E-Records Rulings Force Rigorous Traceability Requirements

Aug. 15, 2002

Following in the footsteps of the U.S. Food and Drug Administration (FDA), the U.S. Environmental Protection Agency (EPA) released its proposed Cross-Media Electronic Reporting and Record-Keeping Rule (CROMERRR). The proposed ruling sets forth conditions under which EPA will allow an electronic record to satisfy federal environmental record-keeping requirements in EPA regulations.

This rule will have significant impact on U.S. chemical and petrochemical industries. It is also a part of a larger global movement for more rigorous traceability records.

The proposed ruling has created great concern and considerable defensiveness on the part of industry workers, many of whom believe they already have adequate electronic records and will incur unnecessary additional costs. In addition, industry recognizes that some technologies that might be required for compliance do not exist in current systems. How can these manufacturers make financial decisions in the face of this uncertainty?

EPA said it will promulgate a regulation "like" FDA's 21 Code of Federal Regulations (CFR) Part 11. But the chemical and petrochemical industries and EPA are not like the pharmaceutical industry and FDA. FDA has de facto regulatory authority across the globe, which levels the playing field for the whole pharmaceutical industry. In contrast, EPA has regulatory authority in only this country, potentially leaving companies at a competitive disadvantage.

Toward electronic government

Even so, the chemical and petrochemical industries must recognize EPA's effort to promulgate these e-records standards as one part of a larger effort toward "electronic government." It is an effort required to meet the increasingly complex health and safety challenges of the 21st century. This leads to the compelling argument that a "wait and see attitude," which made business sense in the past, poses significant business risk today.

Many in industry, government and regulatory agencies recognize the need to change old methods and are proactively adopting new automation technology because they cannot or will not be able to meet their mandates or business objectives effectively without them. What can industry do to make sure its interests are recognized and included in any new regulations?

Changing realities

Industry must be aware of and participate in at least three new regulatory realities evolving along with the e-commerce revolution: the rapid movement toward global harmonization and traceability, the move to electronic government, and the modernization of regulatory agencies. In addition, 21 CFR Part 11 already is resulting in new and enhanced automation products.

Global harmonization and traceability are not simply the efforts of the World Trade Organization or the Kyoto Protocol. In the aftermath of recent terrorist attacks, we need more rigorous traceability to help ensure the safety of hazardous materials and food and water supplies. This extends to global traceability of electronic banking transactions, as well as many other things that affect health and safety. Efforts include EPA's willingness to use newer, more scientifically sound environmental health and safety data developed from the industry-sponsored DIPPR 911 project.

The U.S. government recognizes the need to move as rapidly as possible to electronic government. The U.S. Department of Justice and the National Archives and Records Administration issued final guidance to federal agencies on implementing the 2000 Government Paperwork Elimination Act.

FDA stated that implementation of 21 CFR Part 11 is being influenced by, and is essentially consistent with, mainstream regulatory standards of e-commerce and e-government. It also noted the influence of the 1998 Electronic Signatures in Global and National Commerce Act. In fact, the Office of Management and Budget (OMB) made it a policy to stop funding projects that do not adequately address security and traceability requirements.

EPA and other regulatory agencies are adopting similar initiatives. Site inspections, although still important, have become inadequate. New e-records standards are being adopted that will allow remote records audits and records submittals.

Working together

EPA's proposal for electronic records-keeping should be viewed as part of the government's overall quest for modernization. Some of these stated initiatives include the establishment of better risk-based priorities based on sound scientific fact, working more closely with the public and industry, and adoption of a more systematic approach to regulation.

If EPA can adhere to and educate industry about these initiatives, the agency should expect to see more industry involvement and cooperation. It is also in the best interests of industry to understand these initiatives and work with EPA. In this way, industry can influence both the upcoming regulations and the compliance criteria. Even before such rulings become law, companies should execute a site-by-site compliance gap analysis based on their own interpretation, develop a compliance plan, and be prepared to begin good faith execution of the plan.

Blanchard is a principal analyst with the ARC Advisory Group, Dedham, Mass. He can be reached at [email protected].