On March 14, 2008, the House of Representatives Homeland Security Committee approved HR 5577, the Chemical Facility Anti-Terrorism Act of 2008 and reported it to the full House of Representatives for further action. [1] The bill would authorize the appropriation of $900 million over the 2010-2012 period for the Department of Homeland Security (DHS) to regulate the security of chemical facilities across the United States, i.e., facilities where certain types of toxic chemicals are used, stored, manufactured, processed, or distributed. The bill would also establish a chemical security office within DHS to carry out the provisions of this legislation, including conducting audits and inspections of the nation’s chemical facilities. [2]

One important, but contentious, provision of the bill that may attract international attention is the requirement for operators of chemical facilities to identify and implement changes at their plants, such as modifications of operating practices or industrial processes, to enhance their inherent safety and thereby reduce the risk from possible terrorist attacks. Although the European Union already has regulations in place embodying the Inherently Safer Technologies (IST) concept, these are based on environmental and worker health rather than security principles and emphasize the replacement of different substances from those addressed in the U.S. legislation. [3] With many nations concerned about the risk of such attacks, if the approach required by HR 5577 becomes U.S. law, it could have wide international influence.

HR 5577 has also been referred to the House Energy and Commerce Committee, where it may receive less support in its current form. [4] This committee must also report the measure before it can be voted on by the full House of Representatives. In addition, the Senate will have to act on the measure, and the President must sign it before it becomes law.

HR 5577 Described
As currently worded, the draft legislation serves a number of purposes. The first is to make permanent the provisions included in section 550 of the DHS Appropriations Act of 2007, passed into law on October 4, 2006, allowing the DHS to regulate security at chemical facilities. [5] A sunset clause included in section 550 means that without the passage of a new law, DHS’s existing legislative authority will expire in June 2009, eliminating the department’s ability to regulate and monitor security standards at chemical production and storage facilities. [6] Permanent authority is to be provided by adding a new section to the 2002 Act establishing the DHS. However, in addition to this basic purpose, HR 5577 also includes several provisions that would significantly expand the scope of the existing legislation and the responsibilities of the DHS. The first of these would allow state governments to adopt measures that are more stringent than federal regulations. [7] This would represent a significant change from the current legislative approach whereby federal regulations preempt or supersede state regulation of chemical facility security. [8] HR 5577 also expands the reach of the DHS’s regulatory powers to include water purification and wastewater treatment facilities, which were previously outside the scope of chemical facility security legislation. [9] Of greatest potential interest for international observers, however, is that the draft legislation also includes language making the consideration and adoption of IST part of the process of improving the security of chemical facilities. [10] As noted, IST is the process of identifying and adopting less dangerous chemicals for use in production processes or other chemical applications.

The Current Regulatory Regime
The current regulatory regime was prepared under the authority granted to DHS by section 550 of the 2007 DHS appropriations act. Under this provision, DHS was obliged to “issue interim final regulations establishing risk-based performance standards for security of chemical facilities and requiring vulnerability assessments and the development and implementation of site security plans for chemical facilities.” [11] In April 2007, the DHS published the Chemical Facility Anti- Terrorism Standards (CFATS), which came into effect on June 8, 2007. [12] The CFATS were reportedly developed in close cooperation with the chemical industry, especially the American Chemical Council (ACC). The CFATS draws heavily on pre-existing voluntary arrangements, most notably upon the Responsible Care Security Code put in place by the ACC immediately after the terrorist attacks of September 11, 2001. [13] According to the ACC, the Responsible Care Security Code “addresses facility, cyber and transportation security [and] requires companies to conduct comprehensive security vulnerability assessments (SVAs) of their facilities, implement security enhancements, and obtain independent verification that those enhancements have been made.” [14] The ACC claims that 100 percent of its members had “completed full Security Code implementation” by June 30, 2005. [15] However, even as it has extolled the virtues of the Responsible Care Security Code, the ACC has opposed legislative and regulatory efforts to require the application of IST principles to chemical facility security. [16]
The approach embodied in the Responsible Care Security Code – and subsequently in CFATS – emphasizes risk assessments, combined with the application of traditional security practices, such as access control and personnel enhancements (including increased training for security guards and background checks for staff). The chemical industry, represented by ACC, the National Association of Chemical Distributors (NACD), and others, is highly supportive of the current regulatory approach and has indicated in public statements that it wishes to see DHS’s current temporary authority and the interim CFATS regulations made permanent without changes to the wording. [17]

Some Aspects of HR 5577 Provoke Opposition
As noted, IST is an alternative approach to securing chemical facilities against terrorist attack and involves the elimination, wherever possible, of the use of chemicals that pose a particularly high risk to public safety. Promoters of IST argue that adopting this approach to chemical facility security offers substantially greater benefits to public security in comparison to the traditional security practices described above. The most important benefit is that facilities that do not house toxic chemicals are not attractive targets for terrorist attack, reducing the need for the intensification of traditional measures. As an additional benefit, the IST approach protects communities equally well against accidental chemical releases. Examples of the application of this approach include oil refineries replacing the use of hydrofluoric acid, which poses a serious Toxic Inhalation Hazard (TIH), with less dangerous sulfuric acid, or water treatment plants using ultraviolet light to sterilize water instead of liquid or gaseous chlorine. [18]

Chemical industry organizations and spokespersons have expressed their support for the primary purpose of the draft legislation in public statements. [19] However, this support has been highly conditional, with industry representatives particularly objecting to the creation of a federal requirement for IST-related assessments and subsequent mandatory implementation actions at high-risk facilities, as part of an overall security strategy. [20] The industry’s objections are not to the underlying concept of applying IST measures to their processes and facilities. Indeed IST was originally developed by the chemical industry, and industry members have made efforts to apply IST principles.

Under the terms of the legislation, the Secretary of Homeland Security will have the final say in determining whether or not the adoption of IST measures is appropriate and feasible at any particular facility. [21] The industry strongly believes that it is inappropriate for Congress to authorize Executive Branch agencies to impose decisions on particular facilities regarding which processes and chemicals they will utilize in their operations. As stressed by industry representatives, “The appropriate role of security laws and regulations is not to dictate industrial processes.” [22] Chemical industry representatives have argued that this
level of regulation, with its potential for federal government intervention, would make it difficult, at best, for the chemical industry to continue to operate profitably in the United States.

Testifying before the House Homeland Security Committee on the IST provisions of HR 5577, Dr. David Pulham, Director of Compliance at Siegfried USA stated:

I’ve heard people say that, since the industry already considers inherent safety in its decision-making process, and since we’re already bound by related regulatory regimes, it should be easy for us to simply comply with a new layer of IST regulation. In fact, it is never a simple task to integrate a new set of rules, imposed by a new regulatory entity, with the engineering and compliance programs we already have to manage. An IST mandate [requirement] would complicate, and in some cases could undermine, existing practices or compliance. Mandating IST for companies like Siegfried that manufacture hundreds of specialty batch products every year is a much greater exercise than what may appear on the surface. Having to debate which approach is inherently safer in a given case would slow down our ability to meet customer needs. And it could be dangerous, if we are compelled to accept, or go along with, an approach that we personally think may not be the lowest-risk approach. [23]

While opposition to the inclusion of IST provisions in HR 5577 is widespread in the chemical industry, there is significant support elsewhere for including the approach. The Association of American Railroads (AAR) has publicly supported the inclusion of IST in the draft law, observing that “[It] is time for the nation’s big chemical companies to stop making the dangerous chemicals that can be replaced by safer substitutes or new technologies currently in the marketplace. If chemical companies would take that step, the threat of a terrorist attack would be greatly reduced and America would be a safer place.” [27] The railroad companies common-carrier obligations prevent them from refusing to transport hazardous chemicals but do not provide liability protection in the event of accidents or terrorist attacks resulting in the transported chemicals being released. The railroads are also under significant pressure to re-route trains transporting hazardous materials around communities in order to reduce the potential harm from incidents, such as the derailment of a number of chlorine tankers in Graniteville, South Carolina in 2005. The mandatory application of IST provisions to chemical production and storage facilities has the potential to provide the rail industry with some relief in both of these areas.

Support for HR 5577’s extension of regulation to water treatment plants and the adoption of IST provisions also can be found in the water-treatment industry, although it is far from universal. Kevin Wattier, General Manager of the Long Beach Water Department, for example, testified before the House Homeland Security Committee saying that: “[I] strongly support the proposed Department of Homeland Security risk and performance based regulation of chemical security practices and U.S. water treatment facilities. … I also believe that alternatives to the handling, transport and storage of gaseous chlorine at these facilities should be encouraged, considered, and implemented where feasible, without impairing critical operations.” [28] This position has been bolstered by a report from the Center for American Progress, which claims that 26 million Americans have benefited from the decisions of 25 water utilities to abandon the use of chlorine gas in favor of using less dangerous liquid chlorine or ultraviolet light for water purification. [29] An alternative view on the extension of DHS regulation and potentially new IST mandates to water-treatment facilities has been expressed by Michael Arceneaux, Deputy Executive Director of the Association of Metropolitan Water Agencies who stated: “We don’t believe that the federal government should make local water treatment decisions.” [30]

The IST approach to security has also attracted the support of the National Academy of Sciences and environmental groups, such as Greenpeace. [31] To date this support has been insufficient, to gain passage of federal legislation obliging chemical manufacturers and users to apply IST principles to their sites.

Although the ongoing U.S. debate over chemical facility security, which dates back to the 1990s, continues to be of interest internationally, it has not yet had a significant impact overseas. With the exception of the United States, most of the developed world continues to approach the regulation of chemical facilities as an environmental or health and safety issue. It is possible, but far from certain, that the passage of U.S. legislation mandating security-driven changes in production processes may lead to pressure for similar action in other countries. A major consideration for most societies is that the possibility of terrorist attacks on chemical facilities remains hypothetical, whereas accidental releases and long-term environmental effects are very real.

Conclusion
Whether HR 5577 will ultimately be enacted remains highly uncertain. Although the need for legislation extending the current temporary DHS authority to regulate security at U.S. chemical facilities is widely accepted, the need is not yet considered urgent. For the past decade, the chemical production and distribution industry has blocked measures incorporating mandatory IST-related assessments or changes to processes, even in the face of increasing support for them at the state level and in parts of the scientific and business communities. At a minimum, it is likely that the legislation will come under pressure for significant amendment. There is also the possibility that competing legislation may be proposed that fulfills the basic demands of the chemical industry without including the contentious aspects of HR 5577, such as IST and the extension of coverage to the water-treatment sector. In the short-term, the most important milestone will be the action of the House Energy and Commerce Committee on the measure.

Markus Binder – Independent Consultant