An estimated 50,000 facilities that store, maintain, or manage chemicals that are considered “chemicals of interest” by the Department of Homeland Security (DHS) will be required to submit security information to DHS, under new regulations being promulgated by the agency. In addition to chemical facilities, these standards may affect a broad range of companies, including energy companies, pulp and paper mills, steel producers, and other commodity manufacturers. DHS has developed a “Top Screen” survey—part of a new system designed to collect and assess chemical security information, known as the Chemical Security Assessment Tool (CSAT)—that must be completed by all facilities within 60 days of the publication of a final list of chemicals subject to the regulation. Accordingly, companies should act now to identify whether the new regulations may apply to their facilities and, if so, should begin the process of developing registration and compliance plans.

The Basic Regulatory Framework

The recently enacted Homeland Security Appropriations Act required DHS to develop and implement regulations to enhance the security of “high-risk” chemical facilities. In response, DHS developed the Chemical Facility Anti-Terrorism Standards (CFATS), which will be widely applied when the final list of “chemicals of interest”—known as “Appendix A”—is published sometime in late September.

In the meantime, even before Appendix A is finalized, DHS has used its authority to contact and require a limited number of facilities to complete their Top Screen surveys. Should the final approval of Appendix A face additional delay, DHS may contact additional facilities.

Notwithstanding all this activity, DHS is still developing guidance for covered facilities on how best to comply with the CFATS performance standards. The ostensible goal of the program is to allow facilities to select the most cost-effective combination of measures to achieve an appropriate level of security necessary to satisfy the performance standards.

The Top Screen Survey and Beyond

The CSAT Top Screen application is an online tool designed by DHS to help companies identify whether their facilities are “high-risk chemical facilities.” The first step toward compliance for affected businesses will be to submit the Top Screen questionnaire. This questionnaire requires companies to provide DHS with information on each facility that maintains chemicals in excess of the corresponding screening threshold quantity (STQ). To begin the process, businesses must register with DHS and must designate an individual to “prepare, submit and authorize” the information for DHS. As noted above, the CSAT Top Screen must be completed by all facilities within 60 days of the publication date of Appendix A.

Based on this information, DHS will categorize facilities into one of four risk tiers, and will notify facilities in writing as to their preliminary tier level. Within 90 days, each covered facility will be required to complete a Security Vulnerability Assessment (SVA) describing its security posture and vulnerabilities. Based on the SVA, DHS will reevaluate and may adjust the preliminary tierings. Covered facilities must then prepare and implement a Site Security Plan (SSP), which, in certain circumstances, must be approved by DHS. As part of the SSP approval process, DHS may enter, inspect and audit covered facilities. DHS has developed and trained a core group of “chemical security inspectors,” positioned throughout the country, who will carry out these inspections.

DHS may order a facility to cease operations, or assess civil penalties of up to $25,000 per day, per violation, if DHS determines that a facility is in violation of any regulatory requirement.

Key steps facilities concerned with the CFATS should consider:

1. Identify a team of key technical and legal personnel to assemble, review and submit information to DHS, and identify any training needed for the designated personnel.

2. Register with the Department of Homeland Security’s Chemical Security Assessment Tool (CSAT), which is the online registration and information submission portal for CFATS.

3. Based on the proposed list of chemicals for Appendix A that was issued on April 2, 2007, identify chemicals that are used or maintained in your facility. Although the final list of chemicals of interest may be different, waiting for the release of the final Appendix A will put many companies up against the short deadline set forth by DHS.

4. Many businesses have completed a vulnerability assessment and implemented a security plan, in preparing for the final release of the standards you may want to update them. To see if this is within the likely ballpark of the final standards you may want to update them.

5. If you are contacted by a DHS Chemical Security representative— particularly concerning what the caller may refer to as “Phase 1” —you may wish to take detailed notes of the call, including the name of the caller and any required actions resulting from the call. It may be advisable at this juncture to seek advice from in-house or outside counsel experienced in the development and intended application of the chemical security program.