Chemical Security Program Stalls

In the wake of a scathing internal investigation of its nearly five-year-old program for protecting the nation’s chemical facilities against potential terrorist attacks, the Department of Homeland Security (DHS) is facing serious questions from Congress.

The internal review, which uncovered widespread management and personnel problems, is providing ammunition to some lawmakers and environmental groups that want to revise the program. The chemical industry and other members of Congress, however, remain steadfast in their support of the program, which they say just needs stronger congressional oversight.

As the sides fight it out, industry officials warn against overreaction in the quest for improvements, saying the program has produced positive results, such as driving facilities to reduce hazards. Since 2001, U.S. chemical companies have invested approximately $10 billion to further enhance security at their facilities, according to industry trade associations.

Closer scrutiny of the Chemical Facility Anti-Terrorism Standards (CFATS) will ensure that federal resources steered toward securing facilities against terrorism are used effectively, says William E. Allmond IV, vice president of government and public relations at the Society of Chemical Manufacturers & Affiliates (SOCMA), a trade association that represents more than 200 mostly small- and medium-sized chemical companies.

“It is our hope that, in the worthy pursuit of improving DHS’s ability to administer CFATS, Congress does not allow itself to be diverted into discussing substantive changes to this successful regulatory framework,” Allmond says.

The program requires chemical companies to address a wide range of threats, from preventing a bomb-laden car from reaching a plant to preventing theft or diversion of materials from a manufacturing site.

CFATS was launched by DHS in June 2007. Under the congressionally mandated program, facilities that make, use, or store threshold amounts of 322 listed “chemicals of interest” are required to conduct vulnerability assessments, develop site security plans, and submit those plans to DHS for review and approval. Facilities must then put in place protective measures that address their unique security challenges. DHS, in turn, validates compliance through inspections and audits.

But an internal assessment of CFATS completed in November 2011 indicates that implementation of the antiterrorism program has been severely hindered by a series of problems that range from wasteful spending to the hiring of unqualified personnel.

Rand Beers, head of DHS’s National Protection & Programs Directorate, ordered the probe last July after he learned that CFATS officials in the Infrastructure Security Compliance Division (ISCD) had made numerous mistakes that led to the improper “tiering” of 600 facilities. Plants are assigned to one of four risk tiers that require increasingly stringent levels of security.

After staff changes were made and the tiering errors were corrected, Beers asked the newly installed director of ISCD, Penny J. Anderson, and her deputy, David M. Wulf, to conduct an internal review of the entire CFATS program.

At a hearing held last month by a panel of the House of Representatives Committee on Energy & Commerce, Beers acknowledged that CFATS “needs a whole lot of work.” But he told lawmakers that ISCD is “correcting course” and has begun work on an 85-item action plan to address the problems identified in the internal investigation. “I assure this committee that the CFATS program is making progress,” said Beers, an expert on counterterrorism with more than 30 years of experience in Democratic and Republican Administrations.

For example, he said, about 1,600 facilities have removed their chemicals of interest, and more than 700 other facilities have reduced the amount of hazardous substances at their sites to the point that they are no longer considered high security risks.

“These actions, many of which were the result of choices made by facilities after the adoption of the CFATS regulation, have helped reduce the number of high-risk chemical facilities located throughout the nation, and have correspondingly made the nation more secure,” Beers said. CFATS now covers 4,458 high-risk chemical facilities.

Wulf told the Subcommittee on Environment & the Economy that the challenges identified in the internal report “are not insignificant, but they are also not insurmountable.” He said “tangible progress” has been made recently, including utilization of a more efficient process for reviewing facility site security plans.

“We have a very aggressive plan to move forward with review of the site security plans and to conduct outreach,” Wulf said.

But several lawmakers said DHS’s own assessment shows that poor management has largely undermined the program. “It is my understanding that you have received 4,200 site security plans to date, but not even one has been approved,” said Rep. Joe L. Barton (R-Texas). “You haven’t conducted a single compliance inspection, nor do you have a procedure in place to conduct one. And you allowed the hiring of inappropriate staff.”

“This is beyond disappointing,” he told Beers. “You have totally mismanaged this program by allowing it to continue to consume over $90 million a year without having a well-developed direction and plan.” Barton suggested that Beers should resign if he can’t fix the problems.

Since its inception, CFATS has received as much as $103 million per year from Congress; funding for the program is set at $93 million in the current fiscal year.

Rep. Gene Green (D-Texas) said he was “surprised and dismayed by the level of dysfunction” and the lack of progress. “It seems to me the root of the problem lies with the fact that DHS has hired people who are unqualified for their positions,” he remarked.

Of the 206 ISCD employees who work full-time on CFATS, about half are assigned to the Inspections & Enforcement Branch. But many were hired before the job descriptions were well defined and as a result have “misaligned expectations” about the job of a chemical security inspector, according to the internal DHS report.

According to the department, many inspectors were recruited from the law enforcement community, including DHS’s Federal Protective Service, an agency that provides security to federally owned and leased government facilities.

Despite their lack of law enforcement authority, the report says some inspectors still seek the right to carry a gun and wear their uniforms “as a symbol of identity and authority.” Some also insist on having titles such as “commander,” which further demonstrates a reluctance to “let go of false assumptions about the nature of the work,” according to the report.

Rep. John M. Shimkus (R-Ill.) also expressed concern that DHS is emphasizing enforcement over partnership with industry. CFATS was not meant to be “another EPA-style program designed to fine people or a bureaucratic backdoor to overregulate chemicals,” he declared.

The program, he said, was meant to be a collaborative effort to secure high-risk facilities. “Congressional intent was that cooperation would get facilities into compliance; we did not intend to increase federal revenues through enforcement actions,” Shimkus said.

Beers reminded lawmakers that CFATS was quickly developed entirely from scratch as an urgent response to the threat of terrorism. The speed with which the program was started, he said, resulted in some decisions that seemed appropriate at the time, but no longer do.

At the program’s outset, Beers noted, certain roles and responsibilities were envisioned for the staff that, in the end, did not apply. “This resulted in the hiring of some employees whose skills did not match their ultimate job responsibilities and the purchase of some equipment that, in hindsight, appears to be unnecessary for chemical inspectors,” he said.

Shimkus and other Republican members of the House subcommittee said the internal review raises questions about the viability of the program.

“I still believe security at facilities with chemicals is much better today than before Congress gave DHS this first-ever regulatory authority,” Shimkus said. “Unfortunately, my confidence in DHS and the substantial amounts Congress has given to it is not nearly as strong. We need to be reassured that DHS’s CFATS program has a plan and intends to focus solely on correcting its internal problems.”

Barton added that CFATS “must be fixed immediately” to provide stability to the program and regulatory assurance to the chemical industry, which he noted “has invested billions of dollars to upgrade security to meet CFATS’s requirements.”

Rep. William Cassidy (R-La.) suggested DHS should “just start over” with CFATS. “It looks like the current program is so dysfunctional as to be beyond restitution,” he said.

But several Democrats on the panel said Congress deserves much of the blame for the program’s shortcomings. “It’s easy after we get a report of failure to beat up on the people running the program. But Congress has a responsibility as well,” Rep. Henry A. Waxman (D-Calif.) said.

Supporting Beers’s point about the accelerated start-up of CFATS, Waxman noted that CFATS is based on a 744-word “rider” that lawmakers attached to the DHS spending bill for fiscal 2007. It directed DHS to develop and adopt, within six months, a full-scale regulatory program to address the potential risks at thousands of chemical facilities nationwide.

“The program was not established with carefully crafted legislation that defined its mission and forged a vision for its implementation,” Waxman said. “It did not have adequate enforcement authority, enforceable deadlines, or clear procedures for approving or disapproving site security plans.”

Yet, he added, the Republican-led committee approved legislation in May 2011 that would “simply rubber stamp the current program for seven additional years.” In a mostly party-line vote, the Energy & Commerce Committee passed a bill, H.R. 908, sponsored by Rep. Timothy F. Murphy (R-Pa.) that would reauthorize CFATS through 2018 and essentially continue the existing program.

Waxman said DHS’s internal assessment proves that H.R. 908 is deeply flawed. “We didn’t really know how the program was working, we didn’t give it any guidance, we didn’t do our job, and that legislation needs to be revisited in light of this new information,” he said.

The effort to secure U.S. chemical facilities has also been sharply criticized by environmental activists who argue that the law that created CFATS is full of holes and does not give DHS sufficient authority to effectively implement the program.

“It’s amazing how the Republicans can keep picking at the many flaws in this program while simultaneously proposing to extend the law unchanged for seven more years,” says Rick Hind, legislative director of the environmental group Greenpeace.

Congress, he notes, has given DHS very limited authority to manage security in the chemical sector. “Right now, DHS is hamstrung in what they can require,” Hind says. “As a result, they have been reduced to the role of pleading and cajoling industry to cooperate with little legal authority to make things happen.”

He points out that Republicans also oppose Waxman’s alternative CFATS plan, which would require all facilities to evaluate the feasibility of switching to safer chemical processes to make them less appealing targets for terrorists. DHS would be authorized to require facilities in the highest risk categories to adopt so-called inherently safer technology (IST), but the authority would be discretionary and subject to an appeal.

IST typically involves modifying processes to reduce the quantity of hazardous chemicals used or stored, reducing temperatures or pressures, or replacing a toxic chemical with a less hazardous one.

Hind says an IST mandate is “the only security measure that takes targets off the table and ensures the safety of millions of people” who live close to chemical plants. “DHS would simply separate the very small number of facilities that cannot feasibly convert from those that claim they cannot,” he says. “It’s time for our government to ensure that safer chemical processes are the norm, not the exception, at all high-risk chemical plants.”

Republican members of the Energy & Commerce Committee unanimously rejected Waxman’s proposal when it was offered as an amendment during the panel’s consideration of H.R. 908 last May. In November 2009, the then-Democrat-controlled House passed Waxman’s legislation (H.R. 2868), but it was not voted on in the Senate.

The chemical industry has fought hard to keep government mandates for alternative chemical processes out of the antiterrorism program, arguing that inherent safety is a well-established engineering process concept—not a security measure.

The American Chemistry Council (ACC), a trade group representing the nation’s largest chemical manufacturers, asserts that Congress should avoid provisions that grant DHS the authority to override chemical engineers, process safety experts, and industry security officials when it comes to decisions regarding changes to chemical processes.

“We still support the risk-based performance standards that are outlined in CFATS,” ACC spokesman Scott Jensen says. “We have offered recommendations to help DHS improve implementation” and clear up the backlog of security plan approvals and inspections, he tells C&EN.

But Jensen says the industry continues to believe that Congress should allow the program to fully mature rather than introduce new or revised statutory requirements, such as an IST mandate. Lawmakers need to focus on oversight, “seeing what they can do to help DHS address some of the issues they’ve outlined,” he adds.

SOCMA’s Allmond says it is important for Congress to “differentiate between the administrative challenges experienced by this young regulatory program and the appropriateness of the standards themselves.” CFATS, he asserts, is a “fundamentally sound security policy” that needs better administration by DHS.

“The standards themselves are robust, and we agree with Beers that they are making the nation safer,” Allmond remarks.

DHS’s internal assessment identified “uncertainty from extremely short program authorizations” as one of the chief sources of CFATS’s current problems. Initially, DHS’s authority to regulate chemical facility security was set to expire on Oct. 4, 2009, which was the deadline for Congress to pass legislation permanently authorizing a comprehensive CFATS program.

But lawmakers have been unable to agree on how to structure CFATS for the long term and have instead continued the program through the annual budget appropriations process. Under the most recent one-year extension, DHS’s authority is scheduled to expire on Oct. 4.

Beers told the House subcommittee that a long-term authorization of CFATS “is vital both to our workforce and to our security partners, the stakeholders in this program. It would give us the stability that a year-to-year renewal unfortunately doesn’t provide us.”

Allmond says that relying on temporary and often last-minute legislative extensions is no way to run a major federal security program that affects thousands of facilities. It is imperative, he says, that Congress allow DHS to implement the program through completion by passing a multiyear authorization.

The key to the program’s future, ACC’s Jensen says, is the action DHS is taking to remedy the problems that have slowed the program’s progress. “What we need,” he says, “is a more effective and efficient implementation of CFATS.”