The Environmental Protection Agency’s (EPA) Risk Management Program (RMP) Rule requires facilities storing specific chemicals above certain threshold amounts to develop risk management programs to prevent and mitigate accidents that could release those chemicals into the environment. Just what the RMP rule entails has been the subject of debate since EPA first proposed the RMP Amendments in 2016. Rules related to RMP requirements have been published, petitioned, delayed, vacated, reissued, and reconsidered. As the most recent action in the ongoing RMP saga, EPA Administrator Andrew Wheeler signed the RMP Reconsideration Rule on November 21, 2019.

Reconsideration Rule

According to EPA Administrator Wheeler, the intent of the RMP Reconsideration Rule is to promote “improved coordination between chemical facilities and emergency responders, reduce unnecessary regulatory burdens, and address security risks associated with previous amendments to the RMP rule.”

What does that entail? In the final Reconsideration Rule, many of the major provisions that were added in the RMP Amendments Rule are rescinded, including the following requirements to:

• Hire a third-party to conduct a compliance audit after an RMP reportable accident. EPA retains the right to still require a third-party audit, when appropriate.
• Conduct a Safer Technologies and Alternatives Analysis (STAA). Again, this can still be required by EPA but is already encouraged under the rule’s existing Process Hazard Analysis (PHA) provisions.
• Conduct and document a root cause analysis after an RMP reportable accident/near miss, in efforts to maintain consistency with the OSHA Process Safety Management (PSM) standard.
• Make very broadly defined information available by facility to the public upon request to alleviate potential security/terrorism threats.

A number of other requirements, particularly as it relates to local emergency coordination and training exercises have been retained and/or modified, as follows:

Retained

• Requirements that facilities must coordinate annually and document coordination with local response organizations.
• Annual notification drills to confirm that emergency contact information is accurate.
• Requirement to perform field and tabletop exercises as a way to train facility personnel and local responders.
• Frequency of 3-year tabletop exercises to ensure regular emergency training is conducted.

Modified

• Provision to reduce potential security risks associated with avoiding the open-ended information disclosure provision.
• Frequency of field exercises by removing the ten-year minimum requirement to reduce burden on local emergency responders.
• Scope and documentation provisions for field and tabletop exercises to reduce burden.
• Requirement to hold a public meeting after an incident that has offsite impacts vs. releases with only onsite impacts.

The EPA RMP Website provides additional information and resources, as well as a copy of the complete RMP Reconsideration Rule and the updated requirements.

Risk-Based Approach

According to the EPA RMP Reconsideration Final Rule Fact Sheet, the final rule retains the prevention provisions that have resulted in the trend of fewer significant chemical accidents, which have declined more than 50% since RMP was first published in 1999. With the RMP Reconsideration Rule, EPA’s intent  is to take a more risk-based approach that focuses on the highest risk facilities (i.e., the less than 2% of RMP facilities reporting multiple releases), as opposed to the 90+% of RMP facilities who reported no accidents from 2007-2016.

Industry Reaction

RMP regulates approximately 12,500 facilities, including agricultural supply distributors, waste/wastewater treatment facilities, chemical manufacturers and distributors, food and beverage manufacturers, chemical warehouses, oil refineries and other chemical facilities. As a whole, industry has commended EPA for taking a more risk-based approach to RMP that reduces the regulatory burden on industry:

• “The RMP program has been working very well. The data clearly shows a continuous reduction in accidents of regulated facilities. It is important for EPA to focus on compliance assistance efforts and promoting enhanced coordination between RMP facilities and local first responders.” Richard Gupton, Senior Vice President of Public Policy and Counsel, Agricultural Retailers Association (ARA)
• “SOCMA and its members have been actively engaged in the reconsideration of the 2017 RMP Amendments and has been supportive of the Agency’s efforts to delay implementation of the prior rule while it conducted reconsideration proceedings. This final rule will provide much-needed certainty at facilities seeking to understand and achieve their RMP compliance obligations.” Robert Helminiak, Vice President of Legal and Government Relations, Society of Chemical Manufacturers and Affiliates (SOCMA)
• “We commend the EPA for developing a rule that reflects the extensive feedback the agency received through a comprehensive and thoughtful process to seek public input. The agency wisely incorporated the recommendation to strike the right balance of sharing vital safety information with emergency responders and protecting sensitive security information. EPA also followed the recommendation to utilize the EPA’s latest data to identify areas where more focused compliance assistance is needed to help facilities further reduce the number of reportable safety incidents.” Mike, Walls, Vice President of Regulatory and Technical Affairs, American Chemical Council (ACC)
• “NACD commends EPA for taking our recommended changes to the 2017 rule seriously and for instead pursuing a commonsense approach that improves facility safety without hamstringing businesses with burdensome requirements that have no proven benefit.” Jennifer Gibson, Vice President of Regulatory Affairs, National Association of Chemical Distributors (NACD)

Implications/What’s Next?

As the regulatory history with the RMP Rule demonstrates, it remains important for impacted companies to stay on top of the requirements, coordinate efforts with local emergency responders, and plan accordingly. For companies impacted by the RMP Reconsideration Rule, it is important to:

• Understand the hazards posed by chemicals at the facility
• Assess the impacts of a potential release
• Design and maintain a safe facility to prevent accidental releases
• Coordinate with local emergency responders
• Minimize the consequences of accidental releases that do occur

Kestrel Tellevate LLC (KTL) has experience working with a broad cross-section of industries impacted by RMP, particularly chemical companies. We have created RMP and General Duty Clause audit protocol and conducted audits and investigation/improvement programs following significant release events. We also routinely work with Local Emergency Planning Commissions (LEPCs) to coordinate emergency response efforts and exercises.

Our understanding of the regulations and industry needs spans years of experience and commitment to helping industry comply with regulations and operate more efficiently. For example, KTL developed and implemented the Guidance Manual and Training Modules for the Responsible Care Management System (RCMS) and RC14001, ACC’s management system integrating environmental, safety/process safety and security. KTL is also a Preferred Provider of compliance services for NACD member companies and a recognized NACD Responsible Distribution Adviser, providing in-depth support for members and affiliates during Responsible Distribution implementation and integration with other management systems and EHS compliance initiatives.

Regulatory enforcement-driven projects such as those related to RMP require skills in regulatory strategy, negotiations, expert analysis, presentations and testimony—and, equally important—trust and relationship building. KTL can work with companies to:

• Identify/understand/prioritize compliance risks
• Outline steps to improve performance
• Define organizational roles and responsibilities
• Streamline compliance methods
• Plan and conduct required tabletop exercises and coordinate with local emergency response
• Implement, monitor, and continually improve

The audit report communicates the information, findings and opinions derived from the audit.  The report communicates either acceptability of the current status of the management system or reports non-conformances that need corrective action. The following outlines the suggested steps for reporting audit results.

Step 1. Assess the Status of Current Internal Controls

One of the auditor’s main responsibilities is to evaluate whether the current internal controls that govern the management system are adequate. Do the audits:

• Highlight areas of concern or hazards that may be a failure waiting to happen?
• Focus attention of the 20% of the factors that cause 80% of the problems?
• Help to eliminate ineffective controls or make existing controls better?
• Aid in the detection and prevention of deficiencies or non-conformances?
• Look through and investigate possible “homeblindness”?
• Verify the management system links are supportive and feed each other information to assure continual improvement?

The auditors must constantly challenge the status quo and push the management system forward beyond its comfort level.

Step 2. Prepare Audit Report

Most facilities use a formal audit report system. The audit report format is prescribed and followed by the auditor. The auditor typically states:

• Date and time of audit
• Department audited
• Management system clauses audited to
• Personnel interviewed
• Documents reviewed
• Summary of findings
• Conformance or non-conformance determination

Step 3. Discuss Audit Findings

The lead auditor will then take the completed audit report and review the contents with the affected department head. Upon acceptance by the department head, the final audit report should then be signed by the department head verifying acceptance and responsibility for any change(s) required.

Step 4. Determine Plan of Action

The entire reason for conducting internal management system audits is to verify conformance and continually improve on the management system. Therefore, it is extremely important that all identified non-conformances are corrected in a timely manner.

Some companies place all audited non-conformances into their corrective/preventive action process for tracking purposes. Others place only critical non-conformances into the corrective/preventive action process. Regardless of the mechanics of tracking the identified audited non-conformances, it is imperative that corrective action is taken.

Once the corrective action is in place, the auditors should review the actions taken and verify the root cause was identified properly and resolved. An accept or reject decision can then be rendered for the change action.

If acceptable, no further action is required, and the issue is considered resolved. If unacceptable, the department head must complete a new root cause analysis, develop a new action plan, and put the new action plan into place. The auditors will now review the new action plan and make a determination of acceptance or rejection.

Audit Team Members

It is advisable to rotate your internal management system audit team members. This will allow for fresh perspective and a new set of eyes to look at the management system. This serves many purposes:

• Gives a specific timeframe of responsibly for those thinking of enlisting as an auditor
• Allows for gradual increase of responsibility over time; new auditors learn and perform audits, older auditors become mentors for the new auditors, graduates leave program and are viewed by company personnel as “knowledge experts” on the management system
• Allows for fresh perspective on auditing
• Trains numerous employees on the management system
• Reinforces the concept of continuous improvement

Are You Prepared?

Use your answers to the questions below to evaluate your preparation for reporting audit results.

• Has the auditor evaluated the current internal controls for suitability, adequacy, and effectiveness?
• Does the auditor have hard copy evidence of conformance and/or non-conformance?
• Have all questions prepared prior to the audit been satisfactorily answered and explained?
• Is the audit report clear, concise, and informative?
• Does the department head agree or disagree with the findings?
• Are all identified non-conformances tracked and resolved in a timely manner?
• Based on audit non-conformances, are procedures and work instructions being changed and improved?
• Do employees understand the management system is being audited, not the employee?
• Is change readily accepted by company personnel?

BIOTECHNOLOGY FOCUS

Identifying and managing your wastes is not a task to be taken lightly. If waste is incorrectly managed, there are regulatory compliance risks, exposure risks, and potential financial penalties that can impact your business. Given these risks, effective waste management requires investments of time, money, and resources. However, if you are proactive in your efforts to inventory your wastes, understand your requirements, and develop a plan to manage your inputs and outputs, it is possible to turn those investments into value for your organization.

The following six best practices can help ensure you are you managing your waste correctly, efficiently, and cost-effectively—and that you can sustain those efforts for the long term:

1.  Inventory your wastes – Biotech labs and industrial processes traditionally produce many different types of waste that can present significant waste management challenges. 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. 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 allwaste being generated by processes throughout the facility.

2.  Understand your compliance requirements – The Environmental Protection Agency (EPA) regulates much of the waste generated by industry. Over the past ten years, the Agency has demonstrated an even stronger focus on labs. 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. 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.

3.  Understand your business processes – Companies who want to proactively manage their waste need to go through the process of understanding where your waste fits into your business processes—and what you need to do with not only your waste, but also your operations, to minimize risk, reduce costs, and ensure compliance. Having business and production processes mapped out helps companies improve the interconnected set of processes, sub-processes, activities, and tasks that allow the business to manage waste most effectively. A thorough review of business and operational processes and the waste being generated further creates the opportunity for a “bottom-to-top” evaluation of all regulatory compliance. 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.

4.  Get the right parties trained – One of the most common violations identified by both DOT and EPA is failure of personnel signing hazardous waste manifests to have appropriate DOT hazardous waste training. 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. There are many people who touch waste at various points in the process and they all need to be trained on how to work with it in a manner that is safe and compliant with regulatory requirements.

5.  Develop waste management strategies – 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? As key indicators of waste quantities are identified, strategies for internal process changes that can minimize waste generation can be implemented.

When developing your strategies, focus on managing waste as close to the source(s) as possible. There are frequently alternatives to hazardous, universal, biohazardous, and special waste management that will minimize risk and improve financials. These waste minimization strategies need to be identified and evaluated to determine their applicability and potential impacts. Options that Kestrel has investigated and assisted with implementing include:

• Treating hazardous waste to minimize quantities for disposal
• Recycling used solvents through evaporation and reclamation strategies
• Solidifying nonhazardous waste waters with associated subtitle D landfilling

6.  Establish a system to sustain ongoing compliance – Documenting waste management procedures and processes, along with management oversight and continual review and improvement, is key to ensuring ongoing compliance. Technology (i.e., a compliance information management system (IMS), apps, tools) can help create process standardization, operational efficiencies, and, subsequently, consistent and reliable compliance/waste management performance. 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 these things can and should be built into a compliance IMS so they can be managed more efficiently.

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.

Understanding your waste requirements and then getting your facility in compliance with those requirements are important steps in your waste management efforts. However, effective waste management is not a one-time effort. It takes ongoing resources and tools to sustain ongoing compliance. Consider the following:

• How do you track your waste inventory?
• Do you have ongoing permitting requirements to manage?
• Does your staff need periodic training?
• Are there regular (e.g., annual, semi-annual) plans and/or reports you need to submit?
• Do you have routine inspections and monitoring?
• How do you maintain your records? Where do you house your documentation?

Managing all these things and effectively resourcing ongoing regulatory compliance needs can quickly become overwhelming—especially for those companies without a dedicated team of full-time environmental, health and safety (EHS) staff.

Technology Tools

Documenting waste management procedures and processes, along with management oversight and continual review and improvement, is key to ensuring ongoing compliance. Technology (i.e., a compliance information management system (IMS), apps, tools) can help create process standardization, operational efficiencies, and, subsequently, consistent and reliable compliance/waste management performance.

However, it must be noted that applying technology to operations isn’t about just finding and buying a software tool. It is about:

• Understanding the business need;
• Customizing and integrating the appropriate tool into existing operations; and
• Deploying it so it is effectively applied.

Scalable Solutions

Virtually every regulatory program, including those related to waste management, 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 when designing compliance efficiency tools helps define the starting point and build a vision for the end result.

Compliance efficiency tools built on an Office 365 platform offer an adaptable/scalable solution that can allow you to more efficiently manage compliance tasks, corrective and preventive actions (CAPAs), and other project activities to ensure you are meeting your compliance requirements. Translating these common compliance functions into modules that can be instrumental in establishing or improving a company’s capability to comply, including:

• Facility profiles
• Waste inventories
• Compliance calendars
• Assessments & inspections
• Mobile forms & checklists
• Audit tracking
• Permit management/tracking
• Document and records management

Adding Business Value

In the end, implementing compliance efficiency tools such as this can provide the resources needed to effectively manage your waste management program—plus a number of other lasting benefits to the overall business:

• Helps improve the company’s capability to comply on an ongoing basis
• Establishes compliance practices
• Creates a strong foundation for internal and 3rd-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 waste management program

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?