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Industry view on some experience with Safety Reports in the context of Seveso 2 Richard Gowland – EPSC/CEFIC Seveso 2 Safety Report Project.

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Presentation on theme: "Industry view on some experience with Safety Reports in the context of Seveso 2 Richard Gowland – EPSC/CEFIC Seveso 2 Safety Report Project."— Presentation transcript:

1 Industry view on some experience with Safety Reports in the context of Seveso 2 Richard Gowland – EPSC/CEFIC Seveso 2 Safety Report Project

2 Safety Report experiences Information from: – Chemical companies, – Federations – University of Maastrict PhD studies

3 Seveso 2 Safety Report Harmonisation Re-cap: – Desire for Flexibility does not make things easier – Deterministic/legalistic systems give clear, auditable and enforceable targets – MS guidance almost always arrived too late for initial submission – Many false starts and much re-work

4 recognising that differences and difficulties are greatly affected by member state legal systems – may explain some of the differences, but does not necessarily ease the suffering!

5 Content……. In Cagliari I discussed: Germany U.K. Netherlands Belgium Italy Now I have brief information from Sweden, Spain, Portugal, France and updates from Germany and U.K., Belgium about trends of interest Cost aspects

6 Future trends for Seveso 2 in Germany? Germany (update on comments made at Cagliari) – concerns about effects of recent amendments Changes to Carcinogens generally welcomed Problems expected for substances dangerous for the environment – is anyone ready for increased workload? Risk mapping should not be made public Requirements for consideration of dust explosion added by government Germany has its own version of Article 12 Concern about encroachment in Lampertheim, Darmstadt and Frankfurt (airport) Source: VCI

7 Future trends for Seveso 2 in Germany? U.K. (update on comments made at Cagliari) Problems expected for substances dangerous for the environment – is anyone ready for increased workload? Changes to Carcinogens generally welcomed Concern about incompatible existing facility activities Pragmatic decisions on ALARP and Safety Report improvements during inspection phase is welcomed Source: VCI

8 Industry Experience Belgium (update on comments made at Cagliari) Different methods – Deterministic vs Probabilistic Probabilistic seems more cost effective (uses publicly available data and some derived from operator experience) Best Practice in a limited application (piping and equipment) Operators confused about the different requirements for the federal vs regional authorities

9 Federation Experience France Up to now : deterministic approach. Concept of « reference scenarios » leading to inappropriate distances, as well for LUP, as for emergency planning. Denial of specific risk assessment, denial of prevention measures. Since law of 30/07/2003, probabilistic approach has been established. A WG, gathering authorities, industry, experts has carried out an excellent job, dealing with the implementation of this approach. But local authorities have to change their way of thinking. Source: UIC

10 Federation Experience France (continued) Safety reports have to be looked into by third parties. Difficulty to obtain an expression of satisfaction from the authorities who are inclined to systematic extra requirements. Superposition of the Seveso directive and the new law creates extra requirements, specially in the scope of LUP. Source: UIC

11 Federation Experience Spain Guidance on Emergency distances and inspections published in 2003 Requirements are now reasonably clear, but there are still significant regional variations Some measures are taken from E.C. guidance (Safety Report from TWG 3) Large involvement of third parties in report writing and assessment Major events with very low expected frequencies are sometimes discounted Source: FEIQUE

12 Federation Experience Spain – continued: Expectations for European level guidance + : – List general accident scenarios – State preferred methods for risk analysis – Criteria for agreeing which major events are unlikely enough to be treated simply and quickly – or discounted. – Resulting assessed Worst cases to be used for Emergency Planning – Drive MS regulators to coordinate their IPPC, Occupational Safety, Pressure Equipment, Dangerous substance storage, classification of dangerous goods etc. regulation and enforcement efforts to improve clarity and efficiency – Ideal – similar facility has basically similar Safety Report in all Member states Source: FEIQUE

13 Industry Experience Portugal: Excellent liaison between C.A. and Operator at beginning of the process Relevant Manuals issued by C.As in time Good exchanges of helpful information and requirements during at least one inspection Some authorities are slow to respond (no inspection or visits - even joint inspections with others) Inspectors lack industrial experience

14 Federation Experience Sweden At least 3 authorities have responsibility for Seveso 2 At least 2 require a copy of the Safety Report and may have different expectations of it Authorities do not always cooperate with each other totally Response is slow and varies according to authorities systems (up to 2.5 years) Most improvements required are in the area of Safety management Systems and not in risk assessment Source : Kemikontoret

15 Impact of Variations – partial review What do the variations do to the process?

16 Variations in Safety Report Content A few simple calculations about cost to industry: 1) Variations in Member States Safety Report Content Requirements 2) Costs for Safety Report Assessment and Inspection

17 Variations in Safety Report Content In E. Versluis work, she found that for top tier sites in 4 member states, the effort required for the Safety Report varied widely: Highest50 man months Lowest7.5 man months Now, what happens for similar facilities in different member states?

18 Variations in Safety Report Content Case 1: A company has similar facilities (same technology, capacity, chemicals etc.) in 6 member states Report Preparation COST ESTIMATE Average cost of preparation of Safety Report at 27 man months* = Euro 400000 Notionally, I would expect 80% of Safety report content could be common I have the impression that today, only 20% is common So……… For a company having 6 establishments this costs Euro 2.00MM. today If the Safety report content was 80% common the total cost would drop to Euro 800000 Todays situation costs additional Euro 960000 – 1.2MM * Source of data E. Versluis reports My example is real: Facilities in Germany, Finland, Netherlands, Italy, Sweden, U.K. – this is probably an more severe case – another follows

19 Variations in Safety Report Content Case 2: A company has similar facilities (same technology, capacity, chemicals etc.) in 6 member states Report Preparation COST ESTIMATE IF Average cost of preparation of Safety Report at 12 man months* = Euro 200000 (lower than average reported) Notionally, I would expect 80% of Safety report could be common I have the impression that today, only 20% is common So……… For a company having 6 establishments this costs Euro 1.00MM. today If the Safety report was 80% common the total cost would drop to Euro 400000 Todays situation costs additional Euro 600000 My example is real: MSs are Germany, Finland, Netherlands, Italy, Sweden, U.K.

20 Profit and Loss What does this add up to for the business? Each facility has a sales value of approximately Euro 30MM per year, total for the 6 facilities = Euro 180MM Profit after tax (P.A.T.) typically 4% - 5% = Euro 9.00MM Cost of safety report variances to the European Business is Euro 960000 – 1.2MM = >10% of PAT

21 Impact of Seveso 2 Charging Costs: Some member states already charge and some are considering charging for Safety Report assessment and establishment inspection.

22 Impact of Seveso 2 Charging BASIS for my COST ESTIMATE Report Assessment costs Euro 46000* (average). Repeats every 5 years. Inspector Visits during report preparation 10 man days Inspection effort 20 man days per year *Source of data E. Versluis report

23 Report Assessment and Inspection costs Impact: for a MS which has 400 Top Tier sites, this imposes an added cost of Euro 16MM per year on the industry in this MS

24 InspectorsNLDGBE Demands are clear85753878 Demands are reasonable1008954100 Demands are not too detailed72789233 Demands are realistic926746100 Demands are easy to enforce54221578 Infringements are easy to detect33382350 Industry Demands are clear71 60100 Demands are reasonable86 67100 Demands are not too detailed21 4050 Demands are realistic86 50100 Demands are easy to comply with86 3071 Demands add to our company standards25 8043 Opinion on Seveso 2 legislation – (E. Versluis interviews)

25 Benefits to Industry Organised Risk Assessment Comparability Improved Discipline Lowered risk

26 The world cup How level is the playing field?

27 Article 12 CCA task This task has the potential to make big improvements. An opportunity for all sides to win? Golden geese may lay golden eggs, They also have wings


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