NACD: Securing the future

17 May 2013 09:59  [Source: ICB]

NACD unveils its new Security Code and emphasizes its importance to member companies

In February 2013, NACD's board of directors approved a new Security Code to be added to its Responsible Distributione_SRTm Code of Management Practice. Code XIII brings together in one place all of the security elements in the present 12 codes, along with some additional new security-specific elements. The code will go into effect for the NACD's fifth cycle, which runs from January 2014 to December 2016, following a program of awareness raising and training of NACD member companies.

Copyright: Rex Features
The need for the code was identified during ongoing discussions between NACD's board and Capitol Hill on re-emphasizing the importance of security in chemical distribution. The code was developed over the past year by NACD's Responsible Distributione_SRTm Committee, which has nine members, including chairman Jim Benning, director of operations with chemical distributor Hubbard-Hall, after a successful evaluation was completed early in the development phase.

Mike Lang, NACD's vice president, Responsible Distributione_SRTm, says: "One of the issues we wanted to convey to Capitol Hill is that since 2002, security has been embedded within our 12 codes. We thought that the message of the importance of security may be communicated better and draw more attention if it were presented as a standalone code. This way we show people that Responsible Distributione_SRTm takes security seriously enough that it is embedded throughout our members' operations, and demonstrate to Capitol Hill a concise and easy-to-understand code to convey the importance of security."

Security has been featured prominently within Responsible Distributione_SRTm since 2002 when security levels were heightened following the tragic events of September 11, 2001. NACD then enhanced its existing codes with security measures to address physical and en route vulnerabilities, cargo security, product stewardship security, and more. All of these elements are brought together in the new code, including training, drills and guidance, management of change, and continuous improvement.

During the development process, interviews and discussions took place with member companies and affiliates, including NACD's Chemical Handler Affiliates. It was also important that other suppliers of professional services, such as the insurance industry, were aware of the code. Information was shared with multiple parties, whose input was incorporated into the drafting.

NACD has been involved in discussions with the Federal Department of Homeland Security (DHS) to assess the potential of adopting the code as part of a background to or a foundation for an Alternative Security Program (ASP) rather than using the existing Site Security Plan (SSP). Discussions towards this goal are progressing.

"Some of the original security features of Responsible Distributione_SRTm were strengthened in line with what DHS is looking for in an ASP, to make sure we're all on the same page," says Roger Harris, chairman of the board of NACD and president and CEO of distributor Producers Chemical.

"They're not complicated things, but they're important. From the time we receive the product at our facilities to the time it is delivered to the customer, we have to make sure the product is handled safely," he says. "Using Producers Chemical as an example, there are some things that have changed since 2002, for example our site gates and doors are now always closed and locked, video surveillance has been installed inside and out, lighting has been improved and alarms installed. Those safeguards are commonplace in the industry today, but they weren't 10 years ago."

The implementation program is based around training for all employees of NACD members. Within a company it may be managed by a Responsible Distributor Code Coordinator, who could be the company's operations manager or in a similar position. Coordinators ensure that the code is applied correctly, with the support of senior management. Dissemination of the code began in April, which included coordinator workshops and webinars, mailing and emailing of the code, and NACD web site information.

Lang says: "We emphasize continuous improvement among our members and we as an organization need to do the same. So we're continuously looking at our Responsible Distributione_SRTm program, and we felt that with a significant change such as the Security Code that we want to make sure that our members are adequately prepared.

"We've spoken and presented information about the Security Code to further complement the educational program. We are conducting special one day workshops, centered on the new Security Code, in addition to the two regular annual workshops that we have. Alongside this is a Responsible Distributione_SRTm Mentoring Program - through which a person educates members even further, helps with their Responsible Distributione_SRTm training needs, and advises on how to better conform to the Responsible Distributione_SRTm program. So we've put some significant resources out there. To raise awareness of the code effectively we need to be certain that our member companies are adequately prepared and we want to make sure that we do it right," he says.

Drivers receive significant training and are taught to be vigilant and apply security at all times - not only driving, loading, and unloading, but ensuring that the vehicle is always in their sight and that paperwork is completed and signed correctly. Over a year, a driver will receive many hours training to maintain awareness and keep them up to date with any changes. All employees must be trained, including office staff such as customer service representatives, who may receive an order from a new, unknown customer for a product that could cause a problem in the wrong hands. All suspicious activities noticed by any employee must be investigated.

Many Security Code elements are already incorporated in NACD member companies' practices. The code coordinator will educate them on how to prepare the Security Code - for example, they will engage senior management to underline the importance of the code, resulting in a heightened awareness for both the code coordinator and senior management.

"NACD members have already worked on the original 12 codes, which have been fine tuned every cycle," Benning says, "The additional code has some new elements that didn't exist before. For example, management of change (MOC) appears in Code XIII and could embrace efficiency, technology, growth, even downsizing and making sure that members have processes in place to manage any changes in respect of security."

In terms of verification, each location adds the code to their internal audit process. All codes are audited for compliance, documented, and signed off by senior management. Any relevant corrective and preventive action also involves senior management. Each member company location carries out an internal audit, at least on an annual basis, and an independent company verifies compliance at least once every three years. Previously, only one location per member was site-verified, now there is a sampling process where some companies with multiple sites will have more than one third-party verification.

"Since the tragedy of 9/11, safety has undoubtedly improved," Harris says, "All companies report on an annual basis to NACD as a condition of membership, its annual Membership and Safety Report, which contains information under a range of headings such as distance travelled, the number of deliveries completed, and occurrence of vehicle accidents. Over the past ten years, the safety and security rating of NACD members has continually improved. It is considerably better than non-member companies in our industry and is almost twice has high as manufacturing generally. As an industry we are very safe."

Harris adds that since facilities in the supply chain are also included in NACD's responsibilities, member company representatives and drivers are trained to ensure good product stewardship at customers' sites. Producers and distributors have created additional awareness among themselves about security and NACD Chemical Handler Affiliates are also trained in Responsible Distribution,e_SRTm so all are more in tune with the importance and necessity of security when dealing with different providers in the chemical industry. The message is consistently conveyed to all parties with which NACD is working collaboratively and sharing best practices.

"I applaud our members and the effort they've been making not just with Responsible Distributione_SRTm, but also with overall security, which they have successfully integrated into their everyday operations," Lang says. "We're pleased with the improvements they've made and their awareness that we can deliver an even more effective message to Capitol Hill and to the community abroad of just how well our members are doing. The new code will add to and complement their work so far."

Harris concludes: "We have worked on this for more than a year and I am pleased and proud of the work of the NACD board and Responsible Distributione_SRTm committee - we have created in this Security Code something to use for a long time to come by those who regulate us."


  • Leadership commitment
  • Analysis of threats, vulnerabilities and consequences
  • Implementation of security measures
  • Information and cyber-security
  • Documentation
  • Training, drills and guidance
  • Communications, dialogue and information exchange
  • Response to security threats
  • Response to security incidents
  • Audits
  • Third party verification
  • Management of change
  • Continuous improvement

Author: Mark Whitfield

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