Manufacturing Safety with EHS Risk Management

Steve Melito: Hey everybody, welcome to New York State Manufacturing Now, the podcast that’s powered by FuzeHub. I’m your host, Steve Melito. Today we’re talking to Jim Testo, President of EHS Risk Management. Jim is a nationally recognized leader in the development and implementation of corporate programs for environmental, health and safety, or EHS. He’s a certified safety professional with more than 35 years of experience in leading EHS programs, including with GE silicones and GE power systems. Here in New York State’s Capital Region, he’s built several EHS companies and has some advice and maybe even a few stories for manufacturers today. Jim Testo, welcome to New York State manufacturing now. Thanks for having me on, Steve, it’s a pleasure. So, Jim, you’ve been involved in environmental, health and safety since the 1980s. I think I might have been in high school back then. How did manufacturers approach safety in those days and what’s changed?

Jim Testo: I’ll start off telling a little bit of a story. So I was hired by GE back in the middle 1980s. As I got to the operations and then day one they took me around the plant and showed me some things. And as I was looking at some operations there I didn’t recognize what this piece of equipment was, which was a filter press, and I asked a question and a gentleman touring me around looked at me kind of funny and said aren’t you a chemical engineer? And I said no. He says how did you get a job here without being a chemical engineer? And the thought process back then was that you know, you’re a chemical engineer, anybody can do safety, you’re smart, you can do this. So then, to kind of prove out the point a bit, as I was working at the plant and they still hired me even though I wasn’t a chemical engineer, and I had recognized one of their processes that used industrial grade propane and that means it doesn’t have the smell to it to find it, the mercaptan and as I was looking at the monitors they were using, they were using what is known as what they call hot wires to detect the propane and it’s a standard textbook piece of industrial hygiene, knowledge of industrial hygiene and I was an industrial hygienist that the silicones and this was the man silicone manufacturer poisons those monitors, so they really weren’t working. So I went to my manager and told him what I had found is like I mean, the plant could be filled with propane and we don’t know it and just waiting for a spark. It was like, yes, but the point of that was that you know the theory back then and thought process was anybody can do safety and they did not realize in depth knowledge that you needed and experienced to really do safety right and build programs and systems.

Steve Melito: Got it. So, Jim, today a lot of manufacturers are focused on compliance, regulatory compliance, and it’s as if they want to check a box and say, okay, I’ve done safety now. But what’s the problem with that? Doesn’t OSHA tell you what you need to do?

Jim Testo: Yeah, from the standpoint of compliance, there wants to be compliance, but it’s really all about risk management. It’s all about reducing your risk and controlling that. Just being in compliance really doesn’t get you there. So if I was to try to manage my risk, I would have to build systems and programs. So OSHA doesn’t tell you to have a policy and a procedure and roles and responsibility and accountability. But anybody in the business of safety and health and implementing programs and systems knows, in order to have a good program and manage those risks, that you need systems in place and you need processes in place to do that. So I think business leaders intuitively know that they need to do things like this to control their risks. They know they need processes, systems to do other things in their business and I think over the years they started to recognize that. But if they weren’t really recognizing their risk and taking on programs, it costs them money, it costs them issues. So I’ll tell another story. About five, six years ago I did an investigation for a dual fatality, which was horrible, and the owner of the operations. This is horrible. It’s like I never want this to happen again. So we went on to the investigation and what really happens when something like that happens, not only the understanding that two people are killed, the other things that come into play. So in this situation they were dealing with solvents and they had an explosion in a fire, so the manufacturing process was destroyed. So there was an insurance claim to build a new manufacturing process, I’ll guess you know a million dollars plus. And then there was fines. So of course there was regulators in there and there were fines, which really weren’t the big driver or the big cost and then you have your workers’ comp. So if you kill a couple of people your workers’ comp goes through the roof. Just rough numbers. If you’re, you know, a million dollar premium in workers’ comp, now you’re a million three, and not for that year, for like the next three years and then on top of that, when you have something like this happens, you’ll have litigation. So the widow is going to sue something. So everybody has an employee can’t sue his employer. But so there’s third party suits. So let’s say you got killed on a fork truck. The widow, let’s say in this case, would sue the fork truck manufacturer. Then the fork truck manufacturer says not my problem, you didn’t train them and you know, you didn’t maintain the fork trucks and then goes back to that employer and that can go on forever. Who knows the one that I did. You know I wasn’t privy to what that case ended up, but you just know it costs money.

Steve Melito: So, Jim, you’ve had a lot of manufacturers tell you over the years and you’ve told me this story before that they thought they were doing the right thing because they don’t want to see anybody get hurt, but sometimes it happens. Can you elaborate on that a little bit?

Jim Testo: Yeah, I do get that a lot when I go in and they think they have everything under control and usually they’re not even close. I mean, sorry to say that we do get customers. Usually after something happens they really work in a reactive mode rather than a proactive mode. Once something happens they do get a good recognition and then start to understand the benefits of being proactive and doing things. But that’s changing the whole culture to be proactive. It’s different than what they did. The culture is better these days and I think with even COVID happening and things like that, there’s more emphasis and recognition to health and safety and understanding what this risk. Here I mean, it’s not like it was before, like way back. I’ll tell a story about safety culture and this goes back in the early 90s. I was a consultant with a big consulting firm, erm Environmental Resource. But they were the big gorilla in the business and we got to review a plant. It was a BP plant made gas in Toledo Ohio. They had a couple of incidents. One they had relief valves go off and they basically sprayed oil all over the harbor and they had to replace all the boat covers in the harbor. So it was very costly. Second incident they had. They had a shipment of chemicals come in and it got imported into the wrong pipe, going in and created an acid gas cloud, cleaned out the neighborhood. Everybody backed off. It was a big thing in the news and it cost them a lot. So we went and did the investigation and I led the investigation and it was really under what they call process safety management, whether it was a standard that came out in 1992, dealing with highly hazardous chemicals. They don’t want a catastrophic event and fires and explosions, but we went through and did the assessment. We show that these incidents could have been avoided if you were following. So, for example, there was a lot to do with mechanical integrity and changing out the valves. So the relief valves were set right and didn’t go off. The other one was a more of a management of change. They changed the pipe where the chemical comes in and therefore they put it in the wrong place. So at the end of the presentation I did, at the end of the week we were there, we pointed this out and all the things that they should be doing, and the plant manager took the report and back then we had hard copies and he dropped it on the floor and said we don’t do this here, we make gas, we’re not doing this and he had a couple of beeps there that we’re not doing this and that was the thought process and that was the culture. Now, hopefully, we’ve came a long way from that and we have learned the hard way with a few of the different things. But the good news is, I think in today’s world, if we are able to really start to work proactive and recognize risks and be ahead of time, we can avoid this and it’s much better that industries that are on top of it and have good safety culture they have less accidents, they have less cost, things like that.

Steve Melito: Absolutely, and I would think that for our New York State employers and there’s not a single manufacturer I talked to that does not say I’ve got workforce issues, I can’t find people. If you want to be an employer of choice, the media attention that comes from an accident can’t be very helpful.

Jim Testo: Yeah, I mean, when I work back at GE they call it polishing the GE meatball. That their image and it just was not good if they had fatalities. That wasn’t good for their market and their image and that just can’t have that.

Steve Melito: Right. So, Jim, you are advocating a proactive rather than a reactive approach, and this comes to something, or pertains to something, called leading indicators versus lagging indicators. Can you talk about what those things are and what they mean in practice? Maybe some examples?

Jim Testo: Yeah, I mean, obviously, lagging indicators is after something happens you know we don’t want to learn that way and leading indicators are starting to recognize what the risk can be. So in process safety management, looking at highly hazardous chemicals, they go through a process called a PHA, a process hazard analysis, and you go in and start looking at the frequency of something happening and the severity of it happening. So you start to analyze and start to be a proactive and say, oh, if we don’t maintain these valves, this is what can happen. That’s being proactive and here’s the things we need to put in place so we do have control over the mechanical integrity or something for these valves. So more and more systems that go in place and a good management system is gonna have a policy. It’s gonna have a procedure to implement that policy. It’s gonna have roles and responsibilities, accountability. It’s gonna have hazard recognition and then hazard control so we recognize the hazard ahead of time of what can happen and then we put systems in place. That is the hazard control and that gets followed on with training and communication and, of course, management, evaluating their whole program and using it as part of their business. It’s bad business to have accidents. It’s good business to be on top of this and be ahead of this and usually companies that I find have good systems and good safety programs in place, have good quality in place, have good management of their money in place, that they’re better companies and then the other big piece that’s good today in implementing these programs and getting this done is leveraging today’s technology. Right now, I mean, I get in my car and if I don’t put my seatbelt on, bells and whistles go off. So pretty soon I get in the car and I automatically put the seatbelt on. That’s the behavior. Yeah, so we know that with seatbelts we’ve had less fatalities in cars we do have a fatality. We got the first question did you have a seatbelt on? But even more so now you’ve got the backup my car. I back it up and if I’m gonna hit something on the back right side, the right side of my body vibrates on the seat telling me that you know I’m gonna hit something and now the car will stop by itself. So you know, and that starts to become cost avoidance. I mean, how many children did we not run over because we have this? We don’t know. But now these systems are in place. But I think you’re gonna see the use of technology in safety really start to and we do this in our business now too, with companies really start to play a role in it because we can leverage technology. It’s access to information. People have information on their phones now. You know, I get in my car and I wanna go someplace and I start typing you know a few letters of the address and it tells me where to go. The same way, I can get on my phone and if I have the right systems in there in safety and I start typing hot work, h-o, I don’t get to H-O-T before the hot work permit comes up. So you’re gonna see this come into play, the way we can provide information and pull information and leverage that technology. I think you’ll see. For example, you’re supposed to wear a seatbelt on fork trucks, right, and the fatalities that happen in fork trucks is when the guy comes out of the fork truck and the load ends up on top of him or he falls over the fork truck and you know it’s a simple. It’s certainly a violation under ocean they don’t have their seatbelt on. But I see a lot of people jump on the fork truck and don’t put the seatbelt on. I think eventually you’ll see that fork truck won’t start unless that seatbelt’s on things like that. You’ll see. You know your cell phone talking to you. Before you start this machine up, do you have your safety glasses on? Or the machine won’t start because the guards aren’t in place. So there’s a lot of that built into safety and equipment now. But I think you’re gonna see more and more of it and I think you’re gonna see it where the rubber meets the road with the actual worker. Now we have nice programs and systems and when I put a program for somebody I tell them look, you’re in compliance on paper. But now you gotta do all these things and you’ve gotta implement this program and getting that information to employees and the other good news is employees don’t wanna get hurt, they wanna do it right. They don’t, you know, they wanna go home safely. Especially, I think in my experience the younger generation working that they’re not doing it like the guy that’s been doing it for 20, 30 years on this machine. We always do it this way. You know the dual fatality I talked about says we always let the torch. That’s how we do it. That’s how we do it in the industry. It’s like no, you can’t be doing that, you know. So I think you’re gonna see more and more of the technology play a role and it will be less accidents, just like there’s less fatalities with seat belts and cars.

Steve Melito: We certainly hope so. So, Jim, after everything you’ve just said and I’m sure you have a conversation like this with a lot of manufacturers do any of them come back and just say, Jim, just tell me what I gotta do and how do you answer that question? I do get that.

Jim Testo: Just tell me what I need to do and not need to do. Tell me what I have to do. Well, you don’t have to do anything. But if you don’t do this industrial hygiene monitoring and understand whether the person is overexposed to the standards and he gets sick and gets a disease, let’s say, from breathing in this chemical, and you did not do the right thing to understand that. What’s the regulation tells you you need to monitor. You know have to do anything. But here’s the risk Now and that’s what can happen. But once you know, I find that these industry leaders and these managers of these companies and run them, once they get the right information, they make the right decisions. Once they oh well, I didn’t know that could happen, you know I understand the risk they make the right decisions and this is why you’ll see in you know, certainly bigger organizations that the health and safety leaders are really important to the C-suite. Now you know they’re up there giving the right information. I think years ago to put not to put a negative word to health and safety practitioners, but I think they practiced compliance years ago and really wasn’t communicating the real hazards, you know, to the management and when I get business leaders and they get the right information, they make the right decisions. Yeah, that’s not good, good.

Steve Melito: So let’s end up on a positive note, which is there was a case study I’m sure you know about it Paul O’Neill from Alcoa. He eventually became secretary of the treasury, but back when he was CEO of Alcoa, he went in and talked to the shareholders about the importance of safety.

Jim Testo: Yeah, you know, I use that in my presentations to talk about you know the management, commitment and leadership. So what Paul did when he started, it goes back a number of years, I think in the late 80s, and his first presentation to the board was he started off, we need to talk about safety. And they looked at him and said yeah, yeah, yeah, but what about? You know production? What about sales? What about these? What are you gonna do? And he goes no, you didn’t hear me. We gotta talk about safety. We’re not getting that right and we don’t get that right, we can’t get anything else right and at the end of the day and then in the story, as like 10 years went on, or some of the years went on, he was the company, went from X profits to very profitable and obviously he did other things in the business. But his first approach was you’re not getting the safety right, we gotta fix that first.

Steve Melito: Got it, Jim. Thank you so much for being on New York State manufacturing now. No problem, appreciate it. All right, we’ve been talking to Jim Testo, the president of EHS risk management, about environmental, health and safety for manufacturers. You know it’s August right now, but it’ll be October before you know it, and that means that the New York State Innovation Summit is on the way. This year’s event will be held at the Saratoga City Center in Saratoga Hilton Hotel on October 16th and 17th. It’s an event you will not want to miss, and you’re invited to exhibit if you’re developing, commercializing or offering cutting edge products and technologies in New York State, and if you’re not, you can still join us as an attendee. Would you like to learn more than visit nysinnovationsummit.com, on behalf of FuzeHub in New York State manufacturing now, this is Steve Melito signing off.