Since I posted my article on auditor’s conundrum a week ago on LinkedIn, I received many comments – from consultants, auditors and attorneys. Here is a summary of their comments:
Many consultants are concerned with breaching the confidentiality agreement with the client – even in the face of a continuing criminal act. They seem to think that very bad things will happen to them and the criminal client will sue them. Some are concerned that word will get out and no one will hire them again. Here is my take: First of all, the client is not likely to sue the auditor for breach of confidentiality. Why? Because the client will have to show damages in court as a result of the breach. And there is NO damage. Now, if the auditor had disclosed proprietary information about the the client’s manufacturing process to his competitors, there would be damages. But in the case of notifying authorities of an on-going criminal act, where is the damage to the client? A thief cannot sue his friend for turning him in even if he swears him to secrecy.
As to the concern about the auditor’s reputation for breaching the confidentiality agreement, my take is that the auditor will have a better reputation as a result of stopping an on-going criminal act and protecting the general public. If a company is hesitant about hiring such an auditor who would stop a criminal act, you would not want such company as a client anyway.
The downside of NOT reporting an on-going criminal act (dumping of toxic wastes) for the auditor is great. What do you think the injured parties (people who end up drinking the contaminated water) will do to the auditor? Here is an environmental professional under contract with a client who is dumping toxic wastes and he fails to take action to stop the client. They are going to think the criminal act was done with a wink and a nod from the auditor.
Here is what the auditor should do: As soon as he discovers the illegal activity, he must tell the client to stop immediately. And if the client refuses, he should notify the authority to protect the general public regardless of the confidentiality agreement. At the same time, he should sever his relationship with the client immediately in order to protect himself from possible future action by the injured parties. The underlying reason for the auditor’s action is IMMINENT HARM to the general public.
Some have suggested that the confidentiality clause should include language that reads “except as required by law”. I would expand it to read “except as required by law or in the event of imminent harm to the general public.”
For those who are Professional Engineers, the incident as described in my article would require them to report to the authorities immediately. The overriding duty of a PE is to protect the general public. That duty overrides the confidentiality clause in the face of imminent danger to the public.
A classic example: A PE is hired by a building owner to inspect a building for structural integrity. The owner swears the PE to secrecy. PE discovers that the building is structurally unsound and may collapse any time. The owner proceeds to sell the building even with that knowledge. The PE now has the ethical duty to stop the sale by notifying authorities. Failure to do so may cost him his license and subject him to countless lawsuits by people injured by the collapsed building.
If you generate more than 100 kg of hazardous wastes in a calendar month, you are either a small or large quantity generator under federal hazardous waste regulations. A large quantity generator is someone who generates more than 1000 kg of hazardous wastes in a calendar month. That’s roughy equal to five 55-gallon containers a month.
As a waste generator, there are certain requirements pertaining to preparedness and prevention that you must adhere to:
- You must have an accessible communication or alarm system that is capable of providing emergency instructions to your plant personnel. In the event of an emergency, you must instruct your plant personnel to either evacuate the facility or relocate to a safe area.
- You must have the means to communicate your emergency and request assistance from local authorities such as the police department, fire department and emergency response team. A two-way communication device is needed.
- Your preparedness plan must clearly identify the locations of fire extinguishers, water hose stations, automatic sprinklers and other forms of fire control equipment. It should also include a plant layout showing all exit routes.
- You should also have a complete up-to-date list of spill control equipment such as pumps and absorbents that you keep on-site.
- Your plan must include procedures to test and maintained your emergency equipment to make sure that they are always in a state of operational readiness. It is also critical to assign someone the responsibility of replenishing any expended spill control material (such as sorbents) so that you will have adequate supply in the next spill.
- At the place where you store your hazardous wastes, you must maintain adequate aisle space to allow access for emergency and spill response personnel. The federal regulation does not specify how large the aisle space need to be. As a general rule of thumb, the space should be at lease 24 inches or wide enough for a 55-gallon container to pass through.
- You must also store your waste containers in such a manner that each individual container is easily accessible to an inspector. The inspector must be able to read and inspect the label on each container without having to go through some physical contortion.
- You also need to have procedures in place to minimize the possibility of fire, explosion, or spills. That means that if you are storing highly flammable or ignitable wastes onsite, you need to have “NO SMOKING” signs posted at the storage area.
- The federal rule requires you to “make arrangement” with local authorities on providing emergency response. What that means is that you need to send a copy of your plan to the fire department, police station and local hospital and let them know what kind of wastes you are storing at your facility. Make sure you document any effort you have made to reach out to these local authorities because it is your responsibility to do so under federal law.
- If you have made contractual arrangements with a private emergency response company to handle any spills that you may have, make sure you include the contract in your preparedness plan.
One last point, the rule says that only large quantity generators need to have a WRITTEN plan. If you are a small quantity generator, you do not have to have a written plan – but you must have a plan nonetheless.
My advice is that you make a written plan regardless of your generator status. If you are going to have a plan, you might as well have it written out.
If you are a large quantity generator, you will also have to have a written RCRA Contingency Plan which will include the designation of an Emergency Coordinator who must have delegated authority from senior management to shut down operation in case of an emergency. This person must be accessible and reachable at all times. The Contingency Plan must also be kept up-to-date. Failure to keep a Contingency Plan up to date is one of the most frequently cited violations.
We discuss emergency response and preparedness at our 2-day environmental seminars.
One of the most frequently cited violations under RCRA is the lack of an internal communication system at places where hazardous wastes are being handled.
40CFR264.34 (a) states that “whenever hazardous waste is being poured, mixed, spread, or otherwise handled, all personnel involved in the operation must have immediate access to an internal alarm or emergency communication device, either directly or through visual or voice contact with another employee”.
40CFR 264.32(b) goes on to state that “if there is ever just one employee on the premises while the facility is operating, he must have immediate access to a device, such as a telephone (immediately available at the scene of operation) or a hand-held two-way radio, capable of summoning external emergency assistance.”
The requirements are pretty clear. Yet many facilities do not have them and end up being cited by the inspector.
We have scheduled several online live webinars to discuss the most frequently cited RCRA violations and how to avoid them.
In this post, we review several keys things you need to do right after you have a chemical accident.
- The first priority is human lives. Make sure your employees are alright and their health and safety are secure. If the spill involves ignitable chemicals, make sure all ignition sources are turned off.
- Contain the chemical spill or accident.
- Estimate the amount of spill and determine the Federal Reportable Quantity (RQ) of the chemical that has been spill. The RQ can be found in the List of Lists. This is where preparation comes in handy. If you had reviewed your chemical inventory and determined the appropriate RQ before the spill occurred, you would be in a much better shape.
- Report all spill amounts that exceed the RQ to the National Response Center at 1-800- 424-8802 as soon as possible.
- Check to see if there are any spill reporting requirements mandated by your state agency. Many state agencies require you to report spills that are much below the federal RQ. A list of state reporting requirements can be found here.
- If your spill or chemical release has affected your neighbors in your community, now is the time to be forthright and let your community know what has happened. Do NOT try to stonewall or hide the spills. Your neighbors already know about your spill. So why hide it. Can you imagine how much worse publicity BP would have gotten if it had denied there was an oil spill in the Gulf? They just need to hear from YOU the extent and scope of your accident. Be upfront about it. Don’t try to spin it though some public relations agents. Don’t deny it. If you try to hide it or spin it now, it will only make you look very bad when the truth comes out. And the truth will come out.
- Tell your community the steps you are taking to mitigate the spills and any further steps you plan to take to prevent it from happening again. Your neighbors need to know that you are on top of the situation. They need to hear from you directly. Not from some PR spokesman.
- Keep your community up-to-date on the mitigation measures you are taking.
Many people are under the misconception that if you are open to the public after the spills, it will invite law suits. That’s not true. If you are going to be sued, you are going to be sued whether you are upfront or not. Being evasive and untruthful will only hurt your credibility and your standing in the community.
Note: The topics of Emergency planning and Community Right to Know are covered in our 2-day environmental compliance seminars. Over 2000 environmental professionals have attended our seminars.
There was a chemical accident at a hazardous waste storage facility a number of years ago that released a massive amount of chlorine gas and caused the town to be evacuated.
The chemical Safety Board conducted an investigation and the following is some of its findings.
When you stack chlorine chemical on top of some strong oxidizer, you get yourself an explosive mixture.
BP has a new CEO today.
A few days ago, BP signed a Consent Decree with the Department of Justice and agreed to pay $13 million for various Risk Management Plan violations under the Clean Air Act at its Texas City refinery. If you recall, there was a major incident at that refinery back in March of 2005 where 15 people were killed.
Thus far, BP has paid $137 million in fines which includes $50.61 million to OSHA for Failure to Abate violations under OSHA’s Process Safety Management standards. It has also spent $1.4 billion in corrective action. The OSHA fine is the largest fine in OSHA’s history.
BP conducted many internal environmental and safety audits before the March 2005 incident. Many safety and environmental issues were raised but little or no action was taken – according to the Chemical Safety Board investigators.
An expensive lesson learned?
Posted in air pollution, attorneys, audits, chemical accidents, compliance, Emergency response, EPA enforcement, OSHA
Tagged BP, Norman Wei, OSHA fines, PSM, RMP
In my last post, I presented the U.S. Chemical Safety Board’s finding about one of the contributing factors that lead to the death of 5 contractors. Apparently, the Board was not very happy with the way Xcel conducted itself during the Board’s investigation. Here is a letter the Board sent to the CEO of Xcel expressing its displeasure.
The company actually went to federal court to try to block the release of the CSB report and its request was denied by the federal judge. The company is currently under criminal prosecution.
We have 2-day environmental regulations seminars scheduled in Florida (Fort Myers and Orlando), California (Santa Ana and San Francisco), Nevada (Las Vegas), Georgia (Atlanta), Texas (Houston), New Jersey (Newark) and Virginia (Virginia Beach). For our latest 2010/2011 environmental seminar schedule, click here.
Are these two forces at loggerhead?
The Wall Street Journal just published an article on June 29, 2010 on this thorny topic. This generally pro-business newspaper wrote a scathing expose on how cost cuttings at BP have affected its safety performance.
The paper cites an internal BP investigation that a small oil spill from a BP oil platform in 2008 was caused by a “defective pipeline pump that BP had put off repairing” in the “context of a tight cost budget.” The budget was “underestimated” resulting in “conflicting directions/demands.” Management decided that the problem with the pumps “was not in itself a cause for safety or environmental concern.” The repair was deferred until the following budget year.
The Journal reports that “after a six-month inspection of the Texas City refinery last year, OSHA hit BP with an $87 million fine, the biggest in the agency’s history. About $57 million of what OSHA describes as failure to abate hazards similar to those that caused the 2005 explosion which killed 15 people.”
It is also reported in the Journal that senior management at BP “focused on meeting performance targets, which determined bonuses for top managers and low-level workers alike.”
According to a former BP health and safety manager who was quoted in the Journal, workers had “high incentive to find shortcuts and take risks.”
The CEO of BP also spoke of “slaying two dragons at once; safety lapses that led to major accidents, including a deadly 205 Texas refinery explosions; and bloated costs that left BP lagging” Shell and Exxon Mobil.
After the small BP spill in 2008, BP’s internal report “warned of lax safety oversight and tight budgets.” As reported in the Journal, the BP report went on to conclude: “A key question to ask, especially with apparently minor and disconnected defects, is ‘what’s the worst thing that could happen?'”
I think we all know the answer to that.
The US Chemical Safety Board (CSB) conducts chemical accident investigations and issues findings and recommendations. Several years ago, it conducted an investigation on a refinery explosion in Texas that killed 15 and injured 180 persons. Here are some of its findings:
- “Cost cutting, failure to invest and production pressures” from senior management impaired process safety performance at the refinery.
- “Reliance on low personal injury rate” as a safety indicator failed to provide a true picture of process safety performance.
- There was a “check the box” mentality at the plant where people simply just checked off on safety procedures even though they had not been completed.
- “Personnel were not encouraged to report safety problems and some feared retaliation for doing so.”
- There were “numerous surveys, studies and audits identifying deep-seated safety problems” but management’s response was often “too little, too late”.
We can all learn from these fatal mistakes.
The issue of reward structure at manufacturing facility is a tricky one. Many companies offer bonuses to middle managers for meeting production deadlines. Fewer companies offer similar rewards for excellence in safety. And when they do offer reward on safety, it often pertains mainly to personal safety and not process safety. That is understandable since it is harder to quantify process safety. There are lots of safety indicators for personal safety.
One of the findings by the CSB was that the refinery relied too much on its low personal injury rate as a false indicator that the process was safe. Just because people are not getting injured working next to a building that is about to collapse does not mean that the building will not collapse.
Measuring the wrong thing is worse than not measuring anything at all.
Another fatal mistake this refinery made was that it failed to act on the findings of its own numerous studies and audits. What is the point of doing all these audits if you are not going to fix the problems?
The “check the box” mentality at this refinery is most likely a result of the lack of ownership and training on the part of the employees. If an employee does not feel that he is part of the safety process and does not understand the rationale behind a long check list that he is given to complete, he is likely to just check them off. That’s just human nature.
We can all learn from these mistakes.
The massive oil spill from BP’s offshore drilling rig began on April 20, 2010. It is now officially the worst environmental disaster in U.S. history.
There will be government investigations into what caused the accident and how it could have been prevented. The federal government has initiated a criminal probe into the accident and a Presidential Commission has been formed to look into the root causes of the incident. Someone will probably end up in jail.
What can we learn from this environmental disaster now? Here are some things that we know for sure at this point.
There is no such thing as a fail-safe system. Engineers and experts have assured the public repeatedly that an accident of such magnitude could never happen or are extremely unlikely to happen. Well it happened. The experts have been proven wrong. In fact BP’s 582-page emergency plan entitled “BP Gulf of Mexico Regional Oil Spill Response Plan” dated June 30, 2009 does not contain specific plans to deal with an accident of this magnitude. According to the plan, the TOTAL worst case discharge from an uncontrolled blowout from an exploratory well off shore was 250,000 barrels. The low estimate from the federal government on the amount of oil spilled is around 20,000 barrels per day. That’s 600,000 barrels per month and the spill began on April 20 with no end in sight.
There was no detailed discussion on how to stop a deep water blowout in the response plan. There were no Plan A, Plan B or Plan C outlined in the plan to address this magnitude of a spill. There was no mention of “Top Hat” or “Top Kill” in the plan. That’s why it has taken BP so long to stop the blowout. In fact, the Financial Times of London quoted BP’s CEO on June 3 as saying it was “entirely fair” to criticize the company’s preparations. The CEO went on to say that “what is undoubtedly true is that we did not have the tools you would want in your tool kit.”
The second thing we know is that too many emergency response plans contain a lot of fluff and extraneous material just to make them look substantive and impressive. One would have thought that a 582-page document would have the room to cover ALL possible worst case scenarios – including a blowout of a size that matches what actually happened. But that was not the case.
The 582-page plan was prepared by outside consultants. There is evidence that parts of the BP plan contain boilerplate languages used by other plans elsewhere. One example that has been cited by the media and much to BP’s embarrassment is that the BP plan actually lists walruses as among the Gulf of Mexico’s sensitive biological resources (see section 11 of the report). We all know that walruses live in the Arctic and sub-Arctic regions. They simply do not live in the balmy waters of the Gulf of Mexico. The fact that no one has caught this glaring mistake in the plan during the review process should be a cause of concern. The consultants who prepared this plan has offices in Alaska. A reasonable person could reasonably infer that the reference to walruses came out of a spill response plan that had been prepared for the frigid waters off Alaska. Cutting and pasting did not work this time around. It seldom does, It also tells us that the regulatory agencies responsible for reviewing the BP plan missed the mark by a wide margin.
So what else does this 582 page plan tell us? Size does not matter. It is the content and specifically local contents that really count. Despite its massive volume, the plan contains none of the different remedies that BP has actually tried out since the spill. One valuable lesson we learn from this disaster is that next time when we prepare a spill response plan or a contingency plan we need to focus on site-specific environmental conditions and not pad those plans with boilerplate cut-and-paste languages and fluff. All that flowery language in its 582-page has not helped BP plug that hole. Another valuable lesson we learn is that if we engage the services of an outside consultant or contractor to write our plan, we need to READ it carefully before sending it on to the agencies.
One final lesson we have learned is that if we spend a lot of money to develop a new manufacturing process to make a new widget, we need to also spend some money on how to control the pollution coming out of this new process. That’s one thing the oil industry has failed to do. It spent billions of dollars developing new deep water oil drilling technology without considering new technologies to deal with spills at such great depths.