Tuesday, January 10, 2006

Mining industry: Deadbeats When it Comes to Paying Paultry Fines

USATODAY.com:

The nation's coal mines have been required to pay only a fraction of the federal fines imposed after deadly accidents since 1999, a USA TODAY analysis shows.

The Mine Safety and Health Administration has levied $9.1 million in fines in the past seven years against companies cited for safety violations following mine fatalities. About 28% of that amount has been collected, according to data on MSHA's website.

At least $5.2 million in fines has been reduced to $2.5 million on appeal. An additional $2.2 million in fines is being appealed; about $1 million is listed as delinquent. Proposed fines and fines wiped out by bankruptcies account for the remainder.

MSHA oversees the nation's 1,400 coal mines and 75,000 coal miners. An MSHA team is investigating last week's explosion at the Sago Mine in West Virginia that killed 12 miners and sparked scrutiny of the government's monitoring of mine safety.

Since 1999, 206 accidents have killed 234 coal miners. Fines ranged from $113 to a maximum of $60,000.

From 1999 until last week, Sago had no fatal accidents, but it had been cited for 276 safety violations in the last two years and fined $33,600. It paid $23,986. (Related story: CEO: Mine passageway unblocked)

Its largest fines were often reduced by judges or through negotiations between the mine operator and U.S. Labor Department lawyers. That process, critics say, enables mine owners to wriggle out of severe penalties that are in place to keep workers safe.

"It hurts safety immensely," said Dennis O'Dell, head of health and safety for the United Mine Workers of America. He called the system "broken" because coal companies know they can win reductions in fines proposed by mine-safety inspectors.

"If I'm a coal operator and I get $10,000 of fines and I know I can get those reduced to $250, naturally I'm not going to take it as seriously," O'Dell said.

Tim Biddle, a lawyer who defends coal companies, said inspectors overreach in proposing fines. "The government is not able to back up its claim," he said.

Companies take safety "very seriously" to avoid losing miners — and to avoid shutdowns that occur while a fatality is investigated, Biddle said.

Biddle won a victory for Jim Walter Resources Inc. in November when a judge cut a $435,000 fine to $3,000 for a 2001 accident that killed 13 miners in Alabama. The judge said MSHA failed to prove wrongdoing.

Inspectors are required to consider a fine's economic impact on a company, yet fines can be small compared with earnings. Consolidation Coal Co. paid $1,238 after a miner was killed at a Virginia mine in 2004. Its parent company earned $200 million that year.


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