Institut für Strukturpolitik und Wirtschaftsförderung gemeinnützige GmbH Fiene Grieger Novara,...

Institut für Strukturpolitikund Wirtschaftsförderunggemeinnützige GmbH

Fiene Grieger Novara, November 6, 2013

TRIAL – Threat Identification AndAssessment against Chemical Supply Chains

Case Study from ISW Institute, Halle, Germany

Institut für Strukturpolitikund Wirtschaftsförderunggemeinnützige Gesellschaft mbH

Content:

Improving Safety of dangerous goods following responsible care principles

Improving emergency and crisis management systems for the chemical industry

Improving cooperation between chemical companies and public authorities

Identifying threats and risks related to the security of dangerous goods transport

Reflecting special needs of intermodal transport (rail / road)

Increasing transparency of supply chains by providing better information

about location and status of transport via tracking and tracing

Ensuring functionality of safe supply chains for intermodal transport


Global Charter: (1)

The global chemical industry‘s environmental, health and safety (EH&S) initiative to driveContinuous improvement in performance.

This objective is achieved by going beyond legislative and regulatory compliance and by adopting cooperative and voluntary initiatives with government and stakeholders.

Responsible Care is both an ethic and a commitment that seeks to build confidence and trustIn an industry that is essential to improving living standards and the quality of life.

The charter arose from an examination of chemical industry pratices and performance.

It evolved from the mid-1980‘s, and was shaped by considering the recommendations ofindependent stakeholders from around the world.


Seite 4 www.isw-institut.de November 06, 2013

Global Charter (2)

The charter also focusses on new and important challenges facing the chemical industryand the global society, including the growing public dialogue over sustainable development.

Included are also public health issues related to the use of chemical products, the need forgreater industry transparency, and the opportunity to achieve greater harmonization.

The International Council of Chemical Associations (ICCA), through Responsible Care, willcontinue to undertake actions consistent with the environmental principles of theUnited Nations Global Compact.



The Responsible Care Global Charter Contains Nine Key Elements:

1. Adopt Global Responsible Care Core Principles

2. Implement Fundamental Features of National Responsbile Care Programs

3. Commit to Advancing Sustainable Development

4. Continuously Improve and Report Performance

5. Enhace the Management of Chemical Products Worldwide - Product Stewardship –

6. Champion and Facilitate the Extension of Responsible Care along the Chemical Industry‘s Value Chains

7. Actively support National and Global Responsilbe Care Governance Processes

8. Address Stakeholder Expectations about Chemical Industry‘s Activities and Products

9. Provide Appropriate Resources to Effectively Implement Responsible Care



Product Stewardship:

• Product Stewardship issues will increasingly shape the Responsible Care initiatives in future years

• National Associations with their member companies will commit to this concerted effort

• A Product Stewardship Manual exist for all relevant Chemical Products, which covers:

• The Chemical Processes in which these Products are produced• Guidelines for Customers for handling these products• Guidelines for Service Providers for storage, transportation and handling• Guidelines for potential disposal

• The purpose of the manual is to make health, safety and environmental protection an integral part of designing, manufacturing, marketing, distributing, using, recycling and disposing of chemical products



Example of a Product Stewardship Manual for Butadiene:

Product Stewardship Manual



Material Safety Data Sheets (MSDS):

• Material Safety Data Sheets are issued by the Producer of a Product• It contains information about:

• Classification for transport and storage• REACH registration number• Labelling regulations for storage and shipping• First aid measures• Fire fighting measures• Accidental release measures (personal precautions and protection)• Exposure controls, Personal protection• Physical and chemical properties• Stability and Reactivity• Toxicological information• Ecological information• Disposal considerations

Material Safety Data Sheets are handed out to all parties in a supply chain



Example of a Material Safety Data Sheet for Butadiene:

MSDS Butadiene



Distribution Risk Management

Distribution Risk Management is a continuous process in the chemical industry, and covers the following activities:

• Distribution Risk Review process• Ship vetting process• Warehouse/terminal selection audits• Securement audits• Carrier selection/safety reviews• EH&S Integrated Audits• Materials Distribution Compliance Verification• Chemical weapons list• Security-sensitive products• Embargoed countries


Seite 11 www.isw-institut.de 04.11.2010

Distribution Risk Management:

Business Risk Review Work Process

GPM Capital Projects

10Define Scope

20Conduct Risk

Evaluation

30 Develop

Risk Mgmt. Options

40 Develop

Risk Mgmt. Plan

50 Implement

60 Monitor

DRRDistribution Risk Reviews

M&A WPMergers & Acquisition

PRMSProcess Risk Management

MOCManagement

of ChangeDow has multiple tools that are designed to evaluate risk (a few are shown in this example). All of these tools should be considered an integral part of the Business Risk Review Work Process. All risks, independent of the tool used for assessment, should be evaluated against the elevation criteria set by both the business (step 30.4) and if necessary the EH&S Management Board (Step 30.6 of the BRRWP)

* *

* The industry has many tools that are

designed to evaluate risks. All of these tools, including the Distribution

Risk Review process, are integral parts of the Business Risk Review work process.

DRRDistribution Risk Reviews



The Chemical Distribution Institute (CDI)

The CDI is incorporated under the law of the Netherlands as the Stichting Chemical Distribution Institute (CDI) and operates as a non-profit making foundation.



Safety & Quality Assessment System (SQAS):

• SQAS is a system to evaluate the quality. Safety, security and environmental performance of Logistic Service Providers and Chemical Distributors.

• It is a standardized assesment carried out by independent assessors using a standard questionannaire.

• SQAS assessments do not lead to a certificate, like ISO.

• It is a factual detailed report which each chemical company needs to evaulate according to ist own requirements.

• SQAS was invented as an industry initiative in 1994.

• Since then all relevant service providers are assessed

• Today the chemical indsutry only accepts service providers which are SQAS assessed



Transport-Unfall-Informations- und Hilfeleistungssystem (TUIS)

• TUIS is a mutual help system of the chemical industry in Germany for specialist counseling during transport incidents

• The system was started back in 1982 in Germany, and spans today also over various countries in West- and Central-Europe

• In case of incidents public authorities and civil services have the opportunity to approach this system 24 hours per day.

• The specialist counseling can cover:• Consultations via phone• Specialist counseling on site of the incident• Technical support on site of the incident

• The consultations and technical support of TUIS have the advantage, that they combine support from follwing experts in the process:

• Chemical experts of the production company• Ecologists and Toxicologists• Medical scientists• Specialists of the Fire Brigades



Cooperation between Chemical Companies and Public Authorities:

• Chemical Companies typically maintain a close cooperation with authorities

• The goal is to provide transparency and build trust

• There are regular „Safety Days“ organized in the chemical industry involving:

• Local public authorities• Logistic Service Providers• Local Police• Local Fire Brigades

• In addition the chemical associations keep close contact to the Federal Government

• „Open Days“ are organized on a regular basis involving basically all relevant players in the chemical industry to build trust in the neighborhood



Threats and Risks related to the securityof dangerous goods transport


Seite 17 www.isw-institut.de



Risk of Maritime Piracy - All Cargo Types

ElevatedGuarded

HighSevere

Low



Terrorism Risk

ElevatedGuarded

HighSevere

Low



Counterfeiting Risk

ElevatedGuarded

HighSevere

Low



NATIONAL STRATEGY FOR GLOBAL SUPPLY CHAIN SECURITY

JANUARY 2 01 2

Signed by President Obama



Executive Summary

International trade has been and continues to be a powerful engine of United States and global economicgrowth. In recent years, communications technology advances and trade barrier and productioncost reductions have contributed to global capital market expansion and new economic opportunity.The global supply chain system that supports this trade is essential to the United States’ economy andis a critical global asset.

Through the National Strategy for Global Supply Chain Security (the Strategy), we articulate the UnitedStates Government’s policy to strengthen the global supply chain in order to protect the welfare andinterests of the American people and secure our Nation’s economic prosperity. Our focus in this Strategyis the worldwide network of transportation, postal, and shipping pathways, assets, and infrastructuresby which goods are moved from the point of manufacture until they reach an end consumer, as well assupporting communications infrastructure and systems.



The Strategy includes two goals:

Goal 1: Promote the Efficient and Secure Movement of Goods – The first goal of the Strategy is topromote the timely, efficient flow of legitimate commerce while protecting and securing the supplychain from exploitation, and reducing its vulnerability to disruption. Goal 2: Foster a Resilient Supply Chain – The second goal of the Strategy is to foster a global supplychain system that is prepared for, and can withstand, evolving threats and hazards and can recoverrapidly from disruptions. Our approach is informed by the following guiding principles:

•• Galvanize Action – Integrate and spur efforts across the United States Government, as wellas with state, local, tribal and territorial governments, the private sector and the internationalcommunity.•• Manage Supply Chain Risk – Identify, assess, and prioritize efforts to manage risk by utilizinglayered defenses, and adapting our security posture according to the changing security andoperational environment.



NATIONAL STRATEGY FOR GLOBAL SUPPLY CHAIN SECURITY

Strategy Document



Source: CEFIC and Deloitte



The Chemical Industry wants to be ahead of the Regulators, by

• Enabling Modal Shift away from Road Transport • In accordance with the White book Logistic of the European Commission

• Providing a common Data Structure and Regulatory Framework• Increasing the Efficiency of the logistic Processes

• Real-Time Information of the entire Logistic Chains• Raising the Transparency and Sustainability of Logistic Chains• Providing Information in electronic form

• About Hazardous Chemical Goods in transit• Ensuring Data Protection of sensible Information• Improving Interaction with Emergency Management Systems • Improving the logistical accessibility with focus on the East European Market

• To strengthen the Competitiveness of the European Chemical Industry



Specific Requirements for Inter-Modal Transport:

• Chemical Supply Chains become longer and more complex • Today’s Supply Chains reach out to more emerging countries• The share of hazardous materials in Inter-Modal traffic increases• Emerging countries often have lower safety and security standards• Emerging countries often do not have organized Emergency Response systems• Longer Supply Chains have a tendency to become more vulnerable• Longer Supply Chains have more unaccompanied traffic (Inter-Modal)• This results in less transparency of the logistic chains

The Chemical Industry wants to design sustainable Supply Chains

This requires:

• Transparency and seamless information flows (Tracking and Tracing)• Sufficient safety and security standards• Functioning Emergency Response Systems



• INTERREG IVB Central Europe

Application filed 14. April 2008• Project Duration 11/2008 – 10/2011, • Budget: 2.2 Mio. Euro• Lead Partner: Ministry for Economics, Saxony Anhalt, Germany

The ChemLog Project:

Chemical Logistics Cooperation in Central and Eastern Europe



Logistical Challenges in Central and East Europe:

• Rail Systems in West- and East-Europe not compatible • Inadequate rail- and road infrastructure • Lack of terminal structure for Inter-Modal traffic • Congested ports in the Baltic and the Black Sea • Lack of harmonization of admin and technical standards • Bureaucracy in Customs Clearance – Arbitrary Actions• Lack of harmonization of social standards (driving hours etc) • Lack of a common safety and security standard • Absence of Emergency Response and Crisis Mgmt Systems (i.e. TUIS) • (Non)-Availability of people with excellent logistical background

The above varies from Country to Country



Focussing on West – East Corridors



Project Schedule



ChemLog Objectives

• Strengthening Railway and Waterway transport for chemical goods in comparison to road to improve safety and environmental protection, reduction of costs and increased speed and flexibility for chemical logistics

• Support of development of logistic centres for intermodal transport and their integration in infrastructure planning.

• Support of stronger connection of pipelines for the development of an effective central and eastern European Feedstock Network.

• Initiate transnational know-how and technology transfer for the development of efficient transport systems with focus on West-East dimension

• Support of implementation of trans-European Transport Corridors, Contribution for harmonisation of regulations, coordinated planning of infrastructure and coordinated use of Structural Funds.



Tracking and Tracing solutions for improvement of intermodal transport of dangerous goods in Central and East Europe

• INTERREG IVB Central Europe Application approved on 24 May 2012

• Project duration 07/12 – 12/14, • Budget: 1.9 Mio. Euro• Lead Partner: Ministry for Science and Economy of Saxony-Anhalt (DE)



• Ministry of Science and Economy Saxony-Anhalt, DE (LP)• Ministry of Transport and Regional Development Saxony-Anhalt, DE• Isw Institute for Structural Policy and Economic Development, DE • Otto von Guericke University Magdeburg, DE• Polish Chamber of Chemical Industry, PL• Association of Chemical Industry of the Czech Republic, CZ• Usti Region, CZ• University of Applied Science Upper Austria, AT• Association of chemical and pharmaceutical industry of Slovak Republic, SK• Province of Novara, IT• MAG Hungarian Economic Development Center, HU• University of Maribor, SV • La Spezia Port Authority, IT• Circle Srl, IT • CIMA – International Center for Environmental Monitoring, IT

Project partners:



General • Promotion of intelligent use of ICT for the improvement of intermodal

transport of dangerous goods in Central and Eastern Europe to strengthen regional development and competitiveness of chemical industry

• Facilitate modal shift from road to rail and reduce greenhouse emissions by improving competitiveness of intermodal transport

• Improvement of safety, security, reliability and efficiency of intermodal transport of dangerous goods

Specific

• Applying ICT for development of efficient traffic management and information systems of transnational transport of dangerous goods by tracking and tracing, bundling of transports and connecting of intermodal hubs in Central and Eastern Europe,

• Improvement of framework conditions in view of organizational, institutional and strategic solutions for tracking and tracing technologies for intermodal transport of dangerous goods under involvement of companies, logistic service providers and public authorities,

• Develop recommendations for open and joint standards for tracking and tracing as result of practical testing and facilitate the networking and implementation of T&T technologies in CEE

Objectives



Analysis of Needs for

T&T

Tool Development

Pilot Projects

IdentifyStrengths

and Weaknesses

Identify Needs for companies, LSP

and public entities

General Recommendations

for future T&T development

Analyse existing T&T Technologies

Facilitate cooperation & know-how transfer

Implementation of 4 pilot projects for

practical testing of T&T technologies on

important international transport corridors

Selection-Adaptation of T&T Tools for pilot

projects

Recommendation for implementation of

new T&T tools

Recommendation for joint European

Standard

Main-streaming

Policy level: International, European, National, RegionalStakeholders: Politics, Industry, Logistic Service Provider Time horizon: Long-term, mid-term, short term

Dec 12 Jun 14Jun 13Dec 14



Pilot Project Corridors



Conclusions



Thank you!

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