Monday, February 16, 2009

Toxic Release Inventory Reports - Change for Auxilary Facilities

In 2007, EPA issued a final rule requiring that facilities reporting under Section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA), commonly called the toxics release inventory (TRI), identify the nature of their business by using North American Industry Classification System (NAICS) codes. Beginning with reports submitted 2007, NAICS codes replaced Standard Industrial Classification (SIC) codes that have been in use since TRI was initiated in 1987.

Both the SIC and NAICS systems were developed to organize and track information the US economy. The basic difference in approach to the two systems is that the SIC system classifies establishments based on their economic output (i.e, what they produce or provide), and the NAICS classifies establishments according to the processes used to produce goods and services (i.e., what they do). With one exception, the switch to NAICS did not affect facilities already required to report under TRI. No industry groups were added to or deleted from the list as a result of the change.

The exception involves businesses classified as "auxiliary facilities" which, under SIC, are those facilities that provide support functions for a manufacturing activity. For example, a distribution center operated by a paper products manufacturer was assigned the same SIC code as the manufacturing operation it supported. Under NAICS, the same distribution center would be assigned a code reflecting the warehousing and logistics operations.

Auxiliary facilities traditionally reported to TRI using the SIC code of the establishment they supported. NAICS did not adopt the SIC concept of auxiliary establishments. Under NAICS, these facilities now report their TRI according to their own activities.

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