The Department of Homeland Security (DHS) has promulgated new regulations to safeguard facilities that store hazardous chemicals against terrorist attack. Last week we looked at which facilities are covered by the so called Chemical Facility Anti-Terrorism Standards (Standards). Now let's discuss what covered facilities are required to do.

A Warning

Be warned. The following paragraphs contain analysis of a technical nature. This stuff isn't beach reading. If you hate government regulation and terms like "domiciled," "certified" and "screening," you might want to steer clear. If, on the other hand, you're covered by the Standards, you're going to have to bite the bullet and give it a read.

The Chemical Security Assessment Tool

Covered facilities are required to undergo a site assessment procedure developed by the DHS called the Chemical Security Assessment Tool (CSAT). CSAT is a secure web-based system that includes a set of four tools:

Tool 1: User Registration

The first step in the CSAT process is user registration. A designated person known as the "Preparer" must enter required data using the online screening tool. Another person called the "Submitter," who is certified by the company and must be domiciled in the U.S., submits the data. If either person wants access to the data, a third person from the parent company, the "Authorizer," must approve both the Preparer and Submitter and verify the request as valid.

Tool 2: Top-Screen

After user registration is completed, the DHS forwards a security access code consisting of a user name and password to the facility granting access to a second data gathering process known as Top-Screen. The Top-Screen is essentially a questionnaire that must be completed by Jan. 19, 2008 (this is 60 days from Nov. 20, 2007, the date the DHS published the list of dangerous chemicals - Appendix A - in the Federal Register). It asks for information about the company, its corporate structure, the facility, the chemicals and their storage and use.

Tool 3: Security Vulnerability Assessment (SVA)

DHS analyzes the data provided in the Top-Screen and determines how great a risk the facility poses. "High risk" facilities are placed in one of four risk-based tiers, where Tier 1 represents the highest risk and Tier 4 the lowest. Facilities in Tiers 1, 2 or 3 have 90 days to submit an SVA which includes:

• An asset characterization that identifies and describes potentially critical assets and hazards to those assets as well as to the facility and surrounding area;
• A threat assessment that describes internal, external and internally-assisted threats;
• A security vulnerability analysis;
• A risk assessment; and
• A countermeasures analysis.

Tool 4: Site Security Plan (SSP)

DHS analyzes the SVA. If it still considers the facility high risk, the facility has 120 days to complete an SSP that:

• Addresses each of the vulnerabilities identified in the SVA;
• Identifies potential modes of terrorist attack;
• Explains security measures; and
• Describes how security measures meet what are known as risk-based performance standards. There are 18 standards covering security concerns ranging from chemical storage and cyber-sabotage to background checks on facility employees.

What Happens Next

DHS reviews the SVA and SSP and conducts a site inspection within 60 days. The site inspection is preceded by 24 hours of notice. But DHS can do a surprise inspection if it deems it necessary. Once the inspection is completed, the SVA and SSP are adjusted. DHS then places the facility in one of the four tiers and that's the final placement unless and until circumstances change.

From there, covered facilities must conduct annual audits and periodically update the SVA and SPP and send the updated versions to DHS. DHS can also do further site-inspections as conditions warrant.

Conclusion

That's it in a nutshell. If you're a covered facility, your compliance efforts should be in high gear by now. Remember that the Top-Screen is due to DHS on Friday, January 18. If you're not affected by the Standard, hopefully this overview will give you a good feel for what's going on.

THE CANADIAN PERSPECTIVE

The Chemical Facility Anti-Terrorism Standards are a U.S. law. Here's an article of direct interest to our Canadian members.

'REASONABLE MISTAKE OF FACT'


The Flip Side of Due Diligence, Part 2 of 2

By Glenn Demby

How do you prove the mistake of fact defence? The best way to answer that question is by looking at how courts and labour boards (which, for simplicity's sake, we'll refer to collectively as "courts") have decided the issue in actual cases. There are three questions courts pose when they consider the defence.

Question 1: Was There a Mistake?

First, you must prove that you actually made a mistake. This isn't as simple as it sounds. Mere ignorance or a false assumption that "everything is okay" isn't enough. The mistake must involve what an Ontario court has described as a "belief that such-and-such was the prevailing state of fact, for evidentially-stated reasons."

Example:Officers of an Ontario construction company were charged with not installing guardrails required by the OHS regulations. They claimed that they were operating under an "ongoing confidence" that the company's safety policy, training and other safety efforts "would result in the use of either guardrails or an alternative fall arrest system." The court didn't buy it. Simply not knowing something is wrong doesn't constitute a mistake of fact defence. There's a subtle but important difference, the court explained, between "I didn't know X was the case," and "I thought X but it turned out to be Y" [R. v. Bradisil 1967 Ltd., [1994] O.J. No. 837].

Question 2: Was the Mistake One of Fact?

The mistake must be one of fact, not of law. Employers are expected to know the laws that govern their activities. "If things were otherwise, all a defendant would have to do to avoid liability is claim ignorance or misunderstanding of the law," the Toronto lawyer explains. Mistake of fact, in other words, is designed to protect persons who understand and make reasonable efforts to obey the law.

Example: An AB mine worker enters a confined space where oxygen content is 18.9 percent. He gets stuck and signals for help. But there's no tending worker outside the space so his calls go unheard. He therefore dies inside the space. The government charges the mining company with violation Section 56(3)(a) of the AB OHS Code, which requires employers to ensure that there's a tending worker outside a confined space in which the atmosphere is less than 19.5 percent by volume.

Defence Would Apply: The employer proves that it reasonably believed that the oxygen content was 25 percent.

Defence Wouldn't Apply: The employer knew the oxygen content was 18.9 percent but thought the Code required posting an attending worker at 18.5 percent.

Question 3: Was the Mistake Reasonable?

Last but not least, you must prove that it was "reasonable" in the circumstances for you to believe that the mistaken factual circumstances existed. For example, the AB employer in the example above would have to prove that it was reasonable to believe the oxygen content in the confined space was 25 percent (such as by showing that it tested the atmosphere in the confined space without reason to know that the testing equipment it used had a manufacturing defect that rendered the results inaccurate).

What makes a belief in a set of circumstances reasonable? Answering this question is the key to understanding the defence. And the best way to understand reasonableness is to remember the context. An OHS violation has occurred and somebody has gotten injured as a result. Punishing somebody just because the accident happened would be the kind of absolute liability scheme the Supreme Court said was unfair. Justice dictates that punishment should be meted out only when there's some degree of culpability. The reasonable belief requirement is the attempt to balance these competing interests.

The reasonable belief is based on what lawyers call an objective, rather than a subjective assessment. In other words, courts look at not what the defendant was actually thinking but what a person in the same situation who knew what the defendant knew should have been thinking. To assess the reasonableness of a belief, courts look at two sets of factors:

Foreseeability: A mistake is not reasonable if it was foreseeable that it would lead to an accident. Previous accidents involving the same mistake doom any hopes of a mistake of fact defence. In other words, you don't get to make the same mistake twice.

Inquiry: You can't just assume that your safety measures are adequate. A belief is reasonable only if you have some objective basis to believe it. The same is true of safety-related information provided to you by third parties such as contractors, subcontractors, land owners and even consultants. You can't simply take what they tell you at face value. You must make inquiries about the reliability of the information.

How far must you go to satisfy the inquiry duty? Answer: It depends on the severity of the danger involved. Stated simply, the greater the danger, the greater the lengths to which you'll be expected to go to test the reasonableness of your belief.

Conclusion

There's a good reason that reasonable mistake is the "Side B" of due diligence: It's much harder to prove than reasonable care. Accordingly, most due diligence cases are decided on the basis of reasonable care, rather than on mistake of fact.

OSHA & THE CANDIDATES

John Edwards

John Edwards

By Glenn Demby

Bio: Born in Seneca, SC, on June 10, 1953. Son of mill worker and shop owner. Raised in Robbins, NC. Graduated from North Carolina State University in 1974. Received law degree from UNC, Chapel Hill in 1977. Spent 11 years as a trial lawyer representing individuals suing large corporations and insurance companies. Elected to U.S. Senate in 1988. Ran unsuccessfully for VP on Democratic ticket with John Kerry in 2004.

Position Regarding OSHA: Edwards's political base is made up largely of traditional democratic constituencies, including organized labor. Edwards's voting record gets top grades from the AFL-CIO. And his experience suing big corporations doesn't do anything to harm his standing with the unions.

With respect to workplace safety, Edwards is probably the most outspoken of all the major presidential candidates. His 80-page position paper, The Plan to Build One America, calls for adopting ergonomic standards and strengthening OSHA enforcement. Edwards also has the longest laundry list of OSHA-related positions. Among other things, he has promised to:

• Issue a standard requiring employers to create "programs to systematically find and fix hazards";
• Appoint a "workers' advocate" with hands-on experience in workplace health and safety to head OSHA;
• Require OSHA to report to workers and unions about the progress of investigations and give them a chance to review and comment on proposed settlements;
• Adopt a new chemical safety standard that adopts the recommendations of the Chemical Safety Board;
• Require nursing homes to meet staffing ratios and adopt ergonomic measures to protect their workers;
• Increase OSHA's budget;
• Increase the number of OSHA inspections;
• "Create a culture of enforcement" at OSHA;
• Beef up whistleblower protections for workers who report health and safety violations;
• Increase fines for OSHA offenses and strengthen penalties for cases involving worker fatalities from six months to 10 years in jail;
• Make companies that have been cited for a willful violation resulting in a fatality summarize the incident in their annual report and on the home page of their web site; and
• Require employers to fix cited violations even if their appeal is still pending.

Rhetoric: "The simple act of doing your job should not cause you harm. However, from nursing homes to chemical plants, from meat processing to transportation, ergonomic risks have not been addressed in every sector of our economy."

TOMORROW'S PROFILE: Hillary Clinton

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