Tales from DC: Cass Sunstein and Future of Voluntary Consensus Standards at SBA
From Adele Abrams, Esq., ASSE’s Federal Representative –
On May 18, 2012, I represented ASSE at the bi-monthly meeting of the Small Business Administration’s OSHA/MSHA roundtable. This was a special event, featuring OIRA Administrator Cass Sunstein, who gave a presentation on old and new Executive Orders affecting the regulatory process, so there were approximately 100 lobbyists in attendance (about twice the usual number). Also attending were a number of OSHA officials, including David Michaels, Jordan Barab and Dorothy Dougherty, MSHA official Patricia Silvey, and Adam Naill, of the Senate HELP majority staff.
Mr.Sunstein discussed Executive Order 13563 (which reaffirmed E.O. 12866), which emphasizes the importance of the Regulatory Flexibility Act in job creation, and calls on the agencies to consider the cumulative effects of regulations on business. A new E.O. is coming that will address retrospective review of regulations. Sunstein said that OSHA and MSHA have done “a spectacular job” in protecting employees and have accomplished a lot in a short period. He noted that his father had a small construction company and “business prospers when workers are safe.” The best efforts involve public/private partnerships but the national debate over regulations has become polarized and there is a need to go beyond sound bites and focus on evidence and data, rather than being driven by interests or dogma.
He noted a recent report that says OSHA regulations have no adverse impact on jobs, and he said that SBA’s job is to screen rules that are not justified and to improve those that are justified. One new E.O. addresses international regulatory cooperation, to increase business and improve safety, and he referenced the new OSHA GHS rule as a good example of a rule that can reduce trade parries.
He said that OIRA carefully considers regulatory costs/benefits and that since Obama came into office, there has been $91 billion in net benefits from regulations. Retrospective review makes sense because some rules no longer make sense due to technological improvements or industry changes (e.g., the vapor recovery regulations of EPA that are no longer needed because newer autos capture vapors). He favors retrospective analysis that can be data-driven, because most rules are analyzed at the proposal stage, when no data is really available. He added that a study shows that agencies overestimate the costs of regulations (rather than underestimate them) and this is because they rely on industry input, and there is an incentive to inflate costs.
The new requirements in E.O. 13563 that are not included in 12866 include:
- Requiring agencies to harmonize and simplify rules
- Focus on flexible approaches that maintain freedom of choice for the regulated entities
- Emphasize public participation, using the internet to promote an exchange of views on proposed rules (through www.regulations.gov), and discussing initiatives before proposing rules (he said the SBA Office of Advocacy plays a key role in doing this)
- International regulatory cooperation, to eliminate disparate requirements across borders which can hurt companies through unjustified costs and also hurt worker safety (examples are equivalents for compliance in electrical equipment) between USA, Mexico and Canada.
The two new Executive Orders are 13609 (promote international regulatory cooperation) and 13610 (institutionalizing the regulatory lookback). In addition, OIRA will chair an interagency group to figure out how to promote safety and health rules while avoiding increased costs concerning international cooperation.
During the Q/A session, there was discussion about the proposed closure of the NIOSH Lake Lynn mine research facility, which may hurt the ability to inform regulatory decisions. Sunstein said OIRA has no say in budget issues, but OMB does. It was noted that while OIRA advocates basing regulations on sound data, regulations are not based on current data or cost estimates and OIRA should encourage agencies to take these responsibilities seriously. Sunstein responded that public input is critical in cost/benefit analyses.
There was also discussion about the use of guidance to sidestep regulatory review, and the fact that some agency rules do not meet the “significant economic impact” threshold to trigger application of E.O. 12866, yet they have a significant impact on the smaller sector(s) that are affected and should get reviewed. Sunstein defended OSHA, saying that it does a good job on policy and guidance documents and while it could be bad policy to use guidance in lieu of rulemaking, significant guidance documents must still go through OIRA review and that more guidance documents are being published for public comment, even though they are not binding as a matter of law.
The next speaker was Jordan Barab, who briefly addressed the new GAO report on incentive programs and the OSHA policy on incentive/disciplinary programs that could suppress reporting of injuries and illnesses. GAO has asked OSHA to take action on this, especially regarding VPP and SHARP participants and also to include information on incentive/discipline programs in the next update to the Field Operations Manual. Barab discussed that such programs could violate Sec. 11C of the OSH Act and 29 CFR Part 1904. He added that the policy is an interpretation of existing law, not a new requirement, and added that there are no good data on how prevalent such programs are, but that many VPP participants have them.
SBA’s Bruce Lundegren next gave a report on the meeting last week on the ACUS recommendations concerning incorporation by reference of national consensus standards. The issue involves a Petition filed with the Office of Federal Register that it clarify the term “reasonably available” to mean available free of charge. The legal issue is whether the government can freely publish copyrighted material. The OFR comment period ends June 1, 2012.
Lundegren said there was no consensus reached at the roundtable last week, but a common suggestion has been to make the standards available in the OSHA docket and on the website in “read only” formats, and he reviewed issues with the Technology Transfer Act and OMB Circular A-119 (which implements the mandate for government agencies to use consensus standards when doing a rulemaking, unless they articulate a good reason not to do so).
On March 30, 2012, OMB requested comment about modifications to A-119 and it has now extended the comment deadline until June 1, 2012, to conform with the related OFR comment period. He added that in one FY 2012 appropriations bill there was a rider dealing with an agency within Department of Transportation, and the rider prohibited that agency from using consensus standards unless they were available for free. This could be included in future bills funding other agencies.
During discussion of the issue, Larry Halprin (Keller & Heckman) noted that it is important to have the standards available for review during proposed rule comment periods, not just available as part of a final rule. I noted the ASSE concerns about SDOs ability to recover standard development costs, that eliminating copyright could have a chilling effect on development of new standards and revision of existing standards, and the fact that most ANSI standards cost $75 or less. Others discussed that small business is often precluded from participating in development of consensus standards, and Lundegren encouraged reports on “horror stories” for SBA’s meeting with OMB on this issue, so they will know when things “go wrong” and “people are shut out.”
The final representation was by Art Sapper, Esq., who recently won a key decision against OSHA in the Volks case, which held that OSHA is strictly bound to a six-month statute of limitations from the date of a violation to the issuance of the related citation. The issue in that case, which was decided by the US Court of Appeals, DC Circuit, was recordkeeping violations that were cited based on a review of five years’ worth of OSHA logs. Sapper said that, under this holding, 100 percent of the citations issued for underreporting by OSHA during its recent Recordkeeping NEP will have to be vacated, but that the decision is not a complete “get out of jail free” card concerning recordkeeping, and that employers must still update and correct old logs when they learn that there are errors or receive new information on injuries/illnesses that were not originally listed. Failure to correct logs that have been certified by a company official could lead to criminal prosecution. In addition, the statute of limitations might not be applied where there has been an effort to fraudulently conceal hazardous conditions. He added that one of the concurring judges noted that “Chevron deference” is not due to OSHA when it interprets its statute of limitations, because that is a limitation on its power, not a grant of power (as would be regulatory authority).
The next meeting will be July 20, 2012.