Managing Automation - October 2008 - (Page 41)

Marriott, process industry leader at Deloitte. But, in order to achieve CFATS compliance, it’s likely that chemical manufacturers, large and small, will find themselves needing to implement a wide range of new systems, from product lifecycle management (PLM) applications for tracking product contents to human capital management (HCM) systems required to make sure that individuals accessing regulated information have the proper clearance and training. One thing’s for sure: A large number of chemical facilities are being touched by the CFATS regulations. An estimated 32,000 facilities that handle or store sufficient quantities of potentially dangerous chemicals, such as propane, chlorine, ammonium nitrate, and hydrogen peroxide, were required by the end of last year to submit basic information about their operations to the Department of Homeland Security (DHS). Based on that screening, the DHS earlier this summer began notifying an estimated 7,000 facilities that they are considered “high risk” and must submit more detailed Security Vulnerability Assessments. The assessments require plant managers to detail their operations — from what methods they use to assess security risk to how they store and track potentially dangerous materials. The assessment form, for example, asks whether inventory measurement has been automated and how often measurement is done. Plants are required to submit those assessments between late September and late December. The DHS will then place each high-risk facility in one of four risk categories, with escalating regulatory requirements. Facilities at the highest risk levels are then required to develop full site security plans that detail how they have addressed or will address 19 risk-based performance standards that touch on everything from how plants deal with cyber-security to how they store and protect records, guard against sabotage, and manage shipping, receipt, and storage of materials. The DHS will then review and approve each plant’s security plan. Chemical plants that fail to meet the CFATS requirements and deadlines will face fines of up to $25,000 per day and even possible shutdown by the DHS. VULNERABILITY INFORMATION For many chemical manufacturers, among the more challenging aspects of CFATS will be the requirement that they limit access to specific security-related information to employees who have received specific training, background checks, and certification. CFATS defines what it calls ChemicalTerrorism Vulnerability Information, information generated by each high-risk plant that must be secured and can be accessed only by authorized employees. That information includes data about security breaches and other extraordinary incidents, inspection findings, and training records. CFATS requires that such information, when stored electronically, be highly secure. The problem, experts say, is that many chemical facilities currently have no documented, repeatable processes for assuring that only the right employees have access to critical information. At many plants, training and other employee-related record-keeping is manual, says Todd Nicholson, chief marketing officer at Industrial Defender, a provider of cyber-security assessment services to chemical and other manufacturers. “We’ve seen college interns working for the summer at a plant who are given the task of updating anti-virus signatures,” Nicholson says. “That kind of thing just opens you up for critical information getting into the wrong hands.” Nicholson predicts that many chemical manu- REACHing a State of Denial C FATS isn’t the only wide-ranging new regulation that chemical manufacturers must be concerned about. The European Union is phasing in regulations, known as Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), that will require chemical manufacturers and many of their customers to register the chemicals that they produce or use, evaluate those chemicals, and, in some cases, receive EU authorization to continue using them. The EU launched REACH officially in June with the creation of a new agency, the European Chemicals Agency. Manufacturers are required to begin registering chemicals by Dec. 1, 2008. The EU has estimated that, over the next 11 years, REACH will require manufacturers to register their use of some 30,000 chemicals. REACH may, in fact, prove more expensive for chemical manufacturers to implement and more potentially disruptive than CFATS, experts say. That’s because REACH requires manufacturers not only to register chemicals they make or use, but also to collaborate with suppliers and customers to make sure they are all making and using specific chemicals in the correct quantities. Chemical suppliers that fail to meet REACH requirements or that, for example, ship more of a specific chemical than they have registered can be denied the right to fill orders, says Frank Kochendoerfer, chemical industry business unit director at SAP. The EU has estimated that it will cost manufacturers from €2.8 billion to €5.2 billion to comply with REACH over the next 11 years. “Many companies are totally underestimating the complexity of all the communication that’s required by REACH,” Kochendoerfer says. “They have to deal with the European Chemicals Agency, upstream suppliers, and downstream customers. They don’t want to find out on Dec. 1 that a supplier is non-compliant and can’t ship to you.” SAP, for the past two years, has been working with partner TechniData AG to develop a software application, built on SAP’s environmental health and safety module, to help chemical manufacturers comply with REACH. Six customers have signed up for the product, and two are live with the software. Still, Kochendoerfer says, many U.S.-based chemical manufacturers are still unaware of the scope and potential impact of REACH. “I expect some companies to go out of business or stop doing business in Europe because of this,” he says. “Many are in a state of denial.” 41 October 2008

Table of Contents Feed for the Digital Edition of Managing Automation - October 2008

Managing Automation - October 2008 Contents Take 1 Systems Integration Market Braces for a Wave of Consolidation Kinaxis Launches Program to Lure i2 Customers Patent May Give Mobility a Needed Shot in the Arm New Group Aims at More Efficient Smart Devices Solar, Life Sciences Will Be the Next Frontier For Robots Notes Cover Story:�2009 Companies to Watch Special Report:�Siemens plus UGS: Is the Merger Working? Transformation:�Driving Energy Efficiency Integration: How Clean is Your Data Industries:�Fed Raises Red Flag on Chemicals Product Scan Advertiser Index Next

Managing Automation - October 2008

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