Silica Risk Management for Lenders: Exposures, Obligations, and Resources

EBA TIP SHEET ###Silica Risk Management for Lenders: Exposures, Obligations, and Resources

(10/4/17)

Capsule:

  • Silica: Exposures, Obligations, and Resources.
  • A Lender’s perspective / Overview of actual v. perceived risks associated with silica.
  • Informal Lender Poll: Current approach to silica management in buildings.
  • Lending Considerations
  • Foreclosure/Owner Considerations
  • Review of compiled resources

A Lender’s perspective…

Why is silica even a consideration for a Lender today?

Liability is greatly increased with any and all potential illness/injury resulting from all work activity conducted by employees, contractors and sub-contractors.

1970 OSHA Occupational Safety and Health Act of 1970

General Duty Clause:

(a) Each employer --

(1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees;

(2) shall comply with occupational safety and health standards promulgated under this Act.

Basic information:

This tip sheet addresses the control of employee/contractor exposures to respirable dust containing crystalline silica, which is known to cause silicosis, a serious lung disease, as well as increase the risk of lung cancer and other systemic diseases. This sheet provides information on the effectiveness of various engineering control approaches for several kinds of construction operations and equipment, and contains recommendations for work practices and respiratory protection, as appropriate.

Exposure to fine particles of silica has been shown to cause silicosis, a serious and sometimes fatal lung disease. Construction employees/contractors who inhale fine particles of silica may be at risk of developing this disease. Employees produce dusts containing silica when they cut, grind, crush, or drill construction materials such as concrete, masonry, tile and rock. The small particles easily become suspended in the air and, when inhaled, penetrate deep into employees’ lungs.

Quartz is the most common form of crystalline silica. In fact, it is the second most common surface material accounting for almost 12% by volume of the earth’s crust. Quartz is present in many materials in the construction industry, such as brick and mortar, concrete, slate, dimensional stone (granite, sandstone), stone aggregate, tile, and sand used for blasting. Other construction materials that contain crystalline silica are asphalt filler, roofing granules, plastic composites, soils, and to a lesser extent, some wallboard joint compounds, paint, plaster, caulking and putty. Cristobalite, a less common form of crystalline silica, is formed at high temperatures (>1,470°C) in nature and by industrial processes. The ceramic and brick lining of boilers and vessels, some ceramic tiles, and volcanic ash contain cristobalite.

Regulations regarding silica include. Many state and local municipalities have additional requirements. Compliance, or non-compliance, with a multitude of regulations equals potential risk.

A building owner, or employer in the case of OSHA, is responsible for regulatory compliance but silica related release or exposure or compliance issue could affect an ability to repay a debt no differently than any other environmental issue.A building Property Condition Assessment might indicate certain building components are in need of repair or replacement. What if those components contain silica? Is there enough money in a renovation budget to accommodate this?Does this affect the value of a property? (In current design/build contracts, silica identification and management is typically included).

What is Silicosis?

Silicosis is an irreversible and sometimes fatal lung disease caused by inhaling silica dust into the lungs. As the oldest known occupational lung disease, silicosis had several names before it was finally identified and named, including stonemason's disease, dust consumption, potter's rot, grinder's rot, and rock tuberculosis.

The disease belongs to a group of lung disorders called pneumoconiosis. It's marked by the formation of "nodules" or lumps and fibrous scar tissue in the lungs. Individuals who develop silicosis have a higher risk of developing other serious conditions and diseases, including tuberculosis and lung cancer. The disease has no cure, and more than 250 Americans die from silicosis each year.

What Causes Silicosis?

Silicosis is caused by exposure to inhaled particles of silica. Because its development is directly associated with exposure to silica dust, it can be prevented with the use of respirators and other equipment designed to keep silica dust from entering the lungs. OSHA claims that, with properly working protective equipment, silicosis is 100% preventable.

Who is At Risk for Developing Silicosis?

At least 1.7 million American workers are employed in "at risk jobs" for developing silicosis. At risk jobs increase a worker's risk of developing a work-related illness.

Workers who are at risk for developing silicosis include:

  • Foundry workers
  • Miners
  • Potters and ceramics workers
  • Rock drillers
  • Sandblasters
  • Stonecutters
  • Tunnel workers
  • Bystanders are also at risk, since anyone who inhales silica dust from materials containing crystalline silica are at risk of developing silicosis.

Silica Due Diligence: The employer shall ensure that no employee is exposed to an airborne concentration of respirable crystalline silica in excess of 50 μg/m3, calculated as an 8-hour TWA.

Pitfalls in the Inspection Process:

1) Some local municipalities have their own requirements. It’s not only imperative to use contractors with proper licensing and insurance,but to also use those familiar with locationspecific requirements.

2) The purpose for conducting the silica inspection depends on the use of the report. There are OSHA surveys including air quality testing. Depending on the project and the local requirements there may be differing protocols.

3) Reports must be completed for the purpose intended. An inspection prior to development of an O&M Plan needs to meet the objectives of the building owner. Will the sampling be sufficient to delineate all suspectsilica materials or will there be materials assumed to be silica containing? A pre-demolition survey may need to meet the requirements of the local authority. Some municipalities review silica surveys prior to issuance of a demolition permit.

4) The report must be defensible. The sampling plan and execution should be well thought out and documented, and with corresponding descriptions of sampling strategies employed and why.Building plans and sampling maps should be included. Another inspector should be able to follow the logic and identify the various silica containing materials. This will become critical when handing the report off to maintenance manager.

5) The inspection must be performed with a current and appropriate Exposure Assessment (EA). Consultants that do not provide OSHA exposure monitoring and require proper PPE for their employees have no defense without an applicable EA. The building owner, in viewing asilica survey, may inadvertently cause an exposure to his/her employees.A building owner that hires a non-professional inspector is asking an untrained individual to violate Federal regulations.

Pitfalls in the Abatement Process:

1) As with inspection, state and local jurisdictions (including municipalities) have administrative as well as technical requirements, especially related to pre-work notifications and clearance protocol.

2) The local notification requirements and any other state or local project requirements can impact the schedule of the abatement. Some municipalities may not allow abatement or response actions to occur while portions of a building are occupied. Work may have to be performed during off hours, at night or on weekends. Scheduling subcontractors with these restrictions can impact the overall project schedule and cost.

3) Building systems may have to be shut down for the duration of a project. Electrical systems and HVAC may have to be shut down. Ifsilica components are removed, replacement materials will need to be installed. The removal of the silica is just one part of the overall project.

4) Employee and public notifications are a concern. Proper signage to avoid persons accessing a controlled space is a requirement of the regulations.How will employees or tenants impacted by a project be informed and protected?

5) What will be the clearance criteria for release of the contractor and re-population of the abatement area?How will this be performed and documented?

Pitfalls in the silica Management Plan:

1) The appropriateness of the silica Management Plan (Management Plan; of which,an O&MPlan is but one facet) is dependent on the collateral position of the lender. The risks are different for CMBS, SBA, conventional origination, foreclosure or trust situations. The chart below highlights the differences.The management of silica work, is further complicated by the risk tolerance of the lender, thoroughness of the silica survey, the assumptions included in the survey, and the perceptions of the planner.

2) If the survey is cursory and material categories include assumptions as silica-containing as a tradeoff to cost, then the Management Program will necessarily include many materials that may not contain silica but which must be treated as silica-containing unless proven otherwise. The Management Program may require comprehensive response actionsif the material in question is assumed to contain silica regardless of if it actually does. In short, without the comprehensive sampling and analysis of the material, the Management Plan will need to be conservative, which often results in the building owner (potentially the Lender or a trust) bearing the burden of the decisions made during the silica inspection.

3) Without proper work practices and EA, OSHA regulations require fullOSHA personal protective equipment (PPE)and monitoring for any silica-related work, even when the materials are only suspected to contain silica but have not been proven to contain silica. There is no reference within the rules that allows an owner or operator to assume negative for silica.The only option is to sample or assume positive. Therefore, any suspect material that has not been proven negative by sampling following the proper protocol must be assumed to be silica and treated as such.Sampling is conducted to prove negative, so until laboratory results are received, the inspector must assume that he/she is sampling silica.

Specified exposure control methods.

Objective data such as air monitoring data from industry-wide surveys or calculations based on the composition of a substance, demonstrating employee exposure to respirable crystalline silica associated with a particular product or material or a specific process, task, or activity. The data must reflect workplace conditions closely resembling or with a higher exposure potential than the processes, types of material, control methods, work practices, and environmental conditions in the employer's current operations.

For each employee engaged in a task identified on Table 1, the employer shall fully and properly implement the engineering controls, work practices, and respiratory protection specified for the task on Table 1, unless the employer assesses and limits the exposure of the employee to respirable crystalline silica in accordance with paragraph (d) of this section.

Equipment/task / Engineering and work practice control methods / Required respiratory protection and minimum assigned protection factor (APF)
≤ 4 hours/shift / >4 hours/shift
(i) Stationary masonry saws / Use saw equipped with integrated water delivery system that continuously feeds water to the blade
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions / None / None
(ii) Handheld power saws (any blade diameter) / Use saw equipped with integrated water delivery system that continuously feeds water to the blade
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions:
-When used outdoors / None / APF 10
-When used indoors or in an enclosed area / APF 10 / APF 10
(iii) Handheld power saws for cutting fiber-cement board (with blade diameter of 8 inches or less) / For tasks performed outdoors only:
Use saw equipped with commercially available dust collection system
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions
Dust collector must provide the air flow recommended by the tool manufacturer, or greater, and have a filter with 99% or greater efficiency / None / None
(iv) Walk-behind saws / Use saw equipped with integrated water delivery system that continuously feeds water to the blade
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions:
-When used outdoors / None / None
-When used indoors or in an enclosed area / APF 10 / APF 10
(v) Drivable saws / For tasks performed outdoors only:
Use saw equipped with integrated water delivery system that continuously feeds water to the blade
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions / None / None
(vi) Rig-mounted core saws or drills / Use tool equipped with integrated water delivery system that supplies water to cutting surface
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions / None / None
(vii) Handheld and stand-mounted drills (including impact and rotary hammer drills) / Use drill equipped with commercially available shroud or cowling with dust collection system
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions
Dust collector must provide the air flow recommended by the tool manufacturer, or greater, and have a filter with 99% or greater efficiency and a filter-cleaning mechanism
Use a HEPA-filtered vacuum when cleaning holes / None / None
(viii) Dowel drilling rigs for concrete / For tasks performed outdoors only:
Use shroud around drill bit with a dust collection system. Dust collector must have a filter with 99% or greater efficiency and a filter cleaning mechanism
Use a HEPA-filtered vacuum when cleaning holes / APF 10 / APF 10
(ix) Vehicle-mounted drilling rigs for rock and concrete / Use dust collection system with close capture hood or shroud around drill bit with a low-flow water spray to wet the dust at the discharge point from the dust collector / None / None
OR
Operate from within an enclosed cab and use water for dust suppression on drill bit / None / None
(x) Jackhammers and handheld powered chipping tools / Use tool with water delivery system that supplies a continuous stream or spray of water at the point of impact:
-When used outdoors / None / APF 10
-When used indoors or in an enclosed area / APF 10 / APF 10
OR
Use tool equipped with commercially available shroud and dust collection system
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions
Dust collector must provide the air flow recommended by the tool manufacturer, or greater, and have a filter with 99% or greater efficiency and a filter-cleaning mechanism:
-When used outdoors / None / APF 10
-When used indoors or in an enclosed area / APF 10 / APF 10
(xi) Handheld grinders for mortar removal (i.e., tuckpointing) / Use grinder equipped with commercially available shroud and dust collection system / APF 10 / APF 25
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions
Dust collector must provide 25 cubic feet per minute (cfm) or greater of airflow per inch of wheel diameter and have a filter with 99% or greater efficiency and a cyclonic pre-separator or filter-cleaning mechanism
(xii) Handheld grinders for uses other than mortar removal / For tasks performed outdoors only:
Use grinder equipped with integrated water delivery system that continuously feeds water to the grinding surface / None / None
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions
OR
Use grinder equipped with commercially available shroud and dust collection system
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions
Dust collector must provide 25 cubic feet per minute (cfm) or greater of airflow per inch of wheel diameter and have a filter with 99% or greater efficiency and a cyclonic pre-separator or filter-cleaning mechanism:
-When used outdoors / None / None
-When used indoors or in an enclosed area / None / APF 10
(xiii) Walk-behind milling machines and floor grinders / Use machine equipped with integrated water delivery system that continuously feeds water to the cutting surface / None / None
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions
OR
Use machine equipped with dust collection system recommended by the manufacturer / None / None
Operate and maintain tool in accordance with manufacturer's instructions to minimize dust emissions
Dust collector must provide the air flow recommended by the manufacturer, or greater, and have a filter with 99% or greater efficiency and a filter-cleaning mechanism
When used indoors or in an enclosed area, use a HEPA-filtered vacuum to remove loose dust in between passes
(xiv) Small drivable milling machines (less than half-lane) / Use a machine equipped with supplemental water sprays designed to suppress dust. Water must be combined with a surfactant / None / None
Operate and maintain machine to minimize dust emissions
(xv) Large drivable milling machines (half-lane and larger) / For cuts of any depth on asphalt only:
Use machine equipped with exhaust ventilation on drum enclosure and supplemental water sprays designed to suppress dust / None / None
Operate and maintain machine to minimize dust emissions
For cuts of four inches in depth or less on any substrate:
Use machine equipped with exhaust ventilation on drum enclosure and supplemental water sprays designed to suppress dust / None / None
Operate and maintain machine to minimize dust emissions
OR
Use a machine equipped with supplemental water spray designed to suppress dust. Water must be combined with a surfactant / None / None
Operate and maintain machine to minimize dust emissions
(xvi) Crushing machines / Use equipment designed to deliver water spray or mist for dust suppression at crusher and other points where dust is generated (e.g., hoppers, conveyers, sieves/sizing or vibrating components, and discharge points) / None / None
Operate and maintain machine in accordance with manufacturer's instructions to minimize dust emissions
Use a ventilated booth that provides fresh, climate-controlled air to the operator, or a remote control station
(xvii) Heavy equipment and utility vehicles used to abrade or fracture silica-containing materials (e.g., hoe-ramming, rock ripping) or used during demolition activities involving silica-containing materials / Operate equipment from within an enclosed cab / None / None
When employees outside of the cab are engaged in the task, apply water and/or dust suppressants as necessary to minimize dust emissions / None / None
(xviii) Heavy equipment and utility vehicles for tasks such as grading and excavating but not including: Demolishing, abrading, or fracturing silica-containing materials / Apply water and/or dust suppressants as necessary to minimize dust emissions / None / None
OR
When the equipment operator is the only employee engaged in the task, operate equipment from within an enclosed cab / None / None
29 CFR 1926.1153 Appendix AMethods of Sample Analysis:

This This appendix specifies the procedures for analyzing air samples for respirable crystalline silica, as well as the quality control procedures that employers must ensure that laboratories use when performing an analysis required under 29 CFR 1926.1153 (d)(2)(v). Employers must ensure that such a laboratory: