It's All About the Economy, OSHA, and Electrical Safety at the NRA Central Region Meeting

By Tina Caparella

The tranquil setting of Green Lake, WI, was an ideal spot for the National Renderers Association (NRA) Central Region to hold its annual meeting. While the economy was a notable topic of discussion, so were government regulations and electrical safety.

Dr. Chris Hurt, Purdue University, opened the meeting with a look at the livestock industry, commenting that the aggressive move in using vegetable oils in biofuels has had an impact on escalating feed prices. He examined the current recession, including the federal government’s increased spending to help stimulate the economy. Currently the national debt is at $13 trillion and is projected to balloon to $15 trillion in two years. Hurt informed attendees that the government is paying near zero interest rates and as consumer spending and incomes rise, the tax base will go up and the debt will eventually be paid off.

Hurt’s outlook on unemployment was just as bleak. He said it takes a two percent growth rate to keep unemployment stable, and with projections at a 3.1 percent growth rate for this year, there won’t be much progress in reducing the national unemployment rate, which currently stands at about 10 percent. Hurt cautioned about examining only monthly data in determining how the economy is faring, which, overall, is looking good this year. World growth is on the rise, with an estimated 4.2 percent increase this year.

“What we’re seeing is we’ve been through the valley,” said Hurt. “The economy is showing early signs that it is going to get better, but it will be a long recovery, perhaps five to six years.”

As for meat consumption, U.S. domestic consumption will remain flat, leading to a continued decline in U.S. beef herds, while growth is expected in the export market. The livestock industry is also facing pressure from environmentalists, government, activists, and lenders, making business as usual a thing of the past.

John Weir and Scott Pellock, Vanguard Energy, discussed the energy market, which has been “pretty boring lately.” Weir commented that the financial market drives price movements in natural gas, with the economy being the underlying vehicle. Right now, gas storage levels are at historic highs and the market is in a lull awaiting what effect British Petroleum’s oil crisis in the Gulf of Mexico will have on the energy industry.

Pellock addressed electricity, which has three components: transmission, distribution, and the energy itself. He explained that supply makes up 55 to 60 percent of the total cost per kilowatt, with 20 to 25 percent of the cost being losses, capacity, and transmission. Another 15 to 20 percent of the cost per kilowatt comes from the utility district.

Climate change “feels like just a lot of hot air,” Pellock said, and while many feel the same way, he warned that eventually it will affect all of us in the form of regulations. He expounded on a new cap and trade bill introduced in Congress, and the Environmental Protection Agency’s new regulation on greenhouse gas emissions.

The team of Eric Zabinski and Barb Galluppi, Arthur J. Gallagher Risk Management Services, tackled the topic of risk management strategies in a changing economy. Zabinski underlined how companies adjust in a weak economy by slowing production, consolidating operations, and reducing staff, whereas companies in a recovering economy work more hours, delay new hiring, and go into a “monitor” mode. As for employees, he warned that during a weak economy, employees could file more occupational health claims in case of a layoff, which could lead to more complex or even fraudulent claims. On the other hand, in a recovering economy, be wary that employees may say anything to get hired.

Zabinski shared recent Webcasts the company has provided free of charge on the topics of legal, fraud prevention, occupational health, and claim handling strategies. A link to the Webcasts is available on Render’s Web site at under “Industry.”

Galluppi tackled workers’ compensation claim strategies, maintaining that not all injuries in the workplace are compensable – it must be shown that the hazard is specific to the company. She encouraged renderers to gain knowledge of the situation, overturn rocks, and marshal all defenses. The goal of workers’ compensation is to return the injured worker as close to his/her pre-injury status as possible – mentally, physically, and emotionally – while protecting the interests of the employer. Galluppi provided detailed instructions on ways to ensure this goal is met, including employers showing that they care about the employee and his/her well-being. She also pointed out ways to mitigate fraud and look for fraud indicators.

“Fraud could impact honest people in the organization,” Galluppi stated.

Elizabeth Ash, Seyfarth Shaw, LLP, declared that the Occupational Safety and Health Administration (OSHA) is “an incredibly active agency” and is “cracking the whip” on state agencies’ enforcement. She explained the six types of civil citations, which range from other than serious to “high gravity” citations that carry penalties up to $70,000 per citation. Ash said the most frequently cited standards are personal protection equipment (PPE) and lock out tag out procedures, and that OSHA is using the general duty clause for citations for hazards not covered specifically by a standard. General duty clause citations are automatically serious, with fines up to $7,000. She warned that the agency is currently revamping its penalty policy and increasing its repeat citation timeframe from three years to five years. Ash urged renderers to have a system in place to track citations to avoid repeat offenses.

“Do not accept any citation that is not legally sound,” she insisted. “It could come back to haunt you later.” Ash next discussed the Protecting America’s Workers Act that was first introduced in 2005, was resurrected in 2009, and is expected to come up for a vote later this year. The bill increases protection for whistleblowers, makes changes to OSHA’s civil penalty structure, doubles willful violation penalties, prohibits “unclassified” citations, and increases the kinds of activities considered as criminal liability. She reminded attendees it’s more important than ever to have structures in place to prevent workplace injuries and that employees are properly trained, are following procedures, and are disciplined if they don’t.

Ash pointed out that the U.S. Department of Transportation has jurisdiction over employee safety as it pertains to vehicles driven off-site, i.e., over the road or in transit. If a vehicle is on company property and an employee is working on the vehicle and a hazard exists, then the situation falls under OSHA.

Providing an in-depth presentation on the seven electrical safety habits that make a workplace safer was Al Havens, e-Hazard, who said that the Bureau of Labor Statistics reported 371 electrical fatalities in 2008. Thirty-eight percent of deaths occur in the 25 to 34 year old age group, with most fatalities happening at 120 volts. He advised renderers to use the National Fire Protection Association 70E Standard for Electrical Safety in the Workplace and the 2008 National Electric Code to ensure employees working on electrical equipment are safe. He provided these seven habits to enable employers to comply with 70E:

1. Always verify absence of voltage and use rubber insulating gloves and tools.

2. Use a consensus standard or regulation to establish boundaries for worker safety from shock and arc flash.

3. Always wear arc-rated daily wear and a face shield.

4. Always use a ground fault circuit interrupter, or GFCI, with cord- and plug-connected tools and extension cords.

5. When feasible, create an “electrical safe work condition.”

6. Identify your hazards and adopt PPE or engineering controls as required.

7. Measure, audit, and continuously improve electrical safety processes.

NRA President Tom Cook opened the group’s business meeting stating that the biggest change in Washington, DC, is the increase in regulatory action, causing the association to be more defensive.

“Fortunately, there isn’t too much time left for Congress to do much more damage this year,” commented Cook, who remains optimistic the tax extenders bill will pass reinstating a tax credit for biofuels, which is a small part of a very expensive bill. He said Congress is also reexamining immigration law after learning the majority of Americans support Arizona’s recently passed immigration law.

David Kaluzny, World Renderers Organization (WRO), covered rendering activities worldwide, beginning with predictions that show world demand for animal proteins will grow by 50 percent by 2040, and that the middle class will triple in the next 30 years from 400 million people to 1.2 billion people. Having just returned from the European Fat Processors and Renderers Association (EFPRA) meeting in Budapest, Hungary, Kaluzny shared the two topics that dominated discussions: the European Commission’s (EC’s) new animal by-products regulation and the future feeding of rendered proteins to animals. The new regulation, EC 1069-2009, is expected to be finalized this fall, go into effect next year, and be implemented in 2012. Kaluzny also explained WRO’s role in representing renderers worldwide to international groups such as the World Trade Organization and World Organization for Animal Health, or OIE.

J.J. Smith, Fats and Proteins Research Foundation, disclosed that the biggest issue he focused on as chairman for the past two years was raising money.

“Fortunately, rendered product prices have been fairly good the past year,” Smith commented, allowing the foundation to raise about $800,000. The biggest challenge has been not receiving as much funding from meat packers because rendering is not the main focus of their business. He highlighted one valuable partnership as being with the Poultry Protein and Fat Council of the U.S. Poultry and Egg Association, which provided $65,000 in research funding last year and another $61,000 this year towards poultry protein research. Smith pointed out that the Pork Board is helping co-fund an FPRF research project.

Among research projects being focused on is biosecurity and a new project to ensure rendered products are included in the new pork nutrition book being published next year. FPRF has also added a new membership class, “international sustainable member,” which provides EFPRA a seat on the board with a $30,000 collective contribution.

The central region will hold its next meeting June 8-10, 2011, in Elkhart Lake, WI.

August 2010 RENDER | back