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Increased Enforcement of Chemical Facility Anti-terrorism Standards Against Companies That Store Chemicals For Use In Manufacturing Or Other Processes

February 8, 2017Alerts

Beginning in 2007, the Department of Homeland Security (“DHS”) started implementing the Chemical Facility Anti-Terrorism Standards (“CFATS”) with the intent of “protecting and securing chemical facilities from terrorist attacks.” Any facility that stores threshold quantities of chemicals that are at risk of being released or stolen by terrorists could be regulated under these standards. Facilities under these regulations range from large manufacturing companies to “main street” businesses.

Congress mandated in the CFATS that DHS identify and notify the facilities that should be regulated. By 2014, when the law was reauthorized by Congress, DHS was regulating only approximately 2500 facilities. It then began issuing more notices in late 2016 to thousands of additional facilities requiring them to complete an online survey (“Top-Screen”) concerning chemical storage.

According to DHS, facilities in the following industries may be subject to the CFATS:

  • Chemical manufacturing, storage and distribution

  • Energy and utilities

  • Agriculture and food

  • Paints and coatings

  • Explosives

  • Mining

  • Electronics

  • Plastics

  • Healthcare

While the new presidential administration has indicated it is likely to enforce some existing laws less vigorously, we predict it will more vigorously enforce this chemical risk law because it is also intended to protect the country from terrorist attacks.

Top-Screen Notices

DHS maintains a Chemicals of Interest List (“COI List”). Facilities that receive a Top-Screen notice must report stored chemicals at or above the threshold quantities and concentrations on the COI List. Not all facilities that identify such chemicals will be subject to regulation because DHS does not consider all such facilities to be “high risk” and therefore subject to regulation. For its risk determination, DHS considers COI toxicity, COI accessibility, type of COI container and geographical location, among other factors. Although DHS publishes some of the risk factors it takes into account, it considers the rest to be classified information.

Burdensome Compliance and Confusing Standards

Compliance with the CFATS can be costly and burdensome. For example, regulated facilities must submit Security Vulnerability Assessments (SVAs) and detailed Site Security Plans (SSPs) or Alternative Security Plans (ASPs), even though most of these facilities already have similar plans in place pursuant to other federal and state regulations designed to minimize the risks associated with storing large quantities of chemicals. Facilities must also undergo time-consuming initial DHS inspections and regular inspections thereafter. DHS is requiring currently-regulated facilities to submit new Top-Screens, but it has not informed the public of its reasons for imposing this requirement again.

Compliance can be difficult because of shortcomings in the CFATS statute and regulation. Congress did not clearly state in the CFATS statute what DHS is authorized to do. Likewise, DHS has not clearly or adequately set forth in the CFATS regulation how it enforces the statute or how companies are expected to comply.

Operational Modifications to Lower Security Risk

Facilities that store chemicals on the COI List at or above the threshold quantities should review their operations to determine whether any changes could lower their security risk and thereby decrease the likelihood that they will become regulated. For example, a facility could reduce the amount of chemicals stored on-site to below the threshold amounts and order replacements more frequently. The additional cost of doing this may outweigh the cost and burden of complying with the CFATS. Regulated facilities that modify their operations may seek a redetermination of their risk from DHS, which could shift those facilities to unregulated status.