EPA Proposed Consent Decree To Assess $133K Civil Penalty Against Kayem Foods for Alleged Clean Air Act Risk Management Program Violations

EPA and DOJ recently issued a notice in the Federal Register at https://www.govinfo.gov/content/pkg/FR-2019-05-22/pdf/2019-10673.pdf seeking comment on the proposed settlement with Kayem Foods for alleged violations of the Clean Air Act (“CAA”) Risk Management Program (“RMP”) regulatory requirements set forth at 40 CFR Part 68 at Defendant’s food processing facility located in Chelsea, Massachusetts.

The lodged complaint available at https://www.justice.gov/enrd/consent-decree/file/1163451/download asserts that Kayem Foods’ refrigeration system stored anhydrous ammonia above the threshold planning quantity (“TQP”) of 10,000 lbs, thus, is subject to the RMP requirements. EPA also alleges that Kayem Foods’ process is not eligible for Program 1 under 40 C.F.R. § 68.10(b) because the distance to a toxic endpoint for a worst-case release assessment is greater than the distance to a public receptor. Finally, the Complaint avers that Kayem Foods’ process is subject to Program 3 Prevention Program under 40 C.F.R. § 68.10(d) because it is not eligible for Program 1 and is also subject to the OSHA process safety management standards set forth in 29 C.F.R. § 1910.119. DOJ is accepting comments on the lodged consent decree, which is available at https://www.justice.gov/enrd/consent-decree/file/1163456/download, for 30 days or until June 24, 2019.

Having determined that the Kayem Foods’ process is subject to Program 3 Requirements, EPA alleges the following RMP violations:

· Use of an incorrect release rate in the June 2011 Risk Management Plan and the June 2016 Risk Management Plan resulted in an incorrect determination concerning the greatest distance from the facility that ammonia would be present in the atmosphere at 0.14 mg/L or more during a worst-case release scenario in violation of 40 C.F.R. § 68.25.

· Failure to comply with recognized and generally accepted good engineering practices (“RAGAGEP”) or, for existing equipment designed and constructed in accordance with codes, standards or practices no longer in general use, determine and document that the equipment was designed, maintained, inspected, tested and operating in a safe manner in violation of 40 C.F.R. § 68.65 due to (i) inadequate labeling on piping and valves, (ii) inadequate signage on doors leading to machinery room and concerning identification of ammonia refrigeration system, (iii) failure to have adequate access to ammonia charge line, (iv) failure to adequately seal pipes leading out of machinery room, (v) failure to have audible and visual alarms inside the machinery room or near the entrance doors to the machinery room, (vi) failure to adequately label certain isolation valves and to provide access to one of those valves with an appropriate permanent work surface, (vii) failure to have a quick-closing valve on line from oil pot to high temperature receiver, (viii) failure to locate pressure release valve at least 20 feet from inlet air ductwork, (ix) failure to equip the machinery room with self-closing and tight-fitting doors, (x) failure to have adequate air circulation in machinery room, and (xi) failure to have a shower and eye wash station outside the principal machinery room door.

· Failure to identify earthquakes as an incident with a potential for catastrophic consequences in violation of 40 C.F.R. § 68.67, which requires performance of a process hazard analysis (“PHA”) to identify, evaluate, and control the hazards involved in the process including, without limitation, identify issues related to the siting of the facility.

· Failure to have adequate standard operating procedures for ammonia delivery in violation of 40 C.F.R.§ 68.69, which requires development and implementation of written operating procedures that provided clear instructions for safely conducting activities involved in each covered process and that addressed steps for each operating phase, including emergency shutdown operations and emergency operations.

· Failure to calibrate ammonia detection system at frequency recommended by manufacturer and failure to adequately maintain piping on roof of facility in violation of 40 C.F.R. § 68.73, which requires covered facilities to (a) establish and implement written procedures to maintain the on-going integrity of process equipment, including, (b) inspect and test process equipment based on RAGAGEP and with a frequency consistent with manufacturer’s recommendations and good engineering practices, and more frequently if determined necessary by prior operating experience, (c) document each inspection, and (d) correct deficiencies outside acceptable limits.

· Failure to adequately document actions taken to prevent recurrence of incident that could have resulted in catastrophic release of ammonia in violation of 40 C.F.R. § 68.81, which requires covered facilities to (a) investigate each incident that could reasonably have resulted in a catastrophic release of ammonia, (b) prepare a report at the conclusion of such investigation, (c) have the report reviewed by all affected personnel whose job tasks are relevant to the incident findings, and (d) promptly address and resolve the report findings and recommendations and document any resolution and corrective action.

· Failure to comply with emergency response program requirements of 40 C.F.R. § 69.95 at a time when Defendant was not included in community emergency response plan and when defendant did not include required emergency contacts in its own emergency response plan.

Joe’s Takeaways:

1. First and foremost, the Kayem Foods complaint serves as a valuable roadmap for covered facilities with refrigeration systems that are auditing their facility to ensure compliance with CAA RMP regulatory requirements.

2. While $133K is a substantial civil penalty, it is a tiny fraction of the amount alleged in the complaint, which sought daily penalties in the amount of $37,500 per day for each violation that occurred from January 12, 2009, through November 2, 2015, and in the amount of $99,681 per day for each violation that occurred on or after November 2, 2015.

3. The inspection that spurred this complaint was conducted on July 21, 2014, under the prior Administration nearly 5 years ago, which reinforces that the 5 year statute of limitations for bringing civil enforcement actions may span multiple Administrations….

4. Notwithstanding EPA’s declaration in the proposed RMP rule to rescind virtually all amendments to the Chemical Disaster Rule RMP regulations set forth at 83 FR 24850, 24872 (May 30, 2018) that EPA would utilize an enforcement-led approach to implement the various components of the Chemical Disaster Rule that EPA proposed to rescind (e.g., 3rd party audits, safer technologies and alternatives or “STAA”), the Kayem Foods settlement does not appear to include any Supplemental Environmental Projects or SEPs. It will be interesting to see if EPA addresses this issue if and when it finalizes the proposed rule to rescind virtually all Chemical Disaster Rule amendments to the RMP regulations at 40 CFR Part 68. Stay tuned!