FocusCompliance cost of new US OSHA hazcom rule may be underrated

17 March 2010 20:18  [Source: ICIS news]

By Feliza Mirasol

NEW YORK (ICIS news)--The $100m (€73m) in estimated industry compliance costs for the newly-revised hazard communication (hazcom) rule by the US Occupational Safety & Health Administration (OSHA) is a significant underestimation, a chemical industry association said on Wednesday.

“SOCMA (Society of Chemical Manufacturers and Affiliates) takes issue with the estimated compliance cost OSHA is promulgating,” said Lawrence Sloan, SOCMA president and CEO, in an interview with ICIS.

“Due to the unique nature of the batch, custom and specialty chemical industry, it is estimated that compliance costs may exceed 5% of profits - far in excess of OSHA estimates,” he added.

Sloan said the process of creating new safety data sheets (SDSs) and labels for these businesses is much more complex than for businesses that only make a few commodity products in very large quantities.

OSHA’s revision is meant to align US chemical hazcom standards with the United Nations’ (UN) Globally Harmonized System of Classification and Labelling of Chemicals (GHS), which was published in 2003.

The advantage to doing this is a simpler, more efficient system to safely transport, use, and dispose of chemicals that are traded on the global market, according to OSHA.

Challenges to smaller chemical firms include the time they will need to commit to worker training, investment in new software and other costs related to producing revised SDSs, said Sloan.

Other costs include administrative costs for preparing and mailing out revised information to customers, and labour costs required to survey all existing containers in inventory and replace their labels, Sloan said.

SOCMA recommends a five-year implementation timeframe to meet the requirements of the new globally-harmonised rules.

According to OSHA, savings from implementing the new system should be about $850m/year.

“When OSHA calculates benefits, it normally does it in terms of ‘lives saved’. In this case, OSHA’s analysis may have been a bit different, because they can literally calculate some cost savings to manufacturers that they would get by having one harmonised system of information transmission,” said Brad Hammock, chair of the workplace safety group of US employment law firm Jackson Lewis.

Hammock was the former lead lawyer for a majority of OSHA’s regulatory actions. OSHA will make a significant effort to provide compliance assistance and ease the burdens of implementation, he said.

“That might have the effect of increasing compliance amongst employers,” said Hammock.

($1 = €0.73)

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By: Feliza Mirasol
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