Beginning in July 2016, OSHA will be enforcing a change in its interpretation that narrows which retail establishments are exempt from PSM requirements.
A little background
When OSHA issued the PSM standard, it explained that chemicals in retail facilities (for example, a gas station) are generally sold in small packages, containers, and allotments and as such, were not subject to PSM requirements. Various interpretations resulted in facilities being exempt from PSM coverage if they derived more than 50 percent of its income from direct sales of highly hazardous chemicals to the end user. This came to be known as the “50 percent test,” and came to be applied to many facilities that are not technically “retail” facilities.
OSHA has rescinded all documents and interpretations related to the 50 percent test, which has resulted in numerous facilities now being subject to PSM requirements.
So, what does this have to do with RMP?
This change results in several thousand facilities that had been eligible for the retail exemption under OSHA’s previous interpretation becoming subject to the PSM standard.
According to the EPA, most of these facilities were already subject to the EPA RMP regulation at 40 CFR Part 68, but because of their exemption from PSM requirements, were generally subject to RMP Program 2 requirements. As a result of OSHA’s action, formerly Program 2 facilities that are no longer exempt from the PSM standard will become subject to the more stringent Program 3 requirements.
The Agency said that most affected facilities are agricultural chemical distribution facilities, but the action will also affect other bulk chemical wholesalers.
When will you have to comply with stricter RMP requirements?
OSHA issued the new interpretation in July 2015 and originally set a compliance date of January 2016—a 6-month delay in order to give affected facilities time to implement the requirements of the PSM standard. In September 2015, OSHA was sued by the Agricultural Retailers Association and The Fertilizer Institute, who are seeking a reversal of OSHA’s new interpretation. The lawsuit is pending. In October, OSHA moved the PSM compliance date for affected facilities to July 22, 2016. In December, OSHA moved the enforcement of the new interpretation of the retail exemption policy until after September 30, 2016.
Under EPA’s RMP regulation, facilities are required to revise and update risk management plans within 6 months of a change that alters the program level that applied to any covered process. In the General Guidance on Risk Management Programs for Chemical Accident, the EPA explained that this provision applies in the event that OSHA eliminates a PSM exemption that previously applied.
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In this case, the EPA is interpreting the RMP rule and General Guidance as requiring affected facilities to update RMPs to reflect compliance with the new program level within 6 months of the end of OSHA’s enforcement delay.
According to the EPA, the program level of a facility will not change until OSHA begins to enforce full compliance with the PSM standard at affected facilities. Since the OSHA PSM compliance date is now September 30, 2016, the EPA will require RMP updates for affected facilities to be submitted by March 30, 2017.
If the compliance date for OSHA’s interpretation is subject to further extensions, EPA’s compliance date will automatically change to take effect 6 months after the additional extension. Before the EPA compliance date, facilities affected by OSHA’s action are subject to the program level that applied to their process before OSHA announced its reinterpretation of the retail exemption. In the event that OSHA rescinds (or is ordered by a court to rescind) its interpretation, affected facilities will not be required to update their RMPs for reasons related to OSHA’s retail exemption.
How can you get started if you are ramped up to RMP Program Level 3? Tune in to tomorrow’s Advisor for some tips.