Unanswerable Questions

OSHA's $87,430,000 penalty is an enormous fine, one BP Products North America Inc. already has formally contested. Do big fines trigger better safety? And why did OSHA issue this one now, when the company says its dispute with OSHA about whether or not BP has controlled the hazards effectively at its Texas City, Texas, refinery is already before OSHRC, it has fully addressed OSHA's concerns, and it will complete other promised actions by Dec. 31, 2011.

In an Oct. 30 statement posted on the BP Web site, BP Products North America Inc. said the latest citations were "disclosed to the company late Thursday by the Region 6 Office of the U.S. Occupational Safety and Health Administration. The majority of citations relate to a previously announced disagreement between OSHA and BP as to whether BP is in compliance with a 2005 OSHA Settlement Agreement reached after the March 2005 accident at the Texas City refinery. That matter is presently before the Occupational Health & Safety Review Commission, a body that is independent of OSHA. Today's filing will expedite the process of referring the contested case to an Administrative Law Judge."

"We are disappointed that OSHA took this action in advance of the full consideration of the Review Commission," Texas City Refinery Manager Keith Casey said in the statement. "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. 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. We remain committed to further enhancing our safety and compliance systems and achieving our goal of becoming an industry leader in process safety."

Posted with the statement was a link to an Oct. 5, 2009, letter written on behalf of BP Products North America by Thomas H. Wilson, a co-leader of the Labor and Employment Practice Group at Vinson & Elkins, a storied 700-lawyer firm based in Houston, to Mark Briggs, area director of OSHA's Houston South Area Office. In the letter, Wilson says BP had no formal notice before Aug. 3, 2009, that OSHA expected all actions by the company to be completed by Sept. 23, 2009. The Settlement Agreement contains more than 550 actions or recommendations, and OSHA has expressed concern about the completion of five of them, Wilson wrote. BP filed an amended petition for modification of abatement on Sept. 21, 2009, that spells out how those five items will be resolved. Wilson attached a chart summarizing how each issue raised in OSHA's Aug. 3 letter has been resolved, according to BP.

Big fines make news, and OSHA certainly has turned up its enforcement heat this year. Will this whopper stand up at OSHRC and in the likely federal court battle to follow? Unless BP was more recalcitrant than the letter suggests, why issue it now?

Posted by Jerry Laws on Oct 30, 2009