Environmental Audit - Board of Engineers Malaysia

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Environmental Audit – 

A Proactive Tool For Pollution 

And Accident Prevention 

By Ir. Dr. Chong Hock Guan, CEO and Principal Consultant, GMP Environmental Consultants 

With many environmental 

accidents happening these 

days, we should be more 

proactive to find ways to prevent 

accidents. One of the ways is the 

effective use of environmental audits 

to regularly check an organisation’s 

environmental management and 

practices. 

Most engineers know the word 

“Environmental Audit”, but not many 

know its importance and benefits. 

Some have a misconception that 

environmental audit is a fault-finding 

exercise and a waste of time. Coupled 

with inexperienced auditors with poor 

understanding and application of 

audit methodology, many 

environmental audits are conducted 

in a sub-standard manner, merely to 

satisfy the needs of certification or 

contractual requirements. 

Concepts Of Environmental Audit 

Contrary to what most people 

believe, environmental audit is 

actually fact-finding work. A proper 

and systematic environmental audit 

will definitely yield benefits, and 

some of these benefits include: 

● Highlight positive efforts made in 

environmental performance 

● Identify potential environmental 

accidents 

● Initiate corrective and preventive 

action to avoid accidents and 

disasters 

● Ensure compliance with 

environmental legislation 

● Improve efficiency 

● Reduce wastage and improve cost 

savings 

● Enhance corporate image of the 

organisation 

● Increase confidence of customers 

in the processes and products 

● Educate and motivate the 

workforce 

● Demonstrate management 

commitment to environmental 

control 

● Improve the working environment 

– making the place safer and 

healthier 

● Encourage “self-regulation”- thus 

reduce the burden of enforcement 

So, what is “environmental audit’? 

Environmental audit can be 

defined as “a measure of 

environmental risks, and an 

assessment of environmental 

opportunities”. The popular 

management concept – “What gets 

measured, gets done” – is well applied 

here. This means, audit should have 

measurement involved, and audit 

tools, which can measure 

quantitatively, will be able to measure 

the environmental performance 

effectively. 

Legal Requirements 

The Environmental Quality Act 

(EQA) 1974 of Malaysia specifies 

requirements on environmental audit; 

as contained in Section 33A 

Environmental Audit noted below: 

(1) The Director General may require 

the owner or occupier of any vehicle, 

ship or premises, irrespective of 

whether the vehicle, ship or premises 

are prescribed under Section 18 or 

otherwise, to carry out environmental 

audit and to submit an audit report 

in the manner as may be prescribed 

by the Minister by regulations made 

under this Act. 

(2) For the purpose of carrying out 

an environmental audit and to submit 

BULETIN INGENIEUR 8 

a report thereof, the owner or occupier 

so directed shall appoint qualified 

personnel who are registered under 

subsection (3). 

(3) For the purpose of this section, 

the Director General shall maintain a 

list of qualified personnel who may 

carry out any environmental audit 

and submit a report thereof. 

In addition, Section 51 of the EQA 

1974 further states: 

(1) In addition to and not in 

derogation of any of the powers 

contained in any other provision of 

this Act, the Minister after 

consultation with the Council may 

make regulations for or with respect 

to - (t) regulating environmental audit 

and the submission of an audit report 

and the appointment of qualified 

personnel to assist the Director 

General in carrying out an 

environmental audit of any vehicle, 

ship or premises, irrespective of 

whether the vehicle, ship or premises 

are prescribed under section 18 or 

otherwise, and their manner of 

operation, and prescribing the fees 

chargeable 

Environmental audit in the EQA 

1974 is defined as “a periodic, 

systematic, documented and objective 

evaluation’ to determine – 

(a) the compliance status to 

environmental regulatory 

requirements 

(b) the environmental management 

systems, and 

(c) the overall environmental risk of 

the premises. 

It can be interpreted that the Act 

requires three types of the 

environmental audit to be done 

notably:

● Compliance Audit 

● Environmental 

Management Systems 

Audit 

● Risk Audit 

As noted below, these are 

three of the many other 

types of environmental 

audit. 

Types Of 

Environmental Audit 

The main types of 

environmental audit can 

be categorised as: 

1. Compliance Audit – 

mainly to check on 

compliance with the legal 

or corporate requirements 

2. Environmental 

Management Systems 

Audit – The International 

Standard, ISO 14001 

Environmental 

Management Systems- 

Specification with 

guidance for use specifies 

clearly such a 

requirement. This audit 

checks the whole 

management system with 

regards to the 

requirements of ISO 

14001 Standard. Figure 

1 shows the ISO 14001 EMS model. 

3. Risk Audit – This type of audit 

evaluates the level of environmental 

risks with regards to the operation and 

activities in such organisation. 

4. Due Diligence Audit – This is 

used by organisations or banks to 

evaluate environmental conditions 

when dealing with merging, 

acquisition or divestment of 

properties. 

5. Environmental Impairment 

Liability Audit – an essential prerequisite 

for organisations to obtain 

insurance to cover the liability 

resulting from environmental 

pollution and impact. 

6. Environmental Marketing Audit 

– such an audit is used by 

organisations to check that their 

products are in conformance with 

consumer and legislative 

requirements. 

7. Energy Audit – Since energy 

production involves natural resources, 

this type of audit covers the collection, 

analysis and interpretation of energy 

audit. The results are cost savings and 

efficient use of energy. 

8. Certification Audit – This 

involves assessment against an agreed 

standard prior to issuance of certificate. 

9. Environmental Performance 

Audit – checks on environmental 

performance, including continual 

improvement in reducing 

environmental pollution. 

10. Audit on Contractors and 

Suppliers – examines the 

environmental activities of its 

contractors and suppliers, in particular, 

in reference to their compliance to 

environmental legislation and 

standards. 

11. Product Audit – This usually 

checks the product life-cycle, from 


conception to final disposal, to ensure 

all processes and raw materials used 

are in-line with environmental 

requirements. 

12. Cleaner Production Audit – Also 

called Waste Minimization Audit. This 

audit finds the processes involved in 

reducing and eliminating the use of 

toxic chemicals, which aims to result 

in less pollution and toxic wastes 

produced. 

As there are many types of 

environmental audit, every 

organisation has to be clear on and 

specific which type of environmental 

audit it needs. 

Systematic Environmental 

Audit Methodology 

A systematic environmental audit 

consists of three main stages: 

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1. Pre-Audit 

Pre-audit deals with preparations 

prior to the audit on-site. The work 

include: 

● communicating with the site 

personnel on the audit 

● obtaining background information 

about the site 

● defining the scope and intent of 

the audit 

● determining the type of audit 

● selecting audit team members 

● preparing the necessary equipment 

– audit checklists, personal 

protective equipment and other 

audit tools 

● making preparations on logistic, 

accommodation and 

transportation if needed, and 

● sending a letter of notification to 

the site to confirm the audit onsite 

2. On-Site Audit 

This is the main bulk of the 

audit, and is done in the ‘auditee’. 

Auditee is defined as the 

organisation being audited. This 

Verification 

Interviews 

GMP ENVIRONMENTAL 

CONSULTANTS 

phase comprises five events in 

sequence, they are: 

(i) Opening meeting – This is the 

first formal event at the site, and 

should be attended by audit team 

and the management of the auditee. 

Usually the top management will 

address the audience first, and the 

audit team leader will then inform 

the management on the agenda and 

the methodology of the audit. 

(ii) Familiarization tour – The audit 

team members are accompanied by 

key personnel of the auditee to visit 

the site briefly in order to be familiar 

with the nature of operations and 

the environmental concerns. It 

should be noted that this is not site 

inspection. This event is not needed 

if the audit team members are 

familiar with the site. 

(iii) Interviewing the knowledgeable 

persons – This is the essence of the 

on-site audit, whereby key 

personnel are interviewed to obtain 

Interviewing 

Knowledgeable Persons 

Facts 

Verification of Responses 

Document 

Review 

Audit 

Findings 


facts in response to the audit 

questions. Figure 2 shows the 

importance sequence of events for 

this on-site audit technique. 

(iv) Verification – The facts obtained 

from the knowledgeable persons are 

verified. There are three techniques 

of verification: 

● Document review – this exercise 

examines the manual, procedures, 

work instructions, records and 

supporting documents 

● Verification interviews – 

involves interviewing employees 

randomly to check the 

implementation of systems in 

place. 

● Site Inspection – all physical 

installations at the site are 

checked against the standards 

and good environmental 

practices. 

A combination of any three 

verification techniques can be used, 

with the main intent of confirming 

evidence of the facts obtained. 

Site 

Inspection

(v) Closing Meeting – Audit findings 

and conclusions are presented by the 

audit team leader to highlight 

“Noteworthy Efforts” (conformities) 

and “Areas for Improvement” (nonconformities). 

Recommendations 

should be provided by the audit team, 

though they are not binding. 

3. Post –Audit 

This is mainly report writing and 

follow up after the submission of 

report. The report is confidential, and 

should be factual with key findings 

from the audit, notably with sections 

on Noteworthy Efforts and Areas for 

Improvement. Recommendations for 

improvement should be included, 

unless specifically requested to be 

excluded by the client. 

A good audit report should 

contain the following sections: 

● Cover Letter 

● Executive Summary and 

Score Sheet 

● Working Copy 

● Findings from Site Inspection 

● Summary of Verification 

Interviews 

● Conclusion and Suggestions for 

Action 

Depending on the contractual 

requirements, usually two copies of 

the reports are submitted to the client, 

with a copy extended to the auditee. 

The client may pose questions after 

reading the audit report, and the audit 

team leader must be prepared to meet 

the client and the auditee’s 

representatives to make presentations 

of the findings and to answer specific 

questions. 

Audit Tool 

A good audit tool consists of 

checklists that are accurate and 

reliable so that competent auditors 

using the tool and working 

independently would reach similar 

audit findings from evaluating the 

same audit evidence. A good audit 

tool should preferably have a 

qualitative or quantitative 

measurement of the audit results. GMP 

ISO 14001 Audit Scheme® is one such 

tool which has been widely used in 

industries for measuring quantitatively 

the audit results of environmental 

management systems (EMS). 

Figure 3 shows that using the 

GMP ISO 14001 Audit Scheme®, the 

overall audit results can be 

measured quantitatively against the 

EMS Standard from a scale of 0- 

100%. Figure 4 shows the detail 

results for each component of ISO 

14001 in achieving the overall 

results in Figure 3. 

Responsibilities Of Auditors 

Environmental auditors, whether 

internal or external auditors, are 

professionals. As such, proper codes 

of ethic or principles should be 

followed. 

ISO 19011: 2002 Guidelines for 

Quality or Environmental 

Management Systems Auditing states 

clearly the principles for auditing as 

noted below: 

● Ethical conduct: The foundation 

of professionalism. Trust, integrity, 

confidentiality and discretion are 

essential to auditing. 

● Fair presentation: the obligation 

to report truthfully and accurately. 

Audit findings and conclusions 

should be accurate substantiated 

with facts and evidence. 

● Due professional care: the 

application of diligence and 

judgment in auditing. 

● Independence: auditors should be 

unbiased and free from conflict of 

interests. 

Figure 3 - Audit Score using GMP ISO 14001 Audit Scheme ® 

100% 

22.7% 

Baseline EMS Audit Result for AAA Sdn Bhd 


EMS Standard 

Areas for 

Improvement 

Noteworthy 

Efforts 

● Evidence-based approach: the 

rationale method for reaching 

reliable audit conclusions in a 

systematic audit process. 

Audit team members should be 

competent with the following criteria 

(based on ISO 19011:2002 for EMS 

Auditors): 

(a) Entry qualification – the 

minimum entry qualification is 

secondary education, though a 

university/college qualification is 

preferred. 

(b) Qualified in specific knowledge 

and skills – these can be achieved 

via university education or 

external training. For an 

environmental management 

systems auditor, the training 

syllabus should include: 

● Audit principles and 

methodology 

● Management systems - ISO 

14001 EMS Standard 

● Environmental engineering 

and technology 

● Organisation’s operation and 

general business process 

● Environmental law 

At least 40 hours of training is 

needed for the above courses. 

(c) Environmental related work 

experience – at least two out of 

a total of five years for those with 

5-7 July 2004 

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Figure 4 - Graph on Details of Audit Score 

PERFECT SCORE 

4.1 

ISO 14001 CLAUSE 

4.2 

4.3.1 

4.3.2 

4.3.3 

4.3.4 

4.4.1 

4.4.2 

4.4.3 

4.4.4 

4.4.5 

4.4.6 

4.4.7 

4.5.1 

4.5.2 

4.5.3 

4.5.4 

4.6 

AVERAGE 

GMP ISO 14001 AUDIT SCHEME 

GMP ISO 14001 AUDIT SCHEME - GRAPHICAL PRESENTATION 

Audited Site : AAA Sdn Bhd Date : 5-7 July 2004 

BASELINE EMS ISO 14001 AUDI T 

0.0% 

0.0%` 

0.0% 

0.0% 

0.0% 

0.0% 

14.3% 

16.7% 

20.0% 

25.0% 

20.0% 

22.7% 

33.3% 

33.3% 

33.3% 

37.5% 

42.9% 

50.0% 

0 10 20 30 40 50 60 70 80 90 100 

SCORE PERCENTAGE 

Infancy Developing Maturing Advanced Desired 

secondary education, and at least 

two out of a total of four years 

for those with university/college 

qualification. 

(d) On-the job training and 

experience – minimum four 

complete audits for a total of at 

least of 20 days. 

In Malaysia, the Society of 

Environmental Auditors Malaysia 

(SEAM) was set up in 1998 to gather 

the environmental auditors in 

Malaysia and to provide them with 

information networks regarding the 

development of environmental audit 

and environmental management. 

Conclusion And The Way Forward 

While there are many benefits 

and need for environmental audit, 

challenges still exists which must be 

resolved. Some factors that can be 

considered to ensure success of 

environmental audit in Malaysia 

are: 

● Enforce the use of environmental 

audit through Environmental 

Audit Regulations by the 

Department of Environment. 

Enforcement imposed by the 

Government will increase the 

practice of environmental audit. 

● Increase awareness on the 

importance and benefits of 

environmental audit, through 

talks, training, campaigns, 

promotions and bulletins. 

● Recognise and promote 

environmental auditors as 

important professionals in the 

development of the nation. 

● Provide incentives to 

organisations practicing good 

environmental audits – this can be 

done through awards and tax 

incentives. 

● Train more environmental 

auditors to encourage the proper 

application of environmental 

audit. 

There are tremendous 

opportunities for environmental audit 


GMP Environmental Consultants 

100% 

to grow in Malaysia. Both the public 

and private sectors have respective 

roles to play to ensure the success of 

environmental audit in Malaysia. 

REFERENCES 

1. Chong H.G., December 1999, 

Environmental Audit from the 

Perspective of A Consultant, Bengkel 

Audit Alam Sekitar, Department of 

Environment, Malaysia. 

2. Chong H.G., March 2004, 

Environmental Audit Training 

Manual (Edition 9), GMP 

Environmental Consultants, 

Malaysia. 

3. International Organization for 

Standardization, 1996, ISO 14001: 

Environmental Management Systems 

– Specification with Guidance for 

Use, Switzerland. 

4. International Organization for 

Standardization, 2002, ISO 1901: 

Guidelines for quality and/or 

environmental management systems 

auditing, Switzerland. BEM

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