The Key to Reducing EHS Risks

It's true: Your risks can be reduced by focusing on managing your chemical inventory.

Risk is real, and its consequences can be very costly. Whether your title states it or not, you are a risk manager. When training a new employee on safety practices, you are doing so to avoid workplace accidents and potential litigation. When placing an updated Material Safety Data Sheet (MSDS) into a binder or automated system, you are reducing possible OSHA fines and workplace accidents.

The challenge is getting tougher. In a time of tightening EHS regulations coupled with limited budgets, you are being asked to manage more risks with fewer resources. Doing this requires an understanding of the EHS risks your organization faces so you can focus on efforts that effectively mitigate the most risks.

Reaching a comprehensive understanding of EHS risks requires stepping back and analyzing risk factors. Where and when are accidents occurring? What regulations are you subject to? Which of your facilities are being inspected, by which agencies, and why? How serious are your audit findings? What fines are associated to non-compliance with these regulations?

As you will see, focusing EHS risk management efforts solely on creating a “zero accident” workplace environment to reduce recordable and lost-time incidents is not enough.

Organizations are typically subject to five major EHS risk areas:

1. Workplace physical and health hazards
2. OSHA non-compliance enforcement penalties
3. Environmental releases
4. EPA non-compliance enforcement penalties
5. Negative publicity

Physical and Health Hazards & OSHA Enforcement
In 2010, more than 3 million workplace accidents, including 4,547 fatalities, were recorded. According to OSHA's reports, the majority of workplace accidents in the general manufacturing sector were a result of slips, trips, falls, pinch points, lifting, and other ergonomic issues.

It may be a surprise to many, but OSHA's enforcement actions are not directly correlated with workplace injuries. The majority of OSHA penalties are assessed on written programs and procedures (e.g., Hazard Communication, lockout/tagout, machine guarding, and process safety management). Therefore, your workplace safety risk management must encompass more than the simple mantra of "A Goal of Zero Accidents."

Environmental Releases & EPA Enforcement
Environmental issues such as air, water, and waste also pose a significant source of risk to an organization. However, statistical data is a little trickier to find with respect to which media pose the highest degree of risk because enforcement action originates from individual states rather than the federal government.

According to data published by the National Response Center, there were more than 32,629 spills reported during fiscal year 2011. Many environmental regulations (including CAA, CWA, SPCC, and RCRA) require emergency response/contingency plans, depending on the type and quantity of chemicals stored at a facility. Non-compliance with these types of plans is the source of many notices of violations and enforcement actions at both state and federal levels.

According to EPA statistics on the top 25 civil enforcement cases for 2010, the largest penalties were assessed based on non-compliance associated with the Clean Air Act, the Resource Conservation and Recovery Act, and the Clean Water Act. Each of these top 25 enforcement cases generated penalties above $500,000. A review of environmental notices of violations reveals that recordkeeping, reporting, and housekeeping are the central causes of most EPA enforcement actions generating a monetary fine.

Negative Publicity
Along with lost time, worker's compensation costs, and big penalties, organizations suffer a significant amount of negative publicity from workplace injuries and environmental releases. If severe enough, accidents and releases even can result in long-lasting damage to one's reputation and brand.

A growing trend for companies across nearly all industries is to position themselves as "green" and "sustainable." But these claims will be believable to a skeptical public only if a company is entirely committed to sustainable business practices. Consider the case of Walmart. The world's largest retailer has been a leader in establishing a "sustainability scorecard" for the goods that are sold in its stores, challenging its vendors to design "greener" packaging to reduce landfill waste. However, in May 2010, Walmart agreed to pay $27.6 million in settling a civil case with the state of California over storage, handling, and transportation of hazardous wastes. The environmental compliance officer for Walmart U.S., Phyllis Harris, said the company had implemented a comprehensive hazwaste plan that included improved training and procedures prior to settling the case. Still, this enforcement action made headlines across the country and left the public wondering how important being "green" really was to Walmart.

Improving Chemical Management
With an understanding of the various forms EHS risk can take, the challenge becomes one of mitigating these risks in the most effective and efficient way possible. The most important way a company can better manage EHS risk is by optimizing its management of chemicals. Consider for a moment the sheer number of regulations directly associated with chemicals:

  • Air Permits (CAA)
  • NPDES Permits
  • Storm Water Pollution Prevention Plans
  • EPCRA (Form R and Tier II)
  • TSCA
  • PSM
  • PPE
  • Material Handling
  • Subpart Z (Toxics & Hazardous Substances)
  • Occupational Exposure Limits
  • HazCom

Each regulation requires a plan, a permit, a report, an inspection, and/or a record that a company must obtain, implement, and/or document. As the number of regulations increases, so does the potential severity of EHS risk. Chemicals are something over which a company can exercise a great deal of control.

The chemical risk fact-finding process generally consists of two steps, identifying and assessing.

Specifically identifying what chemicals are used, where they are used, how they are stored, how they are transported, and in what volumes they are used is the first piece of the puzzle. Next, information must be gathered regarding the chemical itself, such as the CAS number, percent by weight of each constituent of the mixture, density, and regulatory information. An MSDS provided by the chemical manufacturer is often the best resource for facilities to use to obtain this chemical information, with the exception of regulatory data. OSHA, EPA, and state regulations often change before the manufacturer updates its MSDS. Therefore, cross-referencing CAS information to the published regulatory chemical lists (EPA LOL, OSHA carcinogens list, etc.) not only will provide the most accurate picture of what regulations your facility is subject to based on the amount and type of chemical it is using, but also will provide insight into the severity of risk the chemical poses to the organization. Often, it is not clear that materials are subject to additional OSHA and EPA regulations until this cross-reference exercise is completed.

After your chemicals are identified (along with volumes, usage, storage, transportation, and regulatory data), it is critical to conduct a chemical risk assessment by facility. The assessment step consists of determining which areas in the facility exhibit risk factors, such as departments with high employee turnover, manufacturing processes with frequent formulation changes, areas or departments showing high rates of worker incidents, or other areas prone to accidents or incidents involving chemicals (e.g., chemical transfer areas or outdoor chemical storage).

Assessing is often a collaborative process involving human resources, operations, transportation, purchasing, and management. Only through involving all departments that may "touch" chemicals in one way or another will a comprehensive picture of EHS risk associated with chemicals begin to emerge. Once these facts are gathered, high-risk areas of the facility will become extremely apparent. For instance, if extremely hazardous substances are identified as being used in an area of the facility that also has a high worker incident rate, then this would be an obvious high-risk area that needs attention. This leads us to the final step in managing EHS risk associated with chemicals: defining and prioritizing goals.

Defining and Prioritizing Goals
Reducing EHS risk associated with chemicals requires clear goals to be established and then prioritized. Goals might include projects such as reducing the variety and quantity of extremely hazardous substances, removing certain hazardous waste streams to become a Small Quantity Generator versus a Large Quantity Generator, eliminating certain exposure routes, modifying purchasing practices to reduce the amount of OSHA carcinogenic chemicals, or modifying chemical loading and unloading procedures. Goals likely will be dictated by the feasibility of the projects and severity of EHS risk present.

Goals must be effectively communicated. Plant management, executive management, workers, safety committees, and other stakeholders in the process must be made fully aware of concerns and solutions in order to reach a true resolution of the problem and subsequently reduce EHS risk. Experience has shown that once everyone understands the prioritized goals and clearly sees how progress is being measured, participation in the solution will increase significantly. Communication is an essential piece of the EHS risk reduction strategy.

Leveraging Technology
Managing and reducing EHS risk associated with chemicals is a daunting task. Often it seems to be an insurmountable goal given lean EHS staffing at many facilities. However, there are tools to assist with this process. Because MSDS documents provide key information about the materials used in a facility, having these data in an electronic format that can be queried and analyzed is an enormous time saver. Additionally, if you have a system that associates material CAS numbers to regulatory information, it greatly simplifies the management of OSHA, EPA, DOT, state, and local regulatory compliance. Finally, if the electronic system offers tools, services, and reporting features that aid in fact-finding and communication, it becomes a key resource for EHS risk reduction related to chemicals.

This article originally appeared in the January 2012 issue of Occupational Health & Safety.

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