From time to time, private businesses are faced with the prospect of partnering with a government agency, office, or department in order to accomplish a goal or undertake a project. Reasons vary: the effort may result from an enforcement action, consent order, or settlement agreement, or it may simply be a strategic priority that requires joining forces with a federal, state, or local government office. In any case, working with government agencies presents opportunities and challenges not regularly encountered in a competitive business’s projects.

Reset Your Clock

Government agencies do not move at the speed of competitive business—they typically move much slower. Government budgeting and spending are intentionally lengthy processes that are subject to the political winds. As a result, it is not unusual for agencies to employ (legacy) infrastructure and systems that have worked in the past, regardless of apparent inefficiencies today.

If the agency will be contributing financially to the effort, it may take years for funding to be proposed, studied, discussed, approved in a budget, and then approved to spend. Similarly, any decision-making can be an arduous and lengthy process involving a multitude of managers and influencers.

Understanding how funding and decisions are made and who needs to be involved is critical to managing the time element of projects. Often, the dominant motive for decision-making is protection of the status quo and personal job security, versus “let’s try something new and exciting”. Stakeholder management requires understanding, patience, and persistence.

Take the Lead

Business should expect to take the lead in project management. Most government agencies will advertise successful projects after they are completed, but will keep unproven or work-in-progress low key, pending successful results. Similarly, they will participate as directed in the work but do not usually want to be viewed as driving a public-private partnership, as even the appearance of an overly close relationship with a particular business can compromise the agency’s perceived objectivity. Finally, many public agencies do not have trained project managers on staff to lead such an effort, while a business may.

Find an Agency Champion

Successful execution of the project plan requires timely coordination and cooperation from the agency, and may involve a number of different departments or functions within it. For example, building a joint facility may involve facilities, IT, security, finance, law, and operations departments. In order to get the cooperation needed from the various departments, those staffs will expect someone in their direct chain of command to prioritize the project.

In competitive business, a Vice President acting as project sponsor may have all the authority he/she needs to expect and get cooperation across the property. But in a government agency, a Director or Section Chief over one of the areas may carry absolutely no authority in another department. Government agencies tend to be very silo-ed in their structures, not matrixed. It is important to find a sponsor far enough up the chain to cover all areas involved and to communicate his support of the project to all areas—even if he/she is not regularly directly involved in the project.

Build a Lasting Relationship

So often, the only time business and agencies interact is when one needs something from the other. This can lead to a strained relationship, characterized by avoidance or begrudging interactions. These are the same agencies, however, where a positive working relationship can result in a business competitive advantage. Working closely with these gatekeepers of the regulations and public trust in a non-confrontational setting can set the foundation for a new relationship built upon mutual understanding and achieving common goals.

Government employees fill a valuable role in society by providing services and protecting society. Besides understanding the current enforcement priorities, they interact with customers, competitors and even employees, and can provide valuable information or ideas for businesses to improve efficiencies or help direct the focus of current business efforts.

Case Study: Utility Environmental Management System (EMS)

Kestrel managed a project with an investor-owned utility to design and implement an Environmental Management System (EMS) at a coal-fired power plant. The result of a consent order from the state Natural Resources Department, both the utility and the agency were involved from design and implementation to final auditing and EMS acceptance by the agency. The project and the associated agency interactions brought the plant higher confidence in its environmental plans and operations, and gave local regulators a deeper understanding of the utility business and ownership of the plant’s path forward.

Takeaways

Working with a government agency to manage a project is different than working with a competitive business. However, doing so can be beneficial to achieving both parties’ objectives if the company knows how to successfully navigate the working relationship:

1. Understand how government funding and decisions are made before project kickoff.
2. Actively manage government stakeholders—expect to take the lead.
3. Find a project sponsor with the authority to ensure cooperation from all agency departments involved.
4. Take advantage of the opportunity to build a positive, long-lasting relationship.

Biotechnology Focus

When it comes to digging deeper into your waste management efforts, it’s important to step back from the waste itself and consider how waste fits into operations—and how it may impact your overall business. What’s coming in? What’s going out? And what risks does this present to the business?

In this Q&A with KTL Principal Lisa Langdon, we discuss how a comprehensive review of operations is the foundation to effectively managing waste.

What does a comprehensive review of operations look like?

Companies who want to proactively manage their waste need to first go through the process of understanding:

1. What waste streams you have;
2. Where your waste fits into your business processes; and
3. What you need to do with your waste and operations to minimize risk, reduce costs, and ensure compliance.

The first step in understanding how waste fits into the business is to thoroughly review and map all business processes, keeping focus on the entire production process. This can start with a facility layout diagram, followed by more specific process and sub-process flow diagrams.

Most biotech operations will have their processes mapped in a fair amount of detail, but perhaps not smaller or startup operations. For example, existing diagrams might be found as part of the documents managed under a quality management systems (QMS) (e.g., ISO 9001) or as part of air permitting or other compliance documents.

As an outside consultant, Kestrel reviews and builds off whatever process flows have already been developed internally to ensure they are comprehensive. The review and process flows should reflect production-related activities, including raw materials receiving, raw material entry and processing in production, product finishing, packaging, and shipping. Capability, capacity, programs, and processes to comply are examined as part of this review.

How does this help a company understand and improve waste management?

Defining, understanding, and improving the material and waste flow within major processes, programs, and projects can be challenging. Through in-depth interviews, data analysis, application of disciplined process improvement methods, and facilitation, we are able to demonstrate how all areas interrelate and impact the way an organization functions—as well as the associated business risks.

Having this all mapped out helps companies improve the interconnected set of processes, sub-processes, activities, and tasks that allow the business to manage waste most effectively. With a comprehensive understanding of a process, program or project, it then becomes possible to make changes that reduce variation and remove activities that contribute no value to the end product or service.

What is the goal on a waste management project like this?

Ultimately, our goal is to help companies decide on priorities for change, and then implement efficient business processes to improve operations and waste management practices that our clients can manage on their own. We maintain our focus on increasing efficiency and reliability without sacrificing quality, capacity, safety, or environmental responsibility.

Kestrel’s forte lies in translating strategy into execution, using process as the critical link to help organizations realize measurable results. By providing an objective perspective, we assist company leaders in analyzing, documenting, operationalizing, and sustaining process, program, and project improvements over the long term.

Auditing is a management tool that can be used to evaluate and monitor the internal performance and compliance of your company with regulations and standards. An audit can also be used to determine the overall effectiveness of an existing system within your company.

How do you incorporate compliance auditing best practices to help maximize compliance, efficiency, and value of your audit? Here are five critical factors for value-added audits.

1. Goal Aligned with Business Strategy

There are many reasons why companies conduct audits:

• Support commitment to compliance
• Avoid penalties
• Meet management system requirements
• Meet corporate or customer mandates
• Support acquisition or divestiture
• Assess organizational structure and competency
• Identify cost saving and pollution prevention opportunities
• Determine alignment with strategic direction

It is vital to define and understand the goal of your compliance audit program before beginning the audit process. Establishing goals enables recognition of broader issues and can lead to long-term preventive programs. Not establishing a clear, concise goal can lead to a waste of resources.

Audit goals and objectives should be nested within the company business goals, key performance objectives, and values. An example of a goal might be to effectively measure environmental compliance while maintaining a reasonable return on investment.

Once the goal is established, it is important to communicate it across all functions of the organization to get company-wide support. Performance measurements should also be communicated and widely understood.

2. Management Buy-in

The audit program must have upper management support to be successful. Management must exhibit top-down expectations for program excellence, view audits as a tool to drive continuous improvement, and work to imbed audits within other improvement processes. Equally important, management must not use audit results to take punitive action against any person or department.

3. Documented Audit Program Systematically Applied

Describe and document the audit process for consistent, efficient, effective, and reliable application. Audit procedures should be tailored to the specific facility/operation being audited. A documented program will include the following:

• Scope. The scope discusses what areas/media/timeframe will be audited. The scope of the audit may be limited initially to what is manageable and can be done very well, thereby producing performance improvement and a wider understanding and acceptance of objectives. It may also be limited by identifying certain procedural or regulatory shifts and changes. As the program is developed and matures (e.g., management systems, company policy, operational integration), it can be expanded and, eventually, shift over time toward systems in place, prevention, efficiency, and best practices. It is important at the scoping stage to address your timeline. Audits should be scoped to make sure you get them done but also to make sure you have audited all compliance areas in an identified timeframe.
• Criteria. Compliance with requirements will clearly be covered in an audit, but what about other opportunities for improvement (e.g., pollution prevention, energy savings, carbon reduction)? All facilities need to be covered at the appropriate level, with emphasis based on potential compliance and business risks. Assess the program strengths, redundancy, integration within the organization, and alignment with the program goal. Develop specific and targeted protocols that are tailored to operational characteristics and based on applicable regulations and requirements for the facility. As protocols are updated, the ability to evaluate continuous improvement trends must be maintained.
• Auditor training (i.e., competency, bias). A significant portion of the audit program should be conducted by knowledgeable auditors (e.g., independent insiders, third parties, or a combination thereof) with clear independence from the operations being audited and from the direct chain of command. For organizational learning and to leverage compliance standards across facilities, it is good practice to vary at least one audit team member for each audit. Companies often enlist personnel from different facilities and with different expertise to audit other facilities. Periodic third-party audits further bring outside perspective and reduce tendencies toward “home-blindness”.

Training should be done throughout the entire organization, across all levels:
+ Auditors are trained on both technical matters and program procedures.
+ Management is trained on the overall program design, purpose, business impacts of findings, responsibilities, corrections, and improvements.
+ Line operations are trained on compliance procedures and company policy/systems.

Consider having auditor training conducted by an outside source to teach people how to decide what to audit and follow a trail. It can also work well to train internal auditors by having them audit alongside an experienced 3rd party.

• Audit conduct (i.e., positive approach). A positive approach and rationale for the audit must be embraced. Management establishes this tone and sets the expectation for cooperation among all employees. Communication before, during, and after the audit is vital in keeping things positive. It is important to stress the following:
  • Auditor interviews are evaluating systems, not personal behaviors.
  • The audit is an effective tool to improve performances.
  • Results will not be used punitively.
• Audit reporting. Information from auditing (e.g., findings, patterns, trends, comparisons) and the status of corrective actions often are reported on compliance dashboards for management review. Audit reports should be issued in a predictable and timely manner. It is desirable to orient the audit program toward organizational learning and continual improvement, rather than a “gotcha” philosophy. “Open book” approaches help learning by letting facility managers know in advance what the audit protocols are and how the audits will be conducted. Documentation is essential, and reporting should always align with program goals and follow legal guidance. There is variability in what gets reported and how based on the company’s objects. For example:
  • Findings only vs. opportunities for improvement and best management practices?
  • Spreadsheet vs. long format report?
  • Scoring vs. prioritization of findings (beware of the unintended consequences of scores!)?
  • Recommendations for corrective actions included or left for separate discussion?

• Corrective and preventive action. Corrective actions require corporate review, top management-level attention, and management accountability for timely completion. A robust root cause analysis helps ensure not just correction/containment of the existing issue, but also preventive action to assure controls are in place to prevent the event from recurring. For example, if a drum is labeled incorrectly, the corrective action is to relabel that drum. A robust plan should be to also look for other drums that might be labeled incorrectly and to add and communicate an effective preventive action (e.g., training or posting signs showing a correctly labeled drum).
• Follow-up and frequency. Address repeat findings. Identify patterns and seek root cause analysis and sustainable corrections. Communications with management should be done routinely to discuss status, needs, performance, program improvements, and business impacts. Those accountable for performance need to be provided information as close to “real time” as possible. There are several levels of audit frequency, depending on the type of audit:
  • Frequent: Operational (e.g., inspections, housekeeping, maintenance) – done as part of routine day-to-day operational responsibilities
  • Periodic: Compliance, systems, actions/projects – conducted annually/semi-annually
  • As needed: For issue follow-up
  • Infrequent: Comprehensive, independent – conducted every three to four years

4. Robust Corrective Action Program

As mentioned above, corrective actions are a must. If there is no commitment to correction, there is no reason to audit. A robust root cause analysis is essential. This should be a formal, yet flexible, approach. There should be no band-aids. Mistake-proof corrections and include metrics where possible. In the drum example given above, a more robust corrective action program would look at the root cause: Why was the drum mislabeled? Did the person know to label it? If so, why didn’t they do it?

The correction itself is key to the success of the audit program. Establish the expected timeframe for correction (including addressing preventive action). Establish an escalation process for delayed corrections. Corrective actions should be reviewed regularly by upper management using the existing operations review process. There must also be a process for verification that the correction has been made; the next audit cycle may not be sufficient.

Note also that addressing opportunities for improvement, not just non-compliance findings, may increase the return on investment associated with conducting an audit.

5. Sharing of Findings and Best Practices

Audit results should be communicated to increase awareness and minimize repeat findings. Even if conducted under privilege, best practices and corrections can and should still be shared.  Celebrate the positives and creative solutions. Stress the value of the audit program, always providing metrics and cost avoidance examples when possible. Inventory best practices and share/transfer them as part of audit program results. Use best-in-class facilities as models and “problem sites” for improvement planning and training.

Value-Added Audit

An audit can provide much additional value and return on organization if it is planned and managed effectively. This includes doing the following:

• Align program goal with business strategy to secure top-down buy-in
• Expand criteria beyond compliance
• Gain goodwill through positive approach
• Document program and results
• Monitor for timely, effective corrective action
• Share opportunities for improvement

BIOTECHNOLOGY FOCUS

Waste regulations can be difficult to understand, and it can be challenging to comply. Regulatory citations often seem like they are in a different language and the terminology used by inspectors can be confusing and difficult to decipher. Compliance often requires speaking not only the lab/industry language, but also the regulator’s language.

To get a true understanding of what regulations apply, it is important to start by asking two fundamental questions:

• What wastes does my company generate?
• What activities does my company carry out that are covered by waste requirements?

Through an evaluation of chemicals onsite, development of an inventory of both chemicals used and waste generated, and identification of processes to efficiently and effectively manage waste, businesses/labs can ensure they understand and meet their EHS regulatory obligations in the most efficient ways possible.

Environmental Protection Agency (EPA): Where Do You Start?

EPA regulates much of the waste generated by industry. Over the past ten years, the Agency has demonstrated an even stronger focus on labs. The most commonly cited EPA penalties under the Resource Conservation and Recovery Act (RCRA), which governs the disposal of solid and hazardous waste, have resulted from the items listed below:

• Dumping hazardous wastes down the drain
• Not having or having inadequate hazardous waste manifests
• Failing to properly train employees in hazardous waste management, handling, and emergency preparedness
• Lack of or improper labeling
• Open containers of hazardous waste onsite
• Failing to comply with hazardous waste generator regulations
• Improperly managing expired paints or spray paints
• Failing to have hazardous waste determinations on file
• Improper consolidation of waste from other nearby facilities
• Noncompliance with underground storage tank regulations

In order to avoid these citations, it is important to first understand your wastes. This is done through an EPA-required waste determination. In addition to reviewing chemicals that are used in processes and the different types of risk they present, a waste determination should evaluate all waste being generated by processes throughout the facility. The following waste streams are of particular regulatory concern, as they have strict regulatory requirements for their management and disposal.

Hazardous Waste
Hazardous wastes are found in a variety of processes in labs and in industry.  Solvents used to operate equipment, chemicals to conduct reactions and create products, maintenance chemicals, and new innovations are all potential sources of hazardous waste and should be included in a comprehensive waste determination.

The most frequently generated hazardous waste type in labs and in industry is flammable liquids. Chemicals such as acetone, toluene, xylenes, and methanol are commonly used flammable liquids that must be managed as hazardous waste. These wastes cannot be dumped down the drain without significant risk of fire, danger to personnel, and regulatory penalty. One of the first questions a regulator will ask in a lab or industrial process setting is to see waste containers. If a facility has chemicals but no waste containers, the regulators immediately jump to the conclusion that waste is not being managed correctly.

Other common hazardous waste streams found in labs and industry include toxic chemicals; corrosive acids and caustic bases; reactive chemicals, such as oxidizers and polymerizing chemicals; and chemicals that are radioactive. All of these are regulated by compliance agencies and require special management.

Examples of EPA regulations applying to labs include such things as identification of the amount of hazardous waste generated in a calendar month by a lab or in industry. The more hazardous waste generated, the more rigorous the EPA regulations.

Universal Waste
EPA also regulates a class of waste referred to as universal waste. Universal wastes are hazardous in their composition but can be recycled (e.g., fluorescent lightbulbs or lamps, CRTs and electronic waste, rechargeable batteries, and mercury-containing items). Failure to collect, label, store, and recycle these types of waste properly can also result in substantial threat of compliance penalty.

EPA regulators have focused on these waste streams as a source of penalty for the past decade. This is one of the most frequent citations issued to businesses. Although not as complex as the requirements for proper hazardous waste management, universal waste has nuances that a generator must be aware of to properly meet the regulatory requirements.

Biohazardous, Sharps, Pharmaceuticals, Unwanted Equipment, and Other Waste Types
Labs and industry have many additional sources of waste that are confusing and present head-scratching challenges as a waste determination is conducted. For example:

• If a facility wants to remove an outdated x-ray machine or electron microscope from service, what are the compliance requirements and is there a way to recycle it?
• If a lab process results in debris that is contaminated with bodily fluids, can they just be thrown in the trash? At what point are they considered “biohazardous?”

Beyond EPA

Additional regulatory agencies that oversee lab and industry operations include the Occupational Safety & Health Administration (OSHA), Department of Transportation (DOT), Department of Homeland Security (DHS), fire department, and others depending upon the type of work being done, chemicals being used, and resulting end products. As with EPA, identifying the other regulations that apply can be quite challenging and overwhelming. For example:

• Under OSHA, evaluation of worker personal protective equipment (PPE), respiratory protection, safety equipment, including safety showers and eye wash stations, and fire extinguishers requires plans, inspections, and training of workers. These programs should be set up as best practice to protect employees.
• As discussed in our previous article, DOT is often forgotten about in labs; however, there are general DOT requirements for any entity receiving or shipping hazardous materials. Failure to have proper DOT training or to know how to properly ship can result in significant financial penalty.

The waste scenarios seen in labs and industry are countless, and each may hold associated regulatory compliance requirements. While this clearly presents business risks, it also provides a unique opportunity to create strategies to manage wastes more effectively and efficiently, improve safety, and reduce the potential costs of regulatory compliance.

BIOTECHNOLOGY FOCUS

Preparing products for shipment out and receiving raw materials in are both critical parts of the biotech lab/industry supply chain. In fact, managing transportation of these materials is an essential component of achieving operational success. Shipping hazardous waste that has resulted from product manufacturing or industrial processes is also vital to operations, as doing so helps to ensure compliance with regulations and minimize risks onsite.

Yet as important as hazardous waste transportation is in the biotech industry, some of the most overlooked regulations in industry are those requirements the Department of Transportation (DOT) has in place for “offering” (i.e., shipping or receiving) hazardous materials into commerce. Regardless of whether a company is shipping hazardous materials, receiving hazardous materials, or shipping hazardous waste, there are regulatory requirements that must be met to avoid substantial penalty and to maintain safe and compliant operations.

Training Requirements and Common Violations

The most significant DOT requirement related to waste relates to the DOT’s regulations for training, as enforced by the Pipeline and Hazardous Materials Safety Administration (PHMSA) division. PHMSA’s Hazmat Transportation Training requirements identify five areas that anyone offering (i.e., shipping or receiving) hazardous materials into commerce must be trained in to meet the General Awareness Hazardous Materials Regulatory (HMR) requirements (49 CFR 172.704).

One of the most common violations identified by both DOT and the Environmental Protection Agency (EPA) is failure of personnel signing hazardous waste manifests to have appropriate DOT training. A manifest tracks hazardous waste movement from your site to the proper destination (i.e., from “cradle to grave”). Each party that handles the waste signs the manifest and retains a copy for themselves. This ensures critical accountability in the transportation and disposal processes. If you are required to use a manifest for off-site shipments of hazardous waste, it is likely that you are required to have some form of hazardous waste training.

Training must be completed within 90 days of employment and must be refreshed at a minimum of every three years. Failure to meet this training requirement can result in substantial financial penalty. Perhaps even more important, lack of training may also impact the understanding of employees in how to correctly—and safely—perform their duties.

Penalties

The 2019 DOT HMR penalty amounts are as follows:

• The maximum civil penalty for a violation of hazardous materials transportation law (49 U.S.C. 5123(a)(1)) is $79,976 per day, per violation.
• For a violation that results in death, serious illness, severe injury, or substantial property damage, the fine is $186,610.
• The minimum penalty for a violation related to hazmat training (required once every three years for all hazmat employees per 49 CFR 172.704) is $481 per day, per violation.

Training and Resources

Training is key to compliance when it comes to shipping and receiving hazardous materials. Kestrel offers training with competency demonstration that meets the DOT Hazardous Materials General Awareness Training requirements. In a one-day seminar, participants:

• Learn all five required areas of compliance
• Develop understanding of various hazard classes and appropriate shipping requirements
• Practice identification of shipping names and use of the DOT Hazardous Materials Table in 49 CFR 172.101 as a reference for information
• Demonstrate competency and understanding through a written exercise at the completion of the class

Kestrel’s next offering of the 8-hour DOT Triennial General Awareness Training is being offered specifically for the biotech industry on Thursday, October 23 in Madison, Wisconsin. Register online.

The following resources may also be helpful in understanding your hazardous waste transportation requirements:

• Commonly Shipped Undeclared Hazardous Materials
• PHMSA Hazmat Transportation Training Requirements

BIOTECHNOLOGY FOCUS

Biotech labs and industrial processes traditionally produce many different types of waste that can present significant waste management challenges. Identifying all the different waste sources in operations is not as easy as it sounds. For example, labs and industry may not fully take the time to evaluate the chemicals in reagents, and as a result, they can make errors in managing the associated waste—errors that present significant risk of regulatory penalty, unnecessary expenditures, or exposure to personnel.

However, as the following case study shows, appropriately identifying and managing wastes also presents opportunities for reduced risk, cost savings, and improved compliance.

Case Study in Waste

Recently, Kestrel assisted an industrial lab located in a large production facility with waste management concerns. An EPA inspection identified several negative findings with an estimated potential fine of $350,000. Kestrel assisted with penalty negotiations and development of waste management strategies.

Inventory and Risk Identification
As Kestrel worked to get the facility in compliance, the inventory and risk identification process uncovered one waste stream that contained small amounts of mercury in test vials. The lab had been comingling this waste stream with their vials of flammable solvent waste, resulting in large lab packs of waste that were expensive to dispose. A five-gallon bucket of vials cost them approximately $250 for disposal, and they were generating up to six buckets per month. While the process of comingling is not a compliance issue when handled as a hazardous waste, it is often an unnecessarily expensive way to manage non-hazardous waste.

Alternative Methods
A thorough evaluation of the reagent used indicated that there were alternative test methods that could be used to test for the same analyte. The lab was able to switch the mercury-containing reagent with a non-mercury-containing alternative. The cost for disposal of the five-gallon buckets dropped from $250 to $85 per bucket. Importantly, the testing methods were just as accurate and met the lab’s needs. This change minimized the risk of mercury exposure or a costly mercury cleanup event and resulted in a cost savings of approximately $1,000 per month.

Sustainable Strategies
Removal of the mercury-containing reagent was just one of many strategic improvements implemented at the lab based on the initial waste evaluation. Kestrel was able to develop strategies to resolve the remainder of the EPA findings. Based on the comprehensive compliance improvements, the EPA penalty was negotiated to a no-penalty ruling and the company did not have to pay any amount in fines. They have now operated for an additional two years with no EPA penalty, continued reduction in waste management costs, minimized risk to employees, and operated a more efficient and streamlined lab.

How About You?

Have you considered your operations and your waste streams? Ask yourself:

• Are there waste streams that you are paying too much to manage?
• Are there alternatives to the reagents or kits you are using that may minimize your risk and improve safety in your lab?
• Are there strategies that can make waste management simpler, more cost-effective, and more compliant that you could implement in your lab?

The interpretation of FSMA compliance for Dietary Supplement (DS) distributers and manufacturers has varied since the law was signed in 2011. As much of the food industry, including FDA, has sought to understand compliance requirements of the various FSMA rules, the DS industry has had even more to assess and determine due to its unique requirements relative to food. This is further complicated by the maturity of specific requirements for the supplement category of products being tested by industry and regulators.

Dual Level of Regulation

Early under FSMA, many DS companies struggled—and many continue to do so—with their compliance to FDA requirements due to their direct regulatory obligations as food and DS companies. Historically, the DS industry enforcement requirements fall under FDA Section 111 GMPs, which require more stringent control of the full production process than what is required for food only. This presents DS with a dual level of regulation, with the DS-specific regulation established years prior to FSMA. In fact, this regulation was well in-place at the signing of FSMA and the additional requirements, which include the 117 GMPs.

The more conservative approach to ensure compliance is to meet requirements under both the FSMA and FDA Food and Dietary statutes concurrently. Alternatively, companies may wait for more clarity on FSMA, as the final rules and compliance dates were pending due to the rulemaking time that was instituted during the rollout phase.

Challenges of Compliance

In meeting the Section 111 GMP requirements for the DS industry, there is significant complexity; however, if managed correctly, Section 111 does address many of the related FSMA requirements. Specific areas required by FSMA but not included in the DS requirements remain, including a complete Food Safety Plan, preventive controls, environmental monitoring, program management updates, and specific organizational roles of Preventive Controls Qualified Individual (PCQI), Qualified Auditor, and Qualified Sanitation Lead.

The challenge of compliance for the DS industry lies in these issues, but also in the variation of company types within the industry (i.e., distributers, manufacturers, suppliers, and the supply chain). For DS companies with many varying aspects, there can be significant variation in requirements due to the various supply chain components. This makes development more challenging based on the proper responsible party for the specifications and the final branded product for distribution. In addition, the situation of making dietary supplements and food in the same plant must be properly addressed. These all must comply with Section 111 requirements. If the Section 111 program ensures a well-qualified supplier program, this can be referenced as 117 compliance for FSMA. Unfortunately, many organizations have not formalized their written and documented programs, as required by Section 111, as well as under FSMA.

To complicate things more, the DS industry is still evolving with rapid expansion of companies, manufacturers, and distributers participating in broad and changing product types. Within the DS supply chain, the functions of product development, specification, manufacturing, operations, and the ultimate responsibility for the product and raw material stages is not easy to determine. This leaves the ultimate responsibility party to be identified—often with overlapped and shared levels of responsibility, from raw material sourcing to final manufacture. Correspondingly, it is vital for DS companies to maintain strict control of suppliers, customers, and product identification at each step of the manufacturing process.

Direct Compliance vs. Third-Party Certification

FSMA maintains its position of direct compliance to the regulations vs. the use of third-party certification for industry-legal interpretation. However, the decision to pursue third-party certification must be evaluated within this rapidly changing industry. Acceptance of these certifications is growing along with FSMA compliance. In fact, many major retail chains require global certification under the Global Food Safety Initiative (GFSI) standards. In line with this, programs must be further defined and developed to meet the GFSI requirements associated with the benchmarked standards (i.e., BRC, IFS, FSSC22000, SQF).

The need for DS companies to be certified to the GFSI through one of the standards will only continue as the distribution channels for DS products grow. These standards are necessary to provide structured requirements and to ultimately simplify the compliance process based on even more research and learning.

Keys to Success

With this rapid evolution of unique DS products, compliance and certification efforts must consider and meet the test of time. This may take several years to establish. DS companies operating under FSMA must make appropriate decisions in the development of their programs to provide evidence that programs and processes have been appropriately implemented.

Key to this is developing and maintaining a documented system with written programs and validation to Section 111 and Section 117 GMPs under FDA to meet all necessary requirements. Sufficient records must be maintained as evidence that programs have been implemented, verified, updated, and maintained as current at all times. Any exceptions addressed by Section 111 or Section 117 compliance must be confirmed and documented within this system. As just one example, in some cases Section 117 cites specific requirements, such as the protection of outside storage containers. If they do not exist, a company must identify this has been determined as an exception.

In addition, it is very important DS companies determine their compliance assessment process for FSMA. These determinations must be made relevant to the existing and verified Section 111 programs and requirements under Section 117. Decisions within any program for FSMA compliance must be clear, verified, and implemented so they can be inspected or audited with proper evidence.

Conducting an internal compliance audit can be a very helpful and important step in confirming all requirements are met and all documented programs and practices are verified and up to date. Any identified risks will lead to program non-conformity, which must be closed to meet the regulatory requirements of Section 111, Section 117, and GFSI, if appropriate. A failure in one compliance situation has the potential to create multiple non-conformances across three areas and, therefore, must be appropriately and quickly addressed.

Mapping Your Requirements

Ultimately, mapping the compliance process for both regulations—and possibly to GFSI certification requirements—must be made, along with a final register of documentation showing all requirements are being met. This requires not only time and resources of the identified qualified personnel, but this effort also must be supported by a well-founded Management Review process to ensure compliance in this rapidly evolving sector.

Biotechnology Focus

• Are you managing your waste correctly? 
• Are you disposing of your waste efficiently and cost-effectively? 
• Do you have a system to track your waste and sustain its management? 

Waste is one of those risks that is often overlooked at companies because it isn’t something core to operations. Unfortunately, if waste is incorrectly managed, there are regulatory compliance risks, exposure risks, and potential financial penalties that can impact your business.  

The following represent just some of the challenging waste situations facing biotech companies that must be addressed:  

• Chemical liquid waste going down the drain 
• Chemicals being evaporated up the hood 
• Biohazardous materials being thrown in the trash 
• Chemical spill cleanup materials that are being thrown in the trash 

Waste products such as these do not belong in standard trash and may hold either more value or more risk to the organization. For example, some wastes have continued value through recycling or repurposing. Conversely, other wastes may be regulated, requiring special disposal processes. Improperly disposing these regulated wastes (i.e., through standard trash) can create safety or environmental risks that may cost big dollars.  

How do you avoid making pricey mistakes?  

Methodical Approach

A methodical, analytical approach to characterizing and evaluating waste can substantially improve efficiencies when it comes to handling waste, and minimize the risks of improper waste management. Evaluation of waste streams (i.e., the type of waste generated and how/where it is generated) can help to identify:  

• Areas to improve efficiencies in waste management processes 
• Wastes that can be minimized and/or prevented to reduce disposal costs 
• Alternative strategies for disposal and waste management that may result in minimized inputs and lower cost of initial supplies  
• Regulatory requirements to avoid any potential penalties for non-compliance 

Let’s take the evaluation of waste solvent as one example. Companies frequently purchase large quantities of solvent and then end up paying for its disposal. Reviewing the type of solvent and how it is being used may reveal an alternative with the potential for significant savings, such as a bench–top distillation unit, which would provide for: 

• Lower upfront costs in the purchase of solvent 
• Lower costs in the disposal of hazardous waste solvent 
• Fewer risks and regulatory requirements associated with stocking less solvent   

Business Benefits

Strategic evaluation of one type of generated waste may also lead to significant business benefits beyond the waste itself. A thorough review of business and operational processes and the waste being generated creates the opportunity for a “bottom–to–top” evaluation of all regulatory compliance. And that can lead to potential savings that a business may not have previously identified. Review and understanding of wastes being generated within a lab or business often leads to the following program area discussions: 

• Review of EPA hazardous waste and opportunities to minimize or more cost-effectively manage this expensive waste stream. 
• Evaluation of compliance with EPA waste requirements to make sure waste is labeled, stored, disposed, and reported correctly. 
• Review of other waste streams, such as biohazardous, radiological, and universal waste streams, to assure they are being efficiently managed and in compliance with regulations. 
• Evaluation of how chemicals are being managed in accordance with regulatory requirements (e.g., EPA, OSHA, DOT). 
• Review of OSHA safety programs and discussions to ensure training, documentation, and procedures are in place to keep employees safe while meeting requirements for such programs as hazard communication, personal protective equipment (PPE), respiratory protection, safety showers, eye wash stations, fire extinguishers, confined space, energy control and emergency response planning. 
• Exploration of options for recycling and best practices that have the potential to significantly improve financial bottom line management and increase sustainability of lab operation. 

Strategy Going Forward

Effectively managing your waste really begins with a comprehensive review of operations. It is a process of understanding what you have, where it fits, and what you need to do with it to minimize risk, reduce costs, and ensure compliance. This process walks a company through the following basic questions:  

• What are my business processes? 
• What kind of waste does my company generate? 
• What waste regulations apply to my business? 
• How do I understand the potential impacts of my waste? 
• How do I come up with a strategy to effectively minimize waste and reduce cost while keeping employees safe? 
• How do I ensure that we efficiently and cost-effectively manage waste and compliance for the long run? 

Over the next several weeks, we will be answering each of these questions in a series of articles to help address some of the common—and often costly—mistakes related to waste management and to help ensure you are managing your wastes in the appropriate and most cost-effective ways possible. 

Kestrel is proud to provide our ongoing support for the manufacture, processing, and distribution of safe food. This fall, we look forward to joining our food industry friends and colleagues at a number of events to promote safe and quality food.

Food Safety Consortium

The Food Safety Consortium is a premiere event for food safety education and networking. The Consortium offers three days of informational sessions on topics including FSMA final rules, FDA inspections under FSMA, food defense, food recalls, new technology, hiring and retaining sanitation workers, building your food safety team, allergen management, proper use of sanitation chemicals, Prop 64, environmental monitoring, GFSI, and more.

• DATE: October 1-3, 2019
• LOCATION: Schaumburg, Illinois
• REGISTER NOW!

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PROCESS EXPO with Special Food Safety Training

Kestrel will once again be joining FPSA at PROCESS EXPO, the nation’s largest trade show dedicated to bringing the latest technology and integrated solutions to all segments of the food and beverage processing and packaging industry.

• DATE: October 8-11, 2019
• LOCATION: Chicago, Illinois
• REGISTER NOW!

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SupplySide West with Featured Panel Discussion

SupplySide West is all about the science and strategy around the development of finished products that drive the global business economy. Learn about new trends from over 1,300 exhibitors and 140 hours of educational and conference programming. Don’t miss Kestrel’s Workshop: FSMA & Import Requirements for Food & Supplement Brands.

• DATE: October 15-19, 2109
• WORKSHOP DATE: October 16, 9 am – 12 pm
• LOCATION: Las Vegas, Nevada
• REGISTER NOW!

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We look forward to seeing you this fall. Contact us if you are interested in learning more about one of these events or setting up a time to meet!

On August 14, 2019, the U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) released a proposed rule to make several miscellaneous amendments to the Hazardous Materials Regulations (HMR) to ensure the safe and secure movement of hazardous materials to industry and consumers by all modes of transportation. This proposed rule is in response to numerous petitions submitted requesting PHMSA address a variety of provisions, including some on packaging, hazardous communication, and incorporation by reference documents. According to PHMSA, the amendments are intended to update, clarify, improve the safety of, or provide relief from various regulatory requirements in the HMR. The proposed amendments include:

• Adopting a phase-out schedule for certain railroad tank cars used to transport poisonous-by-inhalation materials
• Clarifying the cleaning standard for metal drums, including removing residual adhesive from labels
• Allowing the continued use of certain portable and mobile refrigerator systems commonly used in the produce industry
• Allowing for all waste materials to be managed in accordance with the lab pack exception whether they meet the definition of a hazardous waste per the U.S. EPA
• Incorporating an industry standard that can help to enhance the production of oil and gas wells
• Several additional proposed amendments derived from PHMSA’s petition for rulemaking process