Phillips Will Pay Record OSHA Fine for Refinery Blast

HOUSTON —  Phillips 66 Co. will pay a record $4 million to settle hundreds of safety citations issued by federal inspectors after a 1989 explosion here in which 23 people were killed and 130 others were injured, the Occupational Safety and Health Administration announced Thursday.

The settlement was the largest amount ever paid to the OSHA in the 20-year history of the organization but considerably less than the $5.7 million in fines originally recommended. Phillips said paying the fines in no way meant that the company was admitting to safety violations but was instead intended to avoid long and costly litigation.

“This is a real home run for the workers at Phillips,” said Douglas Fuller, an OSHA spokesman. “This sends a message to industry, and it should help them determine how important safety is.”

Phillips 66, a wholly owned subsidiary of Bartlesville, Okla.-based Phillips Petroleum Co., must also implement detailed safety procedures that will be overseen by an independent consultant.

Fish Engineering of Houston was also fined $729,600 in connection with contract work done at the plant, but those fines are being appealed. OSHA originally announced the fines against Phillips in April, 1990, alleging willful violations of federal job safety laws at the firm’s plastics plant in Pasadena, Tex., a Houston suburb. At the time, OSHA officials issued a blistering indictment of Phillips, saying it violated widely recognized and understood safety practices, as well as its own corporate policy.

OSHA had alleged that Phillips was guilty of 566 willful violations and that Fish Engineering had committed 181 willful violations.

“The goal of this settlement is to prevent future tragedies and protect workers, the public and the environment,” said OSHA administrator Gerard F. Scannell. Some of the safety measures must go into effect immediately at the Pasadena plant; Phillips has agreed to undertake similar steps at other facilities in Texas and Utah.

Phillips, meanwhile, issued a statement emphasizing that the settlement agreement means OSHA will no longer characterize any of the safety violations as willful. Although admitting that safety procedures were not followed, the company added: “Phillips 66 admits no liability in connection with the accident, and the company maintains that no OSHA or other safety standards were violated.”

B. M. Thompson, president of Phillips 66, said: “We felt it best to try to reach a settlement to allow both parties to avoid potentially long and costly litigation.”

When Phillips was originally cited, investigators said they found internal documents calling for corrective action in the Pasadena plant but that nothing had been done by the company. OSHA said four highly flammable gases escaped from an open valve and then formed a huge vapor cloud that traveled through the plant in a matter of seconds. The original citations also said plant employees were not familiar with the alarm system in the complex.

The explosions destroyed a portion of the plant that produced polyethylene, which is used to make plastics. It has never been determined what ignited the gases.

The previous record OSHA settlement was also related to a petrochemical blast near Houston, whose ship channel is lined with dozens of plants. Last year, Arco Chemical Co. paid $3.5 million to settle alleged violations connected to a July, 1990, blast that killed 17 workers in nearby Channelview.

The largest fine sought by OSHA was $7.3 million from USX Corp. for 2,000 alleged safety violations at two Northeast steel plants. In December, 1990, USX settled the case by paying $3.2 million.