Emergency Response Planning: A Critical Investment
By Commercial, Data Privacy and Security, ESOPs & Employee Benefits, Franchising
In 1991, Texaco Inc. engaged one of the authors of this article to represent the company after learning that its Star Enterprise Inc. tank farm in Fairfax, Virginia allegedly released petroleum products into the ground, resulting in the contamination of the groundwater in the area. The migration of this contaminated plume resulted in the evacuation of several nearby homes due to the risk of explosion. Fortunately for Texaco, it had a current emergency response and crisis management plan. The plan was implemented quickly beginning with the engagement of environmental engineers to investigate, contain, and remediate the source of the release and the formation of an inside-outside emergency response/crisis management team of business executives, lawyers, engineers, and media advisors. Implementation of the plan enabled Texaco to grapple effectively with defending itself against property damage, personal injury claims, a considerable hazardous substances cleanup effort, massive negative publicity, and a multi-year investigation by governmental authorities.
While most executives agree that having a current Emergency Response Plan is prudent, developing and maintaining it is a task that is often deferred. Corporate executives often rationalize that a catastrophe or other demand for emergency action will not occur on their watch as they turn to more pressing issues. But as fires, explosions, chemical releases and hurricanes like Katrina and Rita have proven, emergencies can quickly happen with devastating results. It does not take an emergency on the scale of major accidents or a hurricane, however, to cause business disruption and damage to a company’s reputation. Circumstances that can disrupt operations or endanger employees and neighboring communities are not uncommon and can happen at any time or place, as illustrated by the chemical plant explosion on November 13, 2005, in Jilin, China. David Lague, Toxic Flow Reaches Chinese City, Cutting Water Supply to Millions, N.Y. TIMES, Nov. 24 & 25, 2005, at A1. In less than one hour, 100 tons of benzene and nitrobenzene poured into the Songhua River, creating a slick of highly toxic contamination that extended 50 miles down the river. Immediately, ten thousand people had to be evacuated and shortly thereafter the water supply to the 4 million residents of the city of Harbin had to be shut down. Fifteen hospitals were placed on standby to handle poisoning cases, and the central government of China began transporting hundreds of thousands of gallons of drinking water to the inhabitants of the city. The chemical plant personnel, rather than alert the downriver communities, initially tried to cover-up the release and only belatedly acknowledged the disaster. Imagine such an incident in the United States or most other countries where a private company responding to such a situation would be fortunate to survive the damage to human health, property, and its reputation resulting from a catastrophe of this nature. In China, however, the culprit was a subsidiary of the state-owned China National Petroleum Corporation and seems to have survived largely unscathed.
Or consider an incident less dramatic but probably more likely to occur on the watch of executives of most companies. About 2:30 a.m. on January 6, 2005, toxic chlorine gas was released when two Norfolk Southern freight trains collided in Graniteville, South Carolina. The release resulted in nine deaths, the treatment of approximately seventy-five people for chlorine gas inhalation, plus the evacuation of approximately 5,400 people within a one-mile radius. Local, state, and federal officials were immediately dispatched to the scene. The accident, which gained significant media coverage, also shut down the rail line and resulted in the closure of businesses, the relocation of public services, and a significant cleanup of homes, companies, schools, churches and parks. This accident, which occurred in the middle of the night with an estimated cost of $6.9 million, caused Norfolk Southern to be thrust instantly into a position of dealing with media, determining what caused the accident, and coordinating with national, state, and local authorities. NATIONAL TRANSPORTATION SAFETY BOARD, RAILROAD ACCIDENT REPORT, COLLISION OF NORFOLK SOUTHERN FREIGHT TRAIN 192 WITH STANDING NORFOLK SOUTHERN LOCAL TRAIN P22 WITH SUBSEQUENT HAZARDOUS MATERIALS RELEASE, NTSB/RAR-05/04, (Jan. 6, 2005); and Norfolk Southern Graniteville Derailment, www.epa.gov/region4/graniteville.
When an emergency occurs, apropos of the Katrina “surprise,” corporate executives should anticipate that little or no time will be available for planning. Decisions that have multiple impacts must be made swiftly and deliberately. An Emergency Response Plan enables an organization to orchestrate a logical, efficient, and effective response that will result in containing damage, shortening operational downtime, reducing injuries, and possibly saving lives.
The importance of a plan is heightened when one considers that its ultimate purpose is to protect employees, the environment, the community, and the corporation. A reasonable investment upfront can pay large dividends in both minimizing property damage and avoiding personnel casualties. The plan is scalable depending on the size and nature of the organization. It is a detailed document that addresses a wide range of actions over time that are both proactive and reactive. These actions may be in response to a variety of incidents that could disrupt an organization’s operations such as hurricanes, tornadoes, fires, floods, hazardous material (hazmat) spills, ice or snowstorms, transportation accidents, earthquakes, explosions, lightning, utility failures, terrorist activities, sabotage, hostage situations, civil disorder, bomb threats, radioactive material releases, computer failures, or an interruption in the supply process. The latter would have especially egregious effects for a company that relies solely on a single supplier for a critical product or service. As demonstrated by Hurricane Katrina, one cannot rely solely on government resources to ensure the safety of property or people or to provide substantial assistance in resuming operations. The government simply does not have, and should not be expected to have, sufficient assets on standby to assist every person and business during large-scale incidents. It is prudent to prepare, and then to act swiftly and efficiently with the resources that are accessible at the time of the incident.
Reasons for an Emergency Response Plan
Several very logical and compelling reasons stand out for developing and maintaining a well-constructed plan. A proper plan will facilitate shutdown procedures and the evacuation of employees more quickly, thus reducing injuries or fatalities. For example, in response to an electrical fire, a trained workforce will know to shut off power, shut down the ventilation system, evacuate the building, assemble at a safe distance, account for employees as well as visitors and contractors, and notify management or the fire department per the plan. As a result, the possibility of workers’ compensation claims or personal injury litigation from employees as well as third parties should be reduced.
A plan will result in a quick and coordinated response from management and staff as well as public authorities. Because each party will know its role and the precise information needed to take action, employees or agencies can respond with the proper resources and focus their efforts on the top priorities (e.g., attending to injuries, extinguishing a fire, containing a spill). Plans for Fortune 500 companies often include corporate-wide guidance and direction in addition to the individualized plans in effect at each plant or subsidiary. Not surprisingly, organizations with a plan in place are able to respond to an emergency and resume business within an optimal timeframe. Entities with a plan have reported significantly shorter incident durations than companies without one. Additionally, those entities without a plan experienced crises lasting approximately two and one-half times longer than those that had a plan. STEVEN FINK, CRISIS MANAGEMENT: PLANNING FOR THE INEVITABLE 67 (2002). While a plan does require an investment of time and usually money, it provides excellent “insurance” beyond that purchased from one’s carrier.
A properly executed plan will also minimize or eliminate the unintended damage or destruction of critical business records. Because the plan should address both electronic and hard copy backup, crucial documents will be readily available. Preserving these records under a plan will eliminate the possibility of the time-consuming task of restoring or recreating them. If documents are water damaged, assuming that they are salvageable, drying processes normally require removal to an off-site location, rendering them unavailable when access may be needed most. With an effective plan, that problem is obviated, thus allowing the company to focus its efforts where they should be – on resuming operations.
A comprehensive plan will prepare senior management to deal with the multiple and concurrent demands that accompany an incident. As illustrated by the Star Enterprise tank farm release and the railroad accident in Graniteville, a variety of actions must be implemented rapidly and simultaneously. Releases into the air, water, and ground often occur concurrently. A fire may simultaneously result in injuries and threaten extensive property damage through an explosion of flammable liquids. A company frequently must proceed on multiple tracks (i.e., addressing or informing media, employees, shareholders, and investigators). While providing too much information to any of these interests could be incriminatory in any follow-on litigation, the company’s reputation could be equally damaged if it is perceived to be withholding or manipulating information. Thus, an extant emergency response and crisis management plan that has been endorsed by top management can be the key to the public’s perception of the incident and the organization’s long-term reputation. The CEO of Ashland Oil was well prepared and took a proactive approach when an oil storage tank collapsed into the Monongahela River near Pittsburg in 1988, enhancing the company’s reputation as a responsible corporation despite the substantial release.
Beyond the common sense reasons noted above for having a plan in place, it may be legally required. Companies that store, transport, or manufacture hazardous materials or petroleum products exceeding certain quantities or that operate certain facilities are required by U.S. federal law to have a plan. The Clean Water Act; the Clean Air Act; the Resource Conservation and Recovery Act; the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA); the Hazardous Materials Transportation Act (HMTA); U.S. Coast Guard regulations, Nuclear Regulatory Commission regulations; and Occupational Safety and Health Administration (OSHA) regulations require preparation and adoption of some form of a plan for companies that meet certain criteria. Many of these regulations contain very specific plan requirements such as training, notification of authorities, emergency medical treatment, accounting for employees, evacuation procedures, and emergency equipment inventories. Some facilities (e.g., those subject to Section 112(r) of the Clean Air Act), are required periodically to review and update their risk management plans and notify their employees of any changes. 40 C.F.R. 68.95. OSHA regulations also require Plans to be updated based on certain criteria and reviewed with each employee covered by the plan. 29 C.F.R. 1910.38. In addition, international companies are subject to the laws of the nation in which their facility is located. A plan must be tailored to and comply with these laws. Internationally, legal requirements vary greatly depending on the interests and natural resources of the particular nation.
Principles for Writing a Plan
Several important principles provide the foundation for a sound plan. When followed, they will help make policy and other courses of action consistent. First, an on-site decision-maker (i.e., incident director) must be designated. This person must be someone who is capable of making quick, rational decisions with the best information available at the moment. While this person could be the president, CEO, or COO, it could also be anyone who has the proper attributes and skills to manage multiple and varied issues in a demanding, fast-paced environment. The designated person must clearly possess strong leadership skills, an intimate knowledge of the facility, and familiarity with employees’ capabilities. An understanding of the community and the environment surrounding the facility is also extremely important.
Second, personal employee disaster preparedness should be emphasized from the top down. This emphasis is founded upon both a moral concern for the well-being of all employees and the desire to ensure that employees who are assigned to the company’s emergency response crews are ready for action. As illustrated by the absence of dozens of New Orleans Police Department officers following Hurricane Katrina, employees who are not personally prepared will be consumed in personal and family issues that will likely restrict their ability to report to work.
Redundancy with respect to people, systems, and equipment is the third principle. It is critical to have a secondary and, in most instances, a tertiary person designated to assume key organizational positions in the event of absences or fatalities. Planners should anticipate equipment or system failures by developing an alternative course of action. For example, plan for a backup system or procedure in the event of a telephone outage or computer failure during the incident. A coordinated walkie-talkie system, for example, could have avoided many of the communication problems that arose during the attacks of September 11. Redundancy also applies to such assets as alarms, vehicles, security systems, cleanup equipment, and the emergency operations center or other locations where response actions are being coordinated. The decision regarding whether to have a redundant system or equipment will be subject to an evaluation of cost versus benefit. That is, the cost of backup equipment or systems should be weighed against the probability that the primary equipment or systems will fail and the associated impact of that failure.
Fourth, certain policies must be waived or streamlined during an emergency. Policies that are waived should be articulated along with either the conditions under which they will be waived or the designated approval authority to grant the waiver. Streamlined policies need to be “on-the-shelf” prior to the emergency and ready to be activated. After the incident, the modified policies can be evaluated to determine how well they worked. The parameters of a bona fide “emergency policy” should be stated clearly and succinctly. For example, if the normal procurement process is to obtain three bids, a streamlined policy will waive that requirement for purchasing only urgently needed goods or services that directly support the emergent incident. In these situations, internal controls and conditions should be specified in writing to prevent abuse.
A fifth principle is to establish, to the greatest extent possible, an emergency response organization that parallels the company’s current organization. People who normally work with each other and know the capabilities of their colleagues will work more efficiently than in a different organizational structure. One exception to this guideline is that the company should leverage the hidden talents of its people. Many employees have hobbies, specialized training, or previous careers that may make them more valuable in selected emergency response positions. These talents or skills may be totally different from those encompassed by their current responsibilities. For example, an executive assistant may have a nursing background, which may make that person an excellent candidate as a member or leader of the medical response team. Other skills, hobbies or past vocations might include experience in the military, or as a firefighter, computer technician, emergency medical technician (EMT), police officer, electrician, or plumber. Such information is ideal for obtaining from employees and storing on a computer database for ready access in an emergency.
The final principle is to understand the capabilities of external organizations that might assist during an incident. These include local, state, and federal agencies such as the fire department, sheriff, state police, state department of natural resources, state emergency management agency or division, Federal Emergency Management Agency, U.S. Environmental Protection Agency (EPA), Nuclear Regulatory Commission, or U.S. Coast Guard. Other organizations that may be of assistance include local emergency medical transport services, hospitals, and the Red Cross. Also, it may be necessary to call upon hazmat cleanup contractors and construction contractors. Additionally, maintaining a list of local counselors or instituting an Employee Assistance Program, which is available through most healthcare providers, may prove beneficial for post-trauma counseling on both a group and individual basis.
The Four Phases of an Emergency
One of the primary keys to a successful plan is to organize the plethora of federal, state, local, or foreign national legal requirements and the wide variety of disaster information into a concise set of policies and associated actions. Experience has proven that organizing the plan in four sections or phases is both logical and lays the groundwork for taking quick action in an emergency. The following four phases apply regardless of the size or type of organization:
The Planning and Preparation Phase begins with conducting a risk assessment to determine which emergencies the plan will address. While this is often an unconscious step, a deliberate evaluation of the spectrum of risks must be conducted as a foundation for the plan. Any legal requirements such as notification of authorities, evacuation plans, and similar actions must be identified. Based on the risk assessment and the legal requirements, emergency policies can be established and the appropriate plans developed.
The Planning and Preparation Phase also ensures that procedures are in place to report an incident immediately, to perform shutdown procedures, and to conduct an evacuation and account for employees and visitors. A critical element of this phase is establishing communication systems, including secondary systems. A communications failure can cause emergent incidents to deteriorate as illustrated on several levels in New Orleans with Katrina and, as noted earlier, at the World Trade Center on 9/11. An organizational structure and policy that identifies key individuals, their functional responsibilities and their limits of authority is also very important. Depending on the size of the organization, the functional positions may include an incident director, operations director, human resources director, facility engineer, legal advisor, safety officer, security chief, medical services director, chief financial officer, logistics director, information systems director, and the public information liaison.
For larger facilities, agreements should be made with governmental agencies (e.g., the fire department, the state department of natural resources, or EPA through a regional director) regarding the circumstances during which a transfer of authority from the incident director to public officials would take place. Obviously, it is not an opportune time to initiate these discussions while an incident is in progress. Designating a conference room or other space as an emergency operations center and publishing and distributing a hard copy of the plan with comprehensive checklists, facility layouts, organizational charts, and phone numbers are essential tasks. Material Safety Data Sheets should be attached as an appendix to their plan for each hazardous substance on-site for facilities that use and store hazardous materials. An alternate emergency operations center should be designated in the event that the primary location becomes unusable due to the incident.
This phase also includes preparatory actions for an anticipated event such as a hurricane. Preparatory actions might include performing additional database backups, obtaining supplies, ensuring that employees are ready, and withdrawing cash. Another preparatory issue is to determine the level of medical first aid response that should be provided. This task could range from simply deciding to purchase a first aid kit to qualifying staff in higher level medical support such as cardiopulmonary resuscitation (CPR) or as EMTs. The plan should consider medical support staffing assignments so that serious injuries receive prompt attention regardless of other threats. Due to the short response time required to treat cardiac arrest, which might occur during a catastrophe, many organizations have invested in Automated External Defibrillators (AEDs) for their offices or plants and trained their staffs in AED/CPR response.
The selection and staging of emergency equipment is especially relevant for industrial facilities. Such assets as firefighting equipment, hazmat cleanup equipment, personal protective clothing and other items must be readily available and well maintained. In certain circumstances, contractual agreements with certain vendors or contractors should be negotiated during the planning and preparation phase since during the emergency, the organization will have little leverage to negotiate a commitment to priority service at a favorable price. For example, a service contract with a hazmat cleanup contractor or a flood restoration service may be prudent. Additionally, insurance policies should be reviewed for appropriate levels of property and casualty coverage, including business disruption clauses.
Depending on the type of company facility, worst-case scenarios should be developed so the company may be fully prepared to respond. For example, if containment efforts of a HAZMAT spill are not successful, the substance could threaten a local waterway that serves as a community water source. Such an incident would significantly expand the response effort and management’s actions with regard to local authorities, the media, and prioritization of limited resources.
Training in the form of classroom and tabletop exercises or drills should then be conducted for the appropriate supervisors and employees. Additionally, training or exercises with outside officials (e.g., fire department, police, hazmat contractors, state department of natural resources) and contractors can prove very useful if it can be arranged. It is important to know the capabilities of these outside resources and conversely for public officials to understand the company’s needs. For companies storing certain levels of hazardous materials, preparation of plans to interact with the community and to share information in advance regarding specific materials held at the facility is a requirement of the Emergency Planning and Community Right to Know Act, 42 U.S.C.A. 11003). This information will assist public agencies in preparing to respond to the potential release of on-site hazardous substances. For facilities which handle oil above specific thresholds, a Spill Prevention Control and Countermeasures Plan is required by EPA, 40 C.F.R. 112.
The Initial Response Phase commences when an individual (e.g., employee, contractor, or visitor) becomes aware of an incident. Immediately, all of the work invested in the first phase will begin to pay off and result in effective performance. The company policy should guide the employee’s initial reaction (e.g., notifying security or activating the alarm). Shutdown procedures (e.g., shutting off electricity, securing machinery, shutting down ventilation systems) may vary depending on the nature of the incident. The plan will provide a checklist to guide the incident director through myriad important actions and other details. This initial response to the incident is designed to ensure that personnel are safe, injuries receive prompt medical attention, spills are immediately contained, and property damage is minimized.
Once a damage/injury assessment is initiated and facts are collected, a report is made to the incident director. In this phase, which is characterized by quick actions, safety must be a top priority. A safety observer should be designated to be on-site during applicable incidents. This person will serve several purposes: to heighten the safety awareness of responders, to stop unsafe practices before they result in an injury or fatality, and to help protect against litigation due to negligence or other unsafe practices. If a serious injury or death occurs, the next of kin should be promptly and personally notified. On-scene security needs to be established to eliminate the potential for theft and to preserve any evidence.
Depending on the type and magnitude of the incident, notification to and request for assistance from authorities such as the fire department, state police, state department of natural resources, EPA, or U.S. Coast Guard or foreign government equivalent may be necessary. Subject to the size and organizational structure of the company, internal corporate notifications may be required. It may prove necessary to prepare a news release or to arrange a news conference. Communications should be established with other businesses that may be affected or involved, such as property tenants, subcontractors, municipal water departments, and hospitals. Depending on the circumstances, forecasted weather conditions must be checked to ascertain the possible impact on response teams and undamaged assets. If primary communications methods are out of service, a backup method must be engaged.
A finance and procurement system must be established that is responsive to demands but yet controls and tracks costs. If costs grow, prioritization of requests may be required. Given the pace of operations, it is easy to overlook a decision regarding the disposition of employees who are not engaged in responding to the incident. Will they be involved in some capacity, placed on standby (i.e., available for recall by phone or pager), or sent home? All decisions, directions, and actions should be recorded and maintained.
Additionally, an internal investigation should commence while the event is fresh in people’s minds. Evidence should be documented with photos and potential witnesses should be identified. The company’s insurance adjustor should be notified when sufficient facts are accumulated to provide a clear picture of the incident. Depending on the situation, inquiries should be made about the information required to support an anticipated claim.
The Sustained Response, Cleanup, and Recovery Phase keeps the response effort moving forward, addresses cleanup, and commences recovery. In this phase, personnel issues will arise, financial issues will grow, and logistics can become challenging. For example, on-scene crews will need breaks and meals, requiring the injection of relief crews. If there is an emergency operations center that is staffed for twelve hours or longer per day, a watch schedule should be established so that personnel have opportunities for meals and rest. Decisions will need to be made regarding desired levels of outside assistance (e.g., neighboring fire departments or staff from corporate headquarters). Lodging may be necessary for those who have been dispatched from a distance. As crews fatigue, safety must be emphasized continually. Extra transportation arrangements may be required for the movement of supplies, equipment, or personnel. As expendable inventories are consumed, replenishment of supplies must occur. If applicable, temporary or permanent repair materials for the facility must be procured, with the key being the delivery of the right materials on a timely basis. “The most important thing in a sudden disaster is logistics,” says Adrian van der Knapp, who coordinates emergency-relief operations for the United Nations, Glenn R. Simpson, In Year of Disasters, Experts Bring Order to Chaos of Relief, WALL ST. J., Nov. 22, 2005, at A-1.
Press releases and news conferences, as appropriate, should be continued to update the public. Sustainable security levels must be determined and sufficient security forces arranged. An evaluation must be made regarding the most efficient and effective method of resuming operations. This process may entail temporary repairs enabling limited output, or permanent repairs requiring added delay in opening. Shifting work to other facilities may also be a consideration. Arrangements should be made with the appropriate repair contractors. Costs should continue to be recorded and expenses authorized to prevent uncontrolled spending. Assuming that the company’s data has been backed up, it is important that users be able to access that data via the system. Thus, if computer damage is involved, plan for the rental or replacement of desktops. Also, a review should be made of the staffing vis-à-vis the workload for each functional area and any appropriate personnel adjustments executed.
The After Action Phase involves restoring the facility to complete operation. It concludes the incident and addresses several physical and administrative matters. The investigation by management and legal counsel should provide an executive summary and outline all of the facts associated with the incident. Any facts that are in dispute or contradictions in witnesses’ statements should be expressly stated. If the incident was an act of God, then preventative measures should be evaluated and implemented, if feasible. If equipment failure was the cause, then the investigation should review maintenance procedures, maintenance records, and the suitability of the equipment to perform the job. Recommendations should include equipment replacement, repair, or upgrade.
In anticipation of litigation, observations, evaluations, and recommendations are often presented in a separate document in a privileged format. If personnel error was involved, training records should be reviewed as well as the individual’s performance record. As a result, disciplinary action may be warranted. Also of interest will be the supervisors’ oversight leading to the incident along with any other impact that the supervisor may have had or could have had. If intentional actions such as sabotage or terrorism were the cause, then the investigation should address preventative measures that could enhance security systems, security policies, or security forces. Active or potential litigation, both from internal and external sources, should be identified in the privileged document.
Lessons learned should be developed regarding the plan. If the organization or incident is large, a critique of the plan, separate from the investigation, should be conducted to determine deficiencies to be corrected. This procedure would allow a quicker review of the plan while events are fresh in participants’ minds and also allow for a more informal critique process. As a result of either the investigation or the critique, the plan should be revised as appropriate.
Post-trauma counseling may be required for personnel with severe injuries or employees who experienced traumatic events, such as the death of colleagues. Insurance claims, if applicable, must be filed. Response equipment, such as firefighting equipment or hazmat cleanup equipment, must be cleaned, repaired, or replaced. Inventories must be taken of consumable supplies used in the incident so that supplies can be replenished. All financial records and working papers should be organized for an insurance, tax, or annual audit. A financial report should be prepared that details the total cost, including expenses involved with all contracts, services, lodging, supplies, loss of inventory, medical service, repair or reconstruction, and lost time or productivity. Any uninsured losses should be described thoroughly in the report. If hazardous waste is involved, final disposal must be in accordance with the law and cleanup or transportation records must be maintained for the required period of time.
We believe that the development of a comprehensive Emergency Response Plan is clearly a worthwhile and valuable investment. Similar to an insurance policy, most executives recognize that they should have a plan in place. Although it may be difficult to allocate the time and money required for such a project, it takes only one serious incident to eradicate years of dedicated work in building a company’s reputation. For example, consider the impact that the Bhopal, India, plant disaster had on the reputation of Union Carbide. In addition to reputation, a serious incident can rapidly and detrimentally affect a company’s property, people, and finances. In the unfortunate event of a major emergency, the upfront investment in this “insurance policy” will provide immediate payback that more than justifies the effort involved in preparing the plan. Company management is well-advised to prepare for the unexpected, develop a comprehensive plan, and hope that there is never a need to use it.
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2023.