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A small price to pay: Illinois mines routinely appeal safety penalties
In 2012, federal mine safety inspectors discovered a dangerous buildup of combustible dust inside Murray Energy’s New Era mine in southern Illinois. On top of that, they flagged problems with the communication systems miners would rely on to escape a disaster such as a dust explosion.
The Mine Safety and Health Administration proposed more than $146,000 in fines against the company. Through an appeals process, the company was able to pay less than half that amount, around $68,000.
For a company that made more than $845 million in revenue that year, the fines were comparable to a $5 penalty for someone who earns $60,000 a year.
The New Era mine in the last two decades has successfully appealed fines more than any other underground mine in the state, according to an Energy News Network review of federal mine safety penalties. Appeals meant that only 55% of the $14.36 million in originally proposed penalties for safety violations at New Era were paid since Murray Energy acquired the mine in 1998. (As part of a Chapter 11 bankruptcy proceeding, Murray Energy is now owned by former creditors and known by a different name; New Era has ceased production, though it is still listed as an active mine in federal records.)
Federal inspections are the main safeguard meant to prevent accidents and deaths in an inherently dangerous industry, but critics say the penalties — even as originally proposed — are typically so small that they become a cost of doing business rather than a deterrent for unsafe equipment or inadequate protocols.
Often penalties are reduced dramatically after mines take action to remedy problems. The New Era mine agreed to clean and apply rock dust to mitigate the risk of explosion, move cones so they faced the right direction, and install a two-way communication system, according to documents obtained from the Mine Safety and Health Administration.
The proposed penalties MSHA lodges against Illinois coal mines typically range from hundreds of dollars per violation to slightly upward of $10,000 per violation. When violations relate to fatalities, about $70,000 is often proposed, though not always paid. Even before any reductions are made, the amounts are tiny compared to the annual revenues of mining companies that are often in the hundreds of millions or billions each year. In 2019, the mining company with most operations in Illinois, Foresight Energy, reported $834 million in coal sales revenue and logged a net loss of $320 million. (In 2017, Murray Energy acquired a controlling interest in Foresight. In 2018, Foresight brought in over a billion dollars in revenue.) Peabody’s 2019 revenue from coal sales was $4.62 billion.
Coal companies see the penalties as just “a consequence of doing business,” in the words of Phil Smith, spokesperson for the United Mine Workers of America labor union, which no longer represents any Illinois miners. The penalty amounts are “of little significance” to companies, Smith continued.
Davitt McAteer, head of MSHA under President Bill Clinton, said, “The issue should be: Does the penalty have any consequences? Does it cause the mine operator to pay attention?”
On June 6, 2016, 34-year-old contractor Robert Clark was fatally crushed under a piece of machinery in the New Era mine after he crawled under it to investigate a leak. MSHA blamed the company for failing to have a sufficient policy in place to avoid such a situation, failing to adequately train miners, and failing to adequately maintain the machine. The agency proposed a $69,400 fine, but that was reduced to $45,000 after New Era put a new policy in place and miners were trained, according to the MSHA documents.
At Foresight Energy’s MC-1 mine, penalties for fatal accidents were also significantly reduced after appeals and corrective actions. MC-1 is Illinois’s largest mine and its deadliest this millennium, with five of 16 fatalities.
After Tyler Rath was killed in 2015 driving down a dangerously slippery slope hauling a heavy load without adequate safety measures, MSHA proposed penalties of $347,000 — $69,400 for each of five violations. The total fine was reduced to $239,000 upon appeal, after the company submitted a revised haulage plan, removed degraded tires from service, and retrained miners and management on slope haulage policies.
The agency proposed a $70,000 fine in connection with the death of Dallas Travelstead in the same mine, but the penalty was reduced to $32,000 on appeal. In all, appeals meant that only 65% of $5.2 million originally proposed in fines at MC-1 were paid since it opened in 2008.
At Peabody’s Willow Lake mine, 62% of $8.41 million in proposed fines were paid after appeals, and its Gateway mine — where Glen Campbell died — saw 73% of $4.36 million in proposed penalties ultimately paid after appeals. Both of those mines are now closed — Willow Lake shortly after a fatality in 2012.
“The penalties are generally low, most are appealed, there are substantial reductions in penalties once they’re appealed, and even if they weren’t appealed I don’t know if [the fines] would be enough of a financial incentive to motivate them to alter safety practices,” said Lee S. Friedman, an associate professor at the University of Illinois at Chicago who studies mining.
“On top of that, when we fine these companies now you’ve just penalized them and there’s money being transferred to the federal government, but that money is not being invested in changing engineering controls and infrastructure in the mine,” Friedman continued. “I personally think all the penalties should have no right to appeal or limited appeals, and all that money has to be redirected into changing the actual safety infrastructure in the mines themselves.”
In a statement provided for this story, the Mine Safety and Health Administration said the agency nationwide has moved to collect the outstanding debt from safety violations and issued orders to close 18 mines until payment plans were created. It said a scofflaw program had already collected more than $1.6 million nationally and had received payment commitments for another $6.9 million. No Illinois mines are on the agency’s list of scofflaw mines.
MSHA designates some violations “significant and substantial” and keeps a separate tally of them. The so-called S&S violation rates for Illinois underground mines are about equivalent to or, in some mines, significantly lower than national averages for underground coal mines. If MSHA decides that a mine has a “pattern of violations,” it is put on special notice. The currently operating mines examined for this story are not in that category, according to the agency’s online tool.
Bruce Stanley, a Pittsburgh lawyer who has filed successful lawsuits in major mine disasters in West Virginia, said that mining companies regularly use the appeals process not only to reduce fines but to avoid having the most serious violations on their records.
“These mine operators keep on retainer savvy corporate lawyers whose sole job is to file objections and challenges to the citations and tie them up in the hearing process,” Stanley said. “The hope is that they can actively delay enforcement and also work to compromise to get those more serious violations written down to a lesser violation.”
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