$209 Million Settlement in Upper Big Branch Case
The agreement calls for Alpha Natural Resources, which bought Massey Energy after the explosion, to spend $80 million on safety improvements in its underground mines and also pay a record MSHA fine in connection with the case.
Alpha Natural Resources, the coal company that bought Massey Energy for the equivalent of $8.5 billion in early 2011, will spend $209 million on fines, restitution to victims, and safety improvements in a settlement with federal officials stemming from the April 5, 2010, explosion at the Upper Big Branch-South Mine in Raleigh County, W.Va., which Massey owned at that time. U.S. Attorney R. Booth Goodwin II of the Southern District of West Virginia announced the settlement Dec. 6 in Charleston, W.Va., along with officials from the FBI and the Labor Department's Office of Inspector General.
At the same time, MSHA announced it has imposed a fine of $10,825,368, the largest in its history, as a result of its investigation into the explosion and has issued 369 citations and orders -- including for an unprecedented 21 flagrant violations -- to Massey and to Performance Coal Company, a subsidiary that operated the mine at the time of the explosion. U.S. Labor Secretary Hilda Solis, Solicitor of Labor M. Patricia Smith, MSHA Assistant Secretary Joe Main, and MSHA Administrator for Coal Kevin Stricklin met with victims' families Dec. 6 to share the agency's findings. "The tragic explosion at Upper Big Branch left dozens of families without husbands, fathers, brothers and sons," said Solis. "I made a pledge to the families of those we lost, and the entire mining community, to conduct the most complete and thorough investigation possible in order to find the cause of this disaster. The results of the investigation lead to the conclusion that PCC/Massey promoted and enforced a workplace culture that valued production over safety and broke the law as they endangered the lives of their miners. By issuing the largest fine in MSHA's history, I hope to send a strong message that the safety of miners must come first."
Massey is now named Alpha Appalachia Holdings Inc., and it is a party to the settlement.
MSHA concluded the miners died in a massive coal dust explosion that started as a methane ignition, and it concluded the physical conditions that led to the coal dust explosion resulted from basic safety violations at the mine.
Ken Ward Jr. wrote one of the earliest reports of the settlement in the Charleston Gazette.
Goodwin said the settlement is the largest ever paid to resolve a criminal investigation of a mine disaster. It addresses the corporate criminal liability of the former Massey but not potential criminal charges for any individual. "The criminal investigation of individuals associated with Massey remains ongoing. Alpha has cooperated with the federal criminal investigation since the merger, in addition to implementing a number of safety improvements," a news release from Goodwin's office stated.
The agreement calls for Alpha to spend at least $80 million on safety improvements at all of its underground mines, to place $48 million in a mine health and safety research trust that will fund academic and nonprofit research to advance mine safety, and to pay $46.5 million in restitution ($1.5 million to each family) to relatives of the 29 miners who died in the explosion and to the two individuals who were injured. Alpha also will pay in full all penalties assessed by MSHA, including penalties that arise from the Upper Big Branch accident investigation, for a total of as much as $34.8 million.
Goodwin's release said the safety improvements include these:
- Alpha will install digital monitoring systems in its underground mines to continuously monitor compliance with ventilation requirements and make sure mines are free of methane gas.
- Alpha will implement a plan to ensure each underground mines has the personnel and resources necessary to meet all legal requirements concerning incombustible material and accumulations of coal dust and loose coal.
- Alpha will purchase state-of-the-art equipment to monitor its mines for explosive concentrations of coal dust and use that equipment in all of its underground mines.
- Alpha will buy next-generation rock dusting equipment (pending MSHA approval) and will install cutting-edge oxygen cascading systems to help miners make their way to safety if a serious accident occurs in an Alpha mine.
- Alpha will build a state-of-the-art training facility and implement a full training curriculum. The facility will be used to train Alpha miners and will be available to other mining companies.
"The tragedy at Upper Big Branch will never be forgotten, and the families affected by it will never be made completely whole again. Today's agreement represents the largest-ever resolution in a criminal investigation of a mine disaster and will ensure appropriate steps are taken to improve mine safety now and will fund research to enhance mine safety in the future," said U.S. Attorney General Eric Holder. "While we continue to investigate individuals associated with this tragedy, this historic agreement -- one of the largest payments ever for workplace safety crimes of any type -- will help to create safer work environments for miners in West Virginia and across the country."
"Collectively, these requirements will set a new standard for what can and should be done to protect miners," Goodwin said. "My hope is Alpha's adoption of the measures contained in this resolution will give the rest of the industry a strong push to follow suit."
He added, "The research and development component of this agreement holds the promise of breakthroughs that will transform mine safety in the coming decades. The fund announced today will jump-start innovation and put brilliant minds to work on the risks that coal miners face. We look forward to a future in which coal mining is as safe as any other occupation."
Justin Feldman, worker health and safety advocate with Public Citizen's Congress Watch Division, said the settlement isn't good enough. "The U.S. Attorney's Office should have prosecuted Alpha to hold the corporation criminally liable for the worker deaths. Instead, it opted for a non-prosecution agreement, in which there is no admission or finding of guilt –- meaning a corporation can engage in reckless activity that leads to the deaths of 29 people and still escape criminal prosecution," Feldman said in a statement released by Public Citizen. "Under the terms of the settlement, Alpha will pay $1.5 million to each family of the deceased. No amount of money can bring back a loved one, but offering families this sum while former Massey CEO Don Blankenship enjoys his $33 million golden parachute is a grave injustice. Thankfully, the U.S. Attorney's Office had the wisdom to leave the door open to criminal prosecution of individual Massey officers such as Don Blankenship, who pursued high profits at the cost of his workers’ lives. Public Citizen urges the U.S. Department of Justice to investigate top Massey officials like Blankenship and pursue accountability for wrongdoing."
"From the outset, Alpha has cooperated fully with all regulatory and enforcement agencies and we believe the agreements we've reached represent the best path forward for everyone. We're particularly pleased that a substantial portion of the settlement is going towards furthering miner safety, which has always been Alpha's guiding principle," Alpha CEO Kevin Crutchfield said. "We're mindful that the Justice Department investigation arose from a terrible tragedy which took the lives of 29 miners. Our thoughts will always be with the fallen miners and our sympathies with their families." The company said it continues to conduct its own review of the explosion and will consider MSHA's findings and the findings of other reports in its review.
Alpha listed these actions it has taken since the Massey acquisition: A behavior-based safety culture and training program, Running Right, has been implemented at all Massey locations. Alpha has begun a second phase of training supervisors on Running Right leadership and safety compliance. Mine foremen, superintendents, safety staff, and management in all business units have received emergency response training. Mine plans have been reviewed at all Massey locations, including ventilation surveys and modeling at underground sites, with technical professionals and safety specialists hired to expedite this review. Alpha also hired a team of external experts, including specialists in mine accident investigations, to review the explosion.
Alpha is based in Bristol, Va., and opened a new headquarters building there last month. It has approximately 14,000 employees and is now the fifth-largest coal supplier in the world, CEO Kevin Crutchfield said during the Nov. 28 ribbon cutting ceremony.