Regulations (Preambles to Final Rules) - Table of Contents|
| Record Type:||Process Safety Management of Highly Hazardous Chemicals;Explosives and Blasting Agents|
| Title:||Section 4 - IV. Statutory Considerations|
IV. Statutory Considerations
- Section 3(8) of the Act provides:
The term "occupational safety and health standard" means a standard which requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment and places of employment.
28 U.S.C. 652(8).
In two recent cases, reviewing courts expressed concern that OSHA's interpretation of this and other provisions of the Act pertaining to safety rulemaking could lead to overly costly or under-protective safety standards. In International Union, UAW v. OSHA, 938 F.2d 1310 (D.C. Cir. 1991), the District of Columbia Circuit rejected substantive challenges to the lockout/tagout standard and denied a request that enforcement of that standard be stayed, but it also expressed concern that OSHA's interpretation of the Act could lead to safety standards that are very costly and only minimally protective. In National Grain & Feed Ass'n v. OSHA, 866 F.2d 717 (5th Cir. 1989), the Fifth Circuit concluded that Congress gave OSHA considerable discretion in structuring the costs and benefits of safety standards but, concerned that the grain dust standard might be under-protective, directed OSHA to consider adding a provision that might further reduce significant risk of fire and explosion.
It is, of course, beyond doubt that OSHA rulemakings involve a significant degree of agency expertise and policy-making discretion to which reviewing courts must defer. See e.g., Building & Constr. Trades Dep't, AFL-CIO v. Brock, 838 F.2d 1258, 1266 (D.C. Cir. 1988); Industrial Union Dep't, AFL-CIO v. American Petroleum Inst., 448 U.S. 607, 655 n. 62 (1980). At the same time, the agency's technical expertise and policy-making authority must be exercised within parameters. The lockout/tagout and grain handling standard decisions sought from OSHA more clarification on the question of parameters. In light of those decisions, OSHA believes it would be useful to state its view of the limits of its safety rulemaking authority and to explain why the agency is confident that its interpretive views have in the past and will continue in the future to avoid regulatory extremes.
Stated briefly, the OSH Act requires that before promulgating any occupational safety standard, OSHA demonstrate based on substantial evidence in the record as a whole that: (1) the proposed standard will substantially reduce a significant risk of material harm; (2) compliance is technologically feasible in the sense that the protective measures being required already exist, can be brought into existence with available technology, or can be created with technology that can reasonably be developed; (3) compliance is economically feasible in the sense that industry can absorb or pass on the costs without major dislocation or threat of instability; and (4) the standard employs the least expensive protective measures capable of reducing or eliminating significant risk. In addition, proposed safety standards must be compatible with prior agency action, be responsive to significant comment in the record, and to the extent allowed by statute, be consistent with applicable Executive Orders. These elements set the parameters for safety rulemaking and a decision-making framework for developing a rule within the parameters.
A. Congress Concluded That OSHA Regulations are Necessary To Protect Workers From Occupational Hazards and That Employers Should Be Required To Reduce or Eliminate Significant Workplace Health and Safety Threats
At section 2(a) of the Act, Congress announced its determination that occupational injury and illness should be eliminated as much as possible. "The Congress finds that occupational injury and illness arising out of work situations impose a substantial burden upon, and are a hindrance to, interstate commerce in terms of lost production, wage loss, medical expenses, and disability compensation payments." 29 U.S.C. 651(a). Congress therefore declared "it to be its purpose and policy * * * to assure so far as possible every working man and woman in the Nation safe * * * working conditions * * *." 29 U.S.C. 651(b).
To that end, Congress instructed the Secretary of Labor to adopt existing federal and consensus standards during the first two years after the Act became effective and, in the event of conflict among any such standards, to "promulgate the standard which assures the greatest protection of the safety or health of the affected employees." 29 U.S.C. 655(a). Congress also directed the Secretary to set mandatory occupational safety standards, 29 U.S.C. 651(b)(3), based on a rulemaking record and substantial evidence, 29 U.S.C. 655(b)(2), that are "reasonably necessary or appropriate to provide safe * * * employment and places of employment." When promulgating permanent safety or health standards that differ from existing national consensus standards, the Secretary must explain "why the rule as adopted will better effectuate the purposes of this Act than the national consensus standard." 29 U.S.C. 655(b)(8). Correspondingly, every employer must comply with OSHA standards and, in addition, "furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees." 29 U.S.C. 654(a).
"Congress understood that the Act would create substantial costs for employers, yet intended to impose such costs when necessary to create a safe and healthful working environment. Congress viewed the costs of health and safety as a cost of doing business. * * * Indeed, Congress thought that the financial costs of health and safety problems in the workplace were as large as or larger than the financial costs of eliminating these problems." American Textile Mfrs. Inst. Inc. v. Donovan, 452 U.S. 490, 519-522 (1981) ("ATMI") (emphasis in original). "[T]he fundamental objective of the Act [is] to prevent occupational deaths and serious injuries." Whirlpool Corp. v. Marshall, 445 U.S. 1, 11 (1980). "We know the costs would be put into consumer goods but that is the price we should pay for the 80 million workers in America." S. Rep. No. 91-1282, 91st Cong., 2d Sess. (1970); H.R. Rep. No. 91-1291, 91st Cong., 2d Sess. (1970), reprinted in Senate Committee on Labor and Public Welfare, Legislative History of the Occupational Safety and Health Act of 1970, (Committee Print 1971) ("Leg. Hist.") at 444 (Senator Yarborough). "Of course, it will cost a little more per item to produce a washing machine. Those of us who use washing machines will pay for the increased cost, but it is worth it, to stop the terrible death and injury rate in this country." Id. at 324; see also 510-511, 517.
[T]he vitality of the Nation's economy will be enhanced by the greater productivity realized through saved lives and useful years of labor.
When one man is injured or disabled by an industrial accident or disease, it is he and his family who suffer the most immediate and personal loss. However, that tragic loss also affects each of us. As a result of occupational accidents and disease, over $1.5 billion in wages is lost each year [1970 dollars], and the annual loss to the gross national product is estimated to be over $8 billion. Vast resources that could be available for productive use are siphoned off to pay workmen's compensation and medical expenses * * *.
Only through a comprehensive approach can we hope to effect a significant reduction in these job death and casualty figures.
Id. at 518-19 (Senator Cranston).
Congress considered uniform enforcement crucial because it would reduce or eliminate the disadvantage that a conscientious employer might experience where inter-industry or intra-industry competition is present. Moreover, "many employers -- particularly smaller ones -- simply cannot make the necessary investment in health and safety, and survive competitively, unless all are compelled to do so." Leg. Hist. at 144, 854, 1188, 1201.
Thus, the statutory text and legislative history make clear that Congress conclusively determined that OSHA regulations are necessary to protect workers from occupational hazards and that employers should be required to reduce or eliminate significant workplace health and safety threats.
B. As Construed by the Courts and by OSHA, the Act Sets a Threshold and a Ceiling for Safety Rulemaking That Provide Clear and Reasonable Parameters for Agency Action
OSHA has long followed the teaching that section 3(8) of the Act requires that before it promulgates "any permanent health or safety standard, [it must] make a threshold finding that a place of employment is unsafe -- in the sense that significant risks are present and can be eliminated or lessened by a change in practices." Industrial Union Dep't, AFL-CIO v. American Petroleum Inst., 448 U.S. 607, 642 (1980) (plurality) ("Benzene") (emphasis in original). When, as frequently happens in safety rulemaking, OSHA promulgates standards that differ from existing national consensus standards, it must explain "why the rule as adopted will better effectuate the purposes of this Act than the national consensus standard." 29 U.S.C. 655(b)(8). (National consensus and existing federal standards that Congress instructed OSHA to adopt summarily within two years of the Act's inception provide reference points concerning the least an OSHA standard should achieve. 29 U.S.C. 655(a).) As a result, OSHA is precluded from regulating insignificant safety risks or from issuing safety standards that do not at least lessen risk in a significant way. OSHA must also respond rationally to similarities and differences among industries or industry sectors. See Building and Constr. Trades Dep't, AFL-CIO v. Brock, 838 F.2d 1258, 1272-73 (D.C. Cir. 1988).
OSHA has also long accepted that "any standard that was not economically or technologically feasible would a fortiori not be 'reasonably necessary or appropriate' under the Act. See Industrial Union Dep't v. Hodgson, [499 F.2d 467, 478 (D.C. Cir. 1974)] ('Congress does not appear to have intended to protect employees by putting their employers out of business.')." American Textile Mfrs. Inst. Inc., 452 U.S. at 513 n. 31; American Iron and Steel Inst. v. OSHA, 939 F.2d 975, 980 (D.C. Cir. 1991) (a standard is economically feasible even if it portends "disaster for some marginal firms," but it is economically infeasible if it "threaten[s] massive dislocation to, or imperil[s] the existence of," the industry).
By stating the test in terms of "threat" and "peril," the Supreme Court made clear in ATMI that infeasibility begins short of industry-wide bankruptcy. OSHA itself has placed the line considerably below industry-wide bankruptcy. See for example, ATMI, 452 U.S. at 527 n. 50; 43 Fed. Reg. 27,360 (June 23, 1978) (proposed 200 ug/m3 PEL for cotton dust did not raise serious possibility of industry-wide bankruptcy, but impact on weaving sector would be severe, possibly requiring reconstruction of 90 percent of all weave rooms. OSHA concluded that the 200 ug/m3 level was not feasible for weaving and that 750 ug/m3 was all that could reasonably be required). See also 54 Fed. Reg. 29,245-246 (July 11, 1989); American Iron & Steel Institute, 939 F.2d at 1003 (OSHA raised engineering control level for lead in small nonferrous foundries to avoid the possibility of bankruptcy for about half of small foundries even though the industry as a whole could have survived the loss of small firms.) OSHA standards must also be cost-effective in the sense that the protective measures being required must be the least expensive measures capable of achieving the desired end. ATMI, at 514 n. 32; Building and Constr. Trades Dep't AFL-CIO v. Brock, 838 F.2d 1258, 1269 (D.C. Cir. 1988). (Although the cotton dust and lead rulemakings involved health standards, the economic feasibility ceiling established therein applies equally to safety standards. The feasibility boundary is the same for health and safety rulemaking since it comes from section 3(8), which governs all permanent OSHA standards.) OSHA gives additional consideration to financial impact in setting the period of time that should be allowed for compliance, allowing as much as ten years for compliance phase-in. See United Steelworkers of Am. v. Marshall, 647 F.2d 1189, 1278 (D.C. Cir. 1980), cert. denied, 453 U.S. 913 (1981). In addition, OSHA's enforcement policy takes account of financial hardship on an individualized basis. OSHA's Field Operations Manual provides that, based on an employer's economic situation, OSHA may extend the period within which a violation must be corrected after issuance of a citation. CPL. 2.45B, Chapter 3 E6d(3)(a) (Dec. 31, 1990).
To reach the necessary findings and conclusions, OSHA must conduct rulemaking to determine, based on substantial evidence, the qualitative and, if possible, quantitative nature of the risk with and without regulation, technological feasibility of compliance, availability of capital to the industry, the extent to which capital was required for other purposes, the industry's profit history, the industry's ability to absorb costs or pass them on to the consumer, the impact of higher costs on demand, and the impact on competition with substitutes and imports. See ATMI at 2501-2503; American Iron & Steel Institute generally.
OSHA's powers are further circumscribed by the independent Occupational Safety and Health Review Commission, which provides a neutral forum for employer contests of citations issued by OSHA for noncompliance with health and safety standards. 29 U.S.C. 659-661 (noted as an additional constraint in Benzene at 652 n. 59).
OSHA rulemaking is thus constrained first by the need to demonstrate that the standard will substantially reduce a significant risk of material harm, and then by the requirement that compliance is technologically capable of being done and not so expensive as to threaten economic instability or dislocation for the industry. Within these parameters, further constraints such as the need to find cost-effective measures and to respond rationally to all meaningful comment militate against regulatory extremes. Finally, it is axiomatic that significant departures from prior practice must be justified. International Union, UAW v. Pendergrass, 878 F.2d 389, 400 (D.C. 1989). In the twenty years since enactment, OSHA has promulgated numerous safety standards, standards that provide benchmarks for judging risks, benefits, and feasibility of compliance in subsequent rulemakings. (OSHA's Hazardous Waste Operations and Emergency Response Standard, for example, required use of existing technology and well accepted safety practices to eliminate at least 32 deaths and 18,700 lost workday injuries at a cost of about $153 million per year. 54 Fed. Reg. 9311-9312 (March 6, 1989). The excavation standard also drew on existing technology and recognized safety practices to save 74 lives and over 800 lost workday injuries annually at a cost of about $306 million. 54 Fed. Reg. 45,954 (Oct. 31, 1989). OSHA's Grain Handling Facilities standard relied primarily on simple housekeeping measures to save 18 lives and 394 injuries annually, at a total net cost of $5.9 to $33.4 million. 52 Fed. Reg. 49,622 (Dec. 31, 1991).)
C. The PSM Standard Meets the Statutory Criteria
In promulgating the Clear Air Act Amendments of 1990, Congress conclusively determined that "a process safety standard designed to protect employees from hazards associated with accidental releases of highly hazardous chemicals in the workplace" is necessary and that the standard must, at a minimum, require employers to adopt fourteen specified planning, procedure and training safety measures. Pub.L. 101-549 (Nov. 15, 1990), reprinted at 29 U.S.C.A. 655 note (Supp. 1991). For the reasons explained in detail throughout this statement of findings and conclusions, the standard's fourteen planning, procedure and training requirements, when fully implemented, reduce the risk of catastrophic fire and explosion (330 fatalities and 1,917 injuries/illnesses annually) by 80 percent. This constitutes a substantial reduction of significant risk of material harm. Compliance is technologically feasible because the standard's requirements are already being implemented to some extent. Compliance is economically feasible because all regulated sectors can readily absorb or pass on compliance costs during the standard's first five years, and economic benefits will exceed compliance costs thereafter. The standard's costs, benefits, and compliance requirements are consistent with the Clean Air Act Amendments, as well as with other OSHA safety standards. OSHA considered and responded to all substantive comments on their merits; OSHA evaluated all suggestions for their impact on worker safety, their feasibility, their cost effectiveness, and their consonance with the OSH Act and the Clean Air Act Amendments.
- [57 FR 6356, Feb. 24, 1992; 57 FR 7847, March 4, 1992]
|Regulations (Preambles to Final Rules) - Table of Contents|