INDUSTRIAL TOUR REPORT

ON ENVIROMENTAL ACCOUNTING AND REPORTING.

A CASE OF DADA EDIBLE OIL REFINERY

DEPARTMENT OF ACCOUNTING AND INFORMATION SYSTEMS. UNIVERSITY OF CHITTAGONG . Session: 2009-2010 B.B.A. (4th year)

DATE OF SUBMISSION:September10,2012.

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INDUSTRIAL TOUR REPORT

ON

ENVIROMENTAL ACCOUNTING AND REPORTING.

A CASE OF DADA EDIBLE OIL REFINERY

Submitted To: Mr. Md Ali Arshad Chowdhury

Assistant Professor. Department of Accounting and Information Systems. University of Chittagong

Submitted By:
Titon Chandra Dey
ID N0:07301044 BBA(4th year)
Session:2009-2010

DATE OF SUBMISSION:September10,2012.
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LETTER OF SUBMISSION
September10,2012 To Mr. Md Ali Arshad Chowdhury Assistant Professor, Department of Accounting & Information Systems University of Chittagong, Subject: Submission of the Industrial Tour report. Dear Sir, I beg most respectfully to state that it is of immense pleasure for me to submit my Industrial Tour Report on Environmental Accounting & Environmental Reporting in DADA EDIBLE OIL REFINERY. I have tried my level best to understand the real scenario of scope & practice of Environmental Accounting & Environmental Reporting of DADA EDIBLE OIL REFINERY my effort will be successful only if it pleased you. Finally,I hope that you will accept this paper and take necessary steps in this regard. Besides I would ever be available and ready for any explanation required regarding this paper.

Yours faithfully, Titon Chandra Dey ID N0:07301044 Session: 2009-2010 B.B.A. (4th year).

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PREFACE

The Industrial Tour is a program that is essential for gathering practical knowledge, because practical knowledge has no alternative. A perfect co-ordination between theory and practice is of paramount importance in the context of the modern business world. In order to resole the dichotomy between these two areas, the Department of Accounting and Information Systems Studies, University of Chittagong arranges Industrial Tour Program a practical complication of final examination B.B.A. course. This program is very important to complete his/ her B.B.A. course. Industrial program brings students closer to the business practical and thereby help them to substantiate knowledge so that they can prepare themselves to start a successful career.

As the student of Business Faculty, We got the adventurous thought of the program under our department of Department of Accounting and Information Systems Studies. The program intends to provide practical training in handling of managing jobs as well as integrate the knowledge of about environmental accounting and environmental reporting , practice , scope, and also learn how DADA EDIBLE

OIL REFINERY maintains environmental accounting and environmental

reporting systems.

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ACKNOWLEDGEMENT
This report is the prepared statement of facts relating to which I could not do without the help of some sincere cooperative persons. It is my duty to record my appreciation and gratitude to those few persons who have helped me in several ways. Our profound gratitude is to honourable teacher, Mr Md. Ali Arshad Chowdhury,Assistant Professor, Department of Accounting and Information Systems, University of Chittagong, who has devoted his important time and energy in providing the necessary information and guidance to secure the purpose of the fruitful Industrial Tour Report.

We also want to thank Mr.Rafiqul Islam (Mechanical Engineer) of DADA EDIBLE OIL REFINERY for his kind co-operation and active guidance. We would always remind with gratitude the contribution of all managers and staffs of DADA EDIBLE OIL REFINERY. who spent their valuable time and shared all information with us. We will never forget their kind and friendly behavior. We would like to thank them and other personnel who helped us Mr. Solaiman Ahmed , CEO of MEB industrial complex ltd. Finally, We take entire responsibility of any deficiency that might have in the report.

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EXECUTIVE SUMMARY
Today the environment is changing rapidly and we are obviously heading towards a disaster the responsibility for such changes comes on the shoulder of business community to a large extent. And it is a customary that businesses are disturbing the smooth flow of environmental structure through their thoughtless operation. So, business community should have and practice its moral commitment towards the society by spending for tackling environment. Environmental accounting emerges as a tool to provide this commitment where costs from business communities point of view and effects from society s point of view are balanced. Environmental reporting is still in its infancy compared to financial reporting, but with more media and public scrutiny on corporate green policies and credentials, it is essential that companies communicate and are appraised on these matters consistently and clearly. In this paper, we have tried to define environmental accounting and environmental reporting with its scope and practice and also study of literature analysis environmental accounting and environmental reporting we have also had a through review of the practices followed by our companies like DADA EDIBLE OIL REFINERY. From the general purpose financial statement to the extent of disclosure .

TABLE OF CONTENTS
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Title Page No. 01. Introduction. 8 02 Objectives of the Study 9 03 Scope And Methodology of The Study 10 04. Limitation of The Study 11 05. Theoretical Background. 12 5.1 Environmental Accounting. 14 5.1.1 Conceptual Framework of Environmental Accounting 15 5.1.2 Functions and Roles of Environmental Accounting 16 5.1.3 Basic Dimensions of Environmental Accounting 17 5.1.4 Forms of Environmental Accounting 20 5.1.5 Scope of Environment Accounting 22 5.1.6 Limitations of Environmental Accounting 23 5.2 EnvironmentalReporting 24 5.2.1 Definition of Environmental Reporting 24 5.2.2 Principle Functions of Environmental Reporting 25 5.2.3 Fundamental Requirements of Reporting 28 5.2.4 Elements of Environmental Reporting 30 5.2.5 Components of Environmental Reporting and 34 Information that Should Be Included 6. Literature Review 7. Findings and analysis 7.1 Sample company (DADA EDIBLE OIL REFINERY) 8. Summary and Conclusion References 39 40 42 45 46

01. Introduction.
Environmental accounting (EA) is the systematic effort to assess the ecological significance of economic activity and the economic worth of natural resources. It is employed by businesses, nonprofit organizations, and governments. Businesses may employ EA to control and reduce the costs of managing waste, remediating contaminated sites, paying environmental fines, penalties and taxes, or purchasing pollution prevention technologies. Various national and international organizations employ EA to facilitate ecolabeling

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Environmental accounting needs to work as a tool to measure the economic Efficiency of environmental conservation activities and the environmental efficiency of the business activities of the company as a whole. We introduced "Environmental Accounting", which was to grasp environmental protection cost and effect quantitatively and evaluate environmental investment and effect, from fiscal 1998. Use of traditional accounting- and finance principles to compute the environmental costs of commercial and industrial decisions The concept of environmental reporting is relatively new in Bangladesh. Very few studies have been conducted on environmental reporting in the context of Bangladesh and to the authors best knowledge; all of these studies have investigated into environmental reporting practices through print media. The purpose of environmental reporting is to provide a significant tool for environmental communication and to fulfill organizations accountability in regards to the environmental burden. Therefore, there are certain common items or contents that should be included in environmental reporting. On the other hand, management policies, company ethos, corporate culture, and/or characteristics should also be reflected within the environmental reporting.

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02 Objectives of the Study

1. To explain the concept of Environmental Accounting. 2. To explain the concept of Environmental Reporting.
3. To explain How DADA EDIBLE OIL REFINERY practice in

Environmental Accounting and Environmental Reporting.

.

03 Scope And Methodology of The Study

The scope of Environmental Accounting (hereinafter called as EA) is very wide. It includes corporate level, national & international level. As far as this article is concerned the emphasis is given on the corporate level accounting This report is prepared n the basis of the practical experience gained during

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the period of industrial tour. The information has been collected from primary sources as well as secondary source
Primary Sources:

1. Group discussion with top management of the company. 2. Primary information related to distribution has been collected from the environmental department of the company. 3. Practical experience gained by visiting the factory and the related departments. 4. By holding long conversion with responsible executives in different departments. Secondary Sources: 1. Secondary information has been collected from the literature; articles, journals, paper and different textbooks are also used when textbook related data is required to quote. 2. Web search in www.meb.com
3. Various Web search relating to Environmental Accounting and Environmental Reporting.

04. Limitation of The Study

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It is difficult to collect any information about internal management as well as profit and losses of any company. We did not get any information about environmental accounting and environmental reporting practice of the company due to confidential matter. We have faced also a lot of problem while we have visited DADA EDIBLE OIL REFINERY. Some of the limitation of the study is as follows:
1. The annual report of DADA EDIBLE OIL REFINERY was

not provided by the company. 2. Some data could not be collected for the confidentiality and official secrecy of the company.
3.

Environmental Accounting and Environmental Reporting practice are not available in our country. 4. The term EA and ER is developed in recent years for that data are not available. 5. Non-availability of published data. 6. Information was not provided due to business secrecy. 7. Lack of adequate knowledge of information provider. 8. Non-availability of secondary data.
9. Difference of the oretical & practical knowledge

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05. Theoretical Background.

Environmental Accounting Background
The number of companies and other organizations solidifying their environmental approach and developing business activities that take the environment into consideration and encompass environmental conservation efforts continues to increase. Efforts made in environmental accounting comprise a part of these environmentallyconscious business activities. Environmental accounting data is not only used by companies or other organizations internally, but is also made public through disclosure in environmental reports. The disclosure of environmental accounting data as one of the key elements in an environmental report enables those parties utilizing this information to get an understanding of the companys stance on environmental conservation and how it specifically deals with environmental issues. At the same time, amore comprehensive grasp of the companies and other organizations environmental information can be used.

The History of Environmental Accounting

In the early 1970s, F. Schumacher observed that the modern industrial system was treating its irreplaceable natural capital as if it were income. Viewing the capacity of the biosphere to absorb pollution as a type of natural capital itself, Schumacher maintained that the saturation of the biosphere with pollution constituted an unsustainable depletion of resources. Schumacher's concerns were shared by many environmental scholars of the time, including economist Herman Daly. Only in the late 1980s, however, did Environmental Accounting gain widespread attention and undergo extensive conceptual clarification, empirical measurement, and practical implementation. Today many scholars, nongovernmental organizations, national and regional governments, and international agencies engage in and promote Environmental Accounting.

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In 1991, a Special Conference on Environmental Accounting organized by the International Association for Research in Income and Wealth (IARIW) was held for scientists and practitioners in Baden, Austria. The conference produced a draft manual, later issued by the United Nations Statistics Division (UNSD) as a handbook entitled Integrated Environmental and Economic Accounting. That same year, a colloquium held by the U.S. National Academy of Sciences investigated the relation of Environmental Accounting to the emerging field of industrial ecology, which employs lifecycle analysis of products and design for environment strategies. The 1992 United Nations Conference on Environment and Development held in Rio de Janeiro, also known as the Earth Summit, produced a consensus view on the merit of public policies oriented toward sustainable development. The conference action plan, Agenda 21, endorsed environmental accounting as a component of sustainable development strategies. In 1993, the findings of the Baden conference were partially incorporated into the revised edition of the globally-adopted system of national accounting (SNA). A system of integrated environmental and economic accounts (SEEA) was produced to accompany the SNA. In 2001 (revised 2003 ), UNSD and the United Nations Environment Program published this as the Handbook of National Accounting. A gathering of experts from national statistical agencies and international organizations, known as the London Group on Environmental Accounting, meets annually to develop and refine various protocols for Environmental Accounting. In 2007, the London Group focused on revisions to the SEEA handbook Environmental Accounting.

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5.1 Environmental Accounting.

The Definition of Environmental Accounting Environmental accounting is a term with a variety of meanings. In many contexts, environmental accounting is taken to mean the identification and reporting of environment specific costs, such as liability costs or waste disposal costs. In simple words, Use of traditional accounting- and finance principles to compute the environmental costs of commercial and industrial decisions. For the purposes of this analysis, a much more general definition is used. "Environmental accounting" is more than accounting for environmental benefits and costs. It is accounting for any costs and benefits that arise from changes to a firm's products or processes, where the change also involves a change in environmental impacts. As will be shown, improved accounting for non-environmental costs and benefits -input prices, consumer demand, etc. -- can lead to changes in decisionmaking that have environmental consequences. Thus, we will de-emphasize any clear demarcation between "environmental" accounting and accounting generally. Environmental accounting information need not be the product of accountants, nor Need it be used by accountants? Instead, it is any information with either explicit or implicit financial content that is used as an input to a firm's decision-making. Product designers, financial analysts, and facility managers are equally likely to be the users of environmental accounting data. Almost any type of information collected and analyzed by firms will qualify. Examples include input prices, technical and scientific studies that relate production processes to physical outputs, and legal, marketing, and financial analyses.

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5.1.1 Conceptual Framework of Environmental Accounting

The environmental accounting focuses on two areas: national/regional environmental accounting, and environmental accounting for companies and other organizations. These Guidelines cover environmental Accounting for companies and other organizations. The environmental accounting covered in the Guidelines is composed of the following factors: environmental conservation cost (monetary value), environmental conservation benefit (physical units), and the economic benefit of environmental conservation activities (monetary value). The data for each of these components is represented in figures or descriptive information. In other words, it is a structure for systematically identifying, measuring, and communicating environmental conservation cost and the economic benefit of environmental conservation measures; this is the financial performance portion of environmental accounting, representing the activities of companies and other organizations in monetary value . The environmental accounting system also identifies, measures, and communicates the environmental conservation benefit, which is the environmental performance portion represented in physical units. The results of environmental accounting can be furthermore used for analysis and evaluation.

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5.1.2 Functions and Roles of Environmental Accounting

The functions of environmental accounting are divided into internal and external functions. Internal Functions As one step of a companys environmental information system, internal function makes it possible to manage environmental conservation cost and analyze the cost of environmental conservation activities versus the benefit obtained, and promotes effective and efficient environmental conservation activities through suitable decision-making. It is desirable for environmental accounting to function as a business management tool for use by managers and related business units. External Functions By disclosing the quantitatively measured results of its environmental conservation activities, external functions allow a company to influence the decision-making of stakeholders, such as consumers, business partners, investors, local residents, and administration. It is hoped that the publication of environmental accounting results will function both as a means for companies to fulfill their responsibility for accountability to stakeholders and, simultaneously, as a means for appropriate evaluation of environmental conservation activities.

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5.1.3 Basic Dimensions of Environmental Accounting

1. Relevance Environmental accounting should provide valid information related to a companys environmental conservation costs and benefits from associated activities which contribute to the decision-making of stakeholders. Relevant to the Goal The goal is to provide information beneficial to stakeholders in their decision-making. 2. Materiality and Significance Consideration should be given to the materiality and significance of relevance. Aspects of Materiality and Significance In environmental accounting, materiality is placed on the aspects of quantity and significance is placed on the aspects of quality. From the standpoint of the materiality, consideration is given to the quantitative impact of data that is expressed in monetary value or physical units. The significance focuses on the quality of information from the standpoint of environmental conservation or the future impact that it carries. 3. Reliability Environmental accounting should eliminate seriously inaccurate or biased data and aid in building the trust and reliability of stakeholders. Faithful Representation When disclosing environmental accounting data, it should be represented accurately, faithfully.
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a. Faithful Representation In addition to the fact that the information must be accurate and without error, it must represent the costs and benefits that could be reasonably expected to represent without misleading. b. Substance Over Form Information disclosure should not just be a mere formality of following steps laid out within these guidelines. When necessary, the company should determine an appropriate method of disclosure which conforms to and accurately describes the actual environmental activities being conducted. Prioritizing Substantiality In the event that the substantiality of the information is not fully communicated when following the format set out by these guidelines, necessary supplementary information should be provided to better explain reality. c. Neutrality Information that is disclosed taking a fair and impartial stance. Fair and Impartial Stance A fair and impartial stance is when the company avoids the arbitrary selection of information or intentionally direct readers toward a given conclusion.

d. Completeness The scope of environmental accounting should extend to all material and significant information for all environmental conservation activities. e. Prudence Information that may be vague or unclear should be handled carefully and the nature, scope and grounds on which it is based should be made clear.
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Careful Handling Careful selection is necessary in regard to projected results and predicted comprehensive impact. If these results or impacts are disclosed then the premises and reasoning behind this information should be clearly stated to prevent any misunderstandings by stakeholders. 3. Understandability By achieving understandability of disclosure of necessary environmental accounting data, environmental accounting should eliminate the possibility of any mistaken judgment about the companys environmental conservation activities. Easy to Comprehend Wording To ensure that the disclosed information is easy to understand for stakeholders, wording should be made a simple as possible. No matter how complex the content might be, it is necessary to disclose all essential information. (4) Comparability Environmental accounting makes it possible for a company to make year-on-year comparisons. Information provided should be comparable with different companies in the same sector. Ensuring Comparability There are two methods for comparison: term, comparison of identical companies or organizations, and comparison between companies in the same business sector. It is essential that comparability be ensured when environmental accounting information is disclosed so as not to create misunderstandings amongst stakeholders. Nevertheless, due to the fact that environmental accounting information spans independent and divergent categories, simple comparisons are difficult when there are differences in the business sector, type of operation, or activities engaged in by the businesses. Therefore, in cases in which complex methods have been selected in order to acquire the information established in the Guidelines for use as bases for comparison, the content of said methods shall be clearly stated, and care shall be taken so as not to produce misunderstandings amongst stakeholders.
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(5) Verifiability Environmental accounting data should be verifiable from an objective standpoint. Verifiable Information Verifiable information is data for which the same results can be obtained when using premises, standards, and methods identical to those used by the party which created the data

5.1.4 Forms of Environmental Accounting

1. Environmental Management Accounting (EMA): Management accounting with a particular focus on material and energy flow information and environmental cost information. This type of accounting can be further classified in the following subsystems:

a. Segment Environmental Accounting:

This is an internal environmental accounting tool to select an investment activity, or a project, related to environmental conservation from among all processes of operations, and to evaluate environmental effects for a certain period.

b. Eco Balance Environmental Accounting:

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This is an internal environmental accounting tool to support PDCA for sustainable environmental management activities.

c. Corporate Environmental Accounting:

This is a tool to inform the public of relevant information compiled in accordance with the Environmental Accounting. It should be called as Corporate Environmental Reporting. For this purpose the cost and effect (in quantity and monetary value) of its environmental conservation activities are used.

2. Environmental Financial Accounting (EFA):

Financial accounting with a particular focus on reporting environmental liability costs and other significant environmental costs.

3. Environmental National Accounting (ENA):

National Level Accounting with a particular focus on natural resources stocks & flows, environmental costs & externality costs etc. Need of Environmental Accounting at Corporate Level: It helps to know whether corporation has been discharging its responsibilities towards environment or not. Basically, a company has to fulfill following environmental responsibilities. a. Meeting regulatory requirements or exceeding that expectation. b. Cleaning up pollution that already exists and properly disposing of the hazardous material. c. Disclosing to the investors both potential & current, the amount and nature of the preventative measures taken by the management (disclosure required if the estimated
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liability is greater than a certain percent say 10 per cent of the companies net worth). d. Operating in a way that those environmental damages do not occur. e. Promoting a company having wide environmental Attitude. F .Control over operational & material efficiency gains driven by the competitive global market. g. Control over increases in costs for raw materials, waste management and potential liability

5.1.5 Scope of Environment Accounting

The scope of Environmental Accounting (hereinafter called as EA) is very wide. It includes corporate level, national & international level. As far as this article is concerned the emphasis is given on the Corporate level accounting. The following aspects are included in EA: 1. From Internal point of view investment made by the corporate sector for minimization of losses to environment. It includes investment made into the environment saving equipment/ devices. This type of accounting is easy as money measurement is possible. 2. From external point of view all types of loss or indirectly due to business operation/activities. It mainly includes: a. Degradation and destruction like soil erosion, loss of bio diversity, air pollution, water pollution, voice pollution, problem of solid waste, coastal & marine pollution.

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b. Depletion of nonrenewable natural resources i.e. loss emerged due to over exploitation of nonrenewable natural resources like minerals, water, gas, etc. c. Deforestation and Land uses. This type of accounting is not easy, as losses to environment cannot be measured exactly in monetary value. Further, it is very hard to decide that how much loss was occurred to the environment due to a particular industry. For this purpose approx idea can be given or other measurement of loss like quantity of non-renewable natural re- sources used, how much Sq. meter area deforested and total area used for business purpose including residential quarters area for employees etc., how much solid waste produced by the factory, how much wasteful air pass through chimney in air and what types of elements are included in a standard quantity of wasteful air, type and degree of noise made by the factory, etc. can be used

5.1.6 Limitations of Environmental Accounting

EA suffers from various serious limitations as follows: 1. There is no standard accounting method. 2. Comparison between two firms or countries is not Possible if method of accounting is different which is quite obvious. 3. Input for EA is not easily available because costs and benefits relevant to the environment are not easily measurable. 4. Many business and the Government organization seven large and well managed ones dont adequately track the use of energy and material or the cost of inefficient materials use, waste management and related issue. Many 23fulfill23tins, therefore, significantly
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underestimate the cost of performance to their organization.

poor

environment

5. It mainly considers the cost internal to the company and excludes cost to society. 6. EA is a long-term process. Therefore, to draw a conclusion with help of it is not easy. 7. EA cannot work independently. It should be integrated with the financial accounting, which is not easy. 8. EA must be analyzed along with other aspects of accounting. Because costs and benefits related to the environment itself depend upon the results of the financial accounting, management accounting, cost accounting, tax accounting, national accounting, etc. 9. The user of information contained in the EA needs adequate knowledge of the process of EA as well as rules and regulations prevailing in that country either directly or indirectly related to environmental aspects.

5.2 ENVIROMENTAL REPORTING

5.2.1 Definition of Environmental Reporting
The purpose of environmental reporting is to provide a significant tool for environmental communication and to fulfill organizations

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accountability in regards to the environmental burden. Therefore, there are certain common items or contents that should be included in environmental reporting. On the other hand, management policies, company ethos, corporate culture, and/or characteristics should also be reflected within the environmental reporting. From this perspective, each organization should exert its originality and ingenuity into writing the headings or contents of environmental reporting and the disclosing media. Environmental Reporting is the process in which a Company or Industries reports on its use of resources and its generation and disposal of waste to the department of environment for including the report. Environmental reporting (ER) is public disclosure by a firm of its environment performance information, similar to the publication of its financial performance information.

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5.2.2 Principle Functions of Environmental Reporting

Environmental reporting has two fundamental functions, external (or social) function and internal function, which promotes environmental efforts in organizations activities. It plays very important role in strengthening voluntary environmental efforts in organizations activities. The following three are external functions, when environmental reporting is used as a tool for environmental communication between the organization and the public. (1) Function to disclose information based on the social accountability of organizations (2) Function to provide information that is useful for decision making of interested parties. (3) Function to promote environmental activities by a pledge and review between organizations and the public. The following two are internal functions. (4) Function to establish or revise environmental policies, objectives and programs of organizations. (5) Function to motivate the management and employees and to encourage environmental activities of them. When writing and publishing environmental reporting, it is important to design the environmental reporting achieve properly these functions. Commentary: Function as a tool for environmental communication between the organization and the public. Environmental reporting can be considered as an open-window of organizations and a significant tool for environmental communication. Interested parties outside of the organizations are able to view the intended organizations ideas and measures toward environmental issues through this window. Organizations can also understand the needs and the ideas of interested parties through this window. In addition, environmental reporting is a tool as environmental communication because organizations can understand through the Window what interested parties feel and what they want organizations to do.
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Commentary: Function to disclose information to fulfill the social accountability of organizations Organizations, occupying the main part of socio-economic activities, generate considerable environmental burdens through their operations. The environment is the common heritage of mankind, and it could therefore be considered that organizations should fulfill their accountability to report their environmental burdens, mitigation methods, and environmental conservation efforts. Environmental reporting is one of the most important methods to fulfill the responsibility. Commentary: Function to provide information that are useful for decision making of interested parties. When interested parties make choices among products and services or where they invest, they need variety of product information and/or management information. Information on risk management and environmental information are important in such decision making. Organizations need to provide useful information that helps this kind of decision making. When many interested parties use environmental information in environmental reporting for their choices of products and services, then organizations with commitment to environmental protection will be given higher evaluation they deserve, and the promotion of the voluntary environmental efforts by organizations would be expected in the market mechanism. Particularly, it is expected that environmental reporting will play a significant role as Information media for labor market and capital market such as stock market, while eco-labeling plays an important role in the market of goods and services. This is gradually becoming the reality as SRI, such as the eco-fund in Japan, is rapidly becoming popular. In recent years, socially responsible investment (SRI) is becoming popular in European and North American countries. An increasing number of public pension funds as well as individual investors are willing to invest into business organizations which actively commit environmental efforts. Under these circumstances, Japans business organizations which disclose environmental efforts by writing and publishing environmental reporting will receive an increase amount of green investments or green money from foreign countries, therefore, it will contribute to the integration of the economy and the environment that will lead to a environmentally sustainable society. As more people are concerned about green procurement, more information on
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contractors or suppliers environmental efforts is required, and environmental reporting can be used as a point of reference especially in the selection of partners. Commentary: Function to promote environmental activities by a pledge and review between the organization and the public By disclosing targets and the state of organizations environmental activities, steady improvements in these activities would be expected. This is because the disclosure drives an effect known as pledge and review, in which organizations commit policies and targets on environmental conservation activities and society, in turn, evaluates them. When an organization publishes environmental reporting, if it makes positive efforts, consideration of external interests eyes or comparison among organizations within the same Sector it may lead to the progress in environmental conservation by the whole society. The practice of environmental communication among broader stakeholders increases the environmental consciousness of the whole society. If it deepens the understanding of each Actors state of activities and difficulties faced, it is expected that environmental communication can be useful for sophistication of the environmental activities of the society within the partnership in accordance with each role. Commentary: Function to establish or revise environmental policies, objectives and programs of business organizations. By disclosing environmental reporting, it is expected that organizations will voluntarily improve the contents and quality of environmental conservation in order to enrich the contents of the environmental reporting. In addition, an internal collecting system of environmental information should be improved to provide an opportunity to revise or establish policies, objectives, targets, and action plans concerning the environment. Commentary: Function to motivate the management and employees and encourage environmental activities of them. Employees may not know the details of organizations environmental conservation efforts, and environmental reporting can be used for training employees in order to increase their awareness of its environmental conservation efforts, and to motivate their environmental consciousness. Furthermore, the pride which employees have in the organization would be increased through environmental conservation.
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By including top management commitment, it could potentially motivate CEOs environmental consciousness, as well .

5.2.3 Fundamental Requirements of Reporting

1. Clarification of Reporting Organization

It is essential that the boundary of the reporting organization is clearly defined in environmental reporting. Commentary The state of environmental burden and environmental activities of the organization should be a part of consideration when defining the boundary. A major consideration should be whether the boundary of the reporting includes: an independent company only, a consolidation or group companies, sites in Japan, or sites all over the world. Many organizations do their activities not within one unit of organization, for example, using domestic or international subsidiaries or contracting out transportation sections. Therefore, activities in all related units have to be covered for proper, fair and accurate evaluation of environmental performance of such operations. Thus, it is desirable to include the entire group using the method of consolidated financial statement. However, the cost of data gathering and comparability should be considered when determining the boundary, and consideration should also be given to how far the control of the management can reach. It is necessary to state in environmental reporting the area of boundary used in environmental reporting and the reason why the boundary has been defined. Some existing environmental reporting inconsistently applies different boundaries within one environmental reporting (e.g. the corporate profile applies independent settlement data, environmental performance refers to data corrected at principal sites but not all sites, statements on environmental conservation activities include overseas sites or subsidiaries). Although this may be unavoidable due to the accuracy of collected data or an amount of labor, it is necessary to specify the boundaries applied to each component, should they be different the
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boundaries applied to the whole environmental reporting. If the boundary of this years reporting is different from previous years, the difference should be stated and comparability between the two periods should be considered. In this case, the use of a chart which gives an outline of the whole organization, statements about the strategy of the whole organization, and explanations of the position of each organization will help readers understanding on the reporting organization.

2) Clarification of Reporting Period

It is essential that organizations clearly define the period of the reporting in environmental reporting. Commentary The reporting period of various data within environmental reporting, such as organizational profile, financial information, and environmental performance information, should be unified where possible. If the reporting periods are different for different components of the reporting, it is crucial to clearly mention the difference(s). the period of environmental conservation activities mentioned in environmental reporting should be consistent with the applied period of the environmental reporting. However, not all activities may have finished within a fixed period, past environmental activities may have a continuous effect over a period of time, and reported environmental activities carried out within a fixed period may not accurately reflect all of the organizations environmental conservation activities. In such cases, it is essential to clarify the differences.

3) Clarification of Reporting Areas

It is essential that organizations clearly define the areas of reporting in the environmental reporting. Commentary Recently, in Europe and the United States, the notion that the areas of reporting are not just limited to the environment and can be expanded to social and economic fields, is becoming popular and organizations are

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publishing this as Sustainability Reporting or CSR Report. Social area refers to, for example, occupational safety & health, employee benefit policies, equal opportunities, efforts for the disadvantaged, minimum wages, freedom of union, philanthropy, business ethics, protection of whistle-blowers, recalling of products and so on. Economic area refers to, for example, net sales and profits, assets, amount of investment, wage, labor productivity, employment creation, and so on. However, in contrast to the environmental area, the reporting of social and economic areas is still under development. It is crucial to accumulate various relevant researches and examinations in future in order to determine what and how each element in those areas should be treated in reporting. However, many organizations deal with environmental measures and occupational safety & health at once within the same section in it. Therefore, in many cases, these issues are very closely related to each other. These guidelines have added a new section of the State of Performance of Organizations in Social Area and show examples of social information that should be included in environmental reporting as well as some examples of the entries of operation and managementrelated indices. It is desirable that each organization extends the fields of reporting to social and economic areas at their discretion.

5.2.4 Elements of Environmental Reporting

1. Structure of Environmental Reporting

There are Necessary Components of Environmental Reporting. These are components, essential for making environmental reporting work as a tool for environmental communication that provide useful information to interest parties decision making, and for fulfilling social accountability. All these components are included in the most current environmental reporting. The necessary components and information for environmental reporting are: 1) Basic Headings, 2) Summary of Policy, Targets, and Achievements of Environmental Efforts, 3) State of Environmental Management, 4) State of Activities for Reduction of Environmental Burden, and
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5) State of Performance of Organizations in Social Area. The following twenty five elements are necessary headings in an environmental reporting.

Basic Headings
This includes CEOs statement (including summary of efforts and pledge), the foundation of reporting, and a summary of the nature of the organization, this contains fundamental components to ensure the reporting functions as a communication tool between the organizations and the society, and provides useful information to interest parties decision making. It is also necessary that CEOs statement includes not only a greeting, but also a summary of environmental activities of the organization and commitments to society. The necessary components are the following three headings. (1) CEOs statement (including summary of efforts and pledge) (2) Foundation of reporting (Reporting organization, time period, areas (3) Summary of the organization

2. Summary of Policies, Targets, and Achievements in Environmental Efforts

This component is concerning with policies, targets, plans, achievements and material balance of its activities with regard to organizations environmental activities, and this part describes the state of environmental burden and the outlines of environmental activities of the organization. It is appropriate for targets, plans, and achievements, including state of environmental burden, to be summarized in a table. The necessary components are the following four headings. (4) Environmental policies regarding environmental activities (5) Summary of objectives, plans of environmental activities and achievements in environmental efforts (6) Material balance of its activity (7) Summary of environmental accounting information

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3) State of Environmental Management

This is a section in which the state of the entire environmental management is described. Each of the state of the environmental management system, the state of supply chain Management for environmental conservation, the state of research and development of environmentally conscious technologies, the state of the disclosure of environmental information and environmental communication, the state of compliance with environmental regulations, and the state of social contribution should be described independently. The necessary components are the following six headings. (8) State of environmental management system (9) State of supply chain management for environmental conservation. (10) State of research and development of technologies for environmental conservation and environment-conscious products/services (11) State of the disclosure of environmental information and environmental communication (12) State of compliance with environmental regulations (13) State of social contribution related to environment

4) State of Activities for Reduction of Environmental Burden

The current state of environmental performance and its achievements of the organization to reduce environmental burden with yearly changes should be stated in accordance with the nine core indicators described in the Environmental Performance Indicators for Organizations Measures which reduces environmental burden in the upstream and the downstream of the business, such as green procurements and the reduction of environmental burden by producing or selling products that cause less environmental burden throughout their life-cycle should be

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mentioned in this section. This section would be the biggest in the volume of information in environmental report. The necessary components are the following eleven headings. (14) Total amount of energy input and measures to reduce it (15) Total amount of material input and measures to reduce it (16) Amount of water input and measures to reduce it (17) Amount of greenhouse gasses emission and measures to reduce it (18) Amount of chemical substances emission and transportation and measures to reduce it (19) Total amount of products or sales (20) Total amount of waste generation and final disposal and measures to reduce it (21) Total amount of water disposal and measures to reduce it (22) State of environmental burden caused by transportation and measures to reduce it (23) State of green procurement and measures to promote it (24) State of products and services that contribute to reduction of environmental burden.

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5.2.5 Components of Environmental Reporting and Information that Should Be Included

1) Basic Headings
CEOs Statement (Including Summary and Pledge) The CEOs statement(summary and pledge) to be added at the beginning of environmental reporting. It is extremely significant and it should include the organizations own ideas, current status, and future targets on environmental conservation. Further, the contents of the statement are necessary to be appropriate to the industry, operational scales, and individuality. General statements alone will be incomplete.

Recommended information to be included in environmental reporting

a. The recognition of the necessity of environmental activities within the organization and of the prospect of sustainable society which is orientated environmental conservation in future. b. Environmental policies and strategies of organizations corresponding to industry, operational scales and individuality. c. Summary of environmental burden (significant environmental aspects) according to the industry, operational scales and individuality. d. Summary of environmental activities which reduce environmental burden according to the industry, operational scales and individuality. e. Pledge (commitment) to the society concerning said environmental activities will be carried out and targets will be met by promised time limit. (This is an official promise to the public of the management of the organization, and this is serious as to the management would be held responsible if the promise is broken.) f. Statement that all significant environmental burden and environmental policies, objectives and reduction programs of the burden are accurately included in environmental reporting. g. The signature of the CEO

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h. If environmental reporting is certified, statement that it is certified. If it is registered, statement that it is registered. i. Comparisons between the environmental conservation of the organization and that of industry standards or society in general

(2) Foundations of Reporting (Reporting organization, time periods, and Areas)

This specifically mentions the details of reporting foundations that is the reporting organization, reporting period, reporting areas and reference / in accordance of the reporting standards / guidelines when organizations publish environmental reporting. In addition to this, clarification should be made of the division in charge of publication of the reporting and contacts. Furthermore, methods of receiving feedback and/or enquiries should also be devised. These are nescessary in order to make environmental reporting an effective tool for environmental communication. Recommended information to be included in environmental reporting a. Reporting organization (The boundary of reporting may contain specific sites, plants or subsidiary companies, and the differences with consolidated companies should be explained. If boundaries do not yet include the whole organization, a projected time-scale for complete coverage should be provided. If some portions of environmental reporting have different boundaries, each portion should mention the boundary of reporting. ) b. Reporting time period, the date issued, and schedule for the next issue (and date of the most recent previous environmental reporting, if any) c. The reporting areas (Environmental, social and economic fields) d. Guidelines and standards that are used as in-accordance-with or reference (including industry specific ones). e. The division in charge of the publication and means of contact (including telephone number, fax number, e-mail address)

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f. Any feedback methods, such as attaching a questionnaire sheet or postcard which states that the organization will provide a reply to correspondences g. The organizations URL h. Lists and outlines of major related materials which are also disclosed (such as, a corporate pamphlet, securities reports, environmental policies and communication materials concerning significant environmental aspects if ISO14001 certification is obtained ,environmental brochures, or technical brochures and details of how these can be obtained) (3) Summary of the Nature of the organizations It is necessary to provide a simple outline of the nature of the organization, i.e. what does the organization undertake, and on what scale. If the outline of the organization is not provided, it is difficult to comprehend the likely environmental burden according to the nature of the organizations and which environmental conservation activities are likely to be significant. It is therefore necessary to include brief descriptions of the organization, the products or services involved and indices that illustrate the reporting organization. Recommended information to be included in environmental reporting a. Management policy of the organization b. Nature of organization (kind of industry and type of operation) and its products and services (the field of the business) c. Amount of sales or production (including historical trends for at least the previous five years) d. Number of employees (including historical trends for at least the previous five years) e. Other information on the scale of activity of the reporting organization (e.g., total assets, profits, or total floor space) f. Regions in which the organization operates; the numbers and locations of factories, offices, the headquarters; and major products and locations of each facility (With regard to regions of mining, purchasing of
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principal raw materials, or selling products and services, it should mention whether operations are limited to Japan, specific regions, or overseas.) g. Details of significant changes in size, structure, ownership, or products/services that have occurred in the reporting period (if any changes such as, mergers, company split-up, advances into new business, or construction of new plants) h. An outline of the history of the organization and its environmental conservation activities i. The nature of markets or customers served (such as, retailers, wholesalers, or governments). (4) Environmental policies regarding environmental conservation When organizations make efforts to address environmental issues, it is crucial to establish management policies (Fundamental principles or philosophy concerning environmental activities in the organization) for environmental conservation, and disclose this in their environmental reporting. The management policies or ideas should be appropriate to individual and also be consistent with the CEOs statement (summary and pledge). Recommended information to be included in environmental reporting a. Management policies and posture on environmental conservation (these should be appropriate to the nature and scale of operations and products/services and also the environmental burden caused by the operations) b. Date of the establishment of the policy; measures taken to establish policy; consistency with other management policies; and relation to corporate governance. c. Easy explanation of what management policy intends concerning environmental conservation, vision for the future, and the background to the establishment of policy

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d. The identification of and contents of the environmental charters or agreements to which the business organization agrees with (conforms)

(7) Summary of Environmental Accounting Information Referring to Environmental Accounting Guidelines 2002 published by the Ministry of the Environment, an organization should assess (measure) and analyze, as quantitatively as possible, costs and effects of environmental conservation during operations, and should mention the current state of the implementation of environmental accounting, giving details in summary form. Recommended information to be included in environmental reporting a. Costs expensed for environmental measures b. Environmental effects relating to environmental measures c. Economical effects associated with environmental measures contracts. by

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6. Literature Review
There are some literature on environmental environmental reporting. Some of are given below : accounting and

Corporate environmental reporting has been mainly a phenomenon of developed countries and consequently, most corporate environmental reporting studies were confined to the developed countries (Belal, 2000). A handful of studies concentrated on the newly industrialized countries such as Korea, Hong Kong, Malaysia and Singapore and African countries such as South Africa, Nigeria and Uganda (Belal, 2000). In addition, a majority of corporate environmental reporting has primarily focused on conventional print media, especially annual reports, as a disclosure medium (Lodhia, 2005). This section sheds light on studies (in the international context as well as in the context of Bangladesh) on corporate environmental reporting through corporate annual reports and through corporate websites. In addition, attempts have been made in this section to illuminate the status of environmental reporting in Bangladesh. Bangladesh is experiencing a fast degradation of environment. Some examples of this degradation are Dhakas terrible air pollution, the clinically dead river Buriganga and widespread arsenic pollution in the underground water (Belal, 2000). The Government of Bangladesh started paying attention to the Environmental management of Bangladesh since the 1990s and in order to Improve the environmental condition, the Bangladesh Environmental Protection Act, 1995 was passed. Presently, corporate environmental reporting is not mandatory in Bangladesh. But under the Bangladesh Environmental Protection Act, 1995, companies may be asked to disclose environmental information as and when required (Belal, 2000). The only mandatory environmental disclosure requirement in Bangladesh is the disclosure of expenditures on energy use. Under Schedule-XI, Part-II of the Companies Act 1994 and under Schedule, Part-II of the Securities and Exchange Rules, 1987, the total amount spent on the use of energy is to be shown in notes to the financial statements under a separate head of expenditure.

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7. Findings and analysis

Very few studies on environmental reporting have been undertaken in the context of Bangladesh. All of these studies focused on environmental disclosure through print-media and more specifically, through corporate annual reports. Bose (2006) analyzed 5 years annual reports of 11 Petrobangla companies for examining their environmental reporting status. He found that in 1998-199 and 1999-2000, only 45.45% and in 2000-01, 63.63% and in 2001-02 and 2002-03, only 81.81% of Petrobangla companies disclosed environmental information in their annual reports. The nature of information disclosed was qualitative and descriptive; the reporting companies did not attempt to quantify the environmental information. In addition, companies provided only positive information and ignored negative information. This study also shows that most of the Petrobangla companies provided information only on protection of the environment, pollution control, planting of trees and other matters. They did not provide any information regarding waste generation, conservation of energy, water wastage, recycling of waste and noise nuisance. Environmental information was disclosed either in the Chairmans Statement or Directors Report. Rahman and Muttakin (2005) surveyed 125 manufacturing companies listed on the Chittagong Stock Exchange (CSE) as on May 7, 2005. They analyzed the annual reports of these 125 companies for the year 2003/2004. The researchers found that only 5 companies (4 percent of 125 companies) disclosed environmental information in their annual reports. The information was descriptive in nature; no quantification thereof was made. They also report that the disclosure of environmental information was done in different places of the annual report and there was no standard environmental reporting framework. Shil and Iqbal (2005) surveyed 121 manufacturing companies listed on the Dhaka Stock Exchange (DSE). They reported that only 13 companies (11percent of 121 companies) disclosed environmental information in their annualreports. All companies disclosed qualitative information in the Directors Report. Bala and Yusuf (2003) analyzed the annual reports of 249 public limited companies (listed on the Dhaka Stock Exchange) for the year of 2001. They report that only 26 (10.4 percent of the total) companies
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disclosed environmental information in the Directors Report or in the Chairmans Statement or elsewhere in their annual reports. The information disclosed was qualitative in nature and companies did not follow any specific or standard reporting format. Hossain (2002) conducted a survey of annual reports of 150 nonfinancial companies (listed on the Dhaka Stock Exchange) for the year of 1998-99. The study reveals that only 5 percent of the companies under study disclosed environmental information in the Directors Report or in the Chairmans Report of their annual reports and not a single company disseminated any quantitative information as to the environmental items. An interesting finding of this study is that subsidiaries of multinational companies did not disclose environmental information. Imam (2000) analyzed annual reports of 34 companies listed with the stock exchanges of Bangladesh for the year of 1996-97 and found that only 22.5 percent of the sample companies provided environmental information in their annual reports. Belal (1999) surveyed annual reports of 30 companies of Bangladesh of which 28 were listed and 2 were unlisted. He found that 90 percent of the companies under study made some environmental disclosure. Prior studies in the context of Bangladesh have concentrated only on Environmental reporting practices through corporate annual reports but they did not focus on web-based CER practices. The present study attempts to fill this gap in literature.

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7.1

Sample company

The DADA EDIBLE OIL REFINERY is a leading concern in the country engaged in manufacturing of Soyabean and Palm oil having its production facilities near Shah Amanat International Airport,Patenga, Chittagong; Soyabean and Palm oil of the concern is already established in the market and enjoying a premium over competitors and preferred by end users over imported Soyabean and Palm oil. Considering the expanding market demand of quality Soyabean and Palm oil. In addition to domestic demand, very high potential to International market, DADA EDIBLE OIL REFINERY has set up latest treatment plant.The main raw materials are Crude Soyabean and Palm oil. The operation systems are fully automatic and close systems. The raw materials are inputted only one time finally finish products are Refined Soyabean and Palm oil. There is no spoilage of raw materials that are given in production but very few by product. The production systems are not harmful for environment and they also maintain necessary steps for environment.

Finished products and by products

DADA OIL REFINERY uses crude palm oil and crude soyabean oil to

produce refined palm oil and refined soyabean oil.They import raw materials from Brazil,Argentina etc.They have the permission to import from that sources.Using the raw materials the factory produces refined oil making minimum system loss which also produce Acid oil,Fatty acid.These by products are used in soap factory as raw material.So there is no spoilage of raw materials. A layout of the factorys production process is given below:
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Accounting treatment and reporting

The costing and pricing department of the organisation provided us information about the accounting treatment and reporting system of products of the organisation.They follow the latest principles guided by the BFRS. While calculating the cost of main product they deduct the sale value of by product from the total cost of raw materials.They add the cost of packaging,research to the cost of finished product.

Environmental Issue
The DADA EDIBLE OIL REFINERY has taken care to install completely environment-friendly machines and processes. Their ETP (Effluent Treatment Plant) and ARP (Acid Regeneration Plant) helps to keep the environment clean. ETP helps in neutralizing all industrial waste and ARP helps in recycling waste acid. Unprecedented in the history of Oil refinery industry, this provides an important strength of our commitment to the ideas and principles.The authority of the organization always pioneer in introducing the latest plant to maintain environmentally friendly operations.

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8. Summary and Conclusion

Learning is any permanent change in any concern. In this business world practical knowledge is much more fruitful than theoretical knowledge, The DADA EDIBLE OIL REFINERY is a leading concern in the country engaged in manufacturing of Soyabean and Palm oil. This concern is doing its business with high reputation and integrity. Day by day demand of the products of DADA EDIBLE OIL REFINERY is increasing. With increasing demand DADA EDIBLE OIL REFINERY is expanding their market in home as well as abroad. DADA OIL REFINERY is concerned about environmental accounting systems , environmental issues, and also corporate environmental reporting. We have gathered a lot of knowledge by visiting this leading company. We believe that this will enrich our branches of knowledge and also help in our future life. Finally we show our gratitude is to our honorable Co-coordinator Mr. Md. Ali Arshad Chowdhury,Assistant Professor, Department of Accounting and information Systems, University of Chittagong, for providing his guidance to make the tour fruitful.

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References
1. Websites: i. www.wikipedia.com ii. www.google.com iii. www.environacconting.com iv.www. enviroreporting.com 2.Journals and articles i. Corporate Environmental Reporting on the Internet in Bangladesh: An Exploratory Study Probal Dutta*1and Sudipta Bose* ii. Environmental Accounting and Reporting in Fossil Fuel Sector : A Study on Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) Sudipta Bose iii. An analysis of environmental disclosures by firms prosecuted successfully by the Environmental Protection Authority Craig Deegan and Michaela Rankin iv. Environmental disclosure a Bangladesh perspective Shil, Nikhil Chandra and Iqbal, Masum v. Accounting for the environment: Towards a theoretical perspective for environmental accounting and reporting Michael John Jones Environmental reporting in australia: current practices and issues for the future Roger L. Burritt* 3. Newspapers and magazines

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