Over the course of 2017, U.S. EPA Region 1 has settled several significant enforcement matters arising under the risk management provisions of the Clean Air Act, Section 112(r). The risk management requirements are intended to minimize accidental releases of hazardous substances to the air and to reduce the severity of releases that do occur.
Much of EPA Region 1’s recent enforcement activity has been focused on ammonia refrigeration processes, and most of the cases arise from compliance inspections. EPA Region 1 inspections consider both the Risk Management Plan (RMP) program rules at 40 CFR Part 68 and the General Duty Clause (GDC) statutory language at 42 USC 7412(r)(1). Several settlements this year have adopted a set of “Minimum Safety Measures” as required injunctive relief. These measures were developed by a cross regional team led by EPA Region 1 prior to the change in administrations at the beginning of this year. This article focuses on a few of the significant enforcement matters that EPA Region 1 has recently settled.
RMP Administrative Penalty Settlement
In May 2017, Pawtucket Power Associates, LP entered into a Consent Agreement and Final Order with EPA Region 1, resolving alleged RMP violations involving the company’s ammonia refrigeration system at its facility in Rhode Island. See In re Pawtucket Power Associates, LP, CAA-01-2017-0004 (May 2017). Among other issues, EPA alleged that the facility’s ammonia refrigeration system did not meet industry standards for signage, labeling, emergency switches, and warning alarms, and that Pawtucket failed to inspect ammonia piping for damage to insulation and corrosion in accordance with standard industry practice and the mechanical integrity requirements of the RMP program rules. EPA further alleged that the company had failed to document incident investigations of at least two ammonia release incidents that had occurred in 2010 that had caused injuries, and failed to have an adequate emergency response program.
The parties agreed to a $109,375 civil administrative penalty to settle the matter. The settlement agreement also included a requirement that Pawtucket certify that it had decommissioned the facility’s refrigeration system or achieved certain “minimum safety measures.” These minimum requirements are a collection of process safety program components that EPA has determined should be present at every facility with an ammonia refrigeration system, whether or not the facility is subject to the process safety management standard that is enforced by the Occupational Safety and Health Administration and by EPA for RMP Program 3 facilities.
- The safety measures focus on the following hazards:
- Releases or safety deficiencies that stem from a failure to identify hazards in design/operation of system
- High risks of release from operating or maintenance activity
- Leaks/releases from maintenance neglect
- Inability to isolate and properly vent releases
- Releases from backpressure and overpressure
- Inability to regain control and reduce release impacts
In another settlement, EPA Region 1 explained that the list of minimum safety measures “is not intended to be a complete list of important safety measures but rather a subset of easily verifiable items that EPA and the International Institute of Ammonia Refrigeration believe could help facilities prevent ammonia releases and prepare for any releases that do occur.” In re Carla’s Pasta Inc., CAA-01-2016-0073 (January 2017). In an informal discussion we had with the EPA Region 1 counsel who led the effort to develop the list of minimum safety measures, we understand the intent in developing these standards was that all EPA regions would use them in settlements of RMP Program 1 and 2 enforcement cases, but to date we have not seen any other regions adopt them.
General Duty Clause Administrative Penalty Settlement
In August 2017, Demakes Enterprises, Inc., the owner and operator of a meat processing, cooking, packaging, and storage facility in Lynn, Massachusetts, entered into a Consent Agreement and Final Order with EPA Region 1, resolving alleged GDC violations involving the company’s anhydrous ammonia refrigeration system. See In re Demakes Enterprises, CAA-01-2017-0011 (August 2017).
Based on a compliance inspection in July 2014 and subsequent information received, EPA Region 1 alleged that Demakes failed to design and maintain a safe facility. Among other issues, the company allegedly failed to adequately label refrigeration piping, protect refrigeration piping located near the ground from physical damage, post ammonia warning signs near locations containing significant quantities of ammonia, provide emergency shutdown controls or ventilation switches immediately outside refrigeration system machinery room entrances, maintain and calibrate in accordance with industry standards the facility’s ammonia detection systems, test or replace within 5 years vessel pressure relief valves, and require hot work permits for contractors performing hot work. EPA Region 1 also alleged that Demakes did not minimize the consequences of accidental releases that do occur by, among other reasons, failing to provide eye and body shower units near machinery rooms, equip machinery rooms with self-closing and tight-fitting doors equipped with panic-type hardware, provide adequate air circulation and ventilation in machinery rooms, and include emergency response contact information and chemical inventory information in the facility’s emergency action plan.
General Duty Clause cases typically address situations where there is no RMP plan required, or where EPA believes that there is a recognized hazard that the RMP rules do not address at a specific facility. As illustrated by the alleged violations in the Demakes case, EPA has increasingly viewed as enforceable requirements those applicable industry practices and standards that can act to reduce the likelihood or severity of release events.
According to EPA Region 1’s press release announcing the settlement, Demakes reportedly addressed the conditions alleged by EPA at a cost of $300,000. The parties ultimately agreed to a $132,183 civil administrative penalty to settle the matter, with $117,094 of this amount attributable to the CAA violations and $15,089 to EPCRA violations. The settlement also required Demakes to certify compliance with EPA’s list of minimum safety measures.
RMP and GDC Administrative Penalty Settlement
EPA Region 1 settled with Performance Food Group, Inc. earlier this year for alleged violations of both the GDC and the RMP program rules at the company’s Springfield, Massachusetts facility. The company allegedly violated the GDC by failing to identify hazards associated with the facility’s refrigeration system using industry-recognized hazard assessment techniques; design and maintain a safe facility by failing to post signs warning of the presence of ammonia and restricting entry, label piping systems, prevent corrosion on ammonia piping, insulate piping to prevent condensation, implement basic safety practices such as audible and visual alarms; and minimize the consequences of accidental releases of anhydrous ammonia by failing to have adequate emergency design mechanisms, signs and labels, and basic safety practices. The company allegedly violated the RMP program by failing to submit an RMP for the facility’s refrigeration system.
EPA issued a $184,717 administrative penalty, with $172,055 of that penalty attributable to the CAA violations and the rest attributable to EPCRA violations. In addition, Performance Food Group certified that it had analyzed ammonia inventories at its other facilities nationwide and filed RMPs for those facilities meeting the 10,000-pound RMP threshold for ammonia, and would review its other facilities nationwide to determine whether “bare minimum safety measures” were in place. If not, the company would develop a schedule to put them in place within 12 months.
Lastly, there has also been a significant RMP/GDC settlement proposed by the U.S. Department of Justice and several EPA regions, including Region 1, against Harcros Chemicals Inc. United States v. Harcros Chemicals Inc., No. 2:17-cv-2432 (proposed July 31, 2017). The proposed settlement arises from a voluntary disclosure that Harcros made to EPA concerning RMP violations at three chemical blending, packaging and distribution facilities. The follow up investigation eventually implicated 29 facilities, including a number of warehouses, in Regions 1, 4, 5, 6, 7 and 8.
In the proposed Consent Decree, Harcros agrees to pay a $950,000 civil penalty, complete a Supplemental Environmental Project at a cost of $2,500,000, and engage in a substantial audit process across all of the facilities, using a third party auditor and including review of both RMP and GDC requirements. The proposed audit procedures require significant EPA oversight for audit findings and corrective action planning, and contains a two-page list of industry standards that must be audited against as part of the GDC review. The audit requirements in the proposed Consent Decree are significant, particularly given that EPA has recently announced a delay by several years of the implementation of a pending amendment to the RMP rule which contains enhanced auditing provisions. One explanation for the severity of the enforcement response might be that the type of facilities involved may appear to EPA to be similar to the chemical warehouse that was involved in the catastrophic 2013 warehouse explosion in West, Texas. Another possibility might be the large number of facilities that the company was operating outside of the RMP framework that are potentially subject to RMP requirements.