Over six years ago, two colleagues and I tried a month-long trial in the federal courthouse in downtown Detroit, in which we challenged 65 Process Safety Management (“PSM”) citations that OSHA had issued to a large petroleum refinery in Ohio. A year later, the Administrative Law Judge vacated all but five of the citations and reduced the $2,870,000 penalty to $35,000. The Secretary of Labor appealed.
Yesterday, after five years, the Occupational Safety and Health Review Commission finally issued a decision largely affirming the ALJ’s original decision. The Decision in Secretary of Labor v. BP Products North America, Inc. is, without doubt, the most significant decision yet on the Process Safety Management standard.
The most contentious issue in the BP case was the meaning of “recognized and generally accepted good engineering principles” — or “RAGAGEP” — a phrase that is used but not defined in the text of the PSM standard. The Review Commission made it clear that the PSM standard is a performance-oriented standard — not a prescriptive one — and that OSHA cannot second guess an employer’s discretion in deciding how to comply. Simply because OSHA claims something is RAGAGEP doesn’t make it so. There can be multiple RAGAGEPs as long as companies can show that they engaged in a deliberative process to come up with the standard that they are applying.
To illustrate, for example, OSHA had taken the position that certain pressure relief valves could not have an inlet pressure drop that exceeded 3%. BP noted that the American Petroleum Institute had qualified this principle — a valve’s inlet pressure drop could exceed 3% if an engineering analysis had been conducted, which BP had done. The Commission similarly found that BP’s facility siting program — a program which assesses and addresses potential damage that a workplace explosion could cause to occupied buildings — had been reasonable and would not second guess methodology for assessing risk and prioritizing remediation.
This decision should be welcomed by any employer that already has a robust PSM program even if a particular inspector takes issue with some of your analyses. On the other hand, it is not going to help companies who lack Process Safety Information programs or who have not conducted a Process Hazard Analysis.