How will federal actions ultimately impact West Virginia's coal mining industry?
This is part two
(click here to read Part One) in a series discussing the UBB
mine explosion, the federal response, the potential response and
the possible impact on West Virginia's coal industry. There has
already been a considerable federal response in the short time
since the accident but there will likely be much stronger and more
aggressive action by the federal government. The article will
provide a brief summary of relevant information concerning the UBB
accident and summarize the ensuing federal response.
As has been widely reported, on April 5, 2010, at 3:27 p.m., there
was an explosion at Massey Energy's UBB underground coal mine
located in Montcoal, Raleigh County, West Virginia. Twenty-nine
miners were killed in the explosion that occurred about 1,000 feet
underground.
On April 26, Massey Energy released a letter to its stakeholders.
The letter advised that the UBB mine had ceased operations pending
a determination of the cause of this explosion and that it was
unclear when it would resume production. It also indicated that
company personnel along with federal and state investigators would
be investigating the accident. Since then, three teams of
investigators have been involved in a methodical inspection of the
mine in an effort to determine what went wrong. These teams
represent the U.S. Mine Safety and Health Administration (MSHA),
the State of West Virginia, and Massey Energy. As of mid-August,
that investigation was on-going and no conclusions as to the cause
of the accident had been reached.
Notwithstanding the as-yet unresolved investigation, Congress and
the federal government have responded to the accident in a number
of different ways directed at coal mine operators and MSHA itself.
On May 6, former Senator Robert C. Byrd and Senator Jay Rockefeller
proposed legislation requiring publicly-traded mining companies
such as Massey Energy Co. to report "serious" notices of
mine safety violations issued by state and federal inspectors in
their public filings with the Securities and Exchange Commission
(SEC) in order for it to be tracked by both shareholders and
industry analysts. The bill also imposes penalties if this
information is not fully disclosed. The legislation was amended
into H.R. 4173, the Wall Street Reform and Consumer Protection Act,
which was signed into law by President Obama on July 21.
In addition to the foregoing, on May 13, the U.S. Senate added $22
million in funding for MSHA to H.R. 4899, the supplemental budget
bill. This funding is designed to assist the agency in clearing a
backlog of over 16,000 company appeals of notices of violations
issued by the agency's inspectors. Included in the funding
package is $18.2 million for the solicitor's office at MSHA to
prosecute those appeals and $3.8 million for the Review Commission
to hear them. That supplemental budget proposal was signed by
President Obama on July 29.
On May 14, the U.S. Department of Justice (DOJ) acting through the
U.S. Attorney's Office for the Southern District of West
Virginia sent a letter to the U.S. Secretary of Labor confirming
the fact that the DOJ is currently conducting an investigation into
possible criminal violations of federal law associated with the UBB
explosion. The letter asked that MSHA request that any
Administrative Law Judge (ALJ) designated to hear future claims
relating to administrative actions arising out of the UBB explosion
stay such proceedings until any criminal matters are resolved. The
DOJ is concerned the civil cases may interfere with the criminal
investigation. On May 20, MSHA motioned the ALJ assigned to this
case to stay the civil proceedings while the federal criminal
investigation is being conducted. On June 2, the ALJ issued an
Order granting in part and denying in part the agency's motion
to stay. On June 30, the Federal Mine Safety And Health Review
Commission (FMSHRC) issued an Order staying all civil
proceedings.
On June 24, the U.S. Labor Department Office of Inspector General
issued a report critical of MSHA's practices in connection with
the inspection and oversight of coal mines. The Inspector General
asserted that MSHA failed to subject coal mines that had been cited
for repeated mine safety violations to stricter oversight based
upon a presumed disregard for the well-being of its miners
associated with those violations. Specifically, the Inspector
General found that in 2009, MSHA removed ten mines from a list of
"chronic" violators for inappropriate reasons, such as
its own lack of resources. In response, Labor Secretary Hilda Solis
said that the current violator system needs to be scrapped, and a
new one be put in place that is focused "on protecting
miners". The report and Secretary Solis' comments signal
an intention on the part of both the Department of Labor and MSHA
to more aggressively enforce existing statutes and regulations as
well as seek enhanced powers, the logical consequence of which will
be an increase in the number of notices of violations issued by
MSHA as well as increased penalties and efforts to enjoin continued
operations at locations where it is determined that such action is
warranted.
In addition to the foregoing, three additional major pieces of
federal legislation were introduced in July for the purpose of
ostensibly strengthening mine safety laws in response to the UBB
explosion:
- H.R. 5663 the "Robert C. Byrd Miner Safety And Health Act Of 2010 was introduced by Representative George Miller from California on July 1 and was passed out of the House Judiciary Committee on July 29 and placed on the Union Calendar for consideration by the full House of Representatives. Among other things, this legislation, if enacted, provides for independent investigations of mine accidents involving three or more deaths by a panel appointed by the Secretary of Health and Human Services. It also amends existing mine safety laws by broadening its provisions dealing with a pattern of noncompliance with the statute, to include any violation of the Act, not just violations involving "mandatory health or safety standards." With this change, MSHA would have more expansive authority to order withdrawals from mines where a pattern of violations or accidents is deemed present. Moreover, enhanced civil penalties can be imposed against operators for any violations of the Act where a pattern of such violations is deemed present, even if those violations do not involve mandatory health or safety standards. It also provides for civil penalties of not less than $10,000 or more than $100,000 for retaliation against workers reporting such violations. Those penalties double in the event of repeated retaliatory actions. In addition, criminal convictions for willful violations of the provisions of the Act are increased to $1 million and up to five years in prison for a first offense as well as a criminal penalty for knowingly retaliating against an employee who reports safety violations to MSHA of up to 10 years in prison. This bill also provides for civil and criminal penalties for officers, directors, and agents who knowingly authorize, order, or contribute to the occurrence a violation of the Act. Finally, this Act, if adopted in its current form, would abrogate the "at-will employment" doctrine at coal mines for hourly employees and prohibit the discharge of such employees without reasonable job-related grounds based on a failure to satisfactorily perform job duties.
- H.R. 5788 the Mine Safety Accountability and Improved Protection Act was introduced by Congresswoman Shelley Moore Capito from West Virginia on July 20. The legislation honors the Nation's fallen miners by requiring improved mine safety practices and compliance in order to prevent future mine accidents. The bill was referred to the House Committee on Education and Labor where it is presently pending.
- S. 3671 the Senate Mine Safety And Health Act Of 2010 was introduced by Senator Jay Rockefeller from West Virginia on July 29. This legislation is virtually identical to Representative Miller's bill that was introduced on July 1. Its intended to improve compliance with mine and occupational safety and health law, empower workers to raise safety concerns, prevent future mine and other workplace tragedies, establish rights of families of victims of workplace accidents, and address other mine safety issues. The legislation was referred to the Senate Committee on Health, Education, Labor and Pensions where it is presently pending.
These bills will not be considered until after Labor Day at the
earliest because Congress is in recess until that time. It is
unclear which of these three bills (if any) will ultimately become
law and what form the final version will take. Of the three bills,
Congresswoman Capito's legislation is the least onerous while
creating requirements that will result in maximum safety for West
Virginia's coal miners. That said, the likelihood of a Democrat
controlled Congress passing this bill in lieu of bills sponsored by
their members is questionable. As a consequence, the National
Mining Association (NMA) has signaled it supports some of the
proposed reforms suggested by Congressman Miller and Senator
Rockefeller with certain caveats and modifications. However, there
are other important issues the NMA feels should be addressed where
the legislation is silent. Finally, there are several provisions
outlined in these two bills, the NMA believes could be problematic
for the West Virginia coal mining industry without making coal
mining tangibly safer. The primary areas of concern are:
- Mine safety progress could be threatened by overly punitive provisions;
- Mine safety would not be advanced by additional MSHA workforce authority;
- Mine safety and health will not be improved by penalty provisions that are not commensurate with the severity of the violation;
- Misallocation of safety resources will weaken safety efforts and results; and
- Transparency can be undermined by rule-making.
Many of the NMA's concerns regarding the legislation are
shared by the West Virginia Coal Association (WVCA). In addition to
the NMA concerns, the WVCA believes the current legislation is
problematic for the following reasons:
- Many provisions are very onerous and punitive across industry;
- The legislation is too expansive, containing unnecessary and questionable provisions;
- The legislation empowers MSHA to impose greater enforcement action;
- Many of the provisions have little to do with the UBB accident; and
- Language of the bill doesn't match the stated intention;
Most recently, on August 16, MSHA issued a press release
discussing new guidelines for industry compliance with ventilation
regulations. MSHA released four new program information bulletins
(PIBs) pertaining to ventilation issues in underground coal mines.
According to the press release, the purpose of these PIBs is to
remind mine operators, miners' representatives, MSHA
enforcement personnel and other interested parties about mandatory
coal mine safety standards relative to inadequate ventilation,
intentional changes in the mine's ventilation system,
maintaining face ventilation control devices, and maintaining
methane monitors in permissible and proper operating condition for
mining equipment. The press release also indicated, the release of
these PIBs was prompted by testimony at a recent field hearing
regarding the UBB explosion.
Overall, the final form of the federal mine safety legislation will
largely determine the level of impact the federal government's
actions will have on West Virginia's coal mining industry. The
most prudent course of action would, of course, be for Congress to
await the findings of the various groups investigating the cause of
the UBB explosion and address those specific causes if appropriate
through targeted legislation. Absent those findings, actions
currently being taken on the legislative and regulatory front on
both the state and federal levels run the risk of addressing
perceived rather than real issues threatening miner safety. If that
occurs, the industry will be negatively impacted without any real
or tangible improvement in the safety of working conditions of
miners.
Stay tuned-we will update you periodically regarding new
developments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.