MeetingsRoundtable Meeting — June 2-3, 1999 Chemical Process Safety – National Goal Setting Briefing Paper No. 1 M. Sam Mannan Summary This paper has two objectives. The first objective is to provide additional general background on the subject of the Mary Kay O’Connor Process Safety Center Roundtable on the development of National Process Safety Goals. The second and more important objective is to discuss some specific initiatives that are put forth by the authors in the hope of stimulating Roundtable participants thinking on goals that they might wish to propose. As background to these possible process safety initiatives, the authors briefly examine the series of notorious accidents in the 1970’s and 80’s and other developments that have shaped and are continuing to shape process safety practices to date. The paper notes that while these developments have given rise to significant increases in process safety technical and management knowledge and promising new process safety regulatory requirements, serious deficiencies still exist in regard to needed tools and practices. Among the more important general areas of deficiency noted are:
Participants in the Roundtable are asked to complete their own assessment of national needs and decide whether setting national goals for process safety will be productive and if so, what the character of such goals should be. For example, would it be productive to set a national goal calling for a 10% annual reduction in releases or evacuations, etc.? Would setting such a goal be desirable and productive even if one can not monitor progress given the inadequacies of our present data collection systems? Should one instead focus on monitorable, perhaps more pedestrian initiatives leading to improved process safety practice? The authors argue that for the present it may be more appropriate to pursue national initiatives aimed at generating tools, studies, metrics and programs that address problems in areas of major process safety deficiencies such as the three noted above. In this regard, and in order to stimulate participant discussions at the Roundtable, the paper discusses the following specific areas that might be considered as the subject of a national initiative.
I) Introduction The major goal of this Roundtable set forth in the letter of invitation is to:
The expected outcomes of the Roundtable were also put forth in the invitation as follows:
This is a formidable task, particularly for a two-day meeting, but a task worth undertaking. The National Institute for Occupational Safety and Health (NIOSH) has successfully launched an even broader based initiative on a National Occupational Research Agenda (NORA). In addition, Dr. Rosenstock of NIOSH and others have supported a similar ongoing initiative on a National Process Safety Research agenda by the Chemical Safety and Hazard Investigation Board (CSB). Clearly the Mary Kay O’Connor Center can play a key role in furthering this needed national effort by the CSB because of its unique position in the academic world. In Fact, the Center has already done so by assisting the CSB in developing a report on the Y2K Technology Problem and Chemical Safety. This introductory paper presents a general, very brief overview of some of the factors and forces that have shaped and are shaping process safety practice today and also puts forward some possible National Goals. The primary purpose of putting out these possible candidate goals is to stimulate participants thinking in advance of the June 2-3 meeting and of course we expect many new suggested goals will emerge after discussion of the five substantive papers scheduled for presentation. II) Background Chemical process safety was not a major public concern in the United States prior to 1984. As far as chemical hazards were concerned, public fears focused on disease (cancer) and environmental degradation. Even a series of major process accident tragedies [Flixborough (1974), Seveso, (1976), Three Mile Island, (1979) Cubato, February 1984; Mexico City, November (1984)] did not translate into widespread public concerns about major accidents in US chemical plants that might disastrously affect the public. This situation changed completely after the December 1984 disaster at the Union Carbide plant in Bhopal. Not only was the public’s confidence in the chemical industry shaken; the chemical industry itself questioned whether its provisions for protection against major accidental releases were adequate. After all, the company involved was Union Carbide, which had an excellent engineering and safety reputation in the industry. One major US multinational company’s concern, and lack of technical information about the safety of its plants are described by Bowman and Kunreuther. Their paper notes that,
Based on their personal experience, the authors believe that Chemco’s initial response to Bhopal was fairly representative of the actions and reactions in larger US chemical companies. What the Chemco paper may not convey is the emotional impact that Bhopal had on the industry’s technical self-assurance. The recognition of the chemical industry’s need for technical advances led to a number of initiatives. For example, in 1985, the Chemical Manufacturers Association (CMA) published its guidelines on Process Safety Management and the American Institute of Chemical Engineers (AIChE) created the Center for Chemical Process Safety (CCPS) with significant financial support by industry. Over the next several years many other Centers such as, the National Institute for Chemical Safety, the National Environmental Law Center and the Mary Kay O’Connor Process Safety Center (following the Phillip’s explosion) also came into existence. During this same period, EPA and OSHA started several technical initiatives aimed at gathering information about major accident risks. Based on the increased number of technical conferences, books, journal articles and even new journals dealing with process safety, a strong case can be made that these initiatives have been successful and have led to significant increases in knowledge about process safety engineering and management. Techniques initially developed to deal with the reliability of nuclear devices, nuclear power plants and complex weapons and communications systems have been brought into the chemical sector where additional research extended their breadth and accessibility. The techniques of quantitative risk assessment became readily available to the chemical industry. Even prior to regulatory requirements, most major chemical companies used these techniques in the design of their processes, studies on the consequences of process failures and in some cases also the evaluation of the likelihood that such failures might occur. The increased national concerns about the potential consequences of process safety accidents also triggered a series of legislative actions at the State and National level that led to increased process safety regulatory requirements. At the national level, Congress initially enacted Title III of the Superfund Amendments and Reauthorization Act (SARA) in 1986. This act required states to establish state and local emergency planning committees (LEPCs) and mandated that facilities must make information on hazardous chemicals available to the public. In addition, starting in 1985, a number of states, Delaware, California, Nevada and New Jersey, to name a few, also enacted legislation mandating minimum process safety management practices. In the late 1980’s, further catastrophic process failures provided the political leverage to cause inclusion of provisions addressing process safety in the 1990 Clean Air Act Amendments. Under 112(r) of these Clean Air Act Amendments, Congress enacted legislation that led to several major process safety actions, namely:
Complete compliance with the OSHA regulations was required by May 26, 1997 and the requirements of the EPA Rule must be met by June 20, 1999. III) Observations on potential goals targeted at improvements in process safety. Participants in the Roundtable discussions will need to complete their own assessment of national needs and decide whether setting national goals for process safety will be productive and if so, what the character of such goals should be. For example, would it be productive to set a national goal calling for a 10% annual reduction in releases or evacuations, etc.? Would setting such a goal be desirable and productive even if one can not monitor progress given the inadequacies of our present data collection systems? Should one instead focus on monitorable, perhaps more pedestrian initiatives leading to improved process safety practice? Faced with a similar but, perhaps more difficult challenge, national pollution prevention, Neltner called for the creation of a new metric. "A National P2 Index" that would be a composite of five to ten measures that reflect broad trends in pollution prevention." Is a somewhat similar ‘process accident index’ needed to really measure progress? Such an index might reflect leading indicators such as near misses, use of inherently safer technology, levels of training, as well as incidence and consequences. The authors argue that for the present it may be more productive to pursue national initiatives aimed at generating tools, studies and programs that address areas of major process safety deficiencies such as the following:
When progress has been made on objectives in these more pedestrian areas, it may be opportune to tackle larger, overarching national goals such as ‘A 10% annual reduction in accidental releases.’ In this regard and primarily to stimulate participant discussions at the forthcoming Roundtable, the authors briefly discuss the following specific initiatives that relate to the three areas of deficiency noted above. Each of the seven initiatives discussed below, should be thought of primarily as an example of a possible subject of a specific proposal for a goal:
Unfortunately, the answer to these and other very basic questions does not appear to be available at present. Furthermore, based on a preliminary examination of existing national databases by the CSB (the 600K report) and the Center, it appears as though the data needed to answer some of the simplest of these questions e.g., accident incidence rates, does not exist. There is promise that one may be able to obtain answers in regard to both the incidence and consequences of process accidents for the limited population of firms covered under the new EPA Accidental Release Prevention regulation (Rule). The accident history and associated demographic data in RMP*INFO will allow one to conduct accident epidemiology studies on both the Root causes of accidents and more mundane subjects such as accident incidence rates and such studies are now being pursued at Wharton and the Center. However, it is probably accurate to say that neither the 600K CSB database, the EPA RMP*INFO database, nor other existing databases meet all of the following specifications:
It is generally recognized that collection of near-miss data would provide information on human factors, equipment, maintenance and management system failures that are vital to maintaining process safety. Attempts to collect such data within companies generally fail because of the seemingly inevitable tendency to ‘blame the messenger’. The Aviation Safety Reporting Program (ASRP) established by the FAA in April 1975, could be a model for such a voluntary, confidential process safety near-miss reporting program. Since its inception in 1975, reports of unsafe conditions and practices to Aviation Safety Reporting System (ASRS) has risen from about 3,000 to 32,000 reports per year.
In an effort to remain competitive or achieve competitive advantage, companies are merging, downsizing, reorganizing and outsourcing to reduce costs. Among the changes taking place is a transfer of responsibilities from centralized specialized process safety groups to line organizations and a decrease in total company staffing and dedicated process safety resources. Perron and Friedlander and Perron discuss the impacts of these activities on Human Factors and process safety. They conclude that, "The downsizing process has frequently not included a sufficient review of how safety is affected by reductions in workforce." On the other hand, one could argue that major increases in our ability to apply computer technology in the operation, and the control of processes can allow for safe operations with reduced staffing and reduced human exposure to process incidents. We have largely anecdotal reports and little hard information on the extent of these changes and mainly speculation on the impact that such changes are having on process safety. While the authors are inclined to agree with these anecdotal reports and their conclusions, there is little hard (statistically sound) evidence on the subject. However, if this major industry trend is affecting process safety, it is of great importance to document it and to undertake the development of prescriptive risk management and regulatory actions to mitigate the side effects of this trend.
There are strong reasons to believe that the primary factor limiting the rate of process safety progress is less than adequate execution of established process safety management systems. National initiatives that could make even modest contributions in this area should be very effective in reducing chemical accidents and their consequences. Discussion of this important issue is organized around the following three questions:
.As noted above, significant advances in process safety technology have been made over the last fifteen to twenty years. Whether these advances have resulted in reduced rates of process safety accidents after corrections are made for the number of firms, production volume, etc., is still an open question. Regardless, the ascribed causes of most process accidents can be still traced to the failure of the operating organization to execute its own design and operations intentions or the failure to take into account information available to the organization, , in other words, failure of process safety management systems. Note the following observations in CCPS/AIChE publications:
This view of management failure as the predominant ‘root’ cause of major accidents is not restricted to the US and the CCPS. Hurst, Bellamy, Geyer and Astley maintain that the data from their analysis of "500 reported incidents involving failures of fixed pipework on chemical and major hazard plants" show that:
Even some experienced industry leaders make similar, though somewhat stronger, statements;
While the primary role that management systems play in accident causation seems well established, public acknowledgement of this view has been resisted by many industry leaders because of the legal consequences of accepting such findings in civil tort actions.
Most practitioners believe that the management systems and skills required to implement a good process safety system are not unique. The similarity between the general provisions of the ISO 9000 standards (Quality), the ISO 14000 standards (Environment) and the AIChE process safety management principles would tend to support this position. The following observations made by Tweeddale in 1991 (see Appendix 1 for more detail) still seem very pertinent today:
Tweeddale appears to make a strong case that the less than desired application of established process safety management principles in many firms is not due to the absence of the required management skills but rather the absence of sufficient motivation.
It is often difficult, on narrow financial grounds, to justify designing and perhaps more importantly maintaining the reliability of process systems to meet nominal community standards that call for a very low likelihood of serious injuries or deaths over the full life cycle of a plant. The reason for such difficulties may be that the financial benefits of ‘best’ process safety management practices, particularly in regard to low probability – high consequence events, depend substantially on how the firm values increased customer loyalty, enhanced social franchise, improved regulatory relationships, etc. Are these factors that are of importance only to firms with national products ‘brands’? What is the value of customer loyalty, an enhanced social franchise, or improved regulatory relationships to a mid-sized firm engaged in the production of commodity chemicals? The fact that CCPS members presently have a major project underway on better ways to make a financial case for the value of fully implementing good process safety management practices is evidence that making the financial case is still a significant problem. Any effort aimed at achieving better implementation of process safety management systems must address this issue. It may well be the case that increased process safety does not pay for certain companies. These companies may not be concerned with addressing Bailey’s ‘Higher Tier’ costs (Hidden Regulatory Costs, Contingent Liabilities and Less Tangible Costs) because the benefits of doing so are less then the opportunity costs. If this is indeed the case, then further efforts to have such firms voluntarily adopt process safety management systems that minimize low probability high consequence losses will be fruitless. Instead, attention should be focused on whether and how the costs and benefits of better process safety practice for such firms should be altered by society.
As noted above, many community members and even some experienced industry leaders make statements such as:
Such statements imply that all accidents can be prevented by prudent management actions. A finding that the ‘root cause’ of an accident was ‘failure of a management system’ may therefore imply lack of prudent management action. CMA has opposed characterizing accident investigation findings as " Root causes" because of this reason and noted that "Findings of accident investigations that are characterized as "Root causes" could have a very prejudicial effect in legal proceedings". Proven allegations of negligence in a civil action can be very costly. Process safety experts recognize that if a hazard exists, there is no way of eliminating all likelihood of scenarios that will lead to the realization of the hazard’s potential for harm to one or more subjects of concern. In fact, even the best maintained process safety systems are ‘designed’ to fail at some defined frequency. Thus an unplanned release that occurs in a system maintained as designed to meet community standards is technically not an accident and should not be judged as caused by negligence regardless of how many ‘barriers’ failed. By and large, the rare company that was ‘perfect’ in the design and execution and documentation of their process safety systems is likely to escape allegations of negligence in the event of accident. However, how would companies that were less than perfect, but represented ‘good practice’ fare relative to poor companies? Would documentation of ‘good practice’ by the such companies lead to evidence that is more likely to be built into a successful case for negligence than would the absence of any records showing below average performance by a poor company? Out of these considerations emerges an issue directly related to the purposes and capabilities of our group. If legal scholars were to agree that there is substance to a ‘good practice’ defense against allegations of negligence, are there steps that might be taken by standards associations or regulatory agencies to arrive at metrics that would constitute a legally defensible operational definition of ‘good process safety management practice’?
If there were a clear and direct financial case (property losses, business interruption and liability) for that level of process safety performance that met nominal community standards, one would think that an insurance company would actively reward actions by firms aimed at preventing low probability - high consequence process accidents. They certainly approve of such actions but is this approval reflected in a firm’s premium, as is the case for example with regard to actions such as the installation of a sprinkler system in a warehouse? Ask an insurance company what premium reduction might be expected if a facility made the investments in equipment and training required to reduce the estimated frequency of an incident resulting in death to a member of the community from 1 in 10,000 years, to 1 in 100,000 years, or even 1 death in a 1,000,000 years? For a variety of reasons, including monitoring that such risk reductions were actually accomplished and would be maintained after the premium reduction was granted, it is unlikely that an insurance company would provide significant premium relief to a chemical firm that undertook the above actions. Clearly, reductions in the premium covering the costs incurred for such risk reductions by an individual insured is felt to exceed the benefit to the insurance company over the time frame of interest to the decision maker. However, it is possible that the insurance industry as a whole might find it made economic sense to collectively sponsor promoting educational efforts aimed at motivating better implementation of good process safety management practices by all insureds. The insurance industry could partner with other groups having a stake in the issue such as labor, government, trade associations, public interest groups that have stake in the issue, and mount a campaign similar to the successful effort on seat belts. Self-motivated efforts, induced by a wide variety of factors in addition to direct cost reductions, would reduce the moral hazard problem and over the long run, premiums which do reflect actual losses to a significant extent, should fall. The lower costs of collective action and the clear benefits of prevention to the insurance industry as a whole might overcome concerns that such promotions might provide uneven benefits to firms and thus disturb current competitive positions. A more detailed description of the insurance perspective is given in another White Paper developed for the Roundtable Meeting.
There is contention about whether human factor failures are the proximate or root cause of accidents, but there is little question that they play a very significant role in the scenarios leading to process accidents. While the cause of many human factor failures should be addressed at the design stage and/or by proper execution of appropriate management systems, many of these failures can also be avoided by improved training of the workforce. Larger companies have the resources to address such training needs; many smaller companies do not. The same situation applies in regard to training chemical engineers, chemists and other technical personnel on the need and the means to take process safety into consideration as they carry out their various design, development and production duties. Organizations such as EPA and OSHA have sponsored training programs for smaller companies, but for the most part progress in this area has depended on efforts by non-governmental institutions such as CCPS, AIChE, The Labor Institute, insurance companies, trade associations and universities. However these institutions have depended in large part on industry for their support and this support has been decreasing as firms face increasing competitive pressures. A similar situation obtains in regard to research on process safety problems such as inherently safer processes and basic engineering science. Reducing the likelihood and/or consequences of process failures through the use of inherently safer processes is generally recognized as the preferred approach to process safety. However, currently our society devotes far greater resources to the investigation of accidents and the remediation of their consequences than to promoting truly preventive approaches such as the development of inherently safer processes and the training of managers, students and employees in process safety. A model exists for an institutional approach that might meet some of these research and training needs. In 1986, Congress authorized the federal government to implement a university-based program of basic research and training grants. The Superfund Amendments and Reauthorization Act (SARA) legislation mandates that the research funded by this Program should include development of:
The intent of this coordinated, multi-project, multi-disciplinary, basic research program was to understand and resolve hazardous waste problems by linking biomedical research with related engineering, hydrogeologic, and ecological components. To date more than $300M of public sector research has been expended in more than 23 universities and involving more than 500 projects. Of course an institution devoted to improved chemical process safety would have different objectives, but the roundtable might discuss whether a similar institutional initiative is one of the tools needed to achieve significant improvement in the incidence of chemical process accidents?
There are some conditions under which a firm may not or feels it cannot implement good process safety management practices. In many instances small firms falling under regulations such as the EPA accidental release prevention Rule are not even aware of the concepts of process safety management, or even that they may be covered under the Rule’s Process Safety Management (PSM) provisions. Under the best conditions they often first learn of their regulatory obligations from a supplier or trade association and struggle to come into some type of compliance hopefully with improved practices. Under the worst set of conditions, they never learn of their obligations or having learned of them consciously undertake to avoid their coverage under the regulation by ‘technical’ avoidance. In some instances they reduce inventories below the inventory threshold for regulation and get more frequent deliveries. In other cases they reduce the concentration of a regulated chemical below the regulated concentration threshold and keep a small inventory of high concentration of the same chemical to top off their product, etc. Unfortunately, many of these stratagems result in increased risks to society. As noted above, in some cases management may be convinced that greater efforts on process safety do not pay or that there are better opportunities for use of company resources. Often a business does not have or cannot obtain the resources for an appropriate process safety management program. These marginal businesses operate as long as they can generate a positive cash flow and they pose an above average risk according to conventional wisdom among safety engineers. Under conditions such as these, a case can be made for deploying increased regulatory resources; initially for educational purposes and ultimately for enforcement purposes. Enforcement of regulations can serve an important function in forcing firms to internalize the costs of risks imposed on others. At present, EPA foresees that at most only about 1% of regulated facilities will have their compliance with the Rule’s provisions audited. The situation in regard to the OSHA PSM standard is probably not as good. A useful contribution to improved process safety might result from increased oversight of firms likely to be marginal in their process safety practices. This might be accomplished either directly by government agencies, or through alternative mechanisms such as a third party inspection scheme similar to that used with boilers and pressure vessels.
The authors expect that the Roundtable participants will be able to arrive by consensus at a ranked set of recommended national process safety goals. If this indeed proves to be the case, suggestions on achieving a broad buy-in on such goals, and who should execute them would be the next order of business. Appendix 1 The following observations made by Tweeddale in 1991 still seem to be pertinent today:
Tweedie concludes his paper with this final observation: "Perhaps we need to restrain our response to the seduction of purely quantitative (i.e. ‘scientific’ ) types of research and development, and give equal attention to the qualitative or ‘art’ component of engineering and management, in which judgement plays a large part." Endnotes
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