OSHA to develop PSM rule, won't reinstate retailer exemption

WASHINGTON, May 11, 2016 – The Occupational Safety and Health Administration will develop regulations to update its Process Safety Management Standard but won’t exempt ag retailers from PSM requirements in the meantime.

In a letter to the D.C. Circuit Court of Appeals last week, Labor Department attorney Lauren Goodman said OSHA decided to develop a rule because of “congressional report language indicating a preference for rulemaking.” Congress, at the urging of ag retailers and the fertilizer industry, included language in the report accompanying the fiscal 2016 omnibus spending bill that “directs” the agency to maintain the longstanding exemption from PSM for ag retailers until it completes a rulemaking.

Report language does not carry the force of law, however, and OSHA had not committed to a rulemaking until Goodman wrote to the court May 5.

OSHA had issued an “interpretive rule” last July subjecting retailers to PSM requirements, which the dealers said would cost them up to $25,000 per facility to comply with – 10 times the amount estimated by OSHA. It delayed PSM enforcement at retail establishments twice, the second time until Oct. 1, 2016, after Congress approved the report language (more OSHA information here).

Goodman wrote to the D.C. Circuit as part of pending litigation over PSM brought by the Agricultural Retailers Association (ARA), The Fertilizer Institute (TFI) and a dozen dealers. She said that even though the rulemaking could take up to five years to complete, retailers would nevertheless be subject to the “interpretive rule” starting Oct. 1.

The PSM standard is “performance-based,” according to OSHA. “It outlines key features of safety programs for controlling highly hazardous chemicals, and employers have the flexibility to tailor their safety programs to the unique conditions at their facilities.” Its requirements include 14 “process safety elements,” including employee training, emergency planning and response, mechanical integrity and compliance audits.

In an unusual move, OSHA also sent a letter to every member of Congress asking them “not to take further action that would limit the scope or applicability of the guidance during such time as OSHA conducts rulemaking,” according to ARA.

OSHA also is convening a Small Business Advocacy Review panel to aid in the rulemaking process.

ARA, meanwhile, continues to criticize OSHA’s handling of the issue.

“The agency intends to enforce an amended regulation up to five years before they complete the legally required rulemaking to establish it, and they would like Congress to not prevent them from violating the Administrative Procedure Act in this manner,” the group said.

“OSHA's congressional letter also repeated the fallacy that it is unable to regulate facilities that store and handle anhydrous ammonia or ammonium nitrate, when existing OSHA regulations provide the necessary authority for inspections of both products,” ARA

“ARA will be working with TFI to respond to both communications,” said ARA President and CEO Daren Coppock. “It is baffling why OSHA continues to focus on regulating ammonia as its response to an ammonium nitrate incident at West Fertilizer.” The “incident” in April 2013 was a fire and explosion that killed 15 people in the town of West, Texas.

Coincidentally, the Bureau of Alcohol, Tobacco, Firearms and Explosives held a press conference today to announce it believes that the West fire was intentionally set.

Oral arguments in the court case had been scheduled for next week, but the D.C. Circuit has decided it can rule on the merits of the matter without the benefit of a hearing.

 #30