the new
international standards will affect their production.

For these reasons, SEPA (State Environmental Protection Administration) has

vigorously promoted ISO 14000 activities with considerable success, and set up the
following organizations and initiatives:

National Advisory Committee for Certification and National Registration Committee

for Proficient Auditors

The establishment of demonstration projects, and the selection of cities or regions for
testing ISO 14000 implementation

The encouragement, through local environmental protection authorities, of enterprises

to set up an Environmental Management System (EMS) as well as to apply for ISO
14000 certification

The new industrial park in the city of Suzhou has been selected one of the
demonstration sites by SEPA for the promotion of ISO 14000 in the most effective
way.

The Suzhou Industrial Park (SIP), located near Jinli Lake to the east of the city, with a
planned area of 70 square kilometers, is an important economic cooperation project
between China and Singapore. The project's goal is to develop an industrial park led
by new and high technology industries with modern management systems,
demonstrating eco-efficiency and offering social amenities.

1. General Overview for the Development of Suzhou New Industrial Park (SIP)

In accordance with the policy issued by the State Council for the overall development
of Suzhou, the development goal is "To maintain its old and traditional profile, and
expedite the development of the new industrial district." In 1990, the construction of
the industrial park was started. The park's total planned area was 70 square km, of
which the first phase was 25 square km. The area was divided according to function:
the Central Commercial and Trade Zone, the Science and Technology District, and the
Central Living Communities. In 1992, the SIP was approved by the State Council as a
National Development Zone for new and high tech products. In 1997, it was jointly
designated by the Ministry of Foreign Affairs and the then National Science Council
as a model of science and technical parks for industries, and it was opened to APEC
countries and regions. In 1999, it was identified as the first national demonstration
district by SEPA for ISO 14000 implementation.

During the course of past nine years, the Park authority has promoted development
based on a "trinity" of objectives: to attract high-tech investment, within an open-
market economic district, supporting a modernized new community. These principles
support the commercialization and internationalization of high-tech industries.

The influx of foreign investment based on the existing Suzhou economy has been
vigorously pursued, promoting a rapid yet sustainable urban development. Between
1992 and 1999, the district economy increased by 50% per year, and the domestic
gross product expanded from less than 100 million to 12 billion RMB. During the
same period, business revenue went from 0.3 million to 1.27 billion RMB and the
value of the import-export business went from null to a total of $US 2.88 billion, of
which $US 1.47 billion is from export. There are more than 360 foreign enterprises
involved, with a total investment of $US 3.5 billion. Thirty-nine Fortune 500
companies are involved in some ten projects, with an investment of $US 100 million
in each project.

By the end of July 2001 SIP had approved 594 foreign investment enterprises.
Accumulative contractual foreign investment had reached $US 10 billion. Ninety-five
percent of the projects in SIP were world-famous multinational companies. Twenty-
three companies had a total investment of $US 970 million.

In the process of developing the economy, close attention has also been paid to the
goal of environmental protection and ecology.

2. Implementation of ISO 14000

In October 1997, the Park inaugurated its Environmental Management System (EMS)
under the guidance of SEPA. Within two years, it completed the five-step procedure:
organization and preparation; preliminary environmental audit; system planning;
documentation; and system operation, evaluation, and correction, as well as training.
Brief details are given below.

This procedure includes:

organization and planning;

preliminary environmental audit;

system planning;

system operation; and

inspection and correction.

2.1. Organization

First, the SIP established an executive team to oversee the system. The deputy major
of Suzhou was appointed the team leader, and the SIP director was his chief assistant.
The responsibilities of the team were the establishment of working group for the Park,
the coordination of the activities of the system implementation, and the review of the
major environmental influences, objectives and indicators.

The working group consisted of the environmental official of the Park and personnel
for related departments. Its chief responsibilities were: conducting the pre-audit;
system planning and design; inspection and internal review of the operational process;
formulation of guidelines for environmental management; assistance to the
departments in preparing system documents and operational guidelines; and
conducting training for the work force. The team also established a working office in
charge of daily operations and testing the project.

For the implementation of ISO 14000, the Park, in accordance with SEPA regulations,
formulated the combined environmental factors: environmental policy and objectives,
environmental indicators, quality control for the system, and operational procedures
and systems. This program also included plans for continuous improvement in order
to realize environmental protection and sustainable development, economically and
socially, for the Park.

The entire new SIP, under the Park management authority, fell within the scope of the
ISO system. All utilities and services including public facilities, wastewater treatment
plant, water supply, natural gas, and municipal services were included in the control
process.

2.2. Preliminary EIA (Environmental Impact Assessment)

This involved two major steps: (1) the recognition of factors and (2) the assessment.
In the first step, Park management agencies and their subordinate groups would be
required to define factors from daily operations. The working office would compile,
review and finalize the internal environmental factors.

Several agencies (the Environmental Protection Bureau, the Bureau of Industry and
Commerce, the Bureau of Social Activities, the National Land Office and the Bureau
of Agricultural Management) identified environmental factors from various sources.
Sources for factors included production enterprises, residential communities, banking
and financial institutions, construction areas, and agricultural production units. These
factors were analyzed, reviewed and finalized by the working office. In the analysis
process, consideration was given to (1) the differences between existing
environmental standards and the requirements of new Park planning; (2) compliance
to all laws and regulations; (3) opinions put forward by enterprises and residents; and
(4) past environmental conflicts, appeals and episodes. The most important factors
were then selected, formulated and published.

2.3. System Planning

Based on results from the pre-audit and the integration of the entire development
planning of the Park, an environment management system (EMS) was designed. This
EMS took into consideration existing technology capabilities and work force
qualities.

A workshop was held, and members of upper-level management were invited to give
speeches. The new environmental policy system for the SIP was defined and
explained - its objectives and indicators, its organizational structure, and its system
documentation. The Park management office, being the "first level" agency, stressed
that its administration would be in accordance with the law, and acknowledged the
policy that pollution prevention measures would be taken as guidelines for economic
development. This policy would harmonize sustainable development for society and
the environment. The Park system would combine all of SEPA's evaluation indicators
for the demonstration cities and the quantitative evaluation indicators for
comprehensive environmental improvement requirements imposed on cities.

2.4. Documentation

Based on the requirements of ISO 14001, management asked its relevant agencies to
prepare and submit documentation in accordance with the 14001 protocols. The
principal and supportive documents were disseminated to all agencies under the Park
management organization, and became the reference sources for SIP administration.

2.5. Step-up Training Process

This was considered to be one of the most important elements of the system. The
intention of this training was that every member of the work force should understand
environmental concepts and develop skills through different levels of training. Two
training components were specified for implementation of the system: (1) a publicity
movement to raise environmental awareness among workers and to explain the
necessity for a management system; and (2) the various training courses which have
been held three times since the first half of 1999. Through such training, the entire
work force would acquire a comprehensive understanding of the system, which would
ensure the smooth operation of the process.

2.6. Inspection and Correction

Frequent or daily inspections were combined with the evaluation system. The
evaluation system defined and documented the control and measurement process, and
the measurement parameters controlling scope and frequency were specified in detail.
The various agencies were required to conduct self-inspections, and the Park
environment office was responsible for scheduled on-site inspections.

At the beginning of each year, each agency was to submit an action plan based on
indicators, relevant factors, operational programs and the system documentation. This
action plan would be used to evaluate results. After approving the action plan, the
Park administrator would sign an agreement for environmental responsibility with the
agency. At the end of the year, the Park environment office, on behalf of management,
would judge the daily control and measurement results and decide if the agency had
fulfilled its commitment. This would be reported to the administrator as a part of the
overall evaluation of the agency. Any personnel within that organization showing
special merit in performing environmental duties would be cited for individual
contribution and rewarded.

3. Success of Initial Implementation

Significant results were apparent after the system had been in operation for a little
over a year. Areas for improvement were also identified. Results included:

3.1 Strengthening of the Environmental Management System

By implementing the ISO 14001 system, the SIP management improved its
capabilities for managing the environment. The existing national environmental
management system and new environmental protection measures were incorporated
into the system documentation, which led to those requirements being implemented in
SIP.

3.2 Expedition of related management tasks

Related tasks included the maintenance of the waste water network and the water
treatment plant; a complete inventory of chemicals; and flood control procedures and
precautions to prevent a repeat of the flooding which occurred in 1999.
3.3 Increased competitive advantage for attracting commercial enterprise investment

Many foreign companies have discovered that SIP has benefited from Singapore's
experience in park administration ('Small Government, Large Society' and
'Streamlined, Unified and Efficient') and the implementation of an ISO 14001 system.
Their enthusiastic response has been to choose SIP as a location to establish offices
and factories.

3.4 Improved public awareness of environmental protection issues

The education and awareness-raising programs have caused many people to take
responsibility for environmental concerns. People have frequently presented useful
suggestions for solving problems in the Park.

3.5 Stimulation of regional economic development

A number of enterprises have implemented ISO 14000 and Cleaner Production (CP)
with remarkable economic benefits. For example, the Panasonic Electric Co. saw its
sales plunge in the SE Asia market during the economic crisis there. When the
company's plant in the SIP received its ISO certification, it was able to take advantage
of European market. The Ming Chi Computer Co.'s implementation of CP resulted in
significant energy saving (15 KW per 10000 RMB of product) and water saving
(more than one million RMB per year.) The direct economic benefit to this company
has been well over 15 million RMB per year, from energy and water saving and
resource recycling.

3.6 Improvements to the regional environmental quality

Since the implementation of ISO 14001 in 1999, the SIP has been responsible for a
number of environmental improvements. Eleven new open-type public gardens have
been developed, five agricultural eco-farms have been set up, and 35,000 square
meters of green land have been added. The eco-system along the mountain range has
been improved and over 12 km of the river was dredged. The second phase of
construction of the wastewater treatment plan was completed, giving it a daily
capacity of 40,000 tons. Even though there has been a tremendous expansion in
industrial production capacity, total discharge amounts have not increased. All
national standards for air, water, noise, COD and BOD (chemical and biochemical
oxygen demand) have been met and even surpassed, and the water quality has
exceeded the national standard for an industrial park.

4. Conclusions

In conclusion, the Suzhou Industrial Park has made a significant contribution to the
city of Suzhou and the surrounding region by its attention to environmental issues.
Continued attention to these issues make the Park a outstanding place to work and
live. The environmental quality has reached the national standard. The ISO 14001
management system has been certified by Huaxin ISO institution (Singapore) and
UKAS (United Kingdom Association of Standards.)

As we enter the 21st century, the development of SIP will open up new possibilities
and opportunities for industry. Each plant within the Park will be required to
formulate a plan for implementing cleaner production. In accordance with the target
set up by the Joint Steering Council of Singapore and China, SIP will become a
showcase area of economic prosperity and good environmental management. It will
serve as a model for CP implementation and practice and a good example of an eco-
efficient industrial park in China.