AnalysisNew safety rule changes landscape for chemical industry -- and others

Threat of terrorism or no threat of terrorism, the chemical industry has managed to escape the requirement of meaningfully securing the more than 14,000 chemical facilities in the United States. Security experts argued that short of a direct nuclear attack on an American city, no terrorist action — or accident — could cause a greater mass casualty catastrophe than an explosion at a chemical plant, releasing toxic clouds to waft over a neighboring city. Still, heavy campaign contributions by the industry to key Republicans in Congress, and the intervention of Karl Rove, President Bush’s political strategist, allowed the industry to get away with the window dressing of what was called “voluntary, industry-developed” safety measures rather than the more meaningful, and costlier, real chemical plant security. The exposure of millions of Americans to this kind if risk was bound to come to an end, and it did, with congressional legislation imposing some federal safety standards on chemical plants and allowing DHS to shut down plants which fail to meet even these minimal safety measures.

Now, Michael Giannotto and Kevin Pechulis of Goodwin Procter write that the new safety program will affect much more than the chemical industry. Many companies throughout American industry will be subject at least to the regulations’ information gathering requirements, and some companies, which own or operate facilities considered by the government to be “high risk,” will be subject to more burdensome security standards. All companies storing potentially dangerous chemicals — including such common substances as propane and ammonium nitrate — need to follow DHS’s regulatory initiative as it unfolds and determine if it applies to them.

These two lawyers’ discussion, long and detailed as it is, is worth a careful reading. It is rich in details and insights. We will just summarize their conclusion, in which they write that the owner or operator of any facility which stores chemicals should consult the list of Chemicals of Concern and associated STQs in Appendix A of DHS regulations to determine if it is required to complete a Top Screen. The Top Screen must be submitted within sixty days of the effective date of Appendix A or within sixty days of coming into possession of the chemicals after Appendix A is finalized. The owner or operator of a facility which is determined by DHS to be a high-risk, “covered” facility must be familiar with the procedures and substantive security performance standards of the rule and must have sufficient technical and legal expertise to ensure compliance with the rule’s complex requirements.

The landscape is definitely changing for the U.S. chemical industry and for those who use and rely on chemicals.