Chemical Facility Auditing Proposal Defended by EPA's Giles

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By Patrick Ambrosio

March 31 — An Environmental Protection Agency proposal that would require chemical plants to hire independent third parties to perform compliance audits under the agency's Risk Management Program is supported by evidence that those audits are more effective, the agency's top enforcement official said.

Cynthia Giles, the EPA's assistant administrator for the Office of Enforcement and Compliance Assurance, said March 31 that there are “multiple” studies that show the independence of an auditor makes a “huge difference” in ensuring that a facility is in compliance with regulatory requirements. The third-party auditing requirement is part of a February EPA proposal that aims to improve safety at facilities that house chemicals in the wake of a deadly fertilizer plant explosion in West, Texas.

Current regulations require facilities to conduct compliance audits after a reportable release, but facilities are allowed to self-audit. The EPA said in its proposal (RIN 2050-AG82) that poor compliance audits have been identified as a contributing factor to past chemical accidents, including a 2005 explosion at BP's Texas City Refinery.

“Independence really matters,” Giles said during remarks at an American Bar Association conference in Austin, Texas. “We could see from that [third-party requirement], our hope is, a substantial reduction” in serious incidents.

The proposed third-party auditing requirement was criticized by various industry organizations at a March 29 public meeting hosted by the agency .

Jennifer Gibson, vice president of regulatory affairs at the National Association of Chemical Distributors, said the proposal is based on an incorrect assumption that internal auditors are biased or lenient. The proposed third-party auditing requirement would “severely limit” the number of people qualified and eligible to perform the audits, Gibson said.

The EPA estimated in its proposal that the third-party auditing requirement would cost industry about $5 million annually. The agency is taking public comments on its proposal until May 13.

To contact the reporter on this story: Patrick Ambrosio in Austin, Texas, at pambrosio@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com