Keep a Handle on Hazardous Material Regulations - Compliance
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SECTION: Compliance

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Contact Kim Phelan at (800) 388-0650 ext. 340.

Keep a Handle on Hazardous Material Regulations

By Kim Phelan

Article Date: 12-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.

The regulatory maze gets tricky when the walls keep shifting - technology tools and outsourcing some of the functions can help dealers stay out of danger.

Every equipment dealer is home to hundreds of chemicals and hazardous materials, and the procedures for properly handling and disposing of those substances are, of course, strictly governed by numerous federal, state and municipal rules and regulations. So complex is the regulatory solar system that even dealerships with a full-time environmental health and safety (EHS) director on the payroll may struggle to keep abreast of updates and changes that occur. One such change is imminent: The EPA’s Spill Prevention, Control, and Countermeasure (SPCC) rule has been modified and will take effect July 1, 2009. A rule that stems from the Clean Water Act of the ’70s, the SPCC will soon require full compliance next July from companies established since 2002. Essentially, companies that store more than 1,320 gallons of petroleum products onsite must have a plan in place that details emergency procedures in the event of a spill. While self-certification is an option for those storing 1,320 to 10,000 gallons, the process is very complicated, says Chris Quinn, Northeast district manager for KPA, a Denver-based firm that provides EHS and loss-control services to dealers. And for those dealerships storing more than 10,000 gallons, a professional engineer must be hired to create and certify a custom plan for every spill contingency at each location.“This includes any oil deliveries onsite,” said Quinn. “You have to be able to contain it if an oil tanker has a spill; for example, that plan might include a big berm. Only a professional engineer can really say what is practical for your location.” Quinn says the July 1 date for compliance by newer facilities is final after a series of controversies and postponements. Another regulation that will impact construction equipment dealers, albeit not as soon, covers spray paint procedures – under the revised rules comprised in the “National Emission Standards for Hazardous Air Pollutants: Paint Stripping and Miscellaneous Surface Coating Operations at Area Sources,” dealers with spray coating facilities existing prior to 2007 have been “grandfathered” until 2011 for compliance with a number of updated spray coating procedures. For companies that create a new spray coating facility going forward, compliance is required immediately. (A PDF of the rule, EPA-HQ-OAR-2006-0306, is posted with the electronic version of this article at of the changes pertains to registering your paint facility with the government, says Peter Zaidel, product manager at KPA. Dealers will also be responsible for a host of personnel training and record-keeping requirements specific to the proper use of equipment and chemicals they use in-house, he says. On the environmental side, other changes related to air pollution address specifications for paint booths. Some of the rule’s changes, says Zaidel, also include extension requirements for the equipment used for painting and the location in which it is performed. “This may require large changes to the facility in which equipment parts are painted,” he said.A third regulatory change that has recently come into play for equipment dealers is an OSHA update to the Personal Protective Equipment (PPE) rule – currently employers are required to identify onsite hazards to employees and provide necessary protective gear to prevent injury. However, a loophole in the rule’s wording has, until now, allowed employers to provide the protective equipment but charge their employees for it. New wording, says Zaidel, spells out the employer’s obligation to both provide and pay for protective equipment for employees handling hazardous materials and performing on-the-job tasks that could cause injury.Risk at Every Turn
Monitoring changes to EHS rules and regulations can be a tedious and time-consuming undertaking – keeping the dealership apprised and in compliance with hazardous material and waste issues alone can quickly mount into more than one full-time job. But the consequences of ignorance are grim.
“Unfortunately, the way many of our nonclients find out that they’re not in compliance is by getting fined – and that’s not a good way to find out,” said Zaidel.
But how do inspectors end up on your facility to discover noncompliance in the first place?An accident or spill will draw federal, state and local authorities in a hurry, says Zaidel.“Let’s say an oil hauler comes onsite and starts pumping oil – the guy is on his cell phone not paying attention. Before you know what’s happened, all of a sudden you can get 300 gallons of oil spilled into the ground. That’s obviously going to be a time when EPA and state agencies will show up and do a full investigation.”Dealers can’t underestimate the other major factor that draws inspectors onto their property: A phone call to EPA or OSHA from a disgruntled or terminated employee is sure to bring an inquisitive inspector out for a first-hand look. And if he finds something out of compliance on the environmental or safety side, says Zaidel, he’s likely to bring in others from additional agencies or municipal departments.Properly dealing with hazardous materials onsite is just half the battle for equipment dealers, however; whatever chemicals, fluids or other hazardous substances they ship to customers, transport to other branch locations, or even carry on field service trucks, are all strictly regulated by the Department of Transportation (DOT) and the Federal Aviation Administration (FAA). Noncompliance with these federal agencies’ regulations can lead dealers down a foreboding and expensive path. Quinn cites an instance in which an automobile dealer shipped an 8-ounce spray can of touch-up paint through the mail – an FAA inspector showed up and the dealership was slapped with an immediate $20,000 fine they could not appeal. With similar rigor, when DOT inspectors look at documentation for hazardous waste shipments in transit, Quinn says they have been know to trace shipments back to the point of origin to a dealer – and when they arrive onsite, they will most likely go straight to the parts department or shipping dock and speak directly with the person who signed for the shipment. “If those employees are not properly trained or certified, [DOT inspectors] don’t give you much time to comply,” said Quinn.Construction equipment dealers could face this type of scenario if they ship or otherwise transport paint to a customer, for example. DOT rules would also apply to a field service truck that may be transporting a tank of gasoline, lubes, oils, or, says Zaidel, virtually anything that has an MSDS sheet or has come into contact with something that has an MSDS. How Much is This Going to Cost Me?
Fines may be only the beginning of woes for dealerships that take a lax stance on EHS procedures. In the case of injuries to personnel, the implications for insurance premiums, out-of-pocket direct and indirect costs, and the incalculable cost to a dealer’s reputation are steep indeed.
Most dealers already recognize the importance of keeping their Experience Modifier as low as possible, the point system used by insurance companies on which premiums are based. The higher the Experience Modifier, the higher a dealer’s premium will be above the average.“It’s definitely in the dealer’s best interest to have an onsite environmental and safety program,” said Zaidel. “If you can prevent several accidents and issues where you’d have to file a claim, you can get a pretty solid return on your investment for the program. It might cost you money to hire a consultant or use online services and training tools, but it really makes a big difference when you consider workman’s comp premiums and the indirect costs of an accident. Zaidel says a rule of thumb statistic indicates that for every dollar spent on the direct costs of an accident, a dealer will spend four times as much on indirect costs.“And that ratio is actually on the low side,” added Quinn. “Some experts estimate that number is much higher. The average back injury costs $30,000, but that means you could incur $150,000 in indirect expenses. When it’s all said and done, that’s a large amount of money to make up on your bottom line.”
Technology can help the dealer cope with the many compliance demands. Online MSDS databases, automatic electronic documentation of compliance and training, online training and certification programs, to name a few, provide some simplification to the web of regulatory obligations. Building a partnership with an outside EHS service can also help manage all or portions of the dealer’s compliance burden, in some cases offering dealers an objective snapshot, says Zaidel, about what’s occurring at all the company’s branch facilities.
“Technology tools can help dealers see how everything compares among their locations; they also identify where your largest liabilities are and what to focus on first as a company,” said Zaidel.
Bottom line, however, is that there’s no substitute for top management setting the tone on environment and safety issues.
Zaidel says it’s up to the owner to establish a safety culture at the dealership.“It really has to be something upper management is pushing down, letting everyone know that you take it seriously and you want everyone at the store to take it seriously,” Zaidel said. “Provide plenty of positive reinforcement for preventing accidents and injuries, and if an employee raises a concern, act on it immediately. Show them it’s something you care about by taking care of problems right away.”Quinn adds that employees certainly sense when basic housekeeping measures are a low priority – and when basics are overlooked, they begin to let many other things slide, as well. “If the only thing management is pushing is the bottom line and productivity to make more money, you can wind up minimizing the safety aspect or the environmental aspect of things,” said Quinn. “A lot can be accomplished with good communication from the top down.”He says dealers need to pay attention and learn from accidents that do happen, conducting a full investigation and cause-analysis and then developing policies to ensure the same mistakes aren’t repeated.
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