Punitive Fines Are Not Creating a More Safe Mining Environment

Fines issued by federal inspectors are not making America’s mines any safer, according to the Department of Labor’s Office of Inspector General. The watchdog for the Mine Safety and Health Administration (MSHA) released a report showing no correlation between paying civil monetary penalties (CMP) and safe mining operations. This according to recent article on the Energy & Environment website.

“The CMP program did not have a distinguishable effect on reducing mine hazards and protecting those who work in mines,” the inspector general wrote. The audit followed up on news reports that mine operators with unpaid fines had worse safety records and that MSHA was allowing delinquent mine operators to continue to operate without consequence. Between 2000 and 2017, MSHA collected $900 million of about $1 billion in penalties charged to mining companies.

The report found 75% of operators paid their fines in full, but that had no bearing on rates of fatal or permanent injuries in their mines. The 20 mine operators with the worst accident rates had a 98% payment rate. Since 2000, violation rates for significant and substantial hazards have dropped, but reckless and high-negligence violations have increased.

“Based on the recurrence of violations, those operators who paid violation penalties and continued to incur violations may not have considered the violation penalties a significant enough financial disincentive to avoiding future violations,” the report states. “Likewise, the operators who did not pay may not have seen the incentive in avoiding enforcement actions MSHA could take for nonpayment.”

The inspector general recommended MSHA develop metrics to gauge the fines’ impact on operator behavior. “Federal standards require MSHA to measure the CMP program to ensure its goals are achieved,” the report said.

But MSHA said the impact is too difficult to differentiate from other safety initiatives.
“It is only one of many variables within MSHA’s comprehensive compliance strategy,” Assistant Secretary of Labor David Zatezalo wrote.

The inspector general also concluded MSHA does not prevent delinquent mine operators from opening new mines or taking over existing operations. Fines do not carry over if a mine changes ownership through a sale or company bankruptcy — and nearly 30% of mines have changed hands since 2000. The report recommends the agency mandate operators be in good standing before giving a mine a legal identification number.

In response, Zatezalo wrote: “MSHA has no authority under the Federal Mine Safety & Health Act to issue regulations or implement controls that would turn its mine identifications or legal identification process into licenses or permits to acquire, transfer, or operate mines.”

The inspector general does note Zatezalo carried through on his threat to crack down on delinquent operators through MSHA’s “scofflaw” program. Last October, the former coal executive said his agency had recovered $5.2 million of $67 million in unpaid fines.

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