Congress and the White House Rein in a Flawed Chemical Security Regulation

Numerous national security issues dominate the attention of policymakers today – border security, cybersecurity, North Korea, and Iran easily come to mind. While these are weighty subjects, it’s also important that we don’t lose sight of other key economic and homeland security priorities, including protecting our nation’s chemical manufacturing facilities.

The U.S. Chamber of Commerce and the American Chemistry Council (ACC) commend Congress for passing and the president for signing H.R. 5729, the Transportation Worker Identification Credential Accountability Act of 2018 (P.L. 115-230). This bipartisan legislation, authored by Rep. John Katko (R-NY), constructively addresses a critical screening program for workers who access high-risk chemical facilities.

The new law pushes the Department of Homeland Security (DHS) to complete a long overdue review of the effectiveness of the Transportation Worker Identification Credential (TWIC) program before compelling chemical entities to implement the Coast Guard’s 2016 TWIC reader rule.

Two years ago, Congress mandated a study of the TWIC reader pilot in response to a Government Accountability Office (GAO) report that raised serious questions about the weaknesses of the program. Among its conclusions, GAO said, “With potentially billions of dollars needed to implement the TWIC program, it is important that DHS provide effective stewardship of taxpayer funds and avoid requiring [chemical facilities] to invest in a program that may not achieve its stated goals. DHS estimates that implementing the TWIC program could cost the federal government and the private sector a combined total of as much as $3 billion over a 10-year period.”

In addition to granting DHS additional time to assess the TWIC program, the Katko legislation halts the implementation of the defective reader rule, which would force companies to install and use TWIC cards with readers at considerable expense. Without the much-needed pause provided by H.R. 5729, the new regulation was set to become effective later this month.

What’s notable, the Coast Guard’s 2013 proposed rulemaking benefited from broad industry input. However, when the final requirements surfaced in 2016, it became apparent that the agency made problematic amendments to the rule without sufficient justification and engagement with the business community, striking many as a clear violation of the Administrative Procedure Act.

The scope of the final rule went well beyond what officials initially suggested and departed from established Coast Guard policy. In particular, the regulation increased both the number of facilities and the number of points of entry subject to the rule. We estimate that there would be a massive 276% increase in the number of facilities covered from 532 to approximately 2,000 as a result of the unwarranted change in scope.

The statute that authorized the TWIC reader rule, the Maritime Transportation Security Act (MTSA), allows the Coast Guard to impose security measures (e.g., TWIC readers) on covered entities only to the extent that they’re necessary to deter or mitigate transportation security incidents. Yet the final rule neither acknowledged nor justified the dramatic increases in regulated facilities—and the corresponding hike in businesses’ compliance burdens—compared with the proposed rulemaking. The bottom line is that the TWIC reader requirement is faulty and out of step with the White House’s executive order to reduce regulation and control regulatory costs.

The U.S. Chamber and ACC have significant concerns with the TWIC reader rule. Still, we are pleased that Congress and the White House responded quickly to an urgent business, security, and policy need. Chemical security stakeholders in the public and private sectors are trying to achieve the same goal—enhanced security and resilience at high-risk facilities. The new law creates an opportunity for DHS, the Coast Guard, and industry to move ahead on a new and improved TWIC reader rule that leads to a stronger worker screening program and improves chemical facility security.

About the authors

Matthew J. Eggers

​Matthew J. Eggers is vice president of cybersecurity policy in the Cyber, Intelligence, and Security division at the U.S. Chamber of Commerce.

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Bill Erny