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October 31, 2009

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BP fined record 87m USD for safety violations

Oil giant BP must pay more than $87m (£53m) for failing to correct

potential hazards to workers at its Texas City refinery in the US.

In handing down its record fine to BP Products North America Inc on 30 October, the US Department of Labor’s Occupational Safety and Health Administration (OSHA) slated the company for allowing “hundreds of potential hazards to continue unabated”.

The company had agreed four years ago to take action to eliminate hazards similar to those that caused an explosion at the Texas City refinery in March 2005. The accident, which resulted in 15 people losing their lives and 170 with injuries, led to OSHA fining BP a then record $21m.

The latest penalty comes at the conclusion of a six-month OSHA inspection, in which it evaluated the extent to which BP had complied with its obligations under the 2005 settlement agreement and OSHA standards.

For failing to comply with the terms of the agreement, the Texas City refinery has been issued 270 “notifications of failure to abate”, with fines totalling $56.7m (£34.2m). OSHA also identified 439 new “wilful violations” relating to failures to follow industry-accepted controls on pressure-relief safety systems, as well other process-safety management violations. Penalties for these offences totalled $30.7m (£18.5m).

OSHA’s acting assistant secretary of labor, Jordan Barab, said: “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. BP still has a great deal of work to do to assure the safety and health of the employees who work at this refinery.”

US secretary of labor, Hilda Solis, said BP had not lived up to its commitment and had “allowed hundreds of potential hazards to continue unabated”. She went on: “Fifteen people lost their lives as a result of the 2005 tragedy, and 170 others were injured. An $87m fine won’t restore those lives, but we can’t let this happen again. Workplace safety is more than a slogan — it’s the law. The US Department of Labor will not tolerate the preventable exposure of workers to hazardous conditions.”

BP is contesting all of the citations, including alleged violations and proposed penalties, abatement actions and abatement dates. It has claimed that the majority of citations relate to a disagreement between OSHA and BP as to whether or not it is in compliance with the settlement agreement, and that the matter is still being considered by the Occupational Health & Safety Review Commission, a body that is independent of OSHA.

Texas City refinery manager, Keith Casey, commented: “We are disappointed that OSHA took this action in advance of the full consideration of the Review Commission. 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.”  

He continued: “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.”

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