Mind your SOPs

In 2001, the Denbo family’s scrap metal business, Tennessee Valley Recycling Inc. (TVR), was performing standard hot work/welding maintenance on the mill of our automobile shredder in Pulaski, Tennessee. The crew who was conducting the welding was experienced and had performed this task monthly for years. These employees had been properly trained and had observed the standard operating procedures (SOPs) that TVR had in place for hot work, including:

• filing a hot work permit;
• identifying and mitigating ignition sources;
• distinguishing and reducing sources of fuel;
• working with a charged fire hose nearby; and
• having employees on fire watch.

During the hot work, a spark landed on some oily residue (schmutz, as my Uncle Ted called it) in the bottom of the shredder mill. The schmutz ignited and immediately caught a hydraulic hose on fire. The hydraulic fluid aerosolized, spreading the fire quickly throughout the mill, damaging ferrous magnets, conveyor belts and hydraulic and electrical systems. The direct loss to the property was more than $1.5 million plus three months of lost revenue and income to the company. Fortunately, TVR operated a second auto shredder 50 miles away, which helped to mitigate the operating losses.

TVR had followed its SOPs precisely and still had an enormous loss to the property and its balance sheet. The only positive is that the company’s property insurance program responded as designed and paid the loss subject to their deductible.

This story illustrates that a business can prepare, document and train to prevent loss and still have severe loss occur. This is an absolute of any industry, but in light of the materials processed and the demands on machinery, equipment in the waste and recycling industries are more susceptible to property loss than the equipment used in the majority of other industries.

The importance of having and following SOPs

It is clear from working with recycling and waste clients over the last 16 years that fire safety routinely is an afterthought. As discussed in the prior articles, many companies in the waste and recycling industries do not focus on physical fire protection by upgrading facilities with appropriate sprinkler systems. However, we also typically see operations that do not have or do not follow SOPs that can help prevent fires, even when these same operations spend extensive time and money on safety training for their workforces. Examples of this range from the insignificant to the devastating. We have seen scrap dealers who store materials, such as automobile shredder residue (ASR, or fluff) too close to buildings and to key infrastructure. The same can be said of waste transfer facilities. We have seen paper and plastics recyclers who stack baled materials too high, which keeps sprinkler systems from working optimally in the event of a fire. The excuse is always one of two phrases: “We can’t move the material” or “We don’t have space to store the material.”

I accept that sometimes these businesses have limitations that arise from high volumes that can create poor conditions on the property where they operate. However, the frequent disregard for fire safety in the waste and recycling industries makes me think these operators are not properly informed and educated by industry leaders, loss-control consultants and insurance brokers. The top 25 percent of my clients follow their SOPs ruthlessly and are constantly checking pile and storage height, engaging in hot work training and monitoring other physical conditions that can lead to loss. Do these clients have losses? Obviously, yes, but they have them with less frequency and severity than those clients and prospective clients who do not pay attention to these issues.

Fire-specific SOPs

SOPs specific to fire safety can help businesses in the recycling and waste industries gain better control over loss, reducing the likelihood of loss and enhancing employee safety.

Our partner, Randy Bullock of General Protection Consultants, Birmingham, Alabama, is available to work through a plan with our clients and prospective clients to improve and implement these programs. We try to enforce these plans through contact with the client and follow-up site visits, with the carrot being that proper implementation and monitoring can result in lower property insurance premiums.

Our recommendations can range from the simple to the complex, depending on the client. They typically include requirements that incorporate human and physical elements:

• No smoking on premises. If necessary, provide a designated area where smoking is permitted away from buildings, machinery and any outdoor or indoor storage.
• Perform an annual infrared scan of switchgear and motors.
• Use a heat gun to periodically check bearings and other moving parts that can overheat, resulting in ignition.
• Update preventive maintenance programs to reduce the chance of malfunctions resulting in ignition of mobile and fixed equipment.
• When it comes to batteries (especially lithium-ion):

- clearly state the battery prohibition to customers;
- train personnel to identify batteries and remove them from the waste or recycling stream; and
- store found batteries outside and away from buildings and equipment in covered drums.

• Develop a hot work safety program in conformance with National Fire Protection Association 51B that includes:

- a hot work permit requirement;
-  ignition source identification and mitigation;
-  fuel source identification and mitigation;
-  alternatives to hot work (when applicable); and
-  oxygen source identification and mitigation.

• Manage material (waste, ASR, recyclables) piles in terms of height and proximity to buildings and fixed equipment.
• Manage stacking of bales and interior material. The height will differ based on eave height of the building, type of sprinkler system, volume of water available to the sprinkler system and the type of material being stored.

Waste and recycling companies should work with insurance professionals and loss-control engineers to determine appropriate SOPs and strict implementation. All SOPs should be reviewed annually (or more frequently) to keep pace with changing business practices, new materials and changing volumes of material. SOPs should not be static but should change as a business changes and grows.

While automatic sprinkler systems are paramount to protecting property and enhancing life safety, SOPs, when followed precisely, can reduce fire risk significantly. We encourage all readers of Waste Today and Recycling Today to analyze their companies’ current SOPs and/or to implement SOPs specific to fire safety. This will improve the quality of operations and reduce the chance of physical and monetary loss.