The ARCO Chemical Co. yesterday agreed to pay a record $3.48 million fine to settle federal safety charges stemming from an explosion that killed 17 people at a Texas petrochemical plant last year.
The agreement is the largest settlement in the history of the Labor Department's Occupational Safety and Health Administration and the maximum fine allowed at the time of the blast for "willful" violations of federal safety law.
ARCO Chemical, a subsidiary of Atlantic Richfield Co., signed the agreement less than an hour after it was cited. A Labor Department source said company lawyers did not contest the fine.
Had the explosion occurred this year under the new schedule of OSHA fines approved in last fall's budget reconciliation bill, the fine would have been more than $22 million. Congress voted a sevenfold increase to help reduce the federal budget deficit.
Acting Labor Secretary Roderick DeArment said ARCO also had agreed to beef up safety procedures at the company's four U.S. manufacturing facilities. A spokesman was unsure whether the new rules would be applied at ARCO's eight plants in Europe and Asia.
In a statement released from its Pennsylvania headquarters, ARCO said it did not agree with all the OSHA charges but "the company feels its interests are better served by focusing on improving workplace safety, rather than by contesting or litigating the differences it may have with OSHA."
The 17 workers were killed last July 5 when a 40-foot waste storage tank at the Channelview, Tex., plant near Houston exploded and leveled an area the size of a city block. Investigators believe the blast occurred when a spark ignited vapors escaping from the tank during routine maintenance.
The company was cited for failing to monitor the buildup of an "explosive atmosphere" in the tank and "failure to eliminate or control ignition sources in the presence of flammable vapors," as well as "inadequate control and prevention of human error."
Although employees from an outside contractor were performing the maintenance work, OSHA said yesterday ARCO was responsible because it "maintained total control of the site and dictated the working conditions."
The Channelview accident was the second major petrochemical plant explosion in the Houston area in less than a year, and led OSHA to begin special inspections of all major U.S. petrochemical plants. In October 1989, 23 workers were killed in an explosion at a Phillips Petroleum Co. plant in the Houston area. Phillips is fighting OSHA's proposed $6.4 million fine for safety violations.
In its statement yesterday, ARCO said it was "deeply saddened by the accident and the loss of life and will take all steps necessary to minimize the risk of recurrence." The company also operates chemical manufacturing plants in Bayport, Tex.; Monaca, Pa., and Painesville, Ohio.