OSHA Warns that PSM Standard Exemption Expires in Six Months for All But Smallest Retailers

In a new memorandum, OSHA has revised its interpretation of the Process Safety Management of Highly Hazardous Chemicals (PSM) standard exemption — or 29 CFR 1910.119 — to indicate that in six months the exemption will apply only to the smallest retailers. All other retailers which were previously exempt will now face enforcement and potential citation.

The PSM standard is an OSHA mandate that all businesses handling, manufacturing, or storing large amounts of hazardous chemicals take specific steps to prevent unexpected releases of highly hazardous toxic chemicals. The PSM’s key requirement is a process hazard analysis which involves a careful review of potential chemical accidents that could occur based on the chemicals present, and a review of what safeguards have been put in place to keep them from occurring. The PSM requires “written operating procedures, employee training and participation, pre-startup safety reviews, evaluation of the mechanical integrity of critical equipment, contractor requirements, and written procedures for managing change.”

However, in 2001, OSHA issued a letter of interpretation stating that some facilities could qualify for an exemption from the PSM standard based on factors like their customer base. Most industry observers believe this exemption was intended to apply to small retail establishments, yet there is evidence that many large handlers of hazardous chemicals interpreted this to mean that they were exempt from the PSM standard as well. Among these was the West Texas Fertilizer Co., which kept over 50,000 pounds of anhydrous ammonia onsite yet considered itself exempt from the PSM standard — and suffered  a catastrophic chemical explosion with multiple fatalities in 2013.

In response to the West, Texas disaster, the president issued Executive Order 13650, a measure intended to improve chemical facility safety and security for local communities. (MSDSonline’s Plan1 product is intended to help companies quickly and efficiently disperse chemical facility information to local first responders to help improve safety in the local community.) Many view this newest memorandum as an extension of that order, intended to clarify beyond a doubt that the PSM exemption is intended only for small retailers. According to the memorandum, the exemption now only applies to facilities with the North American Industrial Classification System codes of 44 and 45. These include “office supply stores, computer and software stores, building materials dealers, plumbing supply stores, and electrical supply stores” as well as “catalog showrooms, gasoline stations, automotive dealers, and mobile home dealers.”

Vitally, OSHA has also clarified that for the next six months it will follow an interim enforcement policy as regards the clarified PSM exemption, and OSHA uses language which seems to indicate it is sympathetic to the extra effort this will mean for many businesses. Specifically, OSHA says it “understands that the actions involve initiating administrative programs and undertaking hazard identification and corrective actions that may require some lead time.” Thus, for the next six months, seemingly rather than gunning for citations, “OSHA will focus its resources on providing compliance assistance to affected employers” and “exercise its enforcement discretion during this period and refrain from citing employers for violations of the PSM standard at facilities that it would not have cited under the former PSM retail exemption policy.”

OSHA clarifies that the only exception to this interim enforcement approach would occur if an inspector discovers current conditions that pose “immediate and severe danger” to workers and/or the surrounding community.

It should be noted that companies covered by PSM usually have Tier II reporting responsibilities, including the requirement to share safety data sheets with their local first responders. In addition, some smaller quantities of extremely hazardous materials can trigger requirements for PSM or Tier II, even though the overall amount of the chemical onsite is quite small. Companies covered by PSM are also likely also covered by the EPA’s Risk Management Plan Rule and the Department of Homeland Security’s Chemical Facility Anti-Terrorism Standards (CFATS).

A good chemical management system can help cross reference chemicals against regulatory lists to identify compliance/reporting obligations for all of these obligations.

Check back regularly with the MSDSonline blog for more updates on the new PSM enforcement memorandum as this story continues to develop.

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