OSHA slaps BP with record $87M fine

TEXAS CITY — The Occupational Safety and Health Administration is proposing an $87 million fine against BP for a lack of compliance with safety regulations and agreed-upon improvements at its Texas City refinery after the March 23, 2005, explosions that killed 15 people.

The agency detailed the fine — the largest ever issued by OSHA — during a news conference Friday.

BP responded by formally contesting the agency’s findings.

U.S. Labor Secretary Hilda Solis said that, during 17 inspections since the explosions four years ago, OSHA found 270 cases where BP failed to comply with changes to systems at the Texas City refinery as required in its agreement with the government. In addition, OSHA found 439 new “willful” violations involving pressure release systems on units at the refinery.

A willful violation exists where an employer has knowledge of a violation and demonstrates an intentional disregard for the requirements, OSHA said.

An outdated pressure release system called a blowdown stack was at the heart of the failures that led to the blasts in 2005.

“We are disappointed that OSHA took this action in advance of the full consideration of the (OSHA) review commission,” BP Texas City refinery manager Keith Casey said. “We continue to believe we are in full compliance with the settlement agreement.

“While we strongly disagree with OSHA’s conclusions, we will continue to work with the agency to resolve our differences.”

While acknowledging BP had made strides to fixing problems within the Texas City refinery, a top OSHA official said the safety culture at the refinery still was lacking.

“The fact that there are so many still outstanding, life-threatening problems at this plant indicates that they still have a systemic safety problem in this refinery,” Jordan Barab, acting assistant secretary of labor for OSHA, said.

Within minutes of OSHA’s announcement, BP announced it would contest the agency’s findings.

“BP Products contests the entirety of all citations, including the alleged violations and proposed penalties, including the additional penalty, abatement actions and abatement dates,” a letter from BP’s attorney Thomas Wilson to OSHA’s offices in Houston stated.

The United Steelworkers Union, which represents the bulk of BP’s work force, was taking a cautious approach to OSHA’s enforcement action.

“We are looking at the fine and what OSHA stated needs to be corrected,” union spokeswoman Lynne Baker said. “The USW is willing to work with BP to get these problems resolved and taken care of.”

Part of the change of safety culture at BP was the company’s adoption of the union’s Triangle of Prevention safety protocols which is a partnership of the company and the union in developing a method for finding and fixing potential failures within the refinery. The union stands ready to help BP address OSHA’s concerns, the USW spokeswoman said.

“The USW is concerned there are items that still need to be taken care of,” Baker said. “We are just going to work harder with (BP) to make sure these concerns are addressed.”

In an Aug. 3 letter to BP, OSHA told the company it had failed to make agreed-upon safety improvements at the refinery after the 2005 blasts.

In the letter to Casey, Mark R. Briggs, director of the agency’s Houston South Area Office, said if specific improvements were not made by Sept. 23, it “would constitute a failure to comply with the terms of the 2005 agreement and/or failure to abate” safety hazards at the refinery.

BP requested time to fix the problems OSHA had cited and to argue that the improvements had been made. Two weeks ago, OSHA rejected the BP request.

An OSHA review panel is supposed to consider what steps the agency will take, which could include additional fines, granting an extension or the extreme measure of shutting down the nation’s third-largest refinery. The panel also could agree with BP’s assertion it has complied with the terms of its agreement.

The panel has yet to conduct its review.

Before Friday’s proposed $87 million fine, the largest fine ever levied by OSHA was the $21 million penalty against BP for the 2005 blasts that led to the settlement agreement. BP also has paid a $50 million fine to the Department of Justice to settle criminal charges for violations of the Clean Air Act and faces more fines from the state of Texas after the attorney general sued the company for violations of the state’s environmental regulations.