Management of Organizational Change: A CSB Perspective

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1 Management of Organizational Change: A CSB Perspective Rick Engler CSB Board Member Process Safety Conference May 17, Dordrecht

2 Driving Chemical Safety Change through Independent Investigations to Protect People and the Environment

3 What is the CSB? The CSB is an independent, non-regulatory U.S. Federal agency charged with investigating chemical accidents ~40 professional staff; $11 million annual budget Board members are appointed to 5-year terms by the President and confirmed by the Senate. CSB conducts root cause investigations of chemical accidents at fixed industrial facilities. The agency does not issue fines or citations. Primary policy levers are outreach and safety recommendations.

4 Types of Incidents That We Investigate Jurisdiction: Release of hazardous substance into the ambient air from a fixed facility (with consequences) Incidents in chemical plants, oil refineries and facilities using chemicals Toxic gas releases Explosions Other fatalities, e.g., confined space, hot work Major environmental releases

5 Deployment Criteria Deaths or injuries onsite or offsite Substantial property loss Offsite public or environmental impact SOURCE: St. Louis Fire Department Broad national significance Issue of interest Available resources SOURCE: KMOV via AP

6 What Investigators Do Respond quickly to scene Gather physical evidence Interview people Test equipment Comb through documentary evidence Draft reports with proposed recommendations for Board approval

7 Current Investigations & Deployments Investigation Location Incident Date DuPont Toxic Chemical Release Delaware City Refining Company Enterprise Products Partners Fire and Explosion Sunoco Logistics Partners Flash Fire MGPI Products, Inc., Toxic Chemical Release ExxonMobil Refinery Chemical Release and Fire Packaging Corporation of America Hot Work Explosion La Porte, TX November 15, 2014 Delaware City, DE November 29, 2015 Pascagoula, MS June 27, 2016 Nederland, TX August 12, 2016 Atchison, KS October 21, 2016 Baton Rouge, FL November, 22, 2016 DeRidder, LA February 8, 2017 Loy-Lange Box Company St. Louis, MO April 3, 2017 Report to be released soon

8 Recently Closed Investigations Investigation Location Incident Date Williams Olefins Plant Fire and Explosion Geismar, LA June 13, 2013 Freedom Industries Chemical Release Charleston, WV January 9, 2014 ExxonMobil Refinery Explosion Torrance, CA February 18, 2015 Airgas (Air Liquide) Nitrous Oxide Explosion Cantonment, FL August 28, 2016

9 Drivers of Critical Chemical Safety Change ( Critical Drivers List ) The CDL is a CSB Program to: Identify the most important chemical safety improvement goals of the CSB Pursue implementation of changes most likely to advance chemical safety Focus special advocacy efforts by Board Members and staff Inform deployment decisions and allocation of resources

10 Current Critical Drivers List

11 Significant Historical Process Safety Events Phillips 66 (1989) 23 Dead; 314 Injured; $716 MM in damage Union Carbide, Bhopal (1984) Thousands dead; tens of thousands injured AP Photo/Sondeep Shankar Arco Chemical (1990) 17 Dead; 5 Injured; $36 MM in damage

12 Clean Air Act Amendments of 1990 Created CSB Mandated that EPA promulgate a rule for chemical accident prevention Risk Management Plan rule (RMP) Mandated that OSHA promulgate a rule on chemical process safety Process Safety Management standard (PSM)

13 Process Safety Management A standard issued in 1992 in response to serious chemical industry accidents Main goal is to prevent or minimize employee exposure to the hazards of uncontrolled releases of hazardous chemicals Triggered by exceedance of threshold quantities of highly hazardous substances

14 Key Elements of PSM Standard Process Safety Information Process Hazard Analysis Operating Procedures Training Contractors Mechanical Integrity Hot Work Management of Change Incident Investigation Compliance Audits Trade Secrets Employee Participation Pre-startup Safety Review Emergency Planning and Response

15 Management of Change (MOC) MOC requires employers to establish and implement written procedures to manage changes to process chemicals, technology, equipment and procedures; and changes to facilities that affect a covered process. Inadequate MOC has led to serious incidents.

16 MOC Includes Organizational Change Some organizational changes such as changes resulting from mergers, acquisitions, reorganizations, staffing changes, or budget revisions may affect PSM at the plant level and would therefore trigger a PSM MOC procedure. OSHA Memorandum for Regional Administrators on Management of Organizational Change, March 31, 2009

17 Past CSB Investigations of Relevance BP America Refinery Explosion (Texas City TX, 2005) Formosa Vinyl Chloride Monomer Explosion (Iliopolis IL, 2004) Tesoro Refinery Process Safety Culture Case Study (Martinez CA, 2014)

18 BP America Refinery Explosion (2005)

19 Formosa Vinyl Chloride Monomer Explosion (2004)

20 Tesoro Martinez Refinery Sulfuric Acid Spills (2014)

21 Tesoro Martinez Refinery (Martinez, CA) 1997 Explosion and Fire (1 dead, 46 injured) Sulfuric Acid Releases* (18 injured) Subject of CSB Investigation Fire* (4 dead, 1 injured) 1999 Valero (2002) Tosco Corporation 1988 (Avon) Tesoro (2002-present) Ultramar Diamond Shamrock (2000) 2017 Different owner, many of the same managers and operators. Corrective actions taken after 1999 fire were tracked internally but major safety culture issues persisted.

22 Safety Culture Assessments at the Martinez Refinery Tosco (March 1999) Lacked a commitment to safety Prioritized economics over safety Not good at communicating lessons learned Ultramar (April 2001) Firm management commitment to safety Safety communication effective and consistent Like night and day Tesoro (2013) Mixed, some long-timers say better than Tosco. Workers not encouraged to raise issues. Nobody wants to work in alky unit Valero Tosco Corporation 1988 (Avon) Tesoro Ultramar Diamond Shamrock 2017

23 Recent and Current Investigations Incident Incident Date Transfer Date Consequence Enterprise Pascagoula Gas Plant Explosion and Fire Air Liquide Facility Fatal Explosion Exxon Mobil Torrance Refinery Explosion DuPont LaPorte Facility Toxic Chemical Release June 2016 June 2016 Acquired shortly before incident August 2016 May 2016 Acquired shortly before incident February 2015 November 2014 September 2014; September 2015 March 2016 [permanent closure announced] Put up for sale before incident; Sold after incident Unit shut down; Division spun off in anticipation of merger with Dow.

24 Stay in Touch with the CSB U.S. Chemical Safety Board