NACD: Responsible Distribution has changed chemical logistics for the better

14 November 2011 00:00  [Source: ICB]


 Responsible distribution boosts credibility

Copyright: RexFeatures

Caption: Initiated by NACD 20 years ago, Responsible Distribution and its accompanying third-party verification has changed how chemical distribution in the US is done for the better

As the US-based National Association of Chemical Distributors (NACD) starts its 40th Annual Meeting in November in Bonita Springs, Florida, the association will also be celebrating the 20th anniversary of the adoption of its environmental, health, safety and security management system that is now known as Responsible Distribution.

"Following Responsible Distribution makes NACD members safer, more efficient, and more competitive in the marketplace," says president and CEO, Chris Jahn. "Responsible Distribution continues to set the standard for chemical distributors in the US, Canada, and Brazil to create a safer and more secure global business network."

Jahn says the NACD's safety rating is twice as good as that of all industries combined."Responsible Distribution has been the cornerstone of the industry's progress over the past 20 years," he said in a July article in ICIS Chemical Business.

Andrew Skipp, president of US-based chemical distributor Hubbard-Hall, agrees. Responsible Distribution "is us showing the government that we know what it takes to be good industrial citizens," he said on the sidelines of last year's NACD Annual Meeting.

NACD member companies say the benefits of participating in Responsible Distribution include stronger risk management, reductions in insurance claims and costs, assistance with regulatory compliance, conservation of company resources, development of systematic employee training, and better documentation of company policies, according to Jahn.

"As our nation comes out of this recession, thanks to their commitment to Responsible Distribution, our member companies will be stronger than ever," he says.

In 1988, the Canadian Association of Chemical Distributors (CACD) created and adopted its own program, called Responsible Distribution. The NACD used that as its template when developing its Responsible Distribution Process (RDP) Guiding Principles and Code of Management Practice to meet the needs of the US chemical distribution industry.

Responsible Distribution's beginnings were a bit rocky, however: around 1987-88, the NACD was considering having its members become a part of the Responsible Care program of the US-based Chemical Manufacturers Association (CMA), now the American Chemistry Council (ACC).

"Initially our thoughts were to have chemical distributor members of NACD be able to become a part of Responsible Care, which would give us the right to the logo," recalled John Hess, III, NACD chairman for 1988-1990, in the association's 2006 official history of Responsible Distribution.

By the CMA's rules, it was imperative that any company wanting to become part of Responsible Care had to comply with its seven protocols, one of which had to do with the manufacturing and testing of all products.

"We could not meet that requirement as we were not the manufacturers, and powers that be at CMA were adamant against any exceptions," said Hess.

By 2009, NACD and ACC would sign a memorandum of understanding (MoU) recognizing among other things, the integrity of the Responsible Distribution and Responsible Care programs.

At the annual meeting in December 1991, NACD members voted to implement RDP, and at the next year's meeting, it was decided to raise the stakes. "Early on, one of the main objections or suspicions that our effort faced was the perception that we were looking for 'an easier way' than manufacturers," said 1991 NACD president Jim Doyle in the same official history. "We validated the process by the third-party oversight and gave NACD enormous credibility."

Since 1995, third-party verification has been a major component of Responsible Distribution. "NACD's Responsible Distribution program was the first chemical industry association with third party on-site verification - putting real teeth in the program," says Jahn.

Being proactive pays off. In 1999, the US Environmental Protection Agency (EPA) stated that companies implementing the RDP may have already completed necessary requirements for complying with its Risk Management Program regulation.

In 2002, NACD was the first chemical industry association that incorporated security features in its protocol, says Mike Lang, NACD's vice president of Responsible Distribution, leading to praise from the EPA.

In a November 2002 letter to the NACD membership, EPA administrator Christine Todd Whitman commended NACD for taking this action. NACD members "have also set a benchmark for other companies to follow, by implementing third-party verification of your code of management practice," she added.

The typical NACD member is a small business with $26m (€20m) in revenue, 28 employees, and three sites, according to Jahn.

Ongoing industry consolidation reduced NACD's membership, but it has begun to increase, reaching its highest level in a decade: 261 distributor members and 140 affiliate members, with 40 joining in the past year.

According to Jahn, NACD's members are not, on average, big companies but they have more than 1,500 facilities in the country. "We have a presence in almost every congressional district, so we have broad reach, and we're able to have some influence with folks when we need to," he told ICIS Chemical Business.

With a variety of visits to Washington, DC and other seats of government, "NACD members have never been more engaged and more effective on federal legislation than at any other time in our history," says Jahn. "It's the involvement of our members in the process - grassroots advocacy."

This is good, since Jahn recently said that the one big issue facing Responsible Distribution going forward is "the overbearing regulatory environment [that] creates a tremendous burden on ­chemical distribution companies with questionable benefit."

Another issue confronting Responsible Distribution is companies that are not NACD members, noted Jahn. "Our data show that NACD members are 30% safer than non-members. Distributors that don't follow Responsible Distribution and have accidents that could have been avoided give the whole industry a black eye."

Last December, NACD signed an MoU with CACD and the Brazilian Association of Chemical Distributors agreeing to a common set of Responsible Distribution guiding principles and a code of management practice.

Since then, "NACD has received interest from multiple chemical distributors outside of the US who are exploring membership ­opportunities with NACD," says NACD's Lang. "Responsible Distribution is a competitive advantage and is a highly recognized program among suppliers, customers, and other stakeholders."

With additional reporting by Clay Boswell

By: Ivan Lerner
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