Sunday, September 18, 2005

Record OSHA Fine Expected In BP Blast

As OSHA's September 23 deadline approaches, the Houston Chronicle says that agency is preparing for a recordbreaking fine for the March 23 BP Texas City explosion that killed 15 workers and injured 170. The problem is that apparently settlement talks are under way with the company which could mean a sharply lower fine and that OSHA's complete findings may never be released.
The closed-door meetings between BP and the government agency angered the nation's largest industrial union, which strongly opposed the settlement talks when notified of them by OSHA earlier this week. Victims of the blast also were displeased.

"The families of the 15 who died, the public in general and certainly the workers deserve to know everything that OSHA found before OSHA trades it away," said Mike Wright, director for health, safety and environment for the United Steelworkers in Pittsburgh.

"Even if there is negotiation afterward and the company essentially plea bargains, people still deserve to know what OSHA found initially ... ," Wright said. "This is like the police reaching an agreement with a criminal before an arrest."

Art Ramos Jr., whose father died in the blast, said he believed the agency failed to properly monitor the Texas City refinery and its citation — reduced or not — had little merit.

"Honestly, I think OSHA dropped the ball," he said. "My father thought it was one of the most dangerous plants he had ever been in."
The "advantage" of a settlement, from OSHA's point of view, is that there would be no costly, lengthy appeal of the citation.

The advantage to BP would not so much be the decreased penalty, which would be dwarfed in any case by BP's huge profits, but rather the possible removal of the stigma of a "willful" citation. Settlements often convert "willful" citations into "unclassified" citations, which the companies like because it makes them seem less at fault. In addition, OSHA can't initiate a criminal prosecution unless there has been a willful citation that caused a death, although the Justice Department could still go after BP using environmental regulations.

If no settlement is reached, the size of the fine could break OSHA's previous record:
Those familiar with the case say the fine against BP could surpass the agency's record of about $11 million — an amount that may seem small but is much larger than average. OSHA fines rarely break $1 million.

Even if OSHA issues a multimillion-dollar fine against BP, it would have little financial impact on the energy giant, which posted $12.2 billion in profits in mid-2005.

In fact, BP announced in July that it has already set aside $700 million to deal with death and personal injury claims and had paid out $120 million so far.

More BP Stories from Confined Space here.