$1 million fine for Chevron not enough
Chip Johnson, Chronicle Columnist
Published 2:52 pm, Thursday, January 31, 2013
The $1 million fine proposed by Cal/OSHA against Chevron is an insufficient penalty for the damage caused by a fire that broke out at the oil giant's Richmond refinery last August.
I received tougher punishment in elementary school in the 1970s.
Because a $1 million fine to a company that earns that much in global revenue every two minutes isn't much of a deterrent. It's like asking for the loose change in their pocket.
The $963,200 fine is the maximum allowed by state law, which is a pretty strong indication that the law should be changed so that violators - and company stockholders - feel the pinch.
Fallout from the Aug. 6 blaze was widespread. Scores of workers and nearby residents were affected by billowing clouds of black smoke and fumes released in the fire. Some 15,000 people sought medical treatment at local hospitals because of it. In that context, the regulatory action seems even more insignificant.
Regulators determined that the fire was caused by a breach in a corrosive pipe that plant officials earlier had identified as a potential risk - but didn't repair.
Cal/OSHA chief Ellen Widess said investigators found "willful violations in Chevron's response before, during and after the fire."
And it gets worse.
Chevron has told local officials it plans to appeal the state agency's decision. Such a move can result in a reduction of the proposed fine.
"They have appealed a $300 fine, and my guess is they'll appeal all of this to OSHA, and by the time it's done it won't be $1 million," said Richmond City Councilman Tom Butt, long a critic of Chevron's safety practices. "That's what they do, and it's what OSHA does."
In 2006, the Richmond refinery was granted a variance by Cal/OSHA allowing it to use computers to predict pipe failure, and halt regular physical inspection of pressurized tanks and pipes, Butt said. It's unacceptable for one of the world's largest - and most profitable companies - not to take every precaution within its power to ensure the safety of workers and the nearby community through scheduled and detailed inspections of equipment.
To its credit, the company says it has paid $10 million in compensation to the community - mostly to hospitals. But that's not a penalty, it's a responsibility.
A penalty that amounts to little more than a slap on the wrist for endangering the health and safety of thousands of people supports the idea of a double-standard when it comes to the rich and the rest of us.
Because what would qualify as a felony crime in just about any other circumstance gets treated like a minor infraction when it comes to the wealth, power and undue influence of America's Corporate Kings.
When running at full capacity, the Richmond refinery can produce 242,000 barrels of gasoline and jet fuel every day, said Butt. Each barrel holds 42 gallons, and each gallon of fuel costs around $3.50. That's about $36 million in revenue daily - from a single refinery.
Unfortunately, Cal/OSHA isn't the only regulatory agency lacking a bite when it comes to holding corporations responsible for acts that result in injury or death.
In September, owners of the Crandall Canyon mine in Utah paid $1.1 million in fines and penalties stemming from two misdemeanor charges from a 2007 mine collapse that killed nine people. Mine operators claimed the cave-in was caused by an earthquake. It wasn't. Rep. George Miller, whose congressional district includes Richmond, was the senior Democrat on the House Education and Workforce Committee when the mining company was fined. He pointed out weak existing laws that made it impossible to mete out punishment fitting the crime in workplace safety violations.
"This case is proof positive that weak criminal sanctions under the Mine Act leave many prosecutors with limited penalties to punish those who engage in willful violations," he said in September.
"That's why we must strengthen the law to deter future tragedies and to give prosecutors meaningful tools to hold all those responsible for putting miners in unnecessary danger accountable, no matter where they stand in the corporate chain of command."
We must also strengthen the law here to give Cal/OSHA a bigger bite when workplace operations have the destructive power to place the lives of employees and residents at risk. Because fining a company the size of Chevron the paltry sum of $1 million is a joke.
Chip Johnson's column appears in The San Francisco Chronicle on Tuesday and Friday. E-mail: chjohnson@sfchronicle.com
Read more: http://www.sfgate.com/bayarea/article/1-million-fine-for-Chevron-not-enough-4240769.php#ixzz2JbGvLVCH