March 5, 2012

Andy Fecht, Associate
Safety Director
Teva Pharmaceuticals, Inc.
North American API Division
5000 Snyder Dr
Mexico, Missouri 65265

Dear Mr. Fecht:

Thank you for your April, 2011, letter to the Occupational Safety and Health Administration (OSHA). Your letter requests an interpretation regarding applicability of 29 CFR 1910.119, Process Safety Management of Highly Hazardous Chemicals (PSM), to a process(es) at the Teva Pharmaceutical, Mexico, MO site.

Scenario: Teva Pharmaceuticals Mexico, MO site houses a production process, distillation process, and tank farm. OSHA recently inspected the site and determined that the distillation process and tank farm are part of an interconnected PSM-covered process, due to the fact that they contain more than a threshold quantity of a highly hazardous chemical (HHC). The production process, distillation process, and tank farm are all interconnected by piping. TEVA Pharmaceuticals stipulates that if the production process was a stand alone process, it would not contain a threshold quantity of HHC.

Question: Which parts of this process are covered by PSM?

Reply: OSHA has determined that the Teva Pharmaceutical process you describe is a single interconnected process that contains more than a threshold quantity of highly hazardous chemicals; therefore, the process is covered by OSHA's PSM standard.

29 CFR 1910.119(a)(1)(ii) specifies that the standard applies to, "A process which involves a flammable liquid or gas (as defined in 1910.1200(c) of this part) on site in one location, in a quantity of 10,000 pounds (4535.9 kg) or more..." The standard defines a "process" as, "any activity involving a highly hazardous chemical including any use, storage, manufacturing, handling or the on-site movement of such chemicals or combination of these activities. For purposes of this definition, any group of vessels which are interconnected and separate vessels which are located such that a highly hazardous chemical could be involved in a potential release shall be considered a single process."

An OSHA interpretation published in the Federal Register,^[1] provides OSHA's enforcement policy regarding an interconnected process. The FR notice explains that, "...there is no additional requirement on OSHA to show the potentiality of a release with respect to interconnected (as opposed to separate) vessels. Rather, the PSM standard presumes that all aspects of a physically connected process can be expected to participate in a catastrophic release." The Teva Pharmaceutical process you describe is a single interconnected process.

29 CFR 1910.119(a)(1)(ii)(B) provides an exception for PSM coverage for, "Flammable liquids stored in atmospheric tanks or transferred which are kept below their normal boiling point without the benefit of chilling or refrigeration." In your letter, you suggest that this exception applies. However, during the recent inspection, OSHA determined that not all vessels in Teva's tank farm are functioning solely as storage tanks. While flammable materials in atmospheric storage tanks would not be covered or considered toward the threshold quantity, Teva's storage tank farm is a part of the covered process. As such, the interconnected production process, distillation process, and the non-exempt tanks in the tank farm contain greater than a TQ of flammable liquids and are a PSM-covered process.

In your letter, you mention several process controls, such as, inerting systems and containment dikes. Please note that OSHA does not consider controls when determining the boundaries of a PSM-covered process.^[2]

You also mention an OSHA letter of interpretation addressing^[3] criteria used to establish a "remote distance" between potentially PSM-covered processes. The PSM preamble^[4] discussion mentions the use of dikes around liquid storage tanks to prevent HHCs from interacting with other non-interconnected vessels outside of the dike. For the purpose of determining the limits or boundaries of a covered process, physical barriers, such as dikes, may be used as part of the analysis to determine if non-interconnected equipment or aspects are part of the covered process. However, in the case of the Teva Pharmaceutical's Mexico, MO, site, the tank farm, production process, and distillation process are interconnected by piping. Therefore, physical barriers, such as the dikes, are not relevant when establishing the limits of the PSM-covered process.

Thank you for your interest in occupational safety and health. We hope you find this information helpful. OSHA requirements are set by statute, standards, and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations. This letter constitutes OSHA's interpretation of the requirements discussed. Note that our enforcement guidance may be affected by changes to OSHA rules. Also, from time to time we update our guidance in response to new information. To keep apprised of such developments, you can consult OSHA's website at http://www.osha.gov. If you have any further questions, please feel free to contact the Office of General Industry Enforcement at (202) 693-1850.

Sincerely,

Thomas Galassi, Director
Directorate of Enforcement Programs

^[1] 72 FR 31453-31457. Interpretation of OSHA's Standard for Process Safety Management of Highly Hazardous Chemicals; 6/07/07 (http://www.osha.gov/pls/oshaweb/owadisp.show_document? p_table=FEDERAL_REGISTER&p_id=19633)

^[2]OSHA Letter of Interpretation: Akzo-Nobel Chemicals - Limits of a Process, 2/28/97; (http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=22361)

^[3]OSHA Letter of Interpretation: Remote Distance, Close Proximity and Other PSM Questions; 2/15/94; (http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=21406)

^[4]57 FR 6372, 2/24/93