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Environmental and safety regulations: what you need to know about ammonia used in food and beverage manufacturing: A release of ammonia poses grave risks to company employees and potentially to neighbors and communities.

The deadly ammonium nitrate explosion in April 2013 at a fertilizer plant in West, Texas, killed 15 people and nearly leveled the town. The U.S. Chemical Safety Board's later determinations--that "an intense fire in a wooden warehouse building ... led to the deonaiono of approximately 30 tons of [ammonium nitrate] stored inside in wooden bins" and that the building lacked a sprinkler system, sparking national outrage and prompting state and federal regulators to sharpen their focus on manufacturers' environmental and safety programs.

Food and beverage makers are not immune to this heightened scrutiny, especially facilities that utilize anhydrous ammonia as a refrigerant. This form of ammonia is deemed extremely or highly hazardous under a variety of Environmental Protection Agency (EPA) and Occupational Safety and Health Administration (OSHA) programs. Take, for example, a recent enforcement action by EPA against a major food manufacturer stemming from eight separate incidents between 2006 and 2010 in which accidental releases of anhydrous ammonia at a number of the company's facilities allegedly resulted in property damage, multiple injuries and one fatality.

Food manufacturers using anhydrous ammonia as a refrigerant must comply with specific EPA and OSHA regulations that require the development and implementation of detailed plans to prevent the release of these substances, and to report and manage them when they occur. They must also comply with a "general duty" to manage the risks associated with the chemical.

EPA Regulation and

Enforcement

Anhydrous ammonia, if present or used above quantities specified in the applicable regulations, triggers several right-to-know requirements under the Emergency Planning and Community Right-to-Know Act (EPCRA). EPCRA, enacted in 1986 after a catastrophic leak of methyl isocyanate killed nearly 8,000 people in Bhopal, India, was created to help communities plan for emergencies involving hazardous substances.

Ammonia is listed as a "hazardous substance," an "extremely hazardous substance" and a "toxic chemical" under the various EPA regulations, which mandate emergency planning and notification, community right-to-know reporting, and annual release reporting. Furthermore, a release of more than a "reportable quantity" (RQ) of ammonia--100 pounds--during a 24-hour period triggers an immediate release reporting requirement. Specifically, the owner or operator of the facility must report an on-site ammonia release of more than the RQ to the National Response Center within 15 minutes of discovery and, if more than the RQ goes off-site, make initial and follow-up reports to state and local authorities.

Not surprisingly, failure to comply with these requirements, even in the absence of a catastrophic accident or spill, can give rise to hefty penalties and costly facility upgrades.

For example, the EPA ordered a company to upgrade its equipment and systems at three facilities after an anhydrous ammonia release at only one facility, costing the company over $100,000. The EPA settled with the company for a penalty of $50,000, which the EPA said was reduced because the company was a small business. The settlement also included "Supplemental Environmental Projects" (SEPs) valued at $160,000.

EPCRA is not the only environmental statute that regulates anhydrous ammonia. A few years after the passage of EPCRA, the Clean Air Act Amendments of 1990 added Section 112(r), subtitled "Prevention of Accidental Releases."

Congress expressly included anhydrous ammonia among the "regulated substances" under this section.

Section 112(r) imposes both a general duty and specific requirements for the prevention and management of chemical releases. The general duty provision in subsection (1) was adopted from the General Duty Clause in the Occupational Safety and Health Act. The Clean Air Act general duty provision requires that (i) owners and operators must maintain a facility that is free of a hazard; (i1) where the hazard is recognized by the owner/ operator or by the relevant industry; (iii) the hazard from an accidental release is likely to cause harm; and (iv) the owner/operator could have eliminated or reduced the hazard.

The General Duty Clause should be considered a catch-all enforcement provision to supplement the specific requirements in subsection (7) of Section 112(r)(7) and implementing regulations issued by EPA. Owners or operators of facilities (stationary sources under the Clean Air Act) that have processes containing more than a threshold quantity of a regulated substance are subject to the requirements of the regulation. Anhydrous ammonia is listed as a "regulated toxic substance" with a threshold quantity of 10,000 pounds.

Generally, the chemical accident prevention regulation requires covered facilities to undertake hazard assessment, develop and implement risk management programs and maintain documentation of these programs. Furthermore, the facilities must submit risk management plans to EPA and make the plans available to the public.

EPA has signaled increased focus on these programs in several recent enforcement actions, including a 2013 settlement against a large food processing company in the wake of accidental releases of anhydrous ammonia over several years. The settlement required payment of $3.95 million in penalties, along with implementation of new pipe-testing and audit procedures, as well as a SEP requiring the purchase of $300,000 in emergency response equipment for local fire departments.

In announcing the settlement, the EPA stated that ammonia refrigeration facilities have higher accident rates than other processes, leading the EPA to focus a significant portion of inspection resource on such high risk facilities.

This case, along with dozens of other risk management cases the EPA has brought in recent years, marks a significant departure from past practice, when cases under these provisions often resulted in penalties of less than $25,000.

OSHA Regulation and

Enforcement

Food and beverage facilities may also be subject to OSHA's Process Safety Management Standard.

Although OSHA had already initiated rulemaking, the Clean Air Act Amendments of 1990 required OSHA to issue a chemical process safety management standard. Codified at 29 C.F.R. [section] 1910.119, the Process Safety Management (PSM) Standard contains detailed requirements to proactively address hazards associated with various processes, typically in manufacturing industries that use, store, manufacture, handle or move "highly hazardous chemicals."

PSM requirements are triggered at certain thresholds for various chemicals and flammable substances. For anhydrous ammonia, any process that "involves" 10,000 pounds or more of anhydrous ammonia is subject to PSM.

The cornerstone of PSM is the process hazard analysis, which identifies, evaluates and determines how to control hazards and prevent the release of hazardous chemicals. The process hazard analysis must be updated every five years. The PSM also requires written operating procedures to safely conduct activities in each covered process, as well as initial employee training on those procedures and refresher training every three years. Likewise, it requires employers to conduct compliance audits at least once every three years and to develop and retain audit reports.

In recent years, OSHA has expanded its enforcement of the PSM standard. In November 2011, OSHA announced a National Emphasis Program to increase inspections of PSM-covered chemical facilities. This 2011 National Emphasis Program replaced a 2009 program that only applied to PSM-covered chemical facilities in certain OSHA regions.

Under the 2011 program, OSHA has touted several high-profile PSM citations by issuing press releases announcing penalties from the tens of thousands to hundreds of thousands of dollars. OSHA has also sought multi-facility settlements that go beyond the original scope of alleged violations. Therefore, companies' health and safety programs may only be as strong as their weakest-link facility, meaning that companies should ensure all of their programs are compliant with OSHA and EPA regulatory programs.

Both the EPA and OSHA websites contain helpful summaries of the regulatory requirements and various compliance materials. Using this information as a guide, responsible companies would be well-served to conduct periodic audits of their operations and processes to ensure that potential chemical hazards are identified and controlled and that all regulatory requirements observed. Opinions about the scope and extent of the environmental, safety and health regulations triggered by the use of anhydrous ammonia may vary, but the fact is that a release of ammonia poses grave risks to company employees and potentially to neighbors.

By Elizabeth M. Rothenberg, Donald D. Anderson and Bernadette M. RappoId, McGuire Woods, LLP
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Title Annotation:EXCLUSIVE FEATURE
Author:Rothenberg, Elizabeth M.; Anderson, Donald D.; Rappold, Bernadette M.
Publication:Food Manufacturing
Date:May 1, 2014
Words:1337
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