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Home > Posts > Is Your Company Doing All It Can to Mitigate the Risk of a Catastrophic Accident?
June 14

Is Your Company Doing All It Can to Mitigate the Risk of a Catastrophic Accident?

Keywords: Remanufactured Equipment, Hazardous Area Applications, Compliance, Agency Approvals, Catastrophic Incident, Replicator, Repairs.

Overview
The heavy process industries face a number of potentially catastrophic safety issues. One in particular is the growing use of remanufactured equipment and components from unknown sources that may not be in compliance with the manufacturer's original design specifications.

Some believe that the use of remanufactured equipment began with the use of refurbished valves in the upstream oil & gas industry, most typically on offshore oil rigs. However, as capital budgets tightened and the use of remanufactured equipment proved successful, the practice spread across all the process industries and has migrated to electronic devices as well. While this can provide an attractive low-cost option, a frequently overlooked point is whether or not remanufactured equipment destined for hazardous locations still complies with industry-standard safety requirements. Owner-operators in all industries need to better understand the risks of sourcing remanufactured equipment from unknown and untrusted third parties.

Companies are Putting Themselves at Risk
When purchasing equipment from third-party sources, manufacturers and other industrial organizations may mistakenly assume that the equipment has been recertified to meet the original equipment manufacturer's specifications, but buyer beware. Buying another "Supplier X" device does not necessarily mean replacing like for like. OEM's and end users alike are discovering that third parties frequently leave the original nameplate with its FM approval mark on the equipment, but without properly auditing to ensure it still meets the requirements for use in hazardous locations.

As the use of remanufactured equipment increases, companies frequently unknowingly put themselves at risk of potential catastrophic accidents. For unsuspecting buyers, there's a high risk that remanufactured equipment is being sold without inspection or the approval of a qualified professional engineer or testing agency. In addition to the obvious safety issue should an incident occur, the potential for regulatory noncompliance of remanufactured equipment creates additional financial exposure not only for the end user and supplier, but for the OEM as well. This is particularly true if the incident involves personal injury or a fatality. End users can minimize these risks by dealing with knowledgeable and trusted vendors.

For example, consider the process of buying a vehicle. Prospective buyers have the option of buying a new vehicle, a certified pre-owned (CPO) vehicle, or a non-certified used vehicle. The advantages of buying a new vehicle are many (including that new car smell!), yet price can be a significant barrier to acquisition for many. For buyers who prefer a new vehicle, but price is an obstacle, a CPO vehicle is a good option. Although priced higher than an ordinary used car (but less than a new one), CPOs have the advantages of undergoing a manufacturer's prescribed multi-point inspection and include manufacturer-backed warranty coverage. This reduces the risk of buying secondhand. While there is a degree of risk in buying any vehicle, non-certified used cars carry the highest risk as there is no guarantee against hidden problems surfacing post purchase, some of which could put the purchaser at risk of potential injury or death.

 

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Rating of Purchasing Options

Industrial plants have increased their focus on safety and reliability in the wake of some high-profile industrial accidents. Many leading companies understand the risks associated with equipment sourcing and have implemented best practices to ensure acquired equipment is properly certified for the particular application. Plants struggling with tight capital budgets have a tendency to seek the lowest price possible and may not fully understand the risks. With third-party device vendors' claims that remanufactured equipment is "as good as new," end users can be deceived into thinking that this is actually true, when in fact; non-compliant refurbished equipment can represent a significant safety hazard. (An informative OSHA document provides tips for recognizing non-compliant products.)

A Question of When, Not If
Initially, the use of remanufactured devices was limited to mechanical equipment. More recently, due to tightened capital budgets, end users have also begun to purchase remanufactured electronic equipment. This practice has led to the increased use of remanufactured equipment in hazardous locations, most notably in petrochemical plants and refineries. The reality is that many remanufactured devices no longer meet specifications for safe operation in hazardous areas. The risks are exacerbated in electronic devices, since the formation of an electric arc could introduce a spark that could escalate into a catastrophic incident if the device is compromised and unable to contain it. If the use of uncertified devices for hazardous locations continues unabated, ARC believes it is simply a question of when, not if, a catastrophic incident occurs as a result.

What's in Your Plant?
Acquiring remanufactured equipment is common practice and offers an affordable alternative for many industrial end user organizations. However, ARC encourages readers to gain a better understanding of what they are actually getting. When dealing with third-party vendors, a detailed device history report is frequently missing (similar to what we call a "Carfax" for used cars in North America). If any change was made to the device over its lifetime and it has not been re-certified, the device nameplate should be removed as it may no longer meet the requirements for use in hazardous locations. Unfortunately, many companies do not fully understand the dangers of using non-certified remanufactured devices in hazardous locations because these devices often operate as intended under normal operating conditions.

The issue of remanufactured instruments is compounded by the trend to stock a single version of a device to avoid separate inventories for hazardous area and general-purpose applications. This scenario leads to the use of remanufactured instruments in both general-purpose and hazardous area applications. Certainly, as the number of remanufactured devices grows, the risk of an incident increases correspondingly. Unfortunately, there is no way to tell when or where an incident will occur.

Recommendations
To minimize the risk of an incident as a result of non-certified remanufactured equipment, mechanical or electrical, ARC recommends that users identify where remanufactured devices have been installed, particularly those in hazardous areas. Once identified, those devices should be evaluated with respect to management of change (MOC) procedures to ensure that plant design standards and regulatory requirements are met. Any remanufactured devices that cannot be traced back to proper certification should be subject to re-certification.

When purchasing remanufactured equipment or components from online warehouses such as Amazon or eBay, be sure to identify the seller. Some online resellers may appear to have legitimate ties to the OEM, but that may not be the case. Websites alone can be deceptive. ARC recommends that user organizations do their utmost to obtain the history of remanufactured equipment and components back to the OEM.

Recognizing the increased use of remanufactured equipment, many leading automation suppliers now offer certified remanufactured equipment that meets original specifications. These suppliers audit the remanufacturing process to ensure the device meets the requirements for its intended use, providing peace of mind and minimizing risk.

All signed-in ARC Advisory Group clients can view this report in pdf format at this Link

If you would like to buy this report or obtain information about how to become a client, please Request ARC Info

 

 

 

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