PRIVATIZATION AND ENVIRONMENTAL AUDIT

Gheorghita Diaconu, Manager

KPMG Environmental Consulting

Introduction

Social concern for environmental control has considerably increased due to the occurrence of a great number of environmental incidents in recent years. People have gradually become aware that an effective environmental control needs full regulation.

At a governmental level, this has led to an increasingly deliberate and programmed approach to environmental protection. The attitude towards industry has also become stricter and purposeful. A growing awareness of environmental issues can also be noticed within the business community. This has been reinforced by the application of business principles to environmental management. Although in the past only a few Romanian companies were confronted with the high investment costs for environmental facilities, nowadays there are new environmental components, which may have an impact upon a company’s operation or its position on the market. A company that functions poorly because of lax internal environmental standards risks shut-downs, damage claims, liability suits, negative market effects, problems with shareholders and problems in receiving coverage from insurance companies. On the other hand, companies with a good environmental performance will benefit from a competitive advantage. More and more business pressures have determined the improvement of the environmental performance of the companies (see appendix - Pressures on business).

Environmental protection is no longer a matter exclusively between government and the business community, but rather an affair, which directly or indirectly concerns many other interest groups: directors, banks, participating companies, creditors, contractors, etc. The financial consequences, personal liabilities and the risk of damaging the company’s image have been important incentives for the incorporation of the environmental protection standards within companies.

Initiatives like the adoption of the Business Charter for Sustainable Development (International Chamber of Commerce) show that the Business Community is taking its own responsibility for environmental care.

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