Aug 26, 2016

Small Business Advocacy Review Panel Issues Report on OSHA’s Proposed PSM Changes

(PAINT.ORG) On Aug. 1, the Small Business Advocacy Review Panel (SBAR) issued its report on the U.S. Occupational Safety & Health Administration's proposed changes to the Process Safety Management (PSM) standard. OSHA convened the panel on May 26, in accordance with the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), and five conference calls were held in late June, with panel members consisting of OSHA, the Small Business Administration, and White House Office of Management and Budget, participating along with Small Entity Representatives (SERs). Two ACA member companies had SERs participating on the SBAR panel.

The panel's report addressed 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, and offered recommendations for the agency on its analysis and on possible approaches to regulatory action that may minimize impacts on small entities. Notably, the report cited considerable burdens the revised PSM would add to small businesses without commensurate safety and security benefits.

The SBAR report advised OSHA to limit its changes to only those that are necessary, and some companies questioned whether the PSM standard was the best approach to controlling risk. "Instead, something short of a full PSM program would be adequate to address the risks, particularly risks that arose primarily from the storage of materials," the report stated. The SBAR panel report also suggested that requirement to analyze safer technology and alternatives should be replaced by "performance-based" standards.

The report also stated that some of the chemical substances OSHA is considering adding to the PSM's Appendix A — the list of 137 highly hazardous substances that trigger PSM coverage — may not warrant justification based on their level of hazard, and that a risk-based approach to a chemical inventory should be pursued.

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 following the 2013 West, Texas explosion related to ammonium nitrate. 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, and is intended to reduce employee exposure to highly hazardous substances in the workplace. The standard 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. 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 the Environmental Protection Agency's (EPA's) Risk Management Plan (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.

EPA recently completed a similar SBAR panel regarding proposed changes to the 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.