On August 1, 2013, President Obama signed Executive Order 13650 entitled: Improving Chemical Facility Safety and Security. The action was driven in response to an explosion at a fertilizer facility in West, Texas. The focus of the EO is to reduce risks associated with hazardous chemical incidents to owners and operators, workers, and communities by enhancing the safety and security of chemical facilities. In the two years since the signing of the order, agencies including the Department of Homeland Security (DHS), Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA) have been working to address the goals established in the order. The Obama Administration released a status update fact sheet in June 2015 outlining the progress of the agencies.

One of the main areas of agency activity with the potential to have a major impact on the cold chain is modernizing policies and procedures. OSHA, EPA and DHS are all considering significant policy changes to major regulatory programs including Process Safety Management (PSM), the Risk Management Program (RMP) and the Chemical Facilities Anti-Terrorism Standards (CFATS) program. Each of these agencies has taken steps towards regulatory change and the issue of chemical facility safety and security will continue to be a high priority for the remainder of the Obama Administration.

OSHA PROCESS SAFETY MANAGEMENT

In November 2013, OSHA released a Request for Information (RFI) detailing potential changes to the PSM program. IIAR worked with the Global Cold Chain Alliance (GCCA) and others to develop a coalition of partners to jointly submit comments to OSHA. The comments express concern over the additional and unnecessary burdens that would be placed on industry should the regulatory proposals be enacted. The coalition of groups signing on to the comments to DHS and EPA includes: American Frozen Food Institute, American Meat Institute, GCCA, International Association of Refrigerated Warehouses, International Institute of Ammonia Refrigeration, Refrigerating Engineers and Technicians Association and the U.S. Poultry and Egg Association.

The next step in the regulatory process is formation of a Small Business Regulatory Flexibility Review Act (SBREFA) panel. These panels are designed to solicit input from small businesses impacted by the regulation. The PSM panel was announced in June 2015 and will convene during the summer of 2015. The OSHA regulatory process tends to take longer than many other agencies, so the formal proposed rule to amend the PSM regulation is not anticipated for some time. In addition to working on changes to the PSM regulation, OSHA is also exploring non-regulatory issues related to the PSM program. An example of this is OSHA’s June 2015 guidance to inspectors related to Recognized and Generally Accepted Good Engineering Practices (RAGAGEP). RAGAGEP plays an important role in how inspectors evaluate a facility’s compliance with PSM.

Under the PSM regulation, employers must document that all equipment in PSM-covered processes complies with RAGAGEP. Inspections and tests performed on process equipment are subject to the PSM regulation’s mechanical integrity requirements in accordance with RAGAGEP and Inspection and test frequency must follow manufacturer’s recommendations and good engineering practice.

The OSHA guidance importantly recognizes that PSM does not strictly define RAGAGEP. Employers have the ability to select their own RAGAGEP. The guidance does point to the importance of consensus standards and cites IIAR as a primary source of RAGAGEP. It goes further to state that if a facility is properly following consensus standard, then they are likely in compliance. Engineering documents and technical papers can also form the basis of RAGAGEP. Employers may also develop their own RAGAGEP, but only if it meets or exceeds other applicable standards.

The document gives guidance to inspectors on the interpretation of “shall” and “should” contained in consensus standards. The guidance is clear that “shall,” “must” or similar language means that the practice is a mandatory minimum requirement. “Shall not,” “prohibited” or similar language means that the practice is unacceptable. “Should” or similar language in the RAGAGEP reflects an acceptable and preferred approach.

If an employer adopts “should” practice, it is presumed appropriate. If an employer does not adopt a “should” practice, inspectors are directed that more investigation is required. Inspectors will evaluate whether the employer has determined and documented that the alternate approach is at least as protective, or that the published RAGAGEP is not applicable to the employer’s operations. In the absence of such documentation from the employer, the inspector should examine documents, such as relevant process hazard analyses and management of change procedures, to determine if the employer’s approach is as protective. These clarifications are important, as some members have reported inspectors citing facilities because they have not followed “should” language.

The guidance also provides a list of “enforcement considerations” for inspectors. It is important for facilities to also understand these considerations, as inspectors will be following these when they evaluate a facility’s compliance. A list of the enforcement considerations is provided below:

• Multiple RAGAGEPs may apply to a facility.
• Employers don’t need to comply with inapplicable RAGAGEP.
• Using inapplicable RAGAGEP can be dangerous – citations may be warranted. 
• Where there is not RAGAGEP to provide full coverage, the employer is expected to develop standards to address it. 
• More stringent internal standards are acceptable, but must be consistently followed or the facility will risk citation.
• Selectively applying pieces of consensus standards could be problematic. 
• Inspection and testing of equipment must follow RAGAGEP. n Employers must document compliance with RAGAGEP. 
• Equipment under Mechanical Integrity that is outside acceptable limits must be corrected before use.
  • Interim measures may be acceptable, but warrant inspector scrutiny.
• Employers must ensure that older covered equipment is designed, maintained, inspected, tested, and operating in a safe manner. 
• When evaluating citations for equipment:
  • Establish age and installation date
  • Modifications
  • RAGAGEP selected
• When organizations update RAGAGEP (IIAR standards, as an example):
  • When the update is explicitly retroactive, facilities must comply
  • When stated proactively – Facilities are not mandated to comply, but must demonstrate how new hazards are addressed
    – Can use PHA, MOC, corporate monitoring, review of published standards
• Inspectors are directed to notify OSHA headquarters if they encounter RAGAGEP that is not adequately protective.
• When writing citations for inspections and testing:
  • Reference RAGAGEP selected by employer.
  • If no RAGAGEP selected, reference applicable example(s).
• When citing for inspections and testing frequency:
  • Cite frequencies listed in manufacturer’s recommendations and GEPs.
  • Or more frequently, if indicated by prior operating experience.
• RAGAGEP citations should only reference applicable RAGAGEP
  • Cites cases where API is used in ammonia refrigeration facilities.

EPA RISK MANAGEMENT PROGRAM

EPA issued a Risk Management Program (RMP) Request for Information (RFI) on July 31, 2014 seeking comment on potential revisions to EPA’s RMP regulations and related programs to modernize its regulations, guidance, and policies. The proposed rule seeks to reduce the likelihood of accidental releases of toxic and flammable substances at chemical facilities, and improve emergency response when those releases occur. IIAR, along with coalition partners, provided detailed comments on the RMP RFI expressing concern with many of the proposed revisions. Similar to OSHA, EPA is also seeking small businesses, governments, and not-for-profit organizations to participate as Small Entity Representatives (SERs) for a Small Business Advocacy Review (SBAR) Panel. This panel will focus on the Agency’s development of a rule that proposes to modify the current RMP.

EPA has indicated its desire to issue a proposed rule to amend RMP by the end of calendar year 2015. The rulemaking is a high priority for the Obama Administration, so EPA will be pushing to have a final rule completed before the end of President Obama’s second term.

DHS CHEMICAL FACILITIES ANTITERRORISM STANDARDS PROGRAM As a part of the implementation of the Executive Order, DHS published an Advanced Notice of Proposed Rulemaking (ANPRM) in August 2014 to modify the Chemical Facility Anti-Terrorism Standards (CFATS) program regulations. IIAR and coalition partners also provided comments on the CFATS rulemaking. The coalition’s comments centered on the applicability of CFATS to ammonia refrigeration facilities. To date, the number of facilities deemed high risk and given a CFATS tier with ammonia being the only chemical of interest is extremely small. The coalition is urging DHS to remove the Top Screen requirement for facilities only subject to CFATS due to anhydrous ammonia. DHS is in the process of reviewing the comments received from the ANPRM.

DHS has indicated that a formal proposed rule could be published during 2016. A final rule would not likely come until late 2017 or sometime in 2018.

As the Obama Administration and key agencies including OSHA, EPA and DHS continue implementation of Executive Order 13650, IIAR and its partners will continue to actively engage in the process to promote and protect the interests of the cold chain industry. Members are encouraged to stay informed so they can be aware of the potential changes that could impact their business.