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BP contests a record $87M US fine for lax remedies since fatal 2005 Texas refinery explosion

November 1, 2009, 9:20 am

The Occupational Safety and Health Administration on Friday imposed a record $87 million fine against oil giant BP PLC for failing to correct safety hazards after a 2005 explosion killed 15 workers at its Texas City refinery.

The fine _ the largest in OSHA's history _ comes after a 6-month inspection revealed hundreds of violations of a 2005 settlement agreement to repair hazards at the refinery.

BP officials formally contested the fine, saying they believed the company had fully complied with the settlement agreement.

OSHA said the company also committed hundreds of new violations at the nation's third largest refinery by failing to follow industry controls on pressure relief safety systems and other precautions.

Labor Secretary Hilda Solis said BP failed to live up to the terms of its commitment to protect employees. If the problems are not addressed, Solis said it "could lead to another catastrophe."

"An $87 million fine won't restore those lives, but we can't let this happen again," Solis said. "Workplace safety is more than a slogan. It's the law."

The deadly explosion at BP's Texas City refinery, about 40 miles southeast of Houston, also injured more than 170 people.

In a statement, the company said most of the alleged violations relate to an ongoing disagreement between OSHA and BP that is already pending before the Occupational Health and Safety Review Commission, a body that is independent of OSHA.

"We are disappointed that OSHA took this action in advance of the full consideration of the Review Commission," said Keith Casey, BP's manager of the Texas City refinery. "While we strongly disagree with their conclusions, we will continue to work with the agency to resolve our differences."

The largest prior OSHA fine was $21 million, also leveled against BP in connection with the refinery explosion.

In the latest case, OSHA officials found 270 violations totaling $56.7 million in penalties for BP's failure to take corrective action as required by terms of the 2005 settlement agreement with OSHA. Agency inspectors also identified 439 new willful violations totaling $30.7 million in penalties for failure to repair pressure release safety devices.

OSHA officials said the 2005 explosion was caused by defective pressure relief systems. The explosion occurred after a piece of equipment called a blowdown drum overfilled with highly flammable liquid hydrocarbons. Alarms and gauges that were supposed to warn of the overfilled equipment did not work properly.

Jordan Barab, acting assistant secretary of labor for OSHA, said the agency found "some serious systemic safety problems within the corporation" and at the Texas refinery.

"The fact that there are so many still outstanding life-threatening problems at this plant indicates that they still have a systemic safety problem in this refinery," Barab said.

But BP's Casey called efforts to improve safety performance at the refinery "among the most strenuous and comprehensive that the refining industry has ever seen."

Since the 2005 accident, four additional people have died at the Texas refinery, including one employee and three contractors.

Eva Rowe, whose parents, James and Linda Rowe, were killed in the blast as they worked at the refinery, praised OSHA for "standing up to BP."

"I hope this sends a strong message to the industry that this behavior will not be tolerated," Rowe said. "I hope that this will still lead to criminal prosecution and conviction of the BP officials that were responsible."

Brent Coon, an attorney for several blast victims, said Friday that noncompliance with the OSHA agreement would mean BP is not meeting the terms of a highly criticized federal plea agreement between the oil giant and the Justice Department that settled criminal charges in the explosion. The plea deal was approved in March by a federal judge in Houston.

Under the deal, a BP subsidiary pleaded guilty to a violation of the Clean Air Act _ a felony _ and BP was sentenced to three years probation and fined $50 million.

Coon said he planned to ask the Justice Department to revoke BP's probation and the plea deal and proceed with criminal prosecution in the case.

A Justice Department spokesperson did not immediately return an e-mail seeking comment.

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