BP received back-to-back record OSHA fines before Gulf oil spill

The Occupational Safety and Health Administration hit BP Products North America Inc. with nearly $90 million in penalties less than nine months ago for the company’s failure to correct an array of safety violations that threatened the lives and health of its workers. The fine, which OSHA announced on October 30 of last year, was the largest in the agency’s history.

According to OSHA’s website, prior to the $87,430,000 fine, the largest penalty issued by the agency was $21 million. That fine, issued in 2005, was also levied against BP. OSHA issued the fine for safety violations found at BP’s Texas City, Texas, refinery which resulted in a massive explosion that killed 15 workers and injured 170 others in March 2005. In September 2005, BP agreed to take several corrective actions to eliminate the hazards that caused the deadly Texas City refinery explosion.

However, at the conclusion of a months-long follow up inspection designed to evaluate the extent to which BP complied with its obligations under the 2005 agreement, OSHA officials found BP had done nothing to improve the health and safety conditions in its Texas City facility.

“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,” said Labor Secretary Hilda L. Solis.

OSHA then issued the $87.4 million fine against BP for its noncompliance with the terms of the settlement agreement, which included 270 “notifications of failure to abate” with fines totaling $56.7 million. OSHA also identified 439 new willful violations for its failure to follow industry-accepted controls on the pressure relief safety systems and other process safety management violations with penalties totaling $30.7 million.

In issuing the agency’s largest-ever fine, Solis said that $87 million wouldn’t restore the lives lost and damaged, but that the federal government could not allow such a reckless disregard for safety to happen again. “The U.S. Department of Labor will not tolerate the preventable exposure of workers to hazardous conditions,” Solis said.

Tragically, even back-to-back record fines didn’t compel BP to action. The company’s record as a maverick oil giant with little concern for safety culminated April 20 when its Deepwater Horizon platform exploded and sank into the Gulf of Mexico, killing 11 workers and injuring 17 others and creating the worst environmental catastrophe in U.S. history. BP undoubtedly found it more economical to pay OSHA fines than to institute the same level of safety in its U.S. facilities that it does in its European operations. It’s also likely that BP also found comfort in knowing that the federal government put a $75-million cap on oil spill liability. For a company that earns billions in profit every quarter, the U.S. government’s limited fines do not deter reckless endangerment but encourage it when there are vast profits to be made.

According to OSHA, 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. OSHA may assess a penalty of up to $70,000 for each willful violation. To big oil companies, that’s petty change.