Based on the settlement in a recent enforcement case involving violations of the Clean Air Act (CAA) Risk Management Program (RMP) discussed in yesterday’s Advisor, it seems likely that the U.S. Environmental Protection Agency (EPA) will maintain the controversial third-party audit provisions of the RMP amendments. Let’s take a look at these requirements and industry objections to them.
During the proposal stage of the RMP amendments rulemaking, a majority of industry commenters opposed third-party audits. In addition, the RMP Coalition, a group of industry organizations, petitioned the EPA earlier this year to delay the effective date of the amendments to reconsider certain elements, including the third-party audit provisions.
The current RMP audit provisions require implementing agencies to conduct periodic audits to review the adequacy of facility RMPs and require revisions if necessary to ensure compliance with the Risk Management Program regulations.
Audit Provisions in the Amendments
The audit provisions in the RMP amendments require independent third-party audits under two conditions:
- When an accidental release from a covered process at a facility has occurred and resulted in deaths, injuries, property or environmental damage, evacuations, or sheltering in place; or
- When an implementing agency requires a third-party audit because of conditions at the facility that could lead to an accidental release of a regulated substance or when a previous third-party audit failed to meet the competency or independence criteria of the audit provisions.
Third-party auditors are required to meet competency and independence requirements. The competency provisions require that the auditor be:
- Knowledgeable with the RMP requirements;
- Experienced with the stationary source type and processes being audited and applicable recognized and generally accepted good engineering practices; and
- Trained and/or certified in proper auditing techniques.
The independence provisions require that the auditor:
- Act impartially when performing all audit activities;
- Receive no financial benefit from the outcome of the audit, apart from payment for auditing services;
- Not have conducted past research, development, design, construction services, or consulting for the owner or operator within the past 2 years;
- Not provide other business or consulting services to the owner or operator, including advice or assistance to implement the findings or recommendations in an audit report, for a period of at least 2 years following submission of the final audit report;
- Ensure that all third-party personnel involved in the audit sign and date a conflict-of-interest statement documenting that they meet the independence criteria of this paragraph; and
- Ensure that all third-party personnel involved in the audit do not accept future employment with the owner or operator of the stationary source for a period of at least 2 years following submission of the final audit report.
Industry Cries Foul
In a petition to the EPA to delay the effective date of the RMP amendments, the RMP Coalition claims that the requirement to audit “each covered process” in a facility’s compliance audit imposes costly and burdensome obligations on facilities immediately upon the Final Rule becoming effective. In addition, the Coalition says that the EPA changed the applicability criteria from the proposal and introduced a new third-party audit trigger that “[a]n implementing agency requires a third-party audit due to conditions at the stationary source that could lead to an accidental release of a regulated substance.”
According to the Coalition, this final rule provision transformed a predictable trigger (noncompliance with specific regulations) into an unpredictable one that relies entirely on the implementing agency’s discretion to determine which conditions “could lead to an accidental release.” Since this was established in the final rule and was not part of the proposal, the Coalition claims that no one had a chance to comment on or “object to the incredible breadth of a requirement that covers any conditions that could lead, no matter how remote the chance of the condition resulting in an accidental release.”
Audits and Harcros—What It Means for the RMP Amendments
As discussed in yesterday’s Advisor, Harcros Chemicals will be spending a significant amount of money to engage independent third-party auditors to audit over 20 facilities. These audits are being done voluntarily as part of the settlement agreement and are not required under the RMP regulations currently in effect. It seems to follow that the EPA would not put Harcros through the headache and expense of these audits if the Agency were not seriously contemplating keeping the third-party audit provisions of the RMP amendments. Time will tell.