An image of the BP refinery explosion.

BP Slammed with $87 Million Penalty, Largest OSHA Fine Ever

OSHA today announced it is issuing $87,430,000 in proposed penalties to BP Products North America Inc. for the company's failure to correct potential hazards faced by employees. This fine is the largest in OSHA's history. Previously, the largest total OSHA penalty was $21 million, which was also issued against BP in 2005.

Safety violations at BP's Texas City, Texas, refinery resulted in a massive explosion--with 15 deaths and 170 people injured--in March of 2005. BP entered into a settlement agreement with OSHA in September of that year, under which the company agreed to corrective actions to eliminate potential hazards similar to those that caused the 2005 tragedy. Today's announcement comes at the conclusion of a six-month inspection by OSHA, which entailed a minimum of 17 inspections to evaluate the extent to which BP has complied with its obligations under the 2005 agreement and OSHA standards.

"There were some serious systemic safety problems within the corporation, specifically within this refinery as well, and I think that just the fact that there are so many still outstanding life-threatening problems at this plant indicates that they still have a systemic safety problem in this refinery," said Jordan Barab, assistant secretary of labor for OSHA.

For noncompliance with the terms of the settlement agreement, the BP Texas City Refinery has been issued 270 "notifications of failure to abate" with fines totaling $56.7 million. Each notification represents a penalty of $7,000 times 30 days, the period that the conditions have remained unabated. OSHA also identified 439 new willful violations for failures to follow industry-accepted controls on the pressure relief safety systems and other process safety management violations with penalties totaling $30.7 million.

"They have had four years already to correct these items and during that four years there were periods of time in which various processes were shut down, so, they had adequate time to do that," said Dean McDaniel, the agency's regional administrator in Dallas.

According the McDaniel, during these various process shutdowns, which included a period after Hurricane Rita, BP did do some modifications for repairs, but did not do the key ones that he deemed critical to safety and health matters. "I don't have the full answer of why they did not do those, but clearly they had a window of time to implement these and they did not do that," he said

When asked if OSHA would now take steps to possibly shut down the Texas City plant after BP was given more than four years to come into compliance, McDaniel said the OSH Act does not give the agency carte blanche authority to do so. "The only mechanism that we would have to proceed along those lines would be if we believe there is an imminent danger, that there would be something catastrophic that needed to be taken care of immediately, we could seek an imminent danger and a subsequent restraining order for a particular instance," he said. "As far as the hazards and the violations that we are citing, we are not pursuing imminent danger for those. We believe that if those items are abated and they do corrective action on those, that they'll bring the refinery into compliance and it will resolve the matter."

The BP Texas City Refinery is the third largest refinery in the United States with a refining capacity of 475,000 barrels of crude per day. It is located on a 1,200-acre facility in Texas City, southeast of Houston in Galveston County.

A willful violation exists where an employer has knowledge of a violation and demonstrates either an intentional disregard for the requirements of the Occupational Safety and Health (OSH) Act of 1970, or shows plain indifference to employee safety and health. A penalty of up to $70,000 may be assessed for each willful violation.

A notification of failure to abate can be issued if an employer fails to correct a cited condition and the citation is a final order of the Occupational Safety and Health Review Commission. A penalty of up to $7,000 may be assessed for each day that the violation remains uncorrected.

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