An oil company like BP strives for record earnings, not record fines.
But a recent decision by the federal Occupational Safety and Health Administration (OSHA) reminded the company not to reap profits at the expense of workers’ safety, a move that has resulted in deadly consequences in an industry ripe with dangerous violations.
A little more than a week ago, the U.S. government agency handed down an unprecedented $87.4 million fine against the London-based corporation for failing to bring safety regulations up to code following a 2005 explosion at a Texas refinery that killed 15 people and injured 170. The fine was the largest amount ever issued by the OSHA, replacing the previous record — set by BP, following the 2005 explosion — of $21 million.
After a six-month investigation, the OSHA found that the company has not eliminated the types of hazards similar to the one that caused the 2005 explosion. Officials said that blast at the BP refinery in Texas City, Texas, had faulty alarms and gauges to warn workers of a potential danger.
What’s worse, the conditions haven’t improved. Since the explosion, there have been four more deaths at the refinery, the third largest in the country. And despite an agreement to make corrections, OSHA found 439 new safety violations, it reported in October:
“When BP signed the OSHA settlement from the March 2005 explosion, it agreed to take comprehensive action to protect employees. Instead of living up to that commitment, BP has allowed hundreds of potential hazards to continue unabated,” Secretary of Labor Hilda L. Solis said in a statement. “Fifteen people lost their lives as a result of the 2005 tragedy, and 170 others were injured. An $87 million fine won’t restore those lives, but we can’t let this happen again.”
BP has formally contested the violations, maintaining that they are in full compliance with the OHSA agreement from 2005. They added the violations mostly relate to disagreements that are pending with the Occupational Health and Safety Review Commission, an independent body unaffiliated with the OSHA.
Keith Casey, Texas City Refinery Manager, said he “strongly disagreed” with the OSHA’s conclusions.
“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,” Casey said in a statement.
The BP response reflects an industry that is largely slow to improve and enforce regulations. According to the OSHA, highly hazardous chemicals, which were responsible for the 2005 blast, are the culprits for a large number of explosive incidents. “No other industry sector has had as many fatal or catastrophic incidents related to the release of HHC as the petroleum refining industry,” OSHA reported.
Despite the warnings, oil companies have not improved their safety regulations, even as OSHA has been busy handing out fines to Sunoco, ConocoPhillips, Exxon Mobil, and a handful of others this year.
Still, as unions like the United Steelworkers (USW) try to make headway, they have faced ambivalence. The group pulled out of talks with the American Petroleum Institute (API) and the oil industry to improve safety measures. The USW said they could not reach consensus on providing incident reports and reducing overtime hours, which can lead to worker fatigue.
USW International Vice President Gary Beevers, who is in charge of the union’s National Oil Bargaining program said in a statement:
We have to take such action to protect workers’ lives because the industry repeatedly shows it isn’t willing to take serious measures to ensure the safety of our people and of the community. These oil companies try to get by with as few regulations and mandates as possible; we want a fair playing field.
As the number of new oil discoveries increase, it will most likely mean the industry will continue to grow, much to the ire of environmentalists and labor advocates in the industry. Even though BP reported record profits last year, the economic crisis has slowed its gains recently. Maybe hitting their pockets with large fines will provide enough incentive to finally budge.