harmac transportation inc. - ciac...

RESPONSIBLE CARE®

Verification ReportHarmac Transportation Inc.

April 26 - 27, 2011

Disclaimer

This report has been produced by a team, convened by the Chemistry Industry Association of

Canada (CIAC), to provide advice to the member-company and assist it in meeting its

Responsible Care® commitments. The material in this report reflects the team's best judgment in

light of the information available to it at the time of preparation. It is the responsibility of the

CIAC member-company that is the subject of this report to interpret and act on the report’s

findings and recommendations as it sees fit. Any use which a third party makes of this document,

or any reliance on the document or decisions made based upon it, are the responsibility of such

third parties. Although CIAC members are expected to share the results of this guidance

document with interested parties, the Association, its member-companies, their employees,

consultants and other participants involved in preparing the document accept no responsibility

whatsoever for damages, if any, suffered by a third party as a result of decisions made or actions

based on this report.

Responsible Care® is a registered trademark of the Chemistry Industry Association of

Canada.

Re-verification report for Harmac Transportation Inc., April 2011 Page 2 of 28

EXECUTIVE SUMMARY This report documents the observations and conclusions of the independent verification team tasked with conducting a Responsible Care Verification of Harmac Transportation Inc. The verification was carried out on April 26 and 27, 2011 and included team vis its to their headquarters and Transportation terminal in North York, Toronto and Transportation Terminal in Burlington, Ontario. This was the third Responsible Care verification completed for Harmac Transportation. The last verification was completed on April 28, 2006. As a result of the examination conducted, the verification team is of the opinion that the Responsible Care Ethic and Principles for Sustainability are guiding company decisions and actions, and that a self-healing management system is in place to drive continual improvement. The team believes that the company is capable of responding to the range of Findings Requiring Action identified during the verification - summarized below and discussed in detail in the report. The verification is complete and no further involvement is required by the verification team.

Signed: Date: June 23, 2011 Alec Robertson Verification Team Leader

For more information on this or a previous Responsible Care Verification Report, please contact your local company site or the company’s Responsible Care executive contact: David MacDonald, V.P. Chemicals & Business Development (902) 482-2403 [email protected]


SUMMARY OF VERIFICATION TEAM OBSERVATIONS Following is a listing of the 7 Findings Requiring Action, 12 Best Practices and 2 Extra Miles found in the body of the report. Progress on action to resolve the Findings will require follow-up at each Leadership Group Meeting, with the local CAP(s), and in the company’s annual CEO re-commitment to CIAC. These will also be, along with the decisions pertaining to the 34 Opportunities For Improvement, attached as Appendix 4 as well as in the report text, reviewed during the next Responsible Care re-verification. The wording of each Finding Requiring Action, Opportunity and other comments found in this Summary and Appendix 4 is identical to the wording used in the body of the report to avoid any possible misunderstanding of the team’s intent. Findings Requiring Action 1) Complete the documentation that describes the overall Responsible Care

Management System in terms of the plan-do-check-act continual improvement cycle, as described in the CIAC document entitled “Responsible care for Transportation Partners – A new model for enhancing value” - This could be incorporated into the existing management system document.

2) Develop a management system around the Environment Responsible Care code elements.

3) Develop a management system around the Community Awareness aspect of the TransCAER Responsible Care code elements.

4) Complete the cross referencing of the themes and sub themes of the Transportation Partners Responsible Care model to the relevant management systems and operating manuals.

5) Implement a documented process, utilizing the above cross referencing, to perform an annual assessment to substantiate the annual affirmation to the CIAC that Responsible Care is in place.

6) Document, in the management system, the requirement to annually test through an appropriate exercise, the effectiveness of the security management system and its processes.

7) Document the requirement for, and implement, an annual emergency exercise program to validate and maintain the effectiveness of the emergency exercise management system and its processes.

Best Practices 1) Tractor deceleration rates of 9 mph/second trigger an information download for the 60

seconds pre and 40 seconds post the event. This capability has proven valuable to Harmac in incident analysis and they have been told that they are ahead of the curve in adopting this technology.

2) The robustness of the incident/accident investigation protocol utilized to capture even the most minor of incidents.

3) The Driver Scorecard system. 4) The very comprehensive suite of performance metrics focusing on driver behaviour. 5) The overall commitment towards performance improvement – in some cases by 25% in

their quest to zero.


6) Violation rates on Harmac’s current Ontario CVOR and US Dot carrier profiles are significantly below the monitoring thresholds.

7) The PeopleNet data management and On-Board Truck Computer (OBTC) systems that record driving activity and allow for the use of e-mail communication, electronic driver logs, incident flashes and truck operation analysis are an industry best practice.

8) Tractors governed to 102 km/hr, both on pedal and cruise. 9) The VORAD system for sensing blind spot encroachment., 10) The ‘Diesel Talk’ program, a motivational CD series, provides drivers with information

on transportation related health and safety issues. 11) The “pinging” back to dispatchers when posted driving speeds are being exceeded. 12) Well defined driver training program including the use of a well recognized driver

training process (Smith system) for initial, annual refresher and two year repeat driving skills training.

Extra Miles: 1) The 72% reduction in preventable vehicle accident rates over the past 5 years. 2) The focus on technology to improve road safety.


1. INTRODUCTION AND OVERVIEW

1a) The company This is the report by the verification team on those operations of Harmac Transportation Inc., which are covered by the company’s commitment to the Responsible Care initiative of the Chemistry Industry Association of Canada. A description of the company in Canada and which operations are covered by this report can be found in Appendix 1.

1b) Responsible Care Responsible Care is an initiative of the Chemistry Industry Association of Canada by which the association’s members and partners commit to be, and to be seen as, responsible companies within Canadian society. It is based on an ethical approach to the safe and environmentally sound management of chemicals – an approach which started in Canada but has since spread to over 50 countries around the world.

The Responsible Care Ethic: We are committed to do the right thing and be seen to do the right thing. We are guided towards environmental, societal, and economic sustainability by the following principles:

We are stewards of our products and services during their life cycles in order to protect people and the environment.

We are accountable to the public, who have the right to understand the risks and benefits of what we do and to have their input heard.

We respect all people. We work together to improve continuously. We work for effective laws and standards, and will meet or exceed them in

letter and spirit. We inspire others to commit themselves to the principles of Responsible

Care. For transportation partners the ethic is supported in Canada by a Responsible Care Model covering relations with the communities where the partners operate and also responsible management throughout all aspects of those operations. Information on the model and related activities is available from company personnel listed in Appendix 2 of this report, or via the CIAC web site www.canadianchemistry.ca (click on the tab for Responsible Care).

1c) Expectations of CIAC transportation partners Each transportation partner of the CIAC must formally commit to the Responsible Care Ethic and the Transportation Partners Responsible Care Model, as a condition of membership in the association. Progress in implementing these obligations must then be reported to CIAC, both to peers at special networking meetings and also via a formal reporting system to the association. Three years is the typical time allowed to new transportation partners for implementation. The association monitors progress and follows up by arranging for assistance where necessary to ensure that each company eventually meets its commitment.


When a transportation partner considers that its management processes are sufficiently comprehensive that they meet all of the requirements of the Responsible Care Model, it advises the association that implementation is complete to the stage of “Responsible Care-in-Place”. Completion in this sense does not imply that nothing further needs to be done, but that a key milestone has been reached in a process of continuous improvement.

1d) Verification A company’s declaration that the expectations of Responsible Care are being met is an important first step in the verification process, which leads to confirmation and recognition of this by a team of industry and public representatives. Verification is conducted to strict protocols, developed by the association’s transportation partners and others including several critics of the industry and its operations. The first verification takes place when the company firs t states that its performance meets the expected level (Responsible Care-in-Place). This verification is designed to confirm, for the company’s peers in CIAC and the public, the exis tence of a company-wide ethic and management systems which ensure that the principles and specific requirements of the Responsible Care Model are not only in place but are also practised and continuously improved within the organization. Subsequent verifications are also conducted using a different protocol, approximately every three years after formal acceptance of the first verification, to ensure that the ethic and management systems of Responsible Care are firmly rooted in all the company’s operations. This is known as ongoing re-verification. Each verification is conducted by a team consisting of: knowledgeable industry experts with experience in Responsible Care; a representative of the public at large (usually with a public interest background and

with experience in Responsible Care gained from serving on the CIAC’s national advisory panel) and

one or more representatives of the local communities where the company’s facilities are located.

1d) i) Verification of Responsible Care-in-Place

For the purposes of this examination, the requirements described under each theme contained in the Responsible Care Model are sampled in depth using a series of questions. The questions are sent to the company in advance of the verification vis it, so that initial responses can be prepared for prior review by the verification team and supporting documentation, etc. can be available for prompt examination if desired. Additional questions are asked at the discretion of the team during the visit. The approach is “top-down” rather than the “bottom-up” used in conventional audits, and the style of questions is intentionally open-ended, so that the answer cannot be a simple yes/no but calls for explanation. The questioning process starts with the executive responsible for chemical operations in Canada, and works down through the organization to examine the senior level intent and the corresponding support by action at the operating level.


Questions are generally of the following nature: does the organization have an effective management system in place to ensure

understanding of Responsible Care? what is the process to determine and communicate the acceptable level of

performance? what is the process for assessing the performance of the system and effecting

follow-up to meet or exceed the acceptable level of performance? what is the process for ensuring up-to-date documentation? do sufficient resources appear to be, or are thought by employees to be, in place?

The findings are summarized in a report which highlights:

actions required by the team before they consider the company meets the expectations of Responsible Care;

opportunities for improvement, which are recommended but not mandatory; recognition of any exemplary practices of the company which could be a model for

other CIAC transportation partners. The report is given to the company and CIAC, and the company is expected to share the report with interested persons in its communities as part of its dialogue process. If the team considers that actions are required before sign-off, they will arrange for follow-up to confirm that these are complete, and advise the company and CIAC in writing when these have been met to their satisfaction. Responsible Care-in-Place verification of Harmac Transportation Inc. Company name at time: Harmac Transport Corporation Inc. Date of verification (vis it): October 16 – 22, 2003 Locations vis ited: Head Office Toronto, Transport Terminal, Corunna, and Parking

Facility, Brockville, all in Ontario. Team follow-up needed: No Date of final sign-off: December 6, 2003 This Responsible Care-in-Place verification report is available from the contact at the company from whom you accessed this report, or from the company contact shown on page 2 of this re-verification report.

1d) ii) Re-verification Approximately every three years after team acceptance of Responsible Care-in-Place, the CIAC schedules further verifications using a modified approach. The team is similar to that for the original verification, with at least one team member from the previous verification but a different leader. In re-verification the team probes more deeply to examine how well the ethical basis of Responsible Care is understood and adopted within the company, and also how effective are the company’s management systems in applying the ethical principles throughout the company’s operations. This involves not only whether the company intends to do the right things, but also how it monitors activities and results and takes corrective action when deviations occur (often referred to as the Plan-Do-Check-Act parts of the management system).


For re-verification the company is given a more comprehensive list of documentation the team will need to see. Part of this must be sent to the team so they can study it in advance. The questioning process is also more open, in that the team does not have to cover every topic in depth but can probe where they feel it is most relevant for that individual company, plus any areas where the company itself would like feedback on its performance. After studying the information the team meets with the company to plan the vis it stage of the verification, at which a schedule is agreed covering people the team wishes to interview in depth during the subsequent vis it stage of the verification process. Most of these will be company personnel, but some will be representatives of organizations with which the company has business relationships – customers, transporters, etc. – and of local communities where plants, etc. are located. The team examines to determine how strongly the Responsible Care ethic appears to be part of the company’s way of doing business, including awareness of Responsible Care and its implications among the company’s employees. The examination then progresses into a broad-ranging review of the company’s management systems for Responsible Care, with a special investigation into certain topics highlighted by CIAC in the verification protocol. The team looks at how effectively the company’s management systems ensure that obligations of the Responsible Care Model continue to be met, as established in the initial Responsible Care-in-place verification. In subsequent verifications, however, the questioning process also considers how the company tracks and improves its performance regarding these obligations, including how performance measures are established and targets met (what is measured, what are the goals and how are they achieved). Actions taken on concerns, suggestions and recommendations raised in the last verification report are examined, as are significant issues and incidents that have arisen since the previous verification. The team then looks at how the company shared the results of this verification with the local community, and examines how robust the ongoing process of community dialogue appears to be and how issues and concerns are being identified and addressed.

The highlighted topics of special focus are ones where the feedback from the verification process and from the association's transportation partners has suggested the value of a closer examination of the general partners performance and comparison with the intent of the requirements of the Responsible Care Model. This does not necessarily imply that any given company is not performing well, but reveals the range of performance and identifies both cases where some improvement is recommended and also examples from which others can learn. The highlighted topics are Operations Safety, Supply Partner Assessments, Greenhouse Gas Emissions, Security, Emergency Response and “TransCAER” outreach. Although CIAC has no defined performance expectations for broader social responsibility, the team also looks at how the company sees and fulfills its role in this area. The team may also comment on other specific topics where the company has requested feedback.


Responsible Care Re-verification of Harmac Transportation Inc. Company name at time: Harmac Transport Corporation Inc. Date of verification (vis it): October 23 – 26, 2006 Locations vis ited: Head Office in North York, Ontario; transportation terminals in Montreal, Quebec and Kingston, Ontario; truck parking facilities in London and Hamilton, Ontario; and a truck washing facility in Oakville, Ontario. Team follow-up needed: No Date of final sign-off: February 26, 2007 For more context or explanation of any of the items below, please get in touch with the contact at the company from whom you accessed this report. The report below presents the findings of the team from this re-verification of Harmac Transportation Inc. The report does not address all aspects of Responsible Care, as this was covered by the report of the original Responsible Care-in-Place verification. Instead, it focuses more on the items where the team felt there was an opportunity or need for improvement, plus any improvements or practices which are so significant that they should be shared with other CIAC transportation partners as possible examples. In the following sections of this report, findings requiring action are shown in bold face. Opportunities for improvement (recommended but not considered mandatory) are shown in italics, while “extra miles” and best practices are shown underlined).

2. GENERAL FINDINGS OF THE TEAM 2a) Statement on the Responsible Care Ethic

Throughout the interview process the team checked for evidence that the Responsible Care ethic was vis ible and at work in the company, guiding the company’s judgement, decisions and actions. FINDINGS Overview: The Responsible Care ethic continues to be well understood and clearly guides company actions and decisions The Executive contact is very committed to Responsible Care and has the full support of the company President and COO. A strong Responsible Care core and extended team has been formed and all members of the team have fully embraced the ethic and principles. Although the recent recession had slowed the full development of documented management systems to support Responsible Care, the company continued to operate with an effective Plan Do Check Act management cycle. Responsible Care promotion has improved since the previous re-verification by broader use of the logo in corporate website upgrades, commitment plaques being posted in office and garage work areas, in marketing literature etc.


Those interviewed, at various levels throughout the organization, were very open to the re-verification process and displayed a significant commitment to road safety and to fulfilling the requirements of Responsible Care. Opportunities for Improvement: i) Ensure that all opportunities for improvement identified in the 2006 re-verification report

have been appropriately considered and addressed with the results documented. ii) Add Responsible Care signage (e.g. external banners and/or flags) to assist in branding

Responsible Care in the community. iii) Consider migrating Responsible Care to the rest of the transportation companies within

the Seaboard/Harmac group - Seaboard, GWR, Foss and the US company – AJ Weigand by ensuring and communicating that, while it is a CIAC initiative to which Harmac formally subscribes, the ethic, principles and expectations are subscribed to throughout Seaboard and reflected in processes in place throughout the company.

iv) Communicate this re-verification report to the North York community through the local Business Improvement Area (BIA) organization.

2b) Employee Awareness

Here the team considered how much the employees interviewed are aware of Responsible Care and understand how the ethic underpins the company’s and employees’ own actions and decision-making. Also taken into account was the vis ible evidence of Responsible Care and the ethic. FINDINGS Overview: Using an in house orientation slide program, all Harmac employees have received Responsible Care training/retraining since September, 2010. The re-verification team interviewed Health and Safety Committee members and various other employees during our site vis its. They uniformly displayed a good understanding of Responsible Care and what this meant to them in their day to day work activities. Opportunity for Improvement: i) Document employee Responsib le Care training/retraining expectations and include in

the training management system.

2c) Overall Responsible Care Management System It is a requirement of Responsible Care that companies have documented, sound management systems capable of ensuring that all operations of the company across all business units, functions and sites meet the ethic, the model and other expectations of Responsible Care on an ongoing basis. A sound management system drives continuous improvement, and has the following attributes: Plan - review Responsible Care Model requirements - benchmark best practices - get input from stakeholders - decide on best approach - set targets for performance - assign responsibility Do - document


- train people - assign resources - carry out activities Check- audit - measure performance of system - measure performance from system - obtain stakeholders’ feedback - assess employees’ performance Act - follow-up on audit findings - communicate performance, get feedback - reward or correct employees - repeat Plan steps

There must be such management systems both for the overall management of the company and for each specific requirement as defined by the Responsible Care Model. This section 2.3 covers the team’s findings with respect to this overall management system, and section 3 below covers the specific requirements of the Responsible Care Model that were reviewed in the re-verification. FINDINGS Overview: The company organization is structured in such a way that top down corporate objectives and bottom up performance results are passed through the various business units, orbits and management levels in a very efficient manner, with clear responsibilities outlined and results based recognition systems evident throughout. The company’s management system addresses the four Responsible Care themes as defined for CCPA transportation partners. Responsible Care, Environment, and Safety policies, which set the strategic direction for the company, are in place, and supported by a series of documented practices and procedures. The company is a member of the Ontario Trucking Association and the National Tank Truck Carriers Association in the U.S.A. and is also registered under the ISO 9001-2000 Quality Management System Standard and undergoes external audits against this standard. A recognized service provider is utilized to stay abreast of current and emerging regulatory requirements and other related aspects of the transportation industry. Notwithstanding the above, limited progress was made in addressing both the Findings Requiring Action and Opportunities for Improvement identified during the previous re-verification until recently. Bus iness challenges presented by the turndown in the overall economy and the integration of newly acquired companies during intervening years were reportedly the primary causes. However, organizational restructuring that took place during the past year has enabled increased focus on Responsible Care and the areas requiring improvement documented in the previous re-verification report. Most significant amongst organizational changes impacting Responsible Care was the creation of two vice president positions for Seaboard/Harmac. The Chemical liquids and Business Development VP, David MacDonald, joined the company in September, 2010 and subsequently assumed the role of CIAC’s Executive Contact from Seaboard’s President, Mark Shannon. Core and


Extended Leadership teams were subsequently established and have been conducting management reviews of exis ting systems and processes as they relate to the Responsible Care themes. These reviews will form the basis for upgrading various aspects of the corporate management system for better alignment/inclusion with Responsible Care codes and expectations. Findings Requiring Action: i) Complete the documentation that describes the overall Responsible Care

Management System in terms of the plan-do-check-act continual improvement cycle, as described in the CIAC document entitled “Responsible care for Transportation Partners – A new model for enhancing value” - This could be incorporated into the existing management system document.

ii) Develop a management system around the Environment Responsible Care code elements.

iii) Develop a management system around the Community Awareness aspect of the TransCAER Responsible Care code elements.

iv) Complete the cross referencing of the themes and sub themes of the Transportation Partners Responsible Care model to the relevant management systems and operating manuals.

v) Implement a documented process, utilizing the above cross referencing, to perform an annual assessment to substantiate the annual affirmation to the CIAC that Responsible Care is in place.

Opportunities for Improvement: i) With Responsib le Care being first and foremost an ethic, not a program (often displayed

as an umbrella), this should be communicated at the beginning of the management systems document. Responsible Care specifics could be further described with other programs or processes in place elsewhere in this document.

ii) Document Responsible Care responsibilities in appropriate employee job descriptions. iii) The Team suggests that Harmac’s management of change process includes

organizational changes for positions with Responsib le Care responsibilities. iv) Include Responsible Care expectations in the assessment process for potential new

customers.

2d) Follow-up on Findings in Last Verification Report The team reviewed how the company addressed the findings requiring action and opportunities for improvement cited by the previous verification team in their report to the company. Certain follow-up items are covered in the specific topics below. FINDINGS Overview: There were eight findings requiring action from the previous verification and a greater number of opportunities for improvement. The company issued a letter to customers, informing them that the re-verification had been successfully completed. No requests were received for the report itself or for additional information on it. Comments on the follow up of items in the previous report are included in section 2a) of this report above.


2e) Response to Incidents and Concerns since the last Verification

Since the way in which unplanned situations are handled shows the influence of the Responsible Care ethic and responsiveness of the management system, the team looked at the issues, incidents and concerns that have arisen since the last verification and how the company has handled them. Some of these may be covered under individual topics below, as noted. FINDINGS Overview: The company uses an in-house developed incident investigation system which focuses on identification and analysis of the root causes of all incidents. With the bulk of the corporation’s incidents involving the road transportation of products, the investigation processes are tailored primarily for transportation incidents. The on board truck computer (OBTC) is designed to capture vehicle operating information (e.g. vehicle speed, vehicle location, braking data) prior to and at the time of the incident which, when combined with police reports, scene photos etc provide the input information necessary to do an accurate incident re-construction and analysis. Action and closure of incidents affecting the petroleum side of the business is tracked directly from a safety database used to track incidents and concerns. Issues affecting the chemicals business are moved to another database where they are stewarded to closure. A unique feature of the system is its ability to generate an e-mail incident flash which can be broadcast to appropriate management team members as well as to drivers over the OBTC system. Health, safety & environmental issues are also tracked to closure by the HSE management system. There is a weakness in that the safety database does not adequately reflect the final disposition of all incidents to show that the issue has been addressed and closed, nor is there a mechanism to reflect that remedial action taken was indeed effective, after implementation. The overall effectiveness of the comprehensive suite of technologies and management systems utilized is evidenced by preventable accident rates having decreased from 0.25 to 0.07 per 100,000 miles over the past 5 years, a remarkable 72% reduction. Opportunities for Improvement: i) The company should ensure that the safety database reflects the final disposition and

closure of all incidents and concerns that have been reported into the database including those that have been handed off to other control systems for resolution.

ii) Harmac are encouraged to continue their initiative to identify and implement improvement initiatives to reduce product handling incident rates.

Best Practices: i) Tractor deceleration rates of 9 mph/second trigger an information download for the 60

seconds pre and 40 seconds post the event. This capability has proven valuable to Harmac in incident analysis and they have been told that they are ahead of the curve in adopting this technology.

ii) The robustness of the incident/accident investigation protocol utilized to capture even the most minor of incidents.


Extra Mile: i) The 72% reduction in preventable vehicle accident rates over the past 5 years.

2f) Performance measures

The ‘check’ step of a management system is the part that shows the effectiveness of the system, and a key question is: “What does the company check as its indicator of performance?” For a few items – injuries, train accidents, fuel efficiency, non-accident releases and TransCAER events – CIAC specifies measures for reporting under Responsible Care. Most other areas are left to the discretion of each transportation partner. The team was asked to review and comment on the measures used by the company to track and improve performance. Some of these are covered under specific sections below, but general comments are given here. FINDINGS Overview: The company tracks personal injury rates; accident rate per million miles driven; number of product spills and contaminations; and out of service percentages relative to regulatory roadside inspections. Improvement in these areas continues as they continue to implement specific safety initiatives. While their primary benchmarking process is against their own historical performance, company violation status vs. industry benchmarks is readily available via Provincial commercial violation operating record systems in Canada (e.g. CVOR In Ontario) and US Department of Transportation (DOT) records in the US. Harmac reviews this information on a monthly basis to ensure that all violations recorded have been reported by drivers to the company, to ensure that there are no errors in the data compiled and to assess their ongoing performance against their own history and industry norms. Harmac’s current violation rates on the Ontario CVOR (past 24 months of data) are 22.2% of the monitoring threshold with similar overall performance being recorded on the recent US DOT report. Benchmarking is also addressed through the National Tank Truck Carriers Association, which compares performance for similar sized carriers within its membership. A dri ver scorecard program is currently being rolled out to all orbits. Data provided by the comprehensive data gathering by tractor on board computers is a major input to the system. Scorecard information is currently being shared with drivers for self improvement and comparison data provided for individual comparisons to group averages and company benchmarks. In areas where the system implementation is more advanced, it is proving to be of considerable value for recognizing and rewarding good driver performance and in identifying areas of improvement for others. Opportunities for Improvement: i) There is an opportunity for the company to complete the linkage of driver scorecard

performance to the formal performance evaluation process and driver bonus program across all divisions.

ii) Identify and implement a consistent driver incentive program for the entire organization, specifically across the different operating companies.


iii) There is an opportunity for the company to develop a formalized industry performance benchmark process with performance targets established for various identified measurement areas.

iv) Add additional broad based indicators to the current slate of performance measures. (e.g. completion of planned events and activities such as for TransCAER, emergency response drills, and outreach; and tracking of public concerns received).

Best Practices: i) The Driver Scorecard system. ii) The very comprehensive suite of performance metrics focusing on driver behaviour. iii) The overall commitment towards performance improvement – in some cases by 25% in

their quest to zero. iv) Violation rates on Harmac’s current Ontario CVOR and US Dot carrier profiles are

significantly below the monitoring thresholds. 3) TEAM FINDINGS FOR SPECIFIC MANAGEMENT SYSTEMS 3a) Operations Safety

The team looked at how the hazards and risks from potential episodic ('sudden') incidents are identified and controlled throughout the company’s operations, including awareness and understanding of the methods used for assessment and the techniques for hazard control, and how these are applied and kept current. FINDINGS Overview: Safety at Harmac is given top priority. Annual environment health and safety objectives are established, with performance tracked against these and reviewed monthly by functional personnel and senior management. The company has a published safety policy and a very detailed and extens ive Driver’s Guide that outlines safe practices for all aspects of the job. There are a variety of dri ver training programs, including orientation of new drivers that includes Responsible Care, TDG, emergency response, defensive driving and mentoring. Incident flashes via the On-Board Truck Computer (OBTC) system keep drivers aware of safety issues on an ongoing basis. Company vehicles make use of leading edge equipment and technology to enhance safety while on the road. OBTC’s gather extens ive equipment trip operational data and, in concert with the linked PeopleNet data management system, record driving activity and allow for the use of e-mail communication, electronic driver logs, incident flashes and tractor operation analysis. A unique capability is that the system “pings back” to dispatchers when speed limits are exceeded in any of 4 identified speed zones. These four zones represent 39% of areas where issues/incidents occur. Latest dispatch control technology (TWM system) is used to prevent drivers from being dispatched when their qualifications expire, available hours of service are not sufficient to complete the planned trip or when they are not product qualified. Started in 2006, BASE passive shutdown systems have been installed on propane tankers to monitor and automatically shut down the offload process when abnormal pressures occur. This was well before such systems were mandated.


Transportation route risk assessments are carried out on new delivery routes and where new commodities are to be carried. Detailed Journey Management Plans and/or site management plans are also used for selective/strategic locations. There is also a process in place to determine if in fact the company can handle products that that have not been handled in the past. The company has refused to carry some specific commodities as a result of the above assessment. Tractors and trailers are maintained by company personnel with occasional outside contract shop support. Preventive maintenance scheduling is managed by a computerized system. Controls are also in place to ensure that owner operators maintain their equipment on a scheduled basis. Tank cleaning is done at pre-qualified external tank wash facilities. Under run protection has been selectively installed, and anti roll over technology has become standard, on new company petroleum B- train units. A ‘Tire Max’ system is also utilized. It senses and maintains tire pressures using tractor compressor supplied air. There is a formalized management of change process in place for changes to plant and equipment. Health and safety committees, or the equivalent, are in place at terminal facilities. A unique initiative is that monthly Joint Health and Safety (JHSC) meetings are held Ontario-wide via teleconference and include locations that are not required by law to have a JHSC. Driver participation impacts the amount of their safety bonus. There is also a job audit program in place which is specifically applied to driving operations. At least once per year each driver is accompanied by a member of management and their driving performance assessed. Observations by management personnel from the roadside are also carried out. Opportunities for Improvement: i) The company should consider expanding the Journey Management plan to the

chemicals business unit on a strategic basis. ii) Expand the ‘Target Zero’ safety awareness program, considered a best practice

imported via the Tudhope Transport acquisition, to the Chemical Division and potentially other transportation companies within the Seaboard/Harmac group.

iii) Complete linkages between the Transman system and the TWM dispatching computer to prevent equipment from being dispatched when due for inspection and/or servicing.

iv) Anti roll over technology and anti under- run protection are best practices used on petroleum units that the team suggests should be selectively installed on chemical trailers.

Best Practices: The team found several examples of leading edge road transportation equipment, practices and technologies in place or being implemented which it considered worthy of sharing with CIAC peer companies as follows: i) The PeopleNet data management and On-Board Truck Computer (OBTC) systems that

record driving activity and allow for the use of e-mail communication, electronic driver logs, incident flashes and truck operation analysis are an industry best practice.

ii) Tractors governed to 102 km/hr, both on pedal and cruise. iii) The VORAD system for sensing blind spot encroachment., iv) The ‘Diesel Talk’ program, a motivational CD series, provides drivers with information

on transportation related health and safety issues. v) The “pinging” back to dispatchers when posted driving speeds are being exceeded.


vi) Well defined driver training program including the use of a well recognized driver training process (Smith system) for initial, annual refresher and two year repeat driving skills training.

Extra Mile: i) The focus on technology to improve road safety.

3b) Supply Partner Assessments

The team looked at how customers, suppliers, carriers, contractors, etc. are assessed, selected and measured for their performance with respect to meeting the Responsible Care expectations of the company. FINDINGS Overview: There is a formalized process for selection and approval of suppliers based upon quality of work and materials supplied, and there is a preferred vendor list in place. New suppliers are provided with information on Responsible Care and there is an annual review of their performance. Periodic audits of parts and equipment suppliers are carried out by fleet management personnel to ensure company quality standards are met. Annual audits are also carried out by fleet management personnel on external vehicle maintenance facilities. External tank wash facilities are required to complete a self audit developed by the National Tank Truck Carriers Cleaning Council, a program widely accepted throughout the industry. The company’s commitment to Responsible Care is communicated to customers with an expectation that they have processes in place to ensure the safety of personnel, product quality and respect for the company’s equipment. Opportunities for Improvement: i) The company should consider doing a gap analysis between the audit/self assessment

processes used for each supplier and the applicable Responsib le Care elements and codes and making the appropriate adjustments.

ii) Consideration should be given to implementing a formal audit process to periodically validate the quality/accuracy of self assessments.

3c) Greenhouse Gas Emissions The team looked at the company’s history, projections and plans for reducing greenhouse gas emissions, both through reductions in direct emissions from facilities and equipment and through energy efficiency/intensity improvements. FINDINGS Overview: While greenhouse gas emission levels from road transport vehicles are regulated, the company’s approach is to exceed the government standards wherever possible. To this end a number of emissions reduction technologies have been implemented with others being considered as they become available. Implemented examples include the automatic shutdown of tractor engines after 5 minutes idling, bunk heaters in sleeper cabs


to eliminate the need for running vehicle engines for heating, and power units being governed to a maximum speed of 102 KPH. New tractors are purchased with the latest emission reducing technologies and the new driver scorecard system also focuses on improving driving performance, which reduces environmental emissions. Opportunities for Improvement: i) Consider a greater focus on recycling of office materials. This is again an image that

needs to be developed to reinforce the culture of responsib le management of resources.

ii) Housekeeping - at both North York and the Burlington shops. Spillage beside the waste oil tank as an example at the Burlington site and just a general clutter at the shop in North York. Allowing poor housekeeping habits does not support efforts when trying to promote a no drip, no leak culture to drivers or mechanics that repair off-loading pumps.

iii) Waste containers for used oil or used cleaning chemicals should be labeled appropriately. The message potentially received by employees and drivers regarding waste products not being taken could be translated to driver conduct and attitude at load points and customer delivery points.

iv) Include tire and waste oil recyclers in the supplier assessment process. v) Add the condition of waste containers/tanks to Joint Health & Safety Committee

housekeeping checklists.

3d) Security The team looked at how the company assesses and manages potential security threats to personnel, facilities, equipment, etc. throughout its entire transportation system (e.g., yards, terminals, routes, storage locations, etc.) including exposure to diversion of materials for illicit activities such as use as or in production of chemical weapons, explosives or narcotics. FINDINGS Overview: There is a documented overall security plan in place, which includes a process to provide all personnel with security awareness training. All drivers complete a test following the training and they carry a card confirming that security training has been provided. Specific policies also cover point-to-point cargo security; yards and facilities; equipment; and internal activities. A sensitive information plan is communicated on a need to know basis and reviewed annually. The company is a certified and validated participant in “C-TPAT” a security initiative of the U.S. Customs and Border Protection Agency. In 2005 the company’s security initiatives were audited by the U.S. Department of Transportation acting on behalf of the U.S. Department of Homeland Security. Finding Requiring Action i) Document, in the management system, the requirement to annually test through

an appropriate exercise, the effectiveness of the security management system and its processes.


Opportunity for Improvement i) Expedite completion of the planned security assessment and appropriate security

upgrades at the newly acquired Burlington facility.

3e) Emergency Response The team looked at the company’s management system for ensuring appropriate preparedness and response to emergencies throughout the entire transportation system (e.g., yards, terminals, routes, storage locations, etc.), including involvement with local emergency services and other mutual aid processes. FINDINGS Overview: There is comprehensively documented emergency response plan in place, which is designed to ensure an immediate and effective response to operational emergencies. The plan includes specific protocols for all facets of the business including petroleum, chemical and compressed gases. The worst case scenario for an incident at a company terminal, parking or other fixed facility would be a failure of a full tank containing hazardous materials. This is mitigated by a company policy and practice not to park full tanks on these premises. It is recognized however that such parking situations could occur in exceptional circumstances, but every effort is made to prevent this from occurring. Specialised services are contracted to carry out product handling during an emergency, and the company takes responsibility for clean-up and remediation activities, where this is required. The emergency manual has been shared with a number of the company’s core customers which have multiple sites serviced by the organization. Finding Requiring Action i) Document the requirement for, and implement, an annual emergency exercise

program to validate and maintain the effectiveness of the emergency exercise management system and its processes.

Opportunities for Improvement i) The emergency response plan should include the requirement for a periodic review of

the potential impacts of neighbour operations on company owned facilities. ii) Update the emergency response manual for contact names and phone numbers. In the

customer contact section there was a least one company and contact that no longer is correct – for at least the last 7-8 years.

iii) Include local emergency responders in terminal response exercises for scenarios where there is a potential for their participation.

3f) TransCAER Outreach/Community Dialogue The team looked at how the company is fulfilling it’s commitments for ensuring the potentially affected public understands and are prepared for the risks presented by adjacent transportation operations, including outreach and two way dialogue initiatives.


FINDINGS Overview: The company is represented on three (3) CIAC TransCAER committees. These are Toronto, Ontario Regional and National. Involvement with the Quebec Regional TransCAER Committee continues to be sought. Company TransCAER representatives generally attend the required local and regional TransCAER meetings and there appears to be the requisite participation in TransCAER activities. TransCAER events in which the company has participated during the past year included an equipment demonstration by the Toronto Fire Department, a mock exercise led by the city of London and an equipment demonstration as part of the Sarnia area Community Advisory Panel (CAP) in May, 2010. There has been no significant change in concerns expressed by the public since the last verification. These primarily take the form of complaints about the manner in which they have observed company trucks operating on the highway. All complaints of this nature are followed up with the driver concerned and the complainant where information is provided to identify the individuals. The company is a member of the Emery Village Business Improvement Area (BIA) in North York. The local community representative on the verification team is an employee of the BIA. Opportunities for Improvement i) The company should estab lish an ongoing association with the BIA through the local

community representative to facilitate communication with the local community. ii) At the Burlington facility, the company should consider periodic visits with the facility’s

neighbours as a means of keeping abreast of changes to operations adjacent to the facility and to exchange operational risk information.

iii) Community communications and neighbor visits should be recorded/logged to help identify the effort with the communication whether it was successful or not.

iv) Create a layman’s summary of this re-verification report for sharing with their BIA and follow-up with this organization on how it was distributed and received.

3g) Social Responsibility/Sustainability As a separate task from the re-verification process, the verifiers have been requested to collect information on: - How the company sees and fulfills its role in areas of social responsibility and - What, if anything, the company has considered doing, or may have started to do,

opposite the new Responsible Care® Ethic & Principles for Sustainability.

In these areas, the team was not looking for evidence that the company’s performance met certain expectations, but rather for information on how the company sees and fulfills its role in these areas. This information may prove useful as CIAC works to update the Codes of Practice, guidance material and Re-verification Protocol for Transportation Partners. Verifiers have not judged the answers, and the company was not expected to have answers for all or any of these questions. Information provided on social responsibility is detailed below while


FINDINGS Social Responsibility The company recognizes that their success requires engaging employees that have an understanding, and appreciation for the direction and culture of the company. Inherent in this culture is the intent to create a better life for its employees and a responsibility to the broader society. Social responsibility is recognized, encouraged and supported through a number of initiatives. The company newsletter includes a section called “Seaboard/Harmac giving back to the community”. This highlights community spirit stories of friends and co-workers that volunteer their skills, time and efforts to support local communities. The company also runs a number of programs that enhance the lives of their employees and the surrounding community. Some of these are: - Annual food drive - Support for the Salvation Army - Support for sleep apnea testing - Participation in the Sarnia Transportation CAP community outreach program - Educational assistance plan for employees

Principles for Sustainability The company has provided answers to questions on the Principles for Sustainability which are detailed on attachment 3 of this report.

4. CONCLUSION

As a result of the various site vis its, documentation reviews and several interviews with company personnel and external stakeholders, the re-verification team is satisfied that the company’s decision-making and actions are underpinned by the Responsible Care ethic, and that the overall management system is self-healing (i.e., based on a process of continual performance improvement, and identification and timely correction of deficiencies). This was also demonstrated by the clear commitment of company personnel to do the right thing and do it well. The team believes that the company is capable of responding to the Findings Requiring Action identified during this re-verification. The re-verification is complete and no further involvement is required by the re-verification team.

5. COMPANY COMMENTS Harmac Transportation and its representatives would like to thank the re-verification team for a comprehensive, insightful and efficient re-verification process. Harmac is in agreement with the Findings and Opportunities for Improvement (OFI) identified within and appreciate the efforts of all in capturing these for constructive follow up and continuous improvement. The process from here will be to reconvene as a Responsible Care leadership group (core and extended team members) and set out a plan to address the findings and prioritized OFI’s.


Harmac looks forward to the development of the new Transportation Partner Protocol and would be happy to ass ist in anyway needed. Thanks to the re-verification team again for a successful process. David MacDonald Vice President- Chemicals & Business Development, CIAC Executive Contact


APPENDIX 1 COMPANY DESCRIPTION

Harmac Transportation Inc. is a 100% owned subsidiary of Seaboard Liquid Carriers headquartered in Dartmouth, Nova Scotia. Since the previous Re-verification in 2006, the company has continued to be active in three major bulk liquid divis ions (petroleum, liquid chemical and LPG). Core products moved in the liquid/chemical divis ion include soaps, resins, latex, oil, chlorine and solvents. The petroleum division transports gasoline, diesel fuel, jet fuel and naphtha. However, there have been significant organizational and operations scope changes since the previous Re-verification as follows: The Seaboard corporate structure has been changed from regional specific to business

specific profit centres. There are now two Operations Vice Presidents, one for petroleum and LPG, including these areas of Harmac, and a second for Chemical liquids and Business Development. The Chemical liquids and Business Development VP, David MacDonald, joined the company in September, 2010, and has subsequently assumed the role of CIAC’s Executive Contact from Seaboard’s President, Mark Shannon. David brings chemicals industry experience to his new role, having previously been employed by a major Canadian chemicals manufacturer.

In 2006, the company acquired AJ Weigand, a chemical liquid carrier based in Bolivar, Ohio with satellite operations in Duncan, South Carolina. This operation runs 45 units domestically in the US and cross border into Canada.

In April, 2010, a modern terminal and maintenance facility in Burlington, previously owned by a flat deck carrier, was acquired and is currently being used as a base for LPG operations and to augment corporate fleet maintenance capabilities in the central Ontario area.

Petroleum operations have recently expanded with the purchase of Mantei’s Transport, an Alberta based carrier with terminals in Calgary and Edmonton.

The scope of chemicals operations has been scaled down in response to the economic downturn. One outcome of this is that Sarnia operations have been scaled back from a full terminal, maintenance facility to a maintenance shop/ equipment holding yard status. The number of tractors in the Canadian liquid/chemical divis ion has also been reduced from 112 to 87 while the petroleum fleet has increased from 72 to 126.

All Harmac facilities and operational infrastructure in Canada are subject to the Responsible Care commitment. These include the following:

North York office, terminal and garage operations. Montreal office, terminal and garage operations Sarnia garage operations. Burlington office, terminal and garage operations.


APPENDIX 2 TEAM AND CONTACTS

1. The Verification Team

The verification team consisted of the following: Name Affiliation Representing Alec Robertson Consultant Industry (team leader)*

Claude Bourdon Consultant Industry* Jim Wakefield General Public Public* Christina Sulmona Emery Village Business Association Community Team members assigned by CCPA are shown by an asterisk (*).

2. Persons contacted at the company Name Position David MacDonald Vice President- Chemicals & Business Development, CIAC

Executive Contact Bob MacQuarrie Vice President-Energy & Refined Products Harv Roberts Director, HSE-Seaboard Transport Albert Costa Divis ion Manager- Liquid Chemicals Mark Napier Regional Operations Manager-Ontario Todd Stauffer General Manager-Branded Companies Scott Mannett Operations Manager-Liquid Chemicals Brad Beaton Manager-National Compliance Barry Briggs Manager-Health, Safety & Compliance, Central Region Mike Sharpe Quality Assurance Manager Craig Whittaker Process Improvement Manager Jeff Waite HSE Compliance Management Darrell MacNeil Garage Manager – Fleet Solutions Garry Stewart Shop Manager-North York & Burlington Gerald Stephens L.P.G. Operations-Burlington

3. Process for obtaining information The process followed the CCPA Responsible Care Re-verification Protocol (2006-2008) for Transportation Partners, and consisted of a series of interviews with management, support staff and hands on employees, document reviews, and site inspections. Vis its were made to the company head office/transportation terminal in North York and the transportation terminal in Burlington, Ontario.


APPENDIX 3

FACT-FINDING QUESTIONS RE NEW RESPONSIBLE CARE ETHIC & PRINCIPLES FOR SUSTAINABILITY

“Describe any new things you, at the site and/or corporate level, have considered, are doing or have started to do with respect to these concepts: Work for the improvement of people’s lives.

i) Speed management ii) Fatigue management programs iii) Driver behavioral programs being introduced iv) Sleep apnea program being reviewed

Work for the improvement of the environment.

i) Speed management process- Truck speed is governed and monitored ii) Idling time management process - Truck has maximum idle time shut off and

monitored iii) Side shields for wind deflection on van trailers iv) Installation of bunk heaters in tractors to prevent winter idling

Take preventative action to protect health and the environment.

i) New tractor purchases – reduced emission technology Innovate for safer products.

i) Anti roll over technology has become standard equipment on all new petroleum equipment

ii) Under run protection on petroleum equipment iii) Battery emergency disconnect on tractors iv) Better view points for driver vis ibility being incorporated into truck specification

Innovate for safer processes.

i) Mandating the corporate introduction and support to on board computer – PeopleNet

Innovate to conserve resources.

i) Recap in fleet tire program ii) Used oil recovery and sold to industry process companies iii) Seasonal control over exterior lighting

Innovate for products and processes that provide enhanced value.

i) No offers Engage with business partners to ensure stewardship and security of products and/or

services. i) working with customer for increased use of sealed product ii) working with customers and consignees in developing route assessments


Engage with business partners to ensure stewardship and security of raw materials. i) Pail off of residual petroleum products at loading terminal ii) Transport of co mingle products back to origin for the re refinement of the

products Understand and meet expectations for social responsibility.

i) looking at integrating social responsibility as part of the driver outreach meetings ii) looking at a quarterly R.C. leadership round table

Promote awareness of Responsible Care.

i) Website ii) Company letterhead iii) Employee orientation new and exis ting iv) TransCaer v) Marketing literature vi) Office visuals (plaque, banners etc.)


APPENDIX 4 SUMMARY OF OPPORTUNITIES FOR IMPROVEMENT

1) Ensure that all opportunities for improvement identified in the 2006 re-verification report

have been appropriately considered and addressed with the results documented. 2) Add Responsible Care signage (e.g. external banners and/or flags) to assist in branding

Responsible Care in the community. 3) Consider migrating Responsible Care to the rest of the transportation companies within

the Seaboard/Harmac group - Seaboard, GWR, Foss and the US company – AJ Weigand by ensuring and communicating that, while it is a CIAC initiative to which Harmac formally subscribes, the ethic, principles and expectations are subscribed to throughout Seaboard and reflected in processes in place throughout the company.

4) Communicate this re-verification report to the North York community through the local Business Improvement Area (BIA) organization.

5) Document employee Responsib le Care training/retraining expectations and include in the training management system.

6) With Responsib le Care being first and foremost an ethic, not a program (often displayed as an umbrella), this should be communicated at the beginning of the management systems document. Responsible Care specifics could be further described with other programs or processes in place elsewhere in this document.

7) Document Responsible Care responsibilities in appropriate employee job descriptions. 8) The Team suggests that Harmac’s management of change process includes

organizational changes for positions with Responsib le Care responsibilities. 9) Include Responsible Care expectations in the assessment process for potential new

customers. 10) The company should ensure that the safety database reflects the final disposition and

closure of all incidents and concerns that have been reported into the database including those that have been handed off to other control systems for resolution.

11) Harmac are encouraged to continue their initiative to identify and implement improvement initiatives to reduce product handling incident rates.

12) There is an opportunity for the company to complete the linkage of driver scorecard performance to the formal performance evaluation process and driver bonus program across all divisions.

13) Identify and implement a consistent driver incentive program for the entire organization, specifically across the different operating companies.

14) There is an opportunity for the company to develop a formalized industry performance benchmark process with performance targets established for various identified measurement areas.

15) Add additional broad based indicators to the current slate of performance measures. (e.g. completion of planned events and activities such as for TransCAER, emergency response drills, and outreach; and tracking of public concerns received).

16) The company should consider expanding the Journey Management plan to the chemicals business unit on a strategic basis.

17) Expand the ‘Target Zero’ safety awareness program, considered a best practice

imported via the Tudhope Transport acquisition, to the Chemical Division and

potentially other transportation companies within the Seaboard/Harmac group.

18) Complete linkages between the Transman system and the TWM dispatching computer

to prevent equipment from being dispatched when due for inspection and/or servicing.


19) Anti roll over technology and anti under- run protection are best practices used on petroleum units that the team suggests should be selectively installed on chemical trailers.

20) The company should consider doing a gap analysis between the audit/self assessment processes used for each supplier and the applicable Responsib le Care elements and codes and making the appropriate adjustments.

21) Consideration should be given to implementing a formal audit process to periodically validate the quality/accuracy of self assessments.

22) Consider a greater focus on recycling of office materials. This is again an image that needs to be developed to reinforce the culture of responsib le management of resources.

23) Housekeeping - at both North York and the Burlington shops. Spillage beside the waste oil tank as an example at the Burlington site and just a general clutter at the shop in North York. Allowing poor housekeeping habits does not support efforts when trying to promote a no drip, no leak culture to drivers or mechanics that repair off-loading pumps.

24) Waste containers for used oil or used cleaning chemicals should be labeled appropriately. The message potentially received by employees and drivers regarding waste products not being taken could be translated to driver conduct and attitude at load points and customer delivery points.

25) Include tire and waste oil recyclers in the supplier assessment process. 26) Add the condition of waste containers/tanks to Joint Health & Safety Committee

housekeeping checklists. 27) Expedite completion of the planned security assessment and appropriate security

upgrades at the newly acquired Burlington facility. 28) The emergency response plan should include the requirement for a periodic review of

the potential impacts of neighbour operations on company owned facilities. 29) Update the emergency response manual for contact names and phone numbers. In the

customer contact section there was a least one company and contact that no longer is correct – for at least the last 7-8 years.

30) Include local emergency responders in terminal response exercises for scenarios where there is a potential for their participation.

31) The company should estab lish an ongoing association with the BIA through the local community representative to facilitate communication with the local community.

32) At the Burlington facility, the company should consider periodic visits with the facility’s neighbours as a means of keeping abreast of changes to operations adjacent to the facility and to exchange operational risk information.

33) Community communications and neighbor visits should be recorded/logged to help identify the effort with the communication whether it was successful or not.

34) Create a layman’s summary of this re-verification report for sharing with their BIA and follow-up with this organization on how it was distributed and received.

CHEMISTRY INDUSTRY ASSOCIATION OF CANADASuite 805, 350 Sparks Street

Ottawa (ON) K1R 7S8T: 613 237-6215 F: 613 237-4061

www.canadianchemistry.ca

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