ILMA Compoundings February 2018 - 29

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How does an
ILMA member
company identify,
mitigate and minimize
risks from flooding,
including a post-hoc
investigation by governmental authorities?"
power (both primary and backup);
and whether there is a need to transfer
chemicals ahead of a storm.
The Federal Emergency Management
Agency (FEMA) defines 100- and
500-year "floodplains" and "rainfall."
A 100-year floodplain is an "area of
land that has a 1 percent chance of
being inundated by floodwaters from a
bayou, stream, or creek in a given year."
The probability of 100- and 500-year
rainfalls is based on locality. For the
Houston area, the level is 13 inches of
rain in a 24-hour period for a 100-year
storm and 19 inches for a 500-year
storm. There's a 26 percent chance that

a 100-year rainfall will occur in any
given 30-year time period. For a 500year rainfall, the probability drops to 6
percent. The Houston area, interestingly, has had three 500-year rainfalls in
the past three years.
A number of property and casualty
insurers recommend a "hazard and
operability" (HAZOP) analysis as a
risk management tool for floods. The
HAZOP flood analysis addresses the
hazard (what can go wrong), the result
(how bad it will be) and the likelihood
(how often it can happen). ILMA
members probably perform similar
analyses for manufacturing and supply
chains, but not for floods.
A flood-based HAZOP analysis typically would involve bringing in a civil
engineer with floodplain experience
to evaluate flood maps, elevations and
drainage issues. The HAZOP analysis
also would consider flood risks to
existing operations and whether those
risks could be mitigated, such as by
moving backup equipment to higher
elevations within the facility.
Many ILMA members' facilities
already have one or more emergency

response plans, such as an SPCC
plan, and a flood plan could be folded
into such plans. A flood plan could
include: what happens if floodwaters
inundate all or part of the facility;
the effects from short- and long-term
loss of utilities; the risks to electronic
systems and controls for blending
and packaging lines; the lead times
necessary to shut down operations and
move inventory, if necessary; and to
what extent work can be done manually at the facility after the storm.
While a flood HAZOP analysis and
plan might not prevent an investigation by federal, state or local officials
after a storm, they will show that the
company made an appropriate effort
and took the steps to be prepared.
"Bad things" can happen to good,
well-prepared companies from storms.
Fighting a criminal investigation
should not be one of them.
Leiter serves as general
counsel to ILMA, representing
the Association since 1981.
He may be reached at
202-466-6502 or jleiter@bmalaw.net.

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ILMA Compoundings February 2018

Table of Contents for the Digital Edition of ILMA Compoundings February 2018