SOCMA President Delivers Opening Remarks at 2013 Security Summit
By Lawrence D. Sloan,
President & CEO, SOCMA
Seventh Annual Chemical Sector Security Summit
July 10, 2013
Good morning, ladies and gentlemen, and welcome to the seventh annual Chemical Sector Security Summit. I am pleased to once again open this outstanding gathering of professionals from industry, government, academia and security service providers. Each year, this event represents the strong partnership that has been forged between the public and private sectors to exchange information and collectively address some of the most significant challenges to securing the chemical sector.
One of the most important obligations we have as members of the U.S. chemical industry is ensuring safe and secure workplaces. As some of you know, I began my career as a chemical engineer at Air Products & Chemicals and later worked at Nalco Chemical Company. However, before this, during a summer job in college, I worked at FMC Corporation, where I was first introduced to the regulations facing our industry including the then-new SuperFund initiative and CERCLA. It was the year of the terrible Bhopal, India, disaster, and the chemical industry worldwide had a black eye. In the years following the accident, the public-private partnership was a difficult one, as stakeholders struggled, reactively, to determine the most appropriate level of regulation in response to the tragic accident.
Unlike those times, however, following 9/11 our industry worked proactively with our government partners to address how best to secure our assets against acts of terrorism. In fact, many of us in industry had established voluntary security measures for physical and cyber threats well ahead of government-mandated standards. SOCMA members alone, a majority of which are small manufacturers with under $40 million in annual sales, have invested an estimated $515 million in security measures to date.
Nevertheless, it was agreed upon at the time that more can and should be done to protect our sector against acts of terrorism. The establishment of the Chemical Facility Anti-Terrorism Standards in 2007 was truly a collaborative effort, which included broad bipartisan support from Congress. There is no denying the program’s early success. Since CFATS was launched, more than 2,000 facilities have changed processes or inventories in ways that have enabled them to screen out of the program. Thus, as predicted, CFATS is driving facilities to reduce inherent hazards, where in their expert judgment doing so is in fact safer, does not transfer risk to some other point in the supply chain, and makes economic sense. Hundreds of other regulated facilities that had not already done so have already made significant proactive investments in security measures in anticipation of compliance with the full implementation of CFATS.
As most of us are aware, and as I noted last year, the road to implementation of CFATS has been bumpy. Industry has had our share of disagreements with the Department over a few issues and DHS has had some difficulty internally. Furthermore, the CFATS experience has not always been easy for regulated companies, especially small and medium-sized facilities, many of which are represented by SOCMA. Completing site security plans – and now, preparing for, participating in and following up on inspections – requires substantial company resources and personnel.
However, no one should dispute that, despite our disagreements and challenges to its implementation, the two main alternatives to CFATS would both be far worse. Having no chemical security regulation at all would create a risky and tilted playing field in which most companies secured their facilities voluntarily, at significant cost, while a minority created risks for us all, and gained an unfair economic advantage, by not doing so. Our nation would also not be well-served by a prescriptive program that mandated incorporation of inherently safer technology. Such an approach would threaten to drive chemical operations overseas where security standards are weaker.
To a great extent, DHS’s rules implement the statutory mandate issued by Congress in 2006. The CFATS statute was wisely drafted to be comprehensive and flexibly structured to impose security performance standards that are relatively more demanding of higher-risk facilities and less demanding of lower-risk plants. DHS was correct in listening to the private sector in developing a regulatory framework that is performance-based and preserves the ability for security professionals to make investments in measures that suit their specific facilities, but that also provides robust performance standards and imposes strict penalties for non-compliance.
There is no doubt in my mind that our nation’s security is better with CFATS than without.
Furthermore, there has been marked improvement since 2011 under the leadership of National Programs and Protection Directorate Acting Undersecretary Suzanne Spaulding and Infrastructure Security Compliance Division Director David Wulf. Without question, further improvements to CFATS will become necessary as the program progresses, and there undoubtedly will be more times in the future when industry disagrees with decisions made by the Department. But I firmly believe that collaboration makes us stronger, not weaker, and SOCMA is confident that CFATS will continue to move forward with Suzanne and David at the helm.
In conclusion, I welcome each and every one of you to this year’s summit. You have an obligation as a participant to engage with your peers as well as your partners at DHS and with other agency personnel assembled here in Baltimore. Remember: although many government participants in the room are regulators, their mission is supported by you and your tax dollars. I encourage you to dialogue with them and take advantage of the valuable opportunity afforded by this summit to address your concerns or questions—even your compliments—with them this week.
Once again, welcome and thank you for your time and attention this morning.
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