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Greed Explains the Disasters and the Lying Afterwards

12:42 pm in Uncategorized by Leo W. Gerard

(This post is by both Leo W. Gerard, International President of the United Steelworkers, and by Cecil Roberts, International President of the United Mine Workers of America)

As oil mucked the Gulf of Mexico and families mourned 11 dead rig workers, BP officials proclaimed that the corporation’s priority always was safety.

This tracked the tack taken by Massey Energy, whose officials also declared safety was paramount after an explosion in the corporation’s Upper Big Branch mine killed 29 workers.

CEOs commonly make such incongruous assertions to protect profits after corporate-caused disasters. They’re driven by the same factor that is fundamental to the catastrophes – greed.

Nothing wrong with that, right? Not in a society that has converted greed from a vice to a virtue. Not in the place that inspired the book, “Greed is Good: The Capitalist Pig Guide to Investing.” Surely it’s no problem in the land where “Greed” has its own game show on Fox and where Ayn Rand, the “money-is-the-root-of-all-good” philosopher, reigns as Republican queen long after her death.

Americans worship God on the Sabbath and the rich every other day. Billionaire Warren Buffett’s word is investment gospel. Americans gave Wall Street banksters hundreds of billions in bailout money — protecting their multi-million dollar bonuses. But in the midst of the Great Recession caused by Wall Street recklessness, America has repeatedly delayed renewal of unemployment benefits and now is terminating federal health insurance support for the furloughed middle class.

Middle class workers are the ones who die in coal mines and on oil rigs.

Afterwards, CEOs say anything to save the bottom line – the one that will determine their bonuses.

Discussing the Upper Big Branch Mine disaster, Massey CEO Don Blankenship told stock analysts in a conference call late in April:

“Some of the implications have been that we don’t focus on safety or we put dollars in front of safety and nothing could be further from the truth.”

Though the Mine Safety and Health Administration (MSHA) issued 1,342 safety violation notices to Upper Big Branch over the past five years, Blankenship explained that’s just life in the coal business:

“Violations are unfortunately a normal part of the mining process.”

In addition, Blankenship said the titles of two Massey programs proved safety was supreme:

“The naming of those two programs speaks for itself: S1 – safety is job one; P2 – production is job 2. That’s been the case for my entire tenure.”

Still, 29 miners are dead. And dozens died at Massey mines in the past decade. Three died at Upper Big Branch between 1998 and 2010. The Massey dead include two workers who suffocated in a mine run by Massey subsidiary Aracoma Coal Co. on Jan. 19, 2006, just three months after Blankenship issued a memo ordering underlings to produce coal to the exclusion of other activities, such as building ventilation systems called overcasts. Aracoma officials pleaded guilty in December, 2008, to removing and failing to replace ventilation devices, the lack of which contributed to the suffocation deaths.

And Massey workers aren’t as sure as Don Blanekship that safety is job one. Several spoke to NPR about it. Teddy Cole, who worked a dozen years at Upper Big Branch, said Blankenship prioritizes production:

“It’s supposed to be safety first, but to me, it was production first.”

Former co-worker Brian Jerral agreed:

“A lot of times, it’s production first and safety third.”

Adam Vance, who worked at two Massey mines, described a culture of greed:

“They cover [themselves] with their safety meetings, but the main thing Massey’s out for is to get that all-mighty dollar. If the coal ain’t running, they ain’t making no money.”

And it’s a lot of money for Massey — $1.02 million a day in 2008.

Massey miner Ricky Lee Campbell 24, of Beckley, W.Va., told reporters about his safety concerns on April 7. Massey suspended him a week later, then fired him. He has filed a federal whistle-blower complaint.

Similar to Massey, BP officials claim safety is job one.

Shortly after BP named Tony Hayward CEO in 2007, he told the Houston Chronicle:

"I think we have the opportunity to set a new benchmark in industrial safety. . .We have to have a work environment where people don’t get injured or killed, period."

That was significant since an explosion two years earlier had killed 15 workers and injured another 170 at BP’s Texas City, Texas oil refinery, and federal regulators blamed the catastrophe in part on cost cuts initiated by Hayward’s predecessor. The following year, BP admitted oil leaks into Alaska’s Prudhoe Bay were caused partly by cost cutting.

Despite Hayward’s safety assertions, another 11 workers are dead. And survivors told CNN that PB routinely cut corners and pushed production despite potential safety problems. They also told CNN co-workers had been fired for raising concerns about dangerous practices that could delay drilling if remedied and that BP had insisted on an unsual process shortcut on the day of the blast.

Immediately after the rig explosion, BP contended its under-Gulf pipe was spewing only 1,000 barrels of oil a day. Fairly quickly, it revised that estimate to 5,000 barrels, but continued to refuse to make public its live video of the oil-churning pipe.

After a freedom of information request and Congressional pressure forced BP to release the video, federal officials estimated as much as 40,000 barrels are being discharged daily.

Still, BP’s Hayward flatly denied the existence of underwater oil plumes, saying:

“The oil is on the surface. There aren’t any plumes.”

And he discounted the effect of the unleashed oil on the environment:

“The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.”

Hayward had a good (greed-based) reason to deny access to the video, discount the amount of oil spewing into the sea and defy the assessment of government and university researchers who confirmed the plumes of dispersed oil stretching for miles beneath the ocean surface. BP will be fined based on the number of barrels of oil its well disgorges into the gulf – somewhere between $1,100 and $4,300 a barrel — depending on whether the government can prove gross negligence.

David Leonhardt, an economics columnist for the New York Times, described BP’s Texas City, Gulf of Mexico and Alaska crises this way:

“Much of this indifference stemmed from an obsession with profits, come what may.”

Greed.

It’s one of the seven deadly sins. When it afflicts corporate CEOs, it’s deadly to workers.

Honest profit is fine. But it’s perverse to celebrate greed, to elevate it over human life.

Safety Awards That Endanger Workers’ Lives

2:02 pm in Uncategorized by Leo W. Gerard

BP, Massey Energy and Tesoro all have hauled out plaques celebrating safety achievements to deflect allegations of corporate recklessness in the aftermath of explosions in April that killed 47 of their workers.

Though each of these corporations accepted awards for safety statistics, not one has taken responsibility for workplace deaths.

The disconnect between safety awards and dead workers has enabled these corporations to characterize the explosions as accidents, random events for which no one really is to blame, certainly not corporate officials who control conditions in workplaces. That’s why these pseudo-safety awards are so destructive.

The prizes congratulate corporations for reducing incidents such as slips and falls that injure workers to the point that they must miss work. Decreasing worker injuries is good, no doubt about it. But preserving workers’ lives is imperative. The corporate awards programs fail to recognize employers who successfully institute more complicated, costly and rigorous procedures called “process safety management” to eliminate workplace catastrophes that kill.

Awards for slip and fall reduction promote complacency. The plaques hanging in hallways say the oil rig or coal mine or refinery is super safe – so secure it’s worthy of commemoration. They create the illusion of protection in workplaces where process safety management hasn’t been properly implemented. The safety plaques are paper shields, easily immolated in explosions, along with the workers they beguiled.

Some BP executives actually experienced a little of that burn on April 20. A group of BP bigwigs was aboard Deepwater Horizon in the Gulf of Mexico when it exploded. They’d traveled out to the oil rig to celebrate a safety milestone. Workers on the rig had gone seven years without a lost-time accident – well, seven years without reporting one, anyway. Corporations routinely subtly and overtly discourage workers from reporting injuries. For example, companies grant cash awards for designated time periods during which no injury reports are filed and force mishap victims to wear distinctive clothing like orange vests so they get the blame – and not the corporation – for injury reports that cost entire crews their cash awards.

The BP executives escaped Deepwater Horizon with their lives. Eleven roustabouts and roughnecks on that day of safety celebration did not.

Just last year, the federal Minerals Management Service (MMS) gave BP and Transocean, the owner of the Deepwater Horizon rig, Safety Awards for Excellence –SAFE awards. MMS bestows these on offshore oil and gas corporations for “outstanding safety and pollution prevention performance.” Again this year, BP was a finalist for a SAFE award. After the Deepwater Horizon explosion, MMS postponed announcement of this year’s winners. Last year, the U.S. Occupational Safety and Health Administration (OSHA) presented BP Alaska with a three-year re-certification of its Star award, which recognizes safety performance.

All of that would lead workers to believe BP is a safe employer – not like the BP with a refinery in Texas City, Texas that blew up in 2005 killing 15 workers and injuring 170, the BP that OSHA slapped with its second largest total penalty ever — $21 million – for safety violations at Texas City that led to the massive explosion, the BP that OSHA hit with its largest ever fine — $87.4 million – last fall for failure over four years to comply with the terms of its settlement agreement to correct the potential hazards at Texas City.

No, the safety-award-winning BP must be different, a corporation that recognizes its responsibility to establish and conduct safe workplaces.

A study after the BP-Texas City explosion showed that one of the best ways to prevent such catastrophes is meeting the standards of process safety management. These use engineering and management techniques to continuously ensure that machinery and piping are in good condition, meticulously manage and record changes, and properly train workers. The concepts are not exclusive to refineries. They can be used to improve safety in other industrial processes as well.

The refinery industry accepted the process safety standards but hasn’t rigorously implemented them. The United Steelworkers union, which represents oil workers, met with oil corporations and the American Petroleum Institute (API), a trade group for drillers and refiners, in an attempt to write two new standards addressing leading indicators in the refining industry and worker fatigue. But the union abandoned the effort last fall because the industry was more concerned about image than safety.

Then, on April 2, an explosion at the Tesoro refinery in Anacortes, Wash. killed seven workers. Like BP, Tesoro is a safety award winner – but not for comprehensive process safety management. The National Petrochemical and Refiners Association (NPRA) has granted the Anacortes refinery numerous prizes over the years – “merit” and “achievement” and “gold” — including two last year. Tesoro notes on its web site that this recognition is for reducing “recordable injury rates”– the lost-time injuries that must be reported to OSHA.

NPRA doesn’t sponsor an award for corporations that improve process safety management. It’s trying to collect statistics on process safety from drillers and refiners, but participation is anything but compulsory. NPRA stresses that the information it receives on process safety will be collected on an aggregate level so it’s not specific to individual refineries, will be kept secret and will be used for benchmarking only. Clearly, it is striving to entice reticent refiners to participate.

Three days after the Tesoro tragedy, 29 workers died in an explosion in Massey Energy’s Upper Big Branch mine in West Virginia. Massey CEO Don Blankenship immediately began blaming God and the workers themselves for the catastrophe and citing Massey’s safety awards. In 2009, The National Mining Association and the U.S. Mine Safety and Health Administration (MSHA) gave Massey three “Sentinels of Safety” awards, the most any mining company had ever received in one year. These recognize, as the NPRA and MMS awards do, low levels of lost-time injuries. “At Massey Energy, we embrace our commitment to safety at all levels – from executive to miner. The Sentinels of Safety awards reflect the company’s dedication to safety at all of our facilities,” Blankenship said six months before the worst mining disaster in 40 years killed 29 Massey workers.

After two Massey miners suffocated in 2006, the corporation pleaded guilty and paid $4.2 million in criminal fines and civil penalties – the largest settlement in coal industry history — for willful violation of mandatory safety standards. By a count the United Mine Workers of America conducted, 52 people have been killed on Massey Energy properties in the past decade. UMWA President Cecil Roberts called Massey mines the most dangerous in America.

And yet, Blankenship touts Massey’s safety awards. Like BP and Tesoro.

The standards for these prizes must change to stop deluding workers and deceiving the public. No agency or association should ever again laud workplaces that are lax on meeting process safety management standards.

Lies, Damned Lies and Employers

7:02 am in Energy by Leo W. Gerard

Don Blankenship, the man ultimately in charge of Massey Energy’s West Virginia mine where 29 workers died in an explosion April 5, assured financial analysts last week that safety is paramount in his operation.

Massey, the country’s fourth largest mining company, issued a statement that same day asserting that a review of conditions in the Upper Big Branch mine uncovered no problems shortly before the blast that killed more workers than any other mine disaster in nearly four decades.

All that could only mean one thing, right? Massey did nothing wrong and bears no responsibility. So clearly the disaster was an act of God or an omission by workers. God killed them. Or they killed themselves. Blankenship suggested that in earlier interviews and repeated it to stock analysts last week:

"Obviously, I don’t want to speculate, but either something went wrong from a natural/unnatural manner that was not foreseeable by us or human beings or somebody made a mistake or something."

That contention – that God’s hand or worker blunder caused a disaster – is a bogus employer excuse that managers frequently dredge up. The supervisor of the Westray Mine in Canada, where 26 workers died in an explosion in 1992, did the same thing. A government-commissioned report on that catastrophe recounts that manager, Gerald Phillips, “blatently blamed the miners for the explosion.” It’s a refrain that might be repeated in the aftermath of the Tesoro refinery blast on April 2 that killed seven workers and the explosion on the Transocean Ltd. oil offshore oil drilling platform on April 20 that killed 11 workers.

It’s a lie. And when workers die, it’s a damned lie. Employers are responsible for maintaining safe working environments. Yet, across this country, 14 workers are killed on the job every day. The American people and their government must hold employers accountable. Or the workplace killing will never stop.

Employers routinely attempt to dodge culpability. Blankenship spouted the “I-am-not-responsible” talking points in his telephone call with financial analysts. He swore to them with reassuring double negatives:

“It’s not due to us not being focused on safety, not having a strong safety culture, not putting safety first. Some of the implications have been that we don’t focus on safety or we put dollars in front of safety, and nothing could be further from the truth.”

Blankenship has also said incidents are “unfortunately an inevitable part of the mining process,” suggesting they just happen like hurricanes or tornados; no one can control them.

The U.S. Minerals Management Service, which regulates offshore oil rigs like the one that exploded and sank into the Gulf of Mexico this month, blames workers as well. MMS is writing rules requiring rig operators to prevent human error. This follows an MMS report on the 41 deaths and 302 injuries on oil rigs between 2001 and 2007 that said:

“It appears that equipment failure is rarely the primary cause of the incident or accident.”

This is the same MMS whose inspector general, Earl E. Devaney, said suffered from a pervasive “culture of ethical failure.” In three reports to Congress in 2008, Devaney portrayed MMS as, the New York Times said, “a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch.”

It is not surprising that MMS blames workers when, the New York Times noted, eight MMS officials accepted expensive gifts from energy companies. These exceeded values set in federal ethical regulations. And several MMS officials, the Times said:

“Frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.”

Regulators for mines and refineries take an entirely different view from MMS. Kevin Stricklin, the Mine Safety and Health Administration’s administrator for Coal Mine Safety and Health, said while at Upper Big Branch:

"All explosions are preventable. It’s just making sure you have things in place to keep one from occurring.”

That is management’s responsibility.

Similarly, the Occupational Safety and Health Administration does not blame workers for explosions at refineries. To prevent catastrophes, OSHA requires refineries to implement a system called process safety, which is a mixture of engineering and management focused on prevention. After a 2005 blast at the BP refinery in Texas City, Texas that killed 15 workers and injured 170, OSHA launched a two-year program to emphasize process safety at refineries.

Afterward, OSHA director of enforcement Richard Fairfax reported:

“We are pretty shocked and dismayed by what we found.”

OSHA’s review of 14 refineries in the first year found 1,517 violations, including 1,489 for process safety.

While MMS contends “human error,” caused incidents on oil rigs, inspections by MMS and the Coast Guard over the past three years of oil rigs in the Gulf of Mexico found problems such as repair crews working without proper permitting in hazardous areas, inoperable gas detectors and faulty firefighting equipment. These examples of management recklessness are listed in a Houston Chronicle story by Lise Olsen titled, “Blood a part of oil’s price.”

Similarly, former United Mine Workers union President John L. Lewis said coal was washed in the tears of widows. In West Virginia where there are two dozen new coal widows, Blankenship repeatedly has said Upper Big Branch was as safe as other mines and that citations for violations are just a routine part of the mining business.

A review by Ellen Smith, owner of Mine Safety and Health News, showed, however, that Upper Big Branch had a violation rate 30 percent higher than the average underground bituminous coal mine. In addition, a Massey subsidiary, Aracoma, pleaded guilty to criminal charges of willful violation of mandatory safety standards in the 2006 deaths of two miners.

President Obama had this to say about culpability:

“This tragedy was triggered by a failure at the Upper Big Branch Mine, a failure first and foremost of management, but also a failure of oversight and a failure of laws so riddled will loopholes that they allow unsafe conditions to continue. Owners responsible for conditions in the Upper Big Branch Mine should be held accountable for decisions they made and preventive measures they failed to take. And I’ve asked [Labor] Secretary [Hilda] Solis to work with the Justice Department to ensure that every tool in the federal government is available in this investigation.”

Even in the 1800s, managers tried to evade blame by placing it on God and workers. Mine inspector Thomas K. Adams noted that blame shifting in an article published in 1900 by the journal Mine and Minerals:

“During such distressing events [as mine disasters] we have, as usual, a plenteous crop of apologists and general utility men who appear . . . Those men are very resourceful in offering all kinds of excuses for those who are possibly responsible for such calamities. They will tell us about the subtle agencies in operation in nature’s storehouse, the mysteries which wiser men than Solomon cannot unravel and that those mine explosions are the unavoidable and natural accompaniments which gives harmony to the coal-mining industry.”

Adams went on:

“Such rot has no weight with intelligent mining men, of course, but dupes there be everywhere.”

Today is Workers Memorial Day, an occasion to mourn those killed in the workplace, to condemn the lying about culpability and to demand corporate accountability.

An Enduring Memorial for Slaughtered Miners: Criminal Liability for Reckless Owners

9:18 am in Uncategorized by Leo W. Gerard

The catastrophe at Upper Big Branch that killed 29 miners evokes the disaster at Westray that killed 26 almost exactly 18 years earlier.

As at Upper Big Branch, a coal dust and methane explosion ripped through the Westray mine in Plymouth, Nova Scotia early in the morning. As at Upper Big Branch, rescuers discovered bodies, but toxic air forced them out before they could account for all missing miners. After five days, dangerous conditions permanently ended the search for the missing 11 at Westray. They’re entombed in the hazardous workplace that took their lives, a mine like Upper Big Branch that had been cited for dust and methane violations.

Nova Scotia erected a memorial over the spot where the bodies of the 11 are believed to be, with plaques bearing the names of the miners killed. West Virginia no doubt will commemorate those killed at Massey Energy’s Upper Big Branch.

But Canada did something more. It criminalized corporate disregard for worker safety. It’s called the Westray Law.

America needs its own such statute – an Upper Big Branch Law – holding corporate managers and directors criminally accountable for ditching safety for dollars.

Fines and lawsuit settlements have proved ineffective in forcing the likes of Massey to reform. For example, In December of 2008, Massey paid $4.2 million in criminal fines and civil penalties because it had removed ventilation controls in its Aracoma mine, contributing to the deaths of two miners there on Jan. 19, 2006. To put the effect of that punishment in perspective, in that same year Massey paid its CEO, Don Blankenship, a salary more than twice that amount — $11.2 million.

In the 12 months after the $4.2 million admonishment, Massey racked up twice as many violations at Upper Big Branch as it had in 2008. The violations included explosive coal dust and methane build-ups, and they were so serious that the Mine Safety and Health Administration (MSHA) designated Upper Big Branch in August of 2009 as a mine requiring increased scrutiny by inspectors. But it escaped those extra examinations because it appealed so many of its citations, according to U.S. Rep. George Miller, a California congressman who has worked for years to improve mine safety.

Just three days before the Upper Big Branch catastrophe, an explosion at the Tesoro refinery in Anacortes, Wash. killed six workers and severely burned a seventh. Like Massey, Tesoro had paid fines that proved ineffective in creating safe working conditions. Last year, Tesoro shelled out $12,500 for violations that included the most serious transgressions — those with the potential to cause serious injury or death.

As it stands in America now, the captains of corporations believe the most important issue from industry is greenbacks. Blankenship made that clear to his managers in an October, 2005 memo commanding that they “run” or produce coal to the exclusion of everything else:

“If any of you have been asked by your group presidents, your supervisors, engineers or anyone else to do anything other than run coal (i.e. — build overcasts, do construction jobs, or whatever) you need to ignore them and run coal. This memo is necessary only because we seem not to understand that coal pays the bills.”

Blankenship also despises regulators and regulation, publicly deriding MSHA inspectors, declaring at a Labor Day rally last year:

"I also know Washington and state politicians have no idea how to improve miner safety.The very idea that they care more about coal-miner safety than we do is as silly as global warming."

Similarly, he condemns regulation and environmental activists on his Twitter account, a Bloomberg story noted.

At a July 11, 2008, deposition in a lawsuit over the two deaths at the Aracoma mine, Blankenship responded to accusations that he had a “personal drive for increasing company profits at all costs, including the safety of subsidiaries’ associates.”

Blankenship denied it:

“As an accountant, I know that safety is an important cost control. So even if I were so calloused, which I am not, as to believe that safety should be sacrificed for production, I would understand that it doesn’t make any sense because the accidents and so forth cause you to have more costs.”

It’s about the costs – not about causing heartache, widows and fatherless children.

The same was true at the Westray mine.

Nova Scotia empanelled a commission to investigate the Westray Mine catastrophe, and it issued a report in November, 1997 entitled, The Westray Story: A Predictable Path to Disaster. Repeatedly it condemns mine owner, Curragh Resources Inc., for elevating production over safety:

“Indeed, management at Westray displayed a certain disdain for safety and appeared to regard safety-conscious workers as wimps in the organization.”

The report says the mine blew up because mangers failed to keep workers safe, even if regulators’ actions were inadequate:

“The fundamental and basic responsibility for the safe operation of an underground coal mine, and indeed of any industrial undertaking, rests clearly with management . . .Westray management, starting with the chief executive officer, was required by law, by good business practice, and by good conscience to design and operate the Westray mine safely. Westray management failed in this primary responsibility, and the significance of that failure cannot be mitigated or diluted simply because others were derelict in their responsibility.”

The commission also wrote that the mine managers defied coal regulations:

“Much has been said throughout this Inquiry about the inadequacy of the Coal Mines Regulation Act. As outdated and archaic as the present act is, it is painfully clear that this disaster would not have occurred if there had been compliance with the act.”

Violations included managers allowing dangerous coal dust and methane to collect:

“There is no question that management was aware that coal-dust accumulations underground at Westray were at hazardous levels. . . There is no question that management knew that the levels of methane underground at Westray were hazardous.”

And the report gets right to the point about why managers defied regulations: It was all about pushing production to increase profit. The report says:

“Management avoided any safety ethic and apparently did so out of concern for production imperatives. . . Methane detection equipment at Westray was illegally foiled in the interests of production.”

Prosecutors criminally charged Westray mine managers, but the case failed. In response, the United Steelworkers, who were certified to represent the Westray miners after the explosion, began pressing for a new law that would make it easier for prosecutors to hold managers criminally accountable for recklessly endangering workers.

It took a decade and several attempts, but in 2003 Parliament passed the Westray bill unanimously. It imposes a duty on corporations to take reasonable steps to prevent bodily harm to workers. Managers found guilty in workplace deaths face unlimited fines and life sentences.

Since the law took effect in 2004 in Canada, thousands of workers have been killed on the job, but prosecutors have used the Westray Act to press charges against managers fewer than a half dozen times. It has hardly been abused.

In an economic climate that prizes profits over life, the law provides a vehicle to punish the reckless and provoke safety by the callous. In Canada, it sets priorities. People first, profits second. It is political enactment of what nineteenth century French inspector general of mines Frederick Le Play said:

“The most important thing to come out of a mine is the miner.”

Just one week after the Upper Big Branch disaster, S&P Equity Research upgraded its evaluation of Massey stock from hold to buy. S&P explained:

“We believe that the financial impact of the Upper Big Branch mine tragedy to Massey Energy will be immaterial.”

The deaths of 29 miners will be “immaterial” to Massey’s bottom line. America needs an Upper Big Branch Law to make the lives of all workers matter to their employers.