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BP hit with record US fine for safety violations

world Updated: Oct 30, 2009 23:41 IST

British oil giant BP has been hit with a record US fine of 87.4 million dollars for safety violations at a Texas refinery where 15 people were killed in a 2005 explosion, officials said on Friday.

It was the latest in a series of actions taken by the US government over trading abuses and safety and environmental violations for which BP has paid more than 573 million dollars in various fines and settlements.

US Labor Secretary Hilda Solis said BP reneged on an agreement to address critical safety issues discovered after the 2005 blast and failed to correct hundreds of new violations discovered in subsequent inspections.

"This administration will not tolerate disregard for lives," Solis said, after inspectors found 270 cases in which BP failed to comply with agreed changes to its safety systems.

They also found 439 new "willful" safety violations which "if unaddressed could lead to another catastrophe," Solis said in a conference call with reporters.

Many of the new violations were related to the pressure release system at the root of the massive 2005 blast, Solis said.

BP said in a statement that the majority of the citations "relate to a previously announced disagreement" as to whether it is in compliance with safety regulations.

"BP continues to believe we are in full compliance and the company will formally contest these citations," the company said.

The BP Texas City Refinery is the third largest refinery in the United States with a capacity of 475,000 barrels of crude per day.

BP said it takes its responsibility for employees "extremely seriously and we believe our efforts to improve process safety performance have been among the most strenuous and comprehensive that the refining industry has ever seen."

However, officials at the US federal safety watchdog, the Occupational Safety and Health Administration, damned BP for failing to take sufficient actions to fix the problems at the refinery despite 17 inspections over more than four years.

"There were some serious, systemic safety problems within the corporation and specifically within this refinery," said acting assistant secretary of labor for OSHA Jordan Barab.

"Just the fact that there are so many still outstanding problems, life-threatening problems, at this plant, indicates that they still have a systemic safety problem."

A federal investigation of the March 23, 2005 blast found that the catastrophe was "caused by organizational and safety deficiencies at all levels of the BP Corporation."

BP agreed to pay a 21 million dollar fine, which at the time was the largest ever issued by OSHA, and to deal with its safety issues.

The explosion also drew inspectors from the Environmental Protection Agency, which issued a record fine of 50 million dollars in 2007. In February, BP agreed to pay 179 million dollars to settle a federal lawsuit over inadequate pollution controls at the Texas City plant.

In October 2007, the company agreed to pay 323 million dollars in fines and restitution to settle government probes into allegations of price fixing in the propane gas market and crude oil pipeline leaks in Alaska.

There have been four additional fatal incidents at the Texas City refinery since the 2005 explosion, OSHA said.

One worker was crushed between a lift and a pipe rack, another was electrocuted while working on a light circuit, a third was killed when the top blew off a pressure vessel, and a fourth was hit by a front-end loader.