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ERA's Environmental Compliance Management Blog

GHS: Weighing the Costs and Benefits

Posted by Ria Mali

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It seems as though the GHS implementation has gone underway without allowing manufactures and distributors the time to process what exactly is going on. This short piece will give you the how and why of the UN’s Globally Harmonized System and what its implementation really means for your business.

First, the basics:

The GHS System was agreed upon at the international level and adopted by the UN in 2002. The GHS is not meant to change the scope and framework of OSHA HCS, but certain modifications have been put in place. Under the GHS, hazard classification, labels and safety data sheets have been standardized to increase quality and consistency of information provided to workers.  The GHS provides a single set of harmonized criteria for classifying chemicals according to their health, physical and environmental hazards. It also specifies hazard communication elements for labeling and safety data sheets.

Overall there is a common goal of decreasing risk, which is what the GHS will ultimately do. GHS is a means to address some of the confusing aspects of risk communication through consistent symbols, signal words and hazard statements

Major proposed changes to the HCS:

  • Hazard classification: Provides specific criteria for classification of health and physical hazards, as well as classification of mixtures.

  • Labels: Chemical manufacturers and importers will be required to provide a label that includes a harmonized signal word, pictogram, and hazard statement for each hazard class and category. Precautionary statements must also be provided.

  • Safety Data Sheets: Will now have a specified 16-section format.

  • Information and training: The GHS does not address training. However, the proposed HCS will require that workers are trained within two years of the publication of the final rule to facilitate recognition and understanding of the new labels and safety data sheets.

SDS compliance

Costs

Industries affected by the GHS would likely have to incur a one-time transition cost associated with compliance with HCS 2012. This cost would be spread across a three year phase in period and includes reclassifying all chemicals, training employees to recognize GHS label and SDS formats and to becoming familiar with the modified HCS Standard.

Along with this transition cost, an annual compliance cost is expected, but should not exceed existing standard. OSHA estimates annualized compliance cost of the proposed standard of approximately $97 million per year.

For an estimated 90, 000 establishments, OSHA approximates a cost of $11 million a year on an annualized basis to classify chemical hazards and revise SDSs and labels in accordance with the GHS criteria.

For all affected workplaces, OSHA estimates a cost of $44 million a year on an annualized basis to train workers to become familiar with new warning symbols and the revised safety data sheet format under GHS.

Lastly, OSHA estimated annualized costs of $42 million a year for management to become familiar with the new GHS system and to engage in other management-related activities as may be necessary for industry's adoption of GHS.

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Benefits

The GHS will reduce the cost of providing hazard information by eliminating the need to reproduce different versions of labels and SDSs involved in international trade. The GHS framework itself will also be applied to develop regulations in countries without existing systems. Adopting an internationally comprehensible system will facilitate trade.

The primary benefit of adopting the GHS is to increase the quality and consistency of information provided to workers and chemical users. Through a standardized approach to classifying chemicals and formatting SDSs and labels, the GHS will improve employee understanding and employee health and safety at an international level. The standardized classification system will reduce the need for testing and evaluating chemicals against multiple classification systems while standardized SDS and label formats aim to reduce the compliance burden and help workers exposed to chemicals access and understand information more efficiently.

Enhanced worker comprehension will result in appropriate handling and use of chemicals and thereby reduce workplace incidents, fatalities, injuries, and illnesses associated with exposures to hazardous chemicals. For the government, the application of the GHS will reduce the costs of enforcement and improve domestic and international reputation on chemical issues.

OSHA estimates that the revised HCS will prevent 43 fatalities and 585 injuries and illnesses (318 non-lost-workday injuries and illnesses, 203 lost-workday injuries and illnesses, and 64 chronic illnesses) annually. The annualized monetized benefits associated with these reductions in safety and health risks are an estimated $266 million a year. OSHA estimates additional annualized benefits of $585 million a year from cost reductions and productivity improvements attributable to the proposed revisions. In total, OSHA estimates that the proposed revisions will provide net annualized savings of $754 million a year.”

OSHA estimates that the revised HCS will result in savings of $475.2 million from productivity improvements for health and safety managers and logistics personnel, $32.2 million during periodic updating of SDSs and labels, and $285.3 million from simplified hazard communication training.”

For companies, this safer work environment directly translates into an improved corporate image because employees are kept safe and treated properly. Speaking of employees, a safer work environment will lead to better relations with employees. Finally, reduced costs of accidents and of compliance with hazard communication regulations will save your company money.

Overall, the application of the GHS through OSHA should have a net positive impact. OSHA anticipates that, in addition to safety and health benefits, the revised HCS also offers three types of productivity benefits: First, chemical manufacturers will need to produce fewer SDSs in the future Second, employees will benefit by training new employees only once, on GHS labels and SDSs as required by the law Third, firms considering international trade will benefit from standardized guidelines across borders.

Now you understand why the GHS came about and how it is going to affect the Health and SAfety Industry. If you are thiinking of tackling the next steps of reclassifying your hazardous chemicals and re-authoring your SDSs, download our GHS SDS Authoring Handbook to help you get started.

Ask an ERA Expert:

Are you transitioning to the GHS in your business? Do you have any questions or concerns about the topic covered in this article? Want more insight? Now is your chance to ask one of ERA’s Environmental Specialists. Please leave your question or comment below and we’ll make sure one of our expert scientists responds. 

Get Your GHS SDS Authoring Handbook

Ask our SDS Specialist: Fulvio DeSantis is an SDS Authoring and Management expert at ERA Enviromental. If you have any questions about your GHS transition or SDS upkeep contact Fulvio at fulvio.desantis@era-ehs.com

Topics: SDS