“The significant positive impact of tax reform in the U.S. reinforces Novelis’ decision to expand at this time.”
Across the nation, manufacturers have demonstrated a firm resolve in protecting critical infrastructure, their facilities, and key assets from natural disasters, manmade hazards, and terrorism. Industry prudently engages in risk management planning and invests in security as a necessary component of its business operations. To achieve this, manufacturers need regulatory certainty to make appropriate, economically justifiable long-term investments to protect facilities’ threat and vulnerability conditions. Unfortunately, the U.S. Coast Guard (USCG)’s Transportation Worker Identification Credential (TWIC) Reader Requirements Final Rule (Final Rule) runs counter to manufacturers’ efforts to efficiently and effectively protect their facilities. In four short months, manufacturers must comply with a Final Rule that not only lacks regulatory certainty, but also creates significant logistical challenges for the regulated community.
The TWIC reader rulemaking was a long time in coming, as it took USCG several years to study readers’ performance, solicit and evaluate stakeholder feedback, and develop the rule. But when it emerged, the Final Rule was alarmingly flawed. Without notice, the scope of the Final Rule was expanded beyond what was initially proposed, and departed from established Coast Guard policy (PAC 20-04). Specifically, the Final Rule requires electronic TWIC inspections at facilities that only receive Certain Dangerous Cargoes (CDC) by non-maritime modes of transportation, such as truck or rail. It also requires electronic inspections at facilities that only receive, but do not unload, vessels containing CDCs. These changes did not go through public notice and comment – a clear violation of the Administrative Procedure Act.
Moreover, the TWIC Reader Rule is out of step with the new Administration’s regulatory reduction efforts. The rule runs counter to the White House executive order to reduce regulation burdens, as it would create substantial new regulatory burdens for manufacturing sites and for thousands of workers nationwide.
Congressionally-mandated assessments have called into question the effectiveness of the TWIC reader program. In May 2013, the Government Accountability Office (GAO) issued a report (GAO 13-198) that raised concerns about the TWIC reader program’s effectiveness in enhancing security. As a result, GAO called on Congress to halt the promulgation of a Final Rule until the assessment is completed. In December 2016, Congress passed legislation (PL 114-278) that requires the Department of Homeland Security (DHS) to conduct an assessment of the effectiveness of the TWIC program. DHS has yet to complete this critical assessment, but it is still moving forward and requiring that more TWIC readers be installed at more facilities and in more locations – despite uncertainty about their benefits. This situation is creating logistical challenges for facilities that are already in compliance with TWIC visual inspection requirements.
Importantly, for many months, industry expressed their concerns to DHS, the USCG, and Congress that the rulemaking process was undeniably flawed. The regulated community has relied on representations by the USCG that it would extend the Final Rule’s compliance date by three years, but this extension has not materialized. Industry is very concerned at the rapidly approaching deadline for the new rule, as manufacturers now lack the required lead time to sufficiently plan and install new equipment, infrastructure, software, and to train new employees.
Facility security remains a top priority for manufacturers and they want to ensure that their facilities are in compliance with all DHS and USCG regulations. With the compliance deadline looming, manufacturers concerns are growing as they remain in limbo. This flawed rule’s compliance deadline must be delayed while USCG addresses the critical issues regarding effectiveness of the new requirements and the scope of coverage.
The NAM is pleased to introduce a new NAFTA-focused web application, prepared by Esri, the world’s most advanced technology provider of GIS and location intelligence. The tool allows manufacturers, workers, policymakers and other individuals to view historical trade flows of manufactured goods across the NAFTA countries, including by individual state, groups of states, by year of imports and exports, and compared to global trade flows. In the near future, the web app will be expanded to include historical, interactive NAFTA import and export data, at the state level and by product category.
This interactive tool developed by Esri, together with a series of detailed state fact sheets released by the NAM on May 4, helps to underscore the importance of extensive NAFTA relationships for manufacturers of all sizes and sectors, across the United States.