Do you know your new NAICS number?

Environmental consultants now have their own number. So do hazardous waste collectors. What I'm referring to is the North American Industrial Classification System (NAICS). NAICS (pronounced 'knacks') is replacing the Standard Industrial Classification (SIC) code number that EHS pros, businesses, organizations, and the government have been using for statistical purposes since the 1930s. NAICS has yet to appear on the radar screen for most EHS pros. I'd guess that 95 percent or more will give you a blank stare if you ask them what they know about the topic. Some brainstorming will be necessary to ferret out the unique problems that NAICS will present to our profession. For example, safety and health pros have long used injury and illness statistics to compare performance against their identical SIC code number peers. This process will undoubtedly be used the same way within NAICS, but implementation delays and new classifications may offer more than just a few surprises. Another concern relates to OSHA recordkeeping for employee injuries and illnesses. Under the current system, certain SIC codes are exempted from recordkeeping. It's anyone's guess how this issue will be addressed under NAICS, along with the future revision of injury and illness recordkeeping rules.

A little background

How will NAICS affect you? If you think it's a long way off and you don't have to worry about it until the numbers start to appear, you're wrong. NAICS went into effect in 1997 in the U.S. and Canada, and took effect in Mexico this year. The first use of NAICS in the U.S. will be for the Census Bureau's 1997 Economic Census. These census numbers, however, will not be available until early 1999. Government agencies and other organizations and groups are now establishing schedules for implementing and rolling out NAICS. The 1997 NAICS Manual was scheduled for release in April, 1998, by the National Technical Information Service. The manual can be ordered or viewed at the following Internet site: www.census.gov/epcd/www/naics.html. If you think NAICS only deals with OSHA injury and illness statistics or may just be something that appears on a few forms, such as EPA permits, you're wrong. NAICS is about the economy. If we want to grow as EHS professionals, and as a profession, we must think in economic terms and apply economic concepts. One reason the SIC code number system is being changed is to better reflect the U.S. and North American economy. Much has changed since the SIC code number system was last modified in 1987. Economists now recognize that service industries, such as environmental consultants, account for most economic activity but only 40 percent of SIC code numbers. New 'high tech' industries, such as fiber optic cable manufacturing, which may have had little or no economic influence in 1987, are expected to provide a major economic impact in the coming years. In addition, economies are becoming more regionally and globally connected. NAICS addresses this condition by including Canada and Mexico in its system. NAICS numbers will be essentially identical among all three North American countries. They will also be comparable at the two-digit level with the International Standard Industrial Classification (ISIC) system used in Europe and other parts of the world.

More details

The SIC code used a four-digit number to identify the U.S. economy through 10 divisions. NAICS uses a six-digit code and groups the North American economy into 20 broad sectors. The NAICS hierarchy begins with a two-digit code to define a sector, such as 31-33 for manufacturing. The third digit in the NAICS code defines a subsector, such as 334 for computer and electronic product manufacturing. The fourth digit defines an industry group, such a 3346 for manufacturing and reproduction of magnetic and optical media. The fifth digit defines an industry. The sixth digit is a country-specific number. A six-digit NAICS code number in the U.S. may differ from its counterpart in Canada or Mexico. The SIC code broke the U.S. economy down into 1,004 industries. NAICS breaks down the North American economy into 1,174 industries. Although NAICS defines 361 new industries, data for more than two-thirds of all four-digit SIC code numbers will be derivable from NAICS. An example of how industries are being defined, expanded, and created in NAICS can be found by looking at SIC code number 4953, which defined Refuse Systems. Under NAICS, Refuse Systems is being subdivided into eight new industries differentiating collection and disposal, and separating hazardous waste, materials recovery, landfills, and incinerators. So where do you go from here? You need to learn more about NAICS. The first place to start is at the Census Bureau's Internet site (www.census.gov). Check out what it has to say about NAICS. Next, head over to the Internet site www.naics.com. This is a business/marketing site but it contains a lot of good information. Also, use the multi-search engine at Internet site www.dogpile.com to look at a variety of topics about NAICS. A little surfing and a little reading will spark some ideas on how you may benefit from NAICS. Finally, NAICS is not a well-known topic among EHS pros. You should spread the word.