Justice Department Weighs in On Offshore Violations

Seal_of_the_United_States_Department_of_Justice.svgGovernment often seems to move with the speed of an iceberg, but, as the crew of the Titanic found out, when it does move it is a force to be reckoned with.   In the case of offshore oil and gas, it was clear that the government would be very tough on violations after the 2010 Macondo incident.   Five years later, industry can see what a “get tough” approach can look like. On Thursday, the Justice Department and the Bureau of Safety and Environmental Enforcement (BSEE) took action on two offshore incidents.

In 2012, three workers on a Black Elk Energy platform were killed, others were injured and there was an oil spill after an explosion.  Through a failure in communications, workers had attempted to weld on pipes that had not been purged of gas.   On Thursday, the Justice Department indicted Black Elk, two of its service companies and three individuals for the incident.  The three individuals worked for the contractor companies, not Black Elk.   The charges include involuntary manslaughter, failure to follow safety practices and Clean Water Act violations.  You can read the indictment announcement here.

Thursday also brought a settlement in a Clean Water Act investigation of oil company, ATP.   The company agreed to pay some $41 million in fines for the 2012 incident in which the Justice Department says: “A BSEE inspection of the ATP Innovator in March 2012 revealed alleged unlawful discharges of oil and a piping configuration that routed an unpermitted dispersant – a chemical mixture to break up oil – into the facility’s wastewater discharge pipe to mask excess oil being discharged into the ocean.”  You can read about that settlement here.   ATP had filed for Chapter 11 bankruptcy protection in 2012.  It is unclear how this settlement relates to the bankruptcy.

So, one day.  Two incidents.  Six indictments.  $41 million in fines.   Anyone doubt the government is serious about taking action on violations?



Public Reporting of OSHA Penalties

violation trackerOSHA is preparing to release new requirements for company incident reporting. It intends to make accident and injury information available to the public, a possibility that has many in industry concerned.  For those companies, the future is now.   A new website gives the public unprecedented access to information on company violations.

A watchdog group named Good Jobs First now posts what it calls Violation Tracker, listing fine amounts by corporation for a variety of agencies, including OSHA.   There is a very good analysis on the Safety News Alert website here.

Many have already accused OSHA of taking a “name-and-shame” approach to violators, but the Good Jobs First group takes it a step further.  It also identifies corporate subsidies from government.

We live in a very visible, public world.  In many ways that is a good thing, but it means that companies really need to understand that breaking the rules has costs that go well beyond the simple fine.   In many cases, violations and fines bring public scrutiny, and public scrutiny may cause regulators to attach higher fines, which in turn brings more scrutiny.  Depending on your perspective it is either a vicious or a virtuous cycle.

OSHA Field Leadership Class

RMEC OSHA logoI just completed the Train-the-Trainer Class for the Field Leadership in Oil and Gas Exploration and Production put on by OSHA Training  Center at the Rocky Mountain Education Center.   It was developed through the schools’ oil and gas outreach program and was funded by the Susan Harwood Grant Program.

Interesting class and one that I would recommend companies take a close look at for their personnel.   It helps supervisors and managers communicate with their crews, their bosses and people from outside the company, like customer representatives and other contractors, but with a focus on oilfield activity.   What makes this one unique is its heavy emphasis on personality types and social skills.  We tell newly promoted managers that everyone on the crew is different and to figure out what makes each person tick, but then we don’t give them the tools to figure out how those people are different and how to effectively communicate with each one.  This class addresses that problem.

For example, how many times does a supervisor get frustrated with a crewmember who doesn’t jump right on a task. I the supervisor understood that the crewmember had an analytical personality and was just taking the time to think through the task before starting it, that might help him understand the crewmember, figure out how to improve his productivity, and maybe realize he can rely on that crewmember to make sure all of the safety hazards have been considered.

If you would like to hear more about the class or would like leadership training delivered to your personnel, please feel free to contact me at Info@lifelinestrategies.com.


Faint at The Sight of Blood? OSHA Wants to Know

bandaid-fingerWhat kinds of incidents need to be counted as recordable incidents on the OSHA 300 log?  Whole seminars have  been devoted to that question.  When veteran safety guys get together, chances are good the topic of recordables is likely to come up.   Now a new OSHA letter of interpretation adds a  slightly bizarre wrinkle to the issue.  In a letter that was placed on the OSHA website lasts month, the agency says that, if a worker has a minor cut and faints at the site of his own blood, the company must record the injury.  In the particular scenario, the worker has a small cut on his finger and puts a band-aid on it.  OSHA says that would not have been a recordable.  However, the worker then sees the blood and faints.   OSHA says that, even though the cut is not recordable, the worker lost consciousness because of a work-related incident and that is a recordable.

It all seems pretty ridiculous and it lends itself to the view of many in industry that OSHA’s has an arbitrary and anti-business bias when it comes to recordables.    On OSHA’s side, the agency has been handed the impossible task of trying to be specific about a very vague requirement.  The OSH Act is where the reporting requirement comes from and this is the only thing it says about reporting incidents:

The Secretary, in cooperation with the Secretary of Health and Human Services, shall prescribe regulations requiring employers to maintain accurate records of, and to make periodic reports on, work-related deaths, injuries and illnesses other than minor injuries requiring only first aid treatment and which do not involve medical treatment, loss of consciousness, restriction of work or motion, or transfer to another job.

So OSHA doesn’t have a lot of direction from Congress about how it should rule on these very uncommon occurrences.   But rulings like this certainly don’t make America’s workplaces any safer; they just tend to skew the numbers in ways that can make us miss more serious statistical indicators.  and leaves industry wondering, “What is next?  Mandatory training on smelling salts?”

OSHA Penalties To Jump Next Year Thanks To New Budget Bill

When Congress passed a new two-year budget deal last week, a few words tucked into the bill gave OSHA the power to significantly raise its penalties in 2016 on businesses that violate safety regulations.  In simple terms, OSHA’s framework of fines had not been increasing with inflation for many years.  With this budget bill, Congress will allow OSHA to raise fines by up to 150% to “catch up” with inflation and then to go up each year with the inflation rate.

How big a change will that be?  It is a little complex and the budget bill has not been fully reviewed, but an analysis by the Associated General Contractors of America shows “this could mean an initial adjustment of approximately 82% which – as an example – would raise the maximum penalty for a willful violation from $70K to a little more than $124K.”

Remember, that penalty may be one of several violations that OSHA can assign to a violator.   To put it in perspective, OSHA recently charged a North Dakota roofing company with three willful violations for failing to provide adequate fall protection.  The fine was $105,000.  Under the new change that fine could have been nearly $200,000.

The change got very little attention and virtually no debate.  Anyone who follows Congress knows that deals are cut and some surprising provisions have a way of making their way into bills in the final hours.  Back in the 1950’s, one Senator melodramatically blamed these deals on “the midnight power of bourbon and Benedictine.”   However, in this case, OSHA has been very public in pushing for the change.   In testimony in Congress just a month ago, OSHA chief David Michaels said “The most serious obstacle to effective OSHA enforcement of the law is the very low level of civil penalties allowed under our law” and asked Congress to let the fines go up with inflation.

Whether companies agree or not, there is little they can do about it.   This bill had the blessing of the Republican majority in Congress and it would be politically risky for Congress to reopen it.

Bottom line: The price of violating the law on safety just went up.  If you want to make sure your company stays in compliance, contact us at info@lifelinestrategies.com.

Nothing Works Like a Slap on The Wrist: Study of Safety Compliance

In its latest newsletter, OSHA highlights a new study that shows that citations and fines are effective in reducing work-related injuries.  The study, released on the Institute for Work and Health, reviews a number of other studies of work injuries and factors that may help prevent them.  It concludes that enforcement is a very effective way to promote safety.  It looks at a number of other initiatives and finds that they are less effective.  For example, a government inspection alone has a short-term effect on safety, but that the impact diminishes as time passes.

The conclusion that fines get employer focus may seem obvious but the study is important for a couple of reasons.  The first is the obvious point that nothing quite gets the attention of a business owner like a blow to the wallet.  As much as we talk about safety leadership starting at the top, a lot of business owners don’t share that philosophy and may not address problems until they are written up by OSHA.

The second point is the way OSHA has latched onto this study.   The agency is moving down a path of increased enforcement and it appears that OSHA’s leaders see this study as justifying their approach.  As OSHA’s head, David Michaels said in the newsletter, “This confirms what we have been saying for a long time – that OSHA inspections and penalties are important and effective components of a comprehensive strategy to improve workplace safety and health.”

The problem is that this view of workplace safety is one-dimensional.  Yes, there are companies that will only respond to fines, but there are other types of companies as well:

  • Companies that deliver world-class safety as a part of the overall quality of their company (and would whether OSHA is watching or not).
  • Companies that want a strong safety culture, but lack the resources to access and implement best practices.  They benefit most from partnerships with federal agencies and other companies in their industry.
  • Companies where the owners care about their workers and think they are operating safely, but have not been exposed to advances in safety and new regulations.  They benefit from awareness campaigns and, if they truly lack knowledge of safety thresholds, inspections.

OSHA very clearly wants to take a “get tough” approach to industry and this study seems to support that.  However, it is wrong to assume that every company is going to ignore safety until OSHA knocks on the door. It ignores the fact that most safety improvements are generated by industry itself and they happen because companies believe they are the right thing to do.