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Balancing Risk and Probability in Refineries and Chemical Plants: OSHA’s Facility Siting Standards

In contrast to most OSHA standards, the Process Safety Management (“PSM”) standard is a performance-based (as opposed to a prescriptive) standard. The key component of the PSM standard is the process hazard analysis (“PHA”)—a careful review of what might go wrong and what safeguards should be implemented to prevent releases of hazardous chemicals. 

For many employers, the biggest challenge of a PHA is the required “facility siting analysis,” in which the employer evaluates the hazards of the processes in a plant and their proximity to the facility’s employees. Unfortunately, facility siting analyses can be quite complex, and experts will often disagree about the appropriate methodology for predicting structural damage to buildings or the probability of a particular hazard affecting a facility’s employees. OSHA will often “second-guess” an employer’s response to its facility siting analysis and challenge an employer’s “prioritization” of some facility siting issues over others. Litigating facility siting citations can be especially challenging because the potential cost of any mandated abatement can often far exceed the cost of any penalty that has been recommended.

The best defense to any facility siting citation is good documentation. The PSM standard requires employers to address and resolve PHA findings and recommendations, including those involving facility siting. Not only should employers fully document their (or their consultants’) initial analysis, but employers should also fully document any decisions—and the justifications for such decisions—for prioritizing certain facility siting issues over others, as well as any decisions to accept certain low levels of risk in return for addressing greater hazards. 

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.