On August 31, 2007, a release of ammonia occurred at the company’s Waterloo Facility during the transfer of ammonia via a “pump out” line. This release resulted in the death of one employee and the permanent disability of a second employee. Based on EPA’s investigation of the 2007 accident, the Complaint alleges violations of Section 112(r)(7) based on the plant’s failure to properly develop and implement the required risk management program and plan at its Waterloo Facility. The Complaint also alleges that The Company failed to properly report two releases of ammonia from its South Sioux City Facility to EPA’s National Response Center, in violation of Section 103 of CERCLA.
In December 2008, The Company paid a total penalty of $648,000 to the Iowa Department of Occupational Safety Health Administration (“IOSHA”) in settlement of IOSHA’s alleged claims against The Company in connection with this August 31, 2007 incident.
Within 30 Days after the Effective Date of this Consent Decree, The Company shall pay the sum of $450,000.00 as a civil penalty, together with interest accruing from the date on which the Consent Decree is lodged with the Court, at the rate specified in 28 U.S.C. ‘ 1961 as
of the date of lodging.
The Company shall complete a third-party audit of its compliance with CAA Section 112(r), the CAA Chemical Accident Prevention Program 3 requirements, and the General Duty Clause Requirements with regard to the ammonia refrigeration system at its South Sioux City Facility, in accordance with the requirements and deadlines set forth in Paragraphs 13-16 herein. Within 30 days of the Effective Date, The Company shall propose to EPA for its approval the name of a third party auditor and its qualifications to perform the audit that meets the requirements of Paragraph 14, below (Audit). The proposed auditor shall be a knowledgeable and experienced person or firm with expertise in risk management program requirements (and compliance with them) as well as expertise in the risk management requirements of ammonia refrigeration systems. The proposed auditor may not be a person or firm that previously performed audits for The Company.
Within 90 days of EPA’s approval of the auditor, The Company shall perform the audit at the South Sioux Facility and complete the Audit Report as specified in Paragraphs 14 and 15, herein. The Audit shall evaluate and make recommendations regarding the facility’s compliance with the 112(r) program; and shall meet, at a minimum, the following requirements:
a. The Audit shall include a review of the prior 5 years of documentation pertaining to the Section 112(r) regulated processes at the South Sioux City Facility, interviews with The Company personnel and contractors, and shall evaluate whether the risk management program adequately incorporates applicable standards for the facility’s regulated processes, including but not limited to current generally accepted good engineering practices/codes/guidelines, compliance with Federal and state regulations that incorporate industry-specific design codes and practices and applicable manufacturers’ recommendations. The Audit shall also evaluate whether current practices are consistent with applicable manufacturers’ recommendations and instructions, and compliance with Federal and state regulations that incorporate industry-specific design codes and practices.
The Audit shall evaluate compliance with all elements of the risk management program required under 40 CFR Part 68 and shall not be limited to the prevention program section audited as part of a routine (and required) regulatory compliance audit required by 40 C.F.R.§ 68.79. The Audit shall address, but shall not be limited to, the following items:
- Management of Change (MOC): The Audit shall evaluate whether MOC documentation complies with the requirements of 40 C.F.R. 68.75 and includes all required elements; whether a MOC was performed prior to the regulated process changes (not after the fact); whether changes to Process Safety Information (PSI), Process Hazard Analysis (PHAs), operating procedures, mechanical integrity, training, and other program were properly completed and documented; and whether facility personnel involved with or affected by the changes were made aware of any required changes, and any resulting change to standard procedure(s).
- Pre-Startup Safety Review (PSSR): The Audit shall evaluate whether PSSRs required by 40 C.F.R. 68.77 were completed prior to bringing subject equipment online; whether findings and recommendations were appropriate; whether recommendations and action items were resolved or implemented; and whether facility personnel involved with or affected by the changes were made aware of any required changes, and any resulting change to standard procedure(s).
- Management System: The Audit shall evaluate whether the management system, as written, meets the requirements of 40 C.F.R. 68.15; and whether the management system is properly implemented at the facility, with clearly delineated lines of authority and decision making for implementation of the risk management program.
- Process Hazard Analysis (PHA): The Audit shall evaluate whether PHAs required by 40 C.F.R. 68.67 have been properly performed; whether previously performed PHAs have fully identified issues and root causes of incidents; and whether deficiencies set forth within the PHAs have been resolved properly and in a timely manner.
- Operating Procedures: The Audit shall evaluate whether documented operating procedures meet the requirements of 40 C.F.R. 68.69; are prepared consistent with recognized and accepted good engineering practices; whether the procedures have been updated in a timely manner, written, and whether the operating procedures have been fully implemented and annually certified.
- Lockout/Tag out (LOTO) Procedures: The Audit shall evaluate whether documented lockout/tag out procedures meet the requirements of 40 C.F.R. 68.69(d); whether they have been prepared consistent with recognized and accepted good engineering practices; whether the procedures have been updated in a timely manner; and whether the lock out/tag out procedures have been fully implemented.
- Compliance Audit: The Audit shall evaluate whether the compliance audit(s) at the South Sioux Facility performed pursuant to 40 C.F.R. 68.79, within the five year period preceding the date of lodging of this Consent Decree, properly evaluated risk management implementation activities; whether the Compliance Audits properly identified deficiencies in program elements, whether action items were properly identified by the Compliance Audits; and whether identified deficiencies/action items were resolved in a timely manner.
- Incident Investigation: The Audit shall review the prior 5 years of incidents at the facility (from the date of lodging of the Consent Decree) to determine whether incidents should have resulted in an Incident Investigation required by 40 C.F.R. 68.81 (regardless of whether such investigation occurred.) For incidents where an investigation was performed, the Audit shall evaluate whether the incident investigation was conducted properly, in accordance with The Company’s written incident investigation policy and 40 C.F.R. 68.81; whether findings were appropriate, and whether appropriate action items from each investigation were developed and implemented. For other identified incidents (that were not investigated), the auditor shall recommend whether an incident investigation remains appropriate in order to identify contributing factors or a systemic issue or set of issues that should be investigated further.
- Contractor practices: The Audit shall evaluate whether The Company’s contractor procedures meet the requirements of 40 C.F.R. 68.87; whether the contractor practices are being properly implemented; and whether The Company is properly ensuring performance by contractors(s) of the facility’s risk management program elements.
- Emergency Response: The Audit shall evaluate whether the facility’s emergency response program meets the requirements of 40 C.F.R. 68, Subpart E; whether the program has been fully coordinated with local emergency responders and whether mechanisms for timely notification of first responders and the public are adequate and being implemented. The Audit shall evaluate the facility’s mechanisms for providing notice to the State Emergency Response Commission (SERC) and National Reporting Center (NRC). The Audit shall also evaluate the facility’s implementation of the emergency response program (or of an emergency action program, for a non-responding facility), as applicable.
- Risk Management Plan (RMP): The Audit shall evaluate whether the facility’s RMP meets the requirements of 40 C.F.R. 68, Subpart G, and whether the RMP has been updated in a timely manner following accidents.
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