OSHA in October announced its largest proposed penalty ever â€” $87,430,000 in proposed penalties to BP Products North America Inc. for the company’s failure to correct potential hazards faced by employees.
The prior largest total penalty, $21 million, was issued in 2005, also against BP.
Safety violations at BP's Texas City, Texas, refinery resulted in a massive explosion â€” with 15 deaths and 170 people injured â€” in March of 2005. BP entered into a settlement agreement with OSHA in September of that year, under which the company agreed to corrective actions to eliminate potential hazards similar to those that caused the 2005 tragedy. The record penalty comes at the conclusion of a six-month inspection by OSHA, designed to evaluate the extent to which BP has complied with its obligations under the 2005 agreement and OSHA standards.
"When BP signed the OSHA settlement from the March 2005 explosion, it agreed to take comprehensive action to protect employees. Instead of living up to that commitment, BP has allowed hundreds of potential hazards to continue unabated," said Secretary of Labor Hilda L. Solis.
For noncompliance with the terms of the settlement agreement, the BP Texas City Refinery has been issued 270 "notifications of failure to abate" with fines totaling $56.7 million. Each notification represents a penalty of $7,000 times 30 days, the period that the conditions have remained unabated. OSHA also identified 439 new willful violations for failures to follow industry-accepted controls on the pressure relief safety systems and other process safety management violations with penalties totaling $30.7 million.
"BP was given four years to correct the safety issues identified pursuant to the settlement agreement, yet OSHA has found hundreds of violations of the agreement and hundreds of new violations. BP still has a great deal of work to do to assure the safety and health of the employees who work at this refinery," said acting Assistant Secretary of Labor for OSHA Jordan Barab.
The BP Texas City Refinery is the third largest refinery in the United States with a refining capacity of 475,000 barrels of crude per day. It is located on a 1,200-acre facility in Texas City, southeast of Houston in Galveston County.
Meanwhile, BP PLC (BP) said it is in compliance with safety conditions established by OSHA following a fatal explosion at its refinery in Texas City in 2005.
In a press statement, BP Products North America Inc. (“BP Products”) said it will “formally contest all of the citations, including alleged violations and proposed penalties, abatement actions and abatement dates disclosed to the company by the Region 6 Office of the U.S. Occupational Safety and Health Administration
“The majority of citations relate to a previously announced disagreement between OSHA and BP as to whether BP is in compliance with a 2005 OSHA Settlement Agreement reached after the March 2005 accident at the Texas City refinery.
”That matter is presently before the Occupational Health & Safety Review Commission, a body that is independent of OSHA. Today’s filing will expedite the process of referring the contested case to an Administrative Law Judge.
”’We are disappointed that OSHA took this action in advance of the full consideration of the Review Commission,’ said Texas City Refinery Manager Keith Casey. ‘“We continue to believe we are in full compliance with the Settlement Agreement, and we look forward to demonstrating that before the Review Commission. While we strongly disagree with OSHA’s conclusions, we will continue to work with the agency to resolve our differences’.”
“From the outset, BP Products has cooperated with OSHA in the agency’s review of the company’s Texas City operations and has considered the process a key input to the refinery’s compliance and safety programs,” according to the BP statement..
“’We believe our efforts at the Texas City refinery to improve process safety performance have been among the most strenuous and comprehensive that the refining industry has ever seen,’ Casey said. ‘We remain committed to further enhancing our safety and compliance systems and achieving our goal of becoming an industry leader in process safety’.”
The BP mega fine brouhaha (11/24)
November 25, 2009