U.S. mine safety officials are not adequately evaluating whether monetary penalties are effective at reducing fatal or permanent accidents across the nation's mines, according to an audit from the U.S. Department of Labor's Office of Inspector General released Aug. 20.
The U.S. Mine Safety and Health Administration told auditors that it believes that its safety programs collectively improve mine safety, but it has not evaluated the impact of its civil monetary penalties, or CMP, program. A data analysis conducted for the audit found no correlation between the penalties an operator paid and the safety of its mine operations. The frequency of severe violation recurrence was "very similar" whether or not the operator was delinquent on paying for the violations, the report said.
"Our data analysis showed no correlation between penalties paid and the safety of mine operations," the report concluded. "Specifically, the data revealed most fatal or permanent injury accidents occurred at mines where operators generally paid their penalties in full."
The report noted that the review was conducted in part because MSHA has been reported in the media for allowing delinquent operators to continue to operate without consequence. One of the more high-profile of those media reports included repeated incidences of mines owned by West Virginia Gov. Jim Justice falling into delinquency on mine safety fines.
In 2018, the agency touted collecting $5.2 million from unpaid violations as part of a program targeting "scofflaw" companies that are delinquent on their fines. The agency's current leader, former Rhino Resource Partners LP executive David Zatezalo, has said that going after operators that do not pay their fines is an agency priority under his leadership.
Without metrics, MSHA cannot ensure the program is achieving its intended purpose, the report said. In the 18-month period reviewed, MSHA collected about $900 million in penalties, roughly 90% of what was originally assessed. The report recommended that MSHA develop metrics for the program that measure the degree to which civil penalties deter unsafe mine operations and implement controls that ensure operators are in good standing before proceeding with the process to open a new mine.
"MSHA officials have not measured the impact of the CMP program on mine safety, as they believed it difficult to distinguish the effect of the program from other MSHA safety and enforcement initiatives," the report said. "Without a means of measuring CMP program effectiveness, MSHA has not been able to determine if CMP has been improving mine safety."
Roughly 75% of operators paid their violation penalties in full, and of operators who received a penalty, 84% had 100 or fewer violations across the entire period, the report said. Most severe accidents, however, occurred at mines where operators generally paid between 99% and 100% of their assessed penalties.
"We found that operators who paid violation penalties and those who did not pay continued to have severe violations year-after-year at about the same frequency," the report said. "Severe violations were defined as violations that were reckless or high-negligence, or significant or substantial. These severe violations stemmed from safety hazards that had a reasonable likelihood of causing serious injuries to miners."
The audit also found that MSHA has not prevented delinquent mine operators from starting on a new mine without consequence. Overall, the assessment concluded that the CMP program has not deterred operators from running unsafe mines.
"Our analysis indicated MSHA's violation penalties may not have changed operator behavior and motivated them to fix safety hazards, as intended," the report said. "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. Likewise, the operators who did not pay may not have seen the incentive in avoiding enforcement actions MSHA could take for nonpayment."
MSHA's response to the report was included in the Aug. 20 release of the report and suggested the agency will work with the Office of the Inspector General to explore options for implementing metrics to measure the program. The agency also expressed some skepticism that it has the legal authority to implement controls to ensure the good standing of operators in terms of safety and delinquency on fines prior to assigning a legal mine identification number or changing the legal ownership structure of a mine.
