PEABODY — The Danvers chemical plant explosion in November 2006 exposed the potential hazards that could exist near residential neighborhoods.

It also revealed a gap in local oversight of businesses licensed to store and use flammable materials. To address the need to become a more vigilant watchdog of such establishments, the fire department last week announced a new inspection program — the Peabody Safe Neighborhood Chemical and Flammable Initiative.

The department has added a full-time inspector's position to spearhead the program. Inspector Chris Dowling will fill the new role.

He will serve as the liaison between the department and the South Essex Regional Emergency Planning Committee, which is co-chaired by Peabody Fire Deputy Chief James Coughlin. Dowling will also oversee the yearly issuance of flammable liquid storage permits.

As part of the permitting process, the department has created a new reporting form that will require properties that house flammable materials to perform a "self inspection," signed off on by the business owner. The form and accompanying documentation, including a complete list of all chemical and/or flammable materials used or stored on the premises, will be returned to Peabody's Office of Fire Prevention. The office will then inspect the properties.

Businesses will be inspected yearly. Some will receive unannounced or multiple inspections, especially those that do not cooperate or appear to be a greater risk to neighborhoods, according to Chief Steve Pasdon. Businesses will need to obtain a permit to be able to renew the certificate of registration that is tied to their flammable materials storage license.

The goal of the program, which mirrors the state's Safe Neighborhood Chemical Initiative, is to give the department a full understanding of the materials being used in the city.

"We need to know what's out there," Pasdon said.

The chief did not know how many city businesses would be affected. Captain David Sampson, who will supervise the program, could not be reached for comment.

In Danvers, federal and state investigators determined that the accidental overheating of a chemical mixing tank used by paint manufacturer CAI caused an explosion that damaged more than 100 homes. The overheated tank generated flammable vapors that filled the plant and found an ignition source.

The U.S. Chemical Board said the plant ignored federal and state safety regulations, and its equipment lacked safeguards that would have prevented the explosion. The federal Occupational Safety and Health Administration cited the companies for 23 violations that exposed workers to hazards that could have seriously injured or killed them.