Our policy is to comply with all applicable laws and regulations of all countries in which we operate, and in accordance with our company’s high standards of business conduct. This is the policy stated in our Code of Business Conduct, which governs all employees and representatives of UPS. Important additional information, particularly regarding our strong internal audit capability, is provided in “Marketplace—Operating Responsibly”.
Through our Corporate Environmental Affairs Department, we have established site-specific and activity-specific programs for environmental compliance and pollution prevention. We continually evaluate improved technology and seek opportunities to improve environmental performance. Everyone who is part of the UPS organization is expected to support our effort to maintain a leadership role in protecting the environment. Our environmental responsibilities include:
- Properly storing, handling, and disposing of hazardous materials and other waste.
- Managing wastewater and storm water in compliance with applicable regulations.
- Monitoring and maintaining the integrity of underground storage tanks.
- Complying with laws regarding clean air.
- Protecting against and appropriately responding to spills and releases.
- Seeking ways to minimize waste and prevent pollution.
Agency Environmental Inspections
UPS operates in a regulation-intensive environment due to the number and types of hazardous and nonhazardous materials, wastes, and effluents required to maintain a large number of operating facilities as well as a very large, highly diverse fleet of ground vehicles and airplanes. Compliance procedures are extensive and detailed, and even seemingly small procedural errors in documenting our compliance can lead to financial penalties. Nevertheless, we strive for error-free performance and the lowest possible risk to UPS and our stakeholders. We therefore cooperate fully with all environmental regulatory agencies that oversee our facilities and activities, and report transparently on the results of their inspections.
In 2012, federal and state environmental agencies in the United States conducted 983 environmental inspections at UPS facilities, a 4.9 percent increase from 2011. Of the total environmental inspections, 807 were conducted in our U.S. Domestic Package segment and 176 were conducted in our Supply Chain & Freight segment. Even with the increased number of inspections, notices of violation fell to 42 compared to 55 in 2011. We paid a total of seven fines in 2012, with total penalties of US$12,350. Five penalties occurred in the U.S. Domestic Package segment and two in the Supply Chain & Freight segment. For comparison, we paid 13 fines in 2011, with total penalties of US$11,780. Nine penalties occurred in the U.S. Domestic Package segment and four in the Supply Chain & Freight segment.
In all, the notices of violation that resulted from inspections decreased 23.6 percent year-over-year, a result of increased employee awareness through new tracking tools and enhanced communications. The overall success of our environmental program is reflected in the result of our KPI—Penalties as a Percent of Total Inspections—achieving nearly a 50 percent improvement over 2011 for both our U.S. Domestic Package and Supply Chain & Freight segments. Multi-year data for this KPI is presented in "Key Performance Indicators".
An incidental spill is defined as a spill or release that is required to be reported to a federal or state regulatory agency. A spill at UPS typically occurs on pavement or in a building, and requires a cleanup either by trained company personnel or an outside spill response contractor. The volume from reportable spills in the U.S. in 2012 declined 14 percent, to 4,723 gallons on 144 incidents, compared to 5,499 gallons on 119 incidents in 2011. A high percentage of our spills typically occur from accidents and equipment failure. We continue to address common causes in an effort to reduce the number and volume of spills moving forward. Outside the U.S., we conduct spill management programs as part of implementing our Global Environmental Standards Manual, which is modeled on the ISO 14001 environmental standard. Reportable spills went up slightly and are discussed in "Additional Contextual Information" under “Shortcomings”.