Regulations (Preambles to Final Rules) - Table of Contents|
| Record Type:||Confined and Enclosed Spaces and Other Dangerous Atmospheres in Shipyard Employment|
| Title:||Section 3 - III. Statutory Considerations|
III. Statutory Considerations
OSHA has described the hazards found in confined and enclosed spaces and other dangerous atmospheres in shipyard employment and the measures required to protect affected employees from those hazards in Section I, Background, and in Section II, Summary and Explanation of the Final Rule, earlier in this preamble. The Agency is providing the following discussion of the statutory mandate for OSHA rulemaking activity to explain the legal basis for its determination that the Confined and Enclosed Spaces and Other Dangerous Atmospheres standard, as promulgated, is reasonably necessary to protect affected employees from significant risks of injury and death.
Section 2(b)(3) of the Occupational Safety and Health Act authorizes "the Secretary of Labor to set mandatory occupational safety and health standards applicable to businesses affecting interstate commerce", and section 5(a)(2) provides that "[e]ach employer shall comply with occupational safety and health standards promulgated under this Act" (emphasis added). Section 3(8) of the OSH Act (29 U.S.C. 652(8)) provides that "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."
In two recent cases, reviewing courts have expressed concern that OSHA's interpretation of these provisions of the OSH Act, particularly of section 3(8) as it pertains 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 OSHA's 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 OSH 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.
OSHA rulemakings involve a significant degree of Agency expertise and policy-making discretion to which reviewing courts must defer. (See for example, 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 discernable parameters. The lockout/tagout and grain handling standard decisions sought clarification of the Agency's view of the scope of its expertise and authority. In light of those decisions, the preamble to this safety standard states OSHA's views regarding the limits of its safety rulemaking authority and explains why the Agency is confident that its interpretive views have in the past avoided regulatory extremes and continue to do so in this rule.
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 is cost-effective in that it employs the least expensive protective measures capable of reducing or eliminating significant risk. Additionally, proposed safety standards must be compatible with prior Agency action, must be responsive to significant comment in the record, and, to the extent allowed by statute, must be consistent with applicable Executive Orders. These elements limit OSHA's regulatory discretion for safety rulemaking and provide a decision-making framework for developing a rule.
B. 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 OSH Act (29 U.S.C. 651(a)), 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." 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 2 years after the OSH 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 was supplied 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 regulation is necessary to protect workers from occupational hazards and that employers should be required to reduce or eliminate significant workplace health and safety threats.
C. As Construed by the Courts and by OSHA, the OSH Act Sets Clear and Reasonable Limits for Agency Rulemaking Action
OSHA has long followed the teaching that section 3(8) of the OSH 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 was supplied in original]." Thus, the national consensus and existing federal standards that Congress instructed OSHA to adopt summarily within two years of the OSH 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.
The OSH Act also limits OSHA's discretion to issue overly burdensome rules, as the agency also has long recognized 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 (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 economic infeasibility begins short of industry-wide bankruptcy. OSHA itself has placed the line considerably below this level. (See for example, ATMI, 452 U.S. at 527 n. 50; 43 FR 27360 (June 23, 1978). Proposed 200 ug/m(3) 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/m(3) level was not feasible for weaving and that 750 ug/m(3) was all that could reasonably be required. See also 54 FR 29245-29246 (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.) All 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)). OSHA gives additional consideration to financial impact in setting the period of time that should be allowed for compliance, allowing as much as 10 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).) Additionally, 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 III, paragraph E6d(3)(a), Dec. 31, 1990).
To reach the necessary findings and conclusions, OSHA conducts rulemaking in accordance with the requirements of section 6 of the OSH Act. The rulemaking process enables the Agency to determine the qualitative and, if possible, the quantitative nature of the risk with (and without) regulation, the technological feasibility of compliance, the availability of capital to the industry and the extent to which that capital is 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.) Section 6(f) of the OSH Act further provides that, if the validity of a standard is challenged, OSHA must support its conclusions with "substantial evidence in the record considered as a whole," a standard that courts have determined requires fairly close scrutiny of agency action and the explanation of that action. (See Steelworkers, 647 F.2d at 1206-1207.)
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 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 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 bounds, further constraints such as the need to find cost-effective measures and to respond rationally to all meaningful comment militate against regulatory extremes.
D. Confined and Enclosed Spaces and Other Dangerous Atmospheres in Shipyard Employment Standard Complies With the Statutory Criteria Described Above and Is Not Subject to the Additional Constraints Applicable to Section 6(b)(5) Standards
Standards which regulate hazards that are frequently undetectable because they are subtle or develop slowly or after long latency periods, are frequently referred to as "health" standards. Standards that regulate hazards, like explosions or electrocution, that cause immediately noticeable physical harm, are called "safety" standards. (See National Grain & Feed Ass'n v. OSHA (NGFA II), 866 F.2d 717, 731, 733 (5th Cir. 1989). As noted above, section 3(8) provides that all OSHA standards must be "reasonably necessary or appropriate." In addition, section 6(b)(5) requires that OSHA set health standards which limit significant risk "to the extent feasible." OSHA has determined that the Confined and Enclosed Spaces and Other Dangerous Atmospheres in Shipyard Employment standard is a safety standard, because the standard addresses hazards, such as asphyxiation, explosions, and fires, that are immediately dangerous to life or health, not the longer term, less obvious hazards subject to section 6(b)(5).
The OSH Act and its legislative history clearly indicate that Congress intended for OSHA to distinguish between safety standards and health standards. For example in section 2(b)(6) of the OSH Act, Congress declared that the goal of assuring safe and healthful working conditions and preserving human resources would be achieved, in part:
* * * by exploring ways to discover latent diseases, establishing causal connections between diseases and work in environmental conditions, and conducting other research relating to health problems, in recognition of the fact that occupational health standards present problems often different from those involved in occupational safety.
[The Secretary] should take into account that anyone working in toxic agents and physical agents which might be harmful may be subjected to such conditions for the rest of his working life, so that we can get at something which might not be toxic now, if he works in it a short time, but if he works in it the rest of his life might be very dangerous; and we want to make sure that such things are taken into consideration in establishing standards. [Leg. Hist. at 502-503 (Sen. Dominick), quoted in Benzene at 648-49]
Additionally, Representative Daniels distinguished between "insidious silent killers' such as toxic fumes, bases, acids, and chemicals" and "violent physical injury causing immediate visible physical harm" (Leg. Hist. at 1003), and Representative Udall contrasted insidious hazards like carcinogens with "the more visible and well-known question of industrial accidents and on-the-job injury" (Leg. Hist. at 1004). (See also, for example, S. Rep. No. 1282, 91st Cong., 2d Sess. 2-3 (1970), U.S. Code Cong. & Admin. News 1970, pp. 5177, 5179, reprinted in Leg. Hist. at 142-143, discussing 1967 Surgeon General study that found that 65 percent of employees in industrial plants "were potentially exposed to harmful physical agents, such as severe noise or vibration, or to toxic materials"; Leg. Hist. at 412; id. at 446; id. at 516; id. at 845; International Union, UAW at 1315.) In reviewing OSHA rulemaking activity, the Supreme Court has held that section 6(b)(5) requires OSHA to set "the most protective standard consistent with feasibility" (Benzene at 643 n. 48). As Justice Stevens observed:
The reason that Congress drafted a special section for these substances * * * was because Congress recognized that there were special problems in regulating health risks as opposed to safety risks. In the latter case, the risks are generally immediate and obvious, while in the former, the risks may not be evident until a worker has been exposed for long periods of time to particular substances. [Benzene, at 649 n. 54.]
Challenges to the grain dust and lockout/tagout standards included assertions that grain dust in explosive quantities and uncontrolled energy releases that could expose employees to crushing, cutting, burning or explosion hazards were harmful physical agents so that OSHA was required to apply the criteria of section 6(b)(5) when determining how to protect employees from those hazards. Reviewing courts have uniformly rejected such assertions. For example, the Court in International Union, UAW v. OSHA, 938 F.2d 1310 (D.C. Cir. 1991) rejected the view that section 6(b)(5) provided the statutory criteria for regulation of uncontrolled energy, holding that such a "reading would obliterate a distinction that Congress drew between health and safety risks." The Court also noted that the language of the OSH Act and the legislative history supported the OSHA position (International Union, UAW at 1314). Additionally, the Court stated: "We accord considerable weight to an agency's construction of a statutory scheme it is entrusted to administer, rejecting it only if unreasonable" (International Union, UAW at 1313, citing Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 843 (1984)).
The Court reviewing the grain dust standard also deferred to OSHA's reasonable view that the Agency was not subject to the feasibility mandate of section 6(b)(5) in regulating explosive quantities of grain dust (National Grain & Feed Association v. OSHA (NGFA II), 866 F.2d 717, 733 (5th Cir. 1989)). It therefore applied the criteria of section 3(8), requiring the Agency to establish that the standard is "reasonably necessary or appropriate" to protect employees.
As explained in Section I, Background, and Section II, Summary and Explanation of the Final Rule, earlier in this preamble, and Section IV, Summary of Final Regulatory Analysis, below, OSHA has determined that confined and enclosed spaces and other dangerous atmospheres in shipyard employment pose significant risks to employees and that the provisions of the final rule are reasonably necessary to protect affected employees from those risks. OSHA believes that compliance is economically feasible, because, as documented in the Regulatory Impact Analysis, all regulated sectors can readily absorb or pass on compliance costs.
As presented in Section IV, Summary of Final Regulatory Analysis, later in this preamble, and in Table 1, the standard's costs, benefits, and compliance requirements are consistent with those of other OSHA safety standards, such as the Hazardous Waste Operations and Emergency Response (HAZWOPER) standard.
OSHA assessed employee risk by evaluating exposure to the hazards associated with confined and enclosed spaces and other dangerous atmospheres in shipyard employment. Section IV, Summary of Final Regulatory Analysis, later in this preamble, presents OSHA's estimate of the costs and benefits of the Confined and Enclosed Spaces and Other Dangerous Atmospheres in Shipyard Employment standard. OSHA has set the scope of the Confined and Enclosed Spaces and Other Dangerous Atmospheres standard to address situations in which employees are exposed to these hazards, regardless of the location, shipboard vs. land-side. The Agency believes, based on analysis of the elements of the hazards identified, that there is sufficient information for OSHA to determine that employees in the covered sectors face significant risks related to confined and enclosed spaces and other dangerous atmospheres in shipyard employment. Therefore, the Agency has determined that all employees within the scope of the Confined and Enclosed Spaces and Other Dangerous Atmospheres in Shipyard Employment standard face a significant risk of material harm and that compliance with these standards is reasonably necessary to protect affected employees from that risk.
OSHA has considered and responded to all substantive comments regarding the proposed Confined and Enclosed Spaces and Other Dangerous Atmospheres in Shipyard Employment on their merits in Section II, Summary and Explanation of the Final Rule, earlier in this preamble. In particular, OSHA evaluated all suggested changes to the proposed rule in terms of their impact on worker safety, their feasibility, their cost effectiveness, and their consonance with the OSH Act.
Regulations (Preambles to Final Rules) - Table of Contents|