IN RE OSHA INSPECTION No. 110416880:
INSPECTION BY OCCUPATIONAL SAFETY
AND HEALTH ADMINISTRATION,
UNITED STATES DEPARTMENT OF LABOR
CITGO PETROLEUM CORPORATION
CITGO Petroleum Corporation ("CITGO") and Lynn Martin, Secretary of Labor, United States Department of Labor ("Secretary" or "OSHA"), in full settlement of the captioned matter, hereby agree to the following. This Agreement is entered into in order to avoid the cost and burden of litigation, and to further the efforts of CITGO and OSHA to assure safe workplaces. This Agreement disposes of any and all issues involved in this case.
1. CITGO agrees to implement or cause to be implemented process safety management procedures at its Lake Charles, LA Refinery; at the Corpus Christi, TX, Refinery of its wholly owned subsidiary Champlin Refining and Chemicals, Inc., and at the Paulsboro, NJ Refinery of its wholly owned subsidiary Seaview Oil Company (hereinafter "the Refineries"), pursuant to the terms and timetable set forth in this Agreement. The goal of the process safety management procedures shall be to prevent the incidence and mitigate the consequences of uncontrolled releases of hydrocarbons and/or highly hazardous chemicals at the Refineries. The process safety management procedures shall: (1) provide a systematic approach to identifying, evaluating, and controlling processes involving hydrocarbons and/or highly hazardous chemicals; (2) establish a management structure to address the findings of any process hazard analyses; (3) recommend corrective action; and (4) confirm and document completion or other disposition of recommended corrective actions. The core component of the process safety management procedures to be implemented at the Refineries shall be a process hazard analysis for each process that has the potential for an uncontrolled release of hydrocarbons and/or highly hazardous chemicals, and separate process safety management analyses to assess factors bearing on the overall safety of the Refineries.
2. The process hazard analyses shall be conducted by CITGO or under its direction utilizing a methodology that will best address the hazards of the particular process at issue. The process hazard analyses shall include, but not be confined to: (1) a human factors analysis of working conditions that may adversely impact the safety performance of CITGO personnel and potentially produce accident event sequences, especially during startup, maintenance operations, and upset/emergency conditions, (2) an analysis of the safety of process hardware (including but not limited to vessels, piping, valving, and instrumentation), especially during startup, maintenance operations, and upset/emergency conditions, and (3) an analysis of the safety of maintenance procedures, especially during startup and upset/emergency conditions. The process hazard analyses shall be performed by individuals with expertise in engineering, process operations, and maintenance. The teams shall include at least one person with experience and knowledge specific to the hazard or process under evaluation.
3. In addition to performing the process hazard analyses, CITGO will address the following issues in separate process safety management analyses at the Refineries. These analyses shall assure that the following practices and procedures conform to applicable OSHA standards or generally accepted industry standards: a) procedures for startup operations, including whether these procedures are adequately detailed and effectively communicated to operations personnel; b) training programs for unit operators and supervisors, in the areas of startup, upset/emergency conditions, and emergency response; c) training and certification programs for inspection personnel; and d) contingency planning for upset conditions and emergency response planning, including but not limited to the adequacy of evacuation plans, and the adequacy of training and equipment for emergency responders and firefighting personnel. The safety management analysis shall also provide for the assignment of authority and responsibility to plant personnel to identify and correct hazardous conditions.
4. CITGO further agrees to provide to OSHA a separate process hazard analysis of its catalytic cracking units, to be conducted on a priority basis by an independent consultant. One portion of this analysis shall include an evaluation of (1) the adequacy of CITGO'S procedures for conducting startup operations; (2) the adequacy of its hardware for sensing the presence of water in locations where it may collect during startup; and (3) the sizing of relief valves on its catalytic cracking units.
The written results of these three enumerated elements of the analysis as to the catalytic cracking units at the Lake Charles, LA refinery will be forwarded to the OSHA Baton Rouge Area Office no later than four (4) months from the date of execution of this Agreement. The remainder of the analyses as to the catalytic cracking units at the Lake Charles refinery shall be prepared and submitted to the OSHA Baton Rouge Area Office no later than September 30, 1992. The analyses of the catalytic cracking units at the Corpus Christi, TX and Paulsboro, NJ Refineries shall be prepared and submitted to OSHA in accord with the provisions of paragraph 8 below.
5. CITGO agrees that the process safety management procedure will promptly address the findings and recommendations of each process hazard analysis and process safety management analysis (including the independent consultant's analyses of the catalytic cracking units to be performed under paragraph 4) and develop appropriate recommendations. Under this procedure, CITGO management shall: 1) document any actions taken pursuant to the process hazard/process safety management analyses; 2) communicate such actions to operations, maintenance or other personnel who work in the facility, including contractor employees whose working conditions are affected by the findings and recommendations of an analysis; and 3) assure that any required corrective action is implemented according to this Agreement.
In accord with paragraph 8 of this Agreement, CITGO Management will prepare written responses to each process hazard/process safety management analysis. If, upon consideration of the recommendations contained in the analysis, management determines that corrective action is required, that action will be taken. If CITGO Management disagrees with a hazard assessment or recommendation contained in a process hazard analysis, the written response shall explain and state the reasons for the disagreement.
6. Within thirty (30) days after execution of this Agreement, CITGO shall provide the respective OSHA Area Offices with the name of a management contact person for the CITGO Refinery within their jurisdiction. The management contact person shall meet with the appropriate OSHA Area Director within sixty (60) days thereafter, and as necessary to review actions planned or undertaken by CITGO pursuant to this Agreement. Such meetings can be requested by OSHA or CITGO. OSHA agrees that overall coordination of this Agreement shall be provided by the OSHA Office of Field Programs.
7. CITGO agrees to provide OSHA with copies of all the process hazard/process safety management analyses and any management responses thereto, and to review with OSHA any comments or recommendations it may have, upon OSHA's request.
8. CITGO agrees to conduct the process hazard/process safety management analyses required by this Agreement, prepare management responses to the analyses, provide copies of such analyses and management responses to OSHA, and implement any required corrective actions contained in or arising from such analyses, in accordance with the following schedule:
(a) Complete process hazard and process safety management analyses:
Lake Charles, LA Refinery * First Priority Units (APPENDIX A) June 30, 1993 * Second Priority Units June 30, 1995 (APPENDIX B) Corpus Christi, TX Refinery * First Priority Units March 31, 1994 (APPENDIX C) * Second Priority Units June 30, 1995 (APPENDIX C) Paulsboro, NJ Refinery * All Units June 30, 1993
(b) CITGO shall have an additional sixty (60) days after the expiration of each applicable timetable within which to prepare its written management response to each process hazard or process safety management analysis, and to submit copies of the management response to the appropriate OSHA Area Office.
(c) In those instances in which CITGO determines to implement changes in its Refineries as a result of the process hazard or process safety management analyses, CITGO shall implement those changes as soon as reasonably practicable, but no more than twenty-four (24) months following the completion of its written management response within which to implement such changes.
9. If the schedule contained herein cannot be met, OSHA will not unreasonably deny a timely-filed petition for modification of abatement submitted pursuant to 29 C.F.R. 1903.14a as that regulation appears in the Code of Federal Regulations dated July 1, 1990.
10. CITGO agrees that on or before the scheduled completion date for each task in Paragraph 8 above, it will transmit written verification to the respective OSHA Area Office that the task has been completed as scheduled.
11. If OSHA disagrees with CITGO's assessment of any process hazard required by this Agreement, including CITGO'S assessment of the need for corrective action or an appropriate timeframe for executing corrective action, OSHA will state its points of disagreement, and the reasons therefor, in writing so that CITGO may review them. Before OSHA takes any enforcement action with respect to the subject matter of such a disagreement, OSHA and CITGO will engage in good faith discussions to resolve the disagreement. Thereafter, this paragraph shall not limit OSHA's right to use, as appropriate, enforcement methods provided by the OSH Act.
12. CITGO agrees that each employee at any of the Refineries who performs work on a process or maintenance operation involving hydrocarbons and/or highly hazardous chemicals shall be trained in an overview of the process and in pertinent operating procedures for that process. The training will emphasize: (1) the specific safety and health hazards of the process; (2) safe startup procedures and practices; and (3) safe operating procedures and practices applicable to the process. Refresher and supplemental training shall be provided at least annually in the event the process does not undergo significant change, or concomitantly with any process change or modification, to ensure understanding and adherence to the current procedures of the process or maintenance operation. Such training will be completed prior to assigning an employee to a startup, process, or maintenance operation.
13. Where CITGO employs a contractor at any of the Refineries whose employees are to perform work on or near a process or maintenance operation involving hydrocarbons and/or highly hazardous chemicals, before CITGO permits the contractor to commence work, CITGO shall inform the contractor of the known potential fire, explosion or toxic release hazards related to the contractor's work and the pertinent process, and require that the contractor's employees be trained in the work practices and emergency procedures necessary to safely perform their job.
14. CITGO agrees to implement a flame resistant clothing policy at each of its Refineries as follows:
Flame resistant clothing, such as "Nomex" coveralls or their equivalent, will be provided to and worn by all employees, including contractor employees, working in designated mandatory areas of the Refineries. Mandatory areas shall include those inside the battery limits of all process units, laboratory analytical areas, shops, tank farm areas and docks. Offices and administrative areas outside the designated mandatory areas shall be exempt from the requirement to wear flame resistant clothing.
Once a process unit in a mandatory area is shut down, purged of all hydrocarbon and/or highly hazardous chemicals, and properly blinded, the requirement to wear flame resistant clothing in that unit may be suspended provided that the unit is not in close proximity to an active processing unit. The requirement to wear flame resistant clothing will be reinstated after mechanical work is completed and before any isolation blinds are removed.
Visitors to a mandatory area who are not to perform a task that could result in exposure to hydrocarbons and/or highly hazardous chemicals will be given and required to wear a lab coat or similar article made of flame resistant clothing while in the mandatory area.
15. In order to protect CITGO's trade secrets and business confidential information from improper disclosure, all documents or other information made available by CITGO to OSHA under this Agreement shall be handled in accordance with Section 15 of the OSH Act, 29 U.S.C. 644, 18 U.S.C. 1905, and 29 C.F.R. 1903.9, titled "Trade Secrets." In submitting documents to OSHA, CITGO will have the obligation to identify and mark the document, information, or portion thereof that contains trade secret, proprietary or confidential information.
16. OSHA agrees not to issue citations to CITGO for any conditions identified in the process hazard/process safety management analyses required by this Agreement, provided such conditions are being or will be addressed in good faith in accordance with this Agreement (including correction, if necessary). CITGO agrees to allow OSHA reasonable access to each of its Refineries to determine progress and compliance with this Agreement. OSHA agrees that, unless it establishes that CITGO has not attempted in good faith to comply with this Agreement, it shall not conduct programmed inspections of the Refineries, except that OSHA may conduct monitoring inspections to determine compliance with this Agreement. OSHA retains the right to conduct all other types of inspections permitted under the OSH Act.
17. No later than six (6) months following CITGO's verification that it has completed all of the actions enumerated in Paragraphs 1 through 14 of this Agreement, OSHA shall return to CITGO all copies of process hazard analyses, written management responses, and other safety analyses. OSHA shall not thereafter retain any such copies.
18. CITGO agrees to pay the amount of Five Million, Eight Hundred Thousand Dollars ($5,800,000) in settlement of Citations Nos. 1, 2, and 3, Inspection No. 110416880, issued August 29, 1991, no later than September 6, 1991. CITGO hereby waives its statutory right to contest Citations Nos. 1, 2, and 3. The abatement dates set forth in Citations Nos. 1, 2, and 3, are hereby amended to conform to the terms of this Agreement, where applicable.
19. As part of the settlement between the parties, CITGO will fund a safety training program by providing a donation to NIOSH of Two Hundred Thousand Dollars ($200.000) by September 30, 1991. This program will develop a comprehensive process safety management program for employees in the refining and petrochemical industries. It will be offered in locations convenient to the employees, such as Lake Charles, LA, Corpus Christi, TX, Baton Rouge, LA, Port Arthur, Houston and Beaumont, TX. The program will include the hazards associated with chemical processes, the safe handling of chemicals, hazards associated with maintenance and turnarounds, and other areas of safety and health to be determined by the parties. Training will be in addition to and not a replacement for training required to be provided by existing OSHA regulations.
20. The parties agree that this Settlement Agreement shall become a final Order of the Occupational Safety and Health Review Commission. The terms hereof shall be subject to enforcement under Section 11(b) of the Act. CITGO will not oppose the entry of such an Order by the United States Circuit Court of Appeals.
21. CITGO specifically denies that it has violated the Occupational Safety and Health Act, 29 C.F.R. 651 et seq., or any standard or regulation promulgated thereunder. CITGO and OSHA are entering into this Agreement in order to avoid the cost and burden of litigation, and to resolve disputed claims arising from Inspection No. 110416880. CITGO's signing of this Agreement, its consent that Citations 1, 2 and 3 become final orders of the Commission, its payment of any monies in settlement of this case, and its agreement to take actions at its Refineries, do not constitute and are not to be construed as an admission by CITGO of any violation of the OSH Act, or any standard or regulation promulgated thereunder. None of the foregoing shall be offered, used or admitted in evidence in any proceeding or litigation, whether administrative, civil, or criminal, other than in proceedings brought by the Secretary under the OSH Act. This Agreement is not to be construed as an admission of CITGO's fault or liability, nor as an admission that the conditions asserted in the Citations were a cause, proximate or otherwise, of any accident or damages, as to any claim or proceeding for damages which exists or may arise in the future. CITGO specifically denies that it caused or allowed to be caused, proximately or otherwise, any condition described or violation alleged in Citations 1, 2, and 3 issued August 29, 1991.
CITGO is entering into this Settlement Agreement without any prejudice to its rights to raise any defense or argument in any future or pending cases before the Commission or in any other proceedings, including but not limited to the right to assert that any future conditions identical or similar to those alleged in the Citations do not violate the Occupational Safety and Health Act or any standard promulgated thereunder. By entering into this Settlement Agreement CITGO does not admit the truth of any facts or conclusions set forth in the Citations issued in this matter.
22. CITGO shall provide this Settlement Agreement to affected employees by posting it, alongside the Citations, on bulletin boards at the Lake Charles, LA Refinery where employees normally receive important information.
22. Each party agrees to bear its own fees and other expenses incurred by such party in connection with any stage of this proceeding.
Dated: August 29, 1991
FOR CITGO PETROLEUM CORPORATION FOR U.S. DEPARTMENT OF LABOR By __________________________ ____________________________ STEVEN R. BERLIN ALAN C. McMILLAN Vice President Deputy Assistant Secretary Occupational Safety and Health Administration ________________________ ____________________________ PEER L. ANDERSON DAVID FORTNEY Vice President and Deputy Solicitor of Labor General Counsel JAMES E. WHITE Regional Solicitor Jack F. OSTRANDER CITGO PETROLEUM CORPORATION Counsel for Occupational One Warren Place Safety and Health 6100 South Yale Tulsa, Oklahoma 74136 ____________________________ SUE ANN WOLFF Senior Trial Attorney NICHOLAS J. LEVINTOW Trial Attorney ____________________________ ANTHONY PARHAM BRIAN L. PUDENZ Trial Attorneys LAKE CHARLES REFINERY FIRST PRIORITY UNITS (18) * E SRU * C SRU * D SRU * CENTRAL AMINE * SULFTEN * ACID PLANT * DC/DA * SULFUR STORAGE & TANK LOADING * UNICRACKER * C4 GAS RECOVERY * ALKYLATION * ALKY BUTANE SPLITTER * LIGHT ENDS RECOVERY UNIT (LERU) * GIRBOTOL * NGL FRACTIONATION, IVF * NGL FRACTIONATION, IVG * TOPPER TAIL GAS FACILITIES * PROPYLENE FRACTIONATION UNIT APPENDIX A LAKE CHARLES REFINERY SECOND PRIORITY UNITS (24) * COKER I * COKER II * TREATING PLANT * AMINE TREATING * MTBE UNIT * STRAIGHT RUN FRACTIONATION * A REFORMER * B REFORMER * C REFORMER * FUEL GAS PROCESSING UNIT * BLEND OIL HYDROTREATER * A LIGHT CYCLE OIL HYDROTREATER * B LIGHT CYCLE OIL HYDROTREATER * C5/C6 ISOMERIZATION UNIT * A TOPPING UNIT * B TOPPING UNIT * C TOPPING UNIT * E-1 VACUUM UNIT * E-201 VACUUM UNIT * VACUUM FEED PREP UNIT * SULFOLANE UNIT * GASOLINE BLENDING SECONDARY WASTE WATER TREATING * GENERAL YARD FACILITIES APPENDIX A CORPUS CHRISTI REFINERY FIRST PRIORITY UNITS EAST PLANT SULFUR RECOVERY UNITS (2) WEST PLANT SULFUR RECOVERY UNIT TAIL GAS CLEAN-UP UNITS SULFUR LOADING AND STORAGE HF ALKYLATION CAT FEED HYDROTREATER NO. 1 FCCU NO. 2 FCCU SECOND PRIORITY UNITS CRUDE UNIT VACUUM UNIT NO. 4 REFORMER NO. 5 REFORMER AROMATICS EXTRACTION CUMENE CYCLOHEXANE MTBE GASOLINE BLENDING TREATING GENERAL YARD FACILITIES COKING UNITS