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Company: Occidental Chemical
Subject: Report on Increasing Inherent Security of Chemical Facilities
Year: 2010
Sector: Chemical Production
Lead Filer: Green Century Capital Management
Outcome: Vote: 6%

Report on Increasing Inherent Security of Chemical Facilities

 

Whereas:  Security at chemical facilities has become one of the most important issues facing our country. Across the United States, thousands of facilities use, store and transport extremely hazardous substances in large quantities that pose major risks to surrounding communities, employees, and the environment.

According to Risk Management Plans (RMPs) filed by companies with the U.S. Environmental Protection Agency (EPA), at over 100 of these facilities more than one million people live in an area where they could be seriously injured or killed in the event of a catastrophic incident such as a chemical accident or terrorist attack.

A report by the Army Surgeon General in 2003 ranked an attack on a chemical plant second only to a widespread biological attack in the magnitude of its hazard to the public. Numerous other government agencies and private groups have published warnings about these dangers.

Occidental operates chemical facilities in the United States through its chemical segment, Occidental Chemical (OxyChem). Four OxyChem plants put at least one million people at risk in the event of a catastrophic release of chemicals caused by an accident or terrorist attack.

OxyChem also transports hazardous chemicals by rail. According to a February 2008 news release from the Association of American Railroads, "It is time for the nation's big chemical companies to stop making the dangerous chemicals that can be replaced by safer substitutes or new technologies... If chemical companies would take that step, the threat of a terrorist attack would be greatly reduced and America would be a safer place."

It is often possible for a company to increase the inherent security of a facility and decrease the number of people at risk of harm by switching to chemicals that are less acutely hazardous, reducing the quantities of extremely hazardous substances stored at facilities, altering the processes used at facilities, or locating facilities outside densely populated areas.

Improving physical security through such steps as hiring additional security guards, building perimeter fences and designing stronger railcars may not reduce the number of people endangered by a facility or transport route.

Clorox, another chemical company that uses chlorine, announced in November 2009 that it is converting all of its facilities using chlorine to safer chemical processes, which will "strengthen [its] operations and add another layer of security."

RESOLVED: Shareholders request that the independent directors of the Board prepare a report, at reasonable cost and omitting proprietary information, on the implications of a policy for reducing potential harm and the number of people in danger from potential catastrophic chemical releases by increasing the inherent security of OxyChem facilities through steps including reducing the use, storage and transportation of extremely hazardous substances, reengineering processes, and locating facilities outside high-population areas.  The report should be available to investors by August 2010.

 


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