BP admits criminal acts in Texas City blast

25 October 2007 23:58  [Source: ICIS news]

WASHINGTON (ICIS news)--BP admitted on Thursday it broke laws and said it will pay criminal penalties, fines and restitution totalling $373m (€161m) for its fatal Texas refinery accident, pipeline spills in Alaska and propane market manipulation.


In response to charges, fines and consent settlements announced earlier on Thursday by the US Justice Department, the Environmental Protection Agency and four other federal enforcement offices, BP America Chairman Bob Malone said:  “These agreements are an admission that, in these instances, our operations failed to meet our own standards and the requirements of the law.”


“For that, we apologize,” Malone said.


The federal criminal fines against BP included $50m for the March 2005 Texas City, Texas, refinery explosion that killed 15 workers and injured 170 others.


Malone said that in the Texas City disaster, BP was guilty of a felony “for failing to have adequate written procedures for maintaining the ongoing mechanical integrity of process equipment at the Texas City refinery”.


“If our approach to process safety and risk management had been more disciplined and comprehensive, this tragedy could have been prevented,” he said.


Justice Department and EPA officials said their criminal prosecution of BP for the Texas City accident was the first felony action to be brought under the 1990 Clean Air Act Amendments.  They said their Texas City investigation is ongoing and that other criminal charges are possible.


In the March and August 2006 Alaska pipeline spills, which brought $20m in fines and restitution under the agreement announced today, BP said its approach to monitoring and managing corrosion in its Prudhoe Bay oil transit lines “failed to properly consider the risks posed by changing operating conditions”.


“As a result, BP failed to take necessary actions” to prevent the spills, the company said.


The company also admitted that in April 2003 and February 2004 it manipulated or attempted to manipulate propane prices, actions for which the Justice Department assessed a $100m criminal penalty and a $125m civil fine along with nearly $80m in restitution payments.


“This settlement acknowledges our failure to adequately oversee our trading operation,” Malone said.


In connection with the Texas City blast, BP noted that it has already paid out some $1.6bn to compensate victims of the explosion and has resolved more than 1,650 personal injury claims.


In announcing the criminal cases against BP, the Justice Department and EPA indicated they will seek criminal charges against future chemical industry or refinery accidents that result in fatalities or serious injuries.


($1 = €0.70)

By: Joe Kamalick
+1 713 525 2653

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