Summary
The Department of Homeland Security plans to impose new requirements on chemical facilities that possess listed chemicals above specified quantities, and in many cases will require facilities to prepare vulnerability assessments, develop security plans, and implement and install a suite of security measures. These requirements could begin to take effect for certain facilities as early as this summer.
Background
In the four and a half years since the terrorist attacks of September 11, 2001, Congress has debated, but until recently failed to pass, legislation regulating the security of chemical facilities in the US. On October 4, 2006, the Department of Homeland Security Appropriations Act of 2007 (the Act) was signed into law. Section 550 of the Act requires the Department of Homeland Security (the Department) to promulgate interim final regulations for the security of "high-risk" chemical facilities in the United States. While Congress is still debating possible changes to the program, the Department recently issued the interim final regulations required by the Act. 1 Although these regulations will be effective 60 days after publication in the Federal Register, the Department has sought additional comment within 30 days on one key component of the regulations.
What Facilities Are Affected?
Under these regulations, the Department will screen tens of thousands of "chemical facilities" for vulnerability to and potential consequences of a terrorist attack, and will regulate those it determines to be "high-risk." "Chemical facility" is defined broadly as "any establishment that possesses or plans to possess, at any point in time, a quantity of a chemical substance determined by the Secretary to be potentially dangerous or that meets other risk-related criteria identified by the Department." A "high-risk" facility is one which, "in the discretion of the Secretary of Homeland Security, presents a high risk of significant adverse consequences for human life or health, national security and/or critical economic assets if subjected to terrorist attack, compromise, infiltration, or exploitation." The regulations, therefore, can apply not only to facilities that manufacture or process potentially dangerous chemicals, but also to those that store or use potentially dangerous chemicals.
Key Provisions of the Regulations
In brief, under the regulations:
- Facilities possessing threshold quantities of any of 344 "DHS Chemicals of Interest" will be required to complete an electronic questionnaire, known as a "Top-Screen." In addition to general information regarding the location and ownership of facilities, and the chemicals they possess, this questionnaire will seek information on potential for loss of life (or life-changing injuries) or loss of the ability to execute critical defense or governance missions. 2 This information is intended to allow the Department to determine the potential for and consequences of a terrorist attack, and to assess the possible risks if dangerous chemicals are stolen. The Department will use the Top-Screen, along with any other information the Department deems relevant, to determine whether a facility is "high-risk."
- Facilities determined to be "high-risk" must complete Security Vulnerability Assessments (SVAs) and develop and implement Site Security Plans (SSPs), which must include measures that satisfy risk-based "performance standards" established by the Department.
- The Department's performance standards address a range of issues, including perimeter security, access control, employee and contractor background checks, insider sabotage, cyber security and emergency response planning. The performance standards ultimately will require that a facility select measures to "deter, detect and delay" a potential terrorist attack, creating sufficient time "to allow appropriate response" between detection of an attack and the point at which the attack becomes successful.
- The Department will review and approve or disapprove all required submissions but also will conduct site inspections to ensure that security measures are in fact in place. 3
- Under current law, a facility that fails to take the steps required by the Department can be assessed a civil penalty of up to $25,000 per day of non-compliance, and ordered to cease operations, or both. Such penalties can be appealed, first within the Department through an administrative process, and then if necessary in federal court.
- Security information submitted to the Department under the program will be protected as "Chemical-terrorism Vulnerability Information" and will be subject to strict controls.
As noted above, the Department is soliciting further comment on one key element of this program – the "threshold" for determining which facilities must complete the initial Top-Screen electronic screening questionnaire. The list of chemicals and quantities proposed by the Department for this "threshold" is available on the Department's website:http://www.dhs.gov/xprevprot/laws/gc_1175537180929.shtm. Comments are due 30 days after the publication of the regulations in the Federal Register.
What the Regulations Mean to Your Business
As is apparent, this new program can impose potentially significant new requirements on a broad range of businesses. We recommend that all companies that possess or otherwise handle chemicals review the regulations. You may also wish to comment on the proposed threshold chemicals and quantities.
Regulatory Activity Deadlines
- Publication of regulations in the Federal Register – expected April 9, 2007
- Comments on proposed "Screening Threshold Quantities" due – 30 days after publication (May 9, 2007)
- Effective date of the regulations – 60 days after publication (June 8, 2007)
- Top-Screen Questionnaire due – 60 days after effective date (August 7, 2007)
From Venulex.com
Copyright © Latham & Watkins. VenuLex resources are intended for informational purposes only and should not be construed as legal advice.