On March 14, 2016, Environmental Protection Agency (“EPA”) proposed changes to the Risk Management Plan Program (“RMP”) Rule. On January 13, 2017, the EPA published a new final rule. This is third in a planned series that will address five major changes: root cause analysis for near misses, third-party audits, inherently safer technology, emergency response, and availability of information. Last week the blog concerned audit privilege; this week I focus on conditions that trigger a third party audit and new audit finding implementation requirements.

Condition requiring a third party audit: Unchanged from the proposal, third-party audits are required anytime the facility has an incident that meets the five-year accident history criteria as described in §68.42(a). The five-year report criteria remained unchanged: significant on site impacts or known off-site impacts. Usually these events are associated with significant incidents.

In the proposal, the EPA added a second criterion based on an agency finding of non-compliance. This condition was replaced in the final rule with a different criterion: an agency finding of a condition that could lead to an accidental release.[1] The agency could also demand the owner repeat third-party audits that fail to meet competency or independence criteria. See 40 CFR 68.79(f)(2). The deficient condition finding could be based on factors including mechanical integrity deficiencies, smaller incidents that could have been bigger incidents, or smaller incidents that occurred more than once.

Conditions at a stationary source that could lead to an accidental release may include, but are not be limited to, significant deficiencies with process equipment containing regulated substances, such as unaddressed deterioration, rust, corrosion, inadequate support, and/or other lack of maintenance that could lead to an accidental release. The presence of small ‘‘pinhole’’ releases, that do not meet the criteria in § 68.42(a) for RMP- regulated accidental releases, could also constitute conditions that could lead to a larger accidental release of a regulated substance. The occurrence of several prior accidental releases that did not meet the reporting criteria in § 68.42(a) at or from a facility could also constitute conditions which could lead to potentially more severe accidental releases. These releases may be a potential indicator that an owner or operator is not complying with RMP prevention program requirements and would benefit from a third-party audit to prevent future accidental releases.
82 Fed. Reg. 4594, 4616 (Jan. 13, 2017)

Of concern, a smaller incident that “could lead to a larger accidental release of a regulated substance” sounds eerily similar to a “near miss.” Whereas a “near miss” would result in an incident investigation, there is no discussion in the preamble that a “near miss,” should result in a third-party audit.

Third party audit findings: The new rule vastly expanded the “implementation” requirements formally located at §68.79(d) with a new paragraph (f). Effectively the term “promptly determined” has been replaced with a 90 day maximum period. Further, in addition to a certification by the third party auditor, a separate certification is required by a senior corporate official that that a compliant audit was performed and that deficiencies have been, or are in the process of being corrected according to a schedule. Although similar to a Title V certification, the corporate official audit certification cannot be delegated to a responsible official. The audit report, responses to findings, certifications, and schedule must be submitted to the audit committee of the Board of Directors.

Next week we will examine inherently safer technology.


[1] The agency preliminary determination must provide written notice describing the basis for the notice. The process includes an opportunity for the owner to provide additional information to the agency prior to a final determination. The final determination is appealable to the EPA Regional Administrator.