Fiene Grieger Novara, November 6, 2013

1. TRIAL – Threat Identification And Assessment against Chemical Supply Chains Case Study from ISW Institute, Halle, Germany Fiene GriegerNovara, November 6, 2013

2. Content: • Improving Safety of dangerous goods following responsible care principles • Improving emergency and crisis management systems for the chemical industry • Improving cooperation between chemical companies and public authorities • Identifying threats and risks related to the security of dangerous goods transport • Reflecting special needs of intermodal transport (rail / road) • Increasing transparency of supply chains by providing better information about location and status of transport via tracking and tracing • Ensuring functionality of safe supply chains for intermodal transport

3. Global Charter: (1) The global chemicalindustry‘s environmental, healthandsafety (EH&S) initiative todrive Continuousimprovement in performance. This objectiveisachievedbygoingbeyond legislative andregulatorycomplianceandby adoptingcooperativeandvoluntary initiatives withgovernmentandstakeholders. Responsible Care isboth an ethicand a commitmentthatseekstobuildconfidenceandtrust In an industrythatis essential toimprovinglivingstandardsandthequalityoflife. The charterarosefrom an examinationofchemicalindustrypraticesandperformance. Itevolvedfromthe mid-1980‘s, and was shapedbyconsideringtherecommendationsof independentstakeholdersfromaroundtheworld.

4. Global Charter (2) The charter also focusses on newandimportantchallengesfacingthechemicalindustry andthe global society, includingthegrowingpublicdialogueoversustainabledevelopment. Includedare also publichealthissuesrelatedtotheuseofchemicalproducts, theneedfor greaterindustrytransparency, andtheopportunitytoachievegreaterharmonization. The International Council of Chemical Associations (ICCA), throughResponsible Care, will continuetoundertakeactionsconsistentwiththe environmental principlesofthe United Nations Global Compact. www.isw-institut.de

5. The Responsible Care Global Charter ContainsNine Key Elements: Adopt Global Responsible Care Core Principles 2. Implement Fundamental Features of National Responsbile Care Programs 3. Commit toAdvancingSustainable Development 4. ContinuouslyImproveand Report Performance 5. Enhacethe Management of Chemical Products Worldwide - ProductStewardship – 6. Champion andFacilitatethe Extension ofResponsible Care alongthe Chemical Industry‘s Value Chains 7. Activelysupport National and Global Responsilbe Care GovernanceProcesses 8. AddressStakeholderExpectationsabout Chemical Industry‘s Activitiesand Products 9. ProvideAppropriate Resources toEffectivelyImplementResponsible Care www.isw-institut.de

6. ProductStewardship: • ProductStewardshipissues will increasinglyshapetheResponsible Care • initiatives in futureyears • National Associationswiththeirmembercompanies will committothisconcertedeffort • A ProductStewardship Manual existfor all relevant Chemical Products, whichcovers: • The Chemical Processes in whichthese Products areproduced • Guidelines for Customers forhandlingtheseproducts • Guidelines for Service Providers forstorage, transportationandhandling • Guidelines for potential disposal • The purposeofthemanualistomakehealth, safetyand environmental protection • an integral partofdesigning, manufacturing, marketing, distributing, using, recycling • anddisposingofchemicalproducts www.isw-institut.de

7. Exampleof a ProductStewardship Manual forButadiene: www.isw-institut.de

8. Material Safety Data Sheets (MSDS): • Material Safety Data Sheets areissuedbythe Producer of a Product • Itcontainsinformationabout: • Classificationfortransportandstorage • REACH registrationnumber • Labellingregulationsforstorageandshipping • First aidmeasures • Firefightingmeasures • Accidentalreleasemeasures (personal precautionsandprotection) • Exposurecontrols, Personal protection • Physicalandchemicalproperties • StabilityandReactivity • Toxicologicalinformation • Ecologicalinformation • Disposalconsiderations • Material Safety Data Sheets arehanded out to all parties in a supplychain www.isw-institut.de

9. Example of a Material Safety Data Sheet for Butadiene: www.isw-institut.de

10. Distribution Risk Management • Distribution Risk Management is a continuous process in the chemical industry, and covers the following activities: • Distribution Risk Review process • Ship vetting process • Warehouse/terminal selection audits • Securement audits • Carrier selection/safety reviews • EH&S Integrated Audits • Materials Distribution Compliance Verification • Chemical weapons list • Security-sensitive products • Embargoed countries www.isw-institut.de

11. Distribution Risk Management: Business Risk Review Work Process • The industry has many tools that are designed to evaluate risks. • All of these tools, including the Distribution Risk Review process, are integral parts of the Business Risk Review work process. DRR Distribution Risk Reviews www.isw-institut.de

12. The Chemical Distribution Institute (CDI) The CDI is incorporated under the law of the Netherlands as the Stichting Chemical Distribution Institute (CDI) and operates as a non-profit making foundation. www.isw-institut.de

13. Safety & Quality Assessment System (SQAS): • SQAS is a systemtoevaluatethequality. Safety, securityand environmental • performanceofLogistic Service Providers and Chemical Distributors. • Itis a standardizedassesmentcarried out byindependentassessorsusing • a standardquestionannaire. • SQAS assessments do not leadto a certificate, like ISO. • Itis a factualdetailedreportwhicheachchemicalcompanyneedstoevaulate • accordingto ist ownrequirements. • SQAS was inventedas an industry initiative in 1994. • Sincethen all relevant serviceprovidersareassessed • Today thechemicalindsutryonlyacceptsserviceproviderswhichare SQAS assessed www.isw-institut.de

14. Transport-Unfall-Informations- und Hilfeleistungssystem (TUIS) • TUIS is a mutual helpsystemofthechemicalindustry in Germany forspecialist • counselingduringtransportincidents • The system was started back in 1982 in Germany, andspanstoday also over • various countries in West- and Central-Europe • In caseofincidentspublicauthoritiesandcivilserviceshavetheopportunityto • approachthissystem 24 hours per day. • The specialistcounselingcancover: • Consultations via phone • Specialistcounseling on siteoftheincident • Technical support on siteoftheincident • The consultationsandtechnicalsupportof TUIS havetheadvantage, thattheycombine • supportfromfollwingexperts in theprocess: • Chemical expertsoftheproductioncompany • EcologistsandToxicologists • Medical scientists • SpecialistsoftheFireBrigades www.isw-institut.de

15. Cooperationbetween Chemical Companies and Public Authorities: • Chemical Companies typicallymaintain a closecooperationwithauthorities • The goalistoprovidetransparencyandbuildtrust • Thereareregular „Safety Days“ organized in thechemicalindustryinvolving: • Localpublicauthorities • Logistic Service Providers • Local Police • LocalFireBrigades • In additionthechemicalassociationskeepclosecontacttotheFederal Government • „Open Days“ areorganized on a regularbasisinvolvingbasically all relevant players • in thechemicalindustrytobuildtrust in theneighborhood www.isw-institut.de

16. ThreatsandRisksrelatedtothesecurity ofdangerousgoodstransport www.isw-institut.de

17. www.isw-institut.de

18. Low Guarded Elevated High Severe Risk of Maritime Piracy - All Cargo Types www.isw-institut.de

19. Low Guarded Elevated High Severe Terrorism Risk www.isw-institut.de

20. Low Guarded Elevated High Severe Counterfeiting Risk www.isw-institut.de

21. NATIONAL STRATEGY FOR GLOBAL SUPPLY CHAIN SECURITY JANUARY 2 01 2 SignedbyPresident Obama www.isw-institut.de

22. Executive Summary International trade has been and continues to be a powerful engine of United States and global economic growth. In recent years, communications technology advances and trade barrier and production cost reductions have contributed to global capital market expansion and new economic opportunity. The global supply chain system that supports this trade is essential to the United States’ economy and is a critical global asset. Through the National Strategy for Global Supply Chain Security (the Strategy), we articulate the United States Government’s policy to strengthen the global supply chain in order to protect the welfare and interests of the American people and secure our Nation’s economic prosperity. Our focus in this Strategy is the worldwide network of transportation, postal, and shipping pathways, assets, and infrastructures by which goods are moved from the point of manufacture until they reach an end consumer, as well as supporting communications infrastructure and systems. www.isw-institut.de

23. The Strategy includes two goals: Goal 1: Promote the Efficient and Secure Movement of Goods – The first goal of the Strategy is to promote the timely, efficient flow of legitimate commerce while protecting and securing the supply chain from exploitation, and reducing its vulnerability to disruption. Goal 2: Foster a Resilient Supply Chain – The second goal of the Strategy is to foster a global supply chain system that is prepared for, and can withstand, evolving threats and hazards and can recover rapidly from disruptions. Our approach is informed by the following guiding principles: •• Galvanize Action – Integrate and spur efforts across the United States Government, as well as with state, local, tribal and territorial governments, the private sector and the international community. •• Manage Supply Chain Risk – Identify, assess, and prioritize efforts to manage risk by utilizing layered defenses, and adapting our security posture according to the changing security and operational environment. www.isw-institut.de

24. NATIONAL STRATEGY FOR GLOBAL SUPPLY CHAIN SECURITY www.isw-institut.de

25. Source: CEFIC andDeloitte www.isw-institut.de

26. Source: CEFIC andDeloitte www.isw-institut.de

27. Source: CEFIC andDeloitte www.isw-institut.de

28. www.isw-institut.de

29. www.isw-institut.de

30. The Chemical Industry wants to be ahead of the Regulators, by • Enabling Modal Shift away from Road Transport • In accordance with the White book Logistic of the European Commission • Providing a common Data Structure and Regulatory Framework • Increasing the Efficiency of the logistic Processes • Real-Time Information of the entire Logistic Chains • Raising the Transparency and Sustainability of Logistic Chains • Providing Information in electronic form • About Hazardous Chemical Goods in transit • Ensuring Data Protection of sensible Information • Improving Interaction with Emergency Management Systems • Improving the logistical accessibility with focus on the East European Market • To strengthen the Competitiveness of the European Chemical Industry www.isw-institut.de

31. SpecificRequirementsfor Inter-Modal Transport: • Chemical Supply Chains become longer and more complex • Today’s Supply Chains reach out to more emerging countries • The share of hazardous materials in Inter-Modal traffic increases • Emerging countries often have lower safety and security standards • Emerging countries often do not have organized Emergency Response systems • Longer Supply Chains have a tendency to become more vulnerable • Longer Supply Chains have more unaccompanied traffic (Inter-Modal) • This results in less transparency of the logistic chains • The Chemical Industry wants to design sustainable Supply Chains • This requires: • Transparency and seamless information flows (Tracking and Tracing) • Sufficient safety and security standards • Functioning Emergency Response Systems www.isw-institut.de

32. The ChemLog Project: Chemical Logistics Cooperation in Central and Eastern Europe • INTERREG IVB Central Europe Application filed 14. April 2008 • Project Duration 11/2008 – 10/2011, • Budget: 2.2 Mio. Euro • Lead Partner: Ministry for Economics, Saxony Anhalt, Germany www.isw-institut.de

33. Logistical Challenges in Central and East Europe: • Rail Systems in West- and East-Europe not compatible • Inadequate rail- and road infrastructure • Lack of terminal structure for Inter-Modal traffic • Congested ports in the Baltic and the Black Sea • Lack of harmonization of admin and technical standards • Bureaucracy in Customs Clearance – Arbitrary Actions • Lack of harmonization of social standards (driving hours etc) • Lack of a common safety and security standard • Absence of Emergency Response and Crisis Mgmt Systems • (i.e. TUIS) • (Non)-Availability of people with excellent logistical background • The above varies from Country to Country www.isw-institut.de

34. Focussing on West – East Corridors www.isw-institut.de

35. Project Schedule www.isw-institut.de

36. ChemLogObjectives • Strengthening Railway and Waterway transport for chemical goods in • comparison to road to improve safety and environmental protection, • reduction of costs and increased speed and flexibility for chemical logistics • Support of development of logistic centres for intermodal transport and • their integration in infrastructure planning. • Support of stronger connection of pipelines for the development of an • effective central and eastern European Feedstock Network. • Initiate transnational know-how and technology transfer for the • development of efficient transport systems with focus on West-East dimension • Support of implementation of trans-European Transport Corridors, • Contribution for harmonisation of regulations, coordinated planning of • infrastructure and coordinated use of Structural Funds. www.isw-institut.de

37. Tracking and Tracing solutions for improvement of • intermodal transport of dangerous goods in • Central and East Europe • INTERREG IVB Central Europe Application approved on 24 May 2012 • Project duration 07/12 – 12/14, • Budget: 1.9 Mio. Euro • Lead Partner: Ministry for Science and Economy • of Saxony-Anhalt (DE) www.isw-institut.de

38. Project partners: • Ministry of Science and Economy Saxony-Anhalt, DE (LP) • Ministry of Transport and Regional Development Saxony-Anhalt, DE • Isw Institute for Structural Policy and Economic Development, DE • Otto von Guericke University Magdeburg, DE • Polish Chamber of Chemical Industry, PL • Association of Chemical Industry of the Czech Republic, CZ • Usti Region, CZ • University of Applied Science Upper Austria, AT • Association of chemical and pharmaceutical industry of Slovak Republic, SK • Province of Novara, IT • MAG Hungarian Economic Development Center, HU • University of Maribor, SV • La Spezia Port Authority, IT • Circle Srl, IT • CIMA – International Center for Environmental Monitoring, IT www.isw-institut.de

39. Objectives • General • Promotion of intelligent use of ICT for the improvement of intermodal transport of dangerous goods in Central and Eastern Europe to strengthen regional development and competitiveness of chemical industry • Facilitate modal shift from road to rail and reduce greenhouse emissions by improving competitiveness of intermodal transport • Improvement of safety, security, reliability and efficiency of intermodal transport of dangerous goods • Specific • Applying ICT for development of efficient traffic management and information systems of transnational transport of dangerous goods by tracking and tracing, bundling of transports and connecting of intermodal hubs in Central and Eastern Europe, • Improvement of framework conditions in view of organizational, institutional and strategic solutions for tracking and tracing technologies for intermodal transport of dangerous goods under involvement of companies, logistic service providers and public authorities, • Develop recommendations for open and joint standards for tracking and tracing as result of practical testing and facilitate the networking and implementation of T&T technologies in CEE www.isw-institut.de

40. Analysis of Needs for T&T Tool Development Main-streaming Pilot Projects Dec 12 Jun 13 Jun 14 Dec 14 Facilitate cooperation & know-how transfer IdentifyStrengths and Weaknesses Analyse existing T&T Technologies Implementation of 4 pilot projects for practical testing of T&T technologies on important international transport corridors Recommendation for implementation of new T&T tools Selection-Adaptation of T&T Tools for pilot projects Identify Needs for companies, LSP and public entities Recommendation for joint European Standard General Recommendations for future T&T development Policy level: International, European, National, RegionalStakeholders: Politics, Industry, Logistic Service Provider Time horizon: Long-term, mid-term, short term www.isw-institut.de

41. Pilot Project Corridors www.isw-institut.de

42. Conclusions www.isw-institut.de

43. Source: CEFIC andDeloitte www.isw-institut.de

44. Source: CEFIC andDeloitte www.isw-institut.de

45. Source: CEFIC andDeloitte www.isw-institut.de

46. Thank you! www.isw-institut.de