GOVERNMENT UPDATELowell Randel, Vice President, Government and Legal AffairsGlobal Cold Chain Alliance

Agenda

• Regulatory Climate• Food Safety Modernization Act• Executive Order on Chemical Safety

and Security• Labor Regulations• Q&A

Regulatory Climate

• More than 3200 new regulations in pipeline

• Includes significant regulations covering FDA,

EPA, OSHA and others

• Estimated overall cost of regulatory

compliance in 2013: $1.8 trillion

• Obama Administration priority to get as

much done as possible before end of term

Regulatory Climate

Regulatory Climate

Food Safety Modernization Act

• Food Safety Modernization Act (FSMA) signed into law January 4, 2011

• First major change in over 70 years• Requires over 50 new regulations• All major rules have now been

formally proposed

FSMA Major Rules

• Preventive Controls for Human Food

• Produce Safety Standards• Foreign Supplier Verification Program• Accredited Third Party Certification• Preventive Controls for Animal Food• Sanitary Transportation of Food

Preventive Controls Rule

• Final Rule released on September 10th • Facilities that manufacture, process,

pack or hold human food• In general, facilities required to register

with FDA under sec. 415 of the FD&C Act• Applies to domestic and imported food• Updates CGMPs• Some exemptions and modified

requirements included

Current Good Manufacturing Practices

• Applies to all registered facilities• All CGMP provisions are binding• Must protect against allergens,

biological, chemical and physical contamination of food

Plant Construction and Design

• Plant must be suitable in size, construction, and design to facilitate maintenance and sanitary operations for food-production purposes (i.e., manufacturing, processing, packing, and holding)

• Permits practices to reduce the potential for allergen cross-contact and for contamination of food, food-contact surfaces

• Permits practices to protect food in installed outdoor bulk vessels

Plant Construction and Design

• Constructed such that floors, walls, and ceilings may be adequately cleaned

• Ensures that drip or condensate from fixtures, ducts and pipes does not contaminate food, food-contact surfaces, or food-packaging materials

• Provides adequate working spaces between equipment and walls

• Provides adequate lighting and ventilation• Provides for adequate screening or other

protection against pests

Equipment Requirements

• Designed and installed to permit cleaning and maintenance

• Designed and installed to avoid contamination with contaminated water, fuel, lubricants, etc…

• Seems on food contact services must be smooth

• Freezers, cold storage compartments must have temperature measuring and/or recording device

Modified Requirements

• Modified requirements apply to facilities solely engaged in storage of packaged food requiring time/temperature control (TCS food)• Frozen food “rarely” a TCS food• Packaged food defined as “not exposed to

environment/human contact” • Facilities that store exposed food will not

qualify• Example – vented crates for produce considered

“exposed”

Modified Requirements

• Value added activities (such as repacking and blast freezing) conducted in facilities such as warehouses would be considered holding when product is not exposed to the environment.

• FDA considers the activities described in these comments to be activities performed as a practical necessity for the distribution of the food and, thus, to be within the definition of holding.

Modified Requirements

• Modified Requirements focus on temperature control

• Monitoring the temperature controls• Taking appropriate corrective actions when

there is a problem with temperature controls

• Verifying that temperature controls are consistently implemented

Non-Exempt FacilitiesHazard Analysis and Risk-Based Preventative

Controls

Food Safety Plans

• Hazard analysis• Preventive controls• Supply chain program• Recall plan• Monitoring procedures• Corrective action procedures• Verification procedures

Compliance Dates

• Very small businesses (under $1 million/yr) – 3 years

• Small businesses (under 500 FTEs) – 2 years

• All other businesses – 1 year– Compliance required by September 2016

Executive Order 13650

West Texas – April 2013

EPA Risk Management Program

• Currently undergoing small business review panel– GCCA participating

• Proposed rule expected shortly after SBAR process.

• Final rule expected by end of 2016

RMP Rulemaking

Overview of Proposed Revisions

P1 P2 P3

Third-party audits (applies to the next scheduled audit after an accident) *

√ √

Incident Root Cause Analysis (only for facilities with accidents/near misses) *

√ √

Safer Alternatives Analysis (applies to a subset of P3 in certain NAICS codes) *

√

Coordinating Emergency Response Program Requirements with Local Responders

√ √

Emergency Response Exercises * √ √

Information Sharing * √ √ √

* New Proposed Requirement

Note: The RFI included 19 areas for potential changes. EPA is only pursuing these 6 areas.

Third-Party Compliance Audits• Current Requirements: Facility

owners/operators must perform compliance audits every three years. (Applies to all P2 and P3)

• Issue to Address: Perception that self-auditing is insufficient to ensure safety and compliance with RMP requirements. Lack of auditor independence can result in more lenient or biased audit results that are less accurate and reliable.

Third-Party Compliance Audits• Proposed revisions- Require facilities to :

– Conduct an independent audit.– Auditor must not be associated with the regulated

facility or parent company.• Cannot be a consultant used for other matters

– Applies only to first audit following an accident

• Concerns/Questions:– Need to allow “associated” auditors– Insufficient cost/benefit analysis

• Assumption that non-associated audits always better not founded in data

– Availability of non-associated auditors

Incident Investigations & Root Cause Analysis• Current Requirements: Facility owners/operators

must conduct incident investigations following an incident that resulted in or could have resulted in a catastrophic release (includes a “near miss”). (Applies to all P2 and P3)

• Issue to Address: Facilities not required to complete root cause analysis which could identify the underlying reasons for a chemical accident to prevent future accidents and ensure compliance.

Incident Investigations & Root Cause Analysis• Proposed Revisions: require facilities to:

– Within 12 months, complete a root cause investigation (i.e. identifying the fundamental reason why an incident occurred and the correctable failures(s) in management systems) for all RMP reportable incidents and near miss incidents.

• Concerns/Questions:– Definition of “near miss”– Guidance on “root cause” analysis – flexibility needed– Guidance on requirements of report

Safer Alternatives Analysis• Current Requirements: Facility owners/operators

must develop a PHA to identify, evaluate, and control process hazards involving regulated substances. (Applies to all P3)

• Issue to Address: Facilities are not required to consider safer technologies and alternatives (including inherently safer technologies) that could prevent or minimize the effects of chemical accidents

Safer Alternatives Analysis• Proposed Revisions require P3 facilities in NAICS

codes 322 (pulp and paper), 324 (petroleum refineries), and 325 (chemical manufacturers) to:– As part of PHA, analyze potential safer technologies

and alternatives and the feasibility of implementation of any inherently safer technologies considered.

– Owner would not be required to implement any prescribed technology.

• Concerns/Questions:– High costs– Does not apply to our industry (yet)

Local Coordination• Current Requirements: Facilities must develop

an emergency response program except when the community emergency response plan addresses toxic substances at the facility, or owner/operator has coordinated response actions for flammable substances with local fire department. (Applies to all P2 and P3)

• Issue to Address: Concern that some RMP facilities have not adequately coordinated with Local Emergency Planning Committees (LEPCs) and local emergency responders.

Local Coordination• Proposed revisions require facilities to: (Applies to all

P2 and P3)– Coordinate annually with the LEPC/emergency

responders and ensure response capabilities exist.– Document coordination and allow LEPC/responders to

request facility prepare emergency response program

• Concerns/Questions:– Definition of “coordination”– Need to recognize facility due diligence even when

responders do not engage– Costs associated with transitioning from non-

responder to responder

Emergency Response Exercises

• Current Requirements: Currently there is no RMP requirement for facilities to exercise their emergency response program or plan.

• Issue to Address: Incidents at RMP facilities often indicate poor emergency response planning and execution. Requiring exercises is likely to improve emergency and reduce the consequences of an accident.

Emergency Response Exercises

• Proposed Revisions: Require facilities to test their emergency response program through notification, tabletop, and/or field exercises (Applies to all P2 and P3)– Require “responding” and “non-responding” facilities

to have annual notification exercise.– Require “responding” facilities to conduct field

exercise every 5 years and tabletop exercise in interim years and invite local responders to participate.

– Document all exercises.

Information Sharing• Current Requirements: Facility RMP must be

made available to the public and LEPC/first responders (data restrictions apply based on security concerns). (Applies to all facilities)

• Issue to Address: Need to find a better way to make emergency response information easier to comprehend and ensure greater transparency without compromising security.

Information Sharing• Proposed revisions add new disclosure elements: (Applies to all

facilities)– LEPCs and responders: Summaries of chemical hazard information;

including incident investigation reports (with root cause findings); drill/exercise reports; compliance audits; accident history; and summary of the inherently safer technologies implemented or planned to be implemented.

– General public: Providing existing public information in an easy format.

– Public meetings: Occur once every five years and within 30 days of a reportable accident.

• Concerns/Questions:– Too much information – will overwhelm LEPCs– What is “easy format”?– Public meetings have little value, high cost

• 30 days after accident insufficient

Process Safety Management

Key Proposed Changes to PSM

• Adding new management system elements

• Definition and policies surrounding RAGAGEP

• Expanding Mechanical Integrity element• Expanding Management of Change• Revised requirements on coordinating with

first responders• Requiring 3rd party audits

OSHA SBREFA Panel

• Announced SBREFA Panel in June 2015• Next step in rulemaking process:• OSHA process longer than most agencies• Opportunity for small businesses to

evaluate impacts of proposed changes ahead of Proposed Rule

• Will convene after EPA SBAR process complete

RAGAGEP Guidance

• Issued in June 2015• Part of EO process of review• Will guide inspector application of

RAGAGEP in facilities– Detailed list of “Enforcement Considerations”

• Recognizes that PSM does not define RAGAGEP

• Employers can select their own RAGAGEP

RAGAGEP Guidance

• States that if a facility is properly following consensus standard, then they are likely in compliance

• Role of engineering documents/technical papers

• Employer may develop own standards• But only if they meet or exceed other

applicable standards

PSM Status and Response

• GCCA led coalition response to RFI• Meetings held with OSHA to discuss issues

and concerns• Participation in SBREFA Panel• Next step is Proposed Rule• OSHA to move slower than EPA on

rulemaking process

• Public Meeting – October 27– Focus is input on Appendix A– Opportunity for GCCA to reiterate

position on removal of anhydrous from Top Screen requirement

• Proposed rule in 2016?• Final by 2018?

CFATS Rulemaking

Labor Regulations

• OSHA has released a proposed rule to revise injury and illness recordkeeping requirements

• Proposal would require electronic submissions that would be made publicly available.

• Final rule currently under review at OMB

OSHA Electronic Recordkeeping Rule

• Facilities with more than 250 employees required to submit electronically every quarter– Could be expanded to company-wide

• Facilities in designated industries with more that 20 employees must submit annually–Most GCCA member facilities in designated

industries

• Some employers will receive specific notification from OSHA to submit

Recordkeeping Rule – Who is Impacted?

• Privacy of employees• Incentive to underreport• Potential for mischaracterization of

data• Increased inspections and

enforcement

Recordkeeping Rule - Concerns

• Raise threshold from $455/week to $970/week

• Raise exemption level for “HCEs” to $122,148

• Establish a mechanism for automatic increases over time.

Proposed Changes to Overtime Rules

• Rule now in place– Subject of controversy, litigation and

legislation

• Changes union election process– Shortens time between certification and

election from 38 to as few as 10 days

• Limits employer ability to challenge class designations

“Ambush Elections” Rule

Questions?