Showing posts with label faulty safety practices. Show all posts
Showing posts with label faulty safety practices. Show all posts

Sunday, May 22, 2011

Larger Profits + Safety Shortcuts = Death


 
It was a year and six weeks ago (April 5, 2010) that 29 coal miners died in a massive explosion in Massey Energy’s Upper Big Branch mine in Montcoal, West Virginia, making it the worst U.S. mining disaster since 1970.

On May 19, 2011, an independent investigation commissioned by the state’s former governor reported conclusively what everybody involved already knew….that the accident was the result of safety violations by Massey management. In truth, the Upper Big Branch mine was more or less a death trap.

In the investigators’ own words, “The disaster at Upper Big Branch was man-made and could have been prevented had Massey Energy followed basic, well-tested and historically proven safety procedures." The message couldn’t be any plainer: Had Massey paid as much attention to mine safety as it did to company profits, those 29 miners would still be alive.

And it wasn’t as if safety violations were alien to the company. Indeed, Massey Energy Co. was viewed by many as a major accident waiting to happen. In the previous five years leading up to the 2010 disaster, Massey had been cited for more than 1,300 safety violations by the MSHA (Mine Safety and Health Administration), including poor ventilation—believed to be the cause of the explosion. In 2009 alone, Massey was cited 64 times for ventilation violations.

As Gary Hardesty, an AWPPW (Assoc. of Western Pulp & Paper Workers) safety consultant, once put it, “Because maintaining a safe facility costs money, many companies see safety only as another form of overhead.” Obviously, while Massey management bears the brunt of the blame for regarding worker safety as “overhead”—money they would just as soon not have to spend—the MSHA deserves much of the blame as well.

Blithely issuing one safety citation after another to a renegade company with a proven record of ignoring them (or getting them reduced in the appeal process) is not what a government watchdog agency is charged to do. Mechanically going through the motions of slapping a company on the wrist, and desultorily filing the necessary paperwork, is not the same as hands-on regulation an industry’s safety practices. The MSHA failed in its duty.

And, of course, there’s another component to this tragedy, one reflecting organized labor’s unfortunate loss of influence, not only in the industry but in the country at large. As anyone who’s been paying attention to the mining industry since the 1970s knows, as the percentage of union-affiliated mines continues to decline, mining accidents continue to increase. Statistics show that 92-percent of all mine accidents occur in non-union facilities.

In an interview I conducted a couple of years ago with Phil Smith, Communications Director of the United Mine Workers (UMW) International, he made it clear that U.S. mine owners are in collusion to keep miners from seeking union representation. And even though collusion is a violation of federal labor law, one that the NLRB hasn’t seriously addressed, the companies continue to do it. They do it through intimidation and old-fashioned black-balling.

Because coal mining is a close-knit community, once your name gets put on a company shit-list as a “union activist” or “union sympathizer,” it’s going to stay on that list, and you’re going to find it difficult to get hired anywhere. Coal miners might be a remarkably tough but courageous breed of worker, but, tough or not, they have to work to eat, and there are only so many mining jobs to go around. Few are willing to rock the boat.

According to Phil Smith, even on those occasions when a mine does go union, companies have been known to shut down the operation, change names by selling it off to a “phantom subsidiary,” and re-open the mine as a non-union facility. And if anyone squawks too loudly about the illegality of this arrangement, they find themselves out of a job.

So while it’s gratifying to see Massey Energy found guilty of egregious safety violations, it didn’t exactly come as a revelation. Massey management knew it all along, the miners knew it, the MSHA knew it, and the UMW knew it. Alas, the families of those 29 men learned it a year too late.

Monday, July 5, 2010

BP admits faulty safety practice, seeks white knight investor

BP has admitted to not following some standard safety procedures before the Gulf of Mexico oil spill.

STEVE CHIOTAKIS: The oil spill in the Gulf of Mexico has so far cost BP more than $3 billion. Now that includes the cost of containing the spill and cleaning up the oil. It also reflects the cost of drilling relief wells and compensating those affected by the spill. On top of that, another embarrassing admission from BP regarding safety. For the the latest now, we're going to bring in Marketplace's Stephen Beard, who's with us live from London with the latest. Hi Stephen.

STEPHEN BEARD: Hello, Steve.

CHIOTAKIS: What's this about safety? What's the company confessed to?

BEARD: That it didn't follow a standard British procedure on the Macondo well, it did not write up a lengthy assessment of the safety issues around the project before it began. This practice became standard in Britain after a major blowout disaster in the North Sea in the 1980s. Shell says that it always produces a so-called safety case when it drills oil and gas anywhere in the world. BP admits it hasn't done this on any of its U.S. wells because so far it hasn't be required to do so.

CHIOTAKIS: And what's the latest on how this disaster has affected BP, Stephen?

BEARD: Oh, it's devastated the country. The share price is more than halved. It's now widely thought to be a potential takeover target. In fact, there were various reports over the weekend that BP is looking for a so-called white knight, a strategic investor to take a stake to fend off an unwanted bid. Nick McGregor, an oil analyst with brokers Redmayne-Bentley, says BP should be able to find a white knight:

NICK MCGREGOR: The real issue is it will price it will attract with a strategic investor. As we saw with the banks during the credit crunch, there is money out there, but it comes at a fair price when you're in trouble and your back's against the wall.

So BP may not get much for the stake that it sells. Among the potential predators thought likely to stalk BP, two have been mentioned: Exxon Mobile and Petro China.

CHIOTAKIS: All right, Marketplace's Stephen Beard joining us from London. Stephen, thanks.

BEARD: OK, Steve.

Steve Chiotakis talks to Jeremy Batstone-Carr, head of research at the U.K. brokerage firm Charles Stanley.

TEXT OF INTERVIEW

STEVE CHIOTAKIS: The oil leak in the Gulf of Mexico has so far cost the British oil giant more than $3 billion. Share prices have tumbled by half since the oil leak began two and a half months ago. But today, investors smell rescue in the air and, in London anyway, are starting to buy amid reports BP is looking for some outside help.

Dow Jones reports this morning Libya's chief oil official as saying that a piece of BP would be a good buy for that country's sovereign wealth fund. And that's on top of another story we reported earlier, that the company is looking at Middle Eastern investors to prop up its capital after so much has gushed away. Jeremy Batstone-Carr is head of research at the U.K. brokerage firm Charles Stanley. He's with us live from London. Hi Jeremy.

JEREMY BATSTONE-CARR: Hi.

CHIOTAKIS: The company has had this terrible disaster. Who in their right mind would want a piece of it?

BATSTONE-CARR: Well, I think the first thing to say is that there's only a very cautious share price response to these rumors in the market in London. Shares are only about 3 percent or so, which is pretty small. Nonetheless, the share price has collapsed, as everybody knows, it is a stressed company, it's very unlikely to go bust, and what it has got -- and what global oil investors, sovereign wealth funds are interested in -- is what could be very sophisticated production technology. On that basis, a few buyers are beginning to show themselves, particularly from the Middle East.

CHIOTAKIS: And say it doesn't get money from outside investors and becomes the target of some, I don't know, hostile takeover. What happens to that extraordinary liability?

BATSTONE-CARR: Well, clearly if the worst were to come to worst, which we and most people do not believe will happen, then obviously any potential buyer of the business would have to take on that liability. Nonetheless, bad as conditions are, in both in the Gulf of Mexico and for BP, we do not think that the company is frankly in danger of collapse. I would say, just in passing, that if it were to collapse, the impact on the financial markets would probably be about 10 times worse than that of Lehman Brothers.

CHIOTAKIS: Mmmm. All right, Jeremy Batstone-Carr, in London. Thank you, sir.