BP to Pay $21.4 Million OSHA Fine for Fatal Texas Explosion

BP Products North America Inc. has agreed to pay a record-breaking OSHA fine in a partial settlement agreement for a March 23 explosion that killed 15 workers and injured more than 170 at its refinery in Texas City, Texas.

Untouched by the settlement agreement is whether OSHA will refer the case to the Department of Justice for criminal prosecution.

OSHA made public its citation of BP for 303 willful violations in an announcement yesterday (Sept. 22), listing hundreds of safety and health violations.

More than half the $21.4 million fine and 167 of the willful citations were for "non-intrinsically safe electrical equipment." OSHA also cited BP for failure to:

  • Compile written process safety information;
  • Record days away from work incidents on the 2004 OSHA 300 log; and
  • Adequately evaluate the safety and health impact of a catastrophic blast for temporary trailers located near the isomerization (ISOM) unit.

The fatal blast that also injured more than 170 other workers resulted when a fire in the ISOM unit ignited a cloud of hydrocarbon vapors during start-up procedures. In a statement, BP has admitted that failing to warn and evacuate workers from temporary office trailers prior the start-up "greatly increased the number of people killed and injured by the explosion."

"This citation and penalty nearly double the next largest fine in OSHA history sends a strong message to all employers about the need to protect workers and to make health and safety a core value," said solicitor of labor Howard Radzely. "BP will pay the full fine, abate all the hazards and significantly improve their safety measures."

Under the settlement, BP granted OSHA an unusual degree of oversight powers at the Texas facility. The company has agreed to complete a review of the ISOM unit and must alert OSHA if and when BP decides to start the unit up again.

BP also agreed to undertake a wide variety of other corrective actions, including:

  • Hiring a firm with process safety management (PSM) expertise to conduct a refinery-wide audit of the company's PSM systems;
  • Improve workers' safety and health training;
  • Submit to OSHA and BP's authorized employee representative every 6 months for 3 years OSHA 300 logs and all incident reports related to PSM issues; and
  • Notify the OSHA area office of any incident or injury at the refinery that results in an employee losing one or more workdays for the next 3 years.

"We have worked with OSHA in a cooperative and comprehensive manner and we are very pleased to have achieved this agreement," said Ross Pillari, president of BP Products North America. "We will apply the learnings (sic) from this and other investigations to make the Texas City refinery a safer place."

Unresolved Issues

In order to avoid costly legal battles, OSHA often reclassifies willful citations that lead to a fatality as "unclassified" violations. While OSHA has the power to refer willful fatality cases to the Department of Justice for criminal prosecution, the agency has not yet decided whether it will do so in the case of BP. Unclassified violations are rarely referred for criminal prosecution.

Companies are often prepared to fight hard to avoid willful citations, not only because of the potential criminal liability, but also because a willful violation record can make it easier for victims' families to sue in civil court.

Civil settlements with victims' families can easily dwarf OSHA fines, even the record-breaking amount agreed to in this case.

BP, which recorded profits of over $15 billion last year, has set aside $700 million to compensate victims of the explosion.

In a statement, the company said it has reached settlements with the families of "most of the workers who died and with many workers who suffered serious injuries."

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