Fact Sheet on History of 2012 Agreement between OSHA and BP
In October, 2009, the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) proposed $87,430,000 in penalties against BP Products North America, Inc. for 709 alleged failures to comply with a 2005 settlement agreement, and for citations for violations of safety and health standards identified during the agency's inspection of the corporation's refinery in Texas City, Texas (BP-TCR). The inspection of the refinery was conducted from May through October 2009. BP Texas City Refinery (BP-TCR):
- The third largest petroleum refinery in the United States with a refining capacity of 475,000 barrels of crude per day.
- Located on a 1,200-acre facility in Texas City, Texas southeast of Houston in Galveston County.
- 1,200 permanent BP employees and hundreds of additional contractors at the facility
Prior History at BP-TCR:
- On March 23, 2005, an explosion and fire in the Isomerization Unit of the BP Texas City Refinery (BP-TCR) resulted in the death of 15 contractor employees and injury of at least 170 other BP employees and contractors.
- OSHA initiated safety and health inspections into the March 2005 incident and issued citations and fines totaling over $21 million, the highest penalty that OSHA had ever issued to that time.
- The Report of the BP U.S. Refineries Independent Safety Review Panel (aka Baker Report) issued in January 2007 identified a number of systemic process safety issues at BP refineries in the U.S.
- March 2007, U.S. Chemical Safety and Hazard Investigation Board (CSB) released its report Refinery Explosion and Fire (15 Killed, 180 Injured). CSB found, "The Texas City disaster was caused by organizational and safety deficiencies at all levels of the BP Corporation".
- OSHA has conducted 17 separate inspections at the refinery in the last 6 years.
- Prior to the 2005 incident, two employees of BP-TCR died due to a breakdown of the company's lockout and tagout program.
- Since the 2005 incident, four more fatal incidents have occurred at the facility, involving one BP-TCR employee and 3 contractors.
2005 Settlement Agreement
- As a result of the March 2005 explosion and subsequent inspection, BP entered into a settlement agreement with OSHA in September 2005
- BP agreed to pay $21 million in penalties
- The agreement required a comprehensive evaluation of BP-TCR's Process Safety Management program by an independent auditor.
- The agreement also required the implementation of all feasible recommendations of the auditor.
- The agreement also required other abatement actions such as conducting audits and determining the adequacy of pressure relief for individual pieces of equipment
2009 Citations and Penalties
- Comprehensive monitoring inspection initiated on May 4, 2009
- Resulted in alleged violations and proposed penalties because BP-TCR did not comply with the September 2005 agreement to correct the previous citations (270 instances) and other new violations (439 instances) which were cited.
- A Notification of Failure to Abate for violation of two provisions of the 2005 settlement agreement with a penalty of $50,600,000 was issued as a result of 270 separate violations1. In order to achieve the necessary deterrent effect, the Area Director exercised his discretion in issuing the highest gravity-based penalty due to the employer's extensive knowledge of the hazards, and OSHA regulations, and past events at the site.
- 439 willful, per-instance citations with total penalties of $30,730,000 were also issued for new, willful, violations of the PSM standard. A willful violation exists under the Act where an employer has demonstrated either an intentional disregard for the requirements of the Act or plain indifference to employee safety and health.
Timeline of Events Related to the BPTCR Monitoring Inspection
- March 23, 2005 - Isomerization Unit explosion; 15 workers killed, at least 170 injured.
- June 2005 - Residual Hydrotreater Unit explosion and fire.
- September 22, 2005 - Settlement Agreement with OSHA signed.
- June 2006 - Settlement Agreement's independent auditor study and recommendations. Included in the study are recommendations to BP-TCR to implement the ISA S84.00.01 Standard for safety-instrumented-systems.
- July 22, 2006 - an employee of a contractor was fatally injured when he was crushed between a scissor lift and a pipe rack at BP-TCR.
- January 2007 - Baker Report issued which identified numerous systemic process safety issues at BP U.S. refineries, including BP-TCR
- March 2007 - CSB BP-TCR investigation report issued
- June 5, 2007 - BP-TCR experienced a fatality when an employee of a contractor was electrocuted while working on a light circuit in a process area.
- June 7, 2007 - OSHA launches its National Emphasis Program on Refineries, CPL 03-00-004 Petroleum Refinery Process Safety Management NEP.
- January 14, 2008 - The top head blew off a pressure vessel resulting in the death of a BP employee. BP was issued four serious citations related to PSM.
- October 9, 2008 - A contract employee was fatally injured at BPTCR when, after being struck by a front end loader, the employee was pinned on the ground between a guard rail and the bucket of the loader.
- December 2008 - 3rd Party PSM Consultant report on audit of relief valve study methodology.
- September 22, 2009 - The deadline for BP to complete abatement outlined in the 2005 Settlement Agreement.
- October 30, 2009 - OSHA issues Notification of Failure to Abate and willful citations with proposed penalties of $87,430,000.
- August 2010 - OSHA reaches agreement for BP to pay entire $50.6 million penalty for Failure to Abate violations, implements third party oversight of BP processes for relief and safety instrumented system evaluation, enhanced progress reporting.
- July 2012 - OSHA reaches agreement for BP to pay $13 million penalty for citations stemming from the 2009 monitoring inspection. Abatement to be incorporated into the processes put into place to address the FTA citations. 30 citations (grouped to 22 citations) involving relief valves (RVs) with inlet pressure losses between 3 and 5% of the RV set pressure will be litigated in accordance with OSH Review Commission procedures (This issue is presently being litigated before the Occupational Safety and Health Review Commission in a separate case against BP/Husky's refinery in Toledo, Ohio.
- July 2012 - through verification inspections, OSHA determines that BP corrected all of the Failure to Abate violations in accordance with the August 2010 agreement.
This Fact Sheet is advisory in nature and informational in content. It is not a standard or regulation, and it neither creates new legal obligations nor alters existing obligations created by OSHA standards or the Occupational Safety and Health Act. Pursuant to the OSH Act, employers must comply with safety and health standards and regulations issued and enforced either by OSHA or by an OSHA-approved State Plan. In addition, the Act’s General Duty Clause, Section 5(a)(1), requires employers to provide their employees with a workplace free from recognized hazards likely to cause death or serious physical harm. For compliance requirements of OSHA standards or regulations, refer to Title 29 of the Code of Federal Regulations. This information will be made available to sensory-impaired individuals upon request. Voice phone: (202) 693-1999. See also OSHA’s website at www.osha.gov
For more complete information:
Safety and Health
U.S. Department of Labor
1 In October 2009, OSHA announced $87.4 million in penalties against BP resulting from its inspection of the Texas City plant earlier that year. $56.7 million of that penalty was levied for BP's failure to abate the hazards behind the fatal 2005 explosion. In November 2009, U.S. Department of Labor attorneys, in preparation for filing with the Occupational Safety and Health Review Commission, discovered that an OSHA clerical error had led to the duplication of 29 "failure-to-abate" violations totaling $6.1 million. The department attorneys immediately moved to amend the citations, and the full penalty was adjusted to $50.6 million, still the highest fine ever issued by OSHA and paid by an employer.