Determination process for a major hazard facility

Guidance Note Determination process Information for operators of dangerous goods sites on how WorkSafe determines if the site is a major hazard facility. March 2011 1. Introduction 1 1.1. Concepts of determination 1 1.2. Key definitions 2 2. Starting the process 2 2.1. Providing information 2 2.2. Workforce requirements 2 3. The process 3 3.1. Factors to be considered prior to 3 and during an inquiry 3.2. How will operators be informed of decisions? 4 3.3. Time frame for facilities determined 4 to be an MHF 4. Compliance checklist 5 1. Introduction The major hazard facility parts of the Occupational Health and Safety Regulations 2007 (OHS Regulations) set out legal duties for control of risks from operating a major hazard facility (MHF). They apply to the operator of a facility who is the employer with management or control of the facility. A dangerous goods facility is automatically classified as an MHF if the quantities of hazardous materials listed in Schedule 9 of the OHS Regulations, Materials at major hazards facilities (and their threshold quantity) are present, or likely to be present, in a quantity exceeding the threshold values, either individually or in aggregate. However, it is possible for a major incident to occur at a site with quantities of Schedule 9 materials below the threshold values. The determination process allows for other factors that can increase the level of risk. The MHF regulations therefore adopt the following principles for classifying a facility as an MHF: (a) all facilities where quantities of Schedule 9 materials exceed the defined threshold, individually or in aggregate, are automatically classified as MHF (b) WorkSafe Victoria may determine any facility that exceeds 10% of the threshold to be an MHF, if there is a reasonable potential for a major incident to occur at the facility. This guidance note will help operators understand: when the facility might be considered for determination the process WorkSafe will follow in its review of a site for determination the rationale and criteria that WorkSafe uses when deciding to determine a site the steps an operator should take if the facility has been determined to be an MHF. 1.1 Concepts of determination The following are the key concepts behind the determination process used by WorkSafe: The objective of the MHF regulations is the safe operation of MHFs through reducing the likelihood of a major incident occurring or, in the event of a major incident occurring, reducing the consequences to health and safety and property. Obligations under the MHF regulations apply to registered or licensed MHFs. The principal basis for registering a facility as an MHF is if Schedule 9 materials are present or likely to be present above the specified threshold quantities, either individually or in aggregate. Any facility holding more than 10% of the threshold quantities may be determined to be an MHF, if it has a potential for major incidents, having regard to the quantity or combination of Schedule 9 materials and the activities performed at the facility or the land use surrounding the facility. GUI0123/01/02.11

For a facility holding greater than 10% but less than 100% of the threshold quantities, WorkSafe will hold an inquiry to determine whether it should be an MHF. The operator of the facility and other stakeholders will be notified and invited to make submissions. During the inquiry, WorkSafe will consider all relevant factors to form an opinion about the potential for a major incident at the facility. If, as a result of the inquiry, WorkSafe concludes the facility to be an MHF, the facility will then be determined and registered and the MHF regulations will apply. 1.2 Key definitions AQR: Aggregated quantity ratio (AQR) is the quantity calculated by the formula in clause 4 of Schedule 9 of the OHS Regulations, Materials at major hazard facilities (and their threshold quantity), for calculating the threshold quantity when there is more than one scheduled material on site. Dangerous goods (DG): As defined in the Dangerous Goods Act 1985. Determination: The formal process used to classify a site as an MHF when the inventory of scheduled materials at the site is less than 100% of the threshold quantity specified in Schedule 9. Major incident related to an MHF: An uncontrolled incident, including an emission, loss of containment, escape, fire, explosion or release of energy, that (a) involves Schedule 9 materials, and (b) poses a serious and immediate risk to health and safety. Notification: Information submitted to WorkSafe under reg 5.2.28 for review and consideration as to whether the facility should be classified as or determined to be an MHF. Note this term has a different meaning in other parts of the OHS Regulations, such as in reg 5.2.11 where it means contacting the emergency services and informing them that an incident has occurred. It also has a different meaning under the dangerous goods (DG) laws. Registration: A formal process acknowledging that a facility is an MHF. It allows the facility to continue to operate while developing its Safety Case and achieving full compliance with the MHF Regulations. More information on key terms is found in other MHF guidance available from the WorkSafe website and in the definitions of the OHS Regulations (reg 1.1.5). 2. Starting the process 2.1 Providing information An organisation or person is required to notify WorkSafe if they intend to operate an MHF or if the type and quantity of materials at their dangerous goods site exceeds 10% of the threshold quantity specified in the MHF regulations. In most cases, the information WorkSafe will use to decide if a facility is to be determined to be an MHF will come from the notification information required under reg 5.2.27. For guidance on what information should be provided, see the WorkSafe guidance note Notification and Registration of a major hazard facility. Reg 5.2.29(2) also allows WorkSafe to determine a facility to be an MHF if it becomes aware by any other means that the facility could meet the criteria of an MHF. Examples of sources of information that might alert WorkSafe include applications for planning permit amendments that are referred to WorkSafe for comment, reports of an incident at a facility involving Schedule 9 materials or information WorkSafe receives directly from independent parties. 2.1.1. Dangerous Goods notifications Under the Dangerous Goods (Storage and Handling) Regulations 2000 occupiers of premises where dangerous goods are stored and handled in quantities exceeding the manifest quantities, listed in Schedule 2 of those regulations are required to notify WorkSafe of certain information every two years. WorkSafe reviews DG notifications and may hold an inquiry (or a further inquiry) if there is a significant change in inventories of DG. Licensed MHFs are not required by WorkSafe to provide DG notification information. This information is included in the facility s Safety Case, which is provided to WorkSafe for licence assessment and is kept up to date by the operator as per reg 5.2.17(3). 2.2. Workforce requirements In most cases, the requirement to provide information can be handled by a single employee of the operator and does not involve significant consultation with workers. This person needs to understand what information is required and have access to inventory data. One source of data is the DG manifest required under s30 of the Dangerous Goods Act 1985 (DG Act). 2

3. The process Any decision to determine a facility to be an MHF will have important implications for the operator. Therefore, no facility will be determined by WorkSafe to be an MHF without a fair inquiry process (see Figure 3.1). WorkSafe will firstly re-examine the notification information provided by the facility operator and check or clarify items relating to the facility s risk profile. This usually requires a visit to the site and may also involve verification of the notification information. Under reg 5.2.30, WorkSafe must conduct a formal inquiry before determining that a facility is an MHF. WorkSafe must give notice of the inquiry to the facility operator, and invite the operator to make a written submission. WorkSafe will also seek submissions from other parties such as the site s health and safety representatives (HSR), emergency services, local councils and other relevant government agencies etc. WorkSafe must consider these submissions and all relevant information before making a determination. WorkSafe must put any adverse information to the operator to allow for comment, clarification or correction. At the end of the process, WorkSafe must inform the operator in writing of the decision, the reasons for the decision and the date on which the determination takes effect, if applicable. A facility determined to be an MHF will need to comply with all the requirements of the MHF regulations. 3.1 Factors to be considered prior to and during an inquiry Under reg 5.2.29, WorkSafe must take into account the following factors: The quantity or combination of Schedule 9 materials present or likely to be present at the facility. The likelihood of an inquiry is greater where the quantity of Schedule 9 materials is close to the major hazard threshold, or, for example, if inherently unstable or incompatible materials are present in significant quantities. Figure 3.1 The determination process 1. The operator notifies WorkSafe that Schedule 9 material quantities are >10% but <100% of the threshold, or WorkSafe becomes aware of the facility by other means. 2. WorkSafe considers the type and quantity of Schedule 9 materials, the activities involving these materials and other factors. Operator and other stakeholders make written submissions. 3. WorkSafe forms the opinion that there is a potential for major incidents, and application of the MHF regs may be appropriate. Yes 4. WorkSafe informs the operator and other stakeholders of the intention to hold an inquiry, and invites them to make written submissions. 5. WorkSafe considers the submissions and all other relevant information, and determines whether the facility is or is not an MHF. No Not an MHF No further action required under the MHF regulations, but operator must comply with all other OHS and DG regulatory requirements. Factors that lead to nondetermination would be monitored. Determined to be an MHF Worksafe puts adverse information to the operator for comment. 6. Operator informed. 7. WorkSafe registers the MHF. Operator informed. 3

The nature of the activities within the facility involving those materials. The likelihood of an inquiry is greater where the activities at the facility are highly hazardous. Examples include unstable chemical reactions, materials stored in large, closely grouped tanks, or if there is potential for the materials to generate extremely toxic by-products. The land use and activities in the area surrounding the facility. The potential consequences of an incident in a high density residential area would be higher than if the facility were in a remote, non-residential area. During the course of an inquiry, WorkSafe will also consider: Proximity of the Schedule 9 materials to populated areas. If the site s occupied buildings, or workers in other neighbouring industries or people in residential areas are close to the areas where Schedule 9 materials are present, the potential outcome of a major incident may be more severe. Proximity to residential areas versus industrial areas. The possible consequences of an incident in a facility could be more severe if it is close to residential areas, compared with an industrial area. It is possible that sleeping residents would be less able to respond and/or escape. Proximity to sensitive land uses. A more extreme example of the above factor is if the facility is close to institutions such as hospitals, aged care or child care facilities, or other places where prompt and safe evacuation may be difficult. Proximity to other hazardous facilities. If the facility is located close to any MHFs or to other facilities where significant quantities of hazardous materials are present, or to major infrastructure projects, there is potential for escalation of any major incident. Evidence of activities giving rise to a greater likelihood of serious incidents at the facility. Examples could be a poor incident history, a record of regulatory non-compliance or history of control measure failure under test conditions. These may indicate poor asset integrity, safety engineering or safety management. Written submissions to WorkSafe. Whether from the operator or stakeholders, may have content related to the potential for a major incident which would give WorkSafe a reason to determine that a facility is an MHF. 3.1.1. Risk ranking relative to other sites A final factor that WorkSafe takes into consideration before determining a facility to be an MHF, is its risk relative to other facilities on the list of facilities between 10% and 100% of threshold quantity. For example, does it make sense to determine Site A when Site B has not been determined although it has a higher AQR, but is located in an industrial complex and is a storage facility rather than a processing facility? 3.2. How will operators be informed of decisions? Facility determined to be an MHF. WorkSafe will write to the operator after the inquiry stating the decision, the reasons for the decision and the date on which the determination takes effect. The facility will be registered as an MHF on this date. The facility must comply with all requirements of the MHF regulations so far as is reasonably practicable, in addition to other OHS and DG laws. A key initial obligation under the MHF regulations will be submission of a Safety Case outline (reg 5.2.33) within 90 days. Facility not determined to be an MHF. WorkSafe will inform the operator of the decision after the inquiry. A facility not determined to be an MHF isn t subject to the MHF regulations but all other OHS and DG laws still apply. 3.3. Time frame for facilities determined to be an MHF The MHF regulations do not specify a time frame for the determination process. Reg 5.2.32 requires WorkSafe to register an MHF on the date the determination takes effect. This sets the time frame for all subsequent duties and actions required of a facility. The first of these is to prepare a Safety Case outline within 90 days under reg 5.2.31. (See guidance note Safety Case outline for more information). Reg 6.2.26 specifies that the registration expiry date for an MHF must be no later than 30 months after the date registration commenced. Reg 6.1.19 specifies that the operator of an MHF must apply for a licence no later than six months before the registration expiry date. This means that the operator of a facility determined to be an MHF must have its Safety Case prepared and ready for submission to WorkSafe within 24 months of the date that determination takes effect. The letter from WorkSafe informing the operator of determination sets out deadlines for when the Safety Case outline and the Safety Case must be submitted and the dates when registration commences and expires. 4

4. Compliance checklist The following checklist sets out requirements of the MHF Regulations relating to determination. Table 4.1 MHF regulations relating to determination Reg Requirement 5.2.29 Authority may determine facility to be a major hazard facility (1) If the Authority receives notification under regulation 5.2.27, the Authority may determine that the facility is a major hazard facility if the Authority forms the opinion that there is a potential for a major incident to occur at the facility, having regard to all or any of the following (a) the quantity or combination of Schedule 9 materials present or likely to be present at the facility (b) the type of activity within the facility that involves those materials (c) the land use and activities of occupancy in the area surrounding the facility. (2) The Authority, on its own initiative, may determine that a facility is a major hazard facility if (a) the Authority becomes aware that Schedule 9 materials are present or likely to be present at the facility in a quantity exceeding 10% of their threshold quantity but less than their threshold quantity, and (b) the Authority forms the opinion that there is a potential for a major incident to occur at the facility, having regard to all or any of the following (i) the quantity or combination of Schedule 9 materials present or likely to be present at the facility (ii) the type of activity within the facility that involves those materials (iii) the land use and activities of occupancy in the area surrounding the facility. 5.2.30 Inquiry before making determination (1) The Authority must not make a determination under regulation 5.2.29 unless the Authority has conducted an inquiry under this regulation. (2) The Authority must give the operator of a facility that may be the subject of a determination under regulation 5.2.29 written notice of the Authority s intention to conduct an inquiry. (3) A notice under subregulation (2) must (a) state the subject of the inquiry and the reasons for conducting it, and (b) invite the operator to make submissions in relation to the inquiry within 14 days of the date of the notice. (4) The Authority must consider any submissions made by the operator. 5.2.31 Written notice of determination (1) If the Authority makes a determination under regulation 5.2.29, the Authority must send to the operator of the relevant facility a written notice that (a) sets out the determination, and (b) states the reasons for the determination, and (c) specifies the date on which the determination takes effect. (2) The date specified under subregulation (1)(c) must be not less than 30 days after the operator is sent the notice. 5.2.32 Effect of determination If the Authority makes a determination under this division in respect of a facility, the facility is, from the date on which the determination takes effect, to be taken to be registered as a major hazard facility under part 6.2 (Registration). 5

Further Information Contact the WorkSafe Victoria Advisory Service on 1800 136 089 or go to worksafe.vic.gov.au Related WorkSafe publications Guidance note Notification and registration of a major hazard facility Guidance note Safety Case outline for a major hazard facility Related websites epa.vic.gov.au/waste/asbestos.asp customs.gov.au health.vic.gov.au Note: The information presented in this Guidance Note is intended for general use only. It should not be viewed as a definitive guide to the law, and should be read in conjunction with the Occupational Health and Safety Regulations 2007. Whilst every effort has been made to ensure the accuracy and completeness of the Guidance Note, the advice contained herein may not apply in every circumstance. Accordingly, the Victorian WorkCover Authority cannot be held responsible, and extends no warranties as to the suitability of the information for any particular purpose or actions taken by third parties as a result of information contained in the Guidance Note. On 18 June 2017, the Occupational Health and Safety Regulations 2017 (OHS Regulations 2017) replaced the Occupational Health and Safety Regulations 2007 (OHS Regulations 2007), which expired on this date. This publication has not yet been updated to reflect the changes introduced by the OHS Regulations 2017 and should not be relied upon as a substitute for legal advice. Information on the key changes introduced by the OHS 2017 Regulations can be found in the guidance titled Occupational Health and Safety Regulations 2017: Summary of changes - available at https://www.worksafe.vic.gov.au/ data/assets/pdf_file/0011/207659/isbn-ohs-regulationssummary-of-changes-2017-04.pdf. However, this guidance document contains material of a general nature only and is not to be used as a substitute for obtaining legal advice. 6