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OSHA Slaps BP with $50.6M Fine in ’05 TX Blast

Friday, August 13, 2010

BP Products North America Inc. will pay a $50.6 million penalty for the 2005 explosion that killed 15 workers at a Texas refinery and will spend at least $500 million to begin improving worker safety there immediately, under a federal settlement announced Thursday.

The fine is a record by the Occupational Safety and Health Administration—in fact, the second record-setting fine that OSHA has imposed in the disaster.

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. (The penalty announced at the time was higher, but OSHA later discovered some duplication in the citations and adjusted the total.) The explosion killed 15 workers and injured more than 170 others. BP then agreed to correct the problems. 

However, in a follow-up investigation in 2009, OSHA found that, despite some improvements, the company had failed to live up to several extremely important terms of the 2005 agreement. Also in the follow-up investigation, OSHA identified 439 new willful violations and assessed more than $30 million in penalties. BP challenged the fine.

Thursday’s agreement settles those “failure to abate” violations; BP has agreed to pay the fine in full, OSHA officials said. The company has also agreed to take immediate steps to protect current workers at the refinery, allocating a minimum of $500 million to that effort.

The size of the settlement “rightly reflects BP’s disregard for workplace safety and shows that we will enforce the law,” said Secretary of Labor Hilda L. Solis.

Under the agreement, BP will immediately begin performing safety reviews of the refinery equipment according to set schedules and make permanent corrections. The agreement also identifies many items in need of immediate attention; the company has agreed to address those concerns quickly and to hire independent experts to monitor its efforts.

OSHA says the agreement 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.”

Finally, the agency said, “in a step toward workplace safety corporate-wide,” BP will 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.”

More details are available at http://www.osha.gov/dep/bp/bpagreement.html.