Environmental Due Diligence Audit On Al Company Engineering Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Al Ahleia Switchgear Company was established in the early 1980s and is the only company in the State of Kuwait that manufactures electrical products such as Switchgears, Transformers, Substations, Busducts, Battery Chargers, etc. and supplies it to local and Middle East clients for their turnkey projects.

Their products are ISO 14001:2004 certified for Environmental Management System (EMS) standard and also ISO 29001:2007 certified for Petroleum, Petrochemicals and Natural Gas industries and Quality Management Standard (QMS).

This report highlights the various processes involved in carrying out the Engineering Audits on Al Ahleia Switchgear Company with relevant documentations.

What is an Environmental due diligence Audit?

Environmental due diligence audit is a term used in modern organizations which refers to a systematic assessment of a company's assets, ownership restructuring, etc. as part of a rapid and careful Operational Management (Picot, 1988).

How to conduct the audit?

An environmental audit consists of various stages that are inter-twined among each other. The various processes that are involved in carrying out an engineering audit are:

Audit planning: The first and the most important stage in the environmental auditing process is the planning of the audit. As a consultant environmental engineer, it is imperative to train and make all the employees within Al Ahleia Switchgear company, understand the need to carry out an environmental audit and how each can contribute to the proper functioning of the audit process. Once commitment has been obtained by all the employees, the next stages would be to define the audit scope and sites and assemble an audit team.

Conducting the environment audit: This phase is sub-divided into three main divisions such as:

Pre-Audit activities

On-Site Audit activities

Post-Audit activities

Pre-audit activities involves

(a) Developing an audit plan for Al Ahleia Switchgear Company

(b) Send out questionnaires to all the employees within the company

(c) Background information review

(d) Operational information review

(e) Conduct an initial site visit

(f) Develop on-site questionnaires and audit protocols

(g) Audit plan review and arranging logistics

This stage marks the end of the pre-audit activities and the beginning of the On-Site audit activities.

On-site audit activities involves

(a) Opening meeting

(b) Document review

(c) Detail site inspection

(d) Interviewing each employees within Al Ahleia

(e) Review of Audit evidence

(f) Closing meeting

This stage marks the end of the on-site audit activities and the beginning of the post- audit activities.

Post audit activities involves

(a) Collection of information

(b) Preparation of audit report

(c) Circulation of draft audit report among Al Ahleia employees for comments

(d) Final reporting

Audit follow up: The last and the final stage of the Engineering Audit process involves the audit follow up. The steps involved in this stage are:

(a) Developing an action plan so as to mitigate any non-conformances in engineering environmental standards in factories, shop floor and manufacturing department in Al Ahleia Switchgear

(b) Implement the proposed action plan

(c) Monitoring and Control

(d) Review of action plan

The departmental managers, Environmental engineers and other employees who are directly or indirectly responsible in maintaining an eco-friendly and safe environment around Al Ahleia's factories, have to ensure that the proposed action plan is carefully executed and implemented by all other staffs until the next audit.

Techniques used to gather the necessary information

Audit methodology may be defined as the various techniques and methods that are undertaken in order to gather and analyse data and sufficient information required to fulfil audit objectives (Strand, 1983).

Environmental due diligence is audits are usually carried out in mainly three successive phases which are as follows:

Phase 1- A non-discreet assessment of Al Ahleia Switchgear's environmental and OH&S status of its assets. This can also be termed as 'Descriptive Questioning'.

Phase 2- Systematic sampling and normative testing of a small population of the environmental source and verifying whether any non-conformities exists that may deter the potential environmental and OH&S liabilities as evinced from Phase 1. This phase is known as 'Benchmarking'.

Phase 3- Once a problem area has been identified, invasive investigation is carried out to analyse further and thereby provide possible solutions to mitigate the same. Cause-and-effect questions are generated to gather out and determine observed outcomes and solutions for the problem(s) at hand.

Primary data can be collected using the following techniques:

Sample surveys- These types of surveys are either criterion-referenced, cross-sectional or panel (Hansen, 1993).

An example of a Sample Customer Satisfaction survey is shown in the figure.

Criterion Referenced- This deals with the outcomes and processes that leads to the outcomes. These types of Surveys compare actual performance to environmental standards in Kuwait.

Cross-Sectional Sampling- This requires extensive sampling and Sample population must be well defined.

Panel Sampling- It involves collection of data from more than one points in a particular time and takes into account changes in attitudes, facts and opinions from each respondents.

Case studies- Case studies are used to gather in-depth data on complex situations. They are usually qualitative in type that can be classified as:

Critical Instance Case study- Such case studies are used to identify and carry out possible tests and strategy on a unique problem.

Cumulative Case study- This strategy employs data from multiple cases within Al Ahleia to answer audit related questions.

Exploratory Case study- This type of case studies helps to describe conditions and create hypothesis for future audits.

Illustrative Case study- This type of case studies are used to illustrate a business problem by providing examples with regards to certain policies and procedures.

Program effects Case study- This requires multiple auditing and site visits within Al Ahleia factory floors in order to ascertain causality.

Program implementation Case study- Such case studies program data from multiple program sites

Experiments carried out in Al Ahleia factories and sites- Field works helps to differentiate between outcomes that exists after a corrective program has been performed to an outcome when nothing was done to correct a problem.

The following are the commonly employed field experiments:

Before-and-After designs- Such experiments are used to compare the results of an outcome after program participation.

Non-equivalent comparison group designs- This answers cause-and-effect questions within a group.

True experiment designs- Randomly selected participants are assigned to a group for audit questioning.

Secondary data is however ascertained by studying reports and data generated by the various departments within Al Ahleia and making a judgemental and concise report using these. Two general approaches commonly used are:

Evaluation synthesis- Previous studies, tests and reports are carefully studied and data collected from them are used to generate a credible auditing conclusion.

Secondary data analysis- This method is used to answer to certain questions when data was not collected during the past audits in order to analyse and create a proper design.

Anticipated Issues of Significance

Al Ahleia Switchgear Company that deals with manufacturing of electrical equipments such as Switchgears, transformers, etc. are at great risk of damaging and polluting the environment. The following highlights some issues that may be necessary to facilitate and carry out a good environmental audit:

Transformer fluid which contains Polychlorinated Biphenyls (PCBs) are said to cause pancreatic cancer in association with oil exposure amongst factory workers and to those employees that are directly or indirectly related to its manufacturing (Yassi, 2007).

Waste management of end and un-finished products.

Ensure that the Quality Management/Quality Control departments have been carrying out timely audits and testing of products, and non-conformities have been taken care of.

Thorough auditing all around Al Ahleia factory floors and machineries to ascertain whether any cracks or other leaks exists, that may harm the environment in any way.

Sample Questionnaires and Forms

Designing of an excellent questionnaire has been badly neglected by most of the manufacturing companies (Sheather, 1993). Questionnaires should be unambiguous, unbiased, easily understandable, less time consuming, satisfactorily coded, piloted and ethical. The key steps that must be beared in mind are:

What data you require must be clearly known

Additional items that would be required for inclusion must be selected

Individual questions must be designed

Wording must be composed

Layout and presentation must be carefully designed

Prepare the first draft and pre-test

Evaluate the form

Perform the survey on a sample of population

Firstly, all the employees must be noted that an internal audit will be performed in their departments, so that preparation could be done well in advance to prepare their necessary documentations and files.

A template of an internal audit announcement is shown below.


To: Al Ahleia Switchgear Company, Kuwait

From: Ernst & Young Consultants

Date: 5th September 2010

Subject: Internal Environmental Audit

This is to inform you all that Ernst & Young Consultants will be performing an internal environmental audit from the 20th of September 2010 in all the 8 factories around Kuwait.

As you may be aware of the increasing complaints we keep receiving with regards to noise and pollution our factories exudate, the top management, together with the entire department heads have decided to call in Ernst & Young Consultants to advice us how to mitigate this issue, to which they have readily accepted.

The scope of this audit shall encompass all aspects and requisites as revisited within "Environment Management Procedure EMP, Issue 3, Rev. 2".

Ernst & Young have decided to send Miss Beril George and Miss Sree Divya Mallampeta to carry out the audit.

This audit is scheduled to take around 10 days to complete as per initial information received from Ernst & Young.

All staff is hereby advised to be present for the audits and thank you for your assistance in this matter.

Should you require any assistance, please contact your department heads.

Sample Questionnaire






Name of the departmental head


Quantity of Waste materials generated from each factory


List of chemicals and work processes


List of wastes and disposal measures used


Do your factories discharge chemical vapours/toxic gases into the atmosphere during an operation?


List of your known regulatory inspections


Environmental Protection Act Certificates and Registration Number


New processes and programs subject to EMS standards


Are all of Al Ahleia staffs EMS trained


If Yes, Attendance list of trainings held


Are timely audits held as per requirements


If Yes, please provide necessary proof


Do neighbours complain about noise from factory premises?


Are neighbour's complaints monitored systematically and professionally?


Do you have noise-proof barriers in your factories?


License to show you have authority over waste related activities

Gantt Chart

In order to calculate the Gantt Chart, the following parameters have been considered.

Clarification of Audit scope

Pre-audit meeting with Al Ahleia

Main Audit

Opening meeting

Site visit

Questioning, Review of documents, consolidation of findings

Exit meeting

Preparation of Draft Audit report

Preparation of Final & Consolidated Audit report

Action plans to mitigate errors found during Auditing

(Please refer attached Excel Sheet, Gantt Chart.xls)


Appendix 1: PID Diagram illustrating the various Audit processes

Appendix 2: Audit flow chart