Tosco Corporation, the US oil company which is buying the Irish National Petroleum Company from the State, has been fined millions of dollars by US authorities for breaches of environmental and safety laws that have killed five workers in the last four years and injured dozens of others. As recently as last June a fire injured two workers at a Tosco refinery in the US and another employee who was hurt in a fire in March is suing Tosco for $1 million (€1.11 million) because his injuries were due to fire-fighting water being contaminated with fuel oil.
Separately, the Old Greenwich, Connecticut-based company paid $21 million in compensation to the families of three of the men killed at one of its refineries last year. All of the fatalities relate to the company's San Francisco Area Refinery Complex, which consists of three facilities located at Martinez, Rodeo and Santa Maria in northern California. There have also been problems at the Tosco Refinery in Wilmington near Los Angeles where a fire broke out last November.
Fears about Tosco's safety record could increase opposition to the takeover, which SIPTU has already criticised because it is not in the State's long-term interest to get out of the oil business.
A Tosco spokesman defended its safety record. He said the company as a whole came below the American Petroleum Institute's industry average for workplace accidents at refineries. The Avon Refinery at Martinez, scene of the worst accidents, was well above average, he acknowledged. "There have been fatalities. We regret that," he said.
Last July the company announced it would sell the Avon Refinery to Diamond Shamrock Corporation of Texas for $800 million. Avon is the second-largest oil refinery in northern California and the oldest of Tosco's seven operations.
In February last year escaping fuel caught fire at the Avon refinery, burning four workmen to death and badly injuring a fifth. One of the dead was a Tosco employee and the other three were contractors carrying out maintenance work. Tosco was found directly responsibility for the fire and ensuing tragedy. The company was fined $810,750 by the state safety authority and a criminal investigation was also instigated. Of the fine, $730,000 related to "wilful violations" of workplace safety regulations - meaning that the employer committed an intentional and knowing violation or was aware that a hazardous condition existed and made no effort to eliminate it, according to the terms of the fine.
The refinery was closed for four months and a safety review carried out by Contra Costa County, the local authority, concluded it had a "flawed safety culture". Tosco paid $2 million in fines to settle criminal proceedings brought against it by Contra Costa.
The 1999 fire followed an earlier fatal blaze at the same refinery in January 1997 in which one person was killed and 46 injured. The fire was investigated by the Environmental Protection Agency (EPA), which found serious flaws in the management of the refinery.
The California Division of Occupational Safety and Health cited Tosco for 22 state workplace safety regulations and imposed fines of $277,750. At the time it was the highest ever fine against an oil refinery in California.
An inspection at one of the other Tosco refineries in California - Rodeo - following the January 1997 fire led to further fines against the company. This investigation was indirectly critical of Tosco, saying Rodeo was investigated because of concerns about what had happened at Avon. "Due to the excellent maintenance performed by the prior owner of the Rodeo facility - Unocal - similar problems did not exist," said the agency.
Tosco's environmental record is also poor. In September 1996 it paid $175,000 in penalties to the EPA for allegedly violating federal laws requiring the immediate notification of toxic leaks to emergency response agencies and other offences. This year it paid $314,000 to settle dozens of air quality violations going back to 1997. As far back as 1994 the company was in trouble with the EPA, which filed a complaint seeking a $125,000 penalty for a 2,500 gallon oil spill.
The Tosco spokesman said the company was committed to safety and had hired Dupont Consultants to review its whole safety system. He added that apart from the Avon refinery, all the companies' refineries had improved their safety records in recent years. Company sources also pointed out that safety at the Irish operations, the Whitegate Refinery and the Whiddy Island oil storage facility in Co Cork, would remain the responsibility of the local management.
Tosco has agreed to buy the assets of INPC for $100 million plus the value of the company's stocks of oil and petroleum products.
The deal, which has been approved by the board of Tosco, is subject to due diligence and should be completed by the end of October. Tosco has a turnover of $20 billion and is the largest independent refiner and marketer of petroleum products in the US.
