________________________________________ ) LYNN MARTIN, Secretary of Labor, ) United States Department of Labor, ) ) Complainant, ) ) OSHRC Docket V. ) No. 90-1549 ) PHILLIPS 66 COMPANY, ) ) Respondent. ) ________________________________________)
Phillips 66 Company ("Phillips") and Lynn Martin, Secretary of Labor, United States Department of Labor ("Secretary" or "OSHA"), in settlement of the captioned case, pursuant to 29 C.F.R. 2200.100, hereby agree to the following. This Agreement disposes of any and all issues contained in that case.
1. To supplement and enhance existing safety practices and procedures, Phillips agrees to implement process safety management procedures at its Houston Chemical Complex ("HCC") pursuant to the terms of this Agreement. The goal of the process safety management system is to prevent the incidence and mitigate the consequences of uncontrolled releases of highly hazardous chemicals. The process safety management system shall: (1) provide a systematic approach to identifying, evaluating, and controlling hazards in the processes listed herein; (2) provide a management structure to address the findings of the process hazard analysis; (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 system at HCC shall be a process hazard analysis for each process that has the potential for an uncontrolled release of highly hazardous chemicals, and separate process safety management analyses to assess factors bearing on the overall safety of the HCC. The processes subject to this Agreement are as follows: (1) polyethylene units; (2) developmental unit; (3) polypropylene unit; (4) K-Resin unit; and (5) neohexene unit.
2. The process hazard analysis shall be conducted by Phillips or under its direction utilizing a methodology that will best address the hazards of the particular process at issue. The process hazard analysis shall include, but not be confined to, (1) a human factors analysis of working conditions that may adversely impact the safety performance of HCC personnel and potentially contribute to accident event sequences, and (2) an analysis of the safety effectiveness of process hardware, piping, valving, and instrumentation, especially during maintenance operations or upset/emergency conditions. The process hazard analysis shall be performed by individuals with expertise in engineering and in process operations. The team shall include at least one person with experience and knowledge specific to the hazard or process under evaluation, and be led by an independent consultant. Such independent consultant has been retained by Phillips.
3. In addition to the process hazard analysis, Phillips will address
the following issues in separate process safety management analyses to ensure that these areas conform with applicable OSHA standards or generally accepted industry practices: (a) the adequacy of its safety permit and hot work permit procedures, including enforcement; (b) compliance with OSHA's standard regarding lockout/tagout of energy sources during maintenance operations; (c) proper classification of hazardous locations and control over the introduction of ignition sources into such hazardous locations; (d) contingency planning for upset conditions and emergency response planning; (e) upset and emergency condition detection systems, and systems to mitigate the scale of hazardous chemical releases; (f) the siting, separation, design and configuration of physical facilities and equipment to ensure that the facilities are designed, maintained, inspected, tested and operated in a safe manner; (g) the training of operators, technicians, and maintenance personnel, including HAZCOM training; (h) the safety of existing Standard Operating Procedures and maintenance procedures; and (i) the assignment of authority and responsibility to identify and correct hazardous conditions.
4. Phillips agrees that the process safety management system will promptly address the findings of each process hazard analysis and process safety management analysis and develop appropriate recommendations. This management system shall (1) implement and 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 all corrective action is implemented according to this Agreement.
Phillips management will prepare written responses to each process hazard analysis. If, upon consideration of the recommendations contained in the process hazard analysis, management determines that corrective action is required, that action will be taken. If management disagrees with a hazard assessment or recommendation contained in a process hazard analysis, the written response shall explain and justify the disagreement.
5. Within thirty (30) days after execution of this Agreement, Phillips shall provide the OSHA Houston Area Office with the name of a management contact person for HCC. The management contact person shall meet with the OSHA Houston Area Director within sixty (60) days thereafter, and as necessary to review actions planned or undertaken by HCC pursuant to this Agreement. Such meetings can be requested by OSHA or Phillips.
6. Phillips agrees to provide the OSHA Houston Area Office with a certified copy of 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 request.
7. Phillips agrees to conduct the process hazard/process safety management analyses required by this Agreement, provide copies of such analyses and management responses to OSHA, and address any recommended corrective actions contained in or arising from such analyses, in accordance with the following schedule:
Task Completion Date 1. Identify process hazard/process 30 days from date of final safety management analysis staff. Commission Order 2. Complete process hazard/process 1 year from same safety management analyses. 3. Provide OSHA Houston Area Office 1 year from same with process hazard/process safety management analyses. 4. Provide OSHA Houston Area Office 30 days from completion of with management responses. analyses 5. Complete actions recommended by As soon as practicable, but process hazard/process safety within 2 years from completion management analyses. of Step 2
8. If the schedule contained herein cannot be met, OSHA will not unreasonably deny a timely-filed petition for modification of abatement. 29 C.F.R. 1903.14a.
9. Phillips further agrees that on or before the scheduled completion date for each numbered task in Paragraph 7 above, it will transmit written verification to the OSHA Houston Area Office that the task has been completed as scheduled.
10. Phillips further agrees to provide to OSHA an evaluation, to be conducted by an independent consultant, of the adequacy of settling leg maintenance procedures performed while polyethylene reactors are in operation. This evaluation will be forwarded to the OSHA Houston Area Office no later than six (6) months from the date of a final Commission Order.
11. If OSHA disagrees with Phillips' determination of (1) the assessment of a process safety hazard, (2) the need for corrective action, or (3) an appropriate time frame for executing corrective action, OSHA will state its points of disagreement, and the reasons therefor, in writing so that Phillips may review them. OSHA and Phillips will then engage in good faith discussions to resolve the disagreement. This paragraph shall not limit OSHA's right to use, as appropriate, enforcement methods provided by the OSH Act.
12. Phillips agrees to develop and maintain a compilation of written safety information to enable Phillips and all exposed employees, including contractor employees, to identify and understand the specific hazards posed by the processes involving highly hazardous chemicals present at HCC. This safety information will be communicated to all exposed employees, including contractor employees, and shall describe the hazards of the highly hazardous chemicals used in the process, as well as information pertaining to the equipment and technology involved in the process. In addition, Phillips agrees to develop and implement written operating procedures to provide clear instructions for safely conducting process and maintenance operations consistent with the process safety information it develops. The steps required by this paragraph shall be completed within 90 days of the completion of the process hazard/process safety management analyses required under 7.
13. Phillips agrees to train each employee involved in a covered process or maintenance operation in an overview of the process and in pertinent operating procedures for that process. The training will emphasize the specific safety and health hazards of the process, and 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 operating procedures of the process or maintenance operation. Such training will be completed prior to assigning an employee to a process or maintenance operation.
14. Phillips agrees to inform any contractor performing work on, or near, a process, of the known potential fire, explosion or toxic release hazards related to the contractor's work and the process, and ensure that contractor employees are trained in the work practices and emergency procedures necessary to safely perform their job.
15. Phillips will implement a process safety management system at its Borger Refinery & NGL Process Center, Philtex/Ryton Complex, Sweeny Refinery & Petrochemical Complex, and Woods Cross Refinery in accordance with the terms and timetable provided in Appendix "A," which is incorporated herein by reference.
16. All documents or other information made available by Phillips 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. Phillips will have the obligation to identify the document, information, or portion thereof that contains proprietary or confidential information.
17. OSHA agrees not to issue citations to Phillips for any working conditions identified in the process hazard analysis or any other analysis 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). Phillips agrees to allow OSHA access to HCC to determine progress and compliance with this Agreement. OSHA agrees that, assuming good-faith implementation of this Agreement by Phillips, it shall not conduct general schedule inspections, 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.
18. No later than six (6) months following Phillips' verification that it has completed all of the actions enumerated in Paragraphs 1 through 14 of this Agreement, OSHA shall return to Phillips all copies of Phillips' process hazard analyses, written management responses, and other safety analyses. OSHA shall not thereafter retain any such copies.
19. OSHA amends Citation No. 1, Inspection No. 106612433 issued April 19, 1990, to delete any characterization of the alleged violations contained therein.
20. Phillips agrees to pay the amount of FOUR MILLION DOLLARS ($4,000,000.00) in settlement of Citations Nos. 1 and 2, as amended, Inspection No. 106612443 issued April 19, 1990, within thirty (30) days of a final Order of the Commission.
21. The parties agree that this Settlement Agreement shall become the final Order of the Commission and an agreed Order is attached hereto. The terms hereof shall be subject to enforcement under ? 11(b) of the Act. Phillips consents to the entry of such an Order by the Circuit Court of Appeals.
22. The parties agree that the Citation as amended and Notification of Proposed Penalty, Complaint, Answer, Stipulation and Settlement Agreement, Phillips' Notice of Contest, Phillips' failure to continue to contest, Phillips' abatement of the alleged violations, Phillips' payment provided herein and the Commission's Final Order entered herein shall not constitute any evidence or admission on the part of Phillips of any violation of the Occupational Safety and Health Act or regulations or standards promulgated thereunder. None of the foregoing shall be admitted into evidence, in whole or in part, in any proceeding or litigation in any court, agency or forum, except in proceedings brought directly under the Act by the Secretary. The contents of the Stipulation and Settlement Agreement are for the exclusive benefit of the parties hereto, and none of the foregoing constitute evidence or an admission on the part of Phillips that any of the conditions alleged in the Citations or Complaint existed or were a cause, proximate or otherwise, of any accident, or damages, if any, resulting therefrom. Phillips 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 original Citations or the Complaint do not violate the Occupational Safety and Health Act or any standard promulgated thereunder. By entering into this Settlement Agreement Phillips does not admit the truth of any alleged facts, any of the characterizations of Phillips' alleged conduct or any of the conclusions set forth in the Citations or Complaint issued in this matter regarding the standards cited therein.
23. Phillips certifies that the names and addresses of all authorized employee representatives of affected employees are:
Oil, Chemical and Atomic Workers International Union, AFL-CIO Local Union No. 4-227 (clerical group) F. G. Bunch 2306 Broadway Houston, Texas 77012 Telephone No. (713) 649-2714 Facsimile No. (713) 645-2426 Oil, Chemical and Atomic Workers International Union, AFL-CIO (clerical group) Joe Campbell 2306 Broadway Houston, Texas 77012 Telephone No. (713) 649-2714 Facsimile No. (713) 645-2426 Oil, Chemical and Atomic Workers International Union, AFL-CIO Local Union No. 4-227 (plant group) B. G. Martinez 2306 Broadway Houston, Texas 77012 Telephone No. (713) 649-2714 Facsimile No. (713) 645-2426 Oil, Chemical and Atomic Workers International Union, AFL-CIO (plant group) Joe Campbell 2306 Broadway Houston, Texas 77012 Telephone No. (713) 649-2714 Facsimile No. (713) 645-2426 International Brotherhood of Electrical Workers Local Union No. 716 G. G. Welch 1475 North Loop Houston, Texas 77008 Telephone No. (713) 869-8900 Facsimile No. (713) 868-6342 International Brotherhood of Electrical Workers, AFL-CIO J. D. Muhl 1475 North Loop Houston, Texas 77008 Telephone No. (713) 869-8900 Facsimile No. (713) 868-6342
Phillips further certifies that there are no other unions representing affected employees except as set forth above.
24. The Secretary certifies that service of the Settlement Agreement was made on each authorized employee representative by facsimile transmission on August 21, 1991. Affected employees have not raised objections to the reasonableness of any abatement period specified herein.
25. 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 22, 1991.
FOR PHILLIPS 66 COMPANY FOR U.S. DEPARTMENT OF LABOR By__________________________ ____________________________ John VanBuskirk ALAN C. McMILLAN Senior Vice President Deputy Assistant Secretary Occupational Safety and Health Administration _____________________________ ROBERT P. DAVIS Marion R. Froehlich Solicitor of Labor Counsel for Phillips 66 Company JAMES E. WHITE Regional Solicitor JACK F. OSTRANDER Counsel for Occupational Safety and Health ___________________________________ SUE ANN WOLFF Senior Trial Attorney ___________________________________ BRIAN L. PUDENZ JANICE L. HOLMES Trial Attorneys
SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR
Phillips 66 Company ("Phillips") and Lynn Martin, Secretary of Labor, United States Department of Labor ("Secretary" or "OSHA"), hereby agree to the following:
1. Phillips agrees to implement a process safety system at its Borger Refinery & NGL Process Center, Complex, Sweeny Refinery & Petrochemical Complex, and Cross Refinery. This system will be a comprehensive process safety management system which includes but is not limited to the steps described in the Agreement to which this Appendix "A" is attached.
2. Phillips agrees to abide by the following timetable:
Task Completion Date 1. Identify process hazard/process 30 days from date of final safety management analysis staff. Review Commission Order 2. Complete process hazard/process Two and one-half years from safety management analysis on date of final Review the following units: Commission Order Sweeny: 26.1 ARDS Unit, 3A Train 30 HF Alkylation Unit 26.1 AIDS Unit, Trains A and B 28.1 DEA Regenerators and Sour Water Strippers 28.2 Sulfur Unit 15 Hexane Isom 3 FCC Unit 4 FCC Gas Plant 27.1 HOC Unit 27.2 HOC Gas Plant 43 Copper Treater 10ABC NGL Fractionation 17 Light Aromatics Recovery 19 Benzene Hydrogenation Borger: 43 Sulfur Recovery Unit 22 HF Alkylation 9 Crude Unit 10 Crude Unit 34 Sulfur Recovery Unit 42 ARDS 11 Ethane Recovery Unit 29 Cat Cracker 28 Crude Unit 40 Cat Cracker 35 Amine Treater & H(2)S Dryers 41 Hydrogen Unit 44 Amine & Sour Water Treater 6 Hexane Isom Philtex: Propylene Unloading and Storage H(2)S System SO(2) Unloading and Storage Butadiene Unloading and Storage Woods Cross: 7 HF Alkylation 10 Solvent Deasphalting 11 Straight Run Gas Plant 62 Propane Pit 3. Complete process hazard/process Four and one-half years from safety management analysis on same the following units: Sweeny: 15 Benzene Hydrogenation 56 Waste Water System 22 Ethylene Plant 10D NGL Fractionation 21 NGL Fractionation 11 Catalytic Reformer 14 Catalytic Reformer 24 Ethylene Plant 18 Propylene Fractionation 7 Heavy Aromatics Recovery 26.2 Hydrogen Purification Unit 20 Pentane Isomerization 25.2 Distillate HDS Borger: 19.2 Reformer 7 Reformer 2.2 NGL HDS 19.1 Naphtha HDS 19.3 Distillate HDS 36 HDS Treater 1.6 Propane Treater 4 Butane Isom 5 Pentane Isom 6 Benzene Hydrogenation 26 Light Ends Recovery & Alky Feed Treater Philtex: Dimethyl Sulfide Blending and Storage Methyl Mercaptan Reaction and Storage Propane Storage and Processing Butane Storage and Processing Anhydrous HCl Storage Woods Cross: 4 TCC 6 Reformer 12 NHDS 68 Pressurized HC Storage 86 Pressurized HC Truck Loading/Unloading 87 Pressurized HC Railroad Loading/Unloading 5 Vacuum 8 Crude 13 C5/C6 Isomerization 4. Complete process hazard/process Six and one-half years from management analysis on the same following units: Sweeny: 62 Clemens Terminal 68 Sweeny Tank Farm, #1 Pumphouse 88 Freeport Terminal #1 89 San Bernard Terminal 86 Truck Loading Rack 87 Tank Car Loading Rack 6 MTBE Unit and Hydroisom Unit 58 Pipelines 25 Crude Unit 9 Crude Unit 51 Steam Plants 52 Water Treater 90 Jones Creek Terminal 92 Freeport Terminal #2 Borger: 12 Pantex Cryogenic Gas Plant No. 7 Cols. 35-42, 45 No. 1 Cols. 7, 9-12 No. 1 Cols. 13-17 No. 4 Cols. 23-27 No. 4 Cols. 18-22 No. G Cols. 28-34 23 Straight Run Fractionator Cols. 104, 105, 108, 109, 111, 117 N-Butane Treater 2.1 Minalk Treater 13 Front end clean-up NGL Train Rack NGL Truck Rack Above Ground Propane Storage and Loading RAW NGL Feed System E/P Caverns and Handling Propane Caverns and Handling Above Ground IC4 Storage and Handling Above Ground NC4 Storage and Handling Isobutane Caverns and Handling N-Butane Caverns and Handling De-ethanized NGL Feed System Alky Feed Caverns and Handling Above Ground IC5 Storage and Handling Above Ground NC5 Storage and Handling 5. Complete actions recommended by As soon as practicable, but process hazard/process safety within two years from management analyses. completion of the process hazard/process safety management analysis on each unit
3. Upon request by OSHA, Phillips shall make available to OSHA any documents prepared pursuant to this Appendix A including verification of corrective actions taken.
4. The parties recognize that circumstances may cause delays to occur, such as construction or design problems and delays in obtaining necessary permits. If the timetable contained herein cannot be met, Phillips will communicate that information to OSHA, including the reason(s) for the delay and the expected completion date(s). The parties agree that all undertakings by Phillips pursuant to this Appendix "A" are part of a settlement of a dispute between the parties and do not constitute an abatement of any unsafe condition.
5. All documents or other information made available by Phillips under this Appendix 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. Phillips will have the obligation to identify the document, information, or portion thereof that contains proprietary or confidential information. No later than six (6) months following Phillips' verification that it has completed all of the actions enumerated herein, OSHA shall return to Phillips all copies of Phillips' process hazard/process safety management analyses, written management responses, and other safety analyses. OSHA shall not thereafter retain any such copies.
6. OSHA agrees not to issue citations to Phillips for any working conditions identified in the process hazard analysis or any other analysis required by this Appendix, provided such conditions are being or will be addressed in good faith in accordance with this Appendix (including correction, if necessary). Phillips agrees to allow OSHA access to the above facilities to determine progress and compliance with this Appendix. OSHA agrees that, assuming good-faith implementation of this Appendix by Phillips, it shall not conduct general schedule inspections, 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.
DATED August 22, 1991.
________________________________________ LYNN MARTIN, Secretary of Labor, ) United States Department of Labor, ) ) Complainant, ) ) OSHRC Docket V. ) No. 90-1549 ) PHILLIPS 66 COMPANY, ) ) Respondent. ) ________________________________________)
A Stipulation and Settlement Agreement has been filed in this case which disposes of all issues pending before the Review Commission. Upon consideration, it is ORDERED:
1. The Stipulation and Settlement Agreement is approved and its terms are incorporated into this Order.
2. The citations are affirmed as modified in that Agreement.
Dated this ____ day of _________________________,1991. _____________________________________ JUDGE
PHILLIPS 66 COMPANY
August 22, 1991
Mr. Alan C. McMillan Deputy Assistant Secretary Occupational Safety and Health Administration U.S. Department of Labor 200 Constitution Ave., N.W. Washington, D.C. 20210
Re: Phillips 66 Company; Case No. 90-1549
Dear Mr. McMillan:
This letter will confirm our understanding of various terms provided in the stipulation and Settlement Agreement between Lynn Martin, Secretary of Labor, United States Department of Labor and Phillips 66 Company in Case No. 90-1549.
The terms of the Stipulation and Settlement Agreement, including Appendix A attached to that Agreement, remain effective pursuant to its terms but will terminate as to any individual facility named in that Agreement or Appendix A at such time that such facility is not owned by Phillips Petroleum Company or any of its direct or indirect subsidiaries. If, during the term of this Agreement, any of the named facilities is no longer owned by Phillips Petroleum Company or any of its direct or indirect subsidiaries, Phillips will provide to the successor owner any and all analyses conducted pursuant to that Agreement and will inform the successor owner of the terms of that Agreement.
Phillips 66 Company represents to the Secretary of Labor that the process units listed in the Agreement and the Appendix constitute all of the process units at the named facilities which meet the definition of covered process units contained in OSHA's July 17, 1990 Notice of Proposed Rulemaking entitled "Process Safety Management of Highly Hazardous Chemicals," 59 Fed. Reg. 29150-73. In the event the final version of the Process Safety Management Standard requires actions in timeframes shorter than the timetables provided in the Stipulation and Settlement Agreement, the requirements of the Standard will supercede the provisions of the Agreement.
Since October, 1989, Phillips has conducted process hazard analyses on some units listed in the Agreement and Appendix. Those analyses may be submitted to or reviewed by OSHA pursuant to the terms of the Agreement and Appendix and will be considered as analyses conducted pursuant to the Agreement and Appendix. Phillips will not be required to duplicate such analyses simply because they were conducted prior to the execution of the Agreement.
As part of the settlement of this matter, the Secretary and OSHA will dismiss all pending complaints issued under the Occupational Safety and Health Act with respect to the facilities named in the Agreement and Appendix. The complaints that will be dismissed or withdrawn include OSHRC Case No. 90-1271, Case No. 90-3376, and Case No. 91-704.
Phillips will request withdrawal of its Amicus Curiae briefs in Case No. 87-0260, Case No. 87-922 and Case No. 88-237.
Finally, Phillips will begin compliance with the terms of the Agreement immediately upon the execution of the Agreement. However, in the event that the Occupational Safety and Health Review Commission significantly modifies the Agreement to affect the rights and obligations of either party, either party has the right to repudiate the Agreement by prompt written notice to the other party.
Please sign this letter in the space below signifying your agreement to the contents of this letter.
Very truly yours,
John R. VanBuskirk Senior Vice President
AGREED AND APPROVED:
ALAN C. McMILLAN Deputy Assistant Secretary Occupational Safety and Health Administration U.S. Department of Labor