Phillips Faces $2.5 MM in OSHA Fines

25 September 2000 00:00  [Source: ICB Americas]

By Keith Chadwick and Robert BrownThe Occupational Safety and Health Administration (OSHA) has proposed $2.5 million in fines and penalties against Phillips Petroleum Company for safety violations at its Houston Chemical Complex (HCC) in Pasadena, Tex.

On March 27, a butadiene tank at Phillips's K-resin plastics facility exploded. One worker died in the blast and 69 others were injured. OSHA contends that improperly trained workers at the facility were unable to respond effectively to the emergency. Of the $2.5 million being sought by OSHA, only $66,000 is based on alleged serious violations.

Phillips Petroleum says it is disappointed by and strongly disagrees with OSHA's findings. The company says it tried to reach a mutually satisfactory resolution and will contest all of the citations.

Since 1989, HCC has suffered several explosions, resulting in 26 deaths and more than 200 injuries. The K-resin plant, alone, has had two fatal blasts. Phillips paid $4 million in 1989 after an explosion killed 23 workers at its polyethylene plant.

The HCC is currently owned by Chevron Phillips Chemical Company (CPC), a joint venture formed several months after the incident. A spokesman for CPC questions whether OSHA has the authority to impose fines on a successive owner for events prior to its ownership.

"We will cooperate with Phillips in contesting the findings in any way they see fit," says Craig Glidden, vice-president and general counsel at CPC. "Any continuing safety efforts at the plant would be discharged by CPC, and we have initiated a very aggressive safety program which address OSHA's primary concerns.

"We don't believe the citations, as phrased by OSHA, will hold up," Mr. Glidden adds. "The citation cites over 30 violations at $70,000 per instance that are the by-product of one purported failure to train. OSHA has identified every single worker that they believe was not trained properly and used that to aggregate the number to what we believe is a shocking amount of $2.5 million."

Chevron Phillips plans to address more than just the issues raised by the OSHA investigation. The day before OSHA's report, Chevron Phillips announced a new safety program for the three-plant, 630-acre HCC facility.

The company's main initiative is to appoint a "safety czar" to address the concerns of plant employees. CPC will also hire an independent consultant to conduct a chemical safety analysis of HCC's K-resin plant and extend it to the other plants in the Houston complex.

Two full-time hourly workers will serve in HCC's safety department to develop behavior-based safety programs and bring the facility toward OSHA's voluntary protection program. Chevron Phillips will also put a special emphasis on training curriculum for HCC employees and their supervisors who work with equipment that contains reactive chemicals.

"We are working diligently to safely rebuild the K-resin plant and intend to get the first train up and running by the end of the first quarter of 2001," Mr. Glidden says. "We will move to safely, and the key is safely, resume full operations in the facility as soon as possible."

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