According to the technical definition of a two-quarter economic slump, we are in an official recession in Canada. While I’m not an economist, I would venture to guess that commodity prices, especially crude oil prices dropping so dramatically, have had a disproportionate impact on the Canadian economy.
In any regard, as businesses mull over what this may or may not mean to future demands for goods and services, including at least a consideration of consolidation, we thought this might be a good time to revisit the topic of plant closures and decommissioning.
The truth is, regardless of the economy, we know that consolidations and plant closures are a routine part of the business cycle. However, as you develop your strategy, consider the legal, technical, and regulatory issues that may apply to your facility.
Environmental Considerations When Closing Manufacturing Plants
These environmental considerations may be helpful as you begin to contemplate site closure activities.
1. What is the planned use of the property after closure? Will the property be sold, donated, or redeveloped? Are the structures going to be reused, mothballed, or demolished? Starting with the end in mind will help you strategize appropriately.
2. Develop a list of all environmental permits (e.g., Environmental Compliance Approvals) and plans (air, water, wastewater, hazardous waste). These permits will have to be closed out with the Ministry of the Environment and Climate Change, Environment Canada, Technical Standards and Safety Authority (TSSA), and local municipalities. If you are no longer operating a facility, make sure your National Pollutant Release Inventory data is updated as well.
3. Conduct a designated substance survey. The handling and disposal of certain materials and wastes are regulated. These materials can include asbestos, lead, mercury, PCBs, refrigerants, etc. Some of the potential sources include building materials, paint, switches, lights, ballasts, batteries, transformers, and cooling systems. A thorough inventory makes for a more efficient removal and fewer surprises during the demolition process.
4. Inventory current and historical aboveground storage tanks (ASTs) and underground storage tanks (USTs). This may require some investigation of historical documents and blue prints. It can also be beneficial to interview senior employees with regard to chemical-storage and waste-storage activities. The TSSA must be notified of removal of USTs that are no longer in use.
5. Are there any historical hazardous waste-storage areas? These areas may require some special consideration during site closure and remediation.
6. Are there press pits and process tanks associated with the current machinery? Their structural integrity should be evaluated and the contents removed for recycling or disposal.
7. Is there a wastewater treatment plant associated with the facility? If so, there may be treatment chemicals to consider (possibly returned to the manufacturer) and permits with municipalities to consider. The integrity of the treatment tanks and chemical storage containers should also be evaluated.
8. Transformers should be inspected and possibly drained. Fluids should be tested for PCBs unless a record of prior testing and certification is available. Any equipment no longer containing PCBs should be properly decommissioned.
9. Is there air discharge abatement equipment on the property? If there are contaminated media or bag houses, make sure they are properly disposed.
10. Other wastes or raw products stored in various locations can be problematic if they are not considered during the initial inventory. Look for satellite storage areas and cabinets used to store solvents, paints, and other chemicals.
11. How will you protect the local sewer system (sanitary and storm) from illicit discharges, both during the decommissioning and after you have vacated the property?
12. What level of security will be appropriate for the property? Will you need fencing, lighting, locks, and protection on windows? Security measures could be intended to protect against vandalism, theft, or exposure of third parties to any hazardous conditions remaining on the property.
13. Whether you are going to prepare the building for sale or you raze the facility, you need to consider how you will handle the subsequent spoils. If you are preparing for future sale, how will you handle wash water and sludge? If demolishing, how will you handle the debris? It is important to know how you are going to answer these questions long before you begin.
14. Is environmental remediation required under existing regulations? If not, do investigation and/or remediation make the property more marketable? What are the cost benefits of physically remediating the impacted areas verses restricting future uses at the property?
15. Finally, you need to factor in working with regulators at various stages along with potential delays in approvals.
These are just some of the many considerations for facility closures/ decommissions. Bringing together the right team will make the process considerably smoother, more cost effective, and, hopefully, allow you to move the property more quickly to reuse or sale.
If you have any questions or would like to talk to one of our staff about how we can assist you in your efforts, contact me (cpare@dragun.com) at 519.979.7300, ext. 114.