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Chilled Safety Culture Draws NRC Fines

Tuesday, April 23, 2013

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A “chilled work environment” prevented nuclear facility employees from raising safety concerns about flawed rebar—a serious safety shortcoming that has prompted fines against Chicago Bridge & Iron for its recently acquired Shaw Group subsidiary.

The U.S. Nuclear Regulatory Commission has issued a notice of violation and proposed a total civil penalty of $36,400 against Chicago Bridge & Iron for discriminating against an employee who raised safety concerns at one of the company's newly purchased Shaw subsidiaries.

The NRC doubled the normal civil penalties because Shaw did not identify the violations or take corrective action, the agency said Friday (April 19).

CB&I nuclear
Photos: CB&I

CB&I received a notice of violation and civil penalty of $36,400 for having a "chilled work environment" that stifled employee complaints about safety issues for fear of retaliation.

The NRC also urged CB&I to take action to improve safety culture at a second former Shaw subsidiary.

The separate actions, issued April 18, stem from complaints filed with the NRC before CB&I completed an acquisition of the Shaw Group companies in February.

Before the acquisition, Shaw was a Fortune 500 company headquartered in Baton Rouge with about 25,000 employees and $6 billion in FY2012 revenue. Shaw provided engineering, construction, maintenance, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries.

2 Violations

In May 2011, the violation says, a quality assurance supervisor was fired for notifying Shaw and Louisiana Energy Services, an NRC licensee, that some potentially faulty rebar may bave been shipped to its National Enrichment Facility in New Mexico by a third-party vendor, the violation states.

Shaw Group HQ
Wikimedia Commons

CB&I acquired the Shaw Group in February. The complaints involve activities before the sale. Shaw was headquartered (pictured) in Baton Rouge, LA.

The second violation stems from language in Shaw's Corporate Code of Conduct that could "prohibit, restrict, or otherwise discourage employees from participating in protected activities," including providing information to the NRC.

The company has 30 days to respond and describe corrective actions it intends to implement. The company may request alternative dispute resolution for settlement options.

The company must also inform employees about the letter and corrective actions. NRC has instructed CB&I to provide:

  • Steps to ensure that individuals can raise safety and quality concerns without fear of retaliation;
  • Plans describing how CB&I will communicate expectations and policies needed to maintain a safety-conscious work environment;
  • Measures to assess the effectiveness of employee training and for monitoring the development and maintenance of a safety-conscious work environment; and
  • A report on whether The Shaw Group Inc.'s corporate Employee Concerns Program was aware that a chilled environment existed and on changes being made to remedy the chilled environment.

Company to 'Take Immediate Action'

"We take these matters very seriously," Gentry Brann, VP of Global Communications and Marketing for CB&I, said in an email Monday (April 22).

"CB&I will take immediate action to create and promote a healthy safety culture, where all employees feel open to identify issues and express concerns," Brann said.

"Our uncompromising focus is on safety, quality and an open work environment. It is not only CB&I's policy, but our practice."

'Not Free to Raise Safety Concerns'

In a separate letter to Philip K. Asherman, president and CEO of CB&I, the NRC noted a "chilled work environment" at the Lake Charles, LA, facility, formerly known as Shaw Modular Solutions (SMS). According to NRC, workers have reported safety concerns directly to NRC because they were hesistant to go through company channels.

"[P]ortions of the SMS workforce, especially employees with nuclear and quality control backgrounds, have the perception that they are not free to raise safety concerns using all available avenues," said the letter, written by Glenn M. Tracy, director of the Office of New Reactors.

In February 2012, the letter said, Synergy Consulting Services conducted a safety-conscious work environment (SCWE) assessment for SMS.

Results indicated that 27 percent of respondents weren't confident they could raise a qualtiy concern without fear of retaliation; 30 percent said they knew of someone who had experienced negative reaction from management after raising quality concerns; and 37 percent said they did not believe that the SMS discipline policy was appropriate or fair.

NRC fines

CB&I responded to the allegations, saying the company "will take immediate action."

Additionally, results indicated that employees lacked trust in management, with trust decreasing further up the management chain. Forty percent said senior management had not earned their trust.

Those results "demonstrate higher negative response rates than industry norms," the letter said.

"We caution that it is important for SMS and its successor CB&I to recognize that chilling 'messages' have been perceived by workers at the SMS facility in recent years," Tracy wrote.

"Importantly, management must be committed to eliminate situations that detract from developing and maintaining a strong safety-conscious work environment."

'Significant' Number of Concerns

From January 2010 to January 2013, 35 percent of all vendor-related safety allegations involved the Lake Charles facility, NRC said. There are more than 600 vendors supplying nuclear safety-related goods and services.

The NRC said it had received allegations during this time frame that included:

  • 13 allegations that raised 19 separate concerns related to a safety-conscious work environment at SMS;
  • 54 vendor-related allegations;
  • 10 concerns alleging a chilling affect; and
  • Nine concerns alleging retaliation after safety concerns were raised.

While the NRC's review of the complaints didn't identify specific quality issues, the "significant number of employee concerns ... suggests a poor environment for raising safety concerns within the company."

"The NRC takes seriously the ability of employees to raise safety concerns without fear of retaliation, and employee protection from discrimination," said Tracy.

Tracy acknowledged that CB&I was implementing management changes at the former Shaw companies and said, "It is vital to assess the work environment and address unresolved conflicts."

Former Shaw Safety Fraud

On April 11, a former Shaw Group safety manager, Walter Cardin, was sentenced to 78 months in prison, followed by two years of supervised release, for eight counts of major fraud against the Tennessee Valley Authority (TVA). 

A federal jury heard evidence that Cardin lied about injuries at the Brown's Ferry Nuclear Site in Athens, AL, and provided bogus information about injuries at the Sequoyah Nuclear Site in Soddy Daisy, TN, and at Watts Bar Nuclear SIte near Spring City, TN.

Cardin was convicted of generating false injury rates, which the Shaw Group used to collect more than $2.5 million in safety bonuses from TVA.


Tagged categories: Acquisitions; Health and safety; Nuclear Power Plants; Regulations; Whistle blowing

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