This 60-day process will involve a series of conference calls with designated small entity representatives (SERs) from small businesses across the country, including ACA member companies, that will comment on each of the proposals before a panel of OSHA, the Small Business Administration (SBA) and Office of Information and Regulatory Affairs (OIRA) representatives. Following the panel teleconferences, SERs may submit written comments on each of the proposals to OSHA. Based on the input received from SERs, OSHA will be tasked with writing a SBAR panel report to be placed into the public docket, and the report will be considered as OSHA drafts a proposed rule to amend the PSM Standard at a later time. The panel's primary role is to report its findings on issues related to small entity impacts and significant alternatives that accomplish the agency's objectives while minimizing the impact on small entities for the Assistant Secretary of Labor. The report will contain recommendations for the Agency on its analysis and on possible approaches to regulatory action that may minimize impacts on small entities.
The PSM Standard amendments are part of an effort under President Obama's Executive Order 13650, Improving Chemical Facility Safety and Security, which was charged with identifying issues to modernize the PSM standard to prevent major chemical accidents. The modernization topics OSHA is considering stem from industry best practices, inspection history, stakeholder comments received in response to OSHA's 2013 Request for Information and lessons learned from accidents involving highly hazardous chemicals. A number of these topics overlap with EPA's RMP proposed rule, including third party compliance audits, root cause analysis requirements, and safer alternatives analyses. These are issues of major concern to many industries because of the potential high costs, added administrative burden, and lack of commensurate benefits in safety. ACA provided comments to EPA in response to these issues in the RMP proposed rule.
The Environmental Protection Agency (EPA) recently completed a similar SBAR panel regarding proposed changes to the Risk Management Plan (RMP) regulations — regulations that closely track the PSM Standard. OSHA and EPA are obligated to commence SBAR panels if they are considering regulations that can potentially have a significant impact on a substantial number of small entities. The proposed changes to both PSM and RMP have been widely considered to be potentially significant and costly for chemical facilities, with little correlation to addressing significant risks of harm or improving chemical safety and security.
Proposed Schedule for SBAR Panel
Over the past several months, OSHA and SBA have been recruiting SERs to participate in this important panel process. To date, 32 SERs have volunteered to serve on the SBAR panel across many different industry sectors. SERs can participate if they qualify as a small business according to SBA standards, and have facilities regulated under the PSM Standard. Under the RFA, OSHA must complete its SBAR panel process within 60 days of commencing the panel, which initiated on June 2. SERs will be providing input before the SBAR panel of OSHA, SBA and OIRA representatives on June 21, June 22, June 28, and June 29 via conference calls. Written comments will be due July 8, and OSHA must finish the final SBAR report by August 1, when the panel concludes.
All of the background documents detailing OSHA's proposals and comments submitted throughout this process are public and will be posted on the docket. Unlike the EPA SBAR panel, any interested party may submit written comments, even those who are not participating on the panel, until August 12. However, OSHA is under no legal obligation to consider or respond to non-SER comments. The general public will have another opportunity to submit comments for consideration after OSHA writes and releases its proposed rule on PSM.
Proposed Changes to PSM Standard
The PSM Standard is a comprehensive management program for highly hazardous chemicals issued in 1992 in response to a number of incidents that occurred involving catastrophic chemical releases. The Standard is intended to reduce employee exposure to highly hazardous substances in the workplace, and covers the manufacturing of explosives and processes involving threshold quantities of flammable liquids and flammable gasses (10,000 pounds), as well as 137 listed highly hazardous chemicals. PSM is a performance-based standard that outlines safety programs features for controlling highly hazardous chemicals, and employers may tailor their safety programs to the unique conditions as their facilities. The rigorous requirements of the standard include employee participation, training, process hazard analysis, mechanical integrity, process safety information, contactors, operating procedures, emergency response, management of change, hot work permit, incident investigation, and auditing.
While about 10,524 facilities are covered under the existing PSM Standard, OSHA estimates 9,803 additional entities would be affected by these proposed changes—primarily from adding two oil and gas related North American Industry Classification System (NAICS) industries into the scope of the rule. If all the potential changes under consideration are adopted into a revised PSM standard, the agency estimates the total numbers of affected entities to be 20,323 including those entities within the scope of the existing PSM standard and possible additions. These entities employ 1,824,140 employees. In addition to soliciting feedback on any similar provision of EPA's RMP rule and the PSM standard that could be streamlined, topics to be considered by the Small Business Panel include the following.