Thursday, May 1, 2008

Inherently Safer Technology Implementation under HR 5577

This is part of a continuing series taking a detailed look at the provisions of the new Chemical Facility Anti-terrorism Act of 2008 recently introduced in Congress (HR 5577IH). Today’s entry looks at Section 2110(b) that deals with the requirement for implementation of methods to reduce the consequences of a terrorist attack under CFATA of 2008.

Previous blogs in this series include:

The requirement to implement methods to reduce the consequences of terrorist attacks (commonly known as Inherently Safer Technology – IST) is one of the more controversial portions of this legislation. It allows the Secretary of DHS, under clearly defined circumstances, to make operational decisions about manufacturing procedures in chemical facilities. Clearly it is important for facilities to understand those circumstances.

Implementation Can Be Required

Only a chemical facility assigned to a ‘high-risk tier’ can be compelled by the Secretary to implement an IST. As noted in an earlier blog in this series (see: "Ranking of Chemical Facilities by HR 5577") the Secretary is required to establish at least four risk based tiers for covered facilities, one of which (again at least) will be designated for ‘high-risk chemical facilities’. This means that all covered chemical facilities are required to conduct an IST assessment, but only the highest risk facilities can be compelled to implement IST.

There are a number of other factors that limit the Secretary’s authority to require the implementation of an IST. The next factor is the requirement that the Secretary must base his determination on the assessment conducted by the facility in their Site Security Plan (SSP) of the methods to reduce the consequences of a terrorist attack. Of course, the Secretary has the option of not accepting an SSP that does not have all readily recognized IST options analyzed. Once the SSP is approved, only those methods assessed can possibly be directed for implementation.

There are four remaining factors that the Secretary must consider before requiring the implementation of an IST. Those factors are:

  • Would significantly reduce the risk,
  • Would not transfer the risk to another facility,
  • Can be feasibly incorporated,
  • Would not impair the operator’s ability to do business at a location within the United States.

Again, the data to evaluate these factors must come from the assessment performed as part of the SSP. The reason for this is that the Committee realized that, for all but a few situations, there would be no one in the Federal Government with the experience or expertise needed to evaluate the various methods of reducing the consequences of a terrorist attack at the multitude of different chemical facilities across this country.

Significantly Reduce the Risk

The Secretary must find that the assessed IST would "would significantly reduce the risk of death, injury, or serious adverse effects to human health resulting from a chemical facility terrorist incident" {Section 2110(b)(1)(A)}. The key phrase here is ‘significantly reduce’. Rules implementing this section will have to attempt to define ‘significantly reduce’ or this section will generate lots of billable hours for an army of lawyers.

The data for the determination of whether or not the assessed method would ‘significantly reduce’ the risk comes from the assessment performed in the SSP. Once the SSP and the included assessments are approved by the Secretary, the Secretary has no means to compel a change to that assessment.

Transfer the Risk to Another Facility

The Committee listened to industry observers that noted that moving a security problem from one facility to another was not necessarily a solution to a security problem. The Secretary cannot require the implementation of an IST that would

  • "increase the interim storage of a substance of concern outside the facility or directly result in the creation of a new covered chemical facility assigned to a high-risk tier under section 2102(c)(3) or the assignment of an existing facility to a high-risk tier".

The problem here is that the facility cannot determine this in their assessment of proposed method of reducing the consequences of a terrorist attack. Even if the facility to which the risk is being transferred is owned by the same owner/operator, security rules might prohibit the sharing of information about the status of that facility as a ‘covered facility’.

Because of the way that DHS guards the process of risk status determination, the transferring facility would have no way of knowing if the risk transfer would affect the tier ranking of the risk receiving facility. Even DHS would have a difficult time determining the change in risk rating of the receiving facility without extensive discussion with the receiving facility about how change would effect their operations and inventory management.

If the receiving facility is already in a high-risk tier, they are also likely looking at a similar risk transfer back to the originating facility. This severely limits the utility of using inventory transfer, accelerating shipments, or delaying incoming shipments as a method reducing the consequences of terrorist attack.

There is a possible exception. If an organization (railroad, trucking company, or even the management of the facility trying to transfer risk) were to establish an interim storage facility in a rural area, away from local population, critical infrastructure or other facilities, there would be little chance that that facility would be assigned to a high-risk tier.

Can be Feasibly Incorporated

If it cannot be feasibly "incorporated into the operation of the covered chemical facility" {Section 2110(b)(1)(C)} the Secretary cannot require the implementation of the IST. Again, only the facility management can determine what can be feasibly incorporated into the facility. A clear justification of a negative decision should be clearly explained in the assessment.

Lack of feasibility could be due to a wide variety of reasons. The physical constraints of the facility layout may prevent installation of required equipment. Limitations of raw material delivery options may dictate storage requirements. The financial situation is a common concern. One constraint that may be commonly found in specialty chemical manufacturing is customer quality requirements. A wide variety of factors may affect the feasibility of implementing an IST.

Ability to Continue Doing Business in the US

The last factor was added to counter the frequently voiced concern that added government regulation would add significant costs to operations that would make it likely that the facility would be closed and moved off shore. While this argument may be justified in the most extreme cases, it is one that will seldom limit the Secretary’s action on an IST implementation decision. Anything that would drive a company off shore would certainly limit the facility’s ability to ‘feasibly incorporate’ the IST into the operation of the facility.

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