Chemical plant managers who have found themselves missing their friendly neighborhood U.S. Occupational Safety and Health Administration (OSHA) inspector need worry no more.
OSHA announced the nationwide expansion of its process safety enforcement program for the chemical industry, formally known as the Process Safety Management (PSM) Covered Chemical Facilities National Emphasis Program (NEP), or the chemical NEP. The national program is based on a previously piloted program in 16 states.
The origin of the program has its roots in the Texas City Refinery accident of 2005 and the resulting increased scrutiny towards process safety enforcement in the refining industry, which culminated in the refinery NEP.
What Facilities Are Targets?
OSHA has identified four sources of information that it will draw from to develop a list of facilities that will be inspected:
1. Facilities that have submitted a U.S. Environmental Protection Agency (EPA) program Level 3 risk-management plan.
2. Facilities with an explosives manufacturing North American Industry Classification System Code.
3. Facilities that have been previously cited by OSHA for a PSM violation.
4. Local office knowledge of PSM-covered chemical facilities.
Excluded from that list are refineries (refineries have already been scrutinized via the refinery NEP), chemical facilities that participate in OSHA’s Voluntary Protection Program (VPP), and chemical facilities that have been inspected within the past two years. Unfortunately, all other facilities will have no way of knowing whether or not their number is up until the OSHA inspector knocks on their door.
What Will the Inspection Look Like?
The inspectors will focus on developing answers to an undisclosed list of questions and review of safety-related documents, such as piping and instrumentation diagrams, injury logs, process flow diagrams, process hazard analysis, among others.
Otherwise, the inspection will look a lot like any other OSHA inspection, complete with an opening conference, an initial walk-around, employee interviews, document requests and reviews, and a closing conference to discuss findings.
Generally, OSHA will limit its inspection to a particular process unit to ensure it has enough time to adequately review most of the compliance issues related to a facility. Picking the focus unit is a fairly subjective process and may ultimately depend on what the inspectors feel is the area most in need of scrutiny.
However, the chemical NEP instruction document lists some factors that are relevant in selecting a unit to inspect, such as the age of the unit, the number of workers present and units that generate the most incident investigations or compliance audit action items.
Inspectors likely will also rely on comments from operators and employee representatives in making the selection.
What Can We Do To Get Ready?
There are multiple steps that any employer can undertake now to prepare itself for an inspection, none of which can guarantee that an inspector will not issue a citation, but all of which will result in the plant putting its best foot forward.
First, employers can begin the process of analyzing their compliance with the PSM elements that were the subject of the greatest amount of scrutiny during the refinery NEP.
Second, management can designate people who will serve as the lead facilitators for the inspection team.
Third, management can prepare form documents to respond to document requests, including indices for produced documents and cover letter that may accompany responsive documents.
As to performing pre-inspection “gap analysis,” we suggest focusing on the PSM elements that OSHA identified during the refinery NEP as being most commonly deficient. We know now that the top five cited elements during the refinery NEP were:
1. Process safety information for equipment
2. Mechanical integrity equipment deficiencies
3. Process hazard analysis contents
4. Mechanical integrity inspection and testing
5. Process hazard analysis action item closure
With this knowledge and previous experience with OSHA inspections, sites should be able to identify the two or three areas that present the greatest opportunities for short-term improvements.
Finding and closing out at least some action items associated with those elements before an inspection may result in significant benefits, because even if some issues remain for a given element, those issues are less likely to appear to be a systematic problem.
Inspectors often utilize enforcement discretion if they conclude that an employer is working diligently to address previously identified concerns.
In regards to performing a gap analysis, it is imperative that employers structure these reviews to take advantage of applicable legal protections, such as the attorney-client privilege. Otherwise, an employer may find the review being used against it in subsequent proceedings by OSHA or even other parties, such as the EPA in a risk-management plan inspection.
When creating an inspection facilitation team, we suggest designating people who are most familiar with how the site complies with the top five cited elements noted above. One person should serve as the team leader and should be the single point of contact with any agency personnel.
Although it likely goes without saying, picking a team leader with strong interpersonal skills who will present a professional and courteous attitude to the inspectors is a necessity. An inspection can easily be derailed by the inability of plant personnel to “just get along” with OSHA inspectors.
As to preparing form documents, this is simply a good housekeeping step that will help free up plant personnel to respond to the inspectors’ requests, rather than spending time drafting documents that we already know will be needed during the inspection.
Obviously, the employer will want to keep a detailed record of the requests made on the facility and the information provided in response, including requests for documents, interviews and walk-arounds.
The inspection facilitation team should create in advance a spreadsheet with pre-populated headers that can be completed as information is distributed to the inspectors.
Similarly, we suggest sending a cover letter with any distribution of documents in response to a request. A form cover letter that identifies the potential presence of confidential information, asserts any general objections, and includes catch-all language to protect the company against any inadvertent disclosure of privileged material can be created so the only other information that needs to be populated is the request and the information provided in response.
What Is the Risk in Not Preparing?
As many know, the Occupational Safety and Health Act does not provide for extraordinary stiff penalties. The maximum fine for a willful violation of the act’s PSM standard is $70,000, whereas a similar violation under the EPA’s risk-management plan rules carries a fine of $37,500 per day of violation.
Some employers may feel that the risk of penalty is too low to dedicate significant resources to preparing for an inspection. However, penalties are not the only weapon OSHA has in its arsenal.
OSHA has introduced a new enforcement tool called the Severe Violators Enforcement Program, which focuses on, for a lack of a better description, publicly shaming facilities with multiple repeat, willful or failure-to-abate citations coming out of inspections – three or more in the case of chemical NEP inspections.
The practical effect of being included in the program is that OSHA will forward copies of citations to company headquarters, issue a news release about the citation, require certain concessions in any settlement with the company involved (even at different facilities than the one inspected), perform enhanced follow-up inspections, and perform nationwide inspections of any related workplaces.
An intriguing feature of the program is that there is no exit mechanism. In other words, once a facility is placed in the program, there is no way to remove the label.
Further, most facilities take pride in their health and safety programs. OSHA tends to develop perceptions of facilities as good or bad apples, sometimes justifiably and sometimes not.
When inspectors are met with a uniform, prompt and complete response to their requests, it not only reduces the potential for a large citation from the immediate inspection, but it reduces the likelihood of follow-up inspections.
OSHA is much more likely to revisit a facility and check abatement measures if it is uncertain that the facility is managed well enough to reduce or eliminate any identified hazards, a misrepresentation any plant can prevent by seeming and being prepared.
Thus, using some of a plant’s valuable and limited resources to prepare for a potential inspection will almost certainly pay off in both the short and long term.