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

EPA’s Hazardous Waste Generator Improvements Rule became effective on May 30, 2017, federally and in those states and U.S. Territories not authorized for RCRA (i.e., Iowa, Alaska, tribal lands and most of the territories). In the remainder of the states, the rule becomes effective when the state adopts it and adds it to their regulations. States were required to adopt more stringent revisions by July 1, 2019, which means the impacts of this rule should start to be realized across the country. The states are in various stages of adopting the regulation; check the status for your state.

For all intents and purposes, this is a good thing, as the Improvements Rule is designed to:

• Make the RCRA hazardous waste generator regulations easier to understand;
• Provide greater flexibility in how hazardous waste is managed to better fit today’s business operations; and
• Improve environmental protection.

Substantial Regulatory Revisions

The final rule includes over 60 revisions and new provisions to the hazardous waste generator program to make requirements more “user-friendly” in the end. Many of the revisions are technical corrections that address inadvertent errors in the regulations, remove obsolete programs, and clarify unclear citations. Some of the more substantial changes in the final rule, which states are required to adopt unless their requirements are more stringent, are outlined below.

Very Small Quantity Generators (VSQGs)

Conditionally exempt small quantity generators are now called very small quantity generators (VSQGs), and VSQG regulations are moved from 40 CFR 261.5 to 40 CFR 262. A VSQG generates less than 100 kg of hazardous waste in a month and may not accumulate more than 1,000 kg of hazardous waste.

Renotification for Small Quantity Generators (SQG)

The new rule now requires periodic renotification for SQGs every four years; SQGs were previously only required to notify once.

Waste Determinations

Any facility that generates waste needs to determine whether that waste is hazardous. According to the Improvements Rule, his waste determination must be made at the point of generation of the waste, prior to any dilution, mixing, and/or alteration.

Waste Consolidation

VSQGs are allowed to send hazardous waste to a large quantity generator (LGQ) to consolidate it before sending it to a RCRA-designated facility for management, under the condition that the facilities are under the control of the same person. Waste containers must be appropriately labeled (i.e., VSQG Hazardous Waste), and the LQG must notify the state of their participation.

Episodic Generation

Episodic generation of hazardous waste occurs when a non-routine event (planned or unplanned) results in a smaller generator generating atypically larger amount of hazardous waste in a month, triggering more stringent regulations. Under the Improvements Rule, VSQGs and small quantity generators (SQGs) are allowed to maintain their existing generator category in the event they experience an episodic generation event. The Rule allows for one event per calendar year, with the potential to petition for a second. Generators must notify EPA/state agency 30 days prior to initiating a planned event or within 72 hours of an unplanned event. 

Enhanced Labeling

Previous RCRA program labeling regulations did not require waste generators to identify the hazards of wastes, which resulted in failure to communicate risks of wastes being transported, accumulated, or stored in different locations. Under the Improvements Rule, labeling and marking of containers and tanks must clearly indicate the hazards of the hazardous waste contained inside and include the words “Hazardous Waste” . 

Waste generators may use one of several established methods to indicate the waste hazards, including:

• DOT hazard communication consistent with 49 CFR part 172 subpart E (labeling) or subpart F (placarding)
• OSHA hazard statement or pictogram, as described in the OSHA Hazard Communication Standard in 29 CFR section 1910.1200
• NFPA code 704 chemical hazard label
• RCRA hazardous waste characteristic (i.e., ignitable, corrosive, reactive, toxic)

The labeling requirements for containers in the satellite accumulation areas and for containers in the central accumulation area are identical, with the additional requirement that containers in the generator’s central accumulation area are marked with the date that the satellite container was moved to the storage area or the date that waste was initially added to the container in the central accumulation area.

Note that marking containers with RCRA codes is required for SQGs and LQGs prior to sending hazardous waste off-site, per 40 CFR 262.32.

Emergency Response

Previous regulations required generators to make arrangements with Local Emergency Planning Commissions (LEPCs) for potential emergency situations. The Improvements Rule expands this to require documentation of these arrangements/efforts with the LEPCs. In addition, LQGs must prepare an executive summary of their contingency plans containing the information most critical for immediate response to an emergency situation. This Quick Reference Guide must contain the following eight elements:

• Types/names of hazardous waste and associated hazards
• Estimated maximum amounts of hazardous waste onsite
• Hazardous wastes requiring special treatment
• Map highlighting where hazardous wastes are generated, accumulated, and treated
• Map of facility and surroundings that identifies routes of access and evacuation
• Location of water supply
• Identification of onsite notification systems
• Name of emergency coordinator and contact information

Ensuring Compliance

Again, the final rule includes over 60 revisions and new provisions, and authorized states are required to adopt the more stringent portions of the rule and may choose to adopt the less stringent portions. It is important for facilities to:

1. Get a solid understanding of the rule for the states in which it operates. Regulations may vary from state to state.
2. Determine waste generator status to understand which requirements are applicable. VSQGs, SQGs, and LQGs have some different requirements due to their potential impacts on the environment.
3. Assess compliance with the new and revised provisions. Each facility should be assessed to compare existing efforts with updated regulatory requirements.
4. Create a plan to close any compliance gaps. In many cases, the rule offers flexibility to help facilities in their efforts to comply. There are alternatives facilities can and should explore to find solutions that offer the greatest economic and environmental benefits.

Note: EPA developed a workshop on the Hazardous Waste Generator Improvements Rule. The training is designed to explain the Rule’s provisions.

Compliance risk assessment helps to identify and assess risks related to applicable regulatory requirements. Internal and external events or conditions affecting the entity’s ability to achieve objectives must be identified, distinguishing between risks and opportunities. These risks are analyzed, considering the following:

• Size of the risk – where, how big, how often/many?
• Severity of the outcome – to what extent can it impact safety, environmental, operational, financial, customer relations, regulatory compliance?
• Likelihood/probability of each risk – how likely is the occurrence of a negative outcome, considering the maturity of existing controls?

Based on this assessment, management can prioritize risks, select appropriate risk responses (avoiding, accepting, reducing, sharing), and develop a set of actions to align with the entity’s risk tolerance/appetite. An acceptable level of residual risk is considered after selected improvements and controls are applied. From there, policies and procedures can be established and implemented to help ensure the risk responses are effectively communicated so operating managers and individuals can carry out their responsibilities.

A deeper dive compliance program assessment may be performed for those risks that are identified as the company’s most significant.

Compliance Program Assessment

A compliance program assessment looks beyond “point-in-time” compliance to critically evaluate how the company manages compliance programs, processes, and activities, with compliance assurance as the ultimate goal. Capability, capacity, programs, and processes to comply are examined as part of this review. Conducting routine process and compliance audits are also key components of a compliance assurance program.

Compliance program assessment should follow a disciplined and consistent process, resulting in an effective program that guides alignment of activities to an integrated management system for sustained compliance and continuous improvement. An essential part of the assessment, audits capture regulatory compliance status, management system conformance, adequacy of internal controls, potential risks, and best practices.

Compliance program assessment enables a company to define and understand:

• Compliance requirements and where regulated activities occur throughout the organization
• Current company programs and processes used to manage those activities and the associated level of program/process maturity
• Deficiencies in compliance program management and opportunities for improvement
• How to feed review recommendations back into elements of the management system to create a roadmap for sustaining and continually improving compliance

There are six phases associated with a compliance program assessment:

Phase 1 – Regulations, Requirements, and Applicability Analysis: Phase 1 focuses on identifying, organizing, validating, and understanding all of the requirements (legal or other) with which the company must comply. It provides an applicability analysis of the requirements to company operations by functional area and evaluates the associated risks. This stage engages representatives across the company who are responsible for activities subject to the requirements.

Phase 2 – Activities Analysis: This phase involves developing an inventory/profile of all company activities that may trigger the requirements identified in Phase 1. It asks the question, “What activities does the company carry out that are covered by the requirements?”

Phase 3 – Desired Compliance Program Standard: Establishing the company’s expectations for compliance program processes and controls—the desired condition—is essential. This “to-be” standard integrates management system principles into compliance program management. Programs should examine relative risks and ensure that risk-based priorities are being set.

Phase 4 – Actual Compliance Program Condition: In contrast to the desired standard identified in Phase 3, Phase 4 is about describing the company’s current compliance program. It defines how the company performs the activities outlined in Phase 3 (along with who, when, and where)—the “as-is” condition. This is done in the same framework as the desired standard in order to compare them in the next phase.

Phase 5 – Gap Analysis: The gap analysis compares actual compliance program management against the desired standard. It evaluates compliance program management processes, controls, and maturity to determine if they are good as is, need improvement, or are missing. These gaps and opportunities provide the basis for the improvement actions developed in Phase 6.

Phase 6 – Improvement Actions: Phase 6 moves the process along to developing action plans and an approach for ongoing management review that will guide the compliance program development and improvement activities. Compliance program management review is established at the end of this last phase. If there is a management system in place, program review information and action plan tracking can be integrated into that management system.

Outcomes

As a whole, this process will help companies evaluate the degree to which:

• Compliance goals and objectives are set and communicated by management.
• Hazards and risks are identified, sized, and assessed, including an inventory of activities subject to the compliance requirements and the relative risks.
• Existing controls are adequate and effective, recognizing, and addressing changed conditions.
• Plans are in place to address risks not adequately covered by existing controls.
• Plans and controls are resourced and implemented.
• Controls are documented and operationalized across functions and work units.
• Personnel know and understand the controls and expectations, and are engaged in their design and improvement.
• Controls are being monitored with appropriate metrics and compliance auditing and assurance.
• Information system is sufficient to support management system-required functions (e.g., document management and control, action tracking, notifications, training tracking, task calendaring, metrics reporting). Information dashboards can be used for reports to management.
• Deficiencies are being addressed by corrective/preventive action and are being tracked to completion.
• Processes, controls, and performance are being reviewed by management for ongoing improvement, including the maintenance and continual improvement of the integrated management system.

The Occupational Safety and Health Administration (OSHA) is joining businesses and organizations nationwide to recognize the importance and successes of workplace safety and health programs during Safe + Sound Week: August 12-18, 2019.

The week-long event encourages employers to implement workplace safety initiatives, and highlight workers’ contributions to improving safety. Businesses that incorporate safety and health programs can help prevent injuries and illnesses, reduce workers’ compensation costs, and improve productivity.

Participating in Safe + Sound Week can help get your program started, energize an existing one, or provide a chance to recognize your safety successes. Learn more about how to help plan and promote safety and health plans.

A well-designed and well-executed compliance assurance program provides an essential tool for improving and verifying business performance and limiting compliance risks. Ultimately, however, a compliance program’s effectiveness comes down to whether it is merely a “paper program” or whether it is being integrated into the organization and used in practice on a daily basis.

The following can show evidence of a living, breathing program:

• Comprehensiveness of the program
• Dedicated staff and resources
• Employee knowledge and engagement
• Management commitment and employee perception
• Internal operational inspections, “walkabouts” by management
• Independent insider, plus third-party audits
• Program tailoring to greatest risks
• Consistency and timeliness of exception (noncompliance/nonconformance) disclosures
• Tracking of timely and adequate corrective/preventive action completion
• Progress and performance monitoring

Best Practices

To achieve a compliance assurance program on par with world-class organizations, there are a number of best practices that companies should employ:

Know the requirements. This means maintaining an inventory of regulatory compliance requirements for each compliance program, as well as of state/local/contractual binding agreements applying to operations. It is vital that the organization keep abreast of current/upcoming requirements (federal, state, local).

Plan and develop the processes to comply. Identify and assess compliance risks, and then set objectives and targets for performance improvement based on top priorities. From here, it becomes possible to then define program improvement initiatives, assign and document responsibilities for compliance (who must do what and when), develop procedures and tools, and then allocate resources to get it done.

Assure compliance in operations. The organization needs to establish routine checks and inspections within departments to evaluate conformance with sub-process procedures. Process audits should be designed and implemented to cut across operations and sub-processes in order to evaluate conformance with company policies and procedures. Regulatory compliance audits should further be conducted to address program requirements (e.g., environmental, safety, mine safety, security). Audit performance must be measured and reported, and the expectations set for operating managers to take responsibility for compliance.

Take action on issues and problems. Capture, log and categorize noncompliance issues, process nonconformances, and near misses. Implement a corrective/preventive action process based on the importance of issues. Be disciplined in timely completion, close-out, and documentation of all corrective/preventive actions.

Employ management of change (MOC) process. Robust MOC processes help ensure that changes affecting compliance (to the facility, operations, personnel, infrastructure, materials, etc.) are reviewed for their impacts on compliance. Compliance should be assured before the changes are made. Failure to do so is one of the most common root causes of noncompliance.

Ensure management involvement and leadership. Set the tone at the top. The Board of Directors and senior executives must set policy, culture, values, expectations, and goals. It is just as important that these individuals are the ones to communicate across the organization, to demonstrate their commitment and leadership, to define an appropriate incentive/disincentive system, and to provide ongoing organizational feedback.

Maintaining Ongoing Compliance

The compliance assurance program must be a living, breathing program. As risks change, the program must be refreshed, refined, and redeployed. A management system framework can help ensure operational sustainability. A management system drives the auditing process and helps companies say what they will do, do what they say and, importantly, verify it.

Together, there is a real value at the intersection of a compliance assurance program and management systems. Management systems define the internal controls that are in place to reduce risks, prevent losses, and sustain and improve performance over time through the Plan-Do-Check-Act (PDCA) cycle of continual improvement.

Testing and Monitoring

Testing, monitoring, and measuring are crucial elements of this cycle. Without them, it is difficult to understand what is working and what needs improvement. Robust testing and monitoring programs can serve as early warning systems for identifying potential compliance risks before they become enforcement issues.

Compliance should be tested and monitored throughout each level of the organization. A strong testing program will evaluate the results of the compliance risk assessment and assign compliance risks to the business units and processes where they are most likely to occur, creating clear lines of responsibility and accountability. Key risks and the related controls should be tested periodically using statistically valid sampling methodologies, and monitoring activities should be performed on an ongoing basis. Doing so produces trend data that provides the rationale needed for making changes to underlying business processes, as well as emerging risks.

Ongoing compliance excellence relies on top management, operations managers, EHS personnel, and individual employees throughout the organization working together to build and sustain an organizational culture that places compliance on par with business performance. Senior management must focus on the overall culture of the company in terms of taking the necessary steps to reduce risk and make prevention part of daily operations. While it may be impossible to eliminate all risk exposure, a solid risk framework, assessment methodology, and compliance assurance program can help to prioritize risks for active management, sustained compliance, and positive business impacts.

Designing and implementing a new compliance Information Management System (IMS)—or improving an existing one—is not a task to be taken lightly. Change when it comes to any IT system is significant because of the investments of time, money, and resources required, not to mention the disruption to the current way of doing things. That is why it is important to do your homework before jumping in with a system that, if not properly designed, may not meet your needs in the long run. The following eight tips can help ensure you end up with the right compliance IMS and efficiency tools for your organization:

1. Inventory your existing systems – Identify how you are currently managing your compliance needs/requirements. What’s working well? What isn’t working? Do the systems work together? Do they all operate independently? This inventory should evaluate the following:
   • Current systems and tools
   • Status and functionality of existing processes
   • Data sources and ability to pull information from various sources
   • Organizational complexity
   • Compliance status
   • Existing management systems
2. Determine your business drivers – Are you looking to save time? Create efficiencies? Reduce the number of resources required? Have better access to real-time information? Answer to senior management? Respond to regulatory requirements? These drivers will also drive the decisions you make when it comes to module development, dashboard design, reporting, and more.
3. Understand the daily routine of the individuals using the system – Systems and modules should be built according to existing daily routines, when possible, and then implemented and rolled out in a way that encourages adoption. Having a solid understanding of routine tasks and activities will ensure that the system is built in a way that works for the individuals using it.
4. Understand your compliance requirements – Do you have permitting requirements? Does your staff need training? How do you maintain your records? Are there regular (e.g., annual, semi-annual) plans and/or reports you need to submit? Do you have routine inspections and monitoring? All of these things can and should be built into a compliance IMS so they can be managed more efficiently.
5. Get the right parties involved – There are many people that touch a compliance IMS at various points in the process. The system must be designed with all of these users in mind: the end user entering data in the field, management who is reading reports and metrics, system administrator, etc. A truly user-friendly system will be something that meets the needs of all parties. If employees are frustrated by lack of understanding, if the system isn’t intuitive enough, if it is hard to put data in or get metrics out, the system will hold little value.
6. Make your wish list – While you may start your project one module at a time, it is important to define your ultimate desired end state. In a perfect world, how would the system operate? What parts and components would it have? How would things work together? What type of interfaces would users have?
7. Set your priorities, budget, and pace – What is the most important item on your list? Do you want to develop modules one at a time or as a fully functional system? It often makes sense to start where you already have processes in place that can be more easily transitioned into a new system to encourage user buy-in. Priorities should be set based on ease of implementation, compliance risk, business improvement, and value to your company.
8. Select the right consultant – For a compliance IMS, it is valuable to have a consultant who doesn’t just understand technology but also understands your operational needs, regulatory obligations, and compliance issues. An off-the-shelf software solution isn’t a silver bullet. A consultant who can understand the bigger picture of where you want to go and will collaborate to design the right compliance IMS and efficiency tools will bring the most value to your organization.

That is exactly the forward-thinking perspective Kestrel takes on all projects—thinking beyond individual efficiency tools, considering the desired state, and determining how technology can make that happen. By coordinating technology and compliance expertise, Kestrel offers unique capabilities and perspective. Our EHS and food safety professionals understand the regulatory obligations, business needs, and needs of the users. This drives design and development of the right compliance IMS and efficiency tools. That includes the time it takes to develop, adapt, and populate your compliance IMS, including:

• Understanding the bigger picture of where you want to go. We ensure your system is scalable and flexible; upfront planning enhances the outcome more efficiently.
• Collecting and organizing the information in a way that reflects how you conduct business and that aligns with other systems/processes.
• Offering guidance on compliance best practice and what modules and level of customization will bring you the most value.
• Providing as needed compliance support (e.g., review of existing forms and checklists, program improvement, development of training content, compliance audits, audit protocol).

About 100 years ago, when nutrition labeling first began in a modest form, the purpose was to provide basic ingredient information about the product to protect the consumer. Fast forward to today and the goal of nutrition labels has grown beyond just protection. Now, those labels are intended to protect and to help guide consumers in their food choices. Labels are designed to provide facts for nutrients that impact common health concerns, such as weight control, diabetes and high blood pressure.

The Regulations

Nutrition Labeling and Education Act (NLEA) The Nutrition Labeling and Education Act (NLEA) was signed into law in 1990. The Act requires most foods to contain nutrition labeling. In addition, it requires all nutrient content claims (i.e., high fiber, low fat, etc.) and health claims be consistent with Food and Drug Administration (FDA) regulations. Compliance with the nutrition labeling regulations is based on the date the product was labeled, as opposed to the date the product is offered for entry into interstate commerce. NLEA requires information in the following four areas:

• Nutrition Facts Panel
• Ingredient List
• Allergen Statements
• Nutrition Content Claims

Uniform Compliance Dates It is not uncommon for FDA to issue regulations that sometimes require changes in food labeling. To minimize the economic impacts of responding separately to each change, in 1996 the FDA introduced the concept of uniform compliance dates. The uniform compliance date establishes a final compliance deadline for all new food labeling requirements that are established within a specific time period. Most recently, the FDA established January 1, 2022, as the uniform compliance date for food labeling regulations that are published on or after January 1, 2019, and on or before December 31, 2020. Note that the FDA sets compliance dates other than the uniform compliance date, when necessary, such as the final rules for Nutrition Facts labels for packaged foods, as described below. Nutrition Facts Labels All foods sold in packages are required to have a food label. On May 27, 2016, the FDA published final rules on the new Nutrition Facts panel for packaged foods to reflect updated scientific information, including the link between diet and chronic diseases (e.g., obesity and heart disease). As mentioned above, this label is intended to help guide consumers in making more informed food choices. These labels come with their own deadlines that are separate from the uniform compliance dates that FDA has established:

• January 1, 2020 for manufacturers with > $10 million in annual sales
• January 1, 2021 for manufacturers with < $10 million in annual food sales
• July 1, 2021 for manufacturers of single-ingredient sugars, such as honey, maple syrup and certain cranberry products

Compliant Labels

Nutrition labeling can be complex and confusing, particularly for first-time food manufacturers. There are very specific requirements that must be addressed to remain compliant not only with FDA requirements, but also with many vendors who require verification of labeling compliance as a condition of doing business (e.g., Amazon, Walmart, Costco). The following label components must be developed and then continually reviewed to identify which labels need further modification and to ensure ongoing compliance:

• Nutrition Facts Panel is included on all packaging in a place where it can easily be seen by consumers. The panel includes the following:
  • Serving size and servings per container, per FDA guidelines
  • Calories per serving
  • Nutrient values of the following:
    • Total fat (saturated and trans fats)
    • Cholesterol
    • Sodium
    • Total carbohydrates (dietary fibers and sugars)
    • Protein
    • Vitamin A
    • Vitamin C
    • Calcium
    • Iron
• Ingredient List must include all ingredients and sub-ingredients present in the product in the order of predominance by weight in the product.
• Allergen Statements present a high-risk area, as they alert the consumer to the presence of one of more of the top eight allergens:
  • Milk
  • Eggs
  • Fish
  • Crustacean shellfish
  • Tree nuts
  • Wheat
  • Soybeans
  • Peanuts
• Nutrition Content Claims include statements such as low fat, high fiber, low sodium, and can help a company positively market food products. However, these claims must be checked, as each has specific requirements established by the FDA.

In addition, any required instructions for making/preparing the product should be reviewed to ensure they are accurate and properly convey key steps in the process.

Why Comply?

At the most basic level, non-compliance can result in products being pulled from store shelves. However, there are other implications to also consider:

• Improper labeling may impact a company’s ability to supply product to larger retailers with specific requirements.
• It can destroy the integrity of a company who makes false product claims or provides inaccurate nutritional information.
• It can result in legal action if inaccuracies present high risks (e.g., allergen statements, nutritional claims).

To ensure compliance, the food manufacturer must assume responsibility for the following—or work with an experienced food labeling consultant who can:

• Keep track of the most current regulatory requirements, as well as uniform compliance dates (and any other established compliance dates).
• Develop product labeling to ensure labels include the required information.
• Regularly review product labeling to identify any modifications to maintain compliance, particularly due to regulatory changes.
• Preserve the integrity of the company by ensuring consumers are provided with accurate information regarding all products.

Kestrel has worked with food manufacturers/producers in most food categories including baking, candy/confection, meats/proteins, specialty foods, grains flavors, and many others to help meet FDA and large product retailer food labeling requirements. Join Kestrel at the PROCESS EXPO, as we discuss this topic and others during our special food safety training courses this October in Chicago.

Virtually every regulatory program—environmental, health & safety, security, food safety—has compliance requirements that call for companies to fulfill a number of common compliance activities. While they do not necessarily need to be addressed all at once or from the start, considering the eight functions of compliance (as outlined below) when designing a compliance Information Management System (IMS) helps define the starting point and build a vision for the “end point” when planning IMS improvements. These compliance functions translate into modules—facility profiles, employee counts, training tracking, corrective action tracking, auditing tasks, compliance calendars, documents and records management, permit tracking, etc.—that are instrumental in establishing or improving a company’s capability to comply. 

8 Functions of Compliance

1. Inventory means taking stock of what exists. The outcome of a compliance inventory is an operational and EHS profile of the company’s operations and sites. In essence, the inventory is the top filter that determines the applicability of regulatory requirements and guides compliance plans, programs, and activities. For compliance purposes, the inventory is quite extensive, including (but not limited to) the following:
   • Activities and operations (i.e., what is done – raw material handling, storage, production processes, fueling, transportation, maintenance, facilities and equipment, etc.)
   • Functional/operational roles and responsibilities (i.e., who does what, where, when)
   • Emissions
   • Wastes
   • Hazardous materials
   • Discharges (operational and stormwater-related)
   • Safety practices
   • Food safety practices
2. Authorizations, permits & certifications provide a “license to construct, install, or operate.” Most companies are subject to authorizations/permits at the federal, state, and local levels. Common examples include air permits, operating permits, Title V permits, safe work permits, tank certifications, discharge permits, construction authorization. In addition, there may be required fire and building codes and operator certifications. Once the required authorizations, permits, and/or certifications are in place, some regulatory requirements lead companies to the preparation and updating of plans as associated steps.
3. Plans are required by a number of regulations. These plans typically outline compliance tasks, responsibilities, reporting requirements, schedule, and best management practices to comply with the related permits. Common compliance-related plans may include SPCC, SWPPP, SWMP, contingency, food safety management, and security plans.
4. Training supports the permits and plans that are in place. It is crucial to train employees to follow the requirements so they can effectively execute their responsibilities and protect themselves, company assets and communities. Training should cover operations, safety, security, environment, and food safety aimed at compliance with regulatory requirements and company standards and procedures.
5. Practices in place involve doing what is required to follow the terms of the permits, related plans and regulations. These are the day-to-day actions (regulatory, best management practices, planned procedures, SOPs, and work instructions) that are essential for following the required processes.
6. Monitoring & inspections provide compliance checks to ensure locations and operations are functioning within the required limits/parameters and the company is achieving operational effectiveness and performance expectations. This step may include some physical monitoring, sampling, and testing (e.g., emissions, wastewater). There are also certain regulatory compliance requirements for the frequency and types of inspections that must be conducted (e.g., forklift, tanks, secondary containment, outfalls). Beyond regulatory requirements, many companies have internal monitoring/inspection requirements for things like housekeeping, sanitation, and process efficiency.
7. Records provide documentation of what has been done related to compliance—current inventories, plans, training, inspections, and monitoring required for a given compliance program. Each program typically has recordkeeping, records maintenance, and retention requirements specified by type. Having a good records management system is essential for maintaining the vast number of documents required by regulations, particularly since some, like OSHA, have retention cycles for as long as 30 years.
8. Reports are a product of the above compliance functions. Reports from ongoing implementation of compliance activities often are required to be filed with regulatory agencies on a regular basis (e.g., monthly, quarterly, semi-annually, annually), depending on the regulation. Reports also may be required when there is an incident, emergency, recall, or spill.

Reliable Compliance Performance

Documenting procedures on how to execute these eight functions, along with management oversight and continual review and improvement, are what eventually get integrated into an overarching management system (e.g., environmental, health & safety, food safety, security, quality). The compliance IMS helps create process standardization and, subsequently, consistent and reliable compliance performance.

In addition, completing and organizing/documenting these eight functions of compliance provides the following benefits:

• Helps improve the company’s capability to comply on an ongoing basis
• Establishes compliance practices for when an incident occurs
• Creates a strong foundation for internal and 3^rd-party compliance audits and for answering outside auditors’ questions (agencies, customers, certifying bodies)
• Helps companies know where to look for continuous improvement
• Reduces surprises and unnecessary spending on reactive compliance-related activities
• Informs management’s need to know
• Enhances confidence of others (e.g. regulators, shareholders/investors, insurers, customers), providing evidence  of commitment, capability, reliability and consistency in the company’s compliance program

In May 2016, FDA issued its final rule on Mitigation Strategies to Protect Food Against Intentional Adulteration (IA). This rule requires covered facilities to prepare and implement food defense plans. The first compliance date—for businesses with sales of $10 million or more per year and more than 500 full-time equivalent employees—is July 26, 2019. (Note that small businesses have until 2020 and very small businesses have until 2021.)

Just as important, FDA has announced it will begin routine inspections to verify compliance with the IA rule in March 2020. Given those dates, compliance with this rule should be a top priority for the approximately 3,400 impacted firms that operate 9,800 food facilities.

Requirements: Food Defense Plan

Let’s start by defining food defense and why it is so important. According to FDA, “Food defense is the effort to protect food from acts of intentional adulteration.” Intentional adulteration is any act where there is an intent to cause wide-scale public health harm, including acts of terrorism. As such, the rule is designed to primarily cover larger facilities with products that reach many people.

At its most basic level, the IA rule requires every covered facility to prepare and implement a food defense plan. The food defense plan incorporates four major elements:

1. The vulnerability assessment identifies those areas in the process that pose the greatest IA risks. Each step in the facility’s process should be evaluated for the following:
   • Potential severity and scale of the impact on the public
   • Physical access to the product
   • Ability to successfully alter/contaminate the product
2. Facilities must develop and implement mitigation/preventive strategies at each step in the process to address vulnerabilities and minimize the risks of IA.
3. A system must be put in place to ensure implementation of mitigation strategies and to effectively manage the following:
   • Monitoring mitigation strategies, including frequency
   • Corrective action response
   • Verification activities
4. Appropriate recordkeeping must be maintained for food defense monitoring, corrective actions, and verification, and key personnel must receive appropriate training.

Mock Exercise

Kestrel’s previous article on the Four A’s of Food Defense outlines a proactive approach to food defense that will help meet a key requirement by ensuring the organization is working to avoid the risks associated with food adulteration and contamination.

In addition, when conducting an assessment of food defense, IA, and generally accepted industry vulnerability, threats, and controls, Kestrel suggests completing a mock exercise scenario. This allows companies to:

1. Assess their food defense and IA programs under FSMA;
2. Test to confirm their program’s integrity, as documented and implemented; and
3. Conduct vulnerability scenarios to verify, validate, and make improvements. 

The following areas should be addressed in the assessment, strategies, and plan information:

• Facility
• Materials
• Packaging
• Processing
• Key activities
• Storage
• Transportation and distribution
• Management and personnel

A key aspect is also review of and improvements to training programs for all employees based on responsibility, recordkeeping process, management objectives, and program monitoring.

This activity provides the information needed to develop and implement an effective and compliant food defense and IA program under FSMA. Additionally, it can provide verification of the site’s programs, corrective actions to be implemented, and the necessary records of compliance.

Piece of the Puzzle

Food defense is a big piece of the FSMA puzzle. According to Kestrel Food Safety Principal Bill Bremer, “We have included food defense in virtually all of our program development activities this year for GFSI (all schemes) and now FSMA.” Kestrel has worked with over 400 food sites in passing audits and inspections that have included general or focused food defense and IA management programs in food categories including baking, candy/confection, meat, flavor/ingredients, grain, flour, packaging/contact materials, beverages, beans, chemicals, dietary supplements, commissary/catering, and more.

Doing so directly aligns with FDA’s requirements for companies to assess risk and implement preventive controls on a broad basis. Thinking about risk-based strategies—whether in the supply chain or internal systems or whether you are a grower or an importer—is key for any food company planning for the future. Preventive strategies are the essence of FSMA and HACCP. Proactively creating or updating a food defense and safety plan is the first step to ensure compliance.

Join Kestrel at the PROCESS EXPO, as we discuss this topic and others during our special food safety training courses this October in Chicago.

This is the next article in Kestrel’s series about Technology-Enabled Business Solutions.

What do you do when your company has multiple grandfathered-in systems that don’t talk to each other? How about when not all locations have access to the same systems…and you have over 150 locations and are still growing? What about when employees are spending excess time collecting and combining information manually instead of electronically? What if you can’t correlate data and generate reports because of multiple systems?

Cut Your Losses, Prioritize Your Needs

These things happen—probably more frequently than one might think. For one of Kestrel’s clients, a large chemical distribution company, all these things were happening simultaneously, and the cost to upgrade existing systems to respond to these needs was getting out of hand. How do you manage that? Do you just cut your losses and find a new compliance IMS solution? Do you address one issue at a time, or does that introduce the risk that everything won’t work together? Again.

Transitioning from one system to another—whether in part or completely—isn’t simple. It takes planning and forethought to create a scalable solution that can be adapted to the company’s overall needs. Proactively managing any sort of technology transition—including prioritizing needs and scheduling how quickly modules are developed and rolled out—is key.

From the beginning, Kestrel’s EHS and IT consultants worked to fully understand the company’s operations, existing systems and workflows, and desired outcomes of the overall system before recommending an approach. Without these upfront conversations, this company could’ve ended back in the same situation with a different system. Instead, they are on their way to developing a robust and scalable compliance IMS that can be adapted to the company’s overall needs and will eventually replace their off-the-shelf software. 

Starting with the Data

Our client’s initial request was for dashboard reporting that would:

1. Provide a visual of the Excel reports the company was pulling from multiple independent systems, and
2. Create efficiencies in the data collection and reporting approach.

During initial conversations about the company’s compliance, information management, and overall business needs, it became clear to Kestrel that the existing facility database forms the foundation for the overall system. All content stems from this database. To create the efficiencies and dashboards the company wanted, building the facility database needed to happen first.

Facility information was originally tracked on individual Excel spreadsheets that were later combined to create a quarterly report. This very manual practice presented risks of user error in data entry, data manipulation, analysis, and reporting. Kestrel developed a facility database in SharePoint to serve as a centralized list, with detailed information on each location. Multiple other databases were then created that filter content into each facility page to create a simplified view of all items associated with each facility. Those other databases currently include:

• Employee counts
• Facility audits
• Sustainability reports
• List of storage tanks, with other assets to be added in the future
• Facility images
• Managed requirements

Let’s look at the employee database as one example of data that flows into the facility database. The employee database is used to track the number of employees in each location and each department. Information is filtered into the facility database, updating the employee count section. This employee database is also used to track access/permissions to the company site, look up individuals within other forms, and assign training based on job title.

The facility database now acts as the centralized core to the entire system. Information available here can be used to drive other actions and lists within the site, such as compliance tasks, corrective and preventive actions (CAPAs), inspections, near-misses, incidents, permitting requirements, etc.

Bringing in Forms

Where does all the data in those databases come from? That is where mobile forms and checklists enter the picture. Integrating various Office 365 technologies, Kestrel is creating several mobile forms, such as the near-miss app, to allow employees in the field to capture data electronically. The forms are accessible at multiple levels and can be assigned down to an individual location. Importantly, there is no need to log in to submit data, ensuring ease of access and use for all employees.

As employees complete the forms, data is collected and uploaded into the company’s related database(s) in real-time. All forms and databases are integrated. Not only does this eliminate the problems associated with manual data entry and manipulation, it provides real-time access to valuable data.

Compliance Dashboard

Kestrel has also created a login-driven compliance dashboard that houses key metrics, compliance tasks, and an at-a-glance compliance calendar. The dashboard can be customized for various applications based on the company’s needs as they continue to use the system—employees, management, departments, divisions, facilities, etc.

Currently, various compliance tasks (and associated reminders) are assigned to individuals throughout the 150+ locations. The dashboard filters assigned tasks to the individual logged in, so each employee can view his/her compliance-related tasks. At the same time, management can view outstanding issues that fall under their area(s) of responsibility, and the calendar provides a quick overview of compliance deadlines throughout the year.

The dashboard provides additional visibility for compliance tasks and alerts management to issues that need attention/resolution across the organization. It can also incorporate data analytics to help identify patterns and trends, inform business decisions, and guide resources.

Building for the Future

Now that the company has a solid foundation, work can commence to bring the independent systems into a single platform. Kestrel’s EHS team continues to identify additional compliance management needs, including checklists and mobile forms, internal audits, permit tracking, training tracking, safety meetings, mobile inspection/audit functionality, document control, incident reporting, and more. As these needs are identified, they can be built into the larger compliance IMS to create one integrated system going forward.

As Kestrel’s lead SharePoint Specialist Jaime Doty stated in a recent Q&A, “If you know where you want to end in an ideal world, it becomes a lot easier to find the starting point. It also makes creating a scalable system much more likely, because you are designing the system with the end in mind.”

This has ensured development of a system that:

• Is built from the perspective of the people who will be using them—in the field, in the plant, in the office, in the board room
• Integrates various databases and forms into a single, familiar platform
• Allows information to be shared and tracked in multiple ways 
• Gives the ability to manage sites/facilities/plants/departments for compliance purposes 
• Simplifies the data entry process by providing user-friendly functionality 
• Provides for continual adaptation to meet future data management and reporting needs 

That is exactly the forward-thinking perspective Kestrel takes on all projects—thinking beyond individual efficiency tools, considering the desired state, and determining how technology can make that happen. By coordinating technology and compliance expertise, Kestrel offers unique capabilities and perspective. Our EHS and food safety professionals understand the regulatory obligations, business needs, and needs of the users. This drives design and development of the right compliance IMS and efficiency tools—one that works within the company’s implementation timeline and budget—to reduce compliance risk, create operational efficiencies, and generate business improvement and value.