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Emergency Preparedness Measures: Can you Afford Non-Compliance?

Posted on Mon, Jan 27, 2014

The increasing number of stringent regulatory compliance standards compounds the complexity of industrial operations. Many companies believe they have the compliance component of their business under control. Others take a reactionary role rather than a proactive approach.  Without a proactive approach, incidents affecting the financial bottom line of companies, their communities, and surrounding environments will continue.

Every month, audits and enforcement mandates are issued from various federal and state agencies that oversee industrial facilities. Agencies such as OSHA, EPA, and DOT’s PHMSA inspect and fine offending companies for non-compliance for a variety of infractions. Costly non-compliance fines continually result from the lack of an implemented, thorough, or effective preparedness planning and regulatory compliance programs.

Associated penalties are continually increasing. In April of 2013, the PHMSA issued a ruling that incorporated new civil penalties. The ruling included:

  • Increasing the maximum fine possible from $55,000 to $75,000, for knowingly violating the law
  • Revising the maximum penalty from $110,000 to $175,000, for knowingly violating the law in a way that results in “death, serious illness, or severe injury” to a person, or which causes substantial destruction of property
  • Eliminating the minimum civil penalty amount, since most fines are well over the previous set minimum of $250. However, a minimum penalty will be retained for training violations, now to be set at $450.

Below is a sampling of the price of non-compliance. The list is comprised of a wide array of companies from various regulatory agencies (dates are by citation, not occurrence).

January 2013

EPA: A cold storage and ice manufacturing company was ordered to pay penalties of $225,000 for violating federal Clean Air Act requirements meant to prevent chemical releases. The company failed to implement the required Risk Management Plan relating to the use of ammonia at a number of its facilities.

February 2013

OSHA: A railway company was ordered to pay $1,121,099 for violating the whistleblower provisions of the Federal Railroad Safety Act.

March 2013

EPA and Hawaii State Department of Health: A ship repair and dry dock facility on Oahu was fined $710,000 in civil penalties for water pollution control violations. This was the largest Clean Water Act civil penalty against a ship repair facility nationwide.

April 2013

PHMSA: A compliance order and civil penalty of $104,800 was assessed to a pipeline holding company for failure to comply with pipeline safety regulations. The violations pertained to inadequate firefighting equipment and improper inspection and testing record keeping.

PHMSA: After a two-year investigation, a fine of $1.7million was proposed as a result of failing to implement measures to address known seasonal flooding risks to a pipeline system. Additionally, the company failed to establish written procedures to protect the pipeline from floods and other natural disasters, which would have minimized the volume of oil released.

May 2013

OSHA: A company that manufactures wood shavings for animal bedding was assessed $233,870 in proposed fines. Violations included 28 repeat and serious violations of the workplace safety and health standards.

June 2013

PHMSA: Proposed and collected a civil fine of $235,600 with a pipeline company that neglected to implement response plans, emergency shutdown processes, and inspections regarding the facility compressor station.

August 2013

OSHA:  An Ohio steel manufacturing plant’s compliance 24 violations added up to fines totaling $1,138,500. Fifteen of the non-compliance aspects included willful violations of OSHA’s fall protection standards

September 2013

EPA: A refinery’s parent company was issued a $8.75 million penalty for failing to comply with a 2007 settlement that resolved violations of the Clean Air Act. Between 2007 and 2011, the company violated numerous requirements of the initial settlement, including failing to comply with emissions limits. The company also failed to perform corrective actions or to analyze the cause of over 70 incidents involving emissions of hazardous gases through flaring.

October 2013

PHMSA: A pipeline company was assessed a $20,000 fine for failing to present written documentation of public awareness (as recommended by the American Petroleum Institute), and failing to providing baseline material to emergency responders or excavators.

November 2013

OSHA: An Arkansas-based meat processor was issued a total of $121,720 in proposed fines for violations at various sites. The inspection, which began on May 15, 2013, was conducted under OSHA's Site Specific Targeting Program, which directs enforcement resources to high-hazard workplaces with the highest rates of injuries and illnesses. OSHA found a cross section of mechanical, electrical and fall hazards, as well as several deficiencies in the process safety management program. The hazards include failing to guard skylights and roof hatchway, guard a press, provide safety-related work practices to prevent electric shock and arc flash burns, and provide workers with protective equipment when using energized equipment. 

December 2013

EPA: A paint manufacturer was penalized $153,917 for violating federal hazardous waste laws. Violations included failure to properly identify hazardous wastes, failure to properly label and store hazardous waste containers, and failure to train personnel who manage hazardous waste.

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Tags: DOT, OSHA, Emergency Preparedness, EPA, Regulatory Compliance, Emergency Management Program