Risk Management for Chemical Industries
Chemicals have
become a part of our life for sustaining many of our day-to-day activities,
preventing and controlling diseases, and increasing agricultural productivity
etc. An estimation of one thousand new chemicals enter the market every year,
and about 100000 chemical substances are used on a global scale. These
chemicals are mostly found as mixtures in commercial products. Over one million
such products or trade names are available.
The chemical
industrial sector is highly heterogeneous encompassing many sectors like
organic, inorganic chemicals, dyestuffs, paints, pesticides, specialty
chemicals, etc. Some of the prominent individual chemical industries are
caustic soda, soda ash, carbon black, phenol, acetic acid, methanol and azo
dyes. Chemical manufacturing sector in India is well established and has
recorded a steady growth in the overall Indian industrial scenario. The Chemical
and allied industries have been amongst the faster growing segments of the
Indian industry. The Indian chemical industrial sector had a turnover of around
Rs.1200 billion in 2001-2002. The chemical exports also accounts for more than
16.20% of the total Indian exports during 2001-2002.
The
risks associated with the chemical industry are commensurate with their rapid
growth and development. Apart from their utility, chemicals have their own
inherent properties and hazards. Some of them can be flammable, explosive,
toxic or corrosive etc. The whole lifecycle of a chemical should be considered
when assessing its dangers and benefits. Though many of chemical accidents have
a limited effect, occasionally there are disasters like the one in Bhopal,
India, in 1984, where lakhs of people were affected and LPG explosion in Vizag
refinery where huge property damage in addition to 60 deaths was experienced.
Therefore chemicals have the potential to affect the nearby environment also.
· Design and Pre-modification review :
Improper layout like location of plant in down wind side of tank farm , fire
station near process area , process area very close to public road and wrong
material of selection had caused severe damages to the work and outside
environment
· Chemical Risk Assessment: Not
assessed for new chemicals from the point of view of compatibility, storage,
fire protection, toxicity, hazard index rating, fire and explosion hazards
·
Process Safety Management: HAZOP,
FTA, F&E Index calculation, reliability assessment of process equipment,
incorporating safety trips and interlocks, scrubbing system, etc. not done
before effecting major process changes, lack of Management of Change procedure
(MoC), etc.
· Electrical Safety: Hazardous
area classification , protection against static electricity , improper
maintenance of specialized equipment like flameproof etc were ignored.
· Safety Audits: Periodical
assessment of safety procedures and practices, performance of safety systems
and gadgets along with follow up measures were not carried out.
· Emergency Planning: Lack of
comprehensive risk analysis indicating the impact of consequences and specific
written down and practiced emergency procedures along with suitable facilities
had increased the severity of the emergency situations.
· Training: Safety induction
and periodical refresher training for the regular employees and contract
workmen were not carried out.
·
Risk Management & Insurance Planning:
Thorough identification and analysis of all risks and insurance planning were
not done so that interruption risks and public liability risks could also be
managed effectively.
A. Risk Management Consultancy
Following
specialized risk management services are offered to chemical industries,
considering the kind of risks that exists in these plant operations:
1.
STANDARD CONFORMANCE and PERFORMANCE EVALUATION (SCOPE)
SCOPE
would evaluate the existing measures / system based on applicable national /
international standards.
A
few SCOPE reviews that we recommend for chemical manufacturing plants are:
1.1
SCOPE-FP (Fire Protection)
Indian
Standards
·
IS 2189 - Standard for automatic fire
detection and alarm system
· IS 2190 - Code of practice for selection,
installation and maintenance of first aid fire extinguishers
· IS 3844 - Code of practice for installation
and maintenance of internal fire hydrants and hose reels
·
IS 6382 - Carbon dioxide fire extinguishing
system - fixed, design and installation
TAC
Standard
Tariff
Advisory Committee recommendations on hydrant and sprinkler system for fire protection.
Oil
Industry Safety Directorate
·
OISD 117 - Fire Protection Facilities for
Petroleum Depots and Terminals
·
OISD 142 - Inspection of fire fighting
equipment and systems
·
OISD 158 - Recommended Practices on Storage
and Handling of Bulk Liquefied Petroleum Gas
NFPA
Standards
·
NFPA 12 Carbon Dioxide Fire Extinguishing
Systems
·
NFPA 654 Prevention of Fire & Dust in
Pharmaceutical Industries
·
NFPA 1600 Disaster Management
·
NFPA 921 Fire & Explosion Investigation
·
NFPA 45 Fire protection for Laboratories
using Chemicals
1.2
SCOPE - OHS (Occupational Health and Safety)
·
IS 14489 Code of Practice for Occupational
Safety & Health Audit
·
NFPA 101 Life Safety Code
1.3
SCOPE-ER (Electrical Risk)
·
Hazardous Area Classification (base
standard: IS 5572)
·
Selection of Electrical Equipment for
Hazardous Areas (base standard: IS 5571)
·
Lightning Protection (base document: IS:
2309 /NFPA 780 /BS 6651)
·
NFPA 70 B Recommended
Practice for Electrical Equipment Maintenance
·
NFPA 70 E Standard
for Electrical Safety in Employee Work places
2.0
PROCESS SAFETY MANAGEMENT
·
Hazard & Operability (HAZOP) studies
·
Failure Tree Analysis (FTA)
·
Event Tree Analysis (ETA)
·
Primary Hazard Analysis (PHA) using Dow
Index
·
Risk Assessment (with risk ranking
technique)
3.0
ELECTRICAL RISK ASSESSMENT
·
Review of Hazardous Area Classification
·
Lightning Protection Risk Assessment
·
Identification & Control of
Electro-Static Hazards
·
Review of electrical Preventive Maintenance
System
·
Electrical Risk Assessment (fire, shock
explosion) using Semi-Quantitative Risk Ranking (SQRR) technique
4.0
FIRE RISK ASSESSMENT
·
Identification & assessment of fire
risks during operations in receipt, storage, transfer and handling of chemicals
(raw materials and finished products)
·
Identification & control of ignition
sources in areas where flammable chemicals are stored / handled / transferred
o
Review of chemical compatibility in storage
areas and to suggest appropriate fire loss control measures
o
Review of fire detection measures adopted
in the plant & to suggest suitable improvement measures
o
Review of the various active (fire hydrant,
sprinkler, portable fire extinguishers) and passive fire protection
requirements for chemical storage and handling areas and to suggest
improvements as necessary
o
Review of contractor safety awareness
(chemical spill, fire fighting, emergency communication, knowledge of plant
hazards & safety regulations) and to recommend suitable improvement
measures to enhance contractor safety
o
Review of safety awareness and safety
training requirements ( training identification and efficacy) of plant
employees with respect to hazards present in the plant
Fire
risk assessment will be carried out based on techniques like Matrix method,
Hani Raafat Risk Calculator. The consequence, likelihood and exposure of
each hazard are arrived using a systematic approach and will help to determine
the relative importance of hazard and focus on significant risks.
5.0
RISK ANALYSIS & EMERGENCY PLAN
·
Identification of scenarios of potential
disasters / emergencies leading to loss of life , property damage etc. and
qualitative assessment of their likelihood.
·
Quantitative risk assessment for selected
scenarios of major credible events.
·
Recommendations for risk control measures
wherever applicable.
·
Preparation of onsite emergency
preparedness plan
6.0
RISK MANAGEMENT & INSURANCE PLANNING
- Identification of all major internal and external pure risks including the natural risks and analysis of the impact of above risks
- Review of existing risk control measures and offering comments
- Scrutiny of all existing major insurance policies in respect of:
- Rationalization of basic rate of premium and widening of covers
- Applicability / eligibility of discounts in premium
- Application of suitable clauses, warranties and conditions
- Identification of possible areas for refund of premium and suggestions regarding procedure for the same
- Selection of insurance coverage on the basis of risk analysis
- Providing guidelines for fixation of sum insured and illustrate the same on a selected equipment
- Evaluation of business interruption exposure due to identified risks
- Providing guidelines on documentation requirements, procedures for claims under various policies, evaluation of insurers
B. Risk Management Training
Specialized
and focussed training, if imparted effectively, can contribute significantly to
Risk Management. Expert faculty, carefully selected training module,
interactive and participate approach, useful training material, case studies
and syndicate exercises could help in having effective risk management system
in place. The training topics for bulk drug industry could be:
·
Chemical Safety
·
Safety with Compressed gases
·
Solvent Safety
·
Hazard Identification Techniques
·
Industrial Risk Management
·
Fire Prevention and Protection
·
Electrical Risk Management
·
Emergency Preparedness
·
Safety Management system
·
Accident Prevention
·
Personal Protective Equipment
C. Cholamandalam MS Risk Services & Expertise in Chemical
Risk Management
Cholamandalam
MS RISK SERVICES has a team of risk management professionals who understand the
special risk profile of every type of industry, especially the Chemical
manufacturing due to their wide experience in the field of consultancy, fire
investigations and training at chemical plants after their hands on operating
experience in the relevant sector.
Some
of our team members have presented papers in National seminars and
international work shops on Chemical Safety.
Cholamandalam
MS Risk Services Ltd. has executed risk management projects for several process
plants. A few of them are listed below:
·
Shasun Chemicals, Cuddalore, Tamil Nadu
·
ITC - ILTD, R&D Lab
·
Chambal Fertilizers and Chemicals, Kota,
Rajasthan
·
Mangalore Chemicals and Fertilizers,
Mangalore
·
BASF Styrenics, Dahej
·
TANFAC Industries Ltd. , Cuddalore
·
Mangalore Refinery and Petrochemicals
Limited, Mangalore
·
Hindustan Petroleum Corporation Limited,
Vizag Refinery
·
SPIC , Tuticorin
·
LPG bottling plants of HPCL & BPCL ,
Mangalore & Coimbatore
·
POL terminals of HPCL & BPCL, Mangalore
& Coimbatore
·
POL terminal of Indian Oil Corporation,
Mangalore & Coimbatore
·
Coromandel Fertilisers Ltd., Vizag &
Ennore
MAJOR
CHEMICAL DISASTERS IN INDIA
Origin
of accident |
Year |
Date |
Location |
Products
involved |
Number of
|
||
Deaths |
Injured |
Evacuated |
|||||
Bulk
cargo handling terminal |
1997 |
00.01 |
Mumbai* |
Sulphur |
|
|
|
Explosion |
1983 |
29.09 |
Dhulwari |
Gasoline |
41 |
>100 |
.. |
Explosion
(warehouse) |
1992 |
29.04 |
New Delhi |
Chemicals |
43 |
20 |
|
Fire |
1983 |
03.11 |
Dhurabari |
Oil |
76 |
>60 |
- |
Fire |
1985 |
01.11 |
Padaval |
Gasoline |
>43 |
82 |
.. |
Fire
at a chemical store |
1994 |
13.11 |
New Delhi |
Toxic
cloud (chemicals) |
|
500 |
|
Fire
in refinery |
1988 |
09.11 |
Bombay |
Oil |
35 |
16 |
.. |
Leakage |
1984 |
03.12 |
Bhopal* |
Methyl
isocyanate |
2800 |
50
000 |
200 000 |
Leakage |
1989 |
05.05 |
Britannia Chowk |
Chlorine |
- |
200 |
.. |
Leakage |
1990 |
05.11 |
Nagothane* |
Ethane
and propane |
32 |
22 |
|
Leakage |
1988 |
22.12 |
Jhurkully |
Sulphur
dioxide |
- |
500 |
.. |
Leakage |
1989 |
17.01 |
Bhatinda |
Ammonia |
- |
500 |
.. |
Leakage |
1987 |
24.06 |
Bhopal |
Ammonia |
|
|
200 000 |
leakage
(transport accident) |
1997 |
21.01 |
Bhopal |
Ammonia |
|
400 |
|
Leakage
from a pipeline |
1991 |
00.12 |
Calcutta |
Chlorine |
|
200 |
|
Leakage
in an Ice Factory |
1990 |
00.07 |
Lucknow |
Ammonia
gas |
|
200 |
|
Plant
explosion |
1980 |
03.05 |
Mandir Asod |
Explosives |
50 |
.. |
- |
Refinery
fire |
1997 |
14.09 |
Vishakapatnam |
|
34 |
31 |
150000 |
Release |
1985 |
14.05 |
Cochin |
Hexacyclo-pentadiene |
- |
200 |
.. |
Release |
1985 |
04.12 |
New Delhi |
Sulphuric
acid |
1 |
340 |
>10 |
Transport |
1985 |
09 |
Tamil Nadu |
Gasoline |
60 |
.. |
.. |
Transport
accident |
1994 |
00.01 |
Thane District |
Chlorine
gas |
4 |
298 |
|
Transport
accident |
1991 |
00.01 |
New Bombay |
Ammonia
gas |
1 |
150 |
|
Transport
accident |
1995 |
12.03 |
Madras |
Fuel |
~100 |
23 |
|
Transport
accident |
1995 |
00.12 |
Maharashtra |
Ammonia
gas |
|
2
000 |
|
Transport
accident (leakage) |
1991 |
00.11 |
Medran |
Inflammable
liquid |
93 |
25 |
|
|
1985 |
|
India |
Chlorine |
1 |
150 |
- |
Source: OECD, MHIDAS, TNO, SEI, UBA-Handbuch Stoerfaelle, SIGMA, Press Reports, UNEP, BARPI.
Inclusion Criteria
- 25 death or more; or
- 125 injured or more;
- 10000 evacuated or more; or
- 10 thousand people or more deprived of water;
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