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BP Settlement Breaks Record

Regulation: Safety agency hits oil company with $50.6 million fine for workplace violations

by Jeff Johnson
August 23, 2010 | A version of this story appeared in Volume 88, Issue 34

Credit: Newscom
OSHA finds that workplace safety problems remain at BP’s Texas City refinery, where this 2005 accident killed 15 workers.
Credit: Newscom
OSHA finds that workplace safety problems remain at BP’s Texas City refinery, where this 2005 accident killed 15 workers.

BP will pay a $50.6 million fine as part of a recent agreement with the Occupational Safety & Health Administration to resolve workplace safety violations at BP’s Texas City, Texas, refinery. It is the largest fine in OSHA’s history.

The record settlement springs from an OSHA investigation of the 2005 BP refinery accident that killed 15 workers and injured 170 others. In 2007, OSHA fined the company a then-record $21 million because of the accident and ordered BP to take several corrective actions to improve safety. A follow-up investigation in 2009 found that the company had failed to correct deficiencies identified during the earlier investigation; these findings resulted in the latest fine and settlement, which was announced on Aug. 12.

The agreement, said Labor Secretary Hilda L. Solis, who oversees OSHA as part of her department, is intended to ensure that BP makes “critical safety upgrades” as quickly as possible. “The size of the penalty rightly reflects BP’s disregard for workplace safety,” she added in a statement.

The company has also agreed to spend $500 million by 2016 to correct problems that OSHA identified at the plant and to have the work monitored by independent experts.

BP noted in a statement that the company had already spent some $1 billion to improve workplace safety, and it will accelerate an ongoing multiyear program to overhaul process safety practices. However, since the 2005 accident, there have been several more accidents at the Texas City refinery and four deaths (C&EN, Nov. 9, 2009, page 12).

As part of the settlement, BP will also improve safety corporation-wide by establishing a liaison between OSHA and its North American and London boards of directors. According to OSHA, the arrangement will allow safety issues to be raised to the top levels of the company.

Still outstanding are some $30 million in proposed OSHA fines for 439 new “willful violations” at the Texas refinery, which were identified by the 2009 OSHA investigation. These proposed fines have not been resolved and are not part of the $50.6 million settlement.



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