How about Green Tier II for Foxconn?

The Wisconsin win of the gigantic Foxconn manufacturing plant for Southeastern Wisconsin creates as opportunity to apply some new thinking about how to regulate the environmental side of its operations.

Instead of the adversarial model that most environmentalists and regulators love so well, why not a collaborative model that is a win-win for the economy and the environment? I have long dubbed it the green and gold model.

Instead of setting a minimum standard that the company must meet, why not set some aspirational goals that shoot higher and are mutually agreed to?

Foxconn is already at an ISO14000 level, the top international standard for a company’s environment management processes, at its Mexican plants. That’s because many top customers, like Apple, require that vendors to have a rigorous environmental management system to qualify as a vendor. Apple, a major Foxconn customer, knows that it is only as good as its supply chains.

Because Foxconn already has to meet Apple’s stringent rules on a broad range of business practices from employment to safety to hazardous materials and environmental standards, the company should say loud and clear that it intends to hit those high standards in Wisconsin.
It’s would be smart public relations. Reticence on environmental issues generates suspicions.

Foxconn executives could even go further to show their intent to be a good actor in Wisconsin. They could sign up for the DNR’s Green Tier II program, under which a handful of companies have struck a collaborative contract that sets high standards for pollution control in return for less micro-management from the bureaucrats.

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I know it can be done. Serigraph is one of the seven with a Green Tier II contract. The initial contract in 2011 took several years to negotiate. Not only did the DNR have to sign off, but so did the federal Environmental Protection Agency (EPA). It was new ground back then. We just renewed the contract for another five years, with far less hassle. It includes an improved practice for nitrogen oxide emissions.

In my company’s case, where volatile organic compounds (VOCs) from printing processes are the issue, we agreed to a lower cap on our overall VOC emissions in return for not having to permit every new or relocated piece of equipment. Those permits used to apply even to new presses that are zero-emitters.

In the end, Serigraph has lower compliance costs and we have met the aspirational standard for lower emissions. Twenty years ago we emitted 170 tons of VOCs per year. We are now running at 22 tons, thanks to some technological breakthroughs. The collaborative arrangement has proved to be a win for the economy, the company, citizens, taxpayers and the environment.

The Foxconn entrance into Wisconsin is a precedent setting event. Why not set some precedents on the environmental management side of the deal in the bargain?
Foxconn’s bargained for a streamlined permitting process and the right to build in some wetlands, with mitigation. Those concessions have been the center of the environmental concerns surrounding the new plant, but those are the lesser issues compared to various effluents from the $10 billion plant.

Building display panels involves a number of polluting materials. That’s the big deal. That’s where a Green Tier II contract should center.

On the Foxconn side, the contact would give them the comfort of knowing exactly what emission rules they are playing by, because they would be a party to developing the rules. Note: standards would not be lowered.

Note further that Foxconn will be here for decades. A change in control in that time span from Republicans to Democrats in charge of state government could pose a risk to Foxconn. New rules could be written under a command-and-control model. It is highly doubtful, though, that either party would mess with a high-achieving Green Tier II model.

The prosecutorial model of regulation has helped America to reverse some of the abuses that earlier generations of industry wrought. The top-down model has helped clean up water and air resources. But we can make more gains with collaboration and investments in technology.

There still needs to environmental standards set by the government. We can’t slide backward from the progress that’s been made, such as the elimination in the Milwaukee region of most sewage overflows and most air quality exceedances.

But we can be a lot smarter and more ambitious on how we set the next round of standards. Industrial leaders know better about how to get to the next level of high ground than any regulator.

So, why not cut a two-way deal with Foxconn that takes environmental concerns out of the equation?

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  • Bob Dohnal

    yes, great idea. Bureaucrat love to push people around.

  • Steve Dunn

    I totally agree with you. The adversarial model is a thing of the past. That said, I like that FoxConn has the ISO 14K in Mexico- they will definitely need to do that process for the plant(s) here. On another side of the TBL spectrum is their social record. They definitely need to do something progressive here to offset the negative past history, particularly in regards to employee treatment. I think that the issue over the environment can be worked out, the problem is when the Governor and DNR head rush in effusively. At this point, there are many companies doing a lot of good things that never get noticed, however, the negative history is always bubbling below the surface- that is why a measured, pro-active approach with open dialogue is going to be essential here-particularly for the reason you stated-there may be many changes over the years in the political make-up and you can’t yo-yo companies. It would make a lot of sense for FoxConn leadership to make some bold changes here and go beyond anyone’s definition of compliance.

  • lee gierke

    “Note further that Foxconn will be here for decades. “–I hope that is true. Looking at the photos of the abandoned Motorola Plant just over the border in Illinois causes concern. That plant lasted seven years. With the way technology is changing so rapidly, I believe, we should have concern about this industry surviving the 25 years of payback.

    • Steve Dunn

      That is of course the other key downside- how agile is Foxconn?