HR Management & Compliance

OSHA Going for Record Fine Against BP

Signals that the U.S. Occupational Safety and Health Administration (OSHA) is ramping up enforcement became clearer with the levying of a record $87,430,000 proposed penalty against BP Products North America Inc. on October 30.

The previous largest penalty, $21 million, was issued in 2005, also against BP, according to OSHA.

OSHA levied the proposed penalty claiming BP failed to correct potential hazards after a massive explosion at the company’s Texas City, Texas, refinery in March 2005. The explosion resulted in 15 deaths and 170 injuries. Following an investigation, BP entered into a settlement agreement with OSHA in September 2005, under which the company agreed to corrective actions to eliminate potential hazards similar to those that caused the 2005 blast.

After the penalty announcement, BP formally contested all of the citations, saying that the matter was still before the Occupational Health & Safety Review Commission, a body that is independent of OSHA. BP said the penalty proposal 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,” Texas City Refinery Manager Keith Casey said in a statement. “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.”

OSHA levied the proposed penalty after a six-month inspection. OSHA said the inspection was designed to evaluate the extent to which BP has complied with 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,” Labor Secretary Hilda L. Solis said. “Instead of living up to that commitment, BP has allowed hundreds of potential hazards to continue unabated.”

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, according to the OSHA statement. 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 failure 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,” said acting Assistant Secretary of Labor for OSHA Jordan Barab. “BP still has a great deal of work to do to assure the safety and health of the employees who work at this refinery.”

BP said in its statement that it has cooperated with OSHA in the agency’s review of the company’s Texas City operations. “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,” Refinery Manager 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.”

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