April 9, 2015

RCRA Issues at Third-Party Warehouses

A chemical company stores some of its products in containers at a warehouse owned by a separate company. Periodically, warehouse personnel will be the cause of a spill or damaged container resulting in the generation of waste. For example, warehouse personnel driving a forklift could cause a drum to fall off of a pallet or a fork to puncture a container, either of which could cause a spill of product and generation of hazardous waste. In other situations, the chemical company decides a particular batch of product at the warehouse is not sellable and makes the decision that that batch is a waste needing disposal. “Generator” is defined in §260.10 as the “person, by site, whose act or process produces hazardous waste . . . or whose act first causes a hazardous waste to become subject to regulation.” Who is the generator of hazardous waste—the warehouse or the chemical company?

In the instance of warehouse personnel causing a spill or damage to a container resulting in product that is not sellable, the warehouse’s act produces hazardous waste, so the warehouse is a generator. However, the chemical company would also be a generator, since EPA has noted: “The owner of the product or raw material being stored or transported . . . also fits the definition of ‘generator’ of the hazardous waste . . . .” [October 30, 1980; 45 FR 72026] Thus, the warehouse and chemical company would be cogenerators, and the two parties need to agree (in writing) who will take on the generator responsibilities (e.g., 90/180-day accumulation, container inspections, recordkeeping, manifesting, etc.). We have seen two common hazardous waste management scenarios at third-party warehouses:

The cleanest approach (although not one the warehouse usually likes) is to have the owner of the warehouse agree to be the generator of hazardous wastes that are generated at the warehouse as a result of storing the chemical company’s products. Thus, the warehouse gets an EPA ID number from the state and represents itself as the generator whenever hazardous wastes are generated, accumulated, and then manifested offsite (i.e., the warehouse company’s name/EPA ID number go on the manifest in the generator blocks—not the chemical company’s name). The chemical company could subsequently reimburses the warehouse for those hazardous waste disposal costs/activities. In this case, the warehouse is a cogenerator of the hazardous waste and the two companies have decided the warehouse will be responsible for complying with the RCRA generator responsibilities.
If the warehouse refuses to be the generator of record or if the chemical company would prefer to retain the generator responsibilities, the chemical company can be the generator of record for hazardous wastes generated as a result of storing its products at the warehouse. In this scenario, the chemical company must obtain an EPA ID number from the state for the warehouse site and represent itself as the generator whenever hazardous wastes are generated, accumulated, and then manifested offsite (i.e., the chemical company’s name/EPA ID number go on the manifest in the generator blocks—not the warehouse’s). It may be possible for the chemical company to obtain a provisional or temporary EPA ID number for this purpose. When we have seen this approach implemented, someone from the chemical company had to periodically commute to the warehouse and sign the manifest when that company’s hazardous wastes were transported offsite.

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This document addresses issues of a general nature related to the federal RCRA regulations. Persons evaluating specific circumstances dealing with the RCRA regulations should review state and local laws and regulations, which may be more stringent than federal requirements. In addition, the assistance of a qualified professional should be enlisted to address any site-specific circumstances.