Drivers of accident preparedness and safety: evidence from the RMP Rule

This paper provides an overview of recent results derived from the accident history data collected under 112(r) of the Clean Air Act Amendments (the Risk Management Program (RMP) Rule) covering the period 1994-2000, together with a preliminary assessment of the effectiveness of the RMP Rule as a form of Management System Regulation. These were undertaken at the University of Pennsylvania by a multi-disciplinary team of economists, statisticians and epidemiologists with the support of the US Environmental Protection Agency and its Office of Emergency Prevention, Preparedness and Response (OEPPR, formerly CEPPO). Section 112(r) of the Clean Air Act Amendments of 1990 requires that chemical facilities in the US that had on premises more than specified quantities of toxic or flammable chemicals file a 5-year history of accidents. The initial data reported under the RMP Rule covered roughly the period from mid-1994 through mid-2000, and provided details on economic, environmental and acute health affects resulting from accidents at some 15,000 US chemical facilities for this period. This paper reviews research based on this data. The research is in the form of a retrospective cohort study that considers the statistical associations between accident frequency and accident severity at covered facilities (the outcome variables of interest) and a number of facility characteristics (the available predictor variables provided by the RMP Rule), the latter including such facility characteristics as size, hazardousness, financial characteristics of parent company-owners of the facility, regulatory programs in force at the facility, and host community characteristics for the surrounding county in which the facility was located, as captured in the 1990 Census. Among the findings reviewed are: (1) positive associations with (a measure of) facility hazardousness and accident, injury and economic costs of accidents; (2) positive (resp., negative) associations between accident propensity and debt-equity ratios (resp., sales) of parent companies; (3) several interrelated associations between accident propensity and regulatory programs in force; and (4) strong associations between facility hazardousness, facility locations decisions, observed accident frequencies and community demographics.