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Appeal Upholds Years of Chemical Fines

Monday, May 11, 2015

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WASHINGTON, DC—Coating makers, chemical plants, refineries and other employers that use hazardous chemicals may be in for much larger, and longer-running, safety penalties than they realize, under a new federal decision.

The liability could even extend to lapses by previous owners of their facilities.

Citations for violations of federal Process Safety Management standards are not barred by the typical six-month statute of limitations if the danger from the violation persists, the Occupational Safety and Health Review Commission has ruled.

Delek
Delek US

The case involved citations issued after a 2008 explosion and fire at Delek's refinery in Tyler, TX.

That means that the Occupational Safety and Health Administration could issue a citation for each day that a violation is not addressed—even if it takes years.

The ruling by the commission, which serves as an independent review agency for OSHA decisions, seems likely to bolster OSHA's rapidly growing enforcement focus on Process Safety Management.

PSM 101

The Process Safety Management of Highly Hazardous Chemicals standard (29 CFR 1910.119) aims to prevent releases, explosions, fires and other catastrophic events at plants and other facilities that use highly hazardous (reactive, flammable or explosive) chemicals.

The standard was promulgated in 1992 in response to a number of catastrophic incidents worldwide.

The triggers included the 1984 Union Carbide gas leak that killed thousands in Bhopal, India, and the explosion at a Phillips 66 chemical complex in Texas in 1989. That event killed 23 workers and injured more than 130.

Phillips66Explosion
OSHA

OSHA developed the Process Safety Management standard after the 1994 Bhopal catastrophe, which killed thousands, and the 1989 explosion (pictured) that killed 23 workers at a Phillips 66 complex in Texas.

PSM is addressed in standards for general industry and construction.

PSM standards include requirements for the mixing, separation or storage of process chemicals; facility processes; and equipment operation and maintenance.

The standard has been the focus of two National Emphasis Programs since 2009.

Different Owner, Same Obligations

The new ruling comes in an appeal by Delek Refining Ltd. In November 2008, OSHA inspected Delek's refinery in Tyler, TX, following an explosion and fire.

The citations issued included some for hazardous conditions that dated to the refinery's prior owner: La Gloria Oil and Gas Co., which sold the plant to Delek for $68.1 million in April 2005.

OSHA said Delek had violated the PSM standard "by failing to address the findings and recommendations from several [Process Hazard Analyses, or PHAs] conducted by the refinery's prior owner."

PSM_Fire
OSHA

The Process Safety Management standard is aimed at preventing releases, explosions, fires or similar disasters at facilities that use highly hazardous chemicals.

Under the PSM standard, employers must certify that they have evaluated compliance with the provisions of the standard at least every three years and "document that deficiencies have been corrected."

26 Unaddressed Items

In Delek's appeal, however, the Administrative Law Judge found a total of 16 unaddressed items from six PHAs and 10 unresolved items from a compliance audit.

Delek contended that the citations were "time-barred" by OSHA's statute of limitations and that the company had no obligation to address findings and recommendations by the prior owner.

The judge disagreed and, now, so has the commission.

The commission also said that Delek was well aware of the pre-existing conditions, as it had retained several supervisors when it took over the company.

Hazards: One-Time v Continuing

In its appeal, Delek sought support in a 2012 ruling that had overturned OSHA citations stemming from recordkeeping violations.

Specifically, that case involved an employer's failure to record workplace injuries within the time required. The citations were thrown out, however, because the injuries occurred more than six months before the citation date. The same should apply to its case, Delek argued.

TexasCityRefinery2005
U.S. Chemical Safety Board

Process Safety Management failures were cited in the 2005 Texas City Refinery explosion that killed 15 BP workers and injured more than 170 others.

The commission disagreed. It found that the "discrete record-making violation[s]" from the other case were one-time lapses that presented no continuing danger to workers.

An uncorrected workplace condition, on the other hand, constitutes a continuing hazard that may continue to draw citations and fines, the commission said. Documentation may also be required to fully complete the process and stop the violations clock.

Schedules for auditing and abating hazards are not "reset or altered" even if the facility is sold, the commission said.

Because Delek failed to address the longstanding hazards, the commission said, "the dangers described in the PHAs and compliance audits at issue persisted."

Thus, "each day that passed without the recommendations being addressed meant the violative conditions continued, and could be cited by OSHA."

   

Tagged categories: Accidents; Coatings manufacturers; Construction chemicals; Explosions; Health and safety; North America; Oil and Gas; OSHA; Process Safety Management; Program/Project Management; Regulations

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