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Don't Get Caught Non-Compliant: Top Tips for Regulatory Compliance

Posted on Thu, Jan 23, 2014

In early January, a chemical leak from a Freedom Industries storage facility caused West Virginia American Water to shut off the water supply to nearly 300,000 people. The West Virginia Department of Environmental Protection identified five violations which will likely result in substantial fines. In addition, criminal penalties may be pursued.

As demonstrated month after month, compliance is a requirement, not an option.  Some argue that the bureaucracy is riddled with inefficiencies. However, the “rules” are aimed to protect communities and the surrounding environment.  According to David Hall’s Wall Street Journal article, The Morning Ledger: Companies Beef Up Compliance Departments, “Hefty fines and other penalties have jolted companies, especially banks, into a compliance hiring spree, as governments at home and abroad tighten business laws and regulations and ramp up their enforcement activity.” Compliance costs are typically lower than the expenditures associated with non-compliance fines, litigation, reputational risk, and government mandated shutdown of operations. Companies must implement a budget that ensures regulatory compliance.

Managing regulatory compliance for industrial facilities can be a daunting task. Industrial facilities must operate profitably; yet comply with a complex array of federal, state and local regulations.  The consequences of disregarding the various required elements can be corporate self-destruction.

Key concepts for managing regulatory compliance from a corporate perspective include, but are not limited to:

Database Technology

Technology is a useful, and relatively inexpensive tool that enables companies to monitor continually evolving regulatory requirements. In recent history, companies have utilized Excel spreadsheets to manage requirements. However, as a company expands or new regulations are implemented, spreadsheets can become overwhelming, ineffective, and time consuming. Larger operations should consider utilizing database technology to ensure that compliance can be effectively managed on an enterprise-wide level. Utilizing a database limits the duplication of tasks generated when multiple agencies have regulations that are related to the same subject matter.

Available Expertise

Internal resources or outsourced compliance expertise can enable a company to leverage regulatory knowledge enterprise-wide. In order to focus on core business components and reduce managerial and administration efforts required to manage compliance, companies can examine utilizing consultants to ensure appropriate response planning and compliance measures.

Facility-Specific Regulations

A company must recognize mandatory submission requirements and tasks for each facility associated with each regulatory requirement. The implementation of a tracking management system that can eliminate redundancies across converging compliance requirements is extremely beneficial for organizations that have multiple applicable regulatory requirements.

A methodological tracking system should itemize applicable federal, state, and local regulations, and include categorical information that satisfies that regulation. A tracking system should, at a minimum contain the following components: 

  • Operational categories: Categories can range from air quality and hazardous materials, to construction safety and general safety and health. Depending on the detail required by the regulations, further breakouts by subcategories may also be required.
  • Applicable Regulation Level:  Regulations should be further broken down to Federal, state or local regulation categories.  
  • Time/Date Stamping: The Time and Date that each regulation was last updated.
  • Compliance Feedback:  Applicable notes regarding compliance or non-compliance.
  • Industry Standard:  Apply best practices related to compliance with specific regulatory requirements, when practical to do so.
  • Cross-reference: Itemize list of additional regulations that may be applicable to the information provided.
  • Facility Compliance responsibility: Identify contact assigned to maintain compliance for each regulatory requirement.
  • Action Item Reporting: Provides a list of outstanding and completed action items, along with due dates and person(s) assigned. Reports should have filters to customize queries as required by the users.
  • Search Functionality - Create the ability to search database for key words and phrases associated with regulations.

One of the most important aspects of maintaining compliance is ensuring that required response plan and associated revisions are submitted to the proper regulatory agencies in a timely manner. The various agencies have different submission requirements regarding initial and plan revision compliance.

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Tags: DHS, DOT, OSHA, CFATS, Response Plans, EPA, Regulatory Compliance