Source: Shutterstock 458284924
Shutterstock 458284924 63921714b55b0

Chemical Reporting: 4 Keys Help Mitigate Non-Compliance

Dec. 14, 2022
The consequences of non-compliance reach beyond financial penalties — they also cost businesses the loss of their reputation. Following four guidelines will help avoid damaging outcomes.

Statistics for environmental compliance violations in the United States show the average minimum penalty imposed for regulatory non-compliance is $2,500/day per violation. The average maximum fine ranges from $25,000 to $1,000,000/day per violation. For 2022, the U.S. Environmental Protection Agency (EPA) also announced it increased its civil penalties for Resource Conservation and Recovery Act; Emergency Planning and Community Right-to-Know Act (under Comprehensive Environmental Response, Compensation and Liability Act); Clean Air act and Clear Water Act violations.

While financial penalties are a big price to pay for neglecting mandatory regulatory environmental compliance, reputational damage weighs just as heavily on an organization.

For example, in May 2021, the EPA used its emergency powers to order Limetree Bay Terminals, LLC and Limetree Bay Refining, LLC to pause all operations at its St. Croix, U.S. Virgin Islands refinery. The EPA took the necessary steps to protect the community and its members from multiple air pollution incidents at the St. Croix site. The incidents had repeatedly presented an imminent risk to public health, with one chemical release forcing schools to close twice in less than a month.

As a result, Limetree's St. Croix operations were temporarily suspended, causing a significant disruption not only to revenue streams but also the company's reputation. The refinery received significant backlash online from local residents as well.

Ultimately, Limetree officials were forced to close the St. Croix facility permanently, citing “financial constraints” and ongoing safety concerns in the surrounding community. But there’s little question that public perception of the company as an untrusted steward of the environment also contributed to the permanent shutdown.

In addition to costly fines and a corroded public image, other significant consequences include a loss of employee morale, if not employees themselves. In extreme cases, non-compliance violations can also result in criminal charges against company officials (and involved external parties), resulting in a potential permanent business closure.

Any facility that manufactures, stores or handles hazardous chemicals is vulnerable to non-compliance. To avoid the costs of non-compliance, chemical plants should implement four best-practice measures to ensure complete and accurate compliance with regulatory requirements at the federal, state and local level.

1. Stay Proactive

Environmental compliance is not an option; it’s the law. Businesses must therefore make every attempt to avoid, minimize and mitigate the numerous risks of non-compliance from the get-go. Common reporting errors we’ve seen include chemicals being reported inconsistently across sites or certain inventoried chemicals not being reported when they should be. A good first step is a proactive chemical management program to identify and manage hazardous chemicals subject to reporting requirements. Such an approach enables organizations to continually monitor the types and quantities of reportable chemicals at individual facilities, track data and know where and when hazardous chemicals are being stored. Additionally, they should know when inventoried chemicals exceed threshold planning quantities  (TPQs) for extremely hazardous substances (EHSs) that are included in compliance reports. In doing so, environmental, health and safety (EHS) professionals can ensure they complete reports accurately and on time.

Staying proactive in managing environmental compliance requires a deep understanding of what needs to go right, not just what could go wrong. EHS professionals can achieve this through knowledge sharing — the exchange of critical information from previous wins, losses and lessons — to help determine and govern future decisions.

The Strategic Approach to International Chemicals Management (SAICM) was founded in 2006 as a global policy framework to foster the sound management of chemicals through proactive approaches. Critical components of SAICM’s goals include knowledge and information sharing. Unfortunately, information gaps remain an issue, along with large discrepancies in understanding the number of chemicals in commerce. This creates a need to solicit experiences from various regulatory approaches to have a better collective overview and understanding.

Similarly, knowledge-sharing gaps result in errors and non-compliance for many organizations and chemical facilities. Often, institutional knowledge of the reporting process comes down to one or two people who hold the keys to all reporting expertise. Cloistered knowledge that is not adequately shared leads to increased risks of accidental omissions or even missed reporting. To overcome this issue, chemical facilities and organizations must eliminate data silos and work from a single source of truth for information sharing about environmental compliance. They can also share knowledge across the company, involving regional and corporate environmental SMEs. Additionally, they can establish scalable foundations for new or acquired facilities and organically grow a succession plan for reporting.

2. Digitalize Reporting

Digital transformation changed departmental functions more than ever, disrupting how businesses operate and deliver value to their customers on every level.

Over the last decade, EHS leaders began adopting digital solutions to streamline data-intensive and environmental compliance processes. New, innovative technologies allow teams to drive continuous improvements on multiple fronts, particularly for Tier II reporting and other compliance-related activities. These improvements encourage a more intelligent and straightforward reporting process. Additionally, data collection and reporting processes are more efficient and easier to manage across facilities when organizations digitally manage information and automate tasks.

Digital transformation creates an opportunity for EHS operations to be proactive in mitigating risk and managing compliance. Moving away from a series of disjointed manual tasks and adopting a more connected and systematic approach with streamlined EHS operations provides a holistic view of chemical data management. Digitized processes provide real-time progress and transparency to avoid human error and non-compliance risks. Additionally, issues such as lack of visibility, loss of people hours, resourcing and costly consultant manpower can be reduced or eradicated.

Digitizing processes may seem like a simple and seamless process. However, statistics show that 70% of digital transformations fail due to employee resistance. Veteran employees latch on to conventional routines that can be catastrophic for an organization. Compliance-related reporting requires a high level of accuracy that traditional approaches can’t provide. Organizations must address generational differences to overcome this obstacle. Showcasing the benefits of digital transformation in EHS, like simplifying tasks and ensuring efficiencies in compliance, can help alleviate employee resistance.

3. Prepare for Reporting

Preparing Tier II reports requires time, patience and collaboration to meet local and state regulations per EPCRA compliance. Tier II reporting is an ongoing activity and is not something that should occur mere weeks before reports are due on March 1. Instead, the lifecycle of compiling data needed for Tier II reports should be done in phases throughout the year. Organizations that wait until the last minute to submit by the deadline may feel rushed or overwhelmed, leading to the pitfalls of non-compliance reputational damage or hefty fines.

● The first step is to see if state requirements have altered reporting guidelines, such as reporting portals, thresholds or Local Emergency Planning Committees (LEPC) contact, among others.

● Secondly, before compiling data, start gathering purchasing records and other inventory information. It’s important to make sure no new products were added to the inventory from last year. OSHA regulations require a product’s Safety Data Sheet (SDS) to be revised or submitted within three months after a chemical manufacturer or employer becomes aware of new information concerning the hazards of a chemical.

● Lastly, make sure to compare this year’s report to last year’s to see if they’re similar chemicals and the amounts. If there are notable differences, make necessary changes as needed. Now to the fun part — data.

For most companies, the reporting lifecycle falls into four steps: data collection, data validation, data input and data submissions.

Data Collection

Data collection is essential for report preparations and should get early attention. This begins with outreach to sites and facilities between July and November. During this time, EHS teams determine threshold planning quantities (TPQs) at each facility. After this, data collection is returned for Tier II preparations in December.

Data Validation

Initial data validation starts in December and goes through January. During this time, it’s important to ensure the data is accurate and calculate chemical mixture inventories.

Data Input

Data input at the state level happens between January and February. During this phase, EHS teams review data entry, identify errors and check for missing information.

Data Submissions

Data submission occurs when admin work is complete by the March 1 deadline. If necessary, EHS teams must also submit EPCRA Section 302 or 311 filings for inventory management.

A common issue teams face with data collection early is not having it in one central location. Organizations need to centralize digital records electronically to make it easier to locate and share data quickly and avoid making mistakes.

4. Understand Reporting Requirements

It’s crucial for organizations to understand local reporting and compliance requirements. This can be done by recognizing when state or county-specific reporting requirements apply in facility locations.

Team members who oversee specific sites should stay up to date with the EPA’s State Tier II Reporting Requirements and Procedures. The site provides an overview of all 50 states, including information pertaining to contacts, reporting instruction, addresses and other assets needed to ensure compliance.

In addition, EHS professionals must document city or state requirements. These can include reportable quantities, reportable units of measure and others to avoid running into non-compliance.

Requirements vary from state to state, and updates can happen yearly that impact each state differently. For example, Texas updated its Tier II rules in November 2020 to include additional obligations for facilities. This new obligation requires Texas-based facilities to submit an updated Tier II report within 90 days of any changes on reports, including contact information, storage locations and chemical basis year-round.

In July 2021, Vermont also made changes to its requirements by consolidating 13 LEPCs into a single state-wide LEPC. This meant that for the 2021 reporting year, all Vermont Tier II reports were to be submitted to a single LEPC, despite site locations.

The EPA is continuing to explore new updates in the coming years. The latest updates would impact certain materials that have been historically required to be included in all reports, allowing them to be exempted. This is why it’s essential to stay up to date on local reporting requirements to be aware of changes that may impact your facility location.


The EPA was established over 50 years ago to restore national guidelines pertaining to environmental compliance. The government agency monitors and enforces these guidelines to protect people and the environment.

Unfortunately, there continues to be occurrences of environmental non-compliance, including major violations of EPA rules and guidelines regularly, specifically for waste streams and hazardous materials. Companies that ignore these requirements will fall into the trap of financial tolls and reputational headaches.

Organizations and facilities worldwide can easily avoid these damaging outcomes by staying proactive, digitizing processes, preparing for Tier II reporting season and understanding state-specific reporting requirements. It has become easier than ever to be environmentally compliant in today's digital environment. 

About the Author

Luke Jacobs | CEO, Encamp

Luke Jacobs is Encamp’s CEO and helped launch the company in November 2017 as one of its co-founders. Before Encamp, he was an environmental scientist at GHD and a research associate III - project manager for Montana State University, a position funded through the National Science Foundation & U.S. Department of Energy and based in Bloomington, Indiana.

In 2020, Jacobs was included on the Environment + Energy Leader 100 list for his achievements in the environmental industry, and in 2021 was recognized in the Forbes 30 Under 30 Class of 2022 for Enterprise Technology. Jacobs also was appointed to Forbes’s Technology Council in 2021. As an advocate for the environment, Jacobs is an active researcher, writer and speaker on its behalf. He earned his B.S. in Environmental Science from Indiana University (IU) Bloomington, and also received a Certificate of Underwater Resource Management from IU.

Sponsored Recommendations

Keys to Improving Safety in Chemical Processes (PDF)

Many facilities handle dangerous processes and products on a daily basis. Keeping everything under control demands well-trained people working with the best equipment.

Get Hands-On Training in Emerson's Interactive Plant Environment

Enhance the training experience and increase retention by training hands-on in Emerson's Interactive Plant Environment. Build skills here so you have them where and when it matters...

Managing and Reducing Methane Emission in Upstream Oil & Gas

Measurement Instrumentation for reducing emissions, improving efficiency and ensuring safety.

Micro Motion 4700 Coriolis Configurable Inputs and Outputs Transmitter

The Micro Motion 4700 Coriolis Transmitter offers a compact C1D1 (Zone 1) housing. Bluetooth and Smart Meter Verification are available.