On November 15th, 2019 it was announced that the Draft MHI Regulations which had been mulled for the better part of a decade had finally been published for public comment via Regulation Gazette No. 11005, Volume 653, No. 42840 dated 15th November 2019. The publishing of the regulations for public comment marks a significant milestone for those involved in the drafting of the new requirements and will go some way in addressing some of the challenges encountered with the current regulations promulgated in 2001. Being part of the technical committee put together by the Department of Employment and Labour (DEL) to draft these regulations I personally felt like a small victory has been achieved, and now look forward to the collation of comments and working towards promulgation. The current MHI Regulations have been in use since 2001 and in that time have observed by many companies required to. There have however been recognised challenges with the wording of the regulations and the interpretation of some of the requirements therein. Those challenges have led to the need to draft a new set of regulations to close those gaps.
Maybe let’s start with some definitions:
An MHI can be defined as an industrial facility (or process within that facility) where manufacturing and/or storage of bulk quantities of chemical materials takes place. The materials are those which, if they were to lose containment could result in effects that could cause harm to personnel and members of the public in the vicinity of the facility. Effects may include major fires, explosions and release of toxic materials which disperse over a distance.
By South African law (governed by the MHI Regulations, under Section 43 (1) of the Occupational Health and Safety Act No. 85 of 1993), every MHI (or suspected MHI) is required to undertake what is known as an MHI Risk Assessment, which is a Quantified Risk Assessment (QRA) of the facility which takes into account the potential effects in the case of loss of containment as well as the likelihood of occurrence. The MHI Risk Assessments are undertaken by Approved Inspection Authorities (AIAs) which are vetted by the South African National Accreditation System (SANAS). Under current legislation, MHI Risk Assessments are required to be repeated under the following circumstances:
- 5-yearly; or
- If a major incident occurs onsite involving hazardous materials and which requires activation of the Emergency Response Plan (ERP); or
- A change has occurred to the processes onsite such that the risk profile of the site changes (i.e. risk on the surroundings may have increased).
This article aims to describe the changes in the draft regulations, offers some opinions and insights and hopefully provides a basis for the reader to read and comment on the regulations before the closing date calculated to be 90 days from 15th November 2019.
NEW DEFINITIONS
The new regulations contain some new definitions not previously contained in the 2001 promulgated regulations, including (not verbatim):
Dutyholder – this is the employer or self-employed person who supplies or uses hazardous substances defined in the regulations.
Responsible person – A person designated by the dutyholder in writing, who works for the dutyholder in a full-time capacity and who will be the go-to person at the site for MHI-related matters.
Establishment – The area (site) under the control of the dutyholder and in which the quantities of hazardous substances prescribed in the regulations are present. Establishments are divided into three categories:
· High Hazard Establishments;
· Medium Hazard Establishments; and
· Low Hazard Establishments.
The categorisation of establishments is based on newly defined threshold quantities (defined in Annexure MHI A1, MHI A2 and MHI A3 in the regulations). A short summary of the lower thresholds for selected hazardous substances is provided below, as well as the risk studies they would be compelled to produce:
In the current MHI Regulations (2001) an MHI is defined as a site which handles “a quantity” of a substance which may pose a risk that could affect the health and safety of employees and the public. That “quantity” was not defined; over time those in the industry have used the quantities of hazardous substances defined in the General Machinery Regulations as proxies for the MHI Regulations, which is technically not correct.
In the current regulations all MHI sites are compelled to compile MHI Risk Assessments (reports) and Emergency Response Plans (ERPs), regardless of how much material was stored. In the draft regulations three concepts have been introduced which Medium and High Hazard Establishments will have to observe in order to comply with the regulations:
- Major Incident Prevention Policy (MIPP): a high-level document is now a requirement for Medium and High Hazard establishments describing the following:
o How are you organised to deal with major incidents?
o What are your systems to identify major accident hazards and assess risk?
o What are your procedures for operating plant safely?
o How do you manage changes when they occur (Management of Change)?
o How do you plan for emergencies?
o How do you monitor your systems to ensure major incidents are prevented?
- A Process Safety Management System (PSM): A management system that feeds from the MIPP and provides ‘flesh’(the who, what where, when and how) to the topics stated in the MIPP.
- A Safety Report (or Safety Case): A comprehensive report comprising various, separate studies to ensure risk is comprehensively assessed and may include:
o Information on Safety Management System of the Organisation with reference to the PSM (How are you structured to prevent major incident hazards?)
o The location of the establishment (Where are you located geographically, any special features, who are your neighbours?)
o The establishment (What are the specifics of your process and materials handled?)
o Hazard identification and incident risk analysis (What hazards exist, what are the effects and likelihoods of occurrence? This may include Hazard Identification (HAZID) and Hazard and Operability (HAZOP) studies, among others.)
o Measures of protection & intervention to limit consequences of a major incident (identifying Safety Critical Elements (SCEs), defining their performance criteria and ensuring that they are available when required).
- South African National Standards (SANS): Two SANS standards were published in 2018 and are referred to in the draft regulations:
o SANS 1514:2018 “Major hazard installation: Emergency response planning” – This standard details requirements for ERPs for MHI establishments.
o SANS 1461:2018 “Major hazard installation — Risk assessments” – This standard details the technical requirements for compiling MHI Risk Assessments by AIAs.
In addition to the definitions above, some new concepts have been introduced in the regulations, including:
- Installation vs Establishment: Establishment refers to the site in which the quantities of hazardous substances mentioned above, are stored / handled. An installation can be a process or equipment onsite which uses or stores the hazardous substances mentioned. Therefore an establishment can multiple installations contributing to its MHI status.
- Licence to Operate – a licence applicable to the operation of a High Hazard Establishment, obtained from the Chief Inspector, DEL.
THE DRAFT REGULATIONS THEMSELVES
Regulation 3: Management of MHIs
Describes the responsibilities of the dutyholder as well as its responsible person. It states that the dutyholder must obtain certain approvals from Local Authority (municipality) before erecting, modifying or converting an establishment. This is currently the case in the current regulations, however, application has been inconsistent and slightly unclear. The regulations have sought to clarify what is meant by that.
The responsible person must be employed in full time capacity and be under the control of the dutyholder (employee). The Chief Inspector may impose relevant qualifications on the responsible person and the dutyholder must appoint deputies while still retaining the responsible person’s ultimate responsibilities for MHI matters at the site.
Regulations 3(6) and 3(7): Notifying neighbours
This regulation requires the dutyholder to have ongoing consultation with MHI neighbours, to inform those within the establishment’s “Impact Zone” of such and to keep a record of all such interactions. Under this regulation the Chief Inspector may designate MHIs within an area as a Group of MHIs. This regulation might open up the possibility to perform MHI Risk Assessments on complexes containing several industrial facilities with impact on one another. This has been a challenge under the current regulations where there are several MHIs in close proximity to one another and all perform separate risk assessments with no requirement to share knowledge, apart from a requirement to have their MHI Risk Assessments available for all interested parties.
Regulation 4: Notifying the Authorities
Several owners / users of MHIs have expressed the need for clarification of the process for notifying the authorities, especially when it comes to receiving feedback in the form of acknowledgement or some kind of certificate. As with the current regulations, the 2019 draft regulations require that the provincial DEL, the local authority (municipality) and the national DEL be notified of the existence of an MHI. A form for doing so (Annexure D) now exists. Advertising the existence of an MHI is still a requirement, however, now it is specified that such advertisement must be in English and in a local language ubiquitous in the area and by notices in that area.
Regulations 5, 6 and 7: Registration of an MHI
The Chief Inspector may now issue a registration certificate or may choose to reject the registration of an MHI. As the draft regulations stand, the criteria and implications of refusal not clear. A registration fee will be payable for registration as well as re-notification after the required 5-year period. The regulations require that re-registration be undertaken at least 6 months before expiry. Typically with the current regulations, Clients aim to start the process of reviewing / updating their MHI Risk Assessment typically a month or two before the date written on the final report from 5 years before. That approach is not correct, and will be emphasised in the new regulations by the requirement to notify the Chief Inspector by the end of that 5 year period. That means the MHI and notification processes have to be completed before then. In reality an MHI Risk Assessment takes (give or take) 2 months to get to final report stage and a further 6 months to complete notification (in the best case), so the review / update has to be initiated at least 8 months to a year before the the expiry date on the report from 5 years before.
Regulation 8: Revoking MHI Registration
The Chief Inspector can revoke an MHI registration if:
· Dutyholder not ensuring Works are carried out safely;
· Change is effected making the establishment unfit for occupation or operation as an MHI;
· Fact or circumstance not present at registration;
· Failure to comply with Chief Inspector notice;
· Contravention of registration condition(s) (conditions not
· Where the dutyholder ceases operations.
Regulation 10: The MHI Risk Assessment
The MHI Risk Assessment must be done in line with SANS 1461:2018 mentioned above. For the 5-yearly reviews / updates (required as in the current regulations) there is a requirement to notify authorities (without advertisement) as before:
· Chief Inspector (within 60 days)
· Provincial director
· Local authority
The dutyholder must make the most recent MHI report available for any interested party (anyone has right to see it).
Regulation 14: General duties of local authorities
A major challenge to the current MHI regime has been the resource constraints in smaller municipalities meaning that the approach by various local authorities has been inconsistent in how they manage the regulation of MHIs. This has not disappeared under the new regulations, however, there have been some clarifications on the roles of the local authorities, as well as prescription of how they can handle resource constraints by linking up with bigger municipalities.
Under the draft regulations, the local authorities may not permit a new major hazard establishment (MHE) or expansion if risk is unacceptable. They can also prohibit development of an installation which can cause the establishment to be an MHE and must give consent for the Emergency Response Plan (ERP). If they don’t have capacity, neighbouring local authorities must be consulted.
Regulation 15: Emergency Response Plans / Emergency preparedness plans
All ERPs at MHIs must comply with SANS 1514 within 12 months of entry of new regulations. The dutyholder must obtain approval of their ERP from the Local Authority. Importantly, the dutyholder must give early warning to interested and affected parties if a major incident is likely to go offsite (often a recommendation made in MHI Risk Assessments where the effects can reach offsite).
Regulation 16: Reporting of incidents
There are no changes to the current requirements, incidents involving hazardous substances and where the ERP is activated must be reported within 48 hours. The dutyholder must to send a report to Chief Inspector within 7 days after incident and investigate and record all near misses in a register.
Regulation 17: Information and training
This is a new requirement and one which strengthens the process of MHI Risk Assessments. Often the MHI Risk Assessments and information therein have tended to be technical and inaccessible to most workers onsite, particularly those working on the field, next to the installations in question, which have the potential to cause death and injury to them. The dutyholder must provide training for all employees on the following:
· The scope of the new MHI Regs once promulgated;
· Nature of the establishment
· Potential major hazards;
· Potential health and safety risk caused by major incidents;
· Practices and control procedures for a major incidents;
· Refresher training must be provided when:
o There is a change in the establishment; and
o The risk assessment has been reviewed.
Regulation 18: General duties of suppliers
Suppliers must provide training on the use and handling of the hazardous substances they supply, including refresher training every 24 months. If they become aware of a major incident involving their substances, they must inform other customers. Suppliers must provide a 24-hour advice service on handling their substance in case of major incident.
Other requirements
The following are other requirements in the draft regulations:
· Closure of an MHI: requires that the dutyholder notifies the Chief Inspector, Local Authority and Provincial Director at least 60 days before closure.
· Offences and penalties: contravention of the regulations carries a maximum R500,000 fine or 12 months imprisonment.
CONCLUSION
In general, several issues would have been addressed by the draft regulations were they to be promulgated as they stand. However, there are questions particularly around the capacity of the local authorities and the DEL in implementing the new requirements. The lack of capacity will probably mean the DEL relies on self-regulation as is the case currently.