Saturday, October 31, 2009

OSHA Levies Record $87 Million Fine Against Oil Giant BP

The Occupational Safety and Health Administration (“OSHA”) levied a record $87 million fine against oil giant BP. The fine stems from events that took place in 2005, in connection with an explosion at a Texas City, Texas oil refinery owned and operated by BP. At the time of the explosion(in 2005), 15 workers were killed and 170 other workers were injured. Ironcially, Texas City is also the site of a 1947 ammunition explosion that killed 581. The 1947 Texas City Disaster is acknowledged as the largest industrial disaster on American soil.

The fine comes on the heels of OSHA’s 6-month inspection of the Texas City facility that revealed hundreds of violations of a 2005 settlement agreement to repair hazards at the refinery. OSHA officials found and cited 270 violations totaling $56.7 million in penalties on BP’s part in failing to correct violations indentified and required to be correct as part of the 2005 settlement agreement with OSHA. Additionally, OSHA inspectors uncovered 439 new willful violations which totaled $30.7 million. The new fines stem from BP’s failure to repair pressure relief valves and safety devices at the refinery.

This is the largest fine that OSHA has levied in its entire history. BP has 15 days to agree to pay the fines and take corrective measures. Alternatively, BP has the option of contesting the fines through a hearing process. BP has indicated that it might appeal the decision.


  1. Professor Grant:

    Has there been any civil lawsuits against BP on behalf of the victims 15 killed and 170 injured? Has BP paid out to the victim's families for its negligence?

  2. While I can't speak directly to a civil lawsuit, I know that Professor Cassell (S.J.Quinney College of Law) worked diligently to assert the rights of the victims and their families in the plea bargain process between BP and the federal government.

    Here is a starting point if you are interested:

  3. Indeed, as far as I'm aware, there have been civil lawsuits. I don't know the extent of any verdicts or settlements. Professor Douglas thank you for the link to Professor Cassell's work. This is really helpful. I apologize for responding a little late.

  4. Obviously BP is just buying itself some time with an appeal. If BP has failed to correct violations it was notified about in 2005, it certainly will not even begin to correct the former 270 violations in addition to the 439 new ones within the 15 day period.
    In fact, just as reacently as March, BP was cited yet again for violations in its Ohio refinery. This time, there are over 40 violations and fines are estimated around $3 million.

  5. It is reassuring that OSHA and the current administration is going after BP, and likely other oil companies, for violations. It is probably the same type of atmosphere, environment, and violations that led to the oil spill in the Gulf of Mexico in 2010. Large oil companies make billions of dollars each quarter, and their net income is simply mind boggling. 270 violations is not acceptable, and there is no reason why a company making billions of dollars a year for its shareholders can’t maintain adequate internal controls, both from a financial and operational perspective. The operational perspective may be most important, as the oil spill in the Gulf of Mexico demonstrates. The OSHA inspectors did their job, and as taxpayers we should hope and expect that they continue to hold large oil companies accountable for any deficient safety practices.