BP fined record $87m over Texas City

BP, the UK oil company, still has a ``systemic safety problem’’, given continued life-threatening safety problems at its Texas refinery four years after an explosion there killed 15 and injured hundreds, the US government said on Friday.

Jordan Barab, deputy assistant secretary of the Department of Labor’s Occupational Safety and Health Administration (Osha), said that despite the replacement of BP’s chief executive, Lord John Browne, following that explosion, BP continues to violate US safety laws under the leadership of Tony Hayward.

OSHA issued $87.4m in proposed penalties for the company’s failure to correct potential hazards faced by employees – the largest in the agency’s history. The previous record penalty, $21m, was issued in 2005 against BP, when the Texas City refinery exploded.

BP’s compliance with Osha was one of the terms of its probation, set by the Department of Justice in 2007, when BP agreed to three years’ probation and to pay fines totalling $380m to US authorities to settle violations linked to the refinery explosion, oil pipeline leaks and fraud in energy trading.

The probation dates back to the 2005 explosion at the refinery, for which Osha found more than 300 “egregious, wilful violations” in the refinery – BP’s biggest. While BP did not admit guilt, it agreed in a settlement with Osha to a maximum allowable $21m fine and to spend $1bn on the refinery over the next five years, bringing it into compliance.

``BP continues to believe we are in full compliance and the company will formally contest these citations, which will place these issues before an Administrative Law Judge,’’ said Daren Beaudo, BP spokesman.

He noted the matter is also presently before the Occupational Health & 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. We continue to believe we are in full compliance with the Settlement Agreement, and we look forward to demonstrating that before the Review Commission.’’

But Osha said that in inspecting just three of the 28 units at the refinery under its jurisdiction, it felt justified in fining BP $56.7m for 270 instances in which it failed to correct problems identified following the blast. In addition, those inspections uncovered 439 new ``willful violations for failures to follow industry-accepted controls on the pressure relief safety systems and other process safety management violations with penalties totalling $30.7m.’’

``We don’t want to see the loss of one more worker there,’’ said Hilda Solis, labour secretary. ``The US Department of Labor will not tolerate the preventable exposure of workers to hazardous conditions.’’

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