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Labor Department Proposes Historic $87.4 Million Safety Fine on BP

October 30, 2009
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Ever since she was sworn into office in March, Labor Secretary Hilda Solis has warned that she would toughen enforcement of workplace laws.

She followed through on Friday, October 30, by announcing $87.4 million in penalties against BP Products North America Inc., an energy company Solis said has not done enough to improve safety since a 2005 explosion at its Texas City, Texas, refinery killed 15 people and injured 170.

The proposed fine is the biggest in the history of the Occupational Safety and Health Administration, an agency within the Department of Labor. The previous highest levy was $21 million against BP after the 2005 accident.

The latest move follows a six-month OSHA assessment of BP’s compliance with safety-improvement commitments contained in a 2005 settlement agreement.

OSHA found 270 instances in which BP failed to correct previous problems, resulting in fines of $56.7 million. In addition, it discovered 439 “new willful violations” of control standards on pressure-relief safety systems that produced the remaining $30.7 million of the total penalty.

“Let me be clear: The administration will not tolerate disregard for our laws,” Solis said in a conference call with reporters. “Employers have a legal and moral responsibility to protect their workers, who, ultimately, are America’s most important asset.”

But BP asserted that it’s not fair to make it the primary example of the Labor Department’s enforcement strategy because its efforts to improve safety at Texas City “have been among the most strenuous and comprehensive that the refining industry has ever seen,” said Keith Casey, manager of the BP facility southeast of Houston, in a statement.

The company is contesting all the OSHA citations and maintains that the majority of them represent a “disagreement between OSHA and BP” as to whether BP satisfied the 2005 settlement. The dispute is currently before the Occupational Health & Safety Review Commission, which is independent of OSHA.

“We are disappointed that OSHA took this action in advance of the full consideration of the review commission,” said Casey, whose operation refines 475,000 barrels of crude daily. “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.”

Although it is hitting BP hard, the agency said that it is willing to help companies navigate what many in the business community have called complicated federal safety rules.

“This large enforcement penalty is no comment on our ability or willingness to provide compliance assistance,” Jordan Barab, acting assistant labor secretary for OSHA, told reporters.

But cracking down on safety—as well as wage-and-hour violations—will remain a priority for Solis. The Labor Department has boosted funding and increased the number of inspectors in both areas.

Her vision for the daily operation at the BP Texas City facility is one of quiet routine.

“We would like to see people go into work and go home to their families,” she said.

—Mark Schoeff Jr.

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