Industry view on some experience with Safety Reports

in the context of Seveso 2

Richard Gowland – EPSC/CEFIC

Seveso 2 Safety Report Project

Safety Report experiences

• Information from:– Chemical

companies, – Federations– University of

Maastrict PhD studies

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

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!

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

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

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

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

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

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

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

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

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

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

Impact of Variations – partial review

• What do the variations do to the process?

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

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:

• Highest 50 man months• Lowest 7.5 man months

• Now, what happens for similar facilities in different member states?

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 commonSo………• 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• Today’s 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

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 commonSo………• 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• Today’s situation costs additional Euro 600000

My example is real: MSs are Germany, Finland, Netherlands, Italy, Sweden, U.K.

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

Impact of Seveso 2 ‘Charging

• Costs: Some member states already charge and some are considering charging for Safety Report assessment and establishment inspection.

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

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

Inspectors NL D GB E

Demands are clear 85 75 38 78

Demands are reasonable 100 89 54 100

Demands are not too detailed 72 78 92 33

Demands are realistic 92 67 46 100

Demands are easy to enforce 54 22 15 78

Infringements are easy to detect 33 38 23 50

         

Industry        

Demands are clear 71   60 100

Demands are reasonable 86   67 100

Demands are not too detailed 21   40 50

Demands are realistic 86   50 100

Demands are easy to comply with 86   30 71

Demands add to our company standards 25   80 43

Opinion on Seveso 2 legislation – (E. Versluis interviews)

Benefits to Industry

• Organised Risk Assessment• Comparability• Improved Discipline• Lowered risk

The world cup

How level is the playing field?

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