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BP fined a record £53 million for US violations

Author : Paul Gay

03 November 2009

BP has been fined a massive £53m for failing to correct safety hazards at its Texas City refinery, which suffered an explosion in March 2005 that killed 15 people and injured 170 more. The record fine was imposed by the Occupational Safety and Health Administration (OSHA), which cited 270 violations at the oil refinery.

Texas City refinery March 2005
Texas City refinery March 2005

The penalties issued to BP Products North America are for the company's failure to correct potential hazards faced by employees. A BP statement claimed the company believed it was in ‘full compliance’ with the 2005 settlement agreement with OSHA and would work with the agency to resolve the issue. The fine, equivalent to $87m, is the largest in OSHA's history and follows a six-month inspection into whether BP had complied with that agreement.

The previous record penalty was also against BP. In 2005, a $21.3m fine was issued by OSHA as BP entered into a four-year agreement to repair hazards at the Texas City refinery, which is the third largest in the US and can provide around 7% of the country's motor fuel.

Commenting on the 2009 penalty, OSHA said the company had committed hundreds of new violations by failing to follow industry controls on pressure relief safety systems and other precautions. And it was thought that the violations could have led to another catastrophe.

"When BP signed the OSHA settlement from the March 2005 explosion, it agreed to take comprehensive action to protect employees. Instead of living up to that commitment, BP has allowed hundreds of potential hazards to continue unabated," said Secretary of Labor Hilda L. Solis. "Fifteen people lost their lives as a result of the 2005 tragedy, and 170 others were injured. An $87 million fine won't restore those lives, but we can't let this happen again. Workplace safety is more than a slogan. It's the law. The US Department of Labor will not tolerate the preventable exposure of workers to hazardous conditions."

BP was given 15 days to either agree to pay the fine and take corrective action, or to contest the penalty through a hearing process. A company statement suggested that while it strongly disagreed with OSHA's conclusions, BP will continue to work with the agency to resolve their differences.

The company has already been fined $50m by the US Department of Justice in 2007 to settle criminal charges stemming from the Texas explosion. The company has also paid more than $2bn to settle civil law suits and says it has invested more than $1 billion to repair safety problems at Texas City.

The BP Texas City Refinery is the third largest refinery in the US with a refining capacity of 475,000 barrels of crude per day. It is located on a 1,200-acre facility in Texas City, southeast of Houston in Galveston County.

Under US law, a wilful violation exists when an employer has knowledge of a violation and demonstrates either an intentional disregard for the requirements of the Occupational Safety and Health (OSH) Act of 1970, or shows plain indifference to employee safety and health. A penalty of up to $70,000 may be assessed for each wilful violation. A notification of failure to abate can be issued if an employer fails to correct a cited condition and the citation is a final order of the Occupational Safety and Health Review Commission. A penalty of up to $7,000 may be assessed for each day that the violation remains uncorrected

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