Thursday, June 01, 2006

CalOSHA Fines Contractor For Recordkeeping Fraud

The contractor building the new California Bay Bridge eastern span, KFM (Kiewit/FCI/Manson), had once boasted about its immaculate safety record, five times safer than the average heavy construction project, "even safer than your average flower shop."

But all was not as it seemed.

Today, CalOSHA
issued three citations to KFM, A Joint Venture, including a "willful regulatory violation" for the unreported injuries - the most severe classification possible. Of the 13 injuries not reported on the company's annual injury logs, 11 occurred in 2004 - more than doubling the contractor's reported injuries rate that year.

The citations resulted in a $5,790 fine - including $5,000 for the willful violation, the maximum penalty allowed. "Obviously we are very disappointed in KFM after reviewing the findings of this investigation," said Len Welsh, acting director of Cal/OSHA in a statement.


The 13 unreported injuries cited in the Cal/OSHA report included head injuries, leg injuries, back injuries, a hip injury and an employee who was struck on the head and lost consciousness.
So what was the problem?
The Bay Bridge skyway project boasts a remarkably low injury rate compared to other Bay Area bridge or retrofit projects and large construction projects in California or nationwide. Both KFM and Cal/OSHA officials have vouched repeatedly for worker safety conditions on the project.

Yet more than 20 welders who have worked on the project said they were pressured to conceal injuries for fear of retribution or the loss of their job. In addition, crews received cash bonuses for posting clean safety records, a practice the auditor said could either help prevent accidents or simply discourage workers from reporting them.

"During my experience at KFM, I witnessed a pattern of deliberate underreporting of injuries," former KFM field safety manager Winston Peart wrote in an October statement for the state audit and included in the summary of Cal/OSHA's key testimony. "This was frequently accomplished by classifying injuries in a way that allowed individuals to return to work and perform some light-duty assignment."
This citation is particularly significant for a number of reasons.

First, as I noted in a review of an Oakland Tribune series that first broke this story in April 2005, the Bay Bridge project was a classic case "behavior-based safety out of control," as OSHA's chief or recordkeeping, Bob Whitmore termed it. An Oakland Tribune article at the time reported that KFM's amazing safety record was likely due to the $100 to $2,500 bonuses that depended on the number of worker hours logged without reporting a recordable injury, rather than safe working conditions. KFM and its lead firm, Kiewit Pacific Company, also used the stick: suspending workers without pay for reporting injuries.

In documents released today by CalOSHA, several workers described how they were treated.
Along with the citations issued today, Cal/OSHA released statements from 14 workers interviewed during the investigation, alleging a pattern of intimidation and retribution to minimize reported injuries.

"KFM discourages people from reporting injuries," current welder Ventura Ochoa told a Cal/OSHA investigator in March. "The reason is that the foremen get money if no accidents or injuries are reported."

Another witness, Pat Karinen, secretary/treasurer for Pile Drivers Local 34, which represents welders on the project, was interviewed three times during the investigation, according to Cal/OSHA records.

"KFM shows you the door as soon as you are hurt," he told the investigator. ``They are very hard on guys."
The second reason this case was significant is that OSHA had formed a close "partnership" with KFM on this project, and vouched repeatedly for the safety of the project, even after the Oakland Tribune article revealed problems with injury and illness reporting. Len Welsh, Cal-OSHA's acting director, supported the company's punishment and reward behavioral safety policies, stating that rewarding good safety behavior while disciplining bad is a common practice and one that he sees as effective in reducing injuries. Even the revelation that the company had underreported injuries didn't undermine CalOSHA's support of the company:
In a June 1, 2005 e-mail, agency spokesman Dean Fryer wrote: "The purpose of recording injuries is to determine where the employer may have safety problems. Cal/OSHA is frequently on site and is very familiar with the safety practices of KFM, has reviewed their safety program thoroughly and hasn't seen any pattern of problems with recordable injuries.''

On the Bay Bridge project, Cal/OSHA entered into an informal partnership with KFM, allowing state inspectors frequent access to the site. The partnership also meant that any hazardous conditions found would be pointed our but not officially cited.

KFM only agreed to the partnership - and never in writing - after Cal/OSHA found the contractor had knowingly exposed workers to excessive levels of manganese and other welding fumes for more than a year.
Despite the growing evidence that KFM was cooking the books, CalOSHA continued to stick closely to KFM's side until a state audit earlier this year severely criticized the agency, reporting that
Cal/OSHA didn't discover potential underreporting of alleged injuries and an alleged illness on the project because it lacks procedures to ensure the reasonable accuracy of contractor KFM Joint Venture's annual injury reports.

The audit also found Cal/OSHA failed to adequately follow up on three of six complaints received from bridge workers, including an April 2004 complaint in which it found two alleged serious violations but never issued citations to KFM.
Without a system to detect the underreporting of injuries, there is no way to know if employers' reports are accurate, the state audit stated.

The audit also found
that CalOSHA did not use its statutory authority to investigate the [welders'] complaint and issue citations for the two alleged serious violations it found. It instead used the compliance assistance approach outlined by its informal partnership with KFM, which precludes issuing citations.
Cal/OSHA finally launched the investigation of KFM after the state audit report was released initiated in response to California State Assemblywoman Wilma Chan's request and a $200,000 budget allocation.

Despite the serious citations, CalOSHA's Welsh continues to defend the company. After announcing today's citations, Welsh went on to note the lack of fatalities during the project, stating that, despite the serious recordkeeping problems, "This is one of the safest construction work sites we have ever seen."

In a Confined Space post last week, guest-bloggers ERM noted that federal OSHA is partly responsible for CalOSHA's partnership problems:
In defending its failures, Cal-OSHA implicated federal OSHA, which approved and encouraged the partnership with KFM that now seems to be a big part of the reason why Cal-OSHA was complicit in the company’s efforts to conceal safety and health problems


Federal OSHA has been promoting voluntary partnerships for years, in an effort to induce companies to make safety improvements. OSHA lacks the resources to enforce everywhere, the reasoning goes, so the more it can encourage companies to comply voluntarily, the better for everyone. Being kinder and gentler to business is also in line with the political program of the Republican administration.
Finally, it is vitally important that recordkeeping violations be cited in light of a recent Michigan State University study reported that the current national surveillance system for work-related injuries and illnesses may miss two-thirds of the total number of occupational injuries and illnesses.

Meanwhile, Kiewit, which announced today that it would appeal the citations, clearly doesn't understand the significance of these violations:
"It is important to note that the issues raised by Cal/OSHA involve recordkeeping and paperwork processes only," said Kiewit spokesman Kent Grisham. "The exemplary safety achievements at the skyway project are in no way diminished by these allegations."
But in fact, these citations are far from just paperwork. As ERM pointed out last week, "when injuries and illnesses are not recorded, it’s not a case of a meaningless bookkeeping error. Real workers get hurt and sick."

Go back and read ERM's first post, Learning From Enron: Why Accurate OSHA Recordkeeping Matters where they describe the reasons that accurate recordkeeping matters: First, because OSHA relies on companies' self-reported records to target its inspections; second, because inaccurate recordkeeping undermines other OSHA programs which rely on accurate records, for example, to determine what standards need to be issued or strengthened; third, that employees who are coerced into not reporting injuries and illness may not receive proper medical care; and fourth, if employers themselves don’t have an accurate picture of where and why their workers are getting hurt, how will they effectively target their health and safety efforts?

I will end by again quoting ERM on the lesson learned in California: that federal OSHA recordkeeping, like CalOSHA, needs to be independently audited
Does anybody think this would have happened without the state auditor’s investigation? Nor would the auditors have gotten involved without the result of the tireless reporting of the Oakland Tribune.

The conclusion is simple, clear, and logical. If we really want to protect workers and if we really want to know what’s going on in the nation’s workplaces, we not only need OSHA to investigate company records, we need auditors to investigate OSHA.

Related Articles

OSHA Recordkeeping Series by ERM

Part I: Learning From Enron: Why Accurate OSHA Recordkeeping Matters, May 15, 2006
Part II: At AK Steel, as at Enron, the Numbers Don’t Add Up, May 23, 2006
Part III: OSHA Recordkeeping: Who Will Audit the Auditors?, May 27, 2006

Confined Space Bay Bridge Stories

Other Behavioral Safety Articles