(49c) A Guide to the Legal Framework of the PSM Standard for Engineers

A Guide to the
Legal Framework

of the Process
Safety Management Standard

for Engineers

By Christopher J. Cunio, Esq.
and Georges A. Melhem, Ph.D.

The Process Safety
Management (PSM) Standard is a U.S. regulation that was issued by the Secretary
of Labor in 1992 following a series of chemical disasters in the 1980s and
early 1990s.  Its primary purpose is to prevent or minimize the consequences of
release of highly hazardous chemicals into locations that could expose people
to serious bodily injury and death.  To achieve its purpose, the Standard
requires regulated facilities to implement a ?PSM program,? which must contain
14 ?elements.?  The broad scope and highly technical nature of these 14
elements make compliance challenging even for the most sophisticated operators. 

This article focuses
on three elements of the PSM program: process safety information, process
hazard analysis, and mechanical integrity.  These have resulted in the majority
of OSHA citations under the Petroleum Refinery (>50%) and Chemical (>60%)
PSM National Emphasis Programs.  The goal of this article is to provide in-house
engineers with guidance on how to comply with these elements.

Performance Based

            The
PSM Standard is ?performance-based,? which means that the Secretary of Labor directs
?what to do? and the operators determine ?how to do it.?  A site's PSM program
can be a single document or series of documents, but it must contain all
14 elements. 

As one recent
decision explains, OSHA may require an operator to comply with its PSM program
even if that program is more stringent than industry practice.  Sec'y of
Labor v. Wynnewood (2009).  This article provides insight on how to draft a
PSM program to avoid the Wynnewood dilemma.   

PSM Coverage

          The threshold inquiry for PSM compliance
is to determine what areas of a facility must be covered by a PSM program.  Under
the PSM Standard, a PSM program must cover any ?process? that involves ?highly
hazardous chemicals.?  Under the broad definitions of these terms, all
equipment that is involved in or could have an impact on any activity related
to highly hazardous chemicals must be covered by the PSM program, absent an
exception.

OSHA has recently issued
citations for improper delineation of the boundaries of PSM coverage.  See,
e.g., Sec'y v. Delek Refining, Ltd. (2011).  This article
provides guidance on how to properly delineate PSM boundaries in light of the Delek
decision.            

Process Safety Information  

          Process
safety information (PSI) is critical data regarding the highly hazardous
chemicals, technology, and equipment involved in the chemical process.  The PSI
element of the PSM Standard requires the operator to have the following types
of PSI in a complete, accurate, up-to-date, and accessible format:  (1) information
on chemical hazards; (2) information on technology; and (3) information
on equipment.  Compliant PSI is essential to the safe operation of a
facility. 

OSHA
has recently issued citations for incomplete and inaccurate PSI.  See, e.g.,
Sec'y of Labor v. Cargill Meat Solutions Co. (2011).  This article
expounds on the significance of compliant PSI in lieu of the Cargill Meat
Solutions decision.      

Process Hazard
Analysis

          Process hazard analysis (PHA) is a set
of assessments that identify and analyze the significance of potential hazards in
the processing or handling of highly hazardous chemicals.  PHAs help facilities
determine how to control such hazards.  The PHA element of the PSM Standard
requires that an operator regularly conduct PHAs using a team of experts and
employing one of the several generally accepted methodologies.  Completed PHAs
may contain recommendations that must be resolved (accepted, rejected, or
withdrawn) in ?a timely manner.?  This corrective action must be completed ?as
soon as possible.?  Although the PSM Standard does not define these terms,
government publications indicate, for example, that OSHA expects employers to
complete corrective action within one or two years absent unusual
circumstances. 

OSHA has recently
issued citations for failure to properly conduct PHAs (see, e.g. Sec'y
of Labor v. Westlake Vinyls Co. (2012)) and for failure to address
recommendations within an appropriate time (see, e.g., Sec'y
of Labor v. Heritage-WTI, Inc. (2012)).  This article provides guidance on
how to comply with the PHA element and, in particular, the timing requirement
related to corrective action.    

Mechanical Integrity

          Mechanical Integrity (MI) is the system
of assuring that process equipment is in satisfactory condition to safely and
reliably perform its intended design function and operate properly within the
limits established by PSI.  The MI element of the PSM Standard requires operators
to establish and implement an MI program to maintain the ongoing
integrity of process equipment.  Additionally, MI requires written procedures
by which an operator (1) conducts MI training, (2) performs inspections and
testing of process equipment following RAGAGEP, and (3) corrects deficiencies
in process equipment that are outside of acceptable limits (defined by the PSI
or RAGAGEP) (a) before any further use or (b) in a timely manner while assuring
the safe operation of the equipment during an interim period. 

OSHA has recently issued
citations for an MI program's failure to correct process equipment deficiencies
in a safe and timely manner.  See, e.g., Sec'y of Labor v.
Arkema Inc. (2012).  As with PHAs, this article provides guidance on how to
comply with the MI element and, in particular, the timing requirement for
corrective action.     

PSM Violations

          Deficient PSI, PHA, or MI violate the
PSM Standard and could result in an OSHA citation.  There are three categories
of PSM violations: (1) serious, (2) non-serious, and (3) willful.  A violation
is ?serious? if death or serious physical harm (a substantial impairment to
bodily function) could result from the violation.  Conversely, a violation is
?non-serious? if no death or serious physical harm could result from the
violation.  OSHA assesses civil penalties of up to $7,000 for every serious and
non-serious violation.  A violation is ?willful? if committed with either
intentional disregard for or plain indifference to the requirements of the PSM
Standard.  OSHA assesses civil penalties between $5,000 and $70,000 for every
willful violation.  Willful violations that cause death to an employee are
subject to criminal sanctions, including imprisonment of up to 1 year.  A bill
known as the ?Protecting America's Workers Act? was recently proposed in both
the U.S. Senate and House of Representatives and would increase OSHA civil
penalties to between $8,000 (minimum) and $250,000 (maximum) per violation, and
criminal penalties to up to 20 years for repeated deaths.         

          The severity of each OSHA penalty is
determined by the gravity of the violation.  Two factors largely determine the
gravity of a violation: (1) the severity of the injury that could occur
from the violation (high, medium, or low), and (2) the probability that
the injury could result from the violation (greater probability or lesser
probability).  Other factors OSHA may consider include the size of the
operator, the operator's good faith, and the operator's history of violations
at the site.  These factors, however, are not defenses to the underlying
violations.  

          When confronted with a potential PSM
violation (e.g., inadequate PSI, PHAs, or MI), OSHA may issue a citation under
the PSM Standard and under the OSHA General Duty Clause (in case the PSM
Standard does not apply).  The General Duty Clause is a ?catchall provision?
that imposes an independent duty on operators to provide a safe work
environment.  Specifically, it requires an operator to provide a place of
employment that is free from ?recognized hazards? that are currently ?causing,
or are likely to cause [should they occur] death or serious physical harm to .
. . employees.?  A hazard is ?recognized? where: (1) the employer has
identified it, (2) it is known in the industry, or (3) it is blatantly obvious. 
Penalties under the General Duty Clause are the same as those under the PSM
Standard.

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