A Terminal goes up in Flames – Are you prepared for the Aftermath?

The news this week was on the Intercontinental Terminals Company plant in Deer Park, Texas – and it was not good news. A fire, potential air exceedances, release of water and foam used to fight the fire – in general, a huge mess.

So now what happens? Based on the premise that the only difference between a criminal violation and civil enforcement is who gets to your door first, preparation is key.

The first action should be (after making sure everyone is safe) is to begin the internal investigation to determine what happened, if there was fault who’s was it, and any potential root causes. The internal investigation will allow the entity to be a responsible corporate citizen. Other benefits will allow the entity to address liability (to agencies and third-parties), take remedial actions and figure out if there is a way to prevent future issues.

For all of this, pre-planning is a must. And a couple of things flow from this:

1. The company should have a written policy on internal investigations. It does not have to cover the specific event; however, there should be a policy in place.

2. The internal investigation should be structured as a legally privileged investigation and should be all-inclusive. You can always choose late to waive the privilege, but a non-privileged investigation cannot later be made privileged.

3. Are there governmental agencies/regulations/orders that require an investigation? Think the Pipeline and Hazardous Materials Safety Administration or the Chemical Safety and Hazardous Investigation Board.

4. What will the investigation include? Will it include Root Cause Failure Analysis?

5. In line with Item 2 above, the investigation should be managed and directed by outside counsel as this will eliminate many questions regarding whether the investigation is legitimate or not.

Initial decisions impact the internal investigation through the end of the investigation. The goal should be a thorough, high-quality investigation that addresses the issues while ensuring the appropriate protections.

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii

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