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6 The Importance of Partnership in the Conduct of Material Flows Accounting Material flows accounting could provide useful information for life-cycle assessments, materials optimization and selection, policy decisions regarding sustainable development, and policy decisions regarding resource availability, allocation, and management. A well-conceived and well-executed set of material flows accounts should be multidimensional, requiring inputs from many sources, appropriate data management, and careful quality control of input data and analytical methods. The reliability of the resulting product should be dependent on these circumstances and other considerations throughout the material flows accounting process. Formal material flows accounting can be quite complicated, and an important aspect concerns the precision of the data and the accuracy of account results. Flawed or inadequate material flows accounts may lead to inappropriate decisions and actions. As such, it is crucial that material flows accounting activities be highly participatory and collaborative among parties with appropriate material flows account- ing expertise, relevant process knowledge, and familiarity with the ap- propriate data sets. Such participatory collaborations should be thought of as partnerships in the conduct of materials flows accounting. This chap- ter explores the characteristics and importance of partnerships in the con- duct of material flows accounting, the various roles that contributors would play, and potential impediments to effective partnership of stake- holders. 69
70 MATERIALS COUNT EXAMPLES OF PARTNERSHIPS There are many examples of stakeholder partnership in materials-re- lated activities. Most involve the passive transfer of information by orga- nizations to a more active organization developing a work product of use to a broader array of stakeholders. There are fewer true collaborative part- nerships with shared active participation. The three examples briefly de- scribed below, while all relevant to material flows accounting, represent different lines of inquiry and are illustrative of the wide array of partici- patory experiences that can occur. The U.S. Industrial Outlook The U.S. Department of Commerce prepares the U.S. Industrial Out- look Tables (International Trade Administration, 1995) as an annual eco- nomic snapshot of some 600 industry trends in the U.S. economy, broadly compartmentalized into such sectors as nonferrous metals, wood, con- struction, steel mill products, chemicals and allied products, and paper and allied products. The report catalogues production, consumption, ship- ments, and trade, from the manufacturing sector to the higher-technology sector, and the service industry sector, for global industry trends, domes- tic trends, international trade, and growth forecasts. Production of the report involves data identification and acquisition, database development, data analysis, and reporting. Government agencies (e.g., U.S. Geological Survey), industry associations (e.g., the North American Copper Devel- opment Association), and individual industries with significant market share provide the data, and the Department of Commerce develops, ana- lyzes, and reports on the database. The report is used by a wide array of government, industry, academic, and nongovernmental public interest . . Orgamzatlons. The Copper Recycling Initiative The objective of the newly formed industry-government consortium, the Copper Recycling Initiative, is to obtain reliable copper recycling data of global significance. Participating stakeholders include the U.S. Geologi- cal Survey, the International Copper Study Group (whose members rep- resent the trade ministries of many countries), and copper industry repre- sentatives (e.g., the International Copper Association and the International Wrought Copper Council). These organizations develop and implement strategies for collecting statistics on copper recycling. The group plans to launch its first collaborative data collection activity in 2003. The resulting
PARTNERSHIP IN THE CONDUCT OF MATERIAL FLOWS ACCOUNTING 71 database will be used by government, industry, academia, and nongov- ernmental public interest organizations for the development of trends and policies regarding the movement and conservation of copper in the mar- ketplace. A Life-Cycle Assessment Policy Statement The Non-Ferrous Consultative Forums on Sustainable Development represents an international initiative with broad multi-stakeholder par- ticipation in the development of reports and position papers related to global sustainable development of natural resources. This initiative's reports and papers are intended for use in global policy platforms (e.g., the World Summit on Sustainable Development, held in Johannesburg, September 2002; United Nations, 2003~. A policy statement on the use of life-cycle assessment in sustainable development, entitled Policy Making, Metals, and Life Cycle Studies (Non-Ferrous Metals Sustainable Develop- ment Forum, 2002) has been prepared by this group. The emphasis of the paper is on materials flows guidelines, methodology, and data issues for sustainable development. The group that prepared this paper represents 15 countries involving numerous constituencies, including trade minis- tries and their representative associations, metals industries and their associations, academic institutions, and nongovernmental organizations. Life-Cycle Inventory Database Work is now proceeding on a private-public partnership basis, with funding support from the U.S. Department of Energy, the U.S. General Services Administration, the U.S. Environmental Protection Agency, and the U.S. Department of the Navy. The ultimate objective of the project, known as the U.S. Life-Cycle Inventory Database Project, is to develop publicly available life-cycle inventory databases for commonly used ma- terials, products, and processes. The database is being designed to sup- port public and private sector efforts to develop environmentally oriented decision systems and tools; to provide regional benchmark data for gen- erating or assessing company, plant, or new-technology data; and to pro- vide a firm foundation for subsequent life-cycle assessment tasks such as characterization, normalization, and impact assessments. The concept of partnership, its value in material flows accounting, and the characteristics of effective partners that have made these examples illustrative of good collaboration are described next.
72 MATERIALS COUNT OBJECTIVES OF PARTNERSHIP IN MATERIAL FLOWS ACCOUNTING The primary goal of partnership in material flows accounting would be collaborative participation to capture the multidisciplinary and multi- dimensional aspects of accounts. Important objectives for encouraging collaborative participation in the conduct of material flows accounting include the following: · To facilitate the completeness of an account · To overcome proprietary obstacles · To foster the development of accurate data on industrial processes and product manufacturing · To strengthen the reliability of the material flows accounting out- come, · To pool and share resources (technical skills, manpower, co-fund- ing, data) A deliberate attempt to include partners in material flows account data development and account execution would result in early buy-in, more informed and more robust analyses, participatory decision making, compromise, and understanding of the range of positions, options, vari- ables, and uncertainties. These objectives are common to all participants in a collaborative material flows accounting scheme. Taken together, these benefits of part- nership in material flows accounting would serve to strengthen an account's outcome and utilization. CHARACTERISTICS OF EFFECTIVE PARTNERSHIPS AND PARTNERS IN MATERIAL FLOWS ACCOUNTING A well-functioning development process and a reliable database could result from a collaborative partnership with engaged partners. A dysfunc- tional process has specific undesirable characteristics that promote dis- cord. The features of effective partnerships and partners in material flows accounting are explored in this section. Effective Partnerships Partnership can be passive (e.g., occasionally supplying data) or ac- tive (e.g., regularly supplying updated data, engaged in the analytical pro- cess). Better-quality results are achieved if all partners are active partici- pants in an activity. Partnerships can take the form of collaboration, expert consultation, and advisory review. Collaboration typically involves con-
PARTNERSHIP IN THE CONDUCT OF MATERIAL FLOWS ACCOUNTING 73 tribution to the advancement of the work product through coauthorship, sharing of information and data, development of protocols, and/or insti- tutional cofunding and scoping of the direction of the process. Expert con- sultation involves advancement of the work product through the acquired opinions and analyses of highly knowledgeable individuals. Advisory review involves independent critical evaluation of objectives, scope, and work products in various stages of completion to ensure the robustness of the data from conception to completion. All three forms of partnership will be vital to the success of material flows accounting. A variety of enti- ties should be involved in collecting data that will be useful in their appli- cation to material flows activities in the United States (Sidebar 6.1 and Table 6.1). The success of a partnership is contingent on the motivation of each stakeholder to participate. Motivation, in turn, is driven by each stake- holder's incentive of economics, social responsibility, equity, public wel- fare, and organizational charter. The most effective partnerships are those based on stable, trusting relationships among partners over time. Such partnerships facilitate the sharing of data particularly between industry and government (i.e., make the process more transparent), and foster ease of communication among partners, understanding of data needs, and timely resolution of issues of conflict, competition, and priority. Initiatives involving partnership are more participatory if their prod- ucts are clearly meaningful to each partner's incentives and interests. It follows that initiatives have more successful and sustaining outcomes if the incentives, objectives, and needs of each partner are clearly articulated at the outset, understood by all partners, and regarded throughout execu- tion of the activity. Initiatives involving partnership are more participa- tory if commitment is top-down (i.e., propelled from the leadership of each partner's organization). Data in the material flows accounts should be available to the greatest extent feasible, unless proprietary issues demand otherwise. This trans- parency includes individual intents, data, requirements for confidential- ity, potential for conflict, competition, bias, political constraint, trust, and other individual stakeholder concerns. The greater the understanding of these features that exists in the collective engagement, the more effective will be the accounting process and its products. A few databases involve effective partnerships, most notably those that are government sponsored, are transparent, and make most of their data publicly available. However, a sufficient amount of information is proprietary. Although the information may be proprietary for legitimate reasons, its inclusion impedes the ability to judge the merit of most data- bases and analysis results in a transparent manner. Other forms of transparency relate to the substance of a material flows
74 MATERIALS COUNT
PARTNERSHIP IN THE CONDUCT OF MATERIAL FLOWS ACCOUNTING 75 account itself. Hidden flows, data embedded deep within secondary and tertiary production processes, difficult-to-obtain recycling profiles of com- modities, realistic pictures of treatment and disposal of waste, and pro- cess life-cycle inventories are the elements that will make a material flows account truly meaningful. These elements can be captured only through effective partnerships. Missing data are becoming an ever-increasing concern as the demand for more complex data grows. From prior experience, we know that many database efforts begin with legislative mandates. Over time, with reduced budgets, lapsed legislative mandates, and staff turnover, commitments to maintaining the integrity of these databases become less of a priority. In addition, databases that are mandated by regulation may become volun- tary with time. In some cases, where this has occurred, industry has inter- vened to maintain the databases. However, such intervention is now waning to the point at which present-day data integrity is impacting the quality of technical analyses. Currently, databases used for commodity material flows analyses are uneven in quality and require careful scrutiny. To compensate for this deficiency, data users must have better relation- ships with industry to obtain more reliable data and to fill gaps. Initia- tives that are voluntary, nonregulatory, and shared by willing partners result in more commitment and buy-in than initiatives that are regulatorily mandated, enforceable, and obligatory. One of the key objectives of partnership is a coordinated effort to improve the combined database from all contributors. Too often, what is reported in databases is different than what is apparent from surveys of individual industries. This is particularly true for databases that are de- liberately disaggregated for material flows analyses of specialized pro- cesses or commodity sectors. Without proper coordination among part- ners, what results is the introduction of hidden uncertainties in the interaction of databases, leading to hidden uncertainties in the outcomes of the analyses. To ensure the compatibility of data from different sources, highly ag- gregated databases usually require some form of disaggregation, creating a greater need for reliance on assumptions and more opportunities to in- troduce errors. Stewards of databases must be technically knowledgeable about the details of their products and the industrial processes on which databases are based, in order to prevent unintentional misuse or misrep- resentation. In general, and understandably, industrial partners have greater fa- miliarity with and knowledge of material flows data that they generate than do the government organizations to which they provide the data. As such, a greater amount of time is spent in follow-up activity among gov- ernment partners than among industrial partners. It follows that data-
76 MATERIALS COUNT TABLE 6.1 Example of a Metal Flows Account Ledger of Potential Partners Data Provider Government Activity DOC EPA DOE DOI DOD USDA Producer Production Base Material X X X X X Manufacturing X X X X Service Waste Management X Consumption X X X X Recycling Import/Export Accumulation X X X X X X X X X X X By-products X X X X X Waste Storage X X X X Environmental As Source X X X X As Sink X X X NOTES: DOC=Department of Commerce and includes Census and Fisheries Service; EPA=Environmental Protection Agency; DOE=Department of Energy; probing queries within the government require more time to resolve than data probes within industry and are more likely to result in unresolved or unsatisfactory conclusions requiring stop-gap fixes to the database. Each database and consolidation of databases requires a gatekeeper to ensure quality. Data quality and management are critical. Database managers will be critical participants in material flows accounting activi- ties. It is of concern that current database management and maintenance are uneven. Some databases are well maintained with proper technical management by knowledgeable stewards, while others are not, princi- pally because stewards are not sufficiently familiar with the technical con-
PARTNERSHIP IN THE CONDUCT OF MATERIAL FLOWS ACCOUNTING 77 fiat Industry, Association, Commercial Trade and Commercial Service Professional Fee-based USDA Producer Fabricator Providers Associations Databases NGOs X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X DOI=Department of the Interior; and includes U.S. Geological Survey and Bureau of Land Management; DOD=Department of Defense; and USDA=Department of Agriculture and includes U.S. Forest Service. tent of their databases. Furthermore, database managers are not consis- tently and effectively engaged as partners. Partnerships deteriorate or end when the quality of information being supplied by any participant is judged to be inferior or to seriously impair the quality of the work prod- uct. It is imperative to identify and include participants as partners and, to the extent practical, representatives from all constituencies whose in- formation is relevant to the mission of the initiative. Omission of any rel- evant party damages the quality of the product.
78 MATERIALS COUNT Effective Partners Some teams preparing material flows databases are highly produc- tive, seemingly without much effort. There are some notable features of these partnerships that facilitate this process. Participants are flexible, trusting of one another and of the group, open to alternative ideas, par- ticipatory in developing and examining alternatives, contributory to the creative process, constructively critical, in agreement with the objectives of the mission, knowledgeable about processes and data, available for engagement and participation, and willing to share the load. Strong lead- ership and sound management are of great importance to such highly productive teams. Sometimes creativity in the collaborative process can be constrained by individual style, personal agendas, and preconceived expectations. Confrontation fueled by rigidity in attitude, sensitivity to disagreement, or to conflict, need to always appear to be right, fixation on particular points of view, and reluctance to be receptive to and accepting of valid alternatives can thwart the process. Sometimes these characteristics are motivated by competition for funds, market share, information, and so forth. To counteract these tendencies that lead to difficulty, it is important for partners and the leaders of the partnership process to foster coopera- tion, full participatory consideration of alternative points of view, trans- parency in the deliberative process, and collegiality. Impediments to Effective Partnerships . It follows that practices contrary to partnership, whether deliberate or resulting from benign neglect, potentially weaken the reliability of out- comes. Almost all practices that ignore or work against partnerships fos- ter exclusion, confidentiality, and loss of transparency. Examples include the following: · internalizing material flows data within an institutional depart- ment without any form of collaborative outreach; · use of a proprietary methodology (less than full disclosure of how the data analysis was conducted); and · use of proprietary data (either for individual facilities or as aggre- gations of facilities within a process sector). In a competitive marketplace, government regulations, consumer preferences, and downstream manufacturing pressures can drive indus- trial data or processes to be considered as confidential business informa- tion. As such, industries that are the proprietors of the information are often cautious about sharing and participating as partners. Much of this
PARTNERSHIP IN THE CONDUCT OF MATERIAL FLOWS ACCOUNTING 79 caution stems from liability issues, resource availability, and proprietary concerns. These issues may be magnified on a global scale. Such caution within industry is based on the following concerns: · There may be the potential for sensitive material flows data to fall into the hands of business competitors. · A specific material flows analysis outcome might not serve the in- dustry well. · Individual industry sectors could be perceived as being the cause of a disadvantageous outcome. · Producers of competitor materials may use material flows data to demonstrate their products' superiority, particularly if the analysis is taken out of context. · Scholars, activists, analysts, and government regulators could use data to perform their own analyses, reach different conclusions, and pro- mote restricted use of the product or its outright ban. · Material flows analysis conclusions might lead to application of the precautionary principle to control the material. · Stronger (i.e., more reliable) material flows data, such as those pro- vided by some upstream raw materials producers and some downstream end-use product manufacturers, could be overshadowed by weaker (i.e., uncertain or highly variable) account data, such as those describing use- phase characteristics and end-of-life recycling. · A material flows database may be used in further analyses (e.g., life-cycle analysis) in which the common metric on which the analysis is based (e.g., energy gains and losses) for all processes and products may not fairly optimize the benefits of the material. · Data analysis results could be inappropriately monetized. · Quantitative scoring systems for ecological and human health risk factors may be inappropriately integrated into material flows databases. Despite the obvious disadvantages, there may be valid reasons for not promoting transparent partnership, usually related to the sensitivities and impacts of a material flows analysis outcome. Potential impacts from an analysis outcome may compel the practitioner to hold a database in close confidence, at least until it is completed, for reasons that include the following: · The outcome of the material flows analysis process may, depend- ing on its nature, impact policy, strategy, or future action that is signifi- cant to individuals, groups, or society at large. · The outcome of the material flows analysis process may result in the disclosure of confidential business information to competitors in the marketplace.
80 MATERIALS COUNT The U.S. Geological Survey and the former Bureau of Mines both have a long and respected history of accumulating material flows data in the form of mineral publications and databases. This has been an informa- tion-gathering effort for many specific commodity categories, relying on a large amount of voluntary cooperation from the industrial sector. A1- though a large, established, historical database of selected minerals and metals is available for public use from the USGS, some information has been deemed confidential (i.e., labeled "W" for withheld). Confidentiality of information is a constraint that can limit a contributing partner's in- volvement in a potential material flows account. Proprietary, or "W", data are usually from a sole-source provider whose condition of participation requires that contributed data be sanctioned. When data can be used in a transparent manner, better commitment of partners and representation of their information results. It is in the best interest of the effort to seek ways of surmounting constraints of confidentiality, such as through data aggre- gation. Sometimes, the reluctance of individual industries to supply data can be overcome through intervention by industry sector associations working to mediate trust among material flows account stakeholders. Although some interagency links have been forged, the U.S. Geologi- cal Survey's database efforts would be enhanced through even closer part- nerships with such other entities as the U.S. Environmental Protection Agency, the National Institute for Occupational Safety and Health, and the U.S. Department of Energy. Further, since metals and minerals repre- sent a global commodity, sharing information on a more international scale would result in more effective application of material flows account- ing for policies and practices consistent with sustainability in regional and global contexts. This might include global partnerships with other North American, European, Latin American, or Asian entities charged with the development of their own databases. Within the United States, barriers among agencies may exist, involv- ing issues of database objective or content and interagency competition for control of the information-gathering role or a preference for no infor- mation gathering at all. Nothing would subvert even the most well inten- tioned and well organized material flows account mission as much as cross-purpose of intent derived from such competition. Competition, par- ticularly among federal departments and agencies, results from jurisdic- tion of programs, control of programmatic budgets, reluctance to claim ownership of a multiparty work product that influences the operations of one party's organization, and departmental policies on specific issues that impede progress, particularly where the issues relate to legislative man- dates or regulatory initiatives emanating from those mandates. An equally serious impediment would be the attrition of competent staff who are instrumental to the partnership process, inadequate re-
PARTNERSHIP IN THE CONDUCT OF MATERIAL FLOWS ACCOUNTING 81 sources to maintain databases, loss of technical understanding about the content of those databases, and divisive use of hidden agendas by one or more participating entities to sway an account initiative. All of these fea- tures are counterproductive to accomplishing the initiative's mission. It behooves the partnership team to examine these circumstances and mo- tives early in the process and take decisive remedial action to avoid wast- . . ng precious resources. SUMMARY AND FINDINGS Participants as partners in material flows accounting activities will be important to the quality of accounting products. The quality will be en- hanced when partners are knowledgeable and actively engaged in the process and their legitimate concerns are appreciated and respected. The committee concludes that partnerships are critical to developing and maintaining material flows accounts. The most effective partnerships are those based on stable, trusting relationships among partners over time where all gain from the compiled information, and these partnerships will be critical to the success of material flows accounting. The committee recommends that any process for developing material flows accounts be based on a partnership approach. Partnerships among all relevant stakeholder groups should be encouraged, with strong leadership, representation ap- propriate to the material flows accounts under consideration, active par- ticipation in the accounting activity, and regard for each participant's motivations and incentives for participating. The committee recommends that the system be designed to allow for the inclusion of proprietary data, while protecting business confidentiality. Transparency of the data from all sources, including proprietary data held in industrial and aca- demic databases, should be encouraged.
82 MATERIALS COUNT Life-Cycle Inventory Database Work is now proceeding on a private-public partnership basis, with funding support from the U.S. Department of Energy, the U.S. General Services Administration, the U.S. Environmental Protection Agency, and the U.S. Department of the Navy. The ultimate objective of the project, known as the U.S. Life-Cycle Inventory Database Project, is to develop publicly available life-cycle inventory databases for commonly used materials, products, and processes. The database is being designed to support public and private sector efforts to develop environmentally oriented decision systems and tools; to provide regional benchmark data for generating or assessing company, plant, or new-technology data; and to provide a firm foundation for subsequent life-cycle assessment tasks such as characterization, normalization, and impact assessments. The concept of partnership, its value in material flows accounting, and the characteristics of effective partners that have made these examples illustrative of good collaboration are described next. OBJECTIVES OF PARTNERSHIP IN MATERIAL FLOWS ACCOUNTING The primary goal of partnership in material flows accounting would be collaborative participation to capture the multidisciplinary and multidimensional aspects of accounts. Important objectives for encouraging collaborative participation in the concluct of material flows accounting include the following: To facilitate the completeness of an account To overcome proprietary obstacles To foster the development of accurate data on industrial processes and product manufacturing · To strengthen the reliability of the material flows accounting outcome, To pool and share resources (technical skills, manpower, co- funding, data) A deliberate attempt to include partners in material flows account data development and account execution would result in early buy-in, more informed and more robust analyses, participatory decision making, PRE-PUBLICATION VERSION, SUBJECT TO EDITORIAL CHANGES
