Earlier this month, when the House Energy and Commerce Committee reported favorably H.R. 2868, their amended version of the bill included significant changes to one provision that had drawn significant opposition from the chemical industry: the citizen suits provision found in §2116.
Background on Opposition
Back in June, when H.R. 2868 was introduced, one of the provisions that caused a great deal of discussion within the chemical industry was §2116, titled ‘Citizen Suits’. This was a new provision not found in last year’s H.R. 5577. It would have allowed any person to commence a civil action against anyone “who is alleged to be in violation of any standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to this title.” H.R. 2868 §2116(a)(1).
Industry commentors have been unanimous in their concerns about this provision. In addition to being worried about the potential expense of defending against nuisance lawsuits, they have noted their beliefs that security measures could inadvertently be compromised by the discovery process associated with citizen suits.
Citizen Enforcement
When the Energy and Commerce Committee reported favorably H.R. 2868, it changed the name of §2116 to ‘Citizen Enforcement’. It still provides for the initiation of civil suits against any federally-owned facilities or any other government entity that is in “violation of any order that has become effective pursuant to this title.” H.R. 2868 §2116(a)(1). It also provides for civil suits against the Secretary of the Department of Homeland Security (DHS) for “an alleged failure to perform any act or duty under this title that is not discretionary for the Secretary.” H.R. 2868 §2116(a)(2).
These citizen-initiated lawsuits would be brought either in the U.S. District Court of the district in which the alleged violation occurred or in the U.S. District Court for the District of Columbia. When such suits are conducted under §2116(a)(1), the Court may enforce the order in question or “order such governmental entity to take such action as may be necessary, or both.” H.R. 2868 §2116(b)(2). Additionally, the Court may levy civil penalties authorized under §2107 of H.R. 2868. When brought against the DHS Secretary, the Court may require performance of non-discretionary duties.
Sixty-day notice must be give before civil suits may be brought under this section “in such manner as the Secretary shall prescribe by regulation.” H.R. 2868 §2116(d). In suits against other governmental entities or federally-owned facilities, “the Secretary, if not a party, may intervene as a matter of right.” H.R. 2868 §2116(e).
Violations at Non-Federal Facilities
While non-federally-owned facilities are not subject to civil suits under §2116 in the version of H.R. 2868 reported by the Energy and Commerce Committee, the Committee did include new provisions for formal reports about non-performance by private individuals or facilities. These citizen petitions are provided for in new §2117. This section requires the DHS Secretary to develop regulations for the submission, investigation, and replying to such petitions. Additionally, those regulations must provide for the “de novo review of responses to petitions by the Office of the Inspector General for the Department of Homeland Security.” H.R. 2868 §2117(a)(4).
These regulations will provide for any person to report anyone, including government facilities or agencies, “alleged to be in violation of any standard, regulation, condition, requirement, prohibition, plan, or order that has become effective under this title.” H.R. 2868 §2117(b)(1). The petition must include a description of the alleged violation.
Department investigations will be required for all properly presented petitions. The investigation will determine if enforcement activities need to be taken by the Department. The results of all investigations will be reported back to the presenter, keeping within the constraints of the information protection rules set forth under §2110. Any decision not to pursue enforcement action will constitute final agency action under this section.
Not the Final Version
Once again there are significant differences between these provisions in the Energy and Commerce Committee reported version of H.R. 2868 and the Homeland Security Committee reported version. Those differences will have to be reconciled before the bill can come before the full House for a final vote. This certainly means that the provisions of §2116 may yet undergo serious revisions before such a final vote.
Tuesday, October 27, 2009
Monday, October 26, 2009
New IST Provisions in H.R. 2868
Earlier this month, the House Energy and Commerce Committee reported their version of H.R. 2868, the Chemical Facility Anti-Terrorism Act of 2009. Chairman Waxman’s Committee made some changes to §2111, titled “Methods To Reduce The Consequences Of A Terrorist Attack” and dealing with inherently safer technology (IST). This is one of the more contentious issues raised in this proposed comprehensive legislation to extend and make permanent the current Chemical Facility Anti-Terrorism Standards (CFATS).
Section 2101(2) of H.R. 2868 re-establishes the risk-based performance standards (RBPS) requirement of CFATS. One of the new bill’s additions to the current standards is §2101(2)(S), which requires “[a]ssessing and, as appropriate, utilizing methods to reduce the consequences of a terrorist attack.” Section 2111 flushes out specific requirements that must be met for this standard.
Changes in Assessment Requirements
The Energy and Commerce Committee made four revisions to the requirements for reporting assessments required under this section. First, they would require facilities to report on both the methods already implemented at the facility as well as those additional methods assessed. §2111(a)(1)(A). Then they required facilities to include a description of how much the implemented method had already reduced the consequences of a potential terrorist attack. §2111(a)(1)(B). These two changes provide a method for the facility to get credit for methods already implemented as part of the development of earlier site security plans.
Next, in §2111(a)(1)(C), they added the requirement to report “personnel implication” resulting from the assessed method. This change would require the facility to report on the number of jobs potentially lost if the method were implemented. This was added to address industry complaints that allowing DHS to mandate implementation of these methods would adversely impact the economics of continued production at the facility, resulting in job losses.
The final change in the assessment requirements is the definition of the word ‘feasible’. While not a ‘definition’ in the classical sense (it uses the word to define the word), it does require that DHS judge feasibility by the “examination for efficacy under field conditions and not solely under laboratory conditions.” §2111(a)(2). Again, this was added in an attempt to assuage industry concerns that DHS could mandate implementation of methods the had never been applied in an actual manufacturing environment.
Facilities Subject to Required Implementation
The original legislation provided that the Secretary could require implementation of the assessed methods at Tier 1 and Tier 2 facilities. The version reported out of the Energy and Commerce Committee restricts that requirement to only those facilities assigned to the top two tiers “because of the potential extent and likelihood of death, injury, and serious adverse effects to human health, the environment, critical infrastructure, public health, homeland security, national security, and the national economy from a release of a substance of concern at the covered chemical facility.” §2111(b)(1). This definition is used throughout the implementation portion of §2111.
The most important part of this modification is the use of the phrase “from a release of a substance of concern at the covered chemical facility.” This eliminates from consideration facilities that are Tier 1 or Tier 2 due to possession of a substance of concern other than release hazards. Facilities with chemicals that are only a theft or diversion hazard would not be subject to the mandated implementation requirements of this section.
Authority to Require Implementation
The introduced legislation would have given the authority to require implementation of methods to reduce the consequences of a terrorist attack to the Secretary. While that authority would have certainly been delegated in the subsequent regulation, the Energy and Commerce Committee version of the bill would directly assign that responsibility to the Director of the Office of Chemical Facility Security (§2111(b)(1)(A)). Because the Director will be someone with a “demonstrated knowledge of … chemical facility security, hazard analysis, chemical process engineering, [and] chemical process safety reviews” (§2114(b)), this means that the decision is at least partially removed from the political realm of the Department and determined more at the technical level.
Since the legislation now brings facilities covered under the Maritime Transportation Security Act (MTSA) into the CFATS program, the MTSA covered community has expressed their concern about conflicts between CFATS and MTSA security programs. To help ensure that these two acts do not come into direct conflict, the Energy and Commerce Committee version of the bill requires the Director to consult “with the Captain of the Port for the area in which the covered chemical facility is located” (§2111(b)(1)(C)) prior to requiring the facility to implement a method to reduce the consequences of a terrorist attack.
Review of Inability to Comply
The version of the legislation reported out of the Energy and Commerce Committee would extend the time limit for a facility to notify DHS of inability to comply with the mandate to implement specific measures to reduce consequences of a terrorist attack from sixty days to 120 days. This was done to give industry more time to prepare their reply to the Director’s mandate. The written explanation must include a detailed explanation of why the facility cannot comply.
Specifically, the “written explanation shall specify whether the owner or operator’s inability to comply arises under clause (ii) or (iii) of paragraph (1)(A), or both.” §2111(b)(2)(A). These clauses address the facility’s ability to ‘feasibly incorporate’ the mandated method into the facility’s operation, or whether implementation would “significantly and demonstrably impair the ability of the owner or operator of the covered chemical facility to continue the business of the facility at its location.” §2111(b)(1)(A)(iii). This wording implies that a violation of (1)(A)(i) would be insufficient grounds to justify noncompliance with the mandated change.
DHS would be given 120 days to conduct a review of the facility’s written explanation. During this period, the Secretary would be required to consult “with the owner or operator of the covered chemical facility who submitted such explanation, as well as experts in the subjects of environmental health and safety, security, chemistry, design and engineering, process controls and implementation, maintenance, production and operations, chemical process safety, and occupational health, as appropriate.”§2111(b)(2)(B). This was included in the Committee’s version of H.R. 2868 to respond to industry concerns that DHS does not have a staff adequately qualified to judge such technical matters.
There is an important legal phrase added into the wording of §2111(b)(2)(B). The phrase “in his or her discretion” is included, and is used to describe the final decision to require implementation. The importance of this phrase is found in §2116(a)(2), where it explains that citizens may bring civil actions “against the Secretary, for an alleged failure to perform any act or duty under this title that is not discretionary for the Secretary.” Thus, civil actions may not be instituted under §2116 for a decision by the Secretary not to require implementation of IST at a high-risk facility.
Agricultural Sector Provisions
The Energy and Commerce Committee added new provisions to §2111 that addressed specific requirements for the agricultural sector under “Sectoral Impacts.” §2111(c). The Secretary is required to provide ‘Farm Supplies Merchant Wholesalers’ (defined at §2111(c)(3)) with specific guidance, including, “as appropriate, tools, methodologies or computer software, to assist farm supplies merchant wholesalers in complying with the requirements of this section.” §2111(c)(3).
Additionally, DHS is required to report to Congress within six months of H.R. 2868 enactment on the impact of §2111 on “manufacturers, retailers, aerial commercial applicators, and distributors of pesticide and fertilizer.” §2111(c)(2). The report will include data on the number of these agricultural suppliers affected by both the assessment and potentially the implementation requirements of §2111. It would include a survey of “known methods, processes or practices, other than elimination of or cessation of manufacture of the pesticide or fertilizer,” including costs and technical feasibility. That survey will include possible impacts on “other sectors engaged in commerce” and recommendations on how to mitigate adverse impacts so identified. §2111(c)(2)(D).
Additional Work on IST Provisions
Before H.R. 2868 can come to a final vote on the House floor, the IST provisions may still undergo significant modifications. The version of H.R. 2868 produced by the House Homeland Security Committee contains significant differences that will have to be reconciled. Furthermore, modifications are certainly expected to be attempted in floor amendments, and those will come from both sides of the debate. This bill still has a long way to go before it appears in final form to be sent to the Senate for further modifications there.
Section 2101(2) of H.R. 2868 re-establishes the risk-based performance standards (RBPS) requirement of CFATS. One of the new bill’s additions to the current standards is §2101(2)(S), which requires “[a]ssessing and, as appropriate, utilizing methods to reduce the consequences of a terrorist attack.” Section 2111 flushes out specific requirements that must be met for this standard.
Changes in Assessment Requirements
The Energy and Commerce Committee made four revisions to the requirements for reporting assessments required under this section. First, they would require facilities to report on both the methods already implemented at the facility as well as those additional methods assessed. §2111(a)(1)(A). Then they required facilities to include a description of how much the implemented method had already reduced the consequences of a potential terrorist attack. §2111(a)(1)(B). These two changes provide a method for the facility to get credit for methods already implemented as part of the development of earlier site security plans.
Next, in §2111(a)(1)(C), they added the requirement to report “personnel implication” resulting from the assessed method. This change would require the facility to report on the number of jobs potentially lost if the method were implemented. This was added to address industry complaints that allowing DHS to mandate implementation of these methods would adversely impact the economics of continued production at the facility, resulting in job losses.
The final change in the assessment requirements is the definition of the word ‘feasible’. While not a ‘definition’ in the classical sense (it uses the word to define the word), it does require that DHS judge feasibility by the “examination for efficacy under field conditions and not solely under laboratory conditions.” §2111(a)(2). Again, this was added in an attempt to assuage industry concerns that DHS could mandate implementation of methods the had never been applied in an actual manufacturing environment.
Facilities Subject to Required Implementation
The original legislation provided that the Secretary could require implementation of the assessed methods at Tier 1 and Tier 2 facilities. The version reported out of the Energy and Commerce Committee restricts that requirement to only those facilities assigned to the top two tiers “because of the potential extent and likelihood of death, injury, and serious adverse effects to human health, the environment, critical infrastructure, public health, homeland security, national security, and the national economy from a release of a substance of concern at the covered chemical facility.” §2111(b)(1). This definition is used throughout the implementation portion of §2111.
The most important part of this modification is the use of the phrase “from a release of a substance of concern at the covered chemical facility.” This eliminates from consideration facilities that are Tier 1 or Tier 2 due to possession of a substance of concern other than release hazards. Facilities with chemicals that are only a theft or diversion hazard would not be subject to the mandated implementation requirements of this section.
Authority to Require Implementation
The introduced legislation would have given the authority to require implementation of methods to reduce the consequences of a terrorist attack to the Secretary. While that authority would have certainly been delegated in the subsequent regulation, the Energy and Commerce Committee version of the bill would directly assign that responsibility to the Director of the Office of Chemical Facility Security (§2111(b)(1)(A)). Because the Director will be someone with a “demonstrated knowledge of … chemical facility security, hazard analysis, chemical process engineering, [and] chemical process safety reviews” (§2114(b)), this means that the decision is at least partially removed from the political realm of the Department and determined more at the technical level.
Since the legislation now brings facilities covered under the Maritime Transportation Security Act (MTSA) into the CFATS program, the MTSA covered community has expressed their concern about conflicts between CFATS and MTSA security programs. To help ensure that these two acts do not come into direct conflict, the Energy and Commerce Committee version of the bill requires the Director to consult “with the Captain of the Port for the area in which the covered chemical facility is located” (§2111(b)(1)(C)) prior to requiring the facility to implement a method to reduce the consequences of a terrorist attack.
Review of Inability to Comply
The version of the legislation reported out of the Energy and Commerce Committee would extend the time limit for a facility to notify DHS of inability to comply with the mandate to implement specific measures to reduce consequences of a terrorist attack from sixty days to 120 days. This was done to give industry more time to prepare their reply to the Director’s mandate. The written explanation must include a detailed explanation of why the facility cannot comply.
Specifically, the “written explanation shall specify whether the owner or operator’s inability to comply arises under clause (ii) or (iii) of paragraph (1)(A), or both.” §2111(b)(2)(A). These clauses address the facility’s ability to ‘feasibly incorporate’ the mandated method into the facility’s operation, or whether implementation would “significantly and demonstrably impair the ability of the owner or operator of the covered chemical facility to continue the business of the facility at its location.” §2111(b)(1)(A)(iii). This wording implies that a violation of (1)(A)(i) would be insufficient grounds to justify noncompliance with the mandated change.
DHS would be given 120 days to conduct a review of the facility’s written explanation. During this period, the Secretary would be required to consult “with the owner or operator of the covered chemical facility who submitted such explanation, as well as experts in the subjects of environmental health and safety, security, chemistry, design and engineering, process controls and implementation, maintenance, production and operations, chemical process safety, and occupational health, as appropriate.”§2111(b)(2)(B). This was included in the Committee’s version of H.R. 2868 to respond to industry concerns that DHS does not have a staff adequately qualified to judge such technical matters.
There is an important legal phrase added into the wording of §2111(b)(2)(B). The phrase “in his or her discretion” is included, and is used to describe the final decision to require implementation. The importance of this phrase is found in §2116(a)(2), where it explains that citizens may bring civil actions “against the Secretary, for an alleged failure to perform any act or duty under this title that is not discretionary for the Secretary.” Thus, civil actions may not be instituted under §2116 for a decision by the Secretary not to require implementation of IST at a high-risk facility.
Agricultural Sector Provisions
The Energy and Commerce Committee added new provisions to §2111 that addressed specific requirements for the agricultural sector under “Sectoral Impacts.” §2111(c). The Secretary is required to provide ‘Farm Supplies Merchant Wholesalers’ (defined at §2111(c)(3)) with specific guidance, including, “as appropriate, tools, methodologies or computer software, to assist farm supplies merchant wholesalers in complying with the requirements of this section.” §2111(c)(3).
Additionally, DHS is required to report to Congress within six months of H.R. 2868 enactment on the impact of §2111 on “manufacturers, retailers, aerial commercial applicators, and distributors of pesticide and fertilizer.” §2111(c)(2). The report will include data on the number of these agricultural suppliers affected by both the assessment and potentially the implementation requirements of §2111. It would include a survey of “known methods, processes or practices, other than elimination of or cessation of manufacture of the pesticide or fertilizer,” including costs and technical feasibility. That survey will include possible impacts on “other sectors engaged in commerce” and recommendations on how to mitigate adverse impacts so identified. §2111(c)(2)(D).
Additional Work on IST Provisions
Before H.R. 2868 can come to a final vote on the House floor, the IST provisions may still undergo significant modifications. The version of H.R. 2868 produced by the House Homeland Security Committee contains significant differences that will have to be reconciled. Furthermore, modifications are certainly expected to be attempted in floor amendments, and those will come from both sides of the debate. This bill still has a long way to go before it appears in final form to be sent to the Senate for further modifications there.
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