Asia Response Newsletter
Regional Comprehensive Economic Partnership
Release Incident Scrutiny and Governmental Regulations
Message from the CEO
As it becomes apparent that the Asia Pacific (APAC) Response Consortium is necessary to ensure that appropriate response capabilities are in place for chemical manufacturers and transporters in APAC; OURAY is taking steps to ensure that all parties interested in joining the APAC Response Consortium are prepared to comply with the variety of laws, regulations, and customs within the region. This is the first in a series of newsletters written by OURAY to detail the current regulatory environment in the region and is intended for dissemination to current and future Consortium members. The newsletter will be concentrating on global best practices and will also be used to discuss current chemical industry related economic and regulatory issues in the region. In the process, the detailing of recent events will also be utilized to further define how a consortium-centric structured response mechanism will benefit the entire region.
The first goal of the Consortium is to acquire the equipment and stage that equipment as outlined in the APAC proposal. Along with that equipment, comes the challenges of training, coordination, transportation, and regulation across multiple countries and in multiple languages. These newsletters will provide information that will prepare Consortium members with a heightened awareness of what Level 3 response in APAC requires in terms of preparedness and planning.
Regional Comprehensive Economic Partnership
After nine years and 31 regional ministerial meetings; The Regional Comprehensive Economic Partnership (RCEP) was finally signed by 15 countries on November 15, 2020. This partnership, involving 15 countries throughout the Pacific region will encompass the majority of the APAC coverage area except for Taiwan and India. Due to the curtailment of trade barriers the partnership represents, chemical production will likely increase substantially throughout the region and the overall contribution to the global economy annually by 2030 is estimated to exceed $186 billion US Dollars. The RECP will allow member countries to import or export everything from raw products, and intermediates to finished goods with very little specific requirements from member countries. While the RCEP undeniably creates a significant opportunity for the overall consortium member companies in both economic expansion and better access to markets; it also creates a larger overall dilemma for members. This is due by and large to an increase in overall productions levels and increases in the frequency of transportation with a corresponding increase in release incidents overall as a function of the increases in production. As recognized from the first APAC Summit in Singapore in 2019, the overall umbrella of coverage for chemical release emergency response throughout the APAC region is still far from being complete. While RCEP represents a milestone in revenue expansion and new market opportunities for member companies; the increased public scrutiny that will be brought to bear across a now more collective RCEP regulatory sphere, demands an absolute need to ensure that chemical incidents are minimized or eliminated.
Release Incident Scrutiny and Governmental Regulations
In the Asia-Pacific region (APAC), there is an increasing tendency of governmental regulatory bodies to enact new and perhaps draconian policies following accidental chemical releases. Governmental regulatory agencies have for instance, ordered the cessation of certain business operations at particular facilities, put forth requirements to dismantle and remove active plant operating units following release incidents, or have required whole geographic regions to shut down the majority of active plants and remove those plants in the interests of public safety or under the guise of streamlined economic expansion. While blame and causative effects may be distributed typically amongst various parties in an accidental chemical release; it is release incidents that were the catalyst for partial, periodic, or complete plant closures in many cases.
Plant closures such as these carry consequential results for the financial health of any company and in certain cases, may cause a company to contract significantly from a region or an entire market segment. These closures also have longer-lasting effects due to disruptions in the supply chain for all producers, whether commodity, specialty, consumer, or health sciences. As a final point, chemical releases, subsequent plant closures and the potential negative social commercial media coverage can and frequently do result in overall company stock devaluations and can cause serious long-term harm to a business’s balance sheet even after the initial incident has been remediated.
Andhra Pradesh, India 2020 (May) A polystyrene plant in India accidentally releases styrene monomer into the air following restarting of the plant after a government mandated Covid-19 shutdown. A total of 13 people killed, and hundreds hospitalized. The plant is partially shut down again for government investigations with no definitive startup date given.
Hubei Provence, China 2020 (August) A flash explosion at a chemical plant kills six and hospitalizes four. Portions of the plant are shut down for investigations-no startup date given.
Kaohsiung, Taiwan 2020 One worker dies, and two others are hospitalized after exposure to ethylene dichloride (ED) during a routine maintenance (ED pump rebuilding). The plant is temporarily shut down and all operations ceased during investigations.
China 2019-Ongoing; As China works to limit plant incidents (especially uncontrolled product releases and fires) and improve its cities air quality, they have initiated regional plant closures as a powerful tool. Many plant closures, due to uncontrolled releases, air quality concerns or zoning issues are creating gaps in the Chinese chemical industry and this has impacted the global chemical supply chain. Where these gaps are becoming wider, chemical production to fill them is being set up offshore from China and the regional/national markets are being profit impacted from both a loss of product revenue and an increasingly expensive and longer logistical supply chain. As these closures occur more often, the potential for uncontrolled release of products increases due to a statistical likelihood of transportation incidents. The net effect is a contraction of the domestic Chinese chemical sector and lowering of domestic GDP as well as additional shuttering of non-productive or less profitable business units.
In each of these cases, the presence of a robust internal training regime for emergency responders at the plant level, along with the ability to rapidly deploy outside emergency assistance and equipment might have lessened both the actual events, and public scrutiny of the event responses. In the wake of any significant release, the presence of trained responders with mitigation and monitoring equipment would help to lessen any long-term impacts on a facility. Moreover, a comprehensively emergency response trained, and equipped staff combined with outreach to local and regional governmental agencies might dramatically increase the cooperation and contribution of governmental agencies. Through the exhibition of adequate training and equipment stockpiling, APAC members would become the regional standard for chemical safety and excellence, and this would certainly impact relations with governmental agencies in a positive and meaningful manner. Through both positive response training and subsequent real-time actions taken during any emergency, the pre-planning and positioning of equipment and personnel working in concert with appropriate governmental agencies will help sustain a viable chemical sector in the APAC region.
The APAC Consortium was envisioned by the Founding Members as not just a way to pre-position highly specialized emergency response equipment and trained response personnel in the APAC region, but as a robust mechanism for specialized response training of all consortium member plant emergency personnel and as a means of positive outreach to regional and national governments. This type of dedicated, emergency response training would certainly help to mitigate releases and potential loss of human life. When combined with community outreach training of responding governmental regulatory agencies, the relationships established during these training cycles would greatly assist in the lessening of governmental overreach following any release. In short, having a robust emergency response organization that provides for both active Level-3 response as well as plant and community outreach training, can make the difference in an emergency situation between temporary loss of revenue due to an unforeseen incident; versus the potential for business unit contraction and negative profitability or even substantive exit from a region’s market due to harsh public scrutiny and subsequent governmental regulation.
Message from the CEO:
From the beginning, OURAY has strived to provide the most comprehensive and far-reaching chemical emergency and in-plant services available. Many times, this required utilizing existing local resources and overlaying our internal knowledge or mobilizing a high-hazards crew to any global site to conduct emergency response work. In many areas of the world, there does not currently exist sufficient capabilities, either through equipment or properly trained personnel, to respond appropriately to the commodities being transported or manufactured there. This, combined with the chemical manufacturing industries overall move to rely more and more on contractor support and not the use of internal personnel, has created an emergency response void.
In late 2018, Chemours reached out to OURAY looking for support in covering their existing supply chain challenges that existed throughout the Asia-Pacific region. After lengthy conversations about needs and costs, it was determined that these challenges exist for each company in the region that manufactures or transports dangerous or bulk goods. OURAY, and by extension, me personally, are honored to be trusted as the torchbearer for moving this Asia-Pacific Response Consortium forward. While the global pandemic has had a meaningful impact on the trajectory of the Consortium, we as a collective group still see the need to continue to drive this forward. Please join us in this effort as we move into a more secure and well-prepared future.
2020 was a busy year for on-plant and remote chemical transfer operations at OURAY. Both to for non-regulated and extremely dangerous commodities. Follow us on LinkedIn for more information.
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