Environmental Protection Agency (EPA) Region 1 Focuses Enforcement Lens on Risk Management Under the Clean Air Act
Wednesday, March 5, 2014

Until recently, occupational safety programs, covering subjects such as mechanical integrity, process hazard analysis and management of change, were not issues of concern for most environmental managers or environmental lawyers.  These programs were typically considered the purview of the Occupational Safety and Health Administration (OSHA), and they were therefore addressed by occupational safety managers.  Environmental professionals take note: those days are over.

Under Section 112(r) of the federal Clean Air Act, the U.S. Environmental Protection Agency (EPA) is now aggressively enforcing safety and risk management requirements that can impact the accidental release of chemicals. The authority for these actions is found in the risk management provisions of the Clean Air Act, the General Duty Clause at Section 112(r)(1) and the risk management program at Section 112(r)(7).

In the past few years, Beveridge & Diamond has been involved in numerous matters in which we have counseled clients and defended enforcement actions arising under these Clean Air Act provisions, and our experience is that EPA is increasingly relying on them to drive risk management program changes at industrial and commercial facilities.  Facilities implicated by this enforcement trend include industrial plants that manage larger quantities of flammable or toxic substances, commercial facilities with large refrigeration systems, and any facility with a risk management program (RMP) plan. In the latter part of 2013, EPA Region 1 issued two complaints addressing risk management issues, signaling that businesses in New England should expect a more pronounced enforcement focus in this area. Environmental managers need to be well versed in these provisions, effective immediately.

Statutory Basis

Section 112(r) of the Clean Air Act contains two important sections in which environmental and safety laws converge.

First, the General Duty Clause in Section 112(r)(1) states a risk management principle: owners and operators of stationary sources managing extremely hazardous substances have a general duty, in the same manner and to the same extent as exists under OSHA, to (i) identify hazards which may result from releases using appropriate hazard assessment techniques, (ii) design and maintain a safe facility taking steps as are necessary to prevent releases, and (iii) minimize the consequences of accidental releases.

Second, Clean Air Act Section 112(r)(7) provides a broad authority to EPA to issue regulations addressing chemical release prevention, detection and correction, and stipulates that EPA must require owners and operators of stationary sources that manage regulated substances above certain threshold quantities to prepare and implement RMP plans.  This requirement is implemented through the RMP rule at 40 C.F.R. Part 68. Facilities subject to the RMP rule and which are also subject to the OSHA process safety management (PSM) program at 29 CFR 1910.119 will find that the entirety of the PSM program is incorporated into the RMP rule and therefore the OSHA PSM program is fully enforceable by EPA through the Clean Air Act. 

Enforcement History

For many years, EPA’s risk management enforcement program focused nearly exclusively on simple RMP cases, with enforcement actions brought against facilities that did not have RMP plans in place, or against facilities that had plans but were missing significant elements of the RMP program.  EPA rarely invoked the general duty provision in Section 112(r)(1), citing that provision only in a relatively few egregious release cases where severe planning deficiencies were alleged and significant chemical releases had occurred.

More recently, EPA has turned its enforcement focus to both the RMP program and the General Duty Clause, and it is currently aggressively enforcing both. Using specially trained EPA staff and contractors hired through the National Older Worker Career Center, EPA has conducted numerous inspections that are focused exclusively on RMP and general duty issues. In 2011, EPA issued a detailed protocol for these inspections, a copy of which can be accessed here.

The size and complexity of RMP and General Duty Clause cases have increased substantially, as have the number of cases that are being pursued.  Whereas just a few years ago, cases were settling in the $1,000 – 20,000 range, EPA, with assistance from the Department of Justice, has begun pursuing very high penalties to resolve these cases. In 2013, EPA settled an RMP case against Tyson Foods, requiring a payment of a $3.95 million civil penalty and the performance of supplemental environmental projects (SEPs) worth $300,000. In the same year, EPA also settled an RMP case against Dyno Nobel, requiring payment of a $257,000 civil penalty, and (with assistance from the Department of Justice) against Coffeyville Resources, requiring a payment of a $300,000 civil penalty and significant injunctive relief.

Certain regions within EPA have led the enforcement efforts in this area, while other regions have lagged. In 2013 alone, Region 6 pursued and settled at least 20 risk management cases, and Region 7 settled at least 12. Since 2010, Region 6 has settled at least 32 of these cases, Region 4 has settled 16 and Region 7 has settled 14. In New England, Region 1 has been much less active, pursuing only six cases since 2010. However, in late 2013, on the very last day of EPA’s fiscal year, Region 1 issued two administrative complaints under the RMP rules, suggesting that Region 1 is beginning to devote more enforcement effort to this emerging area.

Region 1 Cases

Both recent Region 1 cases arose over allegations that manufacturing facilities had failed to comply with the RMP rules.

The first case, In re: Holland Company, Inc., Docket No. CAA-01-2013-0045, concerns a company that uses hydrochloric acid in a water treatment chemical manufacturing plant and occasionally stores that acid in quantities that exceed the threshold which triggers RMP plan requirements. EPA alleged in its complaint that the company failed to submit an RMP plan to EPA and failed to take the several risk management steps necessary to comply with the RMP rule, including developing an RMP management system, completing a hazard assessment and hazard review, develop and implement operating procedures, complete employee training, administer a mechanical integrity program, and follow reasonable and generally accepted good engineering practices (RAGAGEP). Each of these allegations is customarily a concern for safety managers under OSHA, but in this case they arise under the federal Clean Air Act.

No specific penalty amount was identified in the complaint, but EPA acknowledged that its penalty would be limited to no more than $295,000 in accordance with the administrative penalty cap in the Clean Air Act, Section 113(d).

The second case, In re: Metal Finishing Technologies, LLC, Docket No. CAA-01-2013-0073, concerns a company that used chlorine to treat wastes produced in a manufacturing process in quantities that exceed the RMP plan threshold. This facility had previously submitted an RMP plan to EPA, and EPA alleged in its complaint a number of risk management deficiencies, including failure to update the RMP plan to list the current facility emergency contact, failure to compile written process safety information at the facility, failure to follow guidance published by The Chlorine Institute (thereby allegedly violating the RAGAGEP requirement in the RMP rule), and failure to complete a process hazard analysis, maintain written operating procedures, train employees, comply with mechanical integrity requirements, implement a management of change program, and establish a contractor program. All of these allegations could be viewed as OSHA process safety management issues, which in the past have been the exclusive enforcement domain of OSHA.

EPA proposed in the complaint to assess a penalty of $233,600. The company settled the case in February, 2014, agreeing to perform a supplemental project that eliminated the use of chlorine gas at its facility, at a cost of $54,000, plus the payment of a $12,400 civil penalty.

What Will Come Next?

The extent to which EPA Region 1 expands its risk management enforcement program remains an open question. If the enforcement trends from other EPA regions are a guide, additional expansive activity in this area is likely. Recent Region 1 cases cite only to established RMP rule standards, but it is not a stretch to anticipate an extension of enforcement activities to include the more complex and controversial use of the General Duty Clause to claim violations arising from failures to identify hazards, design and maintain safe facilities, and minimize the consequences of accidental releases.

 

NLR Logo

We collaborate with the world's leading lawyers to deliver news tailored for you. Sign Up to receive our free e-Newsbulletins

 

Sign Up for e-NewsBulletins