11/10/2014. Auditing Your Hazmat Shipping Operations. Hazmat Enforcement. Hazmat Enforcement. Scott C. Dunsmore, CET

Transcription

1 Auditing Your Hazmat Shipping Operations Scott C. Dunsmore, CET 1 Hazmat Enforcement Texas chemical company $15,585 Offered Class 3 materials in unauthorized packaging Indicated RQ on shipping papers when no reportable quantity present Failed to close packages in accordance with manufacturer s instructions Emptied packages from within transport vehicle 2 Hazmat Enforcement Oregon grain shipper $16,425 Offered anhydrous ammonia in unauthorized packages Failed to provide a Proper Shipping Name/shipping description Emptied packages from within transport vehicle 3 1

2 Hazmat Enforcement Illinois fertilizer company $10,357 Failed to provide a proper shipping description Failed to submit a Hazardous Material Incident Report (Form ) Failed to provide initial and recurrent hazmat employee training 4 Hazmat Enforcement Texas chemical company $13,040 Failed to provide a proper shipping description Failed to properly mark hazmat packages Failed to create/maintain t i hazmat employee training records Marked packages as ORM-D when no ORM-D present Failed to close packages in accordance with manufacturer s instructions 5 Civil Penalties For knowing violations $75,000/day/violation $175,000/day/violation if significant $450/day/violation / for failure to train [49 USC 5123(a)] 6 2

3 Criminal Penalties Knowing and willful violations $250,000/incident 5 years imprisonment $500,000/day/incident 000/d /i id for organizations [49 USC 5124, 18 USC 3571] 7 Players PHMSA Through its five regional offices Primarily target packaging manufacturers Modal agencies also inspect FAA FMCSA FRA USCG 8 Why Audit? An audit is the principle management tool for taking inventory of a company s (hazmat shipping) assets and liabilities.* [*Adapted from Thomas H. Truitt, Attorney; Wald, Harkrader & Ross] 9 3

4 Benefits to Auditing Quantifiable benefits include: Improved compliance record Improved incident/accident statistics Decrease in business disruption 10 Benefits to Auditing Unquantifiable benefits include: Improved reputation Favorable publicity Improved regulator relationships Knowledge of job performance measure Feeling of management support 11 7 Steps of a Successful Audit 1. Plan 2. Physical walk-through 3. Document review 4. De-brief bi 5. Review 6. Report 7. Follow-up 12 4

5 Step 1: Planning This most important step may include: Defining the expected outcomes Delineating the scope Selecting the auditor(s) Becoming familiar with the target facility Conducting a pre-document review 13 Defining the Expected Outcomes Begin with the end in mind Stephen Covey, author The key value is to prevent problems from erupting into crisis i before management can act. M.D. Throdahl, former Senior VP, Monsanto Company 14 Defining the Expected Outcomes What is the facility looking to determine? Assurance of compliance to hazmat shipping requirement(s) Comprehensive A specific material/ logistics component Adherence to a management system 15 5

6 Planning Considerations Possible questions to ask during the planning stage include: Is this a one-time action or part of a recurring program? What are the expectations of senior management? What will be the measures of success? 16 Legal Aspects of the Planning Step The facility should also determine: Reporting protocols Written and/or oral Document retention ti Amount of legal oversight 17 Delineating the Scope Obtain the expected results by the most efficient, cost-effective means Approaches: Prototype, or Comprehensive 18 6

7 Selecting the Auditor(s) The audit team s effectiveness will be dependent on an understanding of the company s: Structure Processes Management philosophy 19 Selecting the Auditor(s) Assure adequate coverage of expertise in: Applicable requirements, and Operations (practices, procedures, policies) Determine whether to use in-house staff or third-party auditors 20 Pre-documentation Review Benefits: Increase familiarization with facility: Shipping modes Number of hazmats/frequency Expedite certain aspects of audit Identify areas to focus on during audit 21 7

8 Pre-documentation Review Possible documents to include in pre-document review: Facility questionnaire Classification records/supporting documents Shipping i papers 22 Assessment Categories Hazmat shipping audit elements fall into one of three categories: 1. Material-related assessments 2. Packaging assessments 3. Documentation assessments 23 Material-related Assessments Are the materials properly classified? Are the correct Proper Shipping Names assigned? Has the facility accounted for the ancillaries? Hazardous waste Hazardous substance Marine pollutant 24 8

9 Packaging Assessments May include one or more of the following: Packaging authorization (in theory and practice) Manufacturers instructions Package assembly components and tools Filling/closure Marking and labeling Loading/unloading 25 Documentation Assessments Documents to be review may include: Shipping papers / Shipper s Declarations / Hazardous Waste Manifests Emergency response information Registrations Training records Security plans 26 Step 2: Physical Walk-through What you don t know will hurt you. F. Friedman, Vice President, Occidental Petroleum Corporation,

10 Step 2: Physical Walk-through Use of a function-specific approach allows for assessment of: Compliance of the overall process Individual hazmat employee performance Design tools around planned audit approach Checklists Photos 28 Package Preparation Take note of: Presence/accessibility of package closure instructions and closure tools Material (may need to confirm proper marks and packaging type after document review) Specific employees performing the task(s) 29 Step 3: Document Review No job is done until the paperwork is complete. Author unknown 30 10

11 Shipping Papers May be part of the pre-document review Predicated upon knowledge or acceptance of assigned Proper Shipping Names Look for: Complete and proper descriptions (watch for required add-ons) Emergency response number Emergency response information 31 Training Documents Review training documentation for: General completeness, and Individual accuracy (best done after walk-through step) 32 Classification Documents Proper classification verification requires special competencies Auditors can look for clues, regardless If in doubt, write it down (can be checked during Step 5) 33 11

12 Security Plan This document should be available on a need-toknow basis. Auditor should know what is expected and his/her limitations will he/she be verifying the plan: Exists when required, or Contains all the required elements, or Has adequate security measure based on assessed risks 34 Step 4: De-Brief Work out in Step 1 who will participate This is the time to: Provide a general summation of findings and observations Seek clarification Review next steps and deadlines 35 Step 5: Review Evaluate notes Thoroughly research through primary sources, first and foremost This should not be a solo project peer review! 36 12

13 Step 6: Report Vigorous writing is concise. This requires not that the writer make all sentences short, or that he avoid all detail and treat his subject only in outline, but that every word tell. William Strunk, Jr., Elements of Style 37 Step 6: Report Format will be determined in planning step Observed deficiencies should be: Clearly described, and Supported by specific standard(s) d( Observe all agreed-upon reporting protocols 38 Step 7: Follow-Up Purpose: Close open items Assure practices have been updated to expected standard Determine if new corrective actions are needed Will the follow-up will be formal or informal? Starts the planning for the next cycle of audits 39 13

14 Thank You for Attending Enjoy the rest of the conference! Youmayreachmeat: me at: