Environmental

BP agrees to pay record OSHA fines for Texas City refinery explosions

The Occupational Safety and Health Administration today announced that BP Products North America Inc. will pay a  record $50.6 million penalty for violations that caused the 2005 explosion at its Texas City, Texas, refinery. The blast killed 15 workers and injured 170 others.

The agreement resolves failure-to-abate citations OSHA levied for problems found in a follow-up investigation last year. In addition to paying the record fine, BP has agreed to take immediate steps to protect workers currently employed at the Texas City refinery, allocating a minimum of $500 million to that effort.

“This agreement achieves our goal of protecting workers at the refinery and ensuring that critical safety upgrades are made as quickly as possible,” Secretary of Labor Hilda L. Solis said in a public statement. “The size of the penalty rightly reflects BP’s disregard for workplace safety and shows that we will enforce the law so workers can return home safe at the end of their day.”

Under the agreement, BP is to immediately begin performing safety reviews of its refinery equipment according to set schedules and to make permanent corrections where they are needed. BP has also agreed to address concerns that OSHA says need immediate attention and will hire independent experts to monitor the company’s progress in fixing the known problems.

The agreement also provides an unprecedented level of oversight of BP’s safety program, including regular meetings with OSHA, frequent site inspections, and the submission of quarterly reports for the agency’s review. In a step toward workplace safety throughout all of its U.S. facilities, BP agreed to establish a liaison between its North American and London boards of directors and OSHA, which will allow the agency to raise compliance problems at the highest level of the company’s ranks.

Safer conditions at this refinery should result from this arrangement, which goes far beyond what can normally be achieved through abatement of problems identified in citations,” said Assistant Secretary of Labor for OSHA Dr. David Michaels. “Make no mistake, OSHA will be watching to ensure that BP complies with the agreement and safeguards its workers.”

In September 2005, OSHA cited BP for a then-record $21 million as a result of the fatal explosion at its Texas City refinery in March of that year. Upon issuance of the citations, the parties entered into an agreement that required the company to identify and to correct deficiencies. In a follow-up investigation in 2009, OSHA found that BP had made some changes but that it failed to honor several critical terms of that agreement. Those violations earned BP an $87.4 million fine, which was later lowered after duplicate violations were discovered. The $50.6 million fine is still the largest penalty OSHA has ever issued and agreed to by an employer. The fine also makes BP the recipient of the largest back-to-back fines in OSHA history and does not include fines that will likely result from the Deepwater Horizon explosion, which killed 11 workers and injured several others.

During the 2009 follow-up investigation at Texas City, OSHA also identified 439 new willful violations and assessed more than $30 million in penalties. Litigation before the Occupational Safety and Health Review Commission regarding those violations and penalties is ongoing and is not resolved by today’s settlement.