Risk Managers Face New Chemical Terrorism Rules

Risk managers may have difficulty complying with new security regulations designed to prevent terrorist access to more than 300 chemicals, according to a panel held yesterday by a brokerage concern.

The group's viewpoint was voiced during a seminar on “Chemical Industry Security Risks” presented by Marsh, the insurance brokerage subsidiary of Marsh & McLennan Companies.

Fabrice Lebourgeois, leader of Marsh's chemicals practice, said that after Sept. 11, 2001 and other terrorism incidents in the United States, concerns over attacks employing chemical ingredients were raised and remain a high-security risk in this country.

The Department of Homeland Security issued a regulatory ruling in April to ensure a standard of security would be universal, despite the expenditure of more than $5 billion by the industry to improve security.

With these new regulations coming on the books shortly, Mr. Lebourgeois asked, “Is your organization fully prepared to meet the requirements of DHS?”

Larry Stanton, director of chemical security compliance division, DHS, said the Chemical Facility Anti-Terrorism Standards cover more than 300 chemicals of interest. The standards split the chemicals into three general categories: release hazardous chemicals, theft and diversion chemicals, and sabotage chemicals. All are chemicals that can be used or mixed for use in a terrorist attack.

Industries affected by the new rules, Mr. Stanton noted, can cover not only manufacturers and other industry complexes but also agriculture, universities and other operations that house substantial amounts of these chemicals for their use.

The DHS rules are unique in that they will rely on risk-based performance standards, allowing the facility to draw up its own plans in order to achieve compliance.

Mr. Stanton said it is expected that the rules will be published in the federal register in the next few weeks and facilities will have 60 days to come into compliance. Failure to do so can result in a $25,000 a day fine.

He noted that the department's aim, however, is to help people come into compliance, “and not to fine them.”

Thomas Jenks, managing director with Kroll's Security Group, also a subsidiary of MMC, said it would be wise for the facility managers to contact a consultant to help inventory the chemicals and prepare a plan for compliance. He said the inventory would take two or three days in most cases.

The regulations and listing of chemicals is available online at www.dhs.gov.