Environmental Management System for SMEs

The ISO 14001 standard is intended to provide organizations with the elements of an effective environmental management system (EMS) that can be integrated with other management requirements and help organizations achieve environmental and economic goals.

The standard (ISO 14001:2004) consists of an introduction, a set of definitions of the key concepts of the standard, the system requirements, and two annexes providing guidance on the use of the standard and a table with the correspondence between ISO 9001 and 14001. The system requirements consist of a limited number of chapters: Environmental policy, Planning, Implementation and Operation, Checking and Management Review.

It is not our aim to promote the certification ISO 14001 for Peruvian SMEs. We intend to train these organizations with the methodology know as PDCA (Plan, Do, Check, Act). Our goal is to offer tools to these organizations based on the key principles of an EMS and to promote the transition from an informal to a formal economy.

SMEs are business organizations that produce goods and/or services in a very limited scale if we view them individually; however, collectively, they represent a significant economic force. SMEs are an essential element to characterize the Peruvian economy.

The term “small enterprise” as used in the Peruvian SME Basic Law shall generally mean an enterprise with a regular workforce not in excess of twenty people (or five people in the case of enterprises which are principally engaged in commerce or the service industry). Under this law, a medium enterprise may not employ more than 100 people.

According to the main macroeconomic indicators, 75.9% of economically active workers in Peru are employed by SMEs. They contribute about 43% of Peru’s gross domestic product (GDP). Their prevalence in the national economy is most significant in the service sector –66% versus 14% of the industrial sector. In the industrial sector, SMEs work in a wide variety of fields, including food products, the clothing industry and tailoring, the wood industry, glass manufacturing, basic industries of nonferrous minerals, machinery and appliance manufacturing and electrical accessories and supplies.

SMEs face a series of obstacles which substantially affect their development, such as obstacles to compete, obstacles to enter other markets, credit discrimination and the lack of information and technical training. Consequently, they usually cannot demonstrate their creditworthiness, they do not pay taxes, they do not have accounting records, they cannot support their production capacity, they cannot contract and they lack the legal collateral. The informal economy is estimated to compose between 34% and 49.2% of the economically active population

According to the data provided by CONAM (National Council for the Environment, 2005) there are 55 enterprises certified ISO 14001 in Peru. 92% are members of the private sector and 8% are public institutions. Most of them are large organizations and its economic activities are focused on mining, chemical industry, energy production, packaging industry and food industry.

The process of transition from an informal to a formal economy involves a multidimensional analysis (legal requirements, financial, accounting, quality, environmental issues and so on). This paper will be focused on how to support more SMEs in the internalization of an EMS. For this reason, a practical approach has been designed as a tool of training.

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