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BP Texas refinery hit with record safety fine

November 1, 2009, 9:37 am

By Erwin Seba of Reuters


HOUSTON - US safety regulators ha shit oil giant BP with a record $US87.4 million fine for failing to fix safety violations at its Texas City, Texas, refinery after a deadly 2005 explosion.


In announcing the fines, US Labor Secretary Hilda Solis said old and new safety violations found by the US Occupational Safety and Health Administration at the nation's third largest refinery "could lead to another catastrophe" like the 2005 explosion that killed 15 workers and injured 180.


BP filed a contest to the fine, calling OSHA's actions disappointing as the company believed the Texas City refinery had honored a 2005 agreement with the agency to fix safety problems that led to the blast.


BP said contesting fines will send the dispute to a US administrative law judge for a ruling.


BP also has an appeal pending before the Occupational Safety and Health Review Commission, an independent panel that reviews OSHA actions.


"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," Texas City Refinery Manager Keith Casey said in statement.


A United Steelworkers safety official said the union, which represents Texas City refinery workers, would seek to participate in any settlement talks or hearings before the commission and judge.


"We want this settlement to be fair to company, fair to OSHA and especially fair to workers and to the community around the refinery," USW spokesman Michael Wright said.


Of the fine, $US56.7 million was for 270 instances of failure to abate problems found in 2005.


The remaining $US30.7 million was for 439 new willful violations for not following industry standards on pressure relief systems and other process safety failures, according to the agency.


BP took multiple steps to fix problems found at Texas City in the first three years after the 2005 blast, "but later their commitment waned," OSHA regional administrator Dean McDaniel said.


Systemic problems persist within the company, said a Labor Department official.


"There are some serious systemic safety problems within the corporation, specifically within this refinery as well," acting assistant labor secretary for OSHA Jordan Barab said.


"I think that just the fact that there still are so many life-threatening problems indicates they have a systemic safety problem at this refinery."


In 2005, BP paid a then-record $US21.3 million fine to OSHA and entered into a four-year agreement with the agency.


As the agreement neared its end in September, OSHA warned the company that numerous problems remained.


"BP gets to claim they have the first and second largest fines of any industry under OSHA supervision," attorney for victims of the BP blast Brent Coon said.


BP has said it has invested more than $US1 billion to repair safety problems at Texas City.


The company has paid more than $US2 billion to settle civil lawsuits stemming from the blast.


Earlier this year, BP pleaded guilty to criminal charges in the explosion and paid a $US50-million fine to the US Justice Department.


The company was placed on three years' probation, a condition of which was fulfilling the agreement with OSHA.


The US attorney's office in Houston was reviewing OSHA's action, a spokeswoman said in a statement.


"We will take all appropriate actions to ensure the plea agreement is not violated and cannot comment further at this time," spokeswoman for the US attorney's office Angela Dodge said.


Eva Rowe, who lost both her parents in the explosion hailed OSHA's action.


"I think it's fantastic OSHA is standing up to BP," Ms Rowe said in a statement issued by her attorney.


"I hope that this will still lead to criminal prosecution and conviction of the BP officials that were responsible."


An investigation by the US Chemical Safety Board found cost-cutting by BP amid pressure to meet production targets led to the explosion.


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