An oilfield services company pleaded guilty and was sentenced today in federal court in Bismarck, North Dakota, on charges related to the death of an oilfield worker, the Department of Justice announced today.
The victim, Dustin Payne, worked for Nabors Completion and Production Services (NCPS) at its Williston, North Dakota facility. On Oct. 3, 2014, Payne welded on an uncleaned tanker trailer that had previously carried “production water” or “saltwater,” a liquid waste generated by oil wells that contains flammable chemicals. The tank exploded and Payne was fatally injured. A Marine Corps veteran of campaigns in Iraq and Afghanistan, Payne had recently moved to North Dakota to work in the booming oil industry. He was 28 years old.
Federal law makes it illegal to weld on tanks or other containers that have not been thoroughly cleaned to remove all flammable materials and explosion hazards.
The defendant, C&J Well Services, is the corporate successor to NCPS. NCPS knew that it was against the law to weld on uncleaned tanks and had written policies prohibiting the practice. NCPS policies mandated special training for welders and internal auditing procedures to make sure that welding rules were actually being followed. However, NCPS did not provide welding-specific training to Payne or other welders at the Williston facility, did not effectively supervise the work of the Williston welders, did not require the welders to obtain hot work permits prior to welding and did not follow internal auditing procedures. As a result, Payne and other welders repeatedly welded on uncleaned tanks that contained flammable hydrocarbon residue.
C&J pleaded guilty to a willful violation of the standard requiring that tanks be cleaned before welding. U.S. District Judge Daniel L. Hovland sentenced C&J to pay a $500,000 fine, $1.6 million in restitution to the victim’s estate, and a three-year term of probation, during which C&J must allow the Occupational Safety and Health Administration (OSHA) to inspect its facilities and equipment across the country without a warrant, without advance notice and without a specified inspection reason.
“Company safety policies and compliance monitoring programs that are not implemented, existing only as theoretical paper tigers, do not in fact protect workers,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “Employers that willfully fail to follow workplace safety laws will be prosecuted to the fullest extent of the law.”
“The North Dakota oil industry attracts thousands of workers from across the country for the prospect of well-paying jobs, and many of those workers initially lack significant oilfield experience,” said U.S. Attorney Drew H. Wrigley for the District of North Dakota. “Companies have an obligation to educate North Dakota workers and when they fail to meet those obligations, we will hold them accountable.”
“Federal law has long prohibited welding on uncleaned tanks and employers must comply with these standards to protect their workers,” said Loren Sweatt, Principal Deputy Assistant Secretary of Labor for Occupational Safety and Health at the U.S. Department of Labor. “OSHA vigorously enforces these standards and, when necessary, will make criminal referrals to the Justice Department to prevent future injuries and fatalities.”
“On behalf of the Inspector General, I offer our deepest condolences to the family and friends of Dustin Payne whose tragic death resulted from the willful violation of a Federal safety standard designed to safeguard against dangerous conditions and incidents such as this,” said Andrea M. Kropf, Regional Special Agent-in-Charge at the Department of Transportation Office of Inspector General. “Together with our law enforcement and prosecutorial partners, we are committed to pursuing companies who put the lives of those working in the transportation industry and the public at large at risk.”
The case was prosecuted by Senior Trial Attorney Christopher Costantini and Trial Attorney Samuel Charles Lord of the Justice Department’s Environmental Crimes Section, and Assistant U.S. Attorney Gary Delorme of the District of North Dakota. The case was investigated by the OSHA, the U.S. Environmental Protection Agency – Criminal Investigation Division and the U.S. Department of Transportation Office of the Inspector General, with additional support from the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
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