Protect Your License to Operate with Effective Emergency Planning and Community Response

Peter Molinaro
Michael Parr

The devastation and dislocation caused by Hurricane Harvey and the prospect of additional extreme weather events has cast industrial resilience in stark relief.  Texas, Mississippi and Louisiana are home to a high concentration of chemical manufacturing and energy production, refining and distribution.   The Gulf Coast has experienced a succession of 100, 500 and, some say, 1000 year flood events in recent years. There is abundant scientific evidence that long term changes in climate and weather patterns have the potential to intensify storms and their impact on this manufacturing infrastructure well into the future.

As a result of Hurricane Harvey an Arkema Inc. chemical plant in Crosby, Texas was flooded and lost primary and backup power.  This resulted in a chemical fire caused by decomposition of a highly reactive product when the power loss disabled refrigerated storage.  The uncontrolled fire, covered extensively in local and national media, has heightened public and government concern about the measures necessary to assure protection of citizens and property from dangers posed by hazardous substances during natural disasters or other catastrophic situations.

How does a company assure it has adequately prepared for a dynamic set of threats that redefine our notion of “worst case?” The public expects to be protected from such potential risks and to have the information they need to make their own judgments about their tolerance for such risks.

Effectively managing risk is a dual challenge: the assurance of physical safety and the quality of communication and coordination with neighbors, regulators and first responders.

Job One:  Operational Integrity and Process Safety

A poorly managed incident can do profound harm to a company’s brand, and incur debilitating litigation. A company’s very “license to operate,” ultimately granted by the public, can be threatened.  There are numerous resources to assist in developing a quality process safety management and emergency response system. OSHA and EPA have rules governing process safety and emergency planning. The Center for Chemical Process Safety provides excellent resources to assist this process. Very important considerations include: assessing risks in production, storage, waste management and transportation and objectively identifying plausible worst case scenarios. For example, must facilities in southwest Texas consider increased incidence of heretofore 1000 year flooding events? How susceptible is primary and backup power to flooding? Can hazardous inventories be reduced or “worked off” prior to the event?  If an emergency release event occurs at a chemical facility multiple levels of government will subsequently investigate the causes of and responses, as may the courts.  Such Investigations will scrutinize a company’s decision-making and criteria in the development and implementation of safety and response measures.

Ongoing coordination and drilling with local emergency responders is an essential element of preparation. Sharing information on the types, volumes, locations and hazards of the materials present at the facility and mitigation measures in the event of a release is essential, as is sharing of medical treatment information for any exposures with local hospitals.

Job Two, Three and Four:  Communicate. Communicate. Communicate

How a firm communicates in the initial minutes and hours of an emergency event often defines the company for the duration of the event and beyond. There is an immediate demand for information at a level of detail that is not always knowable at the time.  The public perception of risk is generally very different than that of industry professionals, who operate daily in a risk management framework, and company statements about risk will often be assessed with skepticism by the public. There will be an inevitable tension between the company’s legal team and the public affairs team, as well as between corporate and local staff, as one focuses on managing litigation risk and the other seeks to provide as much information as possible.  In advance of any incident, it is important to arrive at a proper balance between the types of information to share and litigation risk.

It is also critical to understand effective risk communication techniques and be prepared to employ them. In this era of instantaneous and continuous social media-driven news cycles the desire to provide information must be balanced with the need for speed, accuracy and proper risk communications. Spokespersons must avoid appearing to downplay risk or the public’s perception of risk and avoid faulty risk comparisons. At one point during the height of the Arkema incident, the effect of the smoke emanating from the fire was characterized as no more harmful as standing over a backyard barbecue.  This comparison, while likely intended to comfort neighbors, in the absence of accurate air monitoring data, was dismissed as not credible, and contributed to a perception that the danger to the public was being purposefully minimized. Once lost, public trust is very difficult, and expensive, to regain.

The Harvard-MIT Public Disputes Program describes a series of “Mutual Gains” behaviors that should guide communications with the public in response to such incidents:

1. Acknowledge the concerns of the other side.
2. Encourage joint fact finding
3. Offer contingent commitments to minimize impacts if they do occur; promise to compensate unintended consequences
4. Accept responsibility; admit mistakes, and share power
5. Act in a trustworthy fashion at all times
6. Focus on building long term relationships

In the aftermath of the Arkema incident, the company apologized, expressed empathy with the people affected, and set up a hot line to address concerns and offer temporary housing, transportation and a claims resolution process. It also offered to remove and test soot and debris from people’s property.  Investigations will determine whether the plant was adequately prepared for reliably predictable weather events. However, the early failure to adequately and credibly characterize the risk posed by the fire, and a subsequent failure to notify the community of a planned burn-off of the remaining product caused undue public concern and resentment. The local public mistrust, and broader national level scrutiny of the company, will likely burden it for years. History has also shown that such incidents can drive more stringent regulation affecting the entire industry.

The chemical industry has very sophisticated risk management techniques that it applies to designing and operating its processes.  In the post 9-11 period the assessment and implementation of risk management measures for catastrophic events, including natural disasters, has similarly become much more sophisticated and widespread.  The industry needs to embrace effective risk communication with the same rigor that it has risk management in its physical operations.

Peter Molinaro, Senior Advisor with HillStaffer, LLC served as Vice President, North America Government Affairs with The Dow Chemical Company.

Michael Parr, Managing Director with HillStaffer, LLC served as Senior Manager of Government Affairs for E.I. DuPont De Nemours and Company