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### April 20, 2016

# Risk Management Modernization Rule Jim Belke, Office of Emergency Management, USEPA

 

### Proposed rule published March 14, 2016 at https://www.gpo.gov/fdsys/pkg/FR- 2016 -03 - 14/pdf/2016 -05191.pdf  

### Submit comments on or before May 13, 2016 at http://www.regulations.gov/#!docketDetail;D=EPA- HQOEM - 2015 -0725  

### Proposed Changes to RMP Rule Q&As: https://www.epa.gov/rmp/frequent- questions - proposed changes - risk- managment - program - rmp - rule

# Background

 

### On August 1, 2013, President Obama issued Executive Order (EO) 13650: Improving Chemical Facility Safety and Security following several catastrophic chemical facility incidents in the United States.

 Focus is to reduce risks associated with hazardous chemicals by enhancing the safety and security of chemical facilities.

4

# Background  

### The keys areas of emphasis under the EO are:  Strengthening community planning and preparedness,  Enhancing federal operational coordination,  Improving data management, and  Modernizing policies and regulations.  EPA issued a request for information (RFI) on July 31, 2014, and  Convened a Small Business Advocacy Review panel on November 4, 2015 .  Proposed rule published March 14, 2016  OSHA also considering revisions of the PSM standard and has initiated a Small Business Advocacy Review Panel. For more info, see: https://www.osha.gov/dsg/psm/index.html

5

# Overview of RMP Proposed Revisions P1 P2 P3 Third - party a udits (applies to the next scheduled audit after an accident) [Estimated 150 accidents/year] √ √ Incident Root Cause Analysis (only for facilities with accidents/near misses) [Estimated 300 incidents/year] √ √ Safer Technologies and Alternatives Analysis (applies to a subset of P3 NAICS codes*) [ Estimated 1,692 Facilities/4,308 Processes] √ Coordinating Emergency Response Program Requirements with Local Responders √ √ Emergency Response Exercises √ √ Information Sharing √ √ √

6 *Applies to paper manufacturing, petroleum and coal products manufacturing, and chemical manufacturing facilities

### Arijit Pakrasi, Ph.D., P.E., BCEE CB&I

# Risk Management Modernization Rule Impacts

 

### Potentially affects 12,500 facilities  

### Approximately $158.3 million in estimated annualized costs (EPA estimate)

 Largest cost items are current and new responders requirements, and safer technology and alternatives analyses, and information sharing  

### Total annual damages cost estimated at $275 million from RMP facility accidents (EPA estimate)

# Risk Management Modernization Rule Timeline

 

### August 2013 - Executive Order 13650  

### May 2014 - Working Group Report  

### July 2014 - EPA RMP RFI  

### December 21, 2015 – EPA proposed rule sent to OMB  

### March 14, 2016 - Federal Register publication  

### May 13, 2016 - Comment deadline  

### Finalization - ??

# Risk Management Modernization Rule Scope

 An additional requirement for the process hazard analysis (PHA) required for Program 3 processes  Increased emphasis on third party Audits after reportable accidents  Root cause Analysis for incident investigation  Enhancements to the emergency preparedness requirements  Increased public availability of chemical hazard information  Several other changes to certain regulatory definitions and data elements submitted in the RMPs

# Overview of RMP Proposed Revisions P1 P2 P3 Third - party a udits (applies to the next scheduled audit after an accident) [Estimated 150 accidents/year] √ √ Incident Root Cause Analysis (only for facilities with accidents/near misses ) [Estimated 300 incidents/year] √ √ Safer Technologies and Alternatives Analysis (applies to a subset of P3 NAICS codes*) [ Estimated 1,692 Facilities/4,308 Processes] √ Coordinating Emergency Response Program Requirements with Local Responders √ √ Emergency Response Exercises √ √ Information Sharing √ √ √

11 *Applies to paper manufacturing, petroleum and coal products manufacturing, and chemical manufacturing facilities

# Discussed but Not Proposed

 Other Regulated Substances  OCA data sharing  Safety Critical Equipment  Automatic Detection and Monitoring  RAGAGEP  Facility S iting A nalysis  Emergency Shutdown

# Independent Third Party Audits  

### Required for Program 2 or 3 Process  

### In the next scheduled compliance audit following a reportable accident or within 12 months whichever is earlier  

### May also be required a fter findings of significant non compliance by an agency  

### Does not replace 3 -year compliance audits

## Independent Third Party Audits after Accident

 

### Accident Trigger  Existing five -year accident history criteria  On - site death, injuries, or significant property damage  Offsite death, injuries, property damage, evacuations, sheltering in place, or environmental damage  

### In lieu of internal compliance audit which is typical in most facilities  

### Each covered process need to be evaluated in the audit  Severe burden for large industrial complexes

## Independent Third Party Audits after Agency Determination

 

### Based on Significant Non - Compliance from  Previous audit  Agency inspection  

### Significant Non - Compliance  Prevention program subpart C or D  Deficiency of previous audit  

### Written notification by agency required and negotiation possible

## Independent Third Party Auditor Competence

 

### To be selected by the organization  

### Knowledge of RMP Requirements  

### Experienced with facility type and covered processes  

### Experienced with applicable RAGAGEP  

### Trained or certified in proper auditing techniques  

### At least one member is a Licensed P.E.

## Independence and Impartiality

 

### Receive no financial benefit from outcome of audit  

### No existing or recent business relationship (3 years before and after the audit)  

### All persons in the audit team will be required to sign CBI statement in the rule  

### Auditors must have written policy to comply with competency, impartiality, and independence requirements

## Audit Reports/Corrective Action Plans  

### Must identify lead auditor and all participating personnel  

### Summary of qualifications for meeting competency requirements  

### Keep draft and final report for the past two RMP audits and submitted to implementing agency on request  

### Company official will have to sign a certification statement for the third party audit

## Audit Reports/Corrective Action Plans  

### Submit report also to the implementing agency before or at the same time to the facility  

### Report cannot be Attorney Client Privileged  

### Corrective action plans must be generated within 90 days of the audit – also public documents  

### Copy to audit committee of Board of Directors

## Independent Third Party Audit Comments Requested by EPA

 

### Applicability requirements  

### Benefits and costs  

### Documentation of competency, independence, and impartiality of third party auditors  

### Third party auditor criteria  

### Owner or operator obligations  Correcting deficiencies and documenting them

## Incident Investigation  

### Applicable to Program 2 and Program 3 processes  

### More specific definition of “Catastrophic Release” that triggers incident investigation  

### “...... could reasonably have resulted....... ” i.e. “near miss”  

### “.......results in deaths, injuries, or significant damage on site.......”  Not limited to off- site incidents anymore

## Incident Investigation  

### “Near Misses” have not been defined – EPA felt it was too difficult define this for all scenarios  

### Rely of facility to identify the near misses as best as possible  

### May add to the confusion for facilities and may lead to inconsistencies between facilities

## Incident Investigation  

### Significant expansion of scope of incident investigation by including a “Root Cause Analysis”

 A fundamental, underlying, system - related reason why an incident occurred that identifies correctable failure(s) in management systems .  

### Any recognized methodology could be used with an analysis of contributory causes and root causes  

### Reports a lso need to have a schedule for addressing recommendations

## Incident Investigation  

### Incident investigations are to be completed within 12 months of a catastrophic release or a near miss  

### May have extension in case of complex incidents  

### Comments are sought on:  Should investigation be completed before restart?  Are the investigation timeframes adequate  Would there be any conflict with root cause analyses in the NSPS and MACT rules

## Accident History Reporting  

### Results of root cause analyses be included in accident history reporting to disseminate lessons learned  

### Root causes may be categorized as “procedures”, “training”, “communications” for better analysis  

### Schedule for accident history reporting is same as incident investigation – 12 months  

### Sought comments on whether the reporting be limited to Program 3 processes only

## Safer Technology and Alternative Analysis  

### Applicable to only Program 3 processes in  Paper manufacturing (NAICS 322)  Petroleum an coal products manufacturing (NAICS 324)  Chemical manufacturing (NAICS 325)  

### Purpose is to make the process safer through minimization, substitution, moderation, and simplification

## Safer Technology and Alternative Analysis  

### Conducted during the 5 -yr PHA anniversaries  

### Initial analysis is to identify safer alternatives; follow up analysis is to determine cost and feasibility of alternatives  

### Hierarchies:  IST or ISD  Passive strategies: equipment design, process design; inventory management  Active strategies: engineering controls, process controls  Procedural measures

## Safer Technology and Alternative Analysis  

### Similar in process to NJ TCPA IST and Contra Costa County program  

### Definition is vague and may include large number of alternatives – need to be prudent in selection  

### General methodology is in CCPS guidance but many decisions are subjective – how safe is safe enough?  

### Need for development of industry specific methodologies to be consistent between facilities

## Emergency Response Preparedness  

### Applicable to Program 2 and Program 3 facilities  

### Much more coordination with local response authorities to ensure resources and capabilities are in place  

### Documented coordination annually  

### If not adequate, facility may have to develop its own program – ultimate burden rests with facilities  

### The burden is tied to the statutory requirements of the “General Duty Clause” – no precedent

## Emergency Response Preparedness  

### Annual emergency notification system exercises with local response authorities - b oth field and table top exercises  

### Field exercise will include simulation of the accidental release at least every five years  

### Requires full exercise with notification, mobilization, coordination with local emergency responders, equipment deployment  

### Table top exercise will be done annual except when field exercise is done  

### Written report within 90 days

## Information Availability  

### Applicable to all RMP facilities  

### Annual summary notifications to LEPCs – public report  

### Includes accident history, incident investigation, compliance audits, STAA reports, emergency response exercise summaries  

### Some of these were not public reports earlier  

### Limited CBI protection

## Public Meeting/Score Card  

### If qualified, facility is required to hold a public meeting within 30 days of an accidental release  

### Second public meeting if the incident investigation is not completed before this initial meeting  

### Sought comments on  Should a “grade system” and “score card” should be used to rate a facilities performance for RMP compliance?  Should these be made available to LEPCs and public?  How should this grading system be developed?

## Streamlining  

### Several data elements have been proposed for deletion, revision, and addition of data elements  

### In most cases, the deletions are substituted with attestations of compliance – 12 substitutions for P3 facility  

### Attestation take more time than reporting – not exactly streamlining

## Requests for Comments  Scope expansion of RCA  Restart to require completion of Incident investigation report  “Suggesting a concern” triggering a third part audit  D raft audit report to regulatory authority prior to owner/operator  STAA implementation  Facility siting  Emergency shutdown

## So What all of these mean to affected Facilities?  

### Major expansion of effort to maintain compliance  

### More rigorous compliance audits involving third parties  

### Much more information will be in public domain and will be scrutinized in more detail  

### Higher burden with facilities for ensuring emergency response preparedness

## How to Prepare  

### Develop a baseline of your affected processes  P rogram level; STAA analysis; RAGAGEP; documentation; incident investigation; emergency response; facility siting  

### For large organizations with multiple affected facilities, develop compliance guidance for consistency  

### Ensure a good auditing practice/team  

### Ensure coordination with LEPC if not already  

### Engage management more actively in making decisions

### Kenneth S. Komoroski Morgan Lewis

# Introduction – RMP Regulations

 Clean Air Act, Section 112(r) – requires EPA to promulgate rules for chemical accident prevention at facilities that use regulated hazardous substances  Risk Management Program  EPA coordinates this program with OSHA Process Safety Management (PSM)  Every 5 years, covered facilities must submit Risk Management Plans (RMP). The Plan must include:

 Hazard Assessment  Potential effects of release, accident history, worst case release evaluation  Prevention Program  Safety precautions/maintenance, monitoring, training  Emergency Response Program  Medical response, training measures, notice of release

# Presidential Executive Order 13650  EPA is proposing amendments in response to Presidential Executive Order 13650 (Aug. 1, 2013).  Executive Order issued in response to “past and present tragedies.”  West Fertilizer explosion – Texas 2013 (15 fatalities, 160 injured)  BP Refinery explosion – Texas 2005 (15 fatalities, 170 injured)  Tesoro Refinery explosion and fire – Washington (7 fatalities)  Chevron Refinery fire – California 2012 (19 endangered employees, 15,000 residents sought medical treatment)  Williams Olefins explosion and fire – Louisiana 2013 (2 fatalities and several injured )

# Executive Order Goals  

### Goal: To improve chemical facility safety and security in coordination with owners and operators.  

### Goal: Improve coordination among the federal government, first responders and State and local entities.  

### Goal: Identify opportunities and mechanisms to improve response procedures and to enhance information sharing and collaborative planning between chemical facility owners and operators, Emergency Planning Committees and first responders .

# CAA 112r Authority  

### Accident Prevention – EPA is authorized to promulgate “reasonable” regulations for release prevention, detection and correction requirements  

### Regulations may include monitoring, recordkeeping, reporting, training, vapor recovery, secondary containment and other design, equipment, work practice, and operational requirements.  

### EPA may provide technical assistance for “voluntary industry accident prevention standards”

 It appears EPA has gone beyond “voluntary” with the proposed amendments addressing prevention

# Legal Issues  

### Does EPA have the authority to go as far as it does in the proposed amendments?

 Root cause analysis  Third party audits  Mandatory drills/exercises  Requiring “Inherently Safer Technology”  

### EPA has decided not to define “near misses” requiring after-the -fact evaluation

 Creates legal uncertainty/risk

# Third Party Audits  Are Third Party Audits a good idea/better than internal evaluations?  Third Party Audits are required “when an implementing agency has made a determination that a third - party audit at an RMP facility is necessary”

 Grants too much authority to EPA/implementing agency with no defined parameters for the determination  What other use can be made of Third Party Audits?  CAA restrictions on public access?  Use in toxic tort/exposure/citizen suit cases?  Attorney- client privilege?  Audit privilege ?

# 3M RMP Facilities  

### Mix of Program 1, 2 & 3 covered processes  

### Several NAICS code 325 Chemical Manufacturing facilities (Program 3 covered processes)

# RMP Proposed Revisions-Overview P1 P2 P3 Third - party a udits (applies to the next scheduled audit after an accident ) √ √ Incident Root Cause Analysis (only for facilities with accidents/near misses ) √ √ Safer Technologies and Alternatives Analysis (applies to P3 chemical manufacturing facility NAICS codes) √ Coordinating Emergency Response Program Requirements with Local Responders √ √ Emergency Response Exercises √ √ Information Sharing √ √ √

46

# Third - Party Audits - Keep  

### Required upon RMP reportable accident only

# Third - Party Audits - Modify  Concerns about availability of qualified auditors due to strict qualification requirements  Potential to discourage use of expert consultants for implementation & improvement initiatives if there is concern about their future ineligibility as an auditor  Consider similar auditor qualifications to ISO 14001 auditor qualifications (why develop new requirements?)  Require EPA to qualify and identify 3 rd party auditors, rather than placing burden on industry  PE is not the right qualification. CSP, CPEA, CPSA, degreed chemical engineers would be more appropriate

# Third - Party Audits - Modify  Not unreasonable that 3 rd party audit requirement extended to routine compliance audits in future; not unreasonable to assume OSHA adopts similar rule  3M has internal Process Hazard Management (PHM) audit program  Used for years  P rovides valuable internal benefit in hazard reduction and training/education  Could lose this benefit if routine audits become 3 rd party  Allow audit teams to have combination of 3 rd party & internal resources  Clarify scope of the audits  Allow owner/operator opportunity to review/comment on draft audit report prior to regulatory authority

# Incident Root Cause Analysis - Keep  

### Required upon RMP reportable accident  

### 3M already conducts root cause analysis investigations  

### 3M incident investigations already initiated within 48 hours  

### 3M encourages reporting near misses

# Incident Root Cause Analysis - Modify  

### Define “ near miss”  Currently allows after-the -fact evaluation, creating legal uncertainty/risk  

### Large burden to develop incident root cause summaries on all “near misses”  

### Could create a fear of reporting “near misses” due to nature of releasing details to public  

### Limit LEPC summaries to reportable accidents only  

### Subjectivity in defining “root cause”  How do we know for sure that we got to root cause in every case?  

### 3M would need to develop incident root cause summaries suitable for public release

# STAA (Safer Technologies and Alternatives Analysis) 

# - Keep

 

### Limited to Program 3 processes in NAICS 322, 324, and 325  

### Emphasis on hierarchy of control is valuable  

### Not requiring companies to implement IST & ISD for processes where feasible

# STAA (Safer Technologies and Alternatives Analysis) 

# - Modify

 PHA purpose is not to redesign the process (manufacturing does not own product formulation or process design)

 PHA stage is too late for large impacts  IST & ISD evaluation belongs upstream in product/process design stages  IST & ISD subjective and relative to other options. Opens door for second -guessing facilities' analyses  Significantly expands PHA team member qualification requirements (need people with design, financial, etc. backgrounds on team)

# Coordinating ER Program - Keep  

### Coordination with local responders is a good idea  

### 3M internal programs already address sufficiency of external emergency services  

### Not requiring all Program 2 & 3 facilities to be ‘‘responding’’ facilities

# Coordinating ER Program - Modify  

### Local responder exercise participation not required – expand to coordination as well  

### Address how disagreements between local responders and owner/operator regarding which party should provide emergency response will be resolved?  

### Need a consistent, formal assessment of whether or not local emergency responders have “capability” to respond

 Who does this assessment?  

### Hardship (cost and resources) on smaller facilities, particularly in rural areas, if they have to become responding facilities

# ER Exercises - Keep  

### 3M internal programs already address practice drills  

### Not requiring exercise participation by local responders to comply

# ER Exercises - Modify  

### Eliminate the requirement for tabletop and field exercises  

### Resourcing annual tabletop & field exercises  Time consuming 

###  

### Cost of full field drills (mobilizing site, local and contract responders)

 Very expensive for companies and responders alike

# Information Sharing - Keep  

### Not changing policy regarding OCA information  

### Public meeting only after RMP reportable incident

# Information Sharing - Modify  Too much information required for LEPC & Public  Big security concerns  Significant systems would need to be developed for providing public information (info screening; CBI, trade secret & export control reviews; legal approvals; etc.)  May discourage companies from continual improvement (i.e. digging deeper in internal audits, investigations, etc.)  Require information to be updated and provided upon request only (not annually)  No “score card”  Will scores be calibrated amongst independent third - party assessors?

# Other  

### OSHA PSM revisions also expected. How are OSHA PSM and EPA RMP going to maintain consistency?Questions discussed during 04/20/16 A&WMA Webinar on RMP Proposed Rule 52 persons registered at the webinar Does EPA have plans to increase enforcement/inspections for the new rules? C an you describe in more detail and perhaps with some examples - the activities and outcomes EPA might expect for the Safer Technology and Alternatives Analysis? How did EPA arrive at its assessment that the root cause analyses proposed requirements would apply to about 300 facilities per year? The requirements for a 3rd party audit are very restrictive, what options are available to a facility that can't identify a team that meets all these requirements? Can the 3rd party audit criteria/qualifications be required for triennial audits? Has EPA done an assessment of the availability of auditors that will meet the proposed competency and objectivity criteria? The 3rd party audit requires a PE, is it intended that the PE be specifically licensed in the state the facility is located? Will the triennial audits be used to identify significant non- compliance, which will require a 3rd party audit? Consider a facility that routinely uses a pre- qualified and selected independent third-party auditor to perform the triennial compliance. The only services the auditor provides to the company is the triennial compliance audit. If the facility then has a reportable release that requires an independent third-party auditor, would the facility need to find another independent third party auditor, or could they retain their established independent third party auditor to do the postrelease audit? To what agency or organization is the facility obligated to submit the "Lessons Learned" report? Is this the "Lessons Learned" Report required after each tabletop exercise are only after field exercise? If you are currently a Program 1 bec ause the facility has not had an accident meeting the 5 year and then the facility has an accident meeting the requirement which could then cause them to become a program 3, would an audit be required? Do all members of independent audit teams have to be f rom outside the facility? Can the "someone knowledgeable in the process" be an in house person? If a consultant provides non-RMP services to a client, would that person (and more importantly that consulting company) be considered impartial for the RMP required 3rd party audit?