BP Agrees to $13M Settlement With OSHA

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BP Agrees to $13M Settlement With OSHA


WASHINGTON, D.C. -- The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) and BP Products North America Inc. have resolved 409 of the 439 citations issued by the agency in October 2009 for willful violations of OSHA's process safety management (PSM) standard at BP's refinery in Texas City, Texas. According to the announcement, BP will pay more than $13 million in penalties, and already has or will abate all existing violations by the end of this year.

"Protecting workers and saving lives is the ultimate goal of this agreement," stated Secretary of Labor Hilda L. Solis. "For the workers at BP's Texas City refinery, this settlement will help establish a culture of safety. The workers who help keep our nation's oil and gas industries running deserve to go to work each day without fear of losing their lives."

OSHA cited BP in 2005 for a then-record $21 million as a result of an explosion at its Texas City refinery in March of that year that killed 15 workers. Upon issuance of the citations, the parties entered into an agreement that required BP to identify and correct the deficiencies, according to the agency.

Through a 2009 follow-up investigation to evaluate BP's performance under that agreement, OSHA found that BP had made improvements at the plant but failed to correct a number of items; it issued 270 failure-to-abate notices. In a 2010 settlement, BP agreed to pay a penalty of $50.6 million to resolve those notices. In 2009, OSHA also cited BP for 439 willful violations of the agency's PSM standard, including failing to follow industry-accepted engineering practices for pressure relief safety systems. Total proposed penalties for those citations equaled $30.7 million.

Under the new agreement, all violations covered in this settlement have been corrected or will be corrected by Dec. 31 of this year using the procedures established under the 2010 agreement, OSHA announced. That agreement included independent third-party experts who provided oversight of BP processes for relief and safety instrumented system evaluation, along with quarterly progress reports. BP was also required to hire independent experts to monitor its efforts, and allocate $500 million to ensure safety at the Texas City refinery.

All but 30 of the 439 citations from October 2009 are settled by today's agreement. BP accepted 57 willful and 31 serious citations as issued, while 61 original willful citations have been grouped as 34 repeat citations; 150 willful citations have been grouped as 92 unclassified citations; 110 citations have been withdrawn by OSHA; and 30 unresolved citations have been grouped as 22 unresolved citations and remain under contest. These unresolved citations will be litigated or settled in the future.

The 110 withdrawn citations were dropped due to additional documentation from BP that showed several pieces of equipment originally cited were not covered by the PSM standard, were out of service at the time of the inspection or met the applicable Recognized and Generally Accepted Good Engineering Practices requirements. BP's documentation was reviewed and verified by OSHA and independent third-party experts.

The 30 unresolved violations, which were grouped in the settlement as 22 citations, address BP's failure to protect certain pressure relief valves in accordance with RAGAGEP, a safety concept set forth in OSHA's PSM standard that requires employers covered by the standard to operate potentially hazardous facilities using good engineering practices accepted by their industry, according to OSHA.

"Make no mistake, the scope of this agreement should send a clear signal that OSHA is committed to ensuring BP takes seriously the safety and health of America's most important natural resource -- its workers," said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels.

A copy of the agreement is available here, while a timeline on OSHA's actions regarding BP is available by clicking here.